ANNAPOLIS — The chairwoman of a task force appointed to make recommendations on how to improve retirement savings among private-sector employees said her group will place an emphasis on what other countries are doing to solve their own problems.
Kathleen Kennedy Townsend, chair of the Governor’s Task Force to Ensure Retirement Security for All Marylanders, said that while other states are working on the issue none are significantly ahead of Maryland.
“My thought is that other countries have done this on a much broader scale,” said Kennedy Townsend, speaking to the 14-member panel.
Gov. Martin J. O’Malley, who created the task force in a May executive order, announced the appointments of the group on Tuesday. The panel is charged with making recommendations that could lead to a state law mandating private employers to offer retirement plans to employees and possibly create a state managed retirement fund for private-sector employees.
Some studies have found that as many as 50 percent of the adult population is not participating in a retirement plan. And, among those who are, the average savings is about $10,000. In April, a Gallup Poll found that not having enough money for retirement was the No. 1 financial concern of survey respondents.
The Maryland Department of Aging estimates that the proportion of people 60 years old or older in the state could reach 25 percent in the next 6 years.
“We’re talking about a huge crisis here,” said Karen Friedman, policy director at the Pension Rights Center.
Currently, 17 states and the federal government are reviewing the issue of how to increase retirement savings among private sector employees. Three states, California, Connecticut and Oregon are studying the feasibility of a government-managed system while efforts to created a federal solution have stalled.
“Maryland is part of a growing movement,” Friedman said, adding that an unsuccessful bill sponsored earlier this year by Sen. James C. Rosapepe, D-Prince George’s County, “mirrors the California act.”
Friedman and other say that recommendations from the task force, some of which could come by early December, could place the state in the forefront of the issue.
Kennedy Townsend said she wants to spend time looking at how countries such as the Netherlands, Australia and England have addressed the issue rather than spending an extensive amount of time on other states.
“How much of a discussion we have about other states depends on how interesting other states are,” Kennedy Townsend said. “There’s not some magical answer in the United States.”
Kennedy Townsend said she is open to ideas but expressed a preference for a plan that provides “a monthly check” for the balance of a retiree’s life. Government management of such a plan is not out of the question as is the possibility of creating a system that provides a defined benefit, similar to Maryland’s government employee retirement system.
But talks of mandates and government controlled plans have raised the eyebrows of some business owners.
Phylliss Burlage, owner of Millersville tax accounting firm Burlage Associates, said she’s concerned recommendations will impose “another burden on small businesses.”
“They’re really approaching this like it’s a done deal,” Burlage said.
Kennedy Townsend said the fears are unfounded and any recommended solutions will be good for business and the local economy and vowed to come up with a solution.
“Maryland, we are going to solve the problem,” said Kennedy Townsend.