Signing of HB 205 by Governor Carney allows for next steps

Almost 150,000 Delaware workers got a step closer to secure retirement savings when Governor Carney signed HB 205, the Delaware EARNS Act, into law this morning. With the enactment of the legislation, the Office of the State Treasurer (OST) officially begins building the infrastructure that will drive the landmark retirement program.

Delaware EARNS (Expanding Access for Retirement and Necessary Savings) requires businesses with more than five employees that don’t currently offer a retirement plan to participate through a simple payroll process.

“We’ve worked long and hard to make this program a reality for Delawareans who lack access to an employer-sponsored retirement program,” said State Treasurer Colleen Davis. “I am grateful to Representative Larry Lambert, Senator Nicole Poore, all of their colleagues in the General Assembly, the AARP of Delaware, and of course the Governor for helping us get here.”

OST will hire an executive director who will guide the operation of the program and work with the Delaware EARNS Program Board, established by the legislation to oversee initial design and implementation of the program. The Board will consist of the State Treasurer, Secretary of Finance, Insurance Commissioner, Secretary of Labor, and chairperson of the Plans Management Board, each of whom may appoint a designee, as well as two members of the public chosen by the Governor.

“It shouldn’t matter what your background or job is: every Delawarean deserves the opportunity to enter into retirement with economic dignity and security,” said Rep. Lambert, D-Claymont, prime sponsor of the legislation. “For small businesses and the almost 150,000 Delaware workers lacking an employer-sponsored saving program, the Delaware EARNS program will be financially transformative, allowing residents to save for the future while filling a critical need in the marketplace. This new program will put thousands of working Delawareans on a level playing field when it comes to their financial future, and I am excited to see it in action.”

“While every Delaware worker deserves to enjoy their golden years, nearly one in five of our neighbors currently won’t be able to achieve the dream of a financially secure retirement, simply because their employer does not offer a retirement savings plan like a 401(k),” said Sen. Nicole Poore, D-New Castle, the Senate prime sponsor of HB 205. “I want to thank Rep Lambert and Treasurer Davis for recognizing that we can do better for Delaware’s working families. The Delaware EARNS Act signed into law today is a win for thousands of workers who will be able to sleep tonight with the peace of mind that comes from knowing they are on a stable path to a more financially secure future. It’s a win for the hundreds of small businesses that will be on a more even playing field with the major corporations that can afford to provide these competitive benefits, and it’s a win for Delaware’s middle class by bringing a financially secure retirement within reach for nearly 150,000 of our neighbors.”

AARP Delaware, its staff, and its more than 187,000 members advocated for the creation and passage of Delaware EARNS.

“The pandemic has shown how vital it is for Americans to have savings to depend on. We must make it easier for workers to save so they can take control of their future,” said AARP Delaware State Director Lucretia Young. “AARP was pleased to work alongside our State Treasurer to help provide an easy pathway for workers to start building a safety net and grow the savings they need for a more secure future.”

More information about Delaware EARNS can be found at de.gov/earns.

Delaware EARNS would stem savings crisis

More than 200,000 Delaware workers currently lack access to an employer-sponsored retirement program, meaning they have no effective way to save for the future. Bi-partisan legislation introduced in the Delaware House of Representatives creating the Delaware Expanding Access for Retirement and Necessary Savings (“EARNS”) program could reverse that trend.

Many Americans, including Delawareans, face a great retirement crisis, with 52% of the State’s workforce not having an easy way to save through a retirement program at work. Delaware EARNS addresses the situation by automatically enrolling employees into a State-facilitated retirement savings plan unless they elect to opt-out. Delaware EARNS also benefits small businesses who may not be able to offer retirement plans to employees due to the cost and administrative burden, allowing them to attract and keep good employees by offering a crucial benefit like retirement savings.

“If the past year has taught us anything, it’s that the future is unpredictable,” said Delaware State Treasurer Colleen Davis. “I want to do everything I can to help Delawareans make retirement more secure without putting undue burden on employers.”

Businesses with more than five employees will be required to participate in Delaware EARNS through a simple payroll process with the State Treasurer’s Office handling the rest, but those employers who already offer employees some other form of retirement option would not need to participate.

“With no additional cost and just a few extra steps, small businesses in Delaware will be able to provide one of the most valuable benefits to their employees,” Davis said. “Workers benefit immediately by being automatically included in a retirement plan. Programs like Delaware EARNS that use auto-enrollment have a 92% participant rate compared to 61% for plans with just a voluntary rate.”

AARP Delaware and its more than 187,000 members encourage the passage of Delaware EARNS.

“We fully support DE EARNS because AARP believes in planning now, so we have financial security in the future,” said AARP Delaware State Director Lucretia Young. “While Social Security is a critical piece of the puzzle, it’s not enough to ensure secure financial resilience
as we move into our next chapter of life. We urge legislators to pass HB 205 to empower Delawareans to build a more secure financial future for themselves and their families.”

State Representative Larry Lambert, D-Claymont, is the lead sponsor of Delaware EARNS in the House of Representatives.

“We are creating an opportunity for Delawareans where it doesn’t matter what your background is, it doesn’t matter what your job is. You can have access to this transformative tool, which will give you an opportunity to enter into retirement with economic dignity and security,” Lambert said. “It benefits employers too because it makes their businesses more competitive. Some of our neighboring states may offer higher wages or different opportunities, but Delaware will be the first state in our region where all of our small business will offer a state-facilitated retirement savings plan.”

“Saving for retirement is an absolutely essential part of living out a long and healthy life, but too few Delawareans have access to the pensions and retirement plans that our parents and grandparents enjoyed,” said Sen. Nicole Poore, D-New Castle, prime sponsor in the State Senate. “Those who take advantage of savings and investment opportunities early reap the benefits; those who don’t often fall far behind. What we will end up with, if we aren’t careful, is a compounding crisis of underfunded retirement accounts and seniors who can’t afford to get by because of missed opportunities in their teens and twenties. Dozens of states have recognized this and taken action. I’m proud to be moving Delaware in that direction too.”

“Until now, Delaware was one of just five states that has neither taken any action to create, nor explored the feasibility of, such a program,” Davis said. “Enacting Delaware EARNS will enable more people to save for retirement, reduce the need for additional taxes to fund public assistance programs, and even incentivize people to return to the workforce knowing a retirement plan will be available.”

HB 205 can be found here.