Sitting at a table in front of a small business in Warwick, Rhode Island General Treasurer James Diossa and Connecticut Comptroller Sean Scanlon each signed papers marking a new partnership between the two states.
The two were announcing the creation of a new program and a partnership that is designed to help Rhode Islanders retire more easily.
The RISavers program is launching in spring 2025 in a pilot form, with the full program expected to begin shortly after. It will offer private-sector employees whose employers are not currently offering retirement savings options a Roth IRA, a retirement account where withdrawals from the account are tax-free but deposits into it are not, the reverse of a regular IRA.
Diossa and Scanlon, as well as Gov. Dan McKee, Speaker of the House K. Joseph Shekarchi and Sen. Lou DiPalma, spoke in front of AA Sign & Awning, a small business on Jefferson Boulevard, to announce the partnership. The MyCTSavings program, which began two years ago, is serving as a model for RISavers.
More than 170,000 Rhode Islanders do not have a retirement savings plan at their workplace, according to Diossa’s office. The program, he said, would benefit small businesses as well as their employees.
“Many employers, especially small businesses, can’t provide retirement benefits because of the high startup cost or limited administrative capacity,” Diossa said. “Now, these owners can advertise RI Savers as an employee benefit at little to no cost to the employer. Since Rhode Island Savers offers a Roth IRA, there is no employer match required.”
The treasurer said that Connecticut had served as a solid example for Rhode Island to follow, and the strategic partnership between the two states would help RISavers be implemented “quickly and efficiently.”
Deepening the partnerships between states, Scanlon said, was also important in an era of uncertain national politics.
“States can still get things done,” Scanlon said. “We do it in the State House here. We do it in the State House in Hartford. And when states can work together and solve problems that perhaps Washington used to be able to solve, we’re doing the right thing for our constituents and doing the right thing for the futures of our states.”
The bill’s sponsor, Warwick Rep. Evan Shanley, was also present, and said that those benefiting from the new program would be able to contribute to the plans themselves. The bill creating RISavers was signed into law by McKee in September.
AA Sign & Awning is among the companies that stand to benefit from the new program. Its president, Darryl Lindie, said he’s most looking forward to RISavers helping ease the minds of his workers.
“As someone who’s a former naval officer, one of the first lessons I always learned was to take care of your people,” Lindie said. “When I think about that and how it transfers to my leadership today, I think about how I can help the team here… [Having] the tools for retirement and their financial security that allows them to do what they do best [is a big help.]”
Grant Brown of Compensation Planning in Warwick, a company that plans designs and administers retirement plans more easily, said that the new initiative could help more people save money “systematically.”
The program, he said, would be especially beneficial for those just entering the workforce.
“The Roth IRA is a great option for someone – a tax-favored account where all the future growth will be tax free, which, not knowing where tax rates will be in the future and especially for those people that have a long-time horizon to retirement, probably the most cost-effective way to save for the future,” Brown said.
The experiences of Connecticutians, according to Scanlon, showed that the program could provide a leg up to many Rhode Islanders hoping to retire.
“As I travel across the state of Connecticut, I hear incredible stories from people who come up to me and say ‘I’m saving for the first time ever, not just for myself but in the history of my family,’” Scanlon said. “They’re able to think about retiring in a way that their parents never were. And I know that you will start to hear these stories here in Rhode Island, because it’s the reality.”