Commentary: Delaware EARNS would put secure futures within reach


The COVID-19 pandemic has shown us the importance of being prepared for an uncertain future, and that includes having savings to depend on. Unfortunately, hundreds of thousands of Delaware residents have no way to save for the future at work.

Today, about 39% of private-sector workers in Delaware do not have access to a workplace savings program for retirement. For small-business employees, it’s even worse at 48%. Without an easy way to save for retirement, many Delawareans will be forced to rely on Social Security as their only source of income in their later years.

While it’s a critical piece of the puzzle, Social Security alone is not enough to depend on for a secure financial future. According to AARP’s Public Policy Institute, the average Social Security benefits for an age 65-plus Delaware family is only about $24,000 per year, while older Delaware families spend an average of $27,000 a year on food, utilities and health care alone. With numbers like these, it’s no surprise that half of all households are at risk of not being able to handle everyday expenses — like medicine, utilities and housing — in retirement.

Many states are exploring and creating “Secure Choice” programs to address these challenges. These programs are state-facilitated, with program management outsourced to the private sector, leaving no burden to employers. They provide a convenient way for all workers to save for retirement, particularly middle- and low-income workers who lack access to employer-sponsored plans and small businesses that are unable to provide such a benefit.

Here in our state, a solution has emerged — the Delaware EARNS (Expanding Access for Retirement and Necessary Savings) Program, a Secure Choice-inspired initiative proposed by the Office of the State Treasurer and endorsed by AARP. Once the legislation is introduced, we must act quickly to pass Delaware EARNS to ensure all workers can easily grow the savings they need for a more secure future.

The concept behind Delaware EARNS is simple. It will provide a low-cost, plug-and-play program for businesses that don’t already have a retirement savings plan. Research shows that Americans are 15 times more likely to save if they can do so through their regular paycheck and 20 times more likely if they are automatically enrolled.

Delaware EARNS provides an easy pathway for workers to start growing the savings they need to take control of their futures. Employees decide if they want to participate and how much they want to put away from their paycheck automatically. And the savings will move with the employee if they change jobs or careers.

Strong evidence exists to demonstrate the effectiveness of programs like Delaware EARNS. Oregon was the first in the nation to launch a program like this in 2017, known as OregonSaves. Since then, two more states have opened similar programs — CalSavers in California and Illinois Secure Choice. Together, over 318,000 people have contributed more than $210 million to their retirement through these savings accounts.

The importance and strong support for these programs is shown in last year’s numbers alone. Despite the hardships that COVID-19 created, the number of savers increased 142%, contributions nearly tripled and the number of participating employers increased more than 50% in 2020, compared to 2019.

We know that Delaware workers will take full advantage of the opportunity to build a stronger financial future with Delaware EARNS if state lawmakers pass it. In a recent AARP survey, 90% of workers without access to a workplace savings plan said they would use one if it were available.

This type of forward thinking is just what we need to help rebuild our economy and empower Delawareans to build a more secure future for themselves and their families. Join us in urging state leaders to pass Delaware EARNS now.

Lucretia Young is state director of AARP Delaware. Colleen Davis is treasurer for the state of Delaware.

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