Senate committee rejects Peach State Saves automatic retirement plan

The Georgia Senate Retirement Committee on an informational hearing considered Senate Bill 226, the Peach State Saves Act, a proposal to require employers with five or more employees to either facilitate enrollment in a state-run automatic IRA program or maintain a private retirement plan. After testimony from national and state witnesses and extended questioning from committee members, the committee voted 5-4 against advancing the bill.

Proponents told the committee the bill would expand retirement access to an estimated 2 million private-sector Georgia workers who lack workplace plans. Kim Olson, senior officer on the retirement savings project at Pew Charitable Trusts, told the committee, "Pew supports Senate Bill 226" and said similar programs in 17 states had helped close coverage gaps and spurred some employers to adopt private plans instead of relying on the state option.

Jim Potvin, executive director of the Employees' Retirement System of Georgia (ERS), explained how the program would operate if adopted. Potvin said administration would be outsourced to third-party administrators and that employers would generally spend "15 to 30 minutes" to sign up and thereafter transmit payroll data and withheld contributions. Potvin said the bill would default to a Roth IRA but allow the board to offer a traditional pretax IRA as well.

AARP Georgia's advocacy manager Alice Bennett also testified in support, saying the program "promotes personal responsibility" and helps small businesses compete for employees by offering a portable retirement account.

Opponents and some committee members raised compliance and administrative concerns. Senator Walker questioned enforcement and penalties for employers who did not comply, and members sought clarity on whether the bill imposed hard costs on employers; Potvin and other witnesses said employers would not be required to contribute and that administrative costs would be handled as part of payroll, though they acknowledged some additional employer time would be required to transmit payroll information and set up the account.

After testimony and member discussion, Senator McLaren moved to advance the bill; Senator Davenport seconded. The committee then took a roll/hand count. The chair later announced the vote had failed, 5-4, and the bill did not pass out of committee.

The hearing assembled testimony about expected long-term fiscal and demographic impacts if workers do not save for retirement; Olson cited Pew-commissioned modeling estimating higher later-life public assistance costs absent increased household savings. Proponents argued the program would be portable, low-cost to participants, and would increase retirement account uptake through automatic enrollment with an opt-out.

The bill's proponents said there may be some start-up costs and operational decisions for the board to make (choice of default Roth vs. traditional IRA, third-party administrator selection, and employer notification processes). Opponents asked for more details on enforcement, the pace of employer compliance, and the potential administrative burden on very small businesses.

With the committee vote failing, SB226 will not advance from this committee at this time. Sponsors and supporters said they would continue outreach and may refile or seek other paths to expand retirement access.