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Senator Yarbrough outlines state-run auto-enroll savings plan to reach private-sector workers without retirement options
Summary
Senator Yarbrough described SB 2,397, the Tennessee Retirement Savings Plan Act, which would create a state-facilitated auto-enroll Roth IRA program with a seven-member board and phased rollout from 2029–2031; the Council voted 9–2 to recommend against the bill.
Senator Yarbrough introduced Senate Bill 2,397 as the Tennessee Retirement Savings Plan Act and said it would create a state-administered mechanism to help private-sector workers who lack access to employer-sponsored retirement plans.
“So Senate bill 2,397, would start what's called the Tennessee Retirement Savings Plan Act,” Senator Yarbrough said, explaining the bill would create a board and the administrative structure to facilitate private-sector retirement savings through automatic payroll deductions.
Senator Yarbrough and department staff described the scope and rationale: the sponsor said roughly 1.2 million Tennesseans lack access to employer-offered retirement savings and argued the state faces long-run fiscal consequences if insufficient retirement savings persist. Department representative Mr. Wyman said the bill creates a seven-member board chaired by the state treasurer, sets a default 5% employee contribution rate, allows contracting with third-party administrators and investment managers, phases implementation from 2029 to 2031, and prohibits local governments from offering retirement plans to non-governmental employees. He also said the board is barred from implementing a plan that is legally determined to be covered by ERISA.
Committee members pressed on whether individuals can open Roth IRAs now and on the scope of any employer requirement; department staff and the sponsor said private options exist but that auto-enrollment and payroll facilitation substantially increase participation. After discussion a motion for a negative recommendation carried by recorded vote, 9 ayes to 2 noes; the committee recommended against passage to the respective standing committees.
