North Carolina Rep. Jarrod Lowery, R-Robeson, introduced legislation on Wednesday that would offer millions of North Carolinians a retirement savings program to help small business workers who don’t have access to employer-sponsored retirement plans.
Titled “North Carolina Work and Save,” House Bill 79 seeks to create the North Carolina Small Business Retirement Savings Program. It targets nearly 2 million workers in the state who currently have no access to employer-sponsored retirement plans, including employees, independent contractors, and self-employed individuals.
“We have North Carolinians that are not prepared if they’re only saving for retirement through Social Security,” said Lowery. “What North Carolina Work and Save would do is create a public-private partnership… It will allow the treasurer’s office to set up a program where small businesses here in North Carolina can sign up and have a program where their employees can sign up and save for retirement. There’s no cost to the taxpayer. It’s no cost to the small business, but at the end of the day, it could be a huge benefit for those small businesses.”
The average Social Security payment for people over 65 is about $21,000 a year. Factor in expenses like food, healthcare, and utilities costs of up to $22,000 per year, explained Lowery during a press conference, means North Carolinians relying solely on Social Security aren’t prepared for retirement.
The program is designed for small businesses that do not offer retirement savings plans and aims to help workers build a secure financial future.
The legislation proposes establishing a payroll deduction system for Individual Retirement Accounts (IRAs), allowing workers to automatically save a portion of their income for retirement. Legislators said on Wednesday that North Carolinians are 15 times more likely to sign up for retirement if it is through a paycheck deduction at work.
The proposed program will be managed by a newly formed board through the Department of Commerce. The standard package will be a Roth IRA with a contribution rate that begins at 5% of salary or wages, with optional increases up to 8%.
Employers will not be required to contribute but will facilitate payroll deductions.
“Right now, North Carolina spends hundreds of millions of dollars a year in public assistance programs,” added Lowery. “If we can have those 2 million North Carolinians prepared for retirement in 10 to 20 to 30 years, we could save the taxpayers, we could save the state hundreds of millions of dollars. And actually, Pew estimates that we could save half a billion dollars a year in public assistance programs if those nearly 2 million North Carolinians were prepared for retirement.”
The program, supported by AARP, aims to provide better retirement security for North Carolina workers while reducing the strain on public assistance programs for retirees. While sponsors say there are no costs imposed on taxpayers or small businesses, the bill appropriates $400,000 for the 2025-2026 fiscal year and $600,000 for 2026-2027 to kickstart the program, becoming financially self-sustaining over time.
If the proposal succeeds through the General Assembly and the executive branch, it would launch by July 1, 2027.