The math is not adding up when it comes to retirement for many Minnesotans.
According to AARP, the typical working-age household has $2,500 in savings and near retirement households have only $14,500 saved.
The idea that Social Security will carry Minnesotans also falls short. In our state, the average Social Security benefits for a 65+ family is about $22,000 per year, while older American families spend $25,000 a year on food, utilities, and health care alone. Compounding the problem is that 32% or more than 700,000 workers in Minnesota do not have access to a retirement plan through their employer.
“We want to take care of these people,” said Erik Forsberg, who owns several popular Twin Cities restaurants, including Devil’s Advocate in downtown Minneapolis and Stillwater and Dan Kelly’s Broadway Pizza, among others.
As a board member of the Minneapolis Chamber and past board member of the Minneapolis Downtown Council and the Minnesota Restaurant Association, Forsberg was among those who testified at the Minnesota State Capitol in 2022 in favor of the Minnesota Secure Choice Retirement Bill. In May of 2023, Governor Tim Walz signed the bill into law. Secure Choice benefits employees in the private sector who have no opportunity to save for retirement through an employer-sponsored retirement plan such as a 401(k) plan.
“The restaurant industry is very much dependent on humans to do what we do and to do it well,” Forsberg commented. “It is very expensive to hire and train people, so retention is key and this is a tool to help.”
Forsberg is among the panel for a webinar about Secure Choice hosted by AARP Minnesota and the Minneapolis Regional Chamber on Wednesday, Nov. 13, at noon. “Secure Choice is very simple,” said Mary Jo George, AARP associate state director of advocacy and also on the webinar panel. “It’s easy to administer with zero enrolment fees and is voluntary for workers.” George and AARP Minnesota led efforts to get Secure Choice passed in the state.
“Already 19 states, including Minnesota, have passed this,” said George. “States are doing this because we face a vast retirement savings deficit and worry many middle-class retirees won’t be able to afford basic needs.”
The problem persists at higher rates in communities of color, with 45.7% of Hispanic employees and 43% of Black employees without access to an employer plan as compared to 29.8% of white employees.
Secure Choice is being launched by a board of directors that includes Erin Leonard, executive director of the Minnesota State Retirement System, as well as the head of the State Board of Investment and other experts. The board has two years to implement the program and is currently determining the timeline for opening the program, contribution rates, investment funds, a process to address questions and complaints and a plan to get the word out about Secure Choice.
“We want employers to have a voice and that’s why we’re hosting the webinar, to answer their questions, but also get their feedback on their plan,” George said.
George added that the preferred timing for the rollout of Secure Choice is estimated to be anywhere from mid to late 2025 or early 2026. Businesses with five or more employees that don’t already offer a retirement plan must enroll workers in Secure Choice or offer their own plan.
Forsberg thinks his employees will be receptive. “This industry isn’t always treated like a career and not all employees save like it’s a career. This option allows them to have security.”
If you are interested in participating in the Secure Choice Webinar on Wednesday, Nov. 13, you can register here.