(WTOL) - What does saving for your retirement mean to you? Some folks have options though their employers. Some are self-employed. Others work for a small business that does not have retirement options for its employees.
A new rule finalized by the U.S. Department of Labor may change how Ohio workers save for their retirement.
According to the U.S. Census, 49 percent of workers don't have a job where a pension or retirement plan is offered.
A local Toledo retirement expert said when the program is rolled out in Ohio, small business owners will be able to offer their employees an option to save for their retirement at little to no cost or risk to them.
"If I know myself well enough to know that if it's going to be in cash I'll probably spend it, then you want to go with this plan," said Cap Averill, President of Cap Averill II & Associates.
It's a new rule finalized by the U.S. Department of Labor that will allow small businesses in Toledo to create automatic enrollment retirement savings plans for their employees.
"From the small business owners perspective, if they're trying to attract employees and they're able to offer some form of a pension plan, it's a more attractive place to work," said Averill. "From the individual or the savers perspective if they can take part in any form of a pension plan when they'd not be saving other wise that's going to be an advantage long term."
Department of Labor documents state that Ohio would allow businesses with five or more employees to offer a program where folks can opt to have a percentage of their paycheck put it in a retirement savings plan, like an IRA.
Averill said this type of program won't be as protected as a 401k plan by federal laws like ERISA (Employee Retirement Income Security Act of 1974).
"When there's no liability at either the state level or at the employer's level that means the liability falls back on you," said Averill.
AARP Ohio estimates this program would help more than 1.9 million workers across the state save for their retirement. Recent research from AARP states in the state of Ohio, over a five year span using this program, more than 1,000 households will no longer rely on government welfare programs like Medicaid.
"The state of Ohio has pretty much been green lighted to move this along quickly," said Averill.
WTOL reached out to Governor Kasich's office and representatives said they're still learning more about this brand new rule.
The governor has made it a priority to make the state of Ohio a friendly place to start a business. This is key in creating jobs and supporting hometown businesses.