WASHINGTON (3/13/15)--A human resources director from a CUNA-member credit union testified on behalf of his institution before the Senate Special Committee on Aging Thursday.
Rob Carmichael, senior vice president of human resources at Maine Savings FCU, Hampden, spoke at the hearing, which examined how prepared Americans are for retirement.
Carmichael said his credit union offers has offered a 401(k) since 1993 and has an 86% participation rate among its employees. Maine Savings FCU provides at 50% match of the employee's deferral of up to 6% of their salary.
"Why don't all of our employees contribute to their 401(k)? Although I can't speak for each employee, my general sense is that they are merely trying to make ends meet at this point and they are unable to put money aside for something not seen as an 'immediate' need," Carmichael said.
According to Carmichael, the average employee's 401(k) deferral is 6.7%, with entry-level employees deferring about 6%.
For many of these employees, their 401(k) will be their only source of retirement income other than Social Security, Carmichael said.
He also noted that, while the credit union's health insurance plan is likely the most important benefit to a majority of Maine Savings FCU's employees, he believes that the retirement savings opportunities are "a close second."
"I urge this committee to find ways to make 401(k) plan solutions available to many more small business employers who may not have the resources that we do," Carmichael said, adding that a proposed bill--the Retirement Security Act of 2015 (H.R. 557), which proposes several modifications which will provide incentives for small businesses to offer retirement plans to their employees--is a step in the right direction.