State Rep. Doug Wozniak on Tuesday spoke out against a plan to expand government bureaucracy by creating a state-mandated retirement savings program.

House Bill 5461 would create a state-operated individual retirement account (IRA) system that automatically enrolls workers employed by businesses that do not offer a similar retirement savings plan. Many small businesses do not administer standalone retirement plans the way large corporations do. Employers who do not help administer the new program would face steep penalties, including criminal charges and up to a $5,000 fine. Employees who do not wish to participate would have to opt out to avoid automatic enrollment and the corresponding payroll deductions.

“Something about the state garnishing paychecks if workers don’t check a box doesn’t pass the smell test, regardless of how well intentioned it might be,” said Wozniak, R-Shelby Township. “Anyone can walk into a bank right now and sign up for a 401(k) program – it isn’t hard. Forcing small business owners to facilitate deposits into IRA accounts that no one asked for, and which workers may not even be fully aware of, is deceitful and a clear government overstep.”

House Republicans argue the proposed program would be another unnecessary burden on small business owners who would be forced to enroll employees and provide information on the program or face significant penalties. Wozniak said the bureaucratic expectations for small businesses are already far too high and this bill would make the problem even worse.

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