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CPA Now
Feb 23, 2022

Keystone Saves Plan Offers Broad-Based Retirement Savings throughout Pa.

Robert C. Jazwinski, CPA, PFS, CFPBy Robert C. Jazwinski, CPA, PFS, CFP


The Pennsylvania Retirement Security Task Force report, published in 2019, was inspired by a need to enhance retirement savings among Pennsylvanians who are not covered by an employer-sponsored retirement plan. I had the honor to join former Pennsylvania Treasurer Joe Torsella’s effort and represent the PICPA at task force hearings and deliberations held during 2017 and 2018 on the matter prior to the reports release. Several years have passed, and no legislation has been enacted to address the recommendations of the Retirement Security Task Force. That may soon change.

Recent legislative activity and the endorsement of current Pennsylvania Treasurer Stacy Garrity are promising. In late 2021, House Bill 2156 – sponsored by Reps. Tracy Pennycuick (R-Montgomery) and Mike Driscoll (D-Philadelphia) – was introduced that would establish the Keystone Saves Program, which is modeled on the recommendations of the task force. The bill was referred to the House Commerce Committee on Feb. 3, 2022. In a December 2021 press release, Garrity indicated that 10 other states have adopted similar legislation, and she broadly endorsed the legislation.

Nest egg: stacks of cash in a bird's nestApproximately 44% of Pennsylvanians (about 2.1 million residents) have no access to an employer-sponsored retirement plan. Among those employees who do have access to an employer-provided plan, nearly 80% take part and save and invest for their futures. When employees don’t have this access, less than 5% save and invest for their futures. Many who don’t have access to an employer-sponsored plan work for small businesses, although a significant percentage of employees who work for larger employers do not have access to such plans either. There is evidence that shows that many individuals in poverty or on the low end of the wage scale do save, but they save in investments that generate low returns or have high costs.

The task force concluded that Pennsylvania should offer an auto-enrollment payroll deduction IRA modeled after the highly successful education savings plans offered by states throughout the country. The retirement savings plan would be mandatory (with some narrow exceptions) and open to all employers in Pennsylvania who do not offer employee retirement plans.

The task force concluded that the plan should include the following attributes:

  • Maxim inclusiveness to positively impact as many Pennsylvania employees as possible.
  • Auto enrollment to increase participation in retirement saving plans. In the private sector, experience shows that few employees choose to opt out if automatically included.
  • Default contributions, investments, and annual increases to offset tendencies toward procrastination. Default investments need to be oriented to growth for longer time horizons to get the powerful impact of compounded returns over time.
  • Low to no burdens on employers to make it easy to adopt and execute. Employer obligations could be limited to enrollment, deducting specified contributions from wages, and remitting to an investment provider.
  • Costs to be borne by participants so the program does not become a burden on the commonwealth or employers who are required to offer the plans.
  • Resources to educate participants on the importance of investing for the future and to build financial literacy in participants and assist them in saving for their futures.

In addition to the positive impact on the future financial strength of employees, there are potential benefits to Pennsylvania as well. For example, financially stronger residents should put less pressure on the cost of social benefits provided by Pennsylvania while increasing economic activity.

Several studies on happiness and well-being have shown that personal financial strength is only one ingredient. Good health, strong personal relationships, and keeping purpose and meaning in our lives are also important. Helping Pennsylvanians improve their financial security can improve the outlook for Pennsylvania while helping those individuals achieve better lives. We can focus on this achievable objective now and help advance the overall cause down the road.


Robert C. Jazwinski, CPA, PFS, CFP, is president and managing principal of JFS Wealth Advisors with offices throughout Pennsylvania in Camp Hill, Doylestown, Hermitage, Lancaster, Philadelphia, and Pittsburgh. He is a past president of the PICPA.


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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.
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