By Robert C. Jazwinski, CPA, PFS, CFP

Pennsylvania’s Keystone Saves Program, introduced in the General Assembly in early 2023, is modeled after recommendations made by the Private Sector Retirement Security Task Force convened by former Pennsylvania Treasurer Joe Torsella in 2017 and 2018. The recommendations of the task force have been embraced by current Pennsylvania Treasurer Stacy Garrity, and the bill introduced last year was bipartisan.

I had the honor of serving on the Private Sector Retirement Security Task Force, and in my opinion the proposed legislation provides a powerful framework to address many significant social and economic problems.

Testimony given during task force hearings indicated that over 2 million Pennsylvanians have no access to an employer-provided retirement plan. This is the audience that the Keystone Saves Program attempts to assist by offering a low-cost, effective way for employees to build financial and retirement security.

The voluntary retirement savings plan would include all features of a well-designed employer retirement plan. While voluntary, it includes auto-enrollment and compensation deferral that employees can opt out of if they choose. For employers, there would be minimal costs to the withholding and remitting of contributions that are withheld from employees’ wages.

With low costs and a full menu of investment options, employees would be able to participate in the long-term returns of the stock market along with other more conservative investments. Results from the Bridges to Wealth program – sponsored by the Netter Center for Community Partnerships of the University of Pennsylvania – show that many people in poverty will save for the long term, but generally not in the types of investments that allow them to build wealth. Part of the benefit of Keystone Saves is that it provides a basic financial education and a low-cost comprehensive framework for investing in the future.

Because many citizens don’t financially prepare for retirement, more costs are incurred for the state support of people in poverty and less revenue is generated for Pennsylvania. Demographic shifts are on track to cause a significant increase in the elderly and retired over the next 15 years. A recent fact sheet from The Pew Charitable Trusts indicates that the lack of savings will lead to $14.6 billion in increased state spending and $3.2 billion in lost tax revenue over 15 years. Keystone Saves, by assisting Pennsylvanians who don’t have good options to build financial and retirement security, could help all of us with lower long-term social costs through an increase in wealth among those who benefit from the program.

An essential element of building wealth is being able to spend less than you make. Those in elevated income ranges are able to spend substantially less than they earn each year, adding to their net worth over time. Those at lower income ranges, however, are not easily able to do that, so they cannot build substantial wealth over time. Learning the basics of investments in the stock market for long-term returns and wealth accumulation, and committing periodic sums to that objective, will have a powerful impact on financial and retirement security.

I believe that the Keystone Saves Program will benefit all the people of the Commonwealth of Pennsylvania over the long term. This proposal deserves the support of all to help Pennsylvanians achieve better financial futures.

Robert C. Jazwinski, CPA, PFS, CFP, is co-chief executive officer and partner with JFS Wealth Advisors in Hermitage, Pa. He can be reached at rjazwinski@jfswa.com.

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^{Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of the PICPA's officers or members. The information contained herein does not constitute accounting, legal, or professional advice. For actionable advice, you must engage or consult with a qualified professional.}