Connecticut Local Politics

This is kind of an interesting proposal–and if enacted, it would be the first in the nation. From a Senate Dems release:

State Senate President Donald E. Williams, Jr. (D-Brooklyn) joined State Comptroller Nancy Wyman, Senate Majority Leader Martin Looney (D-New Haven), State Senator Gary LeBeau (D-East Hartford), a small business owner, and a member of AARP at a news conference today to announce a proposal to create a state-administered deferred compensation plan—including a 401(k) plan—to small businesses, self-employed individuals, and not-for-profits. [...]

Currently, about 75% of Connecticut’s small businesses (those with fewer than 100 employees) do not offer retirement plans. One significant reason for this problem is that due to their size, small businesses cannot achieve the economies of scale that make 401(k) programs useful to their employees; fees are too high to allow meaningful growth for retirement.
[...]
Our Proposal: Authorize the Comptroller’s Office to submit a Request for Proposals (RFP) with the goal of establishing a state-administered deferred compensation plan—which would include a 401(k) plan — open to any small employers, including those who wish to participate by contributing on behalf of employees who participate. The plan would be initiated and administered by the Comptroller’s Office.

Cost: Start-up costs are minimal and could be recouped through administrative fees (in the same way that plans on the market recoup fees) and repaid to the General Fund over the first few years. The net cost to the state would therefore be zero.

This seems on the surface of it to be a plan that makes sense for small businesses, and it could actually make Connecticut more competitive. But I’m wondering what the rest of you think.