The state's leading business group is firing a warning shot about new legislation that would require Connecticut companies not providing retirement benefits to direct employees toward a state-sponsored program.

The Connecticut Business & Industry Association said Friday in a legislative update that the bill, as yet unfiled, would affect thousands of Connecticut businesses that don't provide their own 401(k), IRA or pension plans. The bill, expected to be similar to one that failed to win legislative approval last year, has been raised in the General Assembly's Labor Committee.

"Proposals like these are reasons why Connecticut often scores low in national rankings for the costs of doing business, state fiscal condition and overall business-friendliness," according to the CBIA. "In a state known for its strong financial services industry and robust marketplace for retirement savings plans that anyone can access, mandating businesses to use a state-run program makes little sense."

But the bill, which last year was sponsored by state Rep. Kevin Ryan, D-Montville, among other legislators, had strong support when it was last submitted, including the backing of State Comptroller Kevin Lembo and the AARP. It was intended to encourage low-income workers to establish savings plans for retirement.

Karen Friedman of the Washington-based Pension Rights Center also testified in favor of the bill, citing statistics that show only one in five workers is covered by a traditional pension plan compared to one in two back in the 1980s.

"Connecticut is part of a new movement exploring how states can play an important role in expanding coverage for private sector workers," she said.

Business interests, particularly in the insurance industry, opposed the changes, saying a state-run system would be less efficient and might compete with private options, reducing employment.

l.howard@theday.com