Pew Supports Bill Designed to Help Rhode Island Workers Access a Secure Retirement

WASHINGTON—The Pew Charitable Trusts expressed support today for a bill newly introduced in the Rhode Island Legislature, saying the measure would help some 172,000 workers secure a stronger financial future.

The Rhode Island Secure Choice Retirement Savings Program Act (HB 5417, S 89) would establish an automated savings program that would automatically enroll employees who lack access to a savings plan at work in an individual retirement account (IRA) into which a portion of their wages would be set aside every pay period.

Under the legislation, workers would be able to save through a standard rate set by the program or by customizing their savings to meet their needs, including changing their contributions or investments, or opting out entirely, at any time; small businesses registered with the program would be able to seamlessly enroll their employees. The program would be a public-private partnership, professionally managed by a private financial services firm with oversight by the state. 

Twelve states have passed similar laws, which are variously known as “auto-IRA,” “work and save,” and “secure choice”: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, New Jersey, New York, Oregon, and Virginia. Although some of the state programs are still in their infancy, more than 600,000 savers in Oregon, Illinois, California, and Connecticut have already amassed nearly $650 million in assets since 2017.

Desiree Hung, an officer with The Pew Charitable Trusts’ retirement savings project, issued the following statement:

“Americans want to build a secure retirement. Yet more than half of private sector workers in the U.S. work for an employer that’s unable to offer retirement benefits.

“Research shows that workers are 15 times more likely to save for retirement if they can use a payroll deduction. The Rhode Island Secure Choice Retirement Savings Program Act offers exactly that: It’s an innovative and practical solution to the challenges workers in Rhode Island face in this tightening economy.

“The act will also allow small businesses to compete with larger businesses to recruit and retain workers. And when workers are financially secure, they’re less reliant on taxpayer-funded government programs, better able to withstand financial shocks, and more likely to save for their future.”