Most Americans save for retirement through employer-provided plans, but over 30 million private sector workers lack access to a plan through their jobs. The availability of savings opportunities varies significantly by state. Since legislative efforts began in earnest in 2012, 80 percent of states have considered—or are considering—legislation to address gaps in access. Nine—California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, Oregon, Vermont, and Washington—have enacted legislation to implement programs for private sector workers. Four more— Minnesota, New Mexico, Utah, and Virginia—have initiated studies to examine the potential impact of various programs.
The efforts generally focus on three approaches:
- Automatic enrollment individual retirement accounts (auto-IRAs). A state-facilitated program administered by a private financial firm. Workers without employer plans are automatically enrolled in an IRA but can decline to participate. Because of the IRA structure, employers have relatively few responsibilities but cannot make contributions.
- A multiple employer plan (state MEP). A state-developed 401(k) plan available to eligible employers. The state, or an appointed authority, takes on some of the roles that would normally fall to employers, such as acting as the plan sponsor, fiduciary, and administrator.
- An online marketplace. A state-managed website listing plans administered by private firms that meet minimum standards. Offerings include plans sold directly to employers, such as 401(k)s, as well as those sold to workers, like IRAs.
Each is detailed in The Pew Charitable Trusts’ 2016 report “How States Are Working to Address the Retirement Savings Challenge.”
The map below highlights efforts from 2012 through mid-2017 and illustrates the continued and growing legislative focus on retirement security.
Source: The Pew Charitable Trusts