In the absence of federal action, state initiatives to improve retirement security for uncovered workers have rapidly gained steam over the past five years. Indeed, more than half of states are either implementing programs, actively introducing legislation, or exploring options (see Figure 1).
States Implementing Programs
The programs that states are currently implementing can be categorized based on the type of retirement accounts involved and on whether they include a mandate that requires employers to auto-enroll workers who are not covered by a retirement plan at work (see Table 1).
So far, Auto-IRAs have been the most popular option, with six states in the process of implementing mandatory auto-IRAs and another two that have passed legislation establishing voluntary ones.
Another two states are setting up multiple employer 401(k) plans, and one has implemented a retirement plan marketplace.
States Introducing Legislation
As of June 30, 2020, nine states have active bills that would establish a state-sponsored retirement saving program for uncovered workers (see Table 2).
States Exploring Options
At least five states are currently studying options to close the coverage gap. For an example of the types of reports prepared for this purpose, see Colorado’s recently completed study and Table 3.
Issues in Brief
Auto-IRA Rollout Gradually Speeding Up (March 2020)
Participation and Pre-Retirement Withdrawals in Oregon’s Auto-IRA (November 2019)
How Have Workers Responded to Oregon’s Auto-IRA (December 2018)
State Auto-IRA Programs: The Keys to Financial Self-Sufficiency (December 2016)
Could the Saver’s Credit Enhance State Coverage Initiatives? (April 2016)
State Savings Initiatives: Lessons from California and Connecticut (March 2016)
State Initiatives to Cover Uncovered Private Sector Workers (March 2016)
CRR Reports for States
Recommendations to Increase Retirement Savings in Colorado (February 2020)
Market Analysis and Feasibility Study for Oregon (July-August 2016)
Report on the Design of Connecticut’s Retirement Security Program (December 2015)