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Saving for retirement is not only difficult for many Americans, even getting access to an employer-sponsored retirement plan is nearly impossible. Some states are attempting to alleviate the situation by providing access to retirement plans for those whose employers do not sponsor a plan. A paper authored by Dan Doonan and Kelly Kenneally of the National Institute for Retirement Security (NIRS) finds Americans are generally supportive of state-sponsored, or state-facilitated retirement plans, no matter their generation or their political affiliation.
A surprising number of states have taken at least a small step in considering legislation to set up state-faciliated plans — 46 have considered or studied or enacted legislation, the authors say. Within the past few years, California, Illinois, Massachusetts, Oregon, and Washington have all launched programs.
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California's is an Auto-IRA, as are the Illinois and Oregon programs. The Massachusetts program is a voluntary open multiple employer plans, and the Washington program is a voluntary marketplace.
The NIRS brief also features a map of the U.S. showing the various stages states are in (or not in), regarding offering state-run retirement plans. Here are the main points the NIRS research found:
- 72% of Americans in the survey said state-facilitated retirement programs are "a good idea."
- 78% of millennials in the survey said such plans are something they would participate in, the highest of the four generations polled.
- Over 70% of those surveyed liked the features typical of such plans: portability; low fees; higher returns than, say, a bank savings account; and automatic enrollment.
The authors caution that "the state-facilitated programs are not considered a replacement for workplace retirement programs." Instead, besides serving as a sort of "retirement plan of last resort" for some workers, "[i]deally, the state-facilitated programs will nudge more employers to offer retirement programs to their employees."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
