State Retirement Savings PlansState Retirement Savings Resource Center

State Retirement Savings Resource Center - Resources

Some 30 states are considering retirement savings plans for small business employees, and seven states are already implementing them. Learn the facts about plan design and see the variety of policies states are pursuing.

 

Legislation Enacted

 

California

 

California Secure Choice Retirement Savings Trust Act (SB 1234)

On September 29, 2016, Governor Jerry Brown signed into law the California Secure Choice Retirement Savings Trust Act. The law creates an auto-enrolled, supplemental retirement savings program for more than 7 million private sector workers in California who do not have access to a retirement savings plan through their job. Legislation enacted in 2012 established the California Secure Choice Retirement Savings Investment Board. The Board studied the issue and gave recommendations to the Legislature on March 28, 2016. Senator Pro Tempore Kevin De León introduced SB 1234 in February 2016 to authorize the state to implement the California Secure Choice Retirement Savings Program. On August 31, 2016 the California Senate passed the California Secure Choice Retirement Savings Act (SB 1234) by a vote of 27-12, after passing the California Assembly on August 25th by a vote of 52-26.

2-minute explainer video on California Secure Choice

 

California Secure Choice Retirement Savings Investment Board

This website is dedicated to promoting greater retirement savings for California’s private-sector workers who currently lack access to employer-sponsored retirement plans.

 

Responses to Request for Information

View the PDFs below for more information

 

American Council of Life Insurers

American Society of Pension Professionals and Actuaries

American Enterprise Institute

Automatic Data Processing Inc. (ADP)

California Chamber of Commerce

Capital One

Center for American Progress

Cheiron

Economic Policy Institute

Investment Company Institute

New America Foundation

New School

The Online 401(k)

PAi

Pension Benefit Guaranty Corporation

Pension Rights Center

PenServ

Prudential

Retirement Revolution

Saved Plus

Securities Industry and Financial Markets Association

TIAA-CREF

 

Connecticut

Connecticut Retirement Security Exchange (Public Act No. 16-29)

State of Connecticut Retirement Security Board

 

Illinois

Ryan Gruenfelder

AARP Illinois

 

Illinois Secure Choice Savings Program (Public Act 98-1150)

Illinois Secure Choice Board

 

Summary

 

Introduction:

The Illinois Secure Choice Savings Program was signed into law on January 5, 2015. The program is expected to provide access to employment-based retirement savings for 2 to 2.5 million private sector workers in Illinois. It will be implemented by June 1, 2017.

 

Plan Characteristics:

Employees who work for a qualifying or participating employer will automatically be enrolled into a Roth IRA with a default investment of 3% of an employee’s wages and a default life-cycle fund with a target date based on the age of the employee.  The individual accounts will be pooled together within investment options that are privately managed by an investment firm.

A 7 member board administers and manages the program. It comprises:

  • the Illinois State Treasurer, or his or her designee, who serves as Chair
  • the Illinois State Comptroller, or his or her designee
  • the Director of the Illinois Governor’s Office of Management and Budget, or his or her designee
  • Two public representatives with expertise in retirement savings plan administration or investment, or both, appointed by the Governor;
  • A representative of participating employers, appointed by the Governor
  • A representative of enrollees, appointed by the Governor.

 

The Board will also create the Secure Choice program fund and administrative fund. The fund’s expenses must not exceed 0.75% of the total trust balance. The board will also explore and establish investment options, select investment firms through an open bid process, establish investment options, create enrollment and educational packets and disclosure forms and ensure risk management and oversight.

 

Employer Requirements:

  • Qualifying employers must be for profit or not for profit entities that have been in business for at least two years. They must have had at least 25 employees in Illinois during the previous calendar year, and they cannot have offered a 401(k) or pensions to their employees during the preceding two years. Small employers that have fewer than 25 employees or that have been in business for less than two years may participate in the program voluntarily. Businesses already offering a retirement plan to their workers cannot participate. Employers will have 9 months to ensure that all employees have been automatically enrolled or have opted out once the Secure Choice Savings Program is open for enrollment.
  • The board will distribute information packets about the plan to employers; employers will subsequently distribute the information packets to their employees. Unless employees opt out, employers will set up payroll deductions to fund all existing employees’ chosen retirement accounts once the program is established. After the program is established, employers will set up payroll deductions for newly hired employees. Employers are not allowed to contribute to their employees’ accounts or take any role in managing the accounts; they have no fiduciary responsibilities. 
  • At any time, employers can set up a different type of employer-sponsored retirement plan, such as a defined benefit plan or a 401(k), instead of participating in a payroll deposit retirement savings arrangement via the Secure Choice Savings Program.

 

Emplopyee Options:

Employees can choose to modify their investment fund choice and investment level or opt-out at any time. Employees must be 18 years of age or older to participate.

 

Sponsors

Daniel Biss, Democrat, District 9, Senate; Barbara Flynn Currie, Democrat, District 25, House of Representatives

 

Maryland

Maryland Small Business Retirement Savings and Program Trust (HB 1378/SB 1007)

 

New Jersey

New Jersey Small Business Retirement Marketplace Act (Chapter 298)

 

Oregon

Joyce DeMonnin

AARP Oregon

 

Retirement Savings Plan (HB 2960)

 

Summary

 

Introduction:

The Oregon Retirement Savings Plan was signed into law on June 23, 2015.  It created a retirement savings board to develop a defined contribution retirement plan for employed Oregonians whose employers do not offer retirement plans. The board will conduct a market analysis to determine the feasibility of the plan, obtain legal advice on the applicability of the Employee Retirement Income Security Act, and determine if employers who are not required to participate in the plan may make the plan available to their employees; all findings must be reported to the state Legislature on or before December 31, 2016. The board will also adopt rules for administration and direct investments of the ORSP participants’ retirement and provide or contract annual status reports. The program is expected to provide up to 642,000 Oregonians access to retirement savings. The plan will be implemented by July 1, 2017.

The governor will appoint the following members to the board: a representative of employers, a representative with experience in the field of investments, a representative of an association representing employees and a retired public member. Appointments are submitted to the Oregon Senate for approval and serve four-year terms without compensation. The Board will create the Oregon Retirement Savings Plan Administrative fund, which will be separate and distinct from the General Fund. In 2015 the state legislature appropriated $743,541 to be expended for the Oregon Retirement Savings Board’s initial costs. Interest earned by the Oregon Retirement Savings Plan shall be credited to the fund, and the board may use fund to pay for its administrative costs and expenses.

 

Plan Characteristics:

Employees will automatically be enrolled into a plan that is pooled and professionally managed. The board will set default contribution and escalation rates and will pool investments from accounts established under the plan. Employee contributions will be deposited directly with the investment administrator, with separate records and accounting for each plan. Employers do not contribute to the plan and the state will not assume liability for investment returns. Account owners maintain their accounts if they changes employers.

 

Employer Requirements:

Enrollment in the plan may be as simple as a one-page form that is filled out in addition to other required paperwork for all newly hired employees. Whenever possible, existing employer and public infrastructures will be used to facilitate contributions to the plan and help to simplify and to clarify rules and procedures for employers.

 

Employee Options:

If an employer does not offer a retirement savings program, its employees will be eligible to participate. The board will investigate whether individuals who are not automatically enrolled may opt into the plan and make contributions to an account.  Employees modify their investment choices, change the percentage of the wages they invest, or opt out of the program at any time.

 

Sponsors

Jules Bailey, Democrat, (Formerly) District 42, (Formerly) House of Representatives; Lee Beyer, Democrat, District 6, Senate; Diane Rosenbaum, Democrat, District 21, Portland

 

Report and Recommendations of the Oregon Retirement Savings Task Force

Oregon Retirement Savings Task Force — September 2014

This report outlines a national retirement crisis and recommends a state-level retirement security program to the legislature.

 

Washington

Cathleen MacCaul

AARP Washington

 

Washington State Small Business Retirement Marketplace (SB 5826)

 

Summary

 

Introduction

Washington’s Small Business Retirement Marketplace (Marketplace) is a virtual marketplace where qualified financial services firms offer low-cost retirement savings plans to businesses with less than 100 employees, including sole proprietors and self-employed individuals. The Marketplace was established effective July 24, 2015 and is expected to be fully operational in early 2017. The gateway for financial services providers and their products to participate in the Marketplace is an administrative process conducted by the Washington Department of Commerce (Commerce) in coordination with the Department of Financial Institutions (DFI) and Office of Insurance Commissioner (OIC). Commerce will contract with a private sector contractor to design and operate the virtual Marketplace in accordance with its verification and approval requirements.

 

Plan Characteristics

Private financial services firms and insurance carriers will bring a variety of plans and investment options to the Marketplace. In order for the marketplace to operate, there must be at least two financial services firms offering approved plans on the marketplace. The marketplace must include a diverse array of private retirement plan options that are available to employers on a voluntary basis, including life insurance plans that are designed for retirement purposes and at least two types of plans for eligible employer participation: (a) A SIMPLE IRA-type plan that provides for employer contributions to participating enrollee accounts; and (b) a payroll deduction individual retirement account type plan or workplace-based individual retirement accounts open to all workers in which the employer does not contribute to the employees' account. The marketplace will also offer direct links to myRA, a new retirement savings account from the US Department of the Treasury. The financial services firms participating in the marketplace must offer a minimum of two product options: (a) A target date or other similar fund, with asset allocations and maturities designed to coincide with the expected date of retirement and (b) a balanced fund. Accounts are portable; when employees switch jobs, they can take their plans with them.

The Washington Department of Commerce will approve firms and retirement plans for inclusion on the Marketplace provided that the meet all application and verification requirements. There is an annual renewal process for all firms and products, as well as an amendment process for any firm or plan changes that happen between annual renewals.

 

Employer Requirements

Participation in the Marketplace and enrollment in an approved plan is voluntary for employers. Enrollment in an approved plan is not an entitlement.

 

Employee Options

Participation in the Marketplace and enrollment in an approved plan is voluntary for employees.

 

Sponsors

Mark Mullet, Democrat, Legislative District 5, Senate; Don Benton, Republican, Legislative District 17, Senate

 

Legislation Introduced

 

Arizona

Arizona Secure Choice Retirement Savings Trust Act (SB1332)

 

Summary

Plan Characteristics:The state will establish the Secure Choice Savings Program, an automatic IRA administered by a state board. The board has the power to make and enter contracts that are needed to administer the fund. The default contribution level is 3% of wages. The board has the power to change the default contribution rate but it cannot be less than 2% or exceed 4%. The board will publish an annual financial report which a different entity will audit. The state is not responsible for paying the beneficiaries of the program; private insurance companies are liable. Any contributions that the employers and employees make to the trust will be used solely for paying benefits to the participants of the program, the actual cost of running the program and making investments for the benefit of the program.

 

Employer Requirements:

Under the Secure Choice Savings Program, private sector employers with 5+ employees that have been in business for at least two years must offer their employees a way to save for retirement via payroll deduction, so the program includes one or more payroll deposit IRA arrangements. After the board opens the program for enrollment, employers with more than 100 employees that do not have a way for their employees to save will need to enroll in such a payroll deposit savings arrangement within the first three months. After six months, employers with less than 50 employees will also need to enroll in a deposit savings arrangement. After nine months, all employers with more than five employees must participate as well. Employers always retain the right to set up an employer sponsored retirement plan. Employers are not responsible for an employee’s decision to participate in the program, they are not a fiduciary, and they are not responsible for the administration of the program; however, the employers can voluntarily contribute to their employees’ investments.

 

Employee Options:

Eligible employees can only opt in during the employer’s designated open enrollment period, and any eligible employee can opt out during the open enrollment period or end their participation at any time.

 

Sponsors

Martin Quezada, Democrat, District 29, Senate; Mark A. Cardenas, Democrat, District 19, House of Representatives; Ceci Velasquez, Democrat, District 29, House of Representatives; Charlene R. Fernandez, Democrat, District 4, House of Representatives

 

Colorado

Colorado Secure Savings Plan (HB 1403)

Sponsors: Representatives Brittany Pettersen and John Buckner, House of Representatives

Nancy Todd and Kerry Donovan, Senate

 

Georgia

Georgia Work and Save Study Committee (SR736)

 

Summary

The president of the Senate will appoint five members of the Senate to the Work and Save committee, which will conduct a study on retirement security in Georgia to determine the best course of action or legislation deemed necessary. Funds necessary to carry out provisions of this resolution will come from funds appropriated by the Senate. The study will include the following: the number and type of employees in the state that are not covered by an employer sponsored retirement plan, the plans being offered by employers, an analysis to determine how the state can encourage employees to prepare for retirement, the feasibility of creating a public-private partnership work and save plan in Georgia to residents without a plan, the best model for such a plan, the criteria for participation by employers and employees, the long term financial impact to the state’s social safety net programs and actions that the state can take to encourage participation by employers and employees in employer sponsored retirement savings plans.

 

Sponsors

Charlie Bethel, Republican, District 54, Senate; John Albers, Republican, District 56, Senate; P. K. Martin IV, Republican, District 9, Senate;  Tyler Harper, Republican, District 7, Senate; Burt Jones, Republican, District 25, Senate; David Shafer, Republican, District 48, Senate

 

Iowa

Iowa Savings Plan Trust (SSB 3164/HR 2417)

 

Indiana

Hoosier Employee Retirement Options Portal (HB1349)

 

Summary

This bill creates a Portal Board with seven members. The board has the power to contract private sector entities to design, implement and operate a portal that will connect eligible employers and their employees with approved retirement plans.  The board can use private funding sources to pay for any expenses associated with starting up the portal and the HERO portal fund will be used to pay for the expenses of the portal. The board has until June 30th, 2017 to design a plan for the operation of the portal and to propose standards for the retirement plans that will be available in the portal. Any financial services firm participating in the portal must at least offer a target date fund and a balanced fund, and they must also display the historical performance on every investment; the default contribution level is 3% of wages and the default investment is a target date fund.  The financial services firm must also allow a rollover feature that would permit an employee to transfer their account to another plan if they chose to terminate their previous plan. Participation is voluntary for employers with 100 or fewer employees. Employees may opt out, select investments, adjust their contribution levels, change their investment option, or terminate their participation at any time.

 

Sponsors

Sean Eberhart, Republican, District 57, House of Representatives; Matthew Lehman, Republican, District 79, House of Representatives

 

Kentucky

Kentucky Retirement Account Program (HB 261)                     

 

Louisiana

Louisiana Secure Choice Savings Plan (SB53)

 

Summary

The Louisiana Secure Choice board will manage the funds of the plan and select 3 or more companies to manage the pool of plan assets. Private Sector Employers with twenty-five or more employees that have been in business for at 2 least years must offer their employees a way to save for retirement via payroll deduction; employers with less than twenty-five employees or employers that have been in business less than two years may participate voluntarily. Employers will choose a provider for their employees and the default contribution level is 3% of wages. The contribution rate will increase by one percent each year to a maximum of either fifteen percent or one hundred dollars per paycheck; the maximum annual payroll contribution is $5,500. Employers can contribute up to $5,000 per year to each employee’s plan, but they are not a fiduciary and they are not responsible for the selection, management or administration of the plan. An employee may opt out, select and later adjust their contribution level, select and later change their investment option, or terminate participation at any time.

 

Sponsors

Troy Brown, Democrat, District 2, Senate

 

Maine

Maine Small Business Marketplace (LD 1318)

 

Summary

 

Introduction:

The state will establish the Maine Small Business Retirement Marketplace a state-facilitated automatic IRA under the office of the State treasurer. The default investment option will be selected by the treasurer and the default contribution level is 3% of wages. The treasurer has the power to make and enter contracts for the administration of the marketplace and fund, but the state is not liable for the payment of any retirement savings benefits accrued by the programs participants.  Funds may be invested by the treasurer or private investment managers that are selected by the treasurer. The treasurer will use funds deposited into an enterprise fund to pay for administration expenses and will also facilitate education and outreach about the program to employers and employees. Before the program opens for enrollment, the marketplace will create and distribute information packets for both the employers and employees that will consist of background information on the program, how to navigate the program’s features, disclosures for employees and information about any publicly accessible website related to the program; employers will give employees these packets at the time of hiring.  Private sector employers with more than 10 employees and which have been in business for at least 2 years must offer their employees a way to save for retirement via payroll deduction; employers retain the right to establish their own retirement plans. Participating employers are not liable for an employee’s decisions when it comes to participating or selecting options; they are not a fiduciary. Financial liability for the payment of retirement savings benefits rests solely on the entities contracted by the board. An employee may opt out, select and later adjust their contribution level, change their investment option, and terminate participation at any time.

 

Plan Characteristics:

The state will establish the Maine Small Business Retirement Marketplace, a state-facilitated automatic IRA under the office of the State treasurer. The default investment option will be selected by the treasurer and the default contribution level is 3% of wages. The treasurer has the power to make and enter contracts for the administration of the marketplace and fund, but the state is not liable for the payment of any retirement savings benefits accrued by the programs participants.  Funds may be invested by the treasurer or private investment managers that are selected by the treasurer. The treasurer will use funds deposited into an enterprise fund to pay for administration expenses and will also facilitate education and outreach about the program to employers and employees. Before the program opens for enrollment, the marketplace will create and distribute information packets for both the employers and employees that will consist of background information on the program, how to navigate the program’s features, disclosures for employees and information about any publicly accessible website related to the program; employers will give employees these packets at the time of hiring. 

 

Employer Requirements:

Private sector employers with more than 10 employees and which have been in business for at least 2 years must offer their employees a way to save for retirement via payroll deduction; employers retain the right to establish their own retirement plans. Participating employers are not liable for an employee’s decisions when it comes to participating or selecting options; they are not a fiduciary. Financial liability for the payment of retirement savings benefits rests solely on the entities contracted by the board.

 

Employee Options:

An employee may opt out, select and later adjust their contribution level, change their investment option, and terminate participation at any time.

 

Sponsors

Henry E. M. Beck, Democrat, District 110, House of Representatives

 

Michigan

Retirement Savings Program Act (HB 5776)

Sponsors: Scott Dianda, Robert Wittenberg, Jeff Irwin, Marilyn Lane, and Winnie Brinks, House of Representatives

 

Minnesota

Report from the Minnesota Management and Budget Office (HF 2536)

 

New Hampshire

Statutory Commission on Retirement Security (HB 239)

 

New York

New York State Secure Choice Savings Program (A 8332/S 6045)

 

Summary

 

Plan Characteristics:

The state will establish the Secure Choice Savings Program, an automatic IRA administered by a state board; the default investment will be a life-cycle fund with a target date and the default contribution is 3% of wages. The board can also establish one or all of the following investment options: a conservative principal protection fund, a growth fund, a secure return fund and an annuity fund.  The board has the power to make and enter contracts and must submit a performance review of investment vendors every four years. The board will also facilitate education and outreach about the program to employers and employees.

 

Employer Requirements:

Under this program, private sector employers with more than 25 employees that have been in business for at least two years must offer their employees a way to save for retirement via payroll deduction; any employer with one or both of these attributes are eligible to voluntarily participate in the automatic IRA program. The state, board and employers are not liable for the payment of any retirement savings benefits accrued by the program’s participants.

 

Employee Options:

Employees may opt not to participate, select or change their investment options, or terminate participation at any time. Participating employers are not liable for an employee’s decisions when it comes to participating or selecting options; they are not a fiduciary. All financial liability will be absorbed by the insurer entities that the board contracts. 

 

Sponsors

Diane J. Savino, Democrat, District 23, Senate

 

Nebraska

Interim study to provide an examination of the availability and adequacy of retirement savings of Nebraska private sector workers (LR 344)

 

North Carolina

Work and Save Plan Study (HB 515)

 

North Dakota

Save Toward a Retirement Today (HB 1200)

 

Ohio

Ohio Secure Choice Retirement Savings Program (SB 199)

 

Pennsylvania

Resolution to conduct a study (HR 220)

 

Rhode Island

Private Employer IRA Program (H 7219)

 

Summary

 

Plan Characteristics

The Automatic Enrollment Payroll Deduction IRA program will be administered by the State’s Department of Labor and Training. The default investment option is a lifestyle balanced qualified default investment alternative and the default contribution level is 3% of wages earned during payroll periods; employees may opt to not participate, select and later adjust their contribution level, select and later change their investment options, and terminate participation at any time. The Department of Labor and Training has the power to make and enter contracts and its budget will absorb the administration fees; it will also facilitate education and outreach about the program to employers and employees. Before the program opens for enrollment, the department will create and distribute information packets for both the employers and employees that will consist of background information on the program, how to navigate the program’s features, and disclosures for employees and information of any internet website; the state investment commission will only create and maintain a website dedicated to the program if there is enough interest by the private sector providers. The state is not liable for the payment of any retirement savings benefits accrued by the program’s participants.

 

Employer Requirements:

Employers have 6 months to establish an automatic payroll deposit retirement savings arrangement and employers with less than 4 employees that have been in business for two or more years can voluntarily participate in the program. Employers will give employees the information packet at the time of hiring Private sector employers with more than 5 employees that have been in business for at least 2 years must offer their employees a way to save for retirement via payroll; they do not need to offer the automatic enrollment payroll deduction IRA program if they set up some other type of employer-sponsored retirement plan. Participating employers are not liable for an employee’s decisions when it comes to participating or selecting options; they are not a fiduciary.

 

Employee Options:

Employees are eligible as long as they do not work for the state government, are not part of a collective bargaining agreement and are over the age of 18 before the beginning of the calendar year.

 

Sponsors

John Edwards, Democrat, District 70, House of Representatives; Kenneth Marshall, Democrat, District 68, House of Representatives; Joseph Shekarchi, Democrat, District 23, House of Representatives; Edith Ajello, Democrat, District 1, House of Representatives; Joseph Solomon, Democrat, District 22, House of Representatives

 

South Carolina

Work and Save Task Force (Amendment to H 5001)

 

Utah

Utah Voluntary Employee Retirement Accounts Program (SB 133)

 

Summary

 

Plan Characteristics:

The state treasurer will contract one or more providers to create a voluntary IRA arrangement for private sector employers with less than 100 employees. The state will contract one or more providers to develop educational information in order to educate the public about the program, but the state will not be liable for gains and losses.

 

Employer Requirements:

§  If an employer does not offer a retirement savings program, it may choose to participate. Every year, the employer will tell its employees whether it is participating in the IRA arrangement; the employer will also tell its employees how they can participate-regardless of the employer’s participation status.

 

Employee Options:

Employees working for a non-participating employer may still elect to participate, but will have to make their own deposits.

 

Sponsors

Todd Weiler, Republican, District 23, Senate; Dixon M. Pitcher, Republican, District 10, House of Representatives

 

Vermont

Continue the work of the Public Retirement Plan Study Committee (Act 157)

 

Virginia

Virginia Retirement Systems Work Group (HB 1998)

 

West Virginia

Study Small Business Group Retirement Savings Program (SCR 58)

 

Wisconsin

Private Retirement Security Plan (SB 45/AB 70)

 

Summary

Plan Characteristics:

This bill creates a Wisconsin Private Retirement Security Board which will conduct a study to help determine the feasibility of creating a private retirement security plan in Wisconsin. The governor and the members of the joint committee will submit their report to the legislature eighteen months after the release of this statement. The report will summarize the feasibility study, notably the testimony received at public hearings and the design of the plan; it will also include the estimates of the initial costs of establishment and administration of the plan and the time it will take to make the plan viable. The board will implement the plan in accordance to the legislation and can charge fees to the participants in the plan to cover administration costs, to recover investment costs and to repay the general fund.

 

Employer Requirements: To be announced.

Employee Options: To be announced.

 

 

Sponsors

Dave Hansen, Democrat, District 30, Senate; Nikiya Harris Dodd, Democrat, District 6, Senate; Janis A. Ringhard, Democrat, District 15, Senate; Mark Miller, Democrat, District 16, Senate; Chris Larson, Democrat, District 7, Senate; Kathleen Vinehout, Democrat, District 31, Senate; Robert W. Wirch, Democrat, District 22, Senate; Fred A. Risser, Democrat, District 26, Senate

 

Search Public Policy

Find the content you are looking for by entering in search terms below.

Susan's Blog

Senior Vice President Susan Reinhard blogs about recent reports and topics such as caregiving and nursing. Read

 

Livability Index Widget

Livability Index

How livable is your community?