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AARP to Push for Retirement Savings Legislation in 2027
A legislative proposal would create a public-private retirement savings option to help workers who don’t have access to such a plan through their jobs
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Amanda Abney didn’t think much about saving for retirement when she first embarked on her career. But now, at age 51, the manager of the Greene County Humane Society worries about it and wishes that her current and previous employers had offered retirement savings plans.
“It would be beneficial, especially to the younger crew, to understand how vitally important it is ... so you’ve got that cushion,” Abney says.
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Abney also thinks that offering a retirement savings plan would make the Humane Society — located in Linton, in the southwestern part of the state — a more attractive place to work and reduce employee turnover.
To encourage more Hoosiers to prepare for their financial futures, AARP Indiana is urging state lawmakers during the 2027 legislative session to pass a bill that would create a public-private retirement savings option.
Businesses that don’t already offer a retirement plan and have five employees or more would automatically enroll their workers in the program, with each employee contributing 5 percent of their paychecks to an individual retirement account. Individuals would be allowed to opt out or adjust their contribution amount.
“Helping more individuals save for retirement would give them a financial cushion to draw on later in life,” says Ambre Marr, AARP Indiana’s legislative director. “Social Security is an important foundation, but for most people, it often isn’t enough on its own.”
In 2022, nearly 1.1 million Indiana private-sector employees worked at companies that did not offer either a traditional pension or a retirement savings plan, AARP research shows.
Having such an option would also help reduce Hoosiers’ reliance on state public assistance programs, which state lawmakers have been especially concerned about lately, Marr notes. If retirement savings stay at low levels, the state may end up spending nearly $6.9 billion more on assistance programs through 2040, according to the Pew Research Center, a nonpartisan think tank.
Looking at reports of the large number of Indiana residents who are not saving for retirement convinced state Sen. Vaneta Becker (R-Evansville) to join the years-long legislative effort to establish a state-run retirement savings program in 2025.
“You have to encourage people to save for retirement, and it’s been hard, especially in a time with high energy costs and high food prices,” says Becker, who is one of the authors of the most recent bill.
Survey Shows Support for Retirement Savings Options
Nationwide, as of October, 22 states have enacted retirement savings programs — 17 of which are auto-IRAs like what is being proposed in Indiana, according to the Georgetown University Center for Retirement Initiatives.
AARP recently commissioned a survey of Indiana small business owners and managers about retirement savings. Most (78 percent) of the 551 participants said more should be done to encourage Hoosiers to save for retirement, and 60 percent worry their employees did not have enough savings to cover expenses when they retire. The majority (85 percent) support a retirement savings option they could offer employees.
The National Federation of Independent Business, a nonpartisan membership organization of small and independent businesses, has opposed the legislation, saying it would impose financial and administrative burdens on small businesses. However, Becker says such a program would not be a strain on employers because they would simply set up retirement contributions as a payroll deduction like they do for taxes.
Becker is also not concerned that the program would take much from the state budget. It would be overseen by a board within the Office of the Treasurer, which Becker says might require one additional employee at most. The board would have governor-appointed members with expertise in investing and banking.
Still, Becker says, there is a surplus in the state budget this year, so “it’s a good time to try to initiate things such as this.”
The Evansville Regional Economic Partnership, an economic development organization in southwest Indiana, has been advocating for a retirement savings program when it talks with lawmakers, says Justin Groenert, its chief strategy officer.
“Access to retirement accounts ... is one of those critical programs that employers can offer their employees,” Groenert says. “Having some sort of a safety net aside from Social Security, Medicare and Medicaid is awfully important.”
To learn more, go to aarp.org/INSavesSurvey.
More AARP Financial Resources
- AARP Retirement Calculator Determine if you are saving enough to retire when — and how — you want.
- AARP Social Security Calculator Figure out when to claim and how to maximize your Social Security benefits.
- AARP Tax Tools Explore resources to help you calculate and prepare taxes.
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