By now, almost every state has at least considered legislation that would establish a state-run retirement plan, and this year alone almost half the state legislatures have considered legislation about one. A panel of key players in the plans established in some states offer an insider’s look.
Panelists in “Meet the 2023 New State-Facilitated Retirement Savings Programs,” a webinar presented by the Georgetown Center for Retirement Initiatives (CRI), included:
- Sen. Dallas Harris, sponsor of the legislation that created the Nevada Employee Savings Trust;
- Rep. Michael O’Donnell, sponsor of the bill that created Missouri’s ShowMe Retirement Savings Program;
- Sen. Sandra Pappas, sponsor of the legislation creating the Minnesota Secure Savings Retirement Program;
- Michael Pieciak, Vermont State Treasurer; and
- Dave Young, Colorado State Treasurer.
The moderator was Angela Antonelli, Research Professor and Executive Director, Center for Retirement Initiatives, Georgetown University’s McCourt School of Public Policy.
Setting the Table
There is a savings gap, said Antonelli, because of the burdens of running one.
States have been stepping into that gap. And by June 2023, state legislatures in three more states have passed measures that would create a state-run plan that provides retirement plan coverage for private-sector employees whose employers have not. The programs these legislatures have approved include auto-IRAs in Minnesota and Nevada, as well as a voluntary multiple employer plan (MEP) in Missouri. In addition, noted Antonelli, one existing program—Vermont—changed its program from a voluntary MEP to an auto-IRA program. 
Of the existing programs, those in California, Colorado, Connecticut, Illinois, Maryland, Massachusetts, Oregon, and Washington are open to all eligible employers and employees.
And, noted Antonelli, four of them—CalSavers, MyCTSavings, Illinois Secure Choice, and OregonSaves—have cumulative assets approaching $1 billion and account for the lion’s share of the assets collectively accumulated by all such programs.
Up Close and Personal
Panelists offered some insights on their experiences in their respective states.
Minnesota. Pappas said that their “main hope is that we have high participation rates and that we help people save.” And Sen. Pappas cited the support of the American Retirement Association in getting the measure over the finish line.
Nevada. Harris said that the support of the Chamber of Commerce had helped “get them over the line” in getting the bill establishing the new state program passed and enacted. “For me, this was a very personal bill,” she said of the legislation creating the Nevada program. Harris told attendees that she knew the benefit of saving through such vehicles.
Vermont. “Seeing the success of other states” was helpful in getting Vermont’s program launched, said Pieciak. One question they wrestled with, he said, was how the program would benefit those who will be retiring soon. Pieciak said they concluded that it still would help those who are near retirement because it could help increase their Social Security benefit payments by delaying the start of collecting them. “This can be a significant lifetime impact,” he said.
Missouri. O’Donnell said that if the state had not enacted the measure creating Missouri’s program, it could cost the state $20 billion to support those whom the program benefits.
Colorado. Young said that they found it helpful in rolling out their program to have people employed to do outreach and talk to chambers of commerce and employees. He added that they learned from having studied the way Oregon rolled out OregonSaves that it is better to not have a long roll-out period.
Young also discussed his state’s cooperation with other states. Colorado is partnering with neighboring New Mexico in offering programs, and he said that he also testified in Nevada to provide “any information he could” as that state’s government considered legislation to establish a program.
The Benefits
“Does saving small amounts add up? Absolutely!” said Antonelli, adding that even if one sets aside a small amount, it can make a difference. 
Early and often. The Georgetown Center argued that “starting to save early through simple, automatic and consistent contributions,” even employees with average salaries can accumulate substantial savings that not only will increase retirement income, but also will supplement their Social Security benefits or better enable them to defer starting to receive their Social Security benefits—and therefore boost the size of those benefits payments.
Can you afford to do nothing? “The cost of doing nothing is simply too high for policymakers to ignore,” said Antonelli; Young gave some specifics in that regard, noting that Colorado would spend $18 billion to pay for safety net services if it had not put its program in place.
Invaluable. “The way the system is structured, it’s on us,” said Harris, continuing, “These types of programs are invaluable. The benefits are incalculable.”
Looking Ahead
What’s ahead for state retirement plan coverage that fills the void for private-sector employees whose employers don’t? The Georgetown Center’s crystal ball says to look for:
- more new programs;
- continued effort to build bridges and increase bipartisan support for such programs;
- partnerships between states;
- application of lessons learned to promote best practices and sharpen performance; and
- continued effort to monitor progress among private providers to help close the access gap.
Persistence and patience. Harris stressed the importance of persistence. She said that one must try “again and again and again” to get such a program off the ground. “Stick with it. It’s a program that’s going to help people.” But be ready to compromise on the right things, she added. Pieciak expressed a similar sentiment, remarking that one should remember that it is a “long-term program that will show results in the long run.”
The Bottom Line
“At the end of the day, this is not a partisan issue,” Young argued. “I can’t understand why we wouldn’t want to help people save for their retirement,” said Antonelli.
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