State Initiatives to Cover Uncovered Private Sector Workers


This brief examines the private sector retirement savings gap, the initiatives that states have taken to address it, and what the U.S. Department of Labor has done to remove regulatory barriers.

Alicia Munnell, Anek Belbase, Geoffrey Sanzenbacher
Publication date:
February 2016
Filed under:
Research Studies
Key findings:
  • Four states – California, Oregon, Illinois, and Connecticut – have enacted auto-IRA legislation;
  • Two other states – Washington and New Jersey – are setting up voluntary marketplaces to promote low-cost retirement plans to small employers;
  • Eleven states are actively pursuing legislation;
  • Seven states were unsuccessful in passing legislation
Download publication:
State-Initiatives-Brief 12 page

While state and local government employees typically have access to an employer-sponsored retirement plan, only about half of private sector workers are covered by such plans. There is growing evidence that many households, especially those with lower incomes, will have to rely exclusively on Social Security in retirement.

Some states have taken the initiative to address this retirement savings gap by pressing for legislative solutions that establish an employer mandate to auto-enroll employees into an IRA or have adopted a marketplace approach to encourage employers to make it easier for employees to save.