State Savings Initiatives: Lessons from California and Connecticut
Published by the Center for Retirement Research at Boston College
California and Connecticut completed studies on the feasibility of state-sponsored retirement savings plans for private sector workers who do not have access to a pension or 401(k) at work. Most employers who do not offer their own plan would be required to automatically enroll their employees into a state Auto-IRA that would follow workers from job to job. This brief highlights key lesson learned from the two studies:
- a mandate with auto-enrollment will yield high worker participation rates;
- employer support is mixed, but they will not discourage participation; and
- successful implementation requires minimizing the employer burden and creating an efficient recordkeeping system and enforcement mechanism.