According to the U.S. Department of Labor (DOL), one-third of
American workers do not have the option to participate in a
retirement savings plan through their employers.1 To
help employees save for retirement, more states are passing or
exploring legislation that requires employers to automatically
enroll their workers in state-sponsored payroll deduction savings
programs. The employee may then opt out, or change the beginning
contribution amount, if the employee wishes to do so. Generally,
this legislative trend affects only employers that do not offer
access to an employer-sponsored retirement plan.
To date, five states have enacted automatic savings program
legislation, each in varying stages of implementation. Similar laws
are pending in three other jurisdictions. Additional states have
enacted laws to create voluntary programs or marketplaces of
retirement savings options.
