A flurry of state laws and bills would allow employees of small businesses to set up Individual Retirement Accounts (IRAs) through state-sponsored programs, making it possible for workers to save with automatic payroll deductions even when their companies don’t offer that option.
Just this year, 17 states are considering bills that would provide access to IRAs to workers whose employers don’t offer such plans. Ten states recently implemented plans or are in the process of setting them up. The state plans don’t require employers to match contributions.
The AARP’s Public Policy Institute says employees are 15 times more likely to build retirement savings if they have automatic payroll deductions at work. But such plans don’t exist for about 55 million American workers, mostly in small or medium-sized businesses, AARP’s research found, and that’s where the states can have an impact.
