Why states are getting involved

A growing number of states are mandating retirement plans to help as many Americans as possible prepare for a more financially secure future. But state plans aren’t the only option – many employers can benefit from the ease and advantages of an employer-sponsored plan and the efficiencies available through a pooled plan arrangement. 

Dedicated to retirement for all

Giving everyone an opportunity to save for retirement and live their best lives has long been Transamerica's mission. We’ve championed workplace retirement plans for over 85 years. With more than two decades of experience in the pooled plan space, we’re committed to partnering with you to support employers of all sizes in selecting a quality plan that eases their administrative burden and helps employees save for retirement with confidence.

U.S. retirement savings: A reality check

43%

of workers at private-sector employers with <100 employees don't have access to an employer-sponsored retirement plan

Only 51%

of employers with <100 employees offer a retirement plan

28%

of non-retired adults have NO retirement savings

89%

of workers say 401(k) or similar retirement plans are an important benefit

Workplace vs. state-facilitated comparison

 State-facilitated IRAWorkplace 401(k)
IRS contribution limit (2025)$7,000$23,500
IRS contribution limit age 50+ (2025)$8,000$31,000
IRS contribution limit age 60-63 (2025)$34,750
IRS contribution limit age 64+ (2025)$31,000
Matching contribution option availableNoYes
Vesting option available 
(Employer contributions only)
N/AYes
Financial advisor support availableNoYes
Employer administrative tasksYesYes
Automatic featuresPer state plan designOptional
Investment optionsPer state plan designYes

Advantages of employer-sponsored plans

Workplace plans generally offer higher contribution limits, flexible plan design features, and a wider range of investment options than state-facilitated plans. See why an employer-sponsored plan may be a better fit for your employer clients and their employees.

Small plan tax credits

SECURE and SECURE 2.0 give small employers retirement plan tax credits.

  • 50% or 100% of start-up/administration costs up to $5,000 for first three years
  • Up to $1,000 per participant credit for employer contributions for first five years
  • $500 credit for adding automatic enrollment

Design flexibility

Plan sponsors may include features not available in state-facilitated programs.

  • A vesting schedule for employer contributions can motivate employees to stay longer
  • Financial well-being education is typically offered by qualified plan recordkeepers to encourage employees to take charge of their financial health. Employers providing the state plan would need to find or create financial education on their own.
  • Employer contributions may be deducted from the organization’s current taxes

Attract and retain talent

  • Contributions may be restricted for higher wage earners in state-facilitated IRA plans due to IRS limits
  • A well-designed employer-provided plan may be an incentive to join or remain with the employer
  • Ability to add a vesting schedule for employer contributions can encourage retention

Easier administration for multi-state employers

  • Employers with locations in multiple states may be required to participate in multiple state programs
  • This adds to administrative complexities
  • An employer-sponsored plan offers a single solution covering all employees

Allows employees to save more

  • Employees can save significantly more in an employer-provided plan compared to most state plans
  • Employer plans may include pre-tax and after-tax employee contributions, giving employees flexibility
  • Employer plans may include profit-sharing or matching contributions
  • Financial well-being education is generally part of the services from retirement plan providers. Employers using the state option would need to develop or locate financial education on their own

Legal protections

Qualified employer-sponsored plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA)

  • ERISA provides significant protections for employee retirement savings 
  • State-facilitated IRA plans are not covered by ERISA so may not have the same level of protection
  • Pooled employer solutions provide fiduciary support that helps protect the employer and employees

Facilitated plans at a glance: State-by-state details

Some states impose penalties for failure to comply. Click individual state links for more information.

States enacted and currently active

States enacted, not yet active

Enacted, unlikely to become active

Talk to us

Your Transamerica representative is ready to help you support your employer clients in choosing a retirement plan that works for their organization and employees. 

Call 888-401-5826.