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.

Weigh the options See more solutions

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

California

CALSAVERS   calsavers.com

Timing
  • Enacted 2016
  • Registration deadline passed for all groups subject to the mandate
Design
  • Employers that do not provide a qualified plan
  • Roth IRA (default) and traditional IRA (optional)
  • Auto enrollment at 5%
  • Auto escalation 1% per year to 8% max
  • Employees may opt out
Investments
  • Contributions held in capital preservation fund for the first 30 days
  • Default investment is target date funds
  • Bond fund, global equity fund, money market fund, sustainability fund also available
  • No employer fees
  • Fixed account fee of $18.00 (annually) plus asset-based fees currently ranging from 0.325% to 0.49%.

Colorado

Colorado Secure Savings Program  coloradosecuresavings.com

Timing 
  • Enacted 2020
  • Registration date passed for all mandated groups
Design
  • Employers in business for two years that have not offered a qualified plan in the last two years
  • Other employers may participate voluntarily
  • Individuals who qualify for an IRA may participate voluntarily
  • Roth IRA (default) and traditional IRA (optional)
  • Auto enrollment at 5%
  • Auto escalation 1% per year to 8% max (may increase to 10% later)
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Contributions held in capital preservation fund for the first 30 days, then moved to default investment option
  • Default investment is target date funds
  • Bond index fund and international equity funds also available
  • No employer fees
  • Annual asset-based fee of approximately 0.32% plus $22 annual account fee (charged quarterly at $5.50) for administrative and investment expenses

Connecticut

MyCTSavings myctsavings.com

Timing
  • Enacted 2016
  • Deadline passed for all mandated groups
Design
  • Employers that do not provide a qualified plan
  • Employers with fewer than 5 employees may opt in voluntarily
  • Roth IRA
  • Auto enrollment at 3%
  • No auto escalation currently
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Contributions held in money market fund for the first 60 days if no other option selected, then moved to target date fund (which is the default investment)
  • Other strategic investment portfolios available, including cash preservation, income, income and growth, balanced, conservative growth, moderate growth, growth portfolios
  • When participants reach normal retirement age, 50% of their account must be invested in a lifetime income option (not yet identified)
  • No employer fees
  • Employees pay account fee of $6.50 per quarter ($26.00 annually) plus 0.26% program administration fee and fees for statements, checks, rollovers, etc.

 

Delaware

DelawareEARNS de.gov/earns 

Timing
  • Enacted 2022
  • Pilot launched May 2024
Design
  • Employers in business for at least six months in preceding calendar year with 5+ employees and do not offer a qualified retirement plan
  • Other employers may participate voluntarily
  • Eligible employees of employers not in the program may participate voluntarily
  • Auto enrollment Roth IRA; Traditional IRA authorized to be added later
  • Auto escalation may be added
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Default investment TBD
  • Default is capital preservation fund for first 30 days; future contributions are defaulted to a TDF
  • Fees: TBD 

 

Illinois

Illinois Secure Choice ilsecurechoice.com

Timing
  • Enacted 2015
  • Registration date passed for all mandated groups
Design
  • Employers that do not provide a qualified plan
  • New businesses may defer joining for two years
  • Self-employed, contract, seasonal workers may enroll
  • Roth IRA (default) and traditional IRA (optional)
  • Auto enrollment at 5%
  • Auto escalation 1% per year, 10% max
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Contributions held in money market fund for the first 90 days if no other option selected, then moved to target date fund (which is the default investment)
  • Other investment options are capital preservation, conservative, and growth funds
  • No employer fees
  • Participants are charged a $16 annual fee plus an annual asset-based fee ranging from .32% to .45%. $5 annual fee for paper statements, waived for electronic delivery of statements

 

Maine

Maine Retirement Investment Trust (MERIT) https://meritsaves.org

Timing
  • Enacted 2021
  • Implementation effective date postponed to December 31, 2024
Design
  • Employers with five or more employees that have not offered a tax-favored retirement plan to some or all of its covered employees in the current calendar year or two preceding calendar years
  • Other employers may voluntarily participate
  • Partnering with Colorado to offer joint program
  • New employers that have not been in business during the current and preceeding calendar year are exempt
  • Individuals who are self-employed or independent contractors may participate voluntarily
  • Roth IRA; account holders may choose a traditional IRA by notifying the program administrator
  • Auto enrollment at 5%
  • Auto escalation may be added at 1% per year to 10% max, by participant election or mandatory
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Contributions will be held in a money market account for the first 30 days then moved to a target-date fund, unless participant directs otherwise
  • Annual account fee of $26, plus annualized asset-based fee of 0.20% and annualized investment-based fee of approximately 0.32%

Maryland

Maryland$aves marylandsaves.com

Timing
  • Enacted 2016
  • Registration deadline passed for all mandated groups
Design
  • Employers paying employees through a payroll system or service that do not currently provide a qualified plan or have not in the prior two years
  • New businesses may defer joining for two years
  • Others may enroll voluntarily: non-covered employees, employees of non-covered employers, gig workers, 1099 employees, self-employed workers
  • Roth IRA. Traditional IRA being considered as an option
  • Auto enrollment at 5%
  • Auto escalation 1% per year, 10% max
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Initial contributions up to $1,000 placed in an emergency savings fund invested in capital preservation fund
  • Contributions after $1,000 default into target date fund if no other investment is elected
  • Investment options are target date, capital preservation, income, and growth funds
  • No employer fees
  • $30 per year after the first year, plus asset-based fees of 0.18% to 0.26%

 

Massachusetts

Massachusetts Defined Contribution CORE Plan  CORE Plan for Nonprofits | Mass.gov

Timing
  • Enacted 2012
  • October 2017:  Program launched
Design
  • Nonprofit employers with up to 20 employees
  • Employer and employee participation voluntary
  • Multiple employer 401(k) plan (MEP)
  • Auto enrollment at 6%
  • Auto escalation 1% or 2% per year (employer decides), 15% max
  • Employees may opt out
  • Employer may contribute safe harbor match of 100% of first 3% of employee contribution AND 50% of the next 2%, OR safe harbor non-elective contribution of at least 3% of employee contribution
Investments
  • Default investment in target date fund
  • Other investments are growth, income, inflation, and capital preservation funds
  • Professionally managed account available for a fee
  • $65 annual fee deducted from participant account, plus fees for administrative features elected by participant
  • Employer pays one-time set up fee of $2,500, annual administrative fee of $200, and compliance fee of $150 or $750, depending on plan design

 

New Jersey

New Jersey Secure Choice Retirement Savings Program nj.gov/treasury/securechoiceprogram/

Timing 
  • Enacted 2019
  • Launched May 2024
Design
  • Employers with 25+ employees, in business more than two years, that do not provide a qualified plan
  • Roth IRA and traditional IRA authorized
  • Auto enrollment at 3%
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • The Board may direct first $1,000 in contributions invested in capital preservation fund
  • Other investment options are lifecycle fund or options deemed appropriate by the Board
  • Administrative fees capped at 0.75% of total fund for first three years after establishment, then capped at 0.6%

Oregon

OregonSaves oregonsaves.com

Timing
  • Enacted 2015
  • Registration deadline passed for all mandated groups
Design
  • Employers that do not provide a qualified plan
  • Employers with no employees and employees of non-participating employers may join voluntarily
  • Roth IRA (default) or traditional IRA (alternative election)
  • Auto enrollment at 5%
  • Auto escalation 1% per year, 10% max, for those who have contributed at least six months
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Contributions held in capital preservation fund for the first 30 days if no other option selected, then moved to target date fund (which is the default investment)
  • Investment options are target date, capital preservation, money market, and growth funds
  • No employer fees
  • Participants pay $4.00 per quarter ($16.00 annually) plus asset-based fees of approximately 0.50% per year

 

Virginia

RetirePath Virginia

Timing 
  • HB 2174 passed 2021
  • Program launched June 20, 2023
  • Registration deadline passed for all employers 
Design
  • Employers in business for at least two years, with 25+ employees who worked 30+ hours a week in the prior calendar year, and that have not offered a qualified retirement plan
  • Other employers may participate voluntarily
  • Eligible employees of employers not in the program may participate voluntarily
  • Self-employed individuals may participate if they have taxable Virginia income
  • Roth IRA (traditional IRA available upon request, including for purposes of recharacterizing Roth IRA contributions)
  • Auto enrollment at 5%
  • Auto escalation at 1% per year to 10% max
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Default investment TBD
  • Contributions default into a capital preservation fund for the first 30 days, then moved to a target date fund based on participant's age. Participants may select other investments
  • Fixed fee of $6.75 per quarter ($27 annually) plus an asset-based fee between 0.22% and 0.32% per year. Additional fees are assessed for outgoing rollovers, paper statements, and paper checks. No employer fees

Washington*

Washington Saves

Timing
  • Enacted March 2024
  • Launch expected July 2027
Design
  • Has been in business in Washington for at least two years as of the immediately preceding calendar year
  • Maintains a physical presence
  • Employers that do not currently offer a retirement plan
  • Employers whose employees worked in the preceding calendar year a combined total of at least 10,400 hours
  • Mandatory auto-IRA
  • Contribution rates TBD
Investments
  • TBD

*Washington Small Business Retirement Marketplace, a voluntary program, launched in March 2018. retirement-marketplace.com

States enacted, not yet active

Hawaii

Hawaii Retirement Savings Program labor.hawaii.gov/hrsp 

Timing
  • Enacted 2022
  • Implementation date: TBD
Design
  • Employers with 1+ employees 
  • Roth IRA for employees who opt in
  • Traditional IRA may be added later
  • Default contribution rate 5% for employees electing to participate
  • No opt out provision since employees much choose to participate
  • Employer contribution not permitted
  • The Board may authorize matching contributions up to $500 to accounts of the first 50,000 participants
Investments
  • Default investment option: TBD
  • Other funds: TBD
  • Fees: TBD, but may not exceed 0.75% of assets after the program’s first three years

 

Minnesota

Minnesota Secure Choice Retirement Program

Timing 
  • Enacted 2023
  • Program is not anticipated to open for enrollment until Q1 2026
Design
  • Employers with 5+ covered employees that do not provide a qualified plan
  • Automatic enrollment payroll deduction IRA (Roth IRA default)
  • Auto enrollment
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Investment options TBD, to include a diversified default investment
  • Other options TBD, to include target date funds, balanced fund, capital preservation fund, or any such combination
  • The Board may assess fees

Missouri

Missouri Show-Me MyRetirement Savings Plan

Timing
  • Enacted 2023
  • Contributions expected to begin on or before September 1, 2025
Design
  • Employer participation voluntary
  • Employers with 50 or fewer employees in last five years that do not currently offer a plan
  • Multiple employer 401(k) plan (MEP)
  • Auto enrollment permitted once employer joins MEP
  • Employees may opt out
  • Employers may contribute
  • Self-employed individuals are eligible
Investments
  • Investments TBD
  • Fees may be charged and Board will seek to minimize them

Nevada
Timing 
  • Enacted 2023
  • Contributions accepted beginning July 1, 2025
Design
  • Employers with 5+ employees, in business at least 36 months, that do not provide a qualified plan during current year or 3 previous calendar years
  • IRA (type TBD)
  • Auto enrollment
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Investment options TBD
  • No overall limits on fees and expenses specified. The program’s administrative costs will be paid out of moneys on deposit in the program’s administrative fund (or, initially, out of any funds appropriated by the state)

New Mexico

New Mexico Work and Save Program

Timing
  • Enacted 2020
  • No anticipated launch date has been announced
Design
  • Voluntary participation for all private sector and nonprofit employers with primary business located in New Mexico
  • Default is voluntary Roth IRA; other IRA options permitted
  • Retirement plan marketplace options include SIMPLE IRA, payroll deduction IRA, MEP as allowed under federal law, 401(a) or 403(b) plans
  • Auto enrollment in a voluntary IRA if allowed by federal law
  • Auto enrollment is permitted for employers participating in the marketplace option
  • Auto escalation TBD for voluntary IRAs; not specified for marketplace option
  • Employees may opt out
  • Employer contribution not permitted in voluntary IRA
  • Employer contribution permitted for employers using the marketplace option with an ERISA plan
Investments
  • Default investment for voluntary IRA is TDF
  • Other funds and structure: TBD
  • Voluntary IRA fees must be below 1%
  • Marketplace fees must cover actual cost of plan, TBD 

New York

New York State Secure Choice Savings Program securechoice.ny.gov 

Timing
  • Enacted 2021
  • Amended 2021, 2023, 2024
Design
  • Employers in business for at least two years, that employed at least 5 employees in the State of New York at all times during the previous calendar year, and has not offered a qualified retirement plan in the prior two years
  • Roth IRA
  • Auto enrollment at 3%
  • No auto escalation
  • Employees may opt out
  • Employer contribution not permitted
Investments
  • Default investment option: TBD
  • Other funds: TBD
  • No overall limits on program fees, which are paid out of moneys on deposit (or, initially, out of any funds appropriated by the state), are specified, although the Board must “keep its annual administrative expenses as low as possible” 

Rhode Island

RISavers Retirement Savings Program

Timing
  • Enacted June 15, 2024
Design
  • Non-governmental employers with at least five employees and no other employer-sponsored or automatic payroll deduction IRA are required to participate
  • Other employers may choose to participate
  • Employees who are 18 and over working for eligible employer for not less than 120 days would be subject to automatic enrollment
  • Employees who are 18 and over working for an optional employer that elects to join the plan may be subject to automatic enrollment
  • One or more payroll deduction IRA arrangements
  • Contribution rate and other details TBD
Investments
  • Default and other investments: TBD
  • Fees: TBD

Vermont

Vermont Saves https://www.vermonttreasurer.gov/vermont-saves

Timing
  • Program revised, newly enacted 2023
  • Phased enrollment begins July 1, 2025 for covered employers with 25+ covered employees
  • Enrollment for employers with 15-24 employees begins January 1, 2026
  • Enrollment for employers with 5-14 employees begins July 1, 2026
Design
  • Employer participation mandatory
  • Employers that have not offered a retirement plan in previous two years
  • Self-employed individuals and contractors may be eligible to participate
  • Roth IRA
  • Auto enrollment at 5%
  • Auto increases from 1% to 8% of active participant’s contribution rate per year
  • Other plan features TBD
  • Employees may opt out
  • Employer contributions not permitted
Investments
  • Default and other investments: TBD
  • Fees: TBD but limited to $30 per participant per year

Enacted, unlikely to become active

New York City

Savings Access New York Retirement Program — A state-run mandatory IRA program was signed into law October 21, 2021. The city-run program is not expected to be implemented.

Seattle, WA

Seattle Retirement Savings Plan — A state-run auto-IRA program was signed into law in March 2024. The city-run program is not expected to be implemented.

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.

Important information

This information is based on information gathered from sources including "State-Facilitated Retirement Savings Programs: A Snapshot of Plan Design Features, Georgetown University Center for Retirement Initiatives, June 30, 2023 Update;" "State-Sponsored Retirement Programs for Private Sector Employees," Investment Company Institute," September 2024; and websites of the individual states mentioned.

Neither Transamerica nor its agents or representatives may provide tax, investment or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.

The hyperlinks or referenced websites may forward you to a third party site. Transamerica does not control, guarantee, endorse, or approve the information, products, services, or any content maintained by third parties. Transamerica expressly disclaims any responsibility for the content, accuracy, and quality of the products and services advertised on the third party sites. The third party content should not be interpreted as legal, tax, or investment advice.