Kevin Hardy, stateline.org
Worried about the numerous workers without eggs in the nest, Nevada launched a new retirement program this month for private workers who have no access to one.
This program requires employers with at least six employees to participate.
Employees who can opt out will be automatically registered in their individual retirement account or IRA through regular payroll deductions.
Nevada Treasury Secretary Zach Conine hopes that a new program created by lawmakers in 2023 will boost financial literacy and ultimately reduce state costs of social services as more people save for retirement. He said that around 500,000 workers are expected to be eligible under the plan, with almost a third of the state’s private workforce being 1.68 million.
“If someone stays with Nevada’s plans or goes out and gets their own retirement savings plan, we don’t care widely,” said Conine, a Democrat who runs for state attorney general. “We care about how people are saving them for retirement.”
Nevada is one of many states that create automatic retirement programs for employees of private employers. Known as Auto-Iras, these programs target employees without access to retirement programs through their jobs, with the aim of dealing with groups such as AARP that are characterized as national retirement crisis.
So far, 20 states have created retirement programs for private workers, according to the Georgetown University Resignation Initiative Center. These programs are generally overseen by state finance officers and appointed committees. Private contractors manage financial markets and potentially fluctuating investment funds.
According to AARP, more than 1 million Americans have been enrolled in the Auto-IRA program launched by the state in recent years. But a group defending Americans over 50 say that almost half of private sector workers (56 million) still have no access to retirement plans through work.
“In the long run, this is an issue we need to address, but in the short term for those individuals, this is a real crisis,” said David John, senior policy advisor at the AARP Institute of Public Policy. “This is something they will face soon, and our goal is to make sure the young people come in and are far more prepared than some of the people they’ve gone before them.”
While anyone can open a savings or investment account, workers are much more likely to participate in a retirement program funded through a simple payroll deduction, John said. State cars require little effort from employees or employers.
“Yes, anyone can go to a financial institution and open an IRA, but the bottom line isn’t,” he said.
Unlike state pension programs for civil servants, including teachers, these cars are the sole property of workers. It’s portable for them, and employees can sometimes even resort to those funds for emergency costs, John said.
Some financial services companies oppose these programs and claim they compete with private sector retirement providers.
So far, more liberal nations have led the Auto-IRA programme. Oregon launched its first country in 2017, quickly following Illinois and California. But John said there is growing interest in more conservative states. Nevada law was sponsored by Democrats, but was eventually signed by Republican Gov. Joe Lombardo.
“This is not a partisan political issue,” John said. “We have a strong interest in many red states.”
Launching a new program
Nevada has chosen to launch a new Auto IRA and participate in the interstate consortium of public automated IRA programs established by the Colorado Department of Treasury. By pooling resources and reducing overhead costs, officials say the state can provide lower planning fees to savers.
“Relatively, setting up one of these is a lot of work, but if it’s not the first one, it’s much less work,” Conine said.
The Nevada State Accountant’s Office was expected to cost around $1.2 million over two fiscal years. This is funds borrowed from the state and are repaid through collection of participant fees for retirees.
Colorado treasurer Dave Young believes the state’s retirement program is both a social and financial cause. It helps workers save more dignified retirements and prevents the state from spending more on services in the long run, he said.
“If we can’t take this and save more people for retirement, there’s this massive tax bill waiting for taxpayers to fund safety net services. Why do that for taxpayers?” Democrat Young said. “Why not try changing people’s trajectories? That’s a relatively simple solution in practice.”
A 2023 report from pay and benefits company Gusto found that the biggest boost to participation is the most earning in Coloradan. Before the order, 10% of employees making between $15,000 and $25,000 a year participated in the retirement plan.
Gusto also discovered more smaller employers offering a 401(k) plan after the state’s program began in 2022.
Colorado has registered more than $100 million in savings for roughly 72,000 workers. Hunter Rayleigh, executive director of the Colorado Retirement Program, has chosen to opt out by approximately 20% of eligible employees.
State programs require all employers operating for at least two years to allow five or more employees to participate or offer their own retirement plans.
Railey said signing up for employers and workers is an easy process, but the first challenge was identifying the smallest employer in the state. The state uses the Unemployment Systems database to explain program requirements directly to businesses.
“The final step is to effectively communicate these are programs that are necessary and that at some point they are imposing penalties,” Rayleigh said. “… Overall, we have found that most businesses take action when they receive business notifications, if not the overwhelming majority of businesses.”
Stacey Garity, a Republican Pennsylvania treasurer, advocates for the state’s automated IRA program. The law that creates the law passes the Democratic-controlled state capitol in a single vote along the party’s line, waiting for action in the Republican-controlled state Senate.
Garity, which is also led by the National Treasury Association’s Retirement Pensions Committee, said the automotive IRA plan would benefit businesses, workers and taxpayers in Pennsylvania.
“These are people we all depend on every day, like mechanics that keep us driving and waitresses covering our coffee,” she said in a statement to Stateline. “Two million hardworking Pennsylvanians who have no access to workplace retirement plans deserve the same opportunity.”
Opposition parties
While the state’s retirement programs are growing, they face industry opposition.
The state branch of the National Federation of Independent Business, representing 600,000 small and medium-sized businesses across the country, is opposed to several measures. In Pennsylvania, the federal claims that 84% of the members surveyed were opposed to the creation of Auto-Ira, claiming that all employees could not afford to invest in retirement and that the new plan placed a heavy burden on small businesses.
The organization did not respond to requests for comment.
The National Association of Insurance and Financial Advisors, representing all state financial service providers, says states should encourage private sector options rather than establishing competing programs.
“If we can’t take this and save more people for retirement, there’s this massive tax bill waiting for taxpayers to fund safety net services. Why do it for taxpayers?”
– Dave Young, Colorado Treasurer
In a statement, Kevin Mayeux, CEO of the association, said Access is not the only barrier to retirement savings. Many Americans, particularly low-income workers, must balance their competing financial priorities with retirement savings, such as child care and rising costs of living.
The organization supports the state’s interest in retirement savings, but lawmakers said it should focus on private sector options. They can include multiple employer plans and pooled employer plans that facilitate small employers to offer retirement plans at competitive rates.
“In short, NAIFA is not opposed to efforts to improve retirement security. They are welcomed,” said Mayeux’s statement to Stateline. “However, we believe that strengthening private sector solutions, rather than replacing private sector solutions with state-run programs, is the path to long-term success.”
But the early success of participating states is to inspire more adoptions, said Angela Antonelli, research professor and executive director at Georgetown University’s Retirement Initiative Center.
In addition to accumulating more than $2 billion in savings for workers, the state’s programs encourage employers to offer their own retirement plans, Antonelli said.
“It’s a huge return on investment. It’s well spent money,” she said.
Antoneli said many participating workers are younger and likely to move to other jobs and careers over time. The hope is that they continue saving through either a state sponsored plan or a retirement plan provided by a future employer.
She is encouraged by the increased interest in these plans and recruitment, but Antonelli said she hopes Congress will ultimately act by requiring employers to provide retirement plans. A bipartisan group of U.S. House members reintroduced the Washington issue legislation this year, but it has not progressed.
“The goal is to get more states to adopt these programs,” she said. “And I think the question is that there is a turning point where the federal government decides to step in right now.”
Stateline Reporter Kevin Hardy can be contacted at khardy@stateline.org.
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Original issue: July 31, 2025, 1:17pm
