© 2026 Pension Rights Center. This work is licensed under a Creative Commons Attribution-Non Commercial 2.5 Generic License.
By David Brandolph
Over the past decade, many states have started mandatory auto-IRA programs to give private-sector workers whose employers don’t sponsor a retirement plan an opportunity to easily save for retirement at their workplace.
A study published by the Center for Retirement Research at Boston College by Adam Bloomfield, Manita Rao and Sita Slavov, shows that requiring auto-IRAs not only expanded retirement plan access to workers through participation in auto-IRAs themselves but also caused employers in those states to adopt more traditional retirement savings plans at a greater rate than employers in states without auto-IRA mandates.
About one-half of American workers don’t participate in a workplace retirement plan. A major reason is that many employers don’t offer them. Workers who are unable to access a retirement plan at work face increased risk of failing to accrue sufficient savings for their retirement years.
To improve access to retirement savings plans, 17 states have been implementing auto-IRA savings programs requiring employers that don’t offer a plan to automatically enroll their workers into such programs through payroll deductions.
States establish rules for their plans and hire private sector plan administrators. Workers enrolled in these programs can opt out or change their payroll deductions, which are placed into accounts managed by investment professionals. Auto-IRAs lack an employer match and generally have lower contribution limits than employer-sponsored retirement plans.
The Center for Retirement Research study examined the auto-IRA policies in Oregon, Illinois, California, and Connecticut, which were rolled out between 2017 and 2022. The researchers sought to learn whether state auto-IRA mandates would prompt some employers to drop their own plans in favor of participating in the state programs, and whether employers who didn’t previously offer their own plan might decide to adopt one instead of opting for the auto-IRA.
The authors found that, without factoring in firms’ size and the specific year that mandates began, the number of employers that decided to sponsor their own plan grew by 5 percent in states not requiring auto-IRAs, while the number of employers doing so in auto-IRA-mandated states grew substantially more, by 40 percent. They also found that employee contributions grew faster in auto-IRA mandated states.
The authors’ findings were consistent with a 2023 Pew study finding that firms in “California, Illinois, and Oregon, three of the first states to launch programs to help private sector workers who lacked access to workplace plans save for retirement, continued to create new plans in 2021 at rates similar to or exceeding those in states without such programs.”
