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The retirement community has watched with keen interest this year as significant milestones were reached by several of the five states that have enacted a state-run mandatory IRA program for private-sector workers. These programs generally require most employers that do not already offer a retirement plan to automatically enroll employees in the state program through payroll deduction.
The five states – California, Connecticut, Illinois, Maryland, and Oregon – have each continued to work toward full implementation of their programs despite encountering a number of hurdles, including the congressional repeal of an Obama-era regulation intended to help facilitate such programs, ERISA preemption lawsuits (in Oregon and California – so far), lengthy procurement processes, and staffing challenges. Below is a brief update on the implementation status of the programs in each state.
In addition to the states noted above, Seattle enacted a city ordinance in November 2017 that would create a mandatory IRA program for workers in the city.
Voluntary state-run programs. Although the mandatory programs described above tend to garner the most attention due to the directive to employers, a number of states have chosen instead to enact programs that are voluntary for employers. These include Massachusetts, which launched a defined contribution retirement plan for small non-profit employers in October 2017, and Washington, which launched an online retirement “marketplace” in March 2018. States that have voluntary programs under development include New York, which enacted the first voluntary state-run IRA program in April 2018, and Vermont, which recently selected a program administrator for its state-run multiple employer plan (MEP).
Voluntary state-run programs. The views expressed in this material are the views of SSGA Defined Contribution as of 05 November 2018, and are subject to change based on market and other conditions.
This document contains certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those projected.
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. Investing involves risk, including the risk of loss of principal. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.
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2270025.13.1.GBL.RTL
Exp: July 31, 2021