Retirement Plan Coverage Gap: A State-By-State Breakdown

401k, retirement, access, plan, coverage

Too many states with too many workers who lack access.

The American Retirement Association (ARA) is kicking its support of The SECURE Act up a notch with a new website that details each state’s retirement plan coverage gap and how, specifically, the legislation would improve worker access.

Using data from the Pew Charitable Trusts, ARA notes that a populous state like California has 739,936 employers that do not provide a retirement plan to employees, meaning that approximately 4 million full-time employees in the state do not have access to an employer-provided retirement plan.

The SECURE Act helps by increasing the employer tax credit for starting a new retirement plan from the current cap of $500 to $5,000, according to the lobbying and advocacy organization, and allows employers to join a pooled employer plan, potentially lowering plan costs and administrative burdens.

Conversely, a less densely populated state like Alaska has 9,902 employers do not provide a retirement plan, with approximately, 50,000 full-time employees in the state do not have access to an employer-provided retirement plan.

EACH STATE’S COVERAGE GAP IS DETAILED HERE.

“American workers are significantly more likely to save for retirement when given access to a retirement plan at work,” ARA claims, citing Vanguard and EBRI research. “In fact, workers who earn $30,000 to $50,000 are 12 times more likely to save at work than on their own.”

It adds that more than five million employers overall in the United States still don’t offer a workplace retirement savings benefit, a generation after the 401k plan design was first introduced.

Today, more than 80 million Americans are already participating in a retirement plan where they work, “but more than 28 million full-time workers don’t have an opportunity to save for retirement in a 401k—and that doesn’t include more than 23 million part-time workers who don’t have that opportunity.”

“The 401k works, but only if workers have access to this critical benefit,” Will Hansen, ARA’s chief government affairs officer, said in a statement. “Fortunately, the U.S. House of Representatives has, by an overwhelming 417-3 margin, passed the SECURE Act, a bipartisan package of commonsense enhancements designed to help small businesses offer a retirement savings plan—and give more working Americans the opportunity to save for retirement.”

Other notable coverage gaps include:

Texas—389,635 employers do not provide a retirement plan to employees, meaning that approximately 3 million full-time employees in the state do not have access to an employer-provided retirement plan.

Florida—353,728 employers do not provide a retirement plan to employees, meaning that approximately 2 million full-time employees in the state do not have access to plan

New York—311,654 employers do not provide a retirement plan to employees, meaning that approximately 2 million full-time employees in the state do not have access to a plan.

Exit mobile version