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.