You may have heard about the state-sponsored retirement savings plans that also impact small employers. If there is an active mandate or one being implemented in your state, you’re probably wondering if it applies to you.
While it’s common for states to have retirement programs in place for public workers, it’s been a growing trend with states to enact legislation for state-administered retirement systems for the private sector. They apply in instances when an employer-sponsored plan isn’t offered to employees, as is the case with about 56 million US workers.
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What are the state-mandated retirement programs?
State-mandated retirement programs are not defined benefit plans like pensions. Instead, they are defined contribution plans, such as individual retirement accounts (IRAs). The states with these mandates automatically enroll employees, who have the choice to opt out of the programs. That’s why the automatic IRAs are known as auto-IRAs, though other names for the programs are used, such as “work and save” and “secure choice.”
The state auto-IRAs are mandatory for any company that doesn’t already offer an employer-sponsored option and has met the other criteria for eligibility, such as employer size. While the auto-IRAs are typically Roth IRAs with after-tax contributions, some states also offer Traditional IRAs for pre-tax contributions through their programs.
Gusto’s data indicates that employees are 20 percent more likely to invest in retirement when they work in a state with auto-enrollment policies. Employers also tend to experience increased employee retention and satisfaction when they offer retirement savings benefits. So, it’s a win-win for employers and employees!
Which states have retirement plan mandates?
There are now more than a dozen states that already have retirement plan mandates and a few that have voluntary versions of these plans or offer 401(k)s. There are also just as many that still have proposed legislation. However, only time will tell whether or not those bills will be enacted. In addition, there are a number of states that have dead or failed bills for similar programs that were introduced to their state legislative branches and didn’t become law.
This table provides an at-a-glance look at the mandate status for each state (i.e., active program, scheduled launch date, proposed legislation, or a dead bill). It also includes the plan name and what size employers are affected, along with whether penalties exist for non-compliance. Click on the plan name to learn more, such as how employer size for eligibility is determined by not just the minimum number of W-2 workers but, in some instances, how many hours, days, weeks, or months they’ve been employed.
| State | State mandate status? | Plan name | Employer size for eligibility | Penalties for non-compliance |
| Alabama | Proposed legislation | |||
| Alaska | Proposed legislation | |||
| Arizona | Proposed legislation | |||
| Arkansas | Proposed legislation | |||
| California | Active program | CalSavers | 1 employee or more | Yes |
| Colorado | Active program | Colorado SecureSavings Program | 5 or more employees | Yes |
| Connecticut | Active program | MyCTSavings | 5 or more employees | Yes |
| Delaware | Active program | Delaware EARNS | 5 or more employees | Yes |
| Florida | None | |||
| Georgia | Proposed legislation | |||
| Hawaii | Legislation took effect, but the program hasn’t been implemented | Hawaii Retirement Savings Program | ||
| Idaho | Proposed legislation | |||
| Illinois | Active program | Illinois Secure Choice | 5 or more employees | Yes |
| Indiana | Proposed legislation | |||
| Iowa | Proposed legislation | |||
| Kansas | Dead bill | |||
| Kentucky | Dead bill | |||
| Louisiana | Dead bill | |||
| Maine | Active program | Maine Retirement Investment Trust (MERIT) | 5 or more employees | Yes |
| Maryland | Active program | MarylandSaves | 1 employee or more | |
| Massachusetts | Voluntary for nonprofits | Massachusetts Defined Contribution CORE Plan—this is an open 401(k) Multiple EmployerPlan (MEP) | 501(c) organization with 20 or fewer employees | |
| Michigan | Proposed legislation | |||
| Minnesota | Launching on or after January 1, 2026 | Minnesota Secure Choice Retirement Program | 5 or more employees | |
| Mississippi | Failed bill | |||
| Missouri | Voluntary; launching September 1, 2025 | Show-Me MyRetirement Savings Plan—this is a 401(k) Multiple EmployerPlan (MEP) | 50 or fewer employees | |
| Montana | Dead bill | |||
| Nebraska | Dead bill | |||
| Nevada | Launching July 1, 2025 | Nevada Employee Savings Trust (NEST) | More than 5 employees | |
| New Hampshire | Dead bill | |||
| New Jersey | Active program | RetireReady NJ | 25 or more employees | Yes, after the first year |
| New Mexico | Launch delayed; voluntary and on hold until further notice | New Mexico Work and Save IRA Program | ||
| New York | In development; launch date to be determined | New York State Secure Choice Savings Program | 10 or more employees | |
| North Carolina | Proposed legislation has been reintroduced | |||
| North Dakota | Failed bill | |||
| Ohio | Dead bill | |||
| Oklahoma | Proposed legislation | |||
| Oregon | Active program | OregonSaves | 1 employee or more | Yes |
| Pennsylvania | Proposed legislation | |||
| Rhode Island | Launching spring 2025 | RISavers | 5 or more employees (required if no existing and qualifying retirement plan); optional for less than 5 employees | |
| South Carolina | Proposed legislation | |||
| South Dakota | None | |||
| Tennessee | Proposed legislation | |||
| Texas | None | |||
| Utah | Dead bill | |||
| Vermont | Active program | Vermont Saves | 5 or more employees | Yes |
| Virginia | Active program | RetirePath | 25 or more employees | Yes |
| Washington | Due to launch on July 1, 2027, but could be phased in | Washington Saves | Employees need to have worked a combined minimum of 10,400 hours during the previous calendar year | Yes, starting in 2030 for willful violations |
| Washington, DC | Dead bill | |||
| West Virginia | Dead bill | |||
| Wisconsin | Failed bill | |||
| Wyoming | Failed bill |
Retirement benefits made easy with Gusto
While state-mandated plans are an option for meeting compliance, you may also want to consider a 401(k) plan with Gusto. 401(k) retirement plans comply with state mandates and can ease administrative time if you have employees in multiple states with mandates. Here are a few additional benefits:
- Reduced cost with tax credits: Eligible businesses may be able to claim up to $16,500 in tax credits for the first 3 years of their 401(k)—potentially covering 100% of plan costs.
- Flexible and affordable plan options: Gusto’s growing list of 401(k) partners means plenty of plans to choose from at low prices to fit your budget.
- Integrated to make life easier: Gusto payroll syncs with your 401(k) plan to make automatic deductions. Employees manage their own Gusto accounts, with access to their paystubs, W-2s, 401(k) accounts, and contribution details.
- Great benefits help you build a great team: Because 401(k) plans have higher contribution limits, employees can save more money with an employer-sponsored 401(k) than with state-mandated IRAs. Gusto’s own analysis even found that employer-sponsored 401(k) offerings increase employee retention.
If you have an existing Gusto account, learn more about our 401(k) partners here.
Or create an account with Gusto to enroll in a 401(k) plan. Gusto’s platform makes that simple.
