How Have Workers Responded to Oregon’s Auto-IRA?
Only about half of private sector workers are covered by employer-sponsored retirement savings plans at any given time, and few workers save without a plan. The net result is that a third of households end up relying almost exclusively on income from Social Security in retirement. In the absence of federal action to close the coverage gap, some states have passed legislation to implement so-called “Auto-IRAs,” which expand coverage by requiring employers who do not offer a retirement plan to automatically enroll their workers into an IRA-based saving program. For this expansion of coverage to translate into retirement security, workers must not opt-out, save at a meaningful rate, and keep their money in the program. This brief provides a look at the impact of Auto-IRAs on retirement saving in the short-term using data from OregonSaves, the first state-run Auto-IRA program in the U.S.