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18 April

State-Sponsored Retirement Plans

April 18, 2025 By Kate Bartolome Newsletter  

State-sponsored retirement plans are gaining traction as a solution to the growing retirement savings crisis. With millions of workers lacking access to employer-sponsored retirement plans, states are stepping in to offer their own programs designed to help individuals save for retirement. These plans—which vary by state—aim to address the gap in retirement savings by providing accessible, low-cost options for workers, particularly those employed by small businesses that do not offer retirement benefits.

In states with these requirements, employers generally must either: (1) sponsor a retirement plan or (2) enroll their employees and facilitate participation in a state-sponsored plan. Plan design varies by state. In perhaps most such states, plans are administered via payroll deduction and employees are automatically enrolled (though, as in employer-sponsored plans, they are generally able to opt out and/or change their enrollment percentage).

The following map categorizes state efforts as follows:

                   

 Green: These 16 states have active state-mandated automatic IRA retirement programs.
 Yellow: These include 4 states (Washington, New Mexico, Missouri, and Massachusetts) with voluntary plans or a combination involving voluntary plan options. These also include 10 states with recent legislative proposals to enact state-mandated or state-sponsored plans.
 Red: These are states with no recent legislative proposals for state plans—however, all but South Dakota have seen some form of recent state interest in establishing a state plan.

If you are in any state other than South Dakota— and especially if you are in a state colored “green” in the map above—now is a great time to reach out to your TPA partner for more information about how state plan participation could impact your clients. Your TPA partner will be able to advise clients either as they set up administrative processes to comply with the state mandate or as they consider sponsoring their own plan.

We are excited to introduce this map as part of our new CPA newsletter, and intend to update it regularly as this landscape shifts.


Hannah Munn
Partner, Poyner Spruill
Hannah’s practice is focused in the areas of Employee Benefits and Executive Compensation. She works with business owners and HR executives to understand and manage employee benefits and executive compensation arrangements. She routinely represents clients before the Internal Revenue Service, Department of Labor, and Pension Benefit Guarantee Corporation and has extensive experience in virtually all aspects of employee benefits.

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ERISA Workplace Retirement Plan Limits

The federal government annually publishes updated qualified retirement plan limits, which impact the contributions, benefit accruals, and compliance of ERISA covered qualified retirement plans. The below tables summarize the most significant changes in recent history.

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