State programs solve.
Angela Antonelli 21, research professor and the executive director of the Center for Retirement Initiatives at Georgetown University’s McCourt School of Public Policy; and Ross Berg, senior research associate with the Center for Retirement Initiatives, 3/25/2021, "America’s Looming Retirement Crisis," https://www.noemamag.com/americas-looming-retirement-crisis/
In the absence of comprehensive federal action, individual states sought to expand access to retirement savings options in recent years. California, Illinois and Oregon have all created auto-IRA programs in which employers who do not already offer a retirement savings plan must facilitate through payroll deduction the ability of their workers to save using the state program. Workers are automatically enrolled at a default contribution level, typically 5%, with the freedom to adjust that contribution level, but workers also can opt out. For some programs, the amount of the contribution made by the worker will automatically increase by 1% each year — a process known as “auto-escalation.” Many businesses do not offer their workers retirement savings plans because they find them too costly and complex to administer, so the state programs are designed to take the burden and cost off employers.
Collectively, these early-stage state programs have accumulated more than $188 million in new retirement savings. And businesses have embraced them: Josh Allison of Reach Break Brewing Company in Astoria, Oregon told OregonSaves that the state’s savings program “helps us recruit solid workers and helps us retain those solid workers.” Programs that require employee participation have been far more successful than ones that rely on voluntary participation, like the retirement marketplace in Washington.