I have been an advocate for mandatory IRA programs for employers that don\u2019t offer them because I believe when push comes to shove, employers would rather have their own plan than be forced into a state-mandated program. A recent Pew study backs me up.<\/p>\n
Pew examined the effects the state programs have had on private market plans and whether eligible businesses would ditch their own defined contribution plans or terminate existing plans as a result.<\/p>\n
The shifts in the share of plans created, pre-and post-implementation of the state programs, align with national trends and in some cases prove larger than the national change, the Pew research found.<\/p>\n
The share of plans created in the U.S.\u2014excluding California\u2014increased from an average of 6.4% before 2019 to 7.3% from 2019 to 2021.<\/p>\n
In the three states examined, the rate of introduction of plans, as a share of existing plans, remained higher than prior to the year when each launched its savings program.<\/p>\n
In California, the share of new plans increased from an average of 8.1% between 2013 and 2018 to an average of 9.4% from 2019 to 2021, when the CalSavers program fits made effective.<\/p>\n
In Illinois, the average share of new plans increased from 5.3% between 2013 and 2017 to 6.2% with Illinois Secure Choice enrolling savers from 2018 to 2021.<\/p>\n
In Oregon, the average share of new plans increased from 6.7% between 2013 and 2016 to 8.5% on average in the years after OregonSaves started in 2017.<\/p>\n
Businesses in California, Illinois, and Oregon continued to create new plans in 2021 at rates similar to or surpassing those in states without state-mandated IRA programs.<\/p>\n
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