State-based retirement plans: why or why not

Many Americans are financially unprepared for retirement. To address this issue, some states have proposed and/or passed legislation to implement statebased, automatic individual retirement account (IRA) plans. With only five states passing legislation, we discuss some of the program design considerations, with a focus on how decisions regarding these considerations impact participation and cost and, ultimately, the feasibility of state-based retirement plans. Next, we analyze the characteristics of the states that have proposed legislation related to state-based retirement programs and those that have not to determine if there are any systematic differences. We also conduct similar comparisons of those states that have successfully passed legislation and those that have proposed but not yet passed state-based retirement plan legislation.