Universal Voluntary Retirement Accounts: Expanding Employee Savings Opportunities

 

While two-thirds of workers are offered some kind of retirement plan through their workplace, a large segment of the workforce -- particularly those employed at small businesses -- do not have any type of retirement planning opportunity through their employer. Only 20 percent of workers at business of fewer than 25 employees are offered retirement options at work.

Despite the benefits of offering retirement plans, the cost of starting up and managing retirement plans -- in addition to navigating the complex landscape of retirement plan options -- can be prohibitively high for many of these small- and medium-sized employers.  Without the opportunity to save through employer-sponsored retirement plans, many workers will struggle to make ends meet upon retirement.

Expanding retirement savings opportunities through a statewide Universal Voluntary Retirement Accounts (UVRA) program can be part of the solution.  UVRAs leverage a state's existing infrastructure to pool the investments of thousands of workers at small- and medium-sized businesses.  They can provide a viable and cost-effective option for businesses that do not provide retirement plans for their employees.  Many states have begun to study the impact and potential of establishing UVRA programs.

A new MassBudget report, "Universal Voluntary Retirement Accounts: Expanding Employee Savings Opportunities," is available at www.massbudget.org.

- From “Universal Voluntary Retirement Accounts: Expanding Employee Savings Opportunities”, e-mail from Noah Berger, MassBudget.org, July 27, 2010.

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