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About half of private sector workers in the country don't have retirement plans at work so some state governments are stepping in. A handful have passed laws that require employers to funnel a small percentage of these workers' pay into state-managed retirement accounts. New Jersey could be the next to do this. NPR's Ina Jaffe covers aging, and she has more.
INA JAFFE, BYLINE: The numbers are in, and they don't look good. About 40 percent of baby boomers have nothing saved for retirement. Meanwhile, about a third of Americans who are currently retired rely on Social Security for almost all of their income.
VINCENT PRIETO: We need to help them correct the situation.
JAFFE: Says Vincent Prieto, the speaker of New Jersey's General Assembly. He's a primary sponsor of the bill that would create a state-run IRA for people who don't have a retirement plan on the job. Prieto explains that these workers would automatically be enrolled then 3 percent of their pay would be forwarded to the state-run plan.
PRIETO: Most of the people that we have talked to really like the idea because, you know, a small percentage - you don't feel it, and it could give you tremendous returns at the end of the day.
JAFFE: Employees could opt out if they wish or save more than 3 percent with all the tax advantages of an IRA. But it's that automatic enrollment that's key, says Sarah Mysiewicz Gill, who handles state legislative issues for the AARP.
MYSIEWICZ GILL: People are 15 times more likely to save if they have access to workplace savings vehicles, but if you add on top of that automatic enrollment, you've got 90 to 95 percent participation.
JAFFE: Legislation to create some form of state-run IRA has been introduced in at least 20 states. Laws have passed in seven so far, though none have gone into effect yet. One of the things that's been holding states back is the possibility of conflict with federal pension regulations. At the White House Conference on Aging this past summer, President Obama announced that his administration would write new rules to fix that.
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BARACK OBAMA: And that's all we're trying to do here is make sure that if you're working hard out there, even if you're not making goo-gobs of money and don't have fancy financial advisers and all that, that you can still put away a little nest egg so that you're protected when you get older.
JAFFE: But there are already plenty of ways to do that without passing new laws, says Marin Gibson, managing director of the Securities Industry and Financial Markets Association. The private market, she says, offers savers plenty of options.
MARIN GIBSON: They could walk into their credit union or bank and open up a plan, and they could have deductions drawn on their pay day and they could buy mutual funds or other investments to help with their retirement.
JAFFE: And, Gibson says, whatever retirement problems the country may be facing, the states are not the places to solve them.
GIBSON: Having 50 different plans with all different rules is not necessarily a good direction for retirement policy.
JAFFE: But New Jersey voters disagree. A poll shows that about 70 percent like the idea of a state-run IRA. And it's not just individual savers who could benefit. New Jersey General Assembly Speaker Vincent Prieto says that if people increase their retirement savings, the state could save millions of dollars in public benefits.
PRIETO: This could help, you know, people have additional money and not have to rely on programs and services that the state may have to subsidize to them if they didn't have that money.
JAFFE: Prieto says he hopes the bill reaches Governor Chris Christie's desk by the end of the year. Ina Jaffe, NPR News.