ANALYSIS: State Retirement Programs to Boost Worker Investments

Some states are trying to fill a gap between large- and small-employer-sponsored retirement plans with state-sponsored retirement savings programs.

Fourteen states have active retirement savings programs, and another seven—as well as Puerto Rico—are in the process of launching theirs.

The programs, which are voluntary for employers in some states and mandatory in others, allow employees to elect automatic payroll deductions up to a certain percentage of income. Those funds are then deposited in state-vetted retirement vehicles such as target-date funds.

Small employers have traditionally offer sponsored retirement plans at a much lower rate than larger employers, ...