While states enacting mandatory IRA programs for employers that don’t offer retirement plans seems burdensome, I do support it, just because it increases retirement plan coverage and likely, plan sponsorship, so these employers start offering a plan on their own and avoid the mandatory state IRA.

Pew indicates that data from 5500 forms suggests that in states that have created what is known as auto-IRAs, employers with plans continue to offer them, and businesses without plans are still adopting new ones at similar or higher rates than before state options were available. Since 2013, before the first state auto-IRA programs were introduced, the percentage of new plans as a share of all employer-sponsored plans increased nationwide from roughly 6% to nearly 8% by 2019.

So while states will require employers to partake in an IRA plan if they don’t offer one, I think it will only spur employers to adopt a plan of their own because of their uneasiness of partaking in any type of government program.