Pew survey finds support for state auto-IRA programs

A survey of workers' attitudes toward state-sponsored automatic IRA programs released Thursday by The Pew Charitable Trusts found widespread support. Pew officials surveyed more than 900 workers without access to retirement plans at small and midsized businesses with five to 500 employees, and conducted additional focus groups for context. After having a typical state role in such programs explained to them, 64% said they support state sponsorship of auto-IRA programs. Among that group, 32% "strongly support" and 32% said "somewhat support." One-fourth of people surveyed were unsure if they would participate in a program, but only 13% said they would opt out. Figures were higher when asked about automatic features for such programs, with 73% of workers surveyed supporting automatic enrollment and 68% supporting automatic escalation. Pew also found no significant difference between a contribution default rate of 6% of earnings vs. 3%. "When employees know all the details … a large majority said they would stay in the plan," said John Scott, Pew retirement savings project director, in an interview. Mr. Scott said that the survey also provided insight into how workers at small- and medium-sized business respond to automatic savings programs, and offered some lessons for employers as well. The survey report, Worker Reactions to State-Sponsored Auto-IRA Programs, is available on Pew's website. Hazel Bradford is a reporter for InvestmentNews' sister publication Pensions&Investments.