The results from this year’s Employee Benefit Research Institute’s Retirement Confidence Survey reveal many things about the state of the country’s retirement readiness.

One conclusion will be news to few stakeholders and students within the retirement industry: While the survey shows retirement confidence may be leveling, and even improving by some measurements, it remains woefully anemic among Americans without access to workplace savings plans.

Read: Retirement crisis? Do you really need to ask?

How bad is it? EBRI surveyed 1,505 respondents, and weighted its findings to represent national averages: By the survey’s numbers, 53 percent of Americans have access to a workplace savings plan. Of those workers who don’t have access, the clear majority—67 percent—report having less than $1,000 in retirement savings.

And 83 percent have less than $10,000 in savings. Factored further, 91 percent without access to an employer-sponsored plan have less than $50,000 in savings.

Read: 4 views on retirement savings portability

Worse still: only 21 percent of respondents without access to a workplace plan report having anything saved, while 88 percent of those with access to plans are saving at least something.

Read: The time is nigh for the 401(k) MEP

In a press call, Craig Copeland, EBRI’s senior research associate, and Mathew Greenwald, president of Greenwald and Associates, the research firm that conducted the survey, each said their firms don’t have an official position on efforts at the state and federal level to create government-run plans that intend to expand access to businesses currently not sponsoring plans.

Yet both noted the stark reality facing savers without access to a retirement plan.

“We need more people saving for retirement, however that is accomplished,” said Copland, who explained EBRI does not advocate for specific types of savings approaches, no matter whether they’re from the private or public sector.

Greenwald reiterated that, saying, “we don’t take a position, but the overall idea of increasing coverage is laudable.”

This January, the Department of Labor closed its comment period for a proposed safe harbor that would make it easier for states to mandate participation in retirement plans.

The safe harbor, which is in the process of being finalized, would allow the states that operate retirement plans and participating employers to be exempt from the Employee Retirement Income Security Act.

To date, several states, including California, Illinois, Massachusetts, Washington, Oregon, Connecticut, Maryland, and New Jersey, have legislated some form of state-run retirement program, though not all would include an employer mandate to participate in the enrollment of workers.

Numerous other initiatives at the state level are underway across the country. And in November 2015, the U.S. Department of Treasury officially launched its myRA savings program, designed as a safe, inexpensive starter savings option to help deliver access for the more than 50 million working Americans without access to a workplace retirement savings plan.

Last September, the Government Accountability Office issued a report encouraging Congressional support for efforts at the state level to increase access to workplace plans.

“We agree that DOL should review and revise existing regulations and guidance to accomplish all that can be done administratively to facilitate state efforts to expand coverage,” wrote GAO in its report’s conclusions.

Alicia Munnell, director of Boston College’s Center for Retirement Research, recently testified before a Senate Finance Committee hearing on retirement security.

Her primary piece of advice to lawmakers: The country’s retirement crisis necessitates “bold changes,” which should include a Congressional mandate that all employers be required to enroll workers in some form of retirement savings plans.

Each of President Obama’s budget proposals has included such a mandate, but over his two terms, Congress has shown little interest in taking up the issue.

As far as EBRI’s new data is concerned, Munnell said it highlights the need to close the coverage gap so that everyone has access to a retirement saving plan through their employer.

“Since no progress has been made in passing federal legislation, states have begun to step into the breach,” explained Munnell in an email to BenefitsPro.

While an advocate for a federal solution, Congressional indifference means state-run programs are the best remaining option, Munnell said.

“I applaud the state initiatives to move the ball forward,” she added.

Betsy Dill, who leads Mercer’s U.S. financial wellness advisory, noted that EBRI’s new data shows that comprehensive access is only one part of the problem.

Among workers with access to a retirement plan, only the minority is taking the basic steps necessary to assure adequate retirement savings, said Dill.

She advocates turnkey financial wellness solutions within retirement plans to improve savings rates for workers currently with access to workplace plans.

Last year, Mercer sold its recordkeeping business and created a new division, the Defined Contribution and Financial Wellness Unit, which is building a new ecosystem of financial wellness tools incorporated with retirement benefits.

As for public-sector initiatives, Dill told BenefitsPro that Mercer “supports the steps being taken to provide greater levels of coverage, and feels they are worthy of attention.”

Not all retirement providers are as supportive of state-run savings programs.

Several trade groups and one provider of retirement plans voiced concerns over the DOL’s proposed safe harbor in comment letters.

Charles Nelson, CEO of Voya Retirement, wrote that proposals at the state level will do little to move the needle on the overall state of retirement preparedness and may even impede efforts in the private sector to expand access.

“A 50-state patchwork of government-administered retirement savings vehicles with inconsistent state and local regulations, low annual contribution limits, no opportunity for employer contributions and limited access to retirement planning and advice,” will do little to improve the existing savings crisis, wrote Nelson.

Many plans at the state level will require deferrals to IRAs, which of course come with substantially lower deferral limits than allowed in 401(k) plans, noted Nelson.

He also said the DOL’s proposed safe harbor, which would limit ERISA’s jurisdiction over prospective state-run plans, is in direct conflict with the agency’s proposed fiduciary rule, scheduled to be finalized in the coming weeks.

The proposed fiduciary, or conflict-of-interest rule, would greatly expand ERISA’s fiduciary requirements to advisors of IRAs. It would also require all advisors to workplace plans with fewer than 100 participants to act as fiduciaries.

Instant Insights /

Does new EBRI data bolster argument for state mandates?

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