A retirement plan mandate: not as scary as it sounds

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A recent legislative proposal would require virtually all employers to offer a retirement plan starting as soon as 2023. The good news is that, not only would this requirement significantly improve retirement readiness for millions of employees, it is also likely to be considerably easier and less expensive for employers to comply with than many realize.

To put the proposal into perspective, it is helpful to look at the experience of countries that have already introduced similar measures. For example, starting in 2012, the UK rolled out a requirement for all employers, regardless of size, to automatically enroll workers in a retirement plan. As a result, the percentage of private sector workers contributing to a retirement plan leaped from 42% in 2012 to 86% in 2019. This increase in coverage was even more notable among groups that have typically lacked coverage, such as low-earners, part-time workers and those employed by micro-employers.