Retirement

Universal Voluntary Retirement Accounts (UVRAs)

More than half the workforce in the United States lacks access to an employer-sponsored retirement savings plan. This savings gap disproportionately affects low-income employees and those working at small or medium sized businesses. Less than 20% of those earning less than $20,000 have pension coverage, and small businesses often find pension plans unaffordable and complex to implement.

Fortunately, several states are considering legislation to create universal retirement savings accounts (UVRAs) that make it possible for more low-wage workers to save for retirement. Specifically, UVRAs, instead of replacing existing private pension plans, would create a new retirement savings option for those not served by the current private pension market. Such UVRAs, sometimes referred to as automatic IRAs, would offer employees not covered by an employer-sponsored retirement plan the opportunity to save through automatic payroll deductions. Moreover such accounts would be both simple (participants would be able to choose from a limited, preselected list of investment options) and portable ( when workers leave jobs their retirement account goes with them).