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Let’s find a way to help Rhode Islanders face retirement

Advocates say a voluntary RISavers program could be one way to help private sector workers save for retirement without creating new costs for employers

Most of us will eventually reach an age when we’ll want or need to stop working.

But for thousands of Ocean State workers, thinking about retirement causes stress, not joy.

They are not wondering when they’ll be able to realize the goal of retirement. They are wondering whether they’ll be able to afford basic needs like food, housing and health care once they stop working.

Starting to save for retirement now — even for folks well into their working years — can make an enormous difference.

That’s why we’re proposing the creation of the RISavers program, which would make a convenient, portable and voluntary IRA program available to private sector workers who currently don’t have a way to save for retirement out of their paycheck.


RISavers is a program that will benefit employers, employees, and the State of Rhode Island.

Through the RISavers program, private employers that do not already offer a qualified retirement savings plan would be required to offer workers access to the new IRA program. Signing up is easy for employers and they are not required to provide any matching of employee contributions.

This means the program does not create new costs for employers. In fact, the ability to offer access to a simple payroll deduction retirement account may help industries that have struggled with staffing shortages to compete with larger companies in attracting and retaining workers.

Employees would be automatically enrolled through payroll deduction and have the ability to opt out anytime. The savings, and the investment returns, belong to the employee — they can choose how much to contribute and take it with them from job to job.

Despite the many benefits, nearly half of all working Rhode Islanders don’t have access to a workplace retirement plan, according to data compiled by the AARP’s Public Policy Institute. The shortfall was even more critical among small businesses. At companies with 100 or fewer employees, two-thirds of workers lacked access to a retirement plan.


RISavers will also save the state money in the future. An increasingly older population without adequate resources for retirement will put significant strain on our state’s safety net programs. A smaller working-age population will feel the financial burden as the state struggles with its budget.

According to AARP, if the savings of low-income retirees were increased to the point that their retirement income was boosted just $1,000 per year, Rhode Island would save more than $25 million over the next decade.

The benefits of RISavers are significant and the time to act is now. By 2030, one out of every four Rhode Islanders will be 65 or older. Without other savings, Rhode Island retirees will be left to rely solely on Social Security income. But it’s clear that for most people, that money — while an important piece of the retirement puzzle — won’t be nearly enough.

Automatic workplace retirement programs are the solution. Research shows that Americans are 15 times more likely to save for retirement when they can do so at work, and 20 times more likely to save if their workplace plan is automatic.

We have successful blueprints from other parts of the country. As of late 2021, programs in Oregon, California and Illinois had resulted in a combined $420 million in retirement savings for almost 430,000 workers, and 11 other states have enacted similar programs.


The benefits of RISavers are clear. And Rhode Islanders have spoken: In AARP Rhode Island’s recently conducted Vital Voices survey, 64 percent of adults age 45 and older said it is important to be able to save for retirement through an employer, and 88 percent agree that state officials should support retirement savings legislation.

It’s time we address Rhode Island’s retirement savings crisis head-on. Let’s give our state’s workers an important new tool to set the course for their own financial future.

Meghan E. Kallman is a Democrat representing District 15 in the Rhode Island Senate. Kristina Brown is the Program Officer for Housing and Economic Policy at United Way of Rhode Island. Catherine Taylor is State Director for AARP Rhode Island.