Almost half of U.S private-sector workers do not have access to the easiest and best way to save for retirement -- a workplace plan -- leaving millions of Americans with an uncertain financial future.
Expanding access to workplace retirement plans is critical to mitigating a retirement crisis that has left many people facing poverty in retirement and needing to rely on family and social programs.
In a Federal Reserve survey, 31 percent of non-retired respondents reported that they have no retirement savings or pension. Few people without access to a workplace plan -- fewer than 10 percent of workers in fact-- save for retirement on their own.
Expanding the number of people who can save through work has broad support from policymakers and groups across the political spectrum, including President Obama and the Heritage Foundation. Four states -- California, Connecticut, Illinois and Oregon -- have invested in their workers and their economies by enacting legislation to create public-private workplace retirement savings plans for those who do not have access.
In Colorado, legislation called the Colorado Secure Savings Plan is our state's best hope for helping all workers make ends meet in retirement. It would allow those without a workplace plan to save a portion of their wages through a simple, opt-out payroll deduction.
Here's why the Colorado Secure Savings Plan is a must:
1) The lack of access to a workplace retirement plan is persistent and growing.
Forty-five percent of Colorado's private-sector workers do not have a plan at work, a number that has grown from 38 percent in the late 1990s.
2) The lowest-income workers are least likely to be offered a workplace plan.
In Colorado, those with the lowest earnings are almost 2.5 times more likely not to have a retirement plan at work than those with the highest earnings. Only 12 percent of workers at the lowest income level, or those who make less than $22,000 a year, participate in a workplace retirement plan. Case in point: 100 CEOs have more saved for retirement than 41 percent of U.S. families combined.
3) People of color are much less likely to have access to a workplace plan.
White workers in Colorado are 30 percent more likely to work for an employer that offers a workplace retirement plan than are minority workers, with Hispanic workers being the least likely to have access to workplace retirement plans.
4) Small businesses, which are a key part of our economy, typically do not offer retirement plans.
Eight out of 10 Coloradans working in our state's smallest businesses -- those with fewer than 10 employees -- have no workplace retirement plan. Six in 10 of those working at businesses with 10-49 employees have no workplace plan. Yet in 2015, three out of 10 private-sector workers in Colorado worked in firms with fewer than 50 employees, and about two out of 20 were employed by firms with 19 or fewer employees.
5) Younger workers are disproportionately affected.
Forty-nine percent of Colorado workers age 25-29, 45 percent of those age 30-34 and 48 percent of those age 35 to 39 have no retirement savings plan at work. Younger people could benefit most from the Colorado Secure Savings Plan. They have many years left to save, and they want to do so.
6)The inability to save through work contributes to many Coloradans relying too heavily on Social Security.
The lowest-income retirees in Colorado depend on Social Security for 80 percent of their income, and Coloradans overall rely on Social Security for 64 percent of their retirement income. Social Security is only intended to replace about 40 percent of a worker's income.
These six reasons -- really 753,972 reasons if you count all the Colorado workers without access to a workplace retirement plan -- make the Colorado Secure Savings Plan a must-do for our workers, families and economy.