Helping Pennsylvanians Save for Retirement

AARP Pennsylvania is pressing hard for the General Assembly to enact a state-facilitated “auto IRA” program for employees of businesses that don’t have employer-sponsored retirement savings accounts.

The proposal, called Keystone Saves, would automatically enroll workers at companies with five or more employees that don’t have a retirement savings option. Workers could opt out.

The measure passed the state House last May by one vote but did not receive a vote in the state Senate. Advocates hope they can push the bill through the Senate this year.

“The most important piece of it for me is that it would help over 2 million private-sector employees save for retirement through a payroll deduction at no cost for the small business,” says Nora Dowd Eisenhower, 72, AARP Pennsylvania’s volunteer state president. She says the bill would help older Americans with financial security, especially if they don’t have retirement funds beyond Social Security.

So far, 20 states have created similar programs for private sector workers. The accounts are portable, which means workers can carry them from job to job. The start-up costs for the state are an estimated $2.5 million for the first two years, but those outlays are offset by savings in other state programs, such as food assistance, when workers retire and can rely on savings, Eisenhower says.

Critics worry that the state programs would supplant private sector savings options or would cost small businesses money. Pew Charitable Trust research in 2024 showed no crowding out of private sector plans. Under Keystone Saves, small businesses would make the accounts available but have no responsibility for the accounts once workers enroll.

Find more at keystonesavescoalition.org.