Metro-Denver employers are above the U.S. average in providing retirement plans, but about a third of full-time and 63 percent of part-time workers lack access, according to a new study.
Workplace retirement plans, such as 401(k) accounts, have become a critical retirement savings tool. Yet access varies drastically across the country and even within a state, according to a study released Tuesday by the Pew Charitable Trusts.
In metro Denver, about two out of three workers have access to a retirement plan, while in Colorado Springs, that ratio is closer to six out of 10. Both metros are above the U.S. metro average but not in the top quarter.
Among part-time workers, only 37 percent had access to an employer-sponsored retirement plan in metro Denver.
Nationwide, 58 percent have access to a plan.
Retirement coverage is an issue of growing importance on a local level as governments consider how they can help. Not doing so could mean facing a population unable to take care of itself in the future, which could put undue strain on Medicaid, food assistance programs and other support services.
“We need to have some sort of mechanism to encourage people to start saving,” said John Scott, director of the retirement savings program at Pew. “Policy nudges can make a difference.”
A bill in the legislature this year to look at ways the state could help workers save more for retirement. Supporters argued unprepared retirees risk draining state finances, while opponents of the measure countered that any solutions were better left to the private sector.
The federal government has put several policies in place recently to try to get Americans to save more. They include the Pension Protection Act of 2006, which enabled automatic contributions to a 401(k) plan, instead of contributions that an employee had to opt into. President Barack Obama also recently created something called myRA, which allows some people who don’t have access to a retirement plan to save.
Lawmakers in several states are considering retirement savings plans for those who don’t have access. Illinois, for one, created a state-run retirement savings program for certain employees without workplace access. It will start enrolling workers in 2017. Washington state last year created a marketplace in which small employers and the self-employed can shop for retirement plans.
In New York, Mayor Bill de Blasio recently endorsed the idea of a retirement savings plan for private-sector workers.
Pew’s analysis of 104 metropolitan areas found that regions with the highest rates of access are in the Northeast, the Upper Midwest and the Pacific Northwest. Many of the areas with the lowest access rates are in the South and parts of the West.
Workers in Grand Rapids, Mich., had the highest rate of access in the U.S. at 71 percent, but only 23 percent of workers in McAllen, Texas, did, making it the lowest in the country.
Areas with a high percentage of low-income workers, small-business employers and Latino populations were most adversely affected. Each of these groups tends to have lower access and lower participation rates in retirement plans.
The lack of access also underscores an overall sense of retirement insecurity in the U.S. Only 21 percent of American workers are very confident they will have enough money for a comfortable retirement, according to a 2016 survey by the Employee Benefit Research Institute; 42 percent are somewhat confident, and 19 percent are not at all confident.
Overwhelmingly, the survey found that those with the most confidence are those with a retirement plan.
Denver Post reporter Aldo Svaldi contributed to this report.
