In their popular book, Nudge, Richard Thaler and Cass Sunstein argue that automatic enrollment in retirement plans is the “obvious answer” to the question of how to get more workers to save more for retirement. Improving retirement savings is increasingly important as today’s workers are not adequately saving for retirement. The average household in America that is close to a traditional retirement age has essentially no personal assets on which to retire. In recent years, several states have passed “Secure Choice” legislation designed to help private sector workers save for retirement by requiring automatic enrollment in individual retirement accounts (IRAs). In 2017, Minnesota legislators introduced the Minnesota Secure Choice Retirement Program Act (MSCRPA), which includes a requirement that businesses automatically enroll their workers in a state sponsored retirement account.

Like other states’ Secure Choice programs, the MSCRPA is intended to increase workers’ retirement savings when compared to the status quo. In addition, the Act takes a unique two-pronged approach to encouraging retirement savings by requiring employers to automatically enroll their employees in one of two state sponsored plans. This feature of the MSCRPA is likely to achieve increased retirement savings when compared to other states’ Secure Choice programs.

This article describes the retirement savings problem currently facing the United States, provides background on the current retirement policy scheme, and seeks to analyze how the MSCRPA (or similarly structured legislation) improves on current retirement public policy and improves on other states’ Secure Choice programs.