Rhode Island will launch the RISavers program, a public retirement savings program for private sector workers in the state who are not currently offered a retirement savings option by their employer, said James A. Diossa, the state's general treasurer, in a news release.
RISavers, which was created by the Rhode Island Secure Choice Retirement Savings Program Act of 2024, will partner with an existing similar program in neighboring Connecticut, according to the Nov. 20 release.
The Rhode Island Treasury will launch a pilot program in the spring of 2025 with a full program launch following shortly afterward.
Specifically, RISavers will offer employees a Roth Individual Retirement Account, while employees at eligible businesses will be automatically enrolled to save but can opt out at any time.
RISavers will be overseen by the state treasury in cooperation with Vestwell State Savings, a third-party administrator with experience implementing and administering state-facilitated retirement savings plans in ten other states.
In addition, retirement savings accounts opened under RISavers will follow the employee if they change jobs.
Moreover, accounts opened through the RISavers program are “portable” so savers will have the ability to choose their risk preference and contribution rate. Contributions will be processed as a payroll deduction to make participation easy for employers and employees alike.
Employers must provide program information and process their employees’ deductions. However, matching contributions will be prohibited by law.
A spokesperson for the Rhode Island Treasury said that Connecticut and Rhode Island will be “equal partners in terms of plan structure for savers,” and that decisions such as the default contribution rate and risk options presented to savers will be the subject of cooperative agreement between the two states.
“Ultimately, the goal of partnership is to reduce the cost to savers,” the spokesperson added. “Through this strategic partnership, employees that enroll with RISavers will pay less in account fees than if Rhode Island created an independent program.”
Connecticut was one of the first states to enact a public retirement savings program, Diossa noted, adding that almost 30,000 Connecticut residents have saved more than $33 million under the ‘MyCTSavings’ program launched in 2022.
The spokesperson for the Rhode Island Treasury estimated that about 170,000 employees at more than 4,000 Rhode Island businesses currently lack access to a workplace retirement savings plan. “While not all of those individuals will enroll in RISavers, states with similar programs generally see an 80% participation rate from employees,” the spokesperson added.
Indeed, this partnership follows other similar programs in other states. In June of this year, the Colorado SecureSavings Program formed a partnership with Vermont’s public retirement savings program, VT Saves, which added Vermont to the Partnership for a Dignified Retirement, an interstate consortium of state-run auto-IRA retirement savings programs that also includes the states of Delaware and Maine.
Colorado SecureSavings was created by the Colorado state treasurer's office and launched in January 2023 and is designed for employees who don’t have access to a workplace retirement savings program.
