The new saver's match of up to $1,000 from the federal government will become available to low- and middle-income retirement savers in 2027. It will replace the current less generous saver's credit, which has not been widely used.
"This is a much better carrot," Ms. Selenski said, referring to the greater attractiveness of the saver's match over the saver's credit.
One of the biggest drawbacks to the current saver's credit is that it is non-refundable, meaning the credit is applied to the taxes that savers owe. If low- and middle-income savers owe no tax — and there are many — they receive no benefit.
The new incentive, in contrast, will match 50% of what low earners put into their retirement accounts, up to $2,000, for a maximum match of $1,000. The money will be deposited directly into their retirement accounts.
The income thresholds for the 50% match vary by tax filing status. A couple filing a joint tax return, for example, will receive a full 50% match if their adjusted gross income is $41,000 or less.
Michael Parker, executive director of the Oregon Treasury Savings Network, which oversees the $174 million OregonSaves program, Salem, said the "additional bump on the saver's credit" gives savers even more reason to join the program, but he is still "not altogether sure" that it will in fact increase program participation.
Not everyone in the program will be eligible for the match because income levels vary, Mr. Parker said.
"I think the jury is still out," he said.
Christine Cheng, director of the $105 million Illinois Secure Choice program, Springfield, is also unsure about whether the saver's match will boost participation.