How Do Firms Respond to State Retirement Plan Mandates?

We investigate how state “Auto-IRA” mandates affect firm offerings of employer-sponsored retirement plans (ESRPs). These policies require firms without ESRPs to facilitate automatic employee contributions to state-created individual retirement accounts (IRAs). We find that these policies increase an individual’s probability of working for a firm with an ESRP by 6-9 percent and of being included in the ESRP by 8-13 percent. At the firm level, these policies increase the probability of offering an ESRP by 7 percent, the probability of establishing a new ESRP by 41-44 percent, and the number of ESRP participants by 6 percent.