State Would Provide IRA Retirement Program To Workers Without One Under Bills

(Source: MIRS.news, Published 03/26/2026) Michiganders whose workplace doesn't offer retirement benefits could enroll in a state-run individual retirement account (IRA) program, under legislation the Senate Labor Committee moved March 19. 

Blocks with the letters I R A

The bills consist of Sen. John Cherry (D-Flint)'s SB 807 and Sen. Mary Cavanagh (D-Redford Twp.)'s SB 808, establishing the "Retirement Savings Board Program" within the state Treasurer. 

According to national reporting by the AARP, about 47 percent of workers in the United States aged 16 to 64 were employed in 2022 by businesses not offering any type of retirement program. Small businesses were pinned by AARP as less likely to offer a plan, with nearly 78 percent of individuals at a workplace with fewer than 10 employees not offering a plan. 

The AARP also published that for companies with more than 1,000 workers, more than a third of workers "did not have access to an employer-sponsored retirement plan." 

While the AARP looked at such numbers from a national lens, DBusiness in September 2024 reported that 94 percent of Michigan-based employers offered 401(k) or 403(b) options when asked by the Troy-based American Society of Employers (ASE). 

The bills passed by a party-line out of committee. 

During the meeting, Cherry said that businesses would be required to submit information to the Treasury for the payroll deductions, the same way they do for taxes. He described how employees without an employer-offered plan currently face time, understanding and ability barriers to sit down and set something up individually, despite how it could benefit them in 40 years.

One of the testifiers, owner Summer Thompson of E&M Design Solutions in Muskegon – which offers engineering project consulting – said that despite her best efforts, offering retirement plans to her employees "is still out of reach." 

Thompson purchased the business in 2022 from her previous boss. She said that E&M Solutions offers health care and paid time off benefits, as well as bonus opportunities, recognizing "how difficult it is for small businesses to compete with larger companies when it comes to benefits." 

But for a retirement plan, "the cost and administrative burdens are simply too high for a small employer like me to take on right now." 

"The good news is my business has begun to turn a corner. I was recently awarded a large contract that will allow us to grow over the next few years. But growth also means hiring and finding skilled employees in today's labor market. That's not easy," she said. "The Michigan Secure Retirement Savings Program would make a real difference for small businesses like mine by providing a simple, affordable way for employees to save for retirement through payroll deductions." 

Another testifier was Troy Morris, the co-founder of Kal Morris Inc. in Marquette, a space logistics and mobility company working on satellite technologies. He has a team of about 20 people, with many coming from the military, NASA and "advanced engineering fields." 

He said that offering retirement benefits takes "significant time, resources, administrative capability and capacity to even put these programs in place, yet keep up with them year-over-year." 

Morris described paying management fees for the plans, evaluating changes and increases and keeping up with minimum contributions levels. 

While SB 807 and SB 808 set up an IRA program that would be automatic in nature, employees could opt out. 

Sen. Thomas Albert (R-Lowell) – the sole Republican on the Senate Labor Committee – asked what the legislation, and its automatic enrollment style, would mean for the single mother attempting to make ends meet at an entry-level job. 

"Probably, in certain situations, that could be a situation that's disadvantageous for the individual at that point in time," Albert said. “And I think that's probably why you see higher withdrawal rate from these accounts from the other states that have done this.”

He asked how the legislation would help someone who's living month-to-month or week-to-week off their paychecks if their payroll is going to be put automatically into an IRA deduction system before they opt out themselves. 

In September 2024, a survey run by CNBC and SurveyMonkey software found that four in 10 American workers were "behind on retirement planning and savings," mostly because of debt, insufficient income and "getting a late start." 

"Everybody, whether you're in an entry-level position or not, has an interest in saving for their retirement," Cherry said in response to Albert's question. "Now, because you are . . . auto-enrolled doesn't mean that you have to put a certain amount of money into an IRA. You can have IRAs with very low levels of money in it, and you have the opportunity to set what your dedication is." 

The bills have been opposed by the Detroit Regional Chamber, the Small Business Association of Michigan and the Michigan Manufacturers Association. 

According to the National Federation of Independent Business (NFIB), representing more than 12,000 small business owners in Michigan, 87 percent of their membership was opposed to a state-run 401K program. 

"And while the legislation indicates that the employer will not be liable for decisions, most employees will still make that assumption because the employer is responsible for introducing and administering the program. Employers will end up being in the crosshairs of any miscommunications or issues when it comes to this program," said NFIB's Michigan state director, Amanda Fisher, in a letter to the committee. 

Fisher said small business owners want to provide benefits that their employees need, but mandatory programs prevent them from crafting relevant benefits that are most important to who's working for them. 

"Saving for retirement should be a matter of personal responsibility, not another regulation put on the backs of small business," Fisher said.