Delaware becomes 16th state to join auto-IRA ranks

Gov. John Carney signed the Delaware EARNS Act, which requires businesses with more than five employees that don't offer a retirement plan to enroll in the state program.

Add Delaware to the list of states offering auto-IRAs.

Delaware Gov. John Carney signed the Delaware EARNS Act (Expanding Access for Retirement and Necessary Savings) into law last week, which requires businesses with more than five employees not currently offering retirement plans to enroll in the state program or a qualified alternative.

According to Delaware’s Office of the State Treasurer, almost 150,000 workers lacking an employer-sponsored saving program will be able to save for retirement under the new program.

“We’ve worked long and hard to make this program a reality for Delawareans who lack access to an employer-sponsored retirement program,” Colleen Davis, Delaware’s state treasurer, said in a statement. “I am grateful to Representative Larry Lambert, Senator Nicole Poore, all of their colleagues in the General Assembly, the AARP of Delaware, and of course the Governor for helping us get here.”

Delaware becomes the 16th state to adopt such a savings program, which means almost one-third of all states in the nation now have one. And so far in 2022, at least 21 state legislatures have debated legislation to establish a new auto-IRA program, amend an existing program or explore their options.

“State programs recently crossed an important milestone in July 2022 with more than a half billion dollars in assets in more than a half million new saver accounts, with many programs preparing to launch this year and early next year,” said Angela Antonelli, research professor at the Georgetown University Center for Retirement Initiatives.

Now that Carney has approved the legislation, the Delaware treasurer’s office is tasked with hiring an executive director to oversee the program and work with the Delaware EARNS Program Board, which will consist of the state treasurer, the secretary of finance, the insurance commissioner, the secretary of labor, the chairperson of the Plans Management Board, plus two members of the public selected by Carney.

AARP Delaware proved to be a staunch advocate for the creation and passage of the Delaware EARNS program, hence the shout-out from Davis.

AARP Delaware State Director Lucretia Young said in the statement that the organization was “pleased to work alongside our State Treasurer to help provide an easy pathway for workers to start building a safety net and grow the savings they need for a more secure future.”