OPINION:
Utah is one of the fastest-growing and strongest state economies in the country. Yet beneath that success lies a warning sign that extends far beyond our borders: Hundreds of thousands of workers lack access to workplace retirement savings.
This is not just a Utah problem. It is a national one.
Across the country, millions of Americans, especially those working for small and midsize businesses, have no access to employer-sponsored retirement plans. In Utah alone, an estimated 700,000 to 900,000 workers fall into this category.
If this problem is left unaddressed, then the result will be predictable: more retirees dependent on public assistance, increased pressure on state and federal budgets, and reduced economic stability for future generations.
Retirement security is often framed as a matter of personal responsibility, and it is. Still, access matters. When large numbers of workers lack basic savings tools, the consequences ripple outward, affecting labor markets, public spending and long-term economic growth.
Utah lawmakers are advancing a solution designed to expand access without expanding government control. House Bill 250 would create the Utah Retirement Plan Exchange, a state-facilitated marketplace where private retirement providers can offer plans to employers in a single, simplified platform.
The goal is straightforward: Make it easier, particularly for small businesses, to offer tax-preferred retirement benefits.
Just as important is what the proposal does not do. It does not mandate participation. It does not create a state-run retirement fund. It does not place the government in the role of asset manager. Instead, it reduces friction in the private market, allowing providers to compete while lowering barriers for employers who want to offer plans but face cost and administrative hurdles.
This matters because the current retirement market works best for large employers. Economies of scale make plans easier and cheaper to administer for big companies. Small businesses, which employ nearly half of America’s workers, often face higher per-employee costs and more complexity. Nationally, only about one-third of small businesses offer retirement plans, and participation rates in those plans lag behind those of large firms.
Utah’s exchange model aims to solve this market gap. By creating a centralized platform, the state can help standardize information, improve transparency and allow providers to serve a larger pool of smaller employers. The results are lower administrative costs, easier plan selection and expanded access without crowding out private-sector innovation.
The exchange would also list financial advisers, helping employers and workers connect directly with professional guidance.
The timing is significant. A federal incentive now offers a Treasury match of up to 50% on as much as $2,000 in annual retirement contributions for eligible workers, capped at $1,000 per year. Yet workers can benefit only if they have access to retirement accounts in the first place. Without expanded access, many lower- and middle-income workers will never see those federal dollars.
States across the country are exploring how to respond. Some are considering mandates requiring employers to provide retirement plans. Others are moving toward state-run savings programs that directly compete with private providers.
Utah is pursuing a different path, one rooted in market competition, employer choice and limited government. The exchange approach keeps the state out of investment management while helping private providers reach workers they currently struggle to serve efficiently.
The stakes are significant. When workers reach retirement age without savings, public spending increases as they rely more on health care support, housing assistance and other safety net programs. At the same time, consumer spending declines, affecting local economies and tax revenue.
Research suggests that, in Utah alone, inadequate retirement savings could drive more than $1 billion in additional public costs by 2040 if trends continue.
Those fiscal realities are not unique to Utah. They are national.
If federal policymakers eventually pursue nationwide retirement access mandates, then states that have already built market-based infrastructure will be better positioned to adapt while preserving employer choice and private-sector leadership.
Utah’s proposal is not about replacing the private retirement market. It is about helping it work for more workers. A construction employee, restaurant worker or small-business staff member should have the same basic opportunity to save for retirement as someone working for a Fortune 500 company.
Retirement security is ultimately about more than individual balance sheets. It is about long-term economic stability, workforce resilience and fiscal responsibility.
States that can expand access while preserving market principles will help shape the future of retirement policy in America. Utah is working to show how that can be done.
• Jason E. Thompson is an entrepreneur and public servant serving in the Utah House of Representatives and as a member of the Utah Federalism Commission. He is the co-sponsor of the proposed legislation. Joseph Elison is a member of the Utah House of Representatives, representing District 72 since Jan. 1, 2023. He is the sponsor of the proposed legislation.
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