Workers are far more likely to save for retirement if their employer provides a 401(k) or similar workplace retirement savings plan. The problem: Millions of employees don’t have access to a plan on the job.

Most large companies offer 401(k)s, but only about half of small and midsize companies do. And one-fourth of private-sector employees work for companies that don’t have a retirement savings plan at all, according to a survey by the Pew Charitable Trusts.

The impact on savings is stark. Nearly one-fourth of U.S. households have saved less than $1,000 for retirement, according to the Employee Benefit Research Institute’s 2017 Retirement Confidence Survey. More than two-thirds of workers who have saved less than $1,000 said they don’t have a workplace retirement plan.

Several states have proposed requiring employers that don’t offer a retirement plan to automatically enroll workers in a state-run IRA. The initiatives have been stalled by legal challenges from industry groups representing employers. They argue that the state-run plans would create regulatory headaches for companies with employees in multiple states and could even discourage some companies from offering 401(k) plans.

Last spring, Congress repealed Obama-era regulations that would have made it easier for states to require employers to enroll their workers in IRAs automatically. A proposal that has more support from employers would allow small businesses to band together to form multiple-employer plans, or MEPs.

Ted Benna, a benefits consultant, is widely credited with creating the 401(k) plan features most companies use today (he came up with the idea for a match). But Benna now believes 401(k) plans are too expensive and cumbersome for many small employers. He has developed model savings plans that provide a way for employers to offer IRAs, with the added benefit of payroll deduction and a company match.

Benna has developed another model for employers with 100 or fewer employees using a SIMPLE IRA, which allows for pretax contributions of up to $12,500, or $15,500 for those over 50. (The maximum an individual can contribute to an IRA is $5,500, or $6,500 if you’re 50 or older.) To keep costs down, Benna’s models use low-cost funds from Vanguard and Schwab.

“You can get the benefits of a 401(k) without using Section 401(k) of the Internal Revenue Code,” he says.

Sandra Block is a senior editor at

Kiplinger’s Personal Finance magazine. Send your questions and comments to moneypower@kiplinger.com.