
Investments shriveled up. Stocks plummeted. Pensions lost ground. Managers in both the public and private sector were left to devise creative solutions for the resulting challenges in post-employment benefits.
In the private sector, more than half of employees don’t participate in a workplace retirement plan, according to the U.S. Government Accountability Office. Without retirement income, many of these workers will have to turn to public safety-net programs such as Medicaid, placing a strain on federal and state coffers.
A Segal Consulting study, co-authored by a CSLF advisory board member, suggests states could reduce their Medicaid costs by implementing a state-sponsored retirement savings plan for private sector workers who are not currently participating in a retirement plan.
The analysis shows states could save $5 billion on Medicaid spending — $100 million each for some states — by requiring participation. Although this doesn’t solve the problems of current retirees, it shines a light on possible solutions for those who will retire over the next generation.