Concerned that social services will be strained in the future as workers age and may have neglected saving for retirement, Nevada lawmakers are again proposing following states such as Oregon and Colorado that have adopted state-backed retirement plans for those working in the private sector. 

The retirement plan proposed by SB305 would be similar to one employees would receive if their workplace offered a 401(k) or other benefits. A portion of an employee’s paycheck would be set aside at regular intervals to invest in their retirement account. 

It’s not the first time the concept has come before the Legislature, but bill supporters say the state is facing a ticking time bomb with an estimated 50 percent of Nevadans in the private sector (593,000 people) working for businesses that do not offer a retirement plan, which will down the road likely put immense pressure on social service programs such as Social Security or food stamps.

“It is my opinion that if we don't get people to start saving, our social programs are going to be in trouble in 30 years and 40 years,” said Sen. Dallas Harris (D-Las Vegas), the bill’s sponsor, during a hearing on Wednesday. “This program costs nothing to the state. It costs nothing to businesses. And it's completely run on the fees of the participants.”

Under an amendment proposed by Harris, the bill would create a Nevada Employee Savings Trust within the state treasurer’s office, which would maintain the program. It would  automatically enroll private sector employees into the program, provided the employee is an adult, has worked at the same place for 120 days and has wages allocable to the state. Employees would be allowed to opt out of the program if they wish.

Their employer also has to have been in business for at least three years and not offer their employees its own state-recognized retirement plan or a similar program offered by a trade association or chamber of commerce.

The bill, which would take effect in July 2025 if passed, would within the extent allowed under federal law allow any employee with funds in the retirement savings program to withdraw the funds “at any time if necessary to meet a financial or other emergency.”

Similar legislation creating a state-backed retirement plan was also introduced in 2019 and 2021, but failed to pass. According to testimony submitted by Pew Charitable Trusts, 12 states have adopted laws creating automated state-backed saving programs, with six actively operating and the others in varying stages of implementation. 

Neal Waters, a member of the Nevada chapter of the National Association of Insurance and Financial Advisors, submitted testimony opposing the bill. Waters called the bill “well-intentioned” but warned it would not address the “foundational reasons” Americans are not saving more for retirement, saying that many state-operated, auto-enrollment plans in other states faced solvency issues and many individuals had different financial goals outside of saving for retirement.

“There is no doubt that saving for retirement is important, and there are significant benefits to saving early and often,” he wrote. “But it is only a part of the larger objective of achieving financial security.”

Waters’ testimony argued that financial planning decisions are best made in consultation with financial services professionals, and that the public has confidence in the private sector to meet those needs.

Sen. Pete Goicoechea (R-Eureka) also raised concerns that the 120-day minimum for eligibility could possibly exclude temporary ranch workers. 

“Concerned about my sector [ranching]. We've got one permanent employee, three guys helping haying in the summer,” Goicoechea said. “The paper trail is what concerns me — we're not so good at the books.” 

Harris reassured Goicoechea that the four-month span of employees not being covered was to ensure employers wouldn’t cut employees off to avoid paperwork, but Goicoechea still expressed concerns employers would get rid of employees on the 119th day.