Employers are not required to offer retirement plans under federal law. Setting up a 401(k), pension, or similar plan is voluntary for private employers. The wrinkle is at the state level: about 17 states now require employers that don’t sponsor their own plan to enroll workers in a state-run retirement savings program, so whether you’re entitled to any retirement benefit at work depends heavily on where you live and how big your employer is.
What Federal Law Actually Requires
The Employee Retirement Income Security Act of 1974 (ERISA) governs most private-sector retirement plans, but it does not force anyone to create one. The Department of Labor states the rule directly: “ERISA does not require any employer to establish a retirement plan. It only requires that those who establish plans must meet certain minimum standards.”1U.S. Department of Labor. FAQs About Retirement Plans and ERISA
Those minimum standards kick in only once a plan exists. They cover funding, when workers become eligible, how quickly benefits vest, and what the plan has to disclose to participants.2U.S. Department of Labor. Employment Law Guide – Employee Benefit Plans Nothing in ERISA obligates an employer to start one in the first place. Social Security remains the only retirement benefit private employers are universally required to contribute toward through payroll taxes, and Social Security is not the subject of this article.
So if you’re working for a private employer that offers no 401(k), no pension, no SIMPLE IRA, and nothing else, that employer is generally within its rights under federal law. The next question is whether your state has changed that answer.
States That Now Require Employer Participation
Roughly 17 states run auto-IRA programs that require certain private-sector employers to enroll workers in a state-sponsored retirement savings account. The mandate typically applies to employers that don’t already offer a plan and that have more than a minimum number of employees, with the threshold varying by state.
States with active programs include California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, and Virginia. Additional states have programs scheduled to launch in 2027 and later.
The mechanics look similar across states. Employees are automatically enrolled with a default contribution rate somewhere in the neighborhood of 3% to 5% of pay. Contributions come out of the paycheck and go into an IRA held with the state program. Workers can opt out or change their contribution rate whenever they want. The employer’s only real job is running the payroll deduction; the state handles the account and investment choices.
Penalties for employers that ignore the mandate range from roughly $100 to $500 or more per eligible employee per year, depending on the state. Because thresholds, deadlines, and enforcement all differ, an employer with workers in multiple states has to check each one separately. This area is moving quickly, and states without a mandate today may adopt one within a few years.
One thing these programs are not: an employer contribution. The money going into your account is your own paycheck deferral. If you want a match, you still need a workplace plan that offers one.
If Your Employer Does Offer a Plan: Automatic Enrollment Under SECURE 2.0
Federal law doesn’t require employers to create a plan, but it does now shape what happens once they do. The SECURE 2.0 Act requires any new 401(k) or 403(b) plan established after December 29, 2022 to enroll eligible employees automatically. The starting contribution rate has to be at least 3% and no more than 10% of pay, and it must rise by one percentage point each year until it reaches at least 10%, up to a maximum of 15%.3Federal Register. Automatic Enrollment Requirements Under Section 414A You can opt out or change your rate at any time.
Several categories are exempt:
- Plans that existed on or before December 29, 2022 are grandfathered.
- Employers with 10 or fewer employees in the preceding year.
- Businesses that have been in existence for less than three years.
- SIMPLE 401(k) plans, governmental plans, and church plans.3Federal Register. Automatic Enrollment Requirements Under Section 414A
The practical takeaway: if you started a job recently at a company that set up its 401(k) after late 2022, you’re likely already enrolled unless you signed something to opt out. Look at a recent pay stub if you’re not sure.
What You Can Do When There’s No Workplace Plan
If your employer offers nothing and your state doesn’t require an auto-IRA, you still have tax-advantaged options on your own. The contribution limits are lower than a workplace plan, but the accounts are open to anyone with earned income.
Traditional IRA
Contributions go in pre-tax and grow tax-deferred until you withdraw them in retirement. For 2026, you can contribute up to $7,500, plus a $1,100 catch-up contribution if you’re 50 or older.4Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living Whether the contribution is deductible depends on your income and whether you or your spouse are covered by any workplace plan. If neither of you is, the full contribution is deductible regardless of income.
Roth IRA
Roth contributions are made with after-tax dollars, and qualified withdrawals in retirement, including all the growth, come out tax-free. The annual limit matches the Traditional IRA: $7,500 for 2026, plus $1,100 catch-up if you’re 50 or older.4Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living The total across all your Traditional and Roth IRAs combined can’t exceed that amount.
Direct Roth contributions phase out at higher incomes. For 2026, single filers can make a full contribution with modified adjusted gross income under $153,000, with a partial contribution allowed up to $168,000. For married couples filing jointly, full contributions are allowed under $242,000, phasing out up to $252,000. Above the ceiling, direct Roth contributions aren’t allowed, though a backdoor conversion may still be an option.
Health Savings Account
If you’re covered by a high-deductible health plan, an HSA offers a rare triple tax benefit: deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. After age 65, you can pull money out for any reason; non-medical withdrawals are taxed as income but carry no penalty, which effectively turns the HSA into a Traditional IRA at that point. For 2026, the contribution limit is $4,400 for self-only coverage and $8,750 for family coverage, with an extra $1,000 catch-up contribution for those 55 and older.5Internal Revenue Service. Revenue Procedure 2025-19 – 2026 Inflation Adjusted Amounts for Health Savings Accounts Balances roll over year to year and can be invested, so an HSA can quietly do double duty as a retirement account.
None of these replace a workplace plan with an employer match, but together they let you build meaningful retirement savings even when your employer offers nothing at all.