While millions of Americans are saving for retirement through employer-sponsored savings plans, nearly half of the nation’s workforce still does not have access to a plan at work. Federal legislation to address this coverage gap was introduced in Congress more than a year ago, but without a national program in place, it may be state government that leads the way.

In fact, the state of California has taken an important step.

In September, California approved a universal retirement savings plan that would require employers to offer “a payroll deposit retirement savings arrangement” for employees through a state-run California Secure Choice Retirement Savings Program. Employees who are not covered by other plans would be automatically enrolled, but would have a choice of opting out. The program also provides for portability of their plan if they change jobs.

The law was enacted in response to retirement predictions that have become a concern across the country.

ucb_quoteThe University of California Berkeley Center for Labor Research and Education found that nearly 50% of middle-income workers in California were projected to retire in or near poverty. The Center also found that more than 6.3 million California workers do not have access to retirement savings opportunities at work. And the majority of those workers earn less than $50,000.

Nationally, we face the same challenges.

Defined contribution retirement savings plans have proven successful in getting people to save for the future. But expanding access needs to be a priority.

There is a solution — one that was crafted with bipartisan congressional support: a national Automatic Individual Retirement Account (IRA), which would provide for automatic enrollment of workers who do not have access to workplace savings, unless they opt out. They would also have a default contribution rate, unless they want to change it.

The Retirement Security Project has estimated that the Auto IRA proposal could raise savings by nearly $8 billion annually. This could go a long way toward enhancing the likelihood of success for workers trying to meet their retirement goals.

Leadership is needed to move this proposal past the goal line. The passage of a universal program in California signals the type of support and political will needed for progress on retirement issues nationwide.