Rep. Jarrod Lowery discusses his proposal for a public-private small business retirement program in a press conference on Feb. 12, 2025. (Screengrab from NCGA livestream)
Lawmakers in the North Carolina General Assembly have reintroduced a bill to create a “work-and-save” retirement program for small businesses around the state.
The public-private retirement program would help employees save through an automatic payroll deduction plan, investing their money into traditional or Roth individual retirement accounts. While the program would be administered by the state, the bill allows for the accounts to be established with both public and private financial institutions.
Sponsored by Republican state Reps. Jarrod Lowery, Jeffrey McNeely, and Harry Warren, the bill represents the second attempt to establish the North Carolina Work and Save Program. The first, introduced in 2023 by the same three lawmakers alongside former state Rep. Jon Hardister, did not make it out of the House Committee on Pensions and Retirement.
“If we can get the average North Carolinian to save $150 a month, we will have them in 10, 20, 30 years sufficiently prepared for retirement,” Lowery said. “We’re talking about laborers, factory workers, farmers — we’re talking about landscapers, electricians, people who keep North Carolina moving.”
To oversee the program, the bill would establish the North Carolina Small Business Retirement Savings Board, made up of 12 members — five appointed by the governor, four appointed by the General Assembly, one appointed by the state treasurer, and one nonvoting advisory member each appointed by the Speaker of the House and the Senate President Pro Tem.
AARP North Carolina director Michael Olender, whose organization has assisted with the lawmakers’ effort, said the goal of the work-and-save program is giving retirees “a greater sense of independence, dignity, and choice.”
“Unfortunately, over the decades, a lot of changes have taken place that’s made retirement or just simply living on a fixed income as an older adult even more and more challenging,” Olender said. “It’s becoming increasingly hard for certain segments of the working population to be able to save for retirement.”
Olender cited a study by Pew Charitable Trusts which showed that over a 10-year period, North Carolina would save approximately $500 million in public assistance for older adults with the enactment of such a program. He added that because the plans are “portable” and can be rolled into other plans should employees change jobs, the financial services industry should see this as a “win-win for everybody.”
According to Pew research, states that have launched work-and-save or “auto-IRA” programs have seen employees gather more than $1 billion in assets since 2017. John Scott, who directs Pew’s retirement savings project, wrote such programs benefit small businesses by allowing them to offer competitive retirement plans they might not otherwise have the resources to administer and maintain while ensuring the accounts are professionally managed by a firm vetted by the state.
Such programs have expanded rapidly across the country as uncertainty around retirement planning grows each year. According to Georgetown University’s Center for Retirement Initiatives, 20 states have enacted some form of state-facilitated retirement savings program as of January 2025, and legislatures in seven more states are considering legislation to do the same. While many states require employers to participate in the IRA program if no other savings account is offered, the North Carolina bill makes enrollment voluntary.
According to the bill, the default package would be a Roth IRA with a “target date fund investment” and a contribution rate beginning at 5% of an employee’s salary, with an option of annual increases of the contribution rate. Employees would have the option of stopping participation at any time or switching to a traditional IRA, as well as to change their contribution rate. Eligible employers must be in the private sector and must not offer a tax-favored retirement plan, nor have done so in the past two years.
McNeely, who runs a small feed milling business founded by his parents that now has around 22 employees, said the retirement program was personal for him. “We are a family, and I want to make sure I take care of my employees,” McNeely said.
“I pray we get it through and we’re able to make sure that in their retirement, North Carolinians will have a little bit more cushion,” he said. “Not real comfortable with where we are with Social Security — it may not even be there in 10 years.”
Read the text of the bill here:
North Carolina Work and Save Program