Poster #88 - Can Behaviorally-Informed Outreach Increase Employer Compliance with State Retirement Savings Programs?

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Abstract

More than 50 million workers across the US lack access to workplace retirement savings programs, many of whom are employed by small businesses. In an effort to close this gap, fifteen states have implemented automatic savings programs – known as “auto-IRA” programs – which are designed to allow workers whose employers do not offer retirement benefits to open and contribute to state-sponsored retirement savings accounts. However, for employees to be able to access these valuable benefits, their employers must register for the program. Despite being legally mandated, many employers fail to take the necessary action. 

We partnered with the Illinois State Treasurer's Office, which administers the state’s auto-IRA program, to test the impact of behaviorally-informed mailers on employer behavior, focusing specifically on small employers. In Illinois, over 70 percent of workers at firms with fewer than 10 employers do not have access to workplace retirement savings programs. Illinois law requires that employers with at least 5 employees, that have been in operations for at least 2 years, and that do not offer or contribute to a qualified retirement plan register for the state auto-IRA program. Employers that do offer qualified retirement plans must report to the state that they are exempt from this requirement. 

In February 2026, we randomly assigned 8,173 non-compliant employers – those who had not yet registered or reported an exemption – to receive one of three letters: the state's status quo compliance letter, a simplified letter emphasizing the benefits of retirement savings for workers and employers, or a simplified letter emphasizing that the process of registering or reporting an exemption is simple and costless. Our primary outcome was employer compliance – defined as registrations for the auto-IRA program or reporting an exemption – in the 30 days after mailing.

We find that both simplified, behaviorally-informed letters substantially increased compliance relative to the status quo letter (from 29 to 45 percent), with effects split roughly evenly between new registrations (+7.5 pp) and new exemptions (+8 pp). The specific content of the letter did not appear to matter: emphasizing benefits for workers and employers increased compliance by 15.3 pp relative to the status quo letter, while emphasizing the ease of the process increased compliance by 15.9 pp. This is consistent with a growing body of evidence suggesting that the impact of specific theoretically-driven framings may have a smaller impact than traditionally assumed once messages are already behaviorally-informed and well-calibrated. Although we find substantial variation in baseline compliance by employer characteristics, we do not find any meaningful treatment effect heterogeneity. 

These findings extend a large body of behavioral science research to a new policy context, documenting that behaviorally-informed outreach can have large and substantial impacts on employer compliance behavior. This relatively low-cost intervention has far-reaching implications for policymakers tasked with ensuring employer compliance with auto-IRA programs, as well as similar regulatory statutes.

Author

• Giovanny A Martinez Rodriguez, Harvard University
  Presenting Author