About a third of American workers lack access to a retirement plan through their employer. A recent report by the National Institute on Retirement Security shows that the median retirement account balance for all working-age households in the United States is only $2,500. Many of these workers are in the service industry, which happens to have some of the highest job growth.

Retiring without substantial savings can lead to poverty in a worker’s senior years. Americans are living longer and spending more time in retirement. The costs of maintaining their pre-retirement lifestyle begin to add up, and mounting medical expenses may add to financial insecurity. A Huffington Post article noted that seniors cannot rely solely on Social Security benefits to maintain their lifestyle in retirement. If retirees cannot downsize, they risk falling behind on bills and possibly becoming homeless. State-administered automatic enrollment retirement savings policies can help workers postpone and increase their Social Security retirement benefits and retire with dignity.

It has been over seven months since the ground-breaking Secure Choice Savings Program was signed into law in Illinois, which will expand employment-based retirement savings opportunities to up to 2.5 million Illinois private-sector workers. Meanwhile, as many as 20 other states are developing their own automatic retirement savings programs. Other states that have already taken steps to expand retirement savings include New Jersey, Washington, California, and Oregon.

One of the questions that state policymakers and businesses have had with respect to these new state policies is whether federal ERISA laws, which generally apply to employer-sponsored retirement savings plans, apply to such state-administered plans where the employer’s only function is to enroll workers and process payroll deductions. Rules from the Department of Labor will provide important clarity to states and businesses interested in expanding retirement savings opportunities through such state policies.