Retirement Plans for Gig Workers: A Hard Target to Hit

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Kristen Ricaurte Knebel

Sept. 23 — Finding retirement savings solutions for workers in the gig economy may be like trying to hit a moving target.

Many workers are covered by a traditional employer-sponsored retirement plan of some kind, but the population of gig workers continues to grow and many of the workers lack access to retirement savings benefits. Uber Technologies Inc. and recently have tried to address the lack of coverage. Uber is teaming with Betterment Inc. to offer workers individual retirement accounts and announced a few weeks ago that it will provide up to $500 a year for workers to use for health-care or other expenses.

How best to provide gig workers with access to a retirement plan was the topic of discussion during an event hosted Sept. 23 by the Brookings Institution. A panel of retirement industry veterans agreed there’s no one-size-fits-all solution.

The Department of Labor has expressed interest in facilitating portable benefits, most recently awarding grants to three nonprofits for retirement research as part of the agency’s efforts to expand the reach of retirement plans to low-wage workers and increase the portability of those plans. The Obama administration included a proposal in its fiscal year 2017 budget that would make it easier for unrelated employers to form pooled 401(k)s in multiple employer plans and the Senate Finance Committee unanimously passed a bill this week that would do the same.

Several Ideas

One way to help gig workers gain some retirement security would be through “incremental changes” to retirement policy that would include state-sponsored retirement savings plans, said David C. John, deputy director of the retirement security project at Brookings. The DOL opened the door for state-run retirement plans when it issued final regulations in August allowing states to set up their own retirement programs for private sector workers.

John is co-author of a paper presented during the event that analyzed different options for boosting the retirement security of gig workers.

The idea that might benefit the most people is a retirement account that would be facilitated by employers, but be portable, John said. He called this approach “the most radical, but probably the most valuable.”

This approach would involve attaching “the retirement account to the worker rather than depending on the employer to offer a retirement benefit,” according to the paper.

Former Deputy Labor Secretary Seth D. Harris said during the panel that portable accounts don’t solve the problem for everyone. Harris is now a distinguished scholar at Cornell University’s School of Industrial & Labor Relations.

Gig workers are a diverse group with different needs, Harris said. The question is how to make retirement accounts simple and accessible to employees, he said.

“The fact that we have a diverse set of solutions doesn’t mean it has to be complex to the worker,” he said.

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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