As traditional defined benefit pension plans continue to disappear, as worries grow about the viability of the Social Security system in future years, workers hoping to have some savings for their retirement years are finding fewer options. Even including 401(k) plans –hard hit by the nation's economic slide –only half the U.S. workforce has access to a pension at the workplace.

The Rhode Island figures mirror the national picture. Some 49 percent of Rhode Island employers do not offer retirement benefits to their full-time workers and only 19 percent offer such plans to their part-time employees.

Lack of pension coverage is a problem that, not surprisingly, disproportionately affects lower-income workers, for whom it is harder to find the money to save for retirement and who are more likely to not have a convenient means to allow savings.

One potential solution is a Universal Voluntary Retirement Account, which is a state-administered defined contribution account that is available for small employers to offer their employees. While such an account would be administered by the state, the management of the accounts would be assumed by a third-party provider chosen through a request for proposals (RFP) process.

The General Assembly has approved creation of a commission to study the possibility of establishing such accounts in Rhode Island. Approved was a Senate bill, 2009-S 0453, sponsored by Sen. William A. Walaska (D-Dist. 30, Warwick) and a House bill, 2009-H 5696, introduced by Rep. Arthur Handy (D-Dist. 18, Cranston). The legislation was introduced at the request of the Office of the General Treasurer.

The legislators said that fewer and fewer workers are approaching retirement age with a comfortable amount of savings, either through traditional pensions or other sorts of savings accounts. One of the reasons is that, in today's economy, workers frequently switch jobs and, since they often have to wait a year or more before qualifying for a plan in their workplace, they may be ineligible for pension coverage for much of their adult working career.

Universal Voluntary Retirement Accounts can provide a cushion for many of these individuals, helping them and lowering the potential long-term burden on the state.

To date, no other states have established UVRAs, but several, including Washington, Connecticut, Maryland, Virginia and West Virginia, are moving in that direction.

In proposing the study commission to consider establishing UVRAs in Rhode Island, General Treasurer Frank T. Caprio said there is ample evidence that although individuals are free to save on their own, they often fail to do so because of sheer inertia. The opportunity to have automatic payroll deductions would help more workers save for their retirements.

The eight-member commission created by the resolution passed by the Senate would consist of two Senators, two members of the House of Representatives, the General Treasurer, a member of AARP, a member of the local business community and a member of the public employees union.

The commission, which would be asked to report its findings and recommendations to the General Assembly by next January, would consult with the Department of Business Regulation, the State Investment Council, private sector retirement plan administrators and providers and other relevant sectors of the financial services industry to develop an effective and efficient method for implementing and operating a UVRA in Rhode Island.