Rhode Island Secure Choice Retirement Savings Program

Learn about the Rhode Island Secure Choice Retirement Savings Program, which requires employers to offer a retirement plan to help Rhode Islanders save for retirement.
Author: Penelope Team

More than 172,000 workers in Rhode Island are employed by businesses that do not provide retirement benefits, and according to Pew that “insufficient retirement savings could lead to $456 million in increased state spending from 2021 to 2040.”

But that is set to change, as Rhode Island is now the 17th state in the U.S. to offer an automated savings program. 

The Rhode Island Secure Choice Retirement Savings Program is a state-sponsored initiative designed to provide employees in the private sector with an easy way to save for retirement. It aims to help workers who do not have access to an employer-sponsored retirement plan.

What are the Benefits of Rhode Island Secure Choice Retirement Savings Program

The Rhode Island legislature just passed the law in June 2024, so details on the plan are still limited. According to the bill, Rhode Island–based businesses with five or more employees will be required to enroll their workers in the RISavers retirement savings program, or provide another type of retirement benefits program, such as a 401(k).

Even without knowing the concrete details of the plan, the benefits of providing employees with an employer-sponsored retirement plan are many, for both workers and businesses.

Benefits for Employers:

Simplified Administration

The RISavers retirement program streamlines the administrative process for employers. They only need to set up payroll deductions for their employees who opt into the program. The state handles account management and investment oversight, relieving employers of these tasks.

Enhanced Employee Benefits

Offering a retirement savings program can significantly improve an employer's benefits package. This can help in attracting and retaining talented employees, giving the business a competitive edge in the job market.

No Fiduciary Responsibility

Employers are not fiduciaries for the RISavers program. This means they are not legally responsible for the management or performance of the investment funds. This reduces potential legal risks and administrative burdens associated with fiduciary duties.

Compliance with State Mandates

By participating in the Rhode Island Secure Choice Retirement Savings Program, employers comply with state requirements to provide retirement savings options to their employees. This helps avoid potential penalties or legal issues related to non-compliance. The state has yet to release deadlines for the retirement mandate, but it’s good for employers to get ahead of these rules. 

Improved Employee Financial Security

When employees have access to a structured retirement savings plan, they are more likely to save for their future. Financially secure employees are often less stressed and more productive, which can positively impact workplace morale and efficiency.

Reduced Turnover Costs

A robust benefits package, including a retirement savings option, can lead to higher employee satisfaction and lower turnover rates. This reduces the costs associated with recruiting, hiring, and training new employees.

Positive Employer Branding

Employers participating in such programs can enhance their reputation as supportive and forward-thinking. This can improve their public image and make them more attractive to potential employees, clients, and customers.

Employee Education and Support

State retirement programs often include resources and tools to help employees understand and manage their retirement savings. This educational support can enhance employee engagement and appreciation for the benefits provided by their employer. Rhode Island has yet to release these materials.

Minimal Impact on Business Operations

State-sponsored retirement programs tend to be straightforward, which means it has minimal impact on daily business operations. Employers can integrate the program with existing payroll systems with relative ease, ensuring a smooth transition and ongoing management.

These benefits collectively make the Rhode Island Secure Choice Retirement Savings Program an appealing option for employers seeking to enhance their benefits offerings without incurring significant costs or administrative burdens.

Benefits for Employees:

Easy Enrollment

Employees are automatically enrolled, simplifying the process of starting a retirement savings plan.

Convenient Savings

Contributions are made through payroll deductions, making it easy for employees to consistently save.


The retirement savings account can be carried from job to job, providing continuity in retirement savings.

Access to Investment Options

Participants have access to a variety of investment options, allowing them to choose based on their risk tolerance and retirement goals.

Improved Retirement Security 

By providing a structured savings plan, employees are better prepared for retirement, reducing financial stress in their later years.

Opt-Out Flexibility

Employees have the choice to opt out if they prefer not to participate.


What type of plan is Rhode Island Secure Choice?

Rhode Island Secure Choice is a state-sponsored automatic enrollment retirement savings program. It is structured as a Roth IRA, allowing employees to contribute post-tax earnings towards their retirement savings. Read more about state mandated retirement plans.

Interested in a better option?

While the Rhode Island state-mandated retirement plans offer many benefits, there are some drawbacks as well. The legislation just passed in June 2024, and the program hasn’t been implemented yet so businesses and their employees can't prioritize saving for the future. If you want to get started immediately, Penelope offers Safe Harbor and Starter 401(k) plans to help you build more wealth. Speak to one of our experts and find out more.

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