State launches IRA saving program for workers whose employers don’t offer one

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Tens of thousands of Nevadans will soon have an easier way to save for retirement, thanks to a newly launched program by the state.

The Nevada Employee Savings Trust, or NEST, launched on July 1. Through the program, Nevadans who do not have access to retirement plans through their private-sector employers will be automatically enrolled in an Individual Retirement Account and can contribute to it a certain amount (or percentage) of each paycheck.

Employees have the ability to opt out of the program, but according to the Nevada State Treasurer’s Office, which administers NEST, approximately 20,500 people have already been enrolled.

That number is expected to rise. By Sept. 1, businesses with six or more employees will be required to either offer their own retirement plan or enroll their employees into NEST.

“I think this is going to help tens of thousands, maybe hundreds of thousands, of Nevadans be in a better place,” said Nevada State Treasurer Zach Conine.

An estimated 593,000 Nevadans lack easy access to a retirement account, according to AARP. Nationally, 1 in 4 adults have no retirement savings at all, according to the American Retirement Association.

It’s estimated more than 40% of small businesses nationwide do not offer retirement benefits to their employees. Employers often cite cost as the barrier stopping them from offering a retirement plan, according to Pew.

States are increasingly deciding to step in, boosted by research showing people are far more likely to save for retirement when contributions are automatically deducted from their paycheck.

Twelve states now have auto-IRA programs, and according to Pew, more than a million people have saved $2 billion through them since the launch of the first program in Oregon in 2017.

The Nevada State Legislature established NEST through legislation passed in 2023. That bill, Senate Bill 305, was sponsored by three Democrats and a Republican. All Democrats supported the measure, while Republicans were divided in their support. Gov. Joe Lombardo signed the bill into law.

Conine acknowledges that access to, and even initial enrollment in, NEST “doesn’t mean every Nevadan is going to save.”

He added, “Not everyone will choose to use it, but those that do all of a sudden have a way to save for retirement really easily — like, really, really easily.”

In advance of the new retirement plan requirement, the Vegas Chamber launched its own pooled 401k program, something Conine sees as a benefit to the community.

“If (people) are saving,I do not care if they are saving with us,” he said. “I care if they’re saving.”

The NEST model could be particularly beneficial for people who work multiple jobs or switch jobs often.

“If you’ve got an account and you’ve got two jobs and you want to put in some money from both paychecks, you can,” said Conine. “You want to put in more money from one and less money from another, you can. If you go get a third job and don’t have either of those two original jobs anymore, you still have the account.”

Gig workers can also set up NEST accounts and deposit money.

The program is designed with retirement in mind, but contributions are easily accessible for emergencies.

“We have a lot of Nevadans, unfortunately, who live paycheck to paycheck,” he said. “When they have some unexpected expense, an emergency, a lot of times they have to go to a payday lender, a title lender, or some other very, very expensive source of credit.”

The principal balance on NEST accounts can be pulled out by the account holder without penalty. As a Roth IRA, contributions are post-tax.

“It can serve as an emergency account,” said Conine.

If someone moves out of Nevada, their account can stay open and contributions can even still be deposited directly into the account. If they have moved to one of the five states in the same interstate consortium as Nevada — Colorado, Maine, Delaware, Vermont and Minnesota — they may be able to connect their account to their new employer in that state.

NEST comes with no costs to employers, other than the minimal time it takes to facilitate enrollment in the program.

Ongoing costs of running the program will be covered through minimal fees, which Conine said are lower than at similar funds not run by states. He put the cost at around $26 annually, plus one-fifth of one percent, or a $2 fee on $1,000.

The upfront $1.2 million cost of launching NEST was covered through a loan from the state general fund.

For more information on NEST, visit nest.nv.gov