State legislators from around the country were urged Friday to enact auto IRA enrollment to trim safety net costs and to keep millions of the elderly from falling into poverty.

That message was stressed by Treasury Department retirement policy chief Mark Iwry at a seminar hosted by the National Conference of State Legislators in Washington D.C. 

Iwry said a chief appeal of auto IRA enrollment for the states is it will propel more workers to start saving earlier, which will lead to less need for government assistance programs later on.

He said only a very few number of small business workers should individually opt out of the plans: people in dire straits and job-holders with low incomes.

States should use the programs as platforms for financial education, he added.

The Secure Choice Retirement Savings Program, which Iwry helped create in California and which was signed into law in September, will keep seven million seniors from sinking into poverty, California State Senate President pro Tempore Kevin de Leon (D-Los Angeles) told the gathering.=

“It is their pathway to self-sufficiency when they can no longer work,” said de Leon.

By mandating workers (who can opt-out) put 3 at least percent of their paychecks into IRAs filled with low-risk Treasury bonds, de Leon said Secure Choice will see millenials become a new generation of savers.

Keying in on the ability of the program to save taxpayers money and having seniors rely less on government aid, he said Secure Choice is about personal responsibility.

American Council of Life Insurers lobbyist Alane Dent said the devil could be in the details for the state offerings.

She cautioned that limiting pre-retirement withdrawals could be a mistake since it is the only pool of savings many low-income families have access to. 

The ACLI executive added there could be other restrictions in Department of Labor rules protecting state programs from federal enforcement actions and private lawsuits that could prevent the programs from becoming widespread.

Two of the DOL requirements she mentioned are ones that require states to insure the savings and ensure the plans are mandated for small employers.

She added that costs in administering the plans could be a deal breaker as well

Dent estimated the bill for Secure Choice will be between $75 million and $130 million, while costs of the Connecticut Retirement Security Program enacted in June could start at $45 million.