Among the American workers who struggle most to save for retirement are those in nontraditional jobs, such as the self-employed, sole proprietors, gig workers, and contract workers. Several people with these jobs and a range of policy, business, and financial experts recently took part in a Nontraditional Workers and Retirement Policy Summit to better understand the problems and talk about potential steps to address them.
The Pew Charitable Trusts sponsored the program, held Oct. 12 in its Washington D.C., offices. The first panel set the stage by discussing the role that nontraditional workers play in America’s workforce and their demographic makeup. Speakers addressed which retirement savings solutions might work for these workers, as well as the difficult legal challenges in bringing workplace retirement plans to such a workforce. Because of these complex issues, most plans —such as 401(k)s—that encourage easy and regular retirement saving are offered through more traditional workplaces.
Four nontraditional workers in differing occupations—a professional shopper, a skydiving instructor, the owner of a handmade beauty and skincare line, and a financial adviser—talked about their retirement goals and their challenges to saving. They said that they find the process complex and wish for more straightforward options and language in the related documents and websites that clearly spells those choices out.
Christy Frikken said she loves running her one-person skydiving instruction business in Perris, California. “But it’s frustrating that the world is not set up to support that model,” she said.
Nontraditional workers, Frikken said, want to save for retirement, but the choices “are very complicated and require lots of extra action on your part, at a time—early in your business, early in your career—when you’re extremely time-strapped.”
Other panels provided the perspective of business and private-sector leaders and emphasized the importance of speed, ease of use, and flexibility in making retirement solutions workable. Policy experts in a subsequent panel explored private-sector and public policy ideas about what kinds of distribution channels would help reach nontraditional workers, encouraging and then helping them to save.
Among the possibilities are tax filings; state agencies; payment apps; worker platforms such as Uber, Lyft, and TaskRabbit; firms that use temp workers; financial advisers; and trusted community advisers. Speakers addressed the difficulties both in enrolling nontraditional workers in savings programs and in facilitating ongoing contributions. For example, voluntary opt-ins have not worked well, and automatic enrollment—a behavioral nudge that can be used for workers even at small employers—faces some legal issues where nontraditional workers are concerned.
The summit organizers’ goal was to help identify effective ways to integrate nontraditional workers into the retirement savings system, acknowledging the complexities they face because of variable income and the nature of their work.
In his introductory comments at the start of the event, John Scott, director of Pew’s retirement savings project, said that all of the participants share the same bottom-line goal.
“At the end of the day,” Scott said, “it’s about getting people into the savings system.”
Alison Shelton works on The Pew Charitable Trusts’ retirement savings project.