The Labor Department finalized rules Thursday aimed at encouraging states to establish their own retirement programs for residents.
President Obama last year directed the Labor Department to issue rules that would allow states to create retirement plans independent of national ones without running afoul of federal laws. Those rules were proposed in November and finalized Thursday.
Under the plan, states can arrange for people to have a portion of their pay automatically withdrawn into a savings program run by the state, much in the same way that people can send a monthly amount right from their bank account into a privately run investment company.
Since then, eight states, including California and New Jersey, have developed their own programs.
The White House hosted a conference on aging last year that determined Americans needed more savings options as one-third don't have access to employer-based retirement programs.
The Labor Department intends to propose a similar rule for big cities next.