Your next retirement plan may be o≠ered by city hall

More than a third of full-time private-sector workers in America don’t have a way to save for retirement on the job. On Tuesday, the U.S. Department of Labor offered a new way to fill that gap: Let cities and counties get involved.

A new rule would clear regulatory barriers that might otherwise stop large municipalities such as New York City from setting up plans for all workers — not just those who work for local government. Officials in the Big Apple, as well as Seattle and Philadelphia, have already expressed interest.

The outgoing Democratic administration of President Barack Obama had wanted to create automatic individual retirement accounts that would follow workers through their careers. That went nowhere in the Republican controlled Congress, but then states started exploring the idea of launching their own, so-called auto-IRA programs.

Now five states — California, Oregon, Illinois, Maryland, and Connecticut — are setting up state-run options. They’ll be requiring employers who don’t offer their own plans to connect workers to state auto-IRAs. The goal is to sign up workers and deduct contributions from payroll in ways that makes saving much easier.

The Labor Department gave its final blessing to these state plans in August. The U.S. government made clear that state autoIRAs were legal, and wouldn’t be subject to the complicated federal rules that govern other retirement plans.

Officials are amending that rule to let local and municipal governments get in on the act.

Not every city or county could set up an auto-IRA, however. Out of almost 90,000 local governments in the U.S., the Labor Department estimates only about 88 would be eligible. First, jurisdictions would need the authority under state law to set up the program. They also couldn’t overlap with an existing statewide retirement plan.

Finally, they’d need to have a population greater than the least-populous state: Wyoming, population 586,000. The U.S. Census Bureau said Denver’s population in July 2015 was 682,545.