Americans are bad at saving. Our saving rates fall well below the majority of other OECD countries, despite the fact that we also lack a nationwide pension system. It’s not completely our fault — monetary policy has kept interest rates at rock-bottom for years, discouraging people from saving. Many Americans also distrust the financial industry, and for good reason.

Still, our lack of saving poses a significant obstacle to achieving retirement security. Forty-five percent of working-age households don’t have any assets in retirement accounts at all. Only about half of private-sector employees have access to any kind of employer-sponsored retirement plan. Social Security, while far from “bankrupt,” may need to reduce the benefits it pays to retirees in the coming decades.

In theory, some solid solutions already exist. Anyone with earned income is eligible to contribute to an IRA, be it a teenager mowing lawns or a mid-career professional. Self-employed workers can set up individual 401(k) plans for themselves. But in practice, not nearly enough people take advantage of these options. In fact, many Americans’ IRA “contributions” are just rollovers from employer plans.

In response, Maryland and several other states are currently considering implementing an “automatic IRA.” The plan works as follows: Employers that don’t offer their own retirement plan are required to automatically enroll employees in a state-managed IRA. Employees make automatic contributions of 3 percent of their salary, deducted from their payroll. Employees who don’t want to participate can opt out.

On the one hand, the automatic IRA strategy offers an opportunity to, as Richard Thaler and Cass Sunstein put it, “nudge” people in the direction of saving for retirement. Automatic enrollment ensures wide coverage, but the opt-out provision preserves choice and agency for those who do not wish to participate.

In theory, a state-run investment fund could offer lower costs and better returns than what many private funds provide. And while some critics object to any new burden imposed on businesses, the legislation as described does not unduly encumber employers.

On the other hand, the strategy has a number of flaws. It does not provide any additional tax-advantaged space beyond what employees already have access to; rather, it simply makes existing tax-advantaged space more readily available to them. By mandating automatic contributions, the legislation will create a significant sum of money that will attract all sorts of “managers” and “advisers” looking to get a piece of the action.

And while the legislation has provisions for matching employer contributions, if an employer has already decided not to offer its own retirement plan, it seems unlikely that the employer would offer matches for employee contributions to the automatic IRA.

Ultimately, the success or failure of Maryland’s automatic IRA proposal will likely come down to the investment strategy the retirement task force appointed by Gov. Martin O’Malley recommends. Rather than chasing lofty returns by investing in opaque, risky, and expensive asset classes, or playing politics with other peoples’ money by mandating that a certain amount of contributions be managed by preferred firms, employee contributions should by default be invested in a low-cost, passively-managed target-date fund. Such funds offer a sensible mix of stocks and bonds, adjust risk tolerance based on an employee’s age, and can operate extremely efficiently, with expense ratios as low as a tenth of a percent.

If this strategy sounds familiar, it’s because the federal government takes the same approach with its Thrift Savings Plan (TSP), available only to federal employees. In a 2013 survey, eighty-seven percent of respondents said they were satisfied or very satisfied with the TSP.

Maryland has an opportunity to make a significant contribution to the retirement security of its citizens by making it far simpler for the average employee to save for the future. However, in doing so, the state should avoid being sidetracked by the slick sales pitches of the financial industry. Low-cost, passively-managed, target-date funds might sound boring, but sometimes boring is good.

Gabriel J. Michael is a senior fellow at the Maryland Public Policy Institute and a doctoral candidate in political science at The George Washington University. His email address is gmichael@mdpolicy.org