Washington is set to create a state-run automatic retirement savings system for workers who don’t already have access to an employer-based retirement system.
Washington Saves will require businesses without retirement plans for employees to allow their workers an opportunity to contribute to an individual retirement account (IRA) via an automatic payroll deduction through the Washington Small Business Retirement Marketplace. Employers will be required to enroll employees who have had continuous employment of one year or more in the program at default contribution rates. Employees may opt out. Washington Saves will launch for enrollees in 2027, according to a press release from the office of State Treasurer Mike Pellicciotti, who requested the legislation.
According to an analysis by AARP in 2022, about 43% of Washington workers in the private sector work for a company that doesn’t offer retirement plans — about 1.2 million people. Lack of access also varies by demographics — 66% of Hispanic workers, 47% of Black workers and 43% of Asian American workers do not have access to an employer-provided plan in Washington. Overall, 42% of all men and 44% of all women do not have such a plan. The legislation that created the system, Senate Bill 6069, was signed into law on Thursday by Gov. Jay Inslee. It passed the Legislature this year, with final votes of 55 to 41 in the House and 35 to 12 in the Senate.
Oregon established the first state-run automated individual retirement savings system in 2017, and several other states, including California, Maryland and Virginia, have followed suit, according to Pew Charitable Trusts.