Washington is the latest state to run a retirement program that will provide coverage for private-sector employees whose employers do not.
On March 27, Pat Sullivan, Executive Director of Legislative Affairs in Inslee’s office, issued an announcement that SB 6069 was among the bills the Gov. Jay Inslee (D) would be signing into law on March 28, which he did. The measure creates Washington Saves, a state-run auto-IRA program.
It didn't take long for the bill to reach his desk. Sen. Mark Mullet (D-Issaquah) introduced the bill on Jan. 9. The Senate passed it on Feb. 12; the House initially passed it on March 1 in a 57-39 vote, and on March 6 passed a version that incorporated Senate views on the amendments it had made. The Senate passed the amended version in a 35-12 vote on March 7.
Washington Saves will be an automatic enrollment individual retirement savings account program. The measure will require covered employers to allow employees an opportunity to contribute to an IRA through an automatic payroll deduction. The default contribution rate is to be not less than 3%, nor more than 7%, of wages. The program also includes automatic escalation that may not exceed 1% per year or cause the maximum contribution rate to exceed 10% of wages. Accounts are portable.
Covered employers are businesses located in Washington State for at least two years, that had employees working a combined minimum of 10,400 hours during the previous calendar year, and that do not already offer employees a qualified retirement plan. They will be required to enroll employees who have had continuous employment for one year or more.
Employees will have a say in how their account funds are invested. They may opt out of the program if they wish. And the measure also allows former participants to continue contributing to their accounts.
A 15-member governing board will design, develop, implement, maintain, and oversee Washington Saves.
The program is to be launched by Jan. 1, 2027, with phased implementation.
- Log in to post comments