Washington Saves: Legislation to Secure Retirement Savings Headed to Governor
OLYMPIA – Engrossed Substitute Senate Bill 6069, known as Washington Saves, is headed to the Governor’s desk for signature following a concurrence vote of 35-12 in the State Senate. Requested by Washington Treasurer Mike Pellicciotti in partnership with Senator Mark Mullet (D-Issaquah) and Representative Kristine Reeves (D-Federal Way) the legislation is designed to address the emerging crisis of retirement savings among Washingtonians.
According to the AARP Public Policy Institute in August of 2022, roughly 1.2 million Washingtonians do not have access to a retirement savings plan, which is about 43-percent of Washington’s private sector employees. In addition, according to the National Institute on Retirement Security, two-thirds of Millennials have nothing saved for retirement.
“We’ve got to make it easier for workers to save for retirement. This bill gives employers a plan they can offer their employees without charging the employer a penny, and it gives employees the ability to have a payroll deduction out of their paycheck that goes directly into a retirement account with low management fees,” said Sen. Mullet. “This bill will help hundreds of thousands of workers in Washington be better prepared for retirement.”
Washington Saves will be a tool to empower Washington’s workforce by increasing individual savings through an automatic Individual Retirement Account (IRA) available for Washingtonians without access to employer-based retirement systems. The funds will then then be invested on their behalf, providing a low barrier, automatic retirement savings account to help secure a pathway toward retirement for every Washingtonian.
“Every Washingtonian deserves the opportunity to thrive economically over the course of their working life and enjoy a dignified retirement. Washington Saves will offer flexibility, ease of access, and security to ensure that a livable retirement is an option for all in our state,” said Treasurer Mike Pellicciotti. “I’m thankful to our legislative partners for their work to send this critically needed savings policy to the Governor.”
Already, fifteen other states have adopted similar proposals to spur retirement savings as the risks of leaving the issue unaddressed, including future pressure on individual and state budgets, becomes increasingly clear. So far, state-facilitated programs across the country have helped participating workers save over $1 billion toward their retirement.
“Working families are struggling to pay for their day-to-day needs, let alone save for retirement. More than half of Washington households lack savings for retirement, leaving our seniors and families financially vulnerable as they approach later life,” said Reeves. “I introduced the Washington Saves program to create more opportunities for workers to save for their retirement and help us fight for a future that includes us all.”
In November of 2023, a survey conducted by Pew Charitable Trusts indicated that 72 percent of Washington’s small-business owners support creation of a state-facilitated retirement savings program.
“Research shows that workers are 15 times more likely to save for retirement if they can use a payroll deduction," said John Scott, director of The Pew Charitable Trusts' retirement savings project. "The Washington Saves Act offers workers that opportunity. It’s an innovative and practical solution, with no costs to employers, that will address the savings challenges workers in Washington face in this economy. And the act will also enable small businesses to compete more effectively with larger businesses in recruiting and retaining workers."
The bill is now headed to the Governor for final enactment.