The Pension Problem
- Close to 70% of workers at small businesses have no employer-sponsored retirement plan.
- Complexity and cost prevent many workers and small businesses from starting plans.
- We’re living longer, yet retirement wealth has fallen for the majority of workers during the past two decades – even before the drop in the stock market.
- Social Security is a necessary stable base of income, but workers also need pensions and savings for true security and comfort in old age.
Washington Voluntary Retirement Accounts
House Bill 2754 and Senate Bill 6541 establish Washington Voluntary Retirement Accounts, making it possible for all workers to save for retirement and small business owners to offer retirement plans. This 2-tiered system features: IRAs open to any worker who chooses and a small business retirement plan open to eligible employers and their employees.
- Defined contribution plan with a limited, but diverse menu of investment options
- Administration by Washington State Department of Retirement Systems, with the option of private sector contracts, and investments by the WA State Investment Board
- Payroll deductions and optional employer contributions
- Portability between jobs
- Reliance on a federal appropriation to support start-up costs and participant account fees to pay for on-going operation of the program