Washington Pondering State-Run Plan

Washington—the state, not the city—is considering legislation that would establish a state-run retirement plan to cover those whose employers do not offer one. 

If the legislation is enacted, the Evergreen State would join its Pacific Coast neighbors in providing such a plan. California was the first to adopt such legislation, and Oregon was the first to establish and run such a program. 

Identical bills were introduced in both chambers of the Washington legislature on Jan. 9, 2024 that would establish the plan. Sen. Mark Mullet (D-Kent) introduced S.B. 6069; Rep. Kristine Reeves (D-King) introduced H.B. 2244.

The bills would modify the law that created the Washington Retirement Marketplace, a virtual marketplace launched in 2018 in which financial services firms offer low-cost retirement savings plans to businesses with fewer than 100 employees, including sole proprietors and the self-employed. The marketplace is intended to serve as “an informational hub, bringing together financial services firms, employers and employees” in order to simplify retirement savings options, facilitate informed decisions about retirement and enable individuals to start building savings.

The Proposal

The legislation would create a state-run program in which employees would be automatically enrolled in a retirement plan if their employer does not offer one. Those employees would contribute money into a portable IRA. Individual participants would be able to modify their contribution rates or amounts and to opt out of participating. 

Covered employers would facilitate the opportunity for covered employees to participate in the program by fulfilling the following administrative duties:

• registering with the program;
• providing the program administrator relevant information about covered employees; 
• offering all covered employees the choice of participating by voluntarily contributing to an IRA or opting out;
• remitting participant contributions; and 
• providing information to covered employees. 

The bills provide that a governing board would design and administer the program. It would be chaired by the state treasurer and would be comprised of seven members:

• the state treasurer; 
• the director of the department or the director's designee; 
• three members appointed by the governor who have demonstrated financial, legal, or other relevant program experience; 
• one member appointed by the governor who would represent the financial industry; and 
• one member appointed by the governor who would represent a retirement advocacy organization.

Status

S.B. 6069 was referred to the Senate Ways and Means Committee; HB 2244 was referred to the House Committee on Consumer Protection & Business. Both committees were set to hold hearings on their chamber’s bill on Jan. 23.