Mayor Signs Retirement Savings Plan Into Law

Along with signing the City budget, the mayor also put into motion the nation’s first city-faciliated, privately-administered retirement savings plan.

Nearly half of the nation’s metropolitan workers lack a retirement savings plan through their employer, and Seattle is no exception. Pew Charitable Trusts revealed in a 2016 study that about 40 percent of employees in the Seattle metro area lack access to workplace retirement plans. But that could soon change.

In addition to signing the 2018 City budget into law on Wednesday, Mayor Tim Burgess also signed legislation that establishes a Seattle Retirement Savings Plan. The program serves as the nation’s first city-facilitated retirement savings plan administered by an outside private party.

Under the new law, an estimated 200,000 Seattle workers without workplace retirement savings opportunities will be automatically enrolled into a plan managed by a third party provider, with the option to end their enrollment in the plan at anytime. Workers will be able to keep the plan throughout their careers, even when they change jobs. Participants will contribute a percentage of their pay into the plan and will choose how their funds are invested. The yet-to-be-formed Seattle Retirement Savings Plan Board will select the investment products to be offered. The plan is expected to take effect in 2019 or 2020.

“Too many Americans have little more than a few hundred dollars in savings, if any savings at all, never mind any significant amount of money for retirement,” Mayor Tim Burgess said in a Wednesday press release. “In Seattle, Black, Latino, and Asian workers are disproportionately disadvantaged by lack of access to workplace retirement savings. We all know that retirees without savings will never be able to participate in society as they should. But with this legislation, which I’m thrilled to sign into law, Seattle is beginning to help disadvantaged workers plan for a future that will be brighter for them, their families, and society as a whole. This is a pro-business, pro-economic stability, pro-growth, and pro-worker achievement.”

Burgess proposed the plan in late September after advocating for such legislation for more than a year. Along with Philadelphia and New York officials, then-Councilmember Burgess lobbied President Barack Obama’s Department of Labor to allow large cities to create city-operated retirement savings plan last year. But his plan stalled when congressional Republicans repealed the Obama administration’s rule change last March, making it unclear if cities had the legal authority to create such a program.

Following legal guidance and discussions with other cities and states interested in automatic retirement plans, Burgess decided that there was strong legal ground to move forward with the legislation, said Georgetown University’s Center for Retirement Initiatives Executive Director Angela M. Antonelli.

Next, the City will form a board to manage the program. A market feasibility study that will help the City determine how to best implement the plan is projected to cost the City $200,000.

For Antonelli, the plan could encourage other cities and states to move forward with similar legislation. “For Seattle to enact a program of this nature would put it at the forefront of a handful of cities and now several states that are determined to help their citizens be able to have greater access to and save for retirement,” Antonelli added.

She added that many older Americans rely on Social Security as their primary source of income. The plan could help workers save and plan “to have a more comfortable and secure future in their retirement,” Antonelli concluded.

mhellmann@seattleweekly.com

More in News & Comment

The exterior of the University District crisis pregnancy center, 3W Medical for Women. Photo by Keiko DeLuca
How Title X Cuts Impact UW Women’s Health

Some student advocates worry that slashed budgets could drive student to misleading crisis pregnancy centers.

Trans Pride Seattle seeks to strengthen the transgender and non-binary community. 
Photo courtesy of Gender Justice League
Trans Pride Seattle Continues Marching

In light of federal budget cuts, the parade that highlights marginalized voices survives due to community crowdfunding.

As the executive director of the Tenants Union of Washington State, Violet Lavatai (left) believes that YIMBY policies 
do not actually help the communities most in need of housing. Photo courtesy Tenants Union of Washington State
The Growing Power of Seattle YIMBYs

The tech-funded “Yes in My Backyard” movement thinks the housing crisis can be solved by rapid development, but does it only benefit those at the top?

Hidden River Farms is 100 acres of farmland in Grays Harbor County. Photo by Lucia Wyss
Sowing the Seeds of Mental Health

Suicide is an epidemic amongst agricultural workers, but young farmers and state legislators are working to find solutions.

Seattle and King County Officials Want a Safe Injection Van

The mobile project—an alternative to permanent sites—still doesn’t have a defined timeline.

Western Washington Could See More Wildfires This Year

Lots of grass and warmer weather could make for worsening fire seasons.

An autopsy found that Tommy Le was shot twice in the back during an fatal encounter with a King County sheriff’s deputy. Photo courtesy Career Link
New Report Calls for Increased Transparency From King County Sheriff’s Office

The fatal shooting of Tommy Le served as a case study for researchers.

Charles Pillon sits inside one of the several buses on Iron Mountain. Photo by Caean Couto
The Last Days of Iron Mountain?

After battling King County government for decades, Charles Pillon may have finally lost the fight over his illegal 10-acre junkyard.

Most Read