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

Protestors gather at SeaTac’s Families Belong Together rally. Photo by Alex Garland
Seattle’s Separated Children

A local non-profit houses several immigrant youths who were separated from their parents at the border. But for how long?

Katrina Johnson, Charleena Lyles’ cousin, speaks at a press conference for De-Escalate Washington’s I-940 on July 6, 2017. Photo by Sara Bernard
Communities of Color Respond to Police Chief Best’s Nomination

Although its a mixed bag for some, the families affected by police shootings say she’s the best one for the job.

While King County Metro has been testing out several trial electric buses since since 2016, the agency aims to have a fully electric bus fleet by 2040. Photo by SounderBruce/Flickr
King County Rolls on With Its Electric Bus Fleet Plans

With an overhaul set by 2040, a new report shows the economic and health benefits of going electric.

Nikkita Oliver speaks at a July 17 No New Youth Jail press conference in front of the construction site of the King County Youth Detention Center. Photo by Josh Kelety
King County Youth Detention Center Moves Forward Despite Opposition

As community criticism of the project mounts, King County tries to take a middle road.

Trouble in Tacoma

A cannabis producer has been shut down for “numerous and substantial violations.”

Between Seattle’s $15 minimum wage and the new no-poach cause agreement, Washington has been leading the nation in advancing fast food workers’ rights. Photo by Fibonacci Blue/Flickr
Washington AG’s Deal Grants Mobility to Fast Food Workers Nationwide

Seven fast food chains have agreed to end no-poaching policies that economists say cause wage stagnation.

The Carlton Complex wildfire burned in north-central Washington state in 2014. Photo by Jason Kriess/Wikimedia Commons
King County Burn Ban Starts This Weekend

Other counties across the state have already enacted similar restrictions.

Numerous complaints against King County Sheriff’s deputies for issues like excessive force and improper search and seizure weren’t investigated due to internal misclassification, a new report says. Photo by Oran Viriyincy/Flickr
Report Finds Complaints Against King County Sheriff’s Deputies Weren’t Investigated

An outside review says that allegations of excessive force and racially-biased policing weren’t pursued.

Most Read