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New Program to Boost Workplace Savings


By Vanessa Ho

Larry Springer has long wanted to offer the staff at his wine shop and wine bar a retirement plan to help them save money. But he found it difficult to figure out which plan was best for him and his five employees.

“To try and find a retirement program was unbelievably complicated and expensive,” said Springer, who owns the Grape Choice in Kirkland, a suburb east of Seattle. A Democratic state representative, he knew the problem was widespread and a barrier to helping people prepare for retirement.

So Springer sponsored a bill to create a marketplace of savings plans designed for small businesses. A companion bill, sponsored by state Sen. Mark Mullet (D-Issaquah), became law in May.

Expected to open in 2017, the Washington Small Business Retirement Marketplace will offer employers with fewer than 100 workers an easy-to-use tool for choosing an affordable savings plan. The plans, which will be voluntary for businesses and employees, will feature automatic payroll deduction and low administrative fees for employers.

Mullet, who owns a Zeeks Pizza and a Ben & Jerry’s in Issaquah, east of Seattle, plans to sign up for the marketplace and make it available to his 52 employees. Springer plans to offer this option, too.

“This is an opportunity to be able to help my employees if they so choose,” Springer said. “From a small-business owner perspective, it’s one more benefit I can offer my employees that will entice them to stay with me.”

It’s also a chance to help the estimated 682,000 employees of small businesses in the state who lack access to a workplace retirement plan. Statewide, about 45 percent of private-sector employees—more than 1.1 million people—work for an employer that doesn’t offer a retirement plan, according to a recent study by the AARP Public Policy Institute.

Financial insecurity
Nearly 25 percent of boomers in Washington have less than $25,000 in savings, an AARP survey found. About 45 percent of working-age households nationally have no retirement account assets, according to the National Institute on Retirement Security.

“It’s a disaster waiting to happen,” said Springer. “With so many more baby boomers hitting retirement age without adequate retirement savings, they’re ultimately going to be relying on public assistance.”

The marketplace is part of a national AARP initiative to help people build economic security. So far, Washington, Oregon and Illinois have adopted state-facilitated workplace savings programs, and about half the states are considering similar legislation.

In Washington, financial services firms joining the marketplace must offer retirement plans that meet standards outlined by the Legislature. Plans must be portable from job to job. Any annual fees charged to an employee must be less than 1 percent of the account balance. Workers will be able to opt out, even if their employers decide to opt in.

Employers will choose which savings plans fill their needs. Some plans will include the ability for an employer to match the worker’s contribution. The state Department of Commerce will have oversight of the marketplace, including a website for businesses and employees to learn about the plans.

Jonathan Stebbins, 32, general manager of Zeeks Pizza in Issaquah, said the marketplace will help him save: “It makes it easy and streamlined through your employer, instead of having to shop for plans on your own.”

Cathy MacCaul, advocacy director for AARP Washington, said the organization will spread the word about the benefits of the program through forums and other events. Go to for information and to receive updates.

She also said the marketplace will help people start saving money when they’re younger, which helps grow investments over the course of many years.

“There’s no way people are going to be able to pay for their retirement with Social Security alone,” MacCaul said. “They need to have additional retirement savings in order to be able to retire with security and dignity.”

Vanessa Ho is a writer living in Seattle.


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