Plans Help Residents Save for Retirement

Chona Kasinger

By Dana E. Neuts

Two million Washington residents do not have access to a retirement savings plan at work, and approximately 131,000 businesses in the state do not offer such plans for their employees. That’s changing.

Washington’s Retirement Marketplace, launched in March, now makes plans with low fees available to individuals who want to save for retirement, with administrative fee-free options for companies that want to offer savings plans to their employees.

Administered by the state Department of Commerce, the Marketplace began taking shape in 2015, when the Legislature, with strong advocacy support from AARP, passed a bill making it possible. Sen. Mark Mullet (D-Issaquah), its sponsor, said there weren’t any no-fee plans available to employers.

“It was being on the other side of the fence as a small-business owner that made me realize how bad the options were in the current market for payroll-deduction retirement options,” Mullet said. “Employees who only make $30,000 per year are stuck in no-man’s land. No financial service firm wants their account, because their balances are too low.”

Once the measure passed, it took two years to implement the Marketplace, a period that included cultivating a roster of approved providers that offered plans that met the state’s qualifications, and developing a marketing program and website ( retirementmarketplace.com).

“The Washington Legislature was asking the industry to do something a little bit different, so it took a couple of years for industry providers to develop plans that met Washington state criteria and federal and IRS regulations,” said Carolyn McKinnon, Marketplace director and Commerce Department policy adviser. “No other state in the nation had done this before.”

The Marketplace currently has two financial providers offering seven retirement plans, including 401(k)s, all verified and approved by the state. Though the original targets of the Marketplace were contractors, small businesses and employees without access to retirement plans, employers of any size can participate.

“Access to affordable retirement savings plans should be available to everyone, especially small businesses and workers in today’s gig economy,” Gov. Jay Inslee (D) said in a news release. “I am proud that Washington is leading the way with the nation’s first voluntary, online Retirement Marketplace.”

McKinnon said that during the first year, the Marketplace will gather feedback, facts and figures to improve the program, such as establishing performance benchmarks. For example, the Commerce Department will monitor how many site visitors who clicked on the Get Started button actually concluded with a referral to a plan provider.

“We think there are opportunities to support Washingtonians at key points in their career lives,” McKinnon said. “There are also major opportunities to serve our immigrant and first-generation American populations. Immigrants are often entrepreneurial, and this program is meant to support entrepreneurs, so they can focus on their business.”

McKinnon hopes the Marketplace will stimulate discussions about retirement savings.

“Please, everybody, talk about saving for your future—with loved ones, at the dinner table, with community service organizations.” she said. “Talk out loud about the importance of saving for retirement.”

Dana E. Neuts is a freelance writer based in Seattle.

Hear an interview with Carolyn McKinnon describing the features and benefits of the Washington State Retirement Marketplace on our podcast. You can listen below or search for AARP Washington State Podcast on your podcast app.