AARP pushes for automatic IRAs to boost retirement savings

AARP Washington is championing a bill to require employers that do not offer retirement plans to make an “automatic enrollment” Individual Retirement Account available to their workers.

House Bill 2516, the “Secure Choice Retirement Savings Program,” was pending in the House of Representatives in mid-February.

AARP says the bill is a necessary antidote to a retirement crisis that leaves employees of some small businesses without a way to save for retirement.

According to AARP, more than 1.1 million Washingtonians work for an employer that does not offer a retirement savings plan, or 45 percent of private-sector employees. Small businesses are less likely to offer plans, AARP said.

The bill, sponsored by Rep. Davina Duerr, D-Bothell, would facilitate voluntary retirement savings by workers by establishing an IRA savings program with automatic enrollment and requiring employers that do not offer retirement plans to make it available to their workers.

“Large numbers of households in this state have no or inadequate retirement savings and many of those households do not have access to any savings plan at work,” the bill reads, adding that the problem will challenge state budgets.

“Washington state is deeply concerned about the retirement prospects of its citizens and the strain that large numbers of ill-prepared retirees may impose on taxpayer-financed elderly assistance program for housing, food, medical care and other necessities.”

AARP said 91 percent of workers who don’t have access to a retirement plan say they would take advantage of one if it were available.

“Washingtonians are working as hard as ever, but many do not have a way to save for retirement out of their regular paycheck,” said Cathy MacCaul, AARP’s advocacy director in Washington, in a release.

The bill was pending in the House Committee on Consumer Protection & Business.

A video of an executive committee hearing is posted at tvw.org/watch/?eventID=2020021106.