The Pension Problem

• Half of all workers have no employer-sponsored retirement plan

• Complexity and cost prevent many workers and small companies from starting plans

• We’re living longer, yet retirement wealth has fallen for the majority of workers during the past two decades – even before the drop in the stock market

• Social Security provides a necessary stable base of income, but workers also need pensions and savings for true security and comfort in old age
Washington Voluntary Accounts

House Bill 1893 and Senate Bill 5791 establish Washington Voluntary Accounts, making it possible for all workers and small business owners to save for retirement. Features include:

• Defined contribution plan with pre-selected menu of investment options

• Administration by Washington Department of Retirement Systems, with the option of private sector contracts, and investment by the State Investment Board

• Payroll deductions and optional employer contributions

• Portability between jobs

The 2-tier system features: In Tier 1) IRAs open to any worker who chooses – simple for workers and their employers; and in Tier 2) A 401(k) or SIMPLE IRA open to any employer who chooses and their employees, with additional employer requirements and higher contribution limits.

Advantages of Washington Voluntary Accounts:

• Provides small businesses with an easy, low cost way to offer retirement benefits and retain employees

• Provides workers with a simple and easy way to save for retirement and build assets

• Promotes low fees and high quality investment options by pooling funds from many small businesses and individual workers

• Broadens the pool of investors, benefiting private investment firms