Philadelphia Voters Approve 78% Auto-IRA Measure, Clearing First City-Run Plan for 208,000 Workers
Updated
Updated · Bloomberg Law · May 20
Philadelphia Voters Approve 78% Auto-IRA Measure, Clearing First City-Run Plan for 208,000 Workers
5 articles · Updated · Bloomberg Law · May 20
Philadelphia voters backed the measure 78% to 22%, authorizing a retirement savings board needed to launch PhillySaves after Mayor Cherelle Parker signed the underlying legislation in January.
About 208,000 private-sector workers in Philadelphia lack an employer retirement plan and could be targeted by the program, which auto-enrolls eligible employees into Roth IRAs at default contributions of 3% to 6%.
Eligible workers must be employed by Philadelphia businesses operating at least two years and offering no retirement plan; self-employed workers cannot enroll, and a nine-member board will oversee a private investment firm running the accounts.
Pew estimated startup costs of up to $1 million and annual costs of roughly $500,000. Philadelphia is poised to become the first city to fully implement an auto-IRA, while 22 states already have state-facilitated savings programs and Pennsylvania does not.
Is Philadelphia's new retirement plan a pioneering solution or just another complex layer in a broken national system?
Will PhillySaves build real retirement wealth or just become a leaky savings account for Philadelphians' short-term needs?
Closing the Retirement Gap: How PhillySaves Will Help Over 200,000 Philadelphians Save for the Future
Overview
Philadelphia voters have recently approved PhillySaves, a new retirement savings initiative led by Mayor Cherelle Parker and City Council leaders. This program was created in response to a widespread lack of employer-sponsored retirement plans, with Pew Research finding that about 208,000 private sector workers in the city had no access to such plans. PhillySaves aims to bridge this gap by offering a crucial new option for over 200,000 Philadelphians to save for retirement, helping residents better secure their financial futures and addressing a major issue of insufficient retirement savings in the city.