Pew Applauds Washington State Legislature, Governor for Helping 1.2 Million Workers Save for Retirement

WASHINGTON-The Pew Charitable Trusts today commended Washington Governor Jay Inslee (D) for signing into law a retirement savings bill, becoming the 16th state in the country to pass an automated savings program. The legislation establishes the "Washington Saves" program for workers who lack access to an employer-sponsored retirement plan, automatically enrolling them into an individual retirement account (IRA) in which a portion of their wages would be set aside every pay period.

In Washington, as many as 1.2 million workers -or 43% of the state's private-sector workforce-work for an employer that's unable to offer retirement benefits. This lack of access to workplace retirement programs disproportionately affects workers of color, as 47% of Black workers and 66% of Hispanic workers in Washington currently don't have access to workplace retirement benefits.

A recent Pew survey found that a large majority (72%) of small-business owners in Washington support the creation of a statewide retirement savings program like Washington Saves.

Similar programs, which are variously known as "auto-IRA," "work and save," and "secure choice," have been enacted in California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Minnesota, Nevada, New Jersey, New York, Oregon, Vermont, and Virginia. Although some of the state programs are still in their infancy, more than 800,000 savers in the eight states with active programs have already amassed over $1 billion in assets since 2017.

Previous Pew studies found that in Washington and nationally, retirement savings shortfalls could lead to increased pressure on public assistance programs; reduced tax revenue; and decreased household spending by retirees, all while shifting the growing fiscal burden to a shrinking population of working-age taxpayers. In Washington state, Pew found that insufficient retirement savings could lead to a $3.9 billion shortfall over 20 years. Data from all 50 states show that unless more workers gain access to retirement savings options, there will be a combined $1.3 trillion in increased federal and state spending to fund public assistance programs from 2021 to 2040.

John Scott, director of The Pew Charitable Trusts' retirement savings project, issued the following statement:

"Research shows that workers are 15 times more likely to save for retirement if they can use a payroll deduction. Washington Saves is an innovative and practical solution, with no costs to employers, that will address the savings challenges workers in Washington face in this economy.

"When workers are financially secure, they're better able to withstand financial shocks and more likely to save for their future. What's more, they're less reliant on taxpayer-funded government programs: Our research shows that expanding access to workplace retirement benefits in Washington will save the state's taxpayers more than $3.9 billion over 20 years.

"Washington Saves is a win for workers, employers, and taxpayers. We applaud Gov. Inslee and the Washington State Legislature for making this a reality."

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