Washington is the latest state taking active steps to address a widespread problem with its workforce—a lack of 401k plan coverage.
The Washington State Department of Commerce recently unveiled a new website for employers and employees without a 401k or other retirement savings options to “comparison shop for low-cost, state-verified retirement savings plans.”
Dubbed “The Retirement Marketplace,” the site aims to help improve retirement security among Washington’s 2 million employees who do not have access to employer-sponsored retirement plans.
“Access to affordable retirement savings plans should be available to everyone, especially small businesses and workers in today’s gig economy,” Gov. Jay Inslee said in a statement.
Currently, around 131,000 companies are based in the state—many of them small businesses that can’t afford to offer retirement plans. This is a rightful cause for concern considering workers with access to employer-sponsored retirement savings options are 15 times more likely to save than those without, according to the Department of Commerce.
“As a small business owner myself, I firmly believe that many, if not most, want to offer competitive benefits for employees, but the complexity and fees can make it cost-prohibitive to do so,” explained Sen. Mark Mullet (D-Issaquah), sponsor of the 2015 bill that created the marketplace. “We want to make it easier to shop for private plans from providers who share our commitment to help people save for retirement.”
In order to be listed among plans in the Retirement Marketplace, certain criteria must be met. Qualifying plans must:
- be reviewed by the Department of Financial Institutions and/or Office of the Insurance Commissioner
- not charge administrative fees to employers
- not charge enrollees more than 1 percent total in annual administrative fees
- undergo an annual renewal process in order to remain in good standing
“Successful businesses know the value of saving for the future and helping their employees do the same,” said Commerce Director Brian Bonlender. “When people have a solid financial foundation, it lifts up the entire economy, strengthening communities by helping more workers participate and prosper.”