Washington Gov. Jay Inslee on Monday signed into law the Washington Small Business Retirement Marketplace, bipartisan legislation that uses the Obama administration’s MyRA plan to provide small business employees with access to retirement plans.
The law, sponsored by two democratic lawmakers in the state, Sen. Mark Mullet and Rep. Larry Springer, creates a voluntary “marketplace” program and establishes a public website that will connect small business employers to existing private-sector retirement plan vendors.
“Washington State’s enactment of the Washington Small Business Retirement Marketplace is a testament to the State’s desire to effectively and efficiently close the retirement savings gap, while steadfastly refusing to compromise investor protections,” said Marin Gibson, managing director at the Securities Industry and Financial Markets Association, in a statement.
“Small businesses often don’t have the information and resources available to find the right retirement savings plan for their employees, and this program will provide easy access to low-cost, low-fee options that are fully portable and provide the same investor protections available to private investors.”
The Washington program uses the new federal MyRA as its cornerstone, and will be run by the Washington State Department of Commerce. It will establish a digital marketplace to match employers with 100 or fewer employees with private sector plans.
The State will work with a private sector firm to develop the marketplace and establish protocols for selecting appropriate vendors.
To be eligible to participate, firms must offer a target date or similar fund with asset allocations and maturities designed for an expected date of retirement, as well as a balanced fund, and the MyRA will be a key component of the program, according to SIFMA.
Jason Furman, chairman of President Barack Obama’s Council of Economic Advisers, said at a recent retirement event held in Washington that the administration is focused on expanding access to retirement savings plans via such measures as the AutoIRA, as well as Obama’s MyRAs; Furman added the administration is “getting that [MyRA] process started.”
Gibson said in the statement that SIFMA applauds Washington’s “continued leadership in the retirement space and encourages other states to consider adopting this workable public-private partnership to effectively expand retirement savings and security in their States as well.”
Washington’s plan is voluntary, with small business employers being able to choose to offer marketplace plans to employees and employees may choose whether to participate. Employees may also roll over plans into an IRA or other retirement account. Government employees are not eligible to participate.