Fresh from being sworn into office, Mayor Tim Burgess unveiled his 2018 budget for the city, including a proposal to establish retirement savings accounts for an estimated 200,000 Seattle workers whose employers don’t provide such benefits. Some Capitol Hill business leaders are lining up to support the plan, arguing that freelancers and the nightlife industry stand to benefit.
Tuesday, the Burgess legislation was sent to the City Council to begin deliberations. “In Seattle, 200,000 workers have no retirement savings plan,” Burgess said. “That’s a recipe for long-term financial instability for those individual workers, their families, and our local economy. We know that people are far more likely to save for retirement if they have an option easily available. That’s exactly what my plan provides.”
The idea, which has been a Burgess pet project, boils down to this: The city would contract a third party administrator to process the payroll of workers within city limits whose employer doesn’t offer any savings program and deduct a small percentage of their pay to personal retirement savings accounts. The amount deducted can be determined by the employee, but the default option is between three and five percent. (Workers could also choose to opt-out of the program at any point.) This account would be portable, and would remain with the employee even if they changed jobs, a boon to freelancers and service industry employees who frequently change jobs. Continue reading