NEWS: Legislature Passes Alaska Work and Save Retirement Program
Legislature Passes Alaska Work and Save Retirement Program
Juneau, AK - The Alaska Legislature passed Senate Bill 21, known as the Alaska Work and Save Program. Sponsored by Senator Bill Wielechowski, D-Anchorage, Representative Costello, R-Anchorage, and Representative Saddler, R-Chugiak, this legislation establishes a state-managed auto-IRA program for private-sector workers who lack access to employer-sponsored retirement plans. Under this program, private-sector employees are enrolled automatically, with contributions to their retirement accounts deducted from each paycheck. The legislation also integrates with the existing Permanent Fund Dividend “Pick.Click.Give” program, allowing Alaskans to save their PFD in their retirement accounts. Employees will retain the right to opt out at any given time and maintain full control over their accounts.
To reduce burdens on small businesses, employers are not obligated to make contributions and incur no additional administrative expenses beyond forwarding payroll deductions. “During committee, we heard from small businesses that Alaska Work and Save is a gift that allows their employees to save automatically for retirement at no cost to them,” said Representative Costello.
As Alaska's senior population grows increasingly reliant on public assistance, the need for early intervention is clear. Alaskans aged 60 and over are expected to double between 2010 and 2030, and many are struggling to make ends meet. The average monthly Social Security benefit is $2,071, less than half the average monthly cost of living in Alaska, at $4,528. Alaska Work and Save aims to reduce that pressure by helping workers build retirement security before they need to rely on state services.
"Right now, roughly half of Alaska's private-sector workers have no retirement plan at work, and we're seeing the impact of that. Seniors are relying more and more on SNAP, falling below the poverty line, and struggling to get by on Social Security, which doesn't come close to covering Alaska's cost of living,” said Senator Wielechowski. “This bill fixes a gap in the system. It gives workers an automatic way to save, it costs employers nothing, and it follows a model that's already working in sixteen other states."
Seventeen states have established comparable state-sponsored IRA programs, resulting in a collective savings of $630 million across 610,000 accounts. The Alaska Work and Save initiative provides employees without access to employer-sponsored retirement plans with a simplified savings option, diminishes administrative burdens for small businesses, and aims to decrease long-term reliance on state assistance programs.
Senate Bill 21 now heads to the Governor’s desk for his signature.
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