Legislation that would create Alaska Work and Save, a state-run program that would provide retirement plan coverage to private-sector employees in Alaska whose employers do not, is still under consideration. 
The bill that would create Alaska Work and Save, SB 135, is not new. Sen. Bill Wielechowski (D-Anchorage) introduced the bill in late April 2023. It was sent to the Senate Labor and Commerce Committee, which held a hearing on the measure a year later.
About the Bill
SB 135 would establish the Alaska Work and Save Program, an auto-IRA program. It also would create the Alaska Retirement Savings Board, which would administer the program.
SB 135 provides that an employer that does not offer a qualified retirement plan would be required to facilitate participation of its employees in the program. Eligible employees would be automatically enrolled in the program and make payroll deductions to an individual retirement savings account. They could opt out if they chose to.
There is one unusual twist: any person who earns compensation in Alaska would be eligible to voluntarily enroll in the program.
Yes, Please
At the April 5, 2024 hearing the Labor and Commerce Committee held, The Brewer's Guild of Alaska, a trade organization representing breweries, wineries, and distilleries in Alaska, called SB 135 “commonsense legislation” that would be “highly beneficial to supporting small businesses in their early years.”
The Brewer’s Guild also looked at the big picture, telling the committee that in its view, “saving for retirement should start as soon as possible for any working adult. More Alaskans saving for their future leads to stronger financial independence and reduced cost to local and state communities that may have to pick up the responsibility of our elders who do not have enough resources to provide for themselves.”
The American Association of Retired Persons (AARP) submitted a report to the committee about a survey it conducted of small business owners in Alaska in which more than three-quarters—77%—of those small business owners said they think state lawmakers should support a bill to make it easier for them to access a retirement savings option for their employees and themselves. They also report that 75% of the small business owners they surveyed were concerned that some Alaska residents have insufficient savings for retirement and could have to rely on assistance from the state of Alaska.
Costs
The Alaska chapter of the National Federation of Independent Business (NFIB) took issue with Wielechowski’s contention that the program would impose no costs on employers. Thor Stacey, State Director of Alaska NFIB, argued that employers would have administrative costs in facilitating their employees’ participation in the program. Similarly, Laura Leigh Latta, Regional Vice President, State Relations for the American Council of Life Insurers, told the committee that in the ACLI’s view the bill would pose “significant costs” for private employers.
But businesses also are concerned about what it would cost them to offer a retirement program themselves, AARP found. In their survey of small businesses in Alaska, almost 75% said retirement plans are too expensive to run. The Brewer's Guild of Alaska, many of whose members have five or fewer full-time employees, expressed a similar sentiment, telling the committee, “For small businesses, it can be a great challenge to offer the full breadth of benefits, like those of a medium or large established corporation.”
AARP also said that 33% of the small business owners they surveyed expressed concern about how complicated retirement plans are to operate, and 30% said running one would take too much time.
Start-up costs. Latta also told the committee that some states where such programs have been put in place experienced high start-up costs. The Alaska Department of Revenue (DOR) in a fiscal note about SB 135 says that the one-time costs associated with the implementation of the proposed legislation would amount to $113,040. The DOR says that is because “Initially, there will not be enough retirement assets to fund the operations of the program, regardless of how it is administered.” It adds that “program administration will determine total initial costs and future funding needs. Ideally, a new funding source would be created for the program.”
Status
SB 135 has been referred to the Senate Finance Committee.
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