Another state has stepped up to try and close the coverage gap — this time by making it easier for small businesses to find a retirement plan provider through a new “retirement plan marketplace.”
Washington is the latest state to take that step, as Gov. Jay Inslee (D) signed into law the Washington Small Business Retirement Marketplace legislation May 18. The law, sponsored by State Sen. Mark Mullet (D-Issaquah) and State Rep. Larry Springer (D-Kirkland), creates a voluntary “marketplace” program, as well as a public website that will connect small business employers (defined as those with 100 or fewer employees) with private-sector retirement plan vendors.
Mullet, who sponsored the Senate version (SB 5826), in a statement about this and a related bill hailed the measure as a program that “addresses critical needs I have heard from many of the employees at my small businesses,” and “will help workers who are early in their careers make better financial decisions, which can set them up to purchase homes and save for retirement down the road.”
Unlike programs like the one signed into law earlier this year in Illinois, the Evergreen State’s plan is voluntary — small business employers may choose whether or not to offer marketplace plans to their workers, and workers may choose whether or not to participate.
Building the Marketplace
To be eligible, firms must offer, at a minimum, a balanced fund and a target date or similar fund with asset allocations and maturities designed for an expected date of retirement. The law also stipulates that the marketplace must offer a MyRA. Annual fees charged to enrollees will be limited to 100 basis points.
The state will work with a private sector firm to develop the marketplace and establish protocols for selecting appropriate vendors. In order for the marketplace to operate, there must be at least two financial services firms offering approved plans on the marketplace, though the legislation states that there is no limit on the number of private sector financial services firms with approved plans participating in the marketplace.
Approved plans must include the option for enrollees to roll pretax contributions into a different individual retirement account or another eligible retirement plan after ceasing participation in a plan approved by the marketplace.
The measure stipulates that the program director shall address how rollovers are handled for eligible Washington employers that have workers in other states, and whether out-of-state employees with existing IRAs can roll them into the plans offered through the marketplace.
Washington is the latest state to take that step, as Gov. Jay Inslee (D) signed into law the Washington Small Business Retirement Marketplace legislation May 18. The law, sponsored by State Sen. Mark Mullet (D-Issaquah) and State Rep. Larry Springer (D-Kirkland), creates a voluntary “marketplace” program, as well as a public website that will connect small business employers (defined as those with 100 or fewer employees) with private-sector retirement plan vendors.
Mullet, who sponsored the Senate version (SB 5826), in a statement about this and a related bill hailed the measure as a program that “addresses critical needs I have heard from many of the employees at my small businesses,” and “will help workers who are early in their careers make better financial decisions, which can set them up to purchase homes and save for retirement down the road.”
Unlike programs like the one signed into law earlier this year in Illinois, the Evergreen State’s plan is voluntary — small business employers may choose whether or not to offer marketplace plans to their workers, and workers may choose whether or not to participate.
Building the Marketplace
To be eligible, firms must offer, at a minimum, a balanced fund and a target date or similar fund with asset allocations and maturities designed for an expected date of retirement. The law also stipulates that the marketplace must offer a MyRA. Annual fees charged to enrollees will be limited to 100 basis points.
The state will work with a private sector firm to develop the marketplace and establish protocols for selecting appropriate vendors. In order for the marketplace to operate, there must be at least two financial services firms offering approved plans on the marketplace, though the legislation states that there is no limit on the number of private sector financial services firms with approved plans participating in the marketplace.
Approved plans must include the option for enrollees to roll pretax contributions into a different individual retirement account or another eligible retirement plan after ceasing participation in a plan approved by the marketplace.
The measure stipulates that the program director shall address how rollovers are handled for eligible Washington employers that have workers in other states, and whether out-of-state employees with existing IRAs can roll them into the plans offered through the marketplace.
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