Add private-sector employees in Alaska and Wisconsin to those covered by state-run plans if their employers do not offer a retirement plan. Maybe. And throw in Georgia.
That is, if the governments of Alaska and Wisconsin enact bills that would create state-run retirement savings plans for private-sector employees who do not have access to them in their workplaces. And in Georgia, a committee might examine a plan for the Peach Tree State.
Nathan Glassey, Director of Federal and State Legislative Affairs of the American Retirement Association, hailed these bills as a means to close the retirement plan coverage gap and remarked that “we support legislators in this effort.”
Alaska
SB 135 would establish the Alaska Work and Save Program, an auto-IRA program.
The bill also would create the Alaska Retirement Savings Board, which would administer the program. The board would have the discretion to partner with other states.
Under the program, an employer that does not offer a qualified retirement plan would be required to facilitate participation of its employees in the program.
Participants. Eligible employees would be automatically enrolled in the program and make payroll deductions to an individual retirement savings account. The scope of the program would be broader than that, however: Any person who earns compensation in Alaska would be eligible to voluntarily enroll in it.
A participating employee could:
- opt out of the program;
- make contributions at a rate different than the default rate; and
- increase contributions at a rate different than the default rate established by the board.
Participants also could direct that money from their accounts be contributed to the crime victim compensation fund, the peace officer and firefighter survivors' fund, or one or more of the educational organizations, community foundations, or charitable organizations that appear on the contribution list contained in the application.
Contributions. Employee contributions would be made at the default contribution rate established by the board, and the contribution rate would increase at the default rate the board established.
Status. Sen. Bill Wielechowski (D-Anchorage) introduced the bill in 2023, and it is still alive. The Labor and Commerce Committee is reviewing the legislation, and the Department of Revenue has analyzed it at the committee’s request. The committee is set to hold a hearing on the measure on April 5.
Georgia
The Georgia Senate may create a committee to study the creation of Peach State Saves, a retirement saving program.
Senate Finance Committee Chairman Sen. Chuck Hufstetler (R-Rome) on March 20 introduced in the state Senate SR 807, a resolution that would create the Senate Peach State Saves Program Study Committee.
In February, Hufstetler had introduced legislation calling for the creation of the Peach State Saves Plan, a defined contribution retirement plan in which multiple employers could participate regardless of whether any relationship exists between and among them other than their participation in the plan. However, the bill was withdrawn.
Why? The rationale the resolution articulates states that 60% of households in Georgia do not have a retirement savings account and that half of Georgia households lack funds sufficient to maintain their quality of life after they retire. Further, it says, an estimated 2.1 million Georgia workers—employees, independent contractors, and self-employed—have no access to an employer-sponsored retirement plan or program, nor any other easy way to save at work.
The resolution says that it should be the policy of the state to assist the private-sector workforce in Georgia—especially moderate- and lower-income working households—in voluntarily saving for retirement. This, it says, would entail facilitating saving in IRAs as well as encouraging employers to adopt retirement savings programs and other retirement plans for employees.
The resolution argues that more adequate, portable, low-cost, and consumer-protective retirement saving by Georgia households will enhance their retirement security. Not only that, it says that providing them a means to save also would reduce the pressure on state public assistance programs for retirees and other elderly citizens—and in the process reduce the potential burden on Georgia taxpayers to finance those programs.
The Committee. The resolution would create a committee that would study the conditions, needs, issues, and problems concerning Georgians’ financial readiness to retire. It also would be empowered to suggest action and legislation to address its findings.
The committee would have seven members from the state Senate; the President of the Senate would appoint them and also would name its chair.
The committee would have until Dec. 1, 2024 to issue a report and propose legislation.
Status. Hufstetler’s bill was referred to the Senate Rules Committee.
Wisconsin
Legislation is before both chambers of the Wisconsin legislature that would create WisEARNS, a defined contribution retirement savings plan for employees of private employers in Wisconsin that do not offer an employer-sponsored retirement plan or that do not offer such a plan to all employees. 
Contributions. Participants would contribute to a Roth IRA through payroll deductions. In an employee’s first year of enrollment, those deduction would be made at 5% of gross wages, with automatic escalation at 1% per year until reaching the maximum allowed under the federal Internal Revenue Code.
Investments. Under the plan, eligible employees must have certain investment options within each account type, including a stable value or capital preservation fund and a target date index fund or age-based fund. Employees would have the ability to choose investment options and change them.
WisEARNS Board. The legislation also would create the WisEARNS Board which would administer the program. The board would operate under the Office of the State Treasurer. It would have nine members:
- the state treasurer or his or her designee;
- the secretary of financial institutions or his or her designee;
- two members appointed by the governor;
- two members appointed by the speaker of the assembly and the president of the senate;
- one member appointed by the state treasurer;
- one member appointed by the State of Wisconsin Investment Board; and
- one member appointed by the other members.
Tax credits. The legislation also would create tax credits for startup costs of employers that choose to establish a retirement plan, as well as the costs of automatic enrollment. It would create two income and franchise tax credits that may be claimed by small businesses that have 100 or fewer employees who received at least $5,000 in compensation during the preceding year. Both credits are based on similar federal tax credits.
The first credit could be claimed by small businesses for the costs of setting up and administering a retirement plan and educating employees about the plan. The credit would be 50% of the costs, limited to the greater of $500 or the lesser of $5,000 or $250 multiplied by the number of non-highly compensated employees who are eligible to participate in the plan. The credit could be claimed for three consecutive years and could be not be claimed for any costs that were deducted under federal law.
The second credit could be claimed by small businesses that provide for automatic enrollment in their retirement plans. The credit would be $500 and could be claimed for three consecutive years, beginning with the year in which the small business first provides for automatic enrollment.
Status. Senate Minority Leader Dianne Hesselbein (D-Middleton) introduced SB 1076 on Feb. 26; it was referred to the Senate Committee on Universities and Revenue. Rep. Mike Bare (D-Verona) introduced AB 1170 on March 22; it was referred to the Committee on State Affairs.
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