By John Iekel
The Washington State Department of Commerce on March 19 announced the launch of the state’s Retirement Marketplace, a virtual marketplace in which financial services firms will offer low-cost retirement savings plans to businesses with fewer than 100 employees, including sole proprietors and the self-employed.
The state intends the marketplace to serve as “an informational hub, bringing together financial services firms, employers and employees” that will simplify retirement savings options, facilitate informed decisions about retirement and enable individuals to start building savings.
Under criteria the Washington State Legislature established, each plan listed on the Retirement Marketplace:
- must first be reviewed by officials at the Department of Financial Institutions and/or the Office of the Insurance Commissioner;
- cannot charge administrative fees to employers;
- cannot charge enrollees more than 1% in total annual administrative fees; and
- must go through an annual renewal process to ensure the plan and provider remain in good standing.
Participation in the Retirement Marketplace is voluntary for both employers and employees. The Department of Commerce administers the marketplace, but private retirement plan providers handle enrollment. The marketplace is also open to self-employed, part-time and temporary “gig” workers.
At launch, the site offers five types of 401(k) plans, as well as Roth and traditional IRAs. In a press release the Department of Commerce says that more plans will be added in the future.
The Washington State Department of Commerce reports that approximately 131,000 businesses in the state, most of them small businesses, do not offer retirement plans to employees.