PHILADELPHIA (KYW Newsradio) — A Philadelphia City Council committee advanced a bill that would ask voters to create a city-run retirement plan for workers who don’t already have one through their employer.
Employers are not required to offer retirement plans, and many small businesses simply can’t afford to. And, while workers could explore options on their own, many simply don’t have the bandwidth. As a result, more than one-quarter of Philadelphia’s workforce is entirely reliant on social security, a pathway to poverty for many.
Councilman Mike Driscoll said the solution could be Philly Saves.
“It gives the more than 200,000 workers in our city who lack a workplace retirement plan, a straightforward payroll deduction option that they can take with them from job to job. It’s portable. They can take it with them,” he said.
Employers without retirement plans would be required to sign up, but would not have to match deductions or take on fiduciary responsibility. They would choose a deduction rate for workers of 3-6% but workers could change the rate or opt out. If the bill passes the full council, voters would be asked to create a Retirement Savings Board to oversee the plan.
Rick Collins of AARP testified in support of the plan.
“It’s time for every Philadelphian to have a secure retirement. It’s time for Philadelphia to lead the way.”
Several states, including New Jersey and Delaware, already have such programs, but not Pennsylvania. Philadelphia would be the first city to take it on.