Guest: How the state can help small-business workers with a retirement plan
There is a way for Washington state to help small businesses offer retirement plans, according to guest columnists Larry Springer and Terry Gardiner
Special to The Times
THE foundation of our nation is built on the bedrock principle that no matter where you start out, if you work hard, you can succeed. That’s the American dream.
But for most workers in Washington state, and America, that dream is rapidly becoming out of reach. Imagine working your whole life, for 30 or 40 years, and not being able to retire. Ever.
For too many workers, that nightmare is a reality.
There is a way for Washington to help small businesses offer retirement plans. It’s simple, good for business and good for our economy. The Legislature should pass this plan.
The average American has $3,000 saved up for retirement, according to the National Institute on Retirement Security. An AARP report said that 500,000 workers near retirement age in Washington state have saved less than $25,000 for retirement, and it’s highly likely they will need government assistance to survive.
This puts a strain on our state budget that we can’t afford.
Small Business Majority’s scientific opinion polling found a staggering 85 percent of small-business owners believe Washington residents will not have enough money saved for the future.
Every dollar Washington spends on services for older adults who can’t afford rent or groceries or their utility bill is a dollar we can’t spend on other essential services like education and public safety.
This is not sustainable. But it doesn’t have to be this way.
It’s time for a common-sense solution that would help small-business owners and individuals take control of their financial future. That’s why we’re supporting a new idea called Save Toward a Retirement Today (STaRT).
This bipartisan legislation, HB 2474, would allow small businesses with up to 100 employees to enroll their workers in simple retirement funds managed professionally by the Washington State Investment Board.
Research shows that when given a choice, seven out of 10 employees will contribute to a retirement savings plan. STaRT is all about choice. Employers can choose if they want to offer these accounts and employees can choose if they want to participate and how much to contribute.
Small Business Majority’s poll found nearly two-thirds of our state’s entrepreneurs support the bill, and a quarter strongly support it.
Opponents say that investors already offer retirement savings accounts to fit every size and budget. If that’s true, then why do fewer than half of all Washington residents have a retirement plan at work?
When things aren’t working, it’s time to try something new, something smarter.
The truth is that 77 percent of small-businesses owners in Washington don’t offer retirement investment options to their employees, according to the Small Business Majority’s poll. They would like to, but they cannot find the time or the money within existing resources. The poll also found that 60 percent of small businesses that don’t offer a plan would likely do so if an affordable plan was available that met their business needs.
We know STaRT would be a great option for small businesses because it’s simple and all about choice. The state would not charge businesses anything to enroll workers. It’s as simple as checking a box. Employers have no obligation to contribute to their employees’ accounts. It would follow employees wherever they go.
The start-up costs to the state are not insignificant — just under $600,000. But this investment would save taxpayers millions of dollars in the long-run. We can’t afford to keep doing nothing.
On Feb. 14, the state House passed HB 2474. The state Senate is refusing to take action. Call your state senators and tell them to pass this bill.
Responsibility, fairness and hard work: These are shared American values. After a lifetime of sacrifice, everyone who saves for retirement deserves the opportunity to enjoy their golden years. Passing the STaRT bill for all Washingtonians makes smart fiscal sense.
State Rep. Larry Springer, D-Kirkland, is a small-business owner. Terry Gardiner of Seattle is vice president of policy and strategy at the Small Business Majority, a national organization.