Pew Commends Philadelphia Voters and Policymakers for Advancing New Retirement Savings Program

PHILADELPHIA-This week, Philadelphia voters overwhelmingly passed a ballot referendum initiative that creates PhillySaves, a new automated retirement savings program in Philadelphia. Voter approval was the final step after the Philadelphia City Council unanimously passed enabling legislation late last year, and Mayor Cherelle Parker signed the legislation on Jan. 20. The referendum required voter approval to create the governing board under the City Charter.

PhillySaves will provide a retirement savings option for the city's estimated 208,000 private sector workers whose employers do not offer retirement benefits. Also known as an "auto-IRA," the program will automatically enroll workers in their own individual retirement accounts (IRAs), giving them the option to opt out or change how much they save at any time. The program will be professionally managed by a third-party financial firm that the city oversees. There is no cost to businesses registered in the program for enrolling their employees.

"Philadelphia voters took an important step this week by approving PhillySaves," said Patrick Morgan, project director for The Pew Charitable Trusts' Philadelphia research and policy initiative. "Mayor Cherelle Parker, City Council President Kenyatta Johnson, Council Member Michael Driscoll, and the rest of the Council should be commended for showing real leadership in ensuring that over 200,000 Philadelphians have a new option to save for retirement and better secure their future.

"It's imperative that PhillySaves gets off to a fast start. We know from looking at similar efforts that appointing a strong board, hiring the right leader, and educating employers and employees about how the plan works is critical to the success of these programs. Philadelphia now has a real opportunity to show that smart policy design, strong execution, and sustained support can expand Philadelphians' retirement security in a practical and affordable way."