Washington state should establish a public-private partnership to set up a low-cost, easily administered retirement savings program for private sector employers, according to Hank Kim, executive director and counsel of the National Conference on Public Employee Retirement Systems (NCPERS).
The executive director made the assertion during his testimony before the Washington State House Committee on Labor & Workforce Development yesterday.
"So 1.57 million workers – or more than half of the state's private sector workers – are not saving for retirement," Kim said. "We know the vast majority of these workers work for small employers, those with fewer than 100 workers. The result is that there are generations of Washington workers moving through their working years with little or no retirement savings who will have only Social Security to rely on."
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The partnership would help create a defined benefit retirement plan to allow professional management of assets and investments and keep costs low, he said.
NCPERS national research discloses that most small employers would like to offer a retirement savings plan, but are discouraged by the financial and administrative costs. A tested proposal developed by NCPERS – the Secure Choice Pension could be a model for addressing the state's dilemma, he testified.
The proposal calls for states, individually, either by themselves or in groups, to pass laws that would create multiple-employer defined benefit pension plans.
The National Conference on Public Employee Retirement Systems (NCPERS) is the largest trade association for public sector pension funds, representing more than 550 funds throughout the United States and Canada.
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