Pew Applauds New Philadelphia Retirement Savings Bills

WASHINGTON-The Pew Charitable Trusts commends the City Council for passage of legislation to create PhillySaves, a new automated retirement savings program in Philadelphia. PhillySaves would provide a retirement savings option for the city's estimated 208,000 private sector workers whose employers do not offer retirement benefits. Under the bills, the program can begin operation once an independent governing board is approved via public referendum in May 2026.

PhillySaves, a type of program also known as an "auto-IRA," would automatically enroll workers in individual retirement accounts (IRA), giving them the option to opt out or change how much they save at any time. The program would be professionally managed by a third-party financial firm that the city oversees. Businesses registered in the program would be able to seamlessly enroll their employees at no cost to them.

Throughout the country, 17 states and two cities-New York City and Seattle-have adopted similar auto-IRA plans. As of December, 12 of these programs had amassed nearly $2.7 billion in savings across more than 1 million participants and 260,000 employers. Among older households in Philadelphia today, those receiving any amount of saved retirement funds have a higher median annual income than those households relying on Social Security.

John Scott, director of The Pew Charitable Trusts' retirement savings project, issued the following statement:

"PhillySaves would benefit Philadelphia's workers, its businesses, and its taxpayers. More than 200,000 workers who currently lack access to retirement savings accounts could start setting aside money for a more secure and comfortable retirement. Philadelphia's businesses would, at no cost to them, be able to attract and retain workers by offering a retirement savings plan. And taxpayers would also benefit, because the more people save for retirement, the less they will need to rely on social assistance programs in the future.

"Pew applauds Council President Kenyatta Johnson and Councilmember Michael Driscoll for shepherding this legislation as well as Mayor Cherelle Parker for her leadership and support."