Committee reports out ‘Alaska Work and Save’ auto-IRA; sponsor, AARP and Colorado officials back the plan

The Senate Labor and Commerce Committee on Monday voted to report a committee substitute for Senate Bill 21, the “Alaska Work and Save” auto-IRA proposal that would create a state-facilitated retirement savings option for employees of employers without an existing plan.

Senator Bill Wilikowski, sponsor of SB 21, said the bill would create an automatic IRA program to increase retirement savings among workers at small businesses. “Over half of American households have no retirement savings,” he said, and “64% of Alaska small businesses do not offer retirement of any kind.” He told the committee the program is designed to be low-cost and simple for small employers.

Marge Stoneking, advocacy director for AARP Alaska, testified in support and said the program would improve retirement readiness for older Alaskans and reduce future reliance on public assistance programs. “Retirement readiness is good for Alaska,” Stoneking said, and she cited polling showing broad support among small-business owners.

Colorado State Treasurer Dave Young, chair of the Colorado Secure Savings board, provided invited testimony about Colorado’s program and a partnership model Colorado offers to other states. Young said Colorado launched a state-run auto-IRA and now offers a “Partnership for Dignified Retirement” that lets smaller states leverage Colorado’s procurement and program manager arrangements. He said Colorado’s program has about 75,000 funded accounts and “well past a hundred million in assets,” and that the program’s average funded account balance is increasing, indicating savers are remaining in the program.

Committee members questioned program design aspects raised by Colorado’s experience: the plan proposed for Alaska is a Roth IRA (post-tax) with automatic enrollment and an annual default escalation in contribution rates, Young said. He reported an opt-out rate of about 20% among those who complete the required know-your-customer process in Colorado. He also said employers in Colorado typically can register and enroll employees quickly and that many small employers view the program as an “easy button” compensation tool.

On a procedural motion on the floor of the committee, Senator Bill Wilikowski moved to “report committee substitute for Senate Bill 21 version 34 LS0254… from committee with individual recommendations and attached fiscal notes.” The motion carried without recorded objection; the committee reported SB 21 with individual recommendations and attached fiscal notes and requested members sign the committee report after adjournment.

Public comment included one in-person testimony from Jane Ann Dreen of Douglas, who described personal experience working for small employers and urged passage so more workers have access to retirement savings options.

Committee Chairman Senator Bjorkman said the committee will next meet April 9 to hear a different bill; no further amendments to SB 21 were adopted during this meeting.

The committee’s report-out advances the measure to the next stage of the legislative process; the committee attached fiscal notes and individual recommendations as part of the report.