Philadelphia Voters Approve City-Run Retirement Savings Program
On May 19, Philadelphia voters approved a ballot measure to establish PhillySaves, the nation's first city-run automatic IRA program. The initiative aims to help over 200,000 residents who lack access to employer-sponsored retirement plans by automatically enrolling eligible workers into IRAs starting in July 2027. PhillySaves will cover employees of Philadelphia-based businesses with at least two years' operation and one employee. Employers are not required to contribute but must handle enrollment and payroll deductions. The program sidesteps ERISA regulations, reducing administrative burdens on small employers while still providing retirement benefits for workers in firms that do not offer 401(k)s or pensions. The initiative is designed to address a significant gap: nearly half of Americans aged 25–64 lack access to employer-sponsored plans. PhillySaves uses automatic enrollment with default contribution rates between 3% and 6%, aiming to encourage long-term savings among lower-wage workers.
