With state-sponsored private-sector retirement programs underway in 10 states, and another 20 legislative proposals expected in 2019, the stage is being set for a collaborative model to get many more states in the game.
The basic idea is for interested states to be able to tap into programs already built rather than starting from scratch. The concept takes a page from 529 college savings plans and Achieving a Better Life Experience plans for people with disabilities, from which states have learned that they can achieve efficiency and economies of scale by sharing such programs.
"I'm hearing a lot of interest from the states, and a lot of states are engaging in that discussion," said Sarah Mysiewicz Gill, Washington-based senior legislative representative for AARP. "We are really excited about it. It's the spirit behind these pro- grams to aggregate small businesses."
So far, seven states — including some that have already passed secure choice legislation — are considering legislative language allowing for such partnerships, and many other private-sector retirement bills being considered this year would allow treasurers or other officials to decide whether collaborating with another state program is the most feasible approach.
"It gives them the running room to make that decision," Ms. Gill said.
Some bills have an interesting twist, calling for collaboration as the next step if their initial programs don't produce the desired participation results.
That is where Washington state now finds itself, after its first private-sector effort — a small-business retirement online marketplace that was similar to one in New Jersey — failed to get enough interest from providers, employers or employees. The program is currently inactive.
State Sen. Mark Mullet, who sponsored the first idea, is now sponsoring a bipartisan-supported bill allowing the state to tap into OregonSaves, the first secure choice program to launch that now has $14.5 million in assets. If that happens, a secure choice program under development in Seattle would follow.