The Alaska Senate advanced a bill Wednesday to establish a savings program for employees whose workplaces do not offer a retirement program.
The Alaska Work and Save Program is what Sen. Bill Wielechowski, D-Anchorage and the bill’s sponsor, called a solution to a retirement savings problem in Alaska. According to a survey by the AARP, nearly half of private-sector employees in Alaska lack a retirement plan.
“This program will help Alaskan businesses offer a competitive benefit at no cost,” he said.
Wielechowski told legislators that social security payments do not cover the high cost of living for seniors in Alaska, increasing their reliance on SNAP and Medicaid, and small businesses cannot always afford to sponsor a retirement program for their employees. Wielechowski proposed establishing the Alaska Work and Save Program for tax advantaged and portable retirement accounts.
The bill passed with 15 yes votes. Sens. Jesse Bjorkman, R-Nikiski, Robert Myers, R-North Pole, George Rauscher, R-Sutton, and Cathy Tilton, R-Wasilla, voted against it.
Sen. Robert Myers, R-North Pole, said that he was conflicted about the bill because it was unclear to him how businesses would help administer the program.
Senate Bill 21 would develop a retirement program called the Alaska Work and Save Program for employees who are not offered a retirement plan by their employer. Applicants would be able to contribute some or all of their Permanent Fund Dividend and additional contributions through payroll deduction to the individual retirement account. Eligible employees would be automatically enrolled and would be able to opt out of the program.
“It fixes a problem in a way that doesn’t overreach, that helps the business community, that helps workers and is good for our state,” Wielechowski said. “Passing this bill is an important step forward towards genuinely improving the lives of Alaskans by helping them save for a rewarding retirement.”
If the bill becomes law, Alaska would join 15 other states that have automatic savings programs, according to Pew, a nonprofit that oversees the nonpartisan Pew Research Center.
Small businesses owners across Alaska wrote in letters of support that a lack of retirement benefits makes it difficult for small businesses to compete with larger companies, and the proposed retirement system would be beneficial for small businesses.
Forbidden Peak Brewery Co-Owner Skye Stekoll supported the bill and wrote that “easy access to a public retirement program would make both starting the process of investing and making continued regular investments far more attainable for our employees, and also make it conceivable for employers to contribute in prorated ways based on hours worked, longevity, etc., regardless of the industry.”
Rachael Miller, chief advocacy officer for the Food Bank of Alaska, wrote to legislators that the bill could increase food security for Alaskan seniors.
“By creating a pathway for workers to save for retirement through automatic payroll deductions, the Alaska Work and Save Program will help workers, particularly in fishing, tourism, and gig-based jobs, prepare for retirement and reduce future reliance on emergency food assistance,” she stated in a letter.
The Department of Revenue would administer the Alaska Work and Save Program. According to a fiscal note, the program will cost $808,000 in 2027 and approximately $524,000-$589,000 annually.