Philadelphia proposes new retirement savings program

The Philadelphia City Council has advanced a proposal to create PhillySaves, a city-sponsored automated retirement savings program designed to reach private sector workers whose employers do not offer retirement benefits.

City officials said the initiative aims to expand access to retirement savings while placing minimal administrative burdens on employers.

Under legislation approved by the council, the program would be authorized to begin operations if voters approve an independent governing board through a public referendum scheduled for May 2026, local outlet WHYY News reported.

If implemented, PhillySaves would target an estimated 208,000 workers in Philadelphia who are currently without access to a workplace retirement plan.

Employers participating in the program would be able to enroll eligible employees at no cost — with the city overseeing the selection of a third-party financial firm to professionally manage the accounts.

Council leaders backing the proposal say the program is intended to strengthen long-term financial security for residents while supporting workforce stability for local businesses.

How Philly Saves would work

PhillySaves would operate as an automatic individual retirement account program, commonly known as an auto IRA.

Workers would be automatically enrolled in an IRA and could opt out or adjust their contribution levels at any time.

Accounts would be portable and tied to individual workers rather than employers, allowing savings to continue as employees change jobs. Businesses would not be required to contribute funds and would face no direct costs beyond facilitating payroll deductions.

Similar programs have been adopted in 17 states and two cities — New York City and Seattle. As of December, 12 of these programs had accumulated nearly $2.7 billion in savings from more than 1 million participants and 260,000 employers, according to researchers at Georgetown University.

The data also shows potential long-term benefits for the city. Among older households in Philadelphia, those receiving any amount of saved retirement funds reported a higher median annual income than households relying solely on Social Security.

Pew commends council action

The Pew Charitable Trusts praised the legislation and urged continued support for the program’s implementation.

John Scott, director of The Pew Charitable Trusts’ retirement savings project, said the initiative could deliver broad benefits across the city.

“PhillySaves would benefit Philadelphia’s workers, its businesses, and its taxpayers,” he said. “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.”