PhillySaves Approved: Philadelphia Creates First Municipal Automatic IRA and Retirement Savings Board

Philadelphia voters approved PhillySaves and a Philadelphia Retirement Savings Board: a city-run automatic IRA to boost payroll-deduction retirement savings.

Philadelphia voters overwhelmingly approved a ballot measure to create the Philadelphia Retirement Savings Board and launch PhillySaves, a city-run automatic retirement savings program. This municipal-level automatic IRA is designed for workers whose employers do not offer workplace retirement plans, expanding access to payroll-deduction savings.

Under the PhillySaves plan, eligible employees will be automatically enrolled into payroll-deduction Individual Retirement Accounts (IRAs) unless they choose to opt out. Automatic enrollment increases participation by removing friction and making saving the default choice. Employees maintain control, with the right to opt out or change contribution levels at any time.

PhillySaves represents the first automatic IRA program at the municipal level in the United States. Its approval reflects a broader trend of state and local retirement savings mandates aimed at closing the gap for workers without employer-sponsored plans. By creating a dedicated Philadelphia Retirement Savings Board, the city establishes oversight and governance focused on secure, efficient administration of the program.

Employers that do not sponsor retirement plans will not be required to contribute to employee accounts. However, covered employers can expect responsibilities tied to payroll-deduction facilitation and administrative compliance. Likely obligations include setting up payroll withholding, transmitting employee contributions to the designated IRA provider, and maintaining records to meet program standards. Clear guidance and phased implementation are expected to help employers adapt.

The opt-out automatic enrollment model is a key feature for boosting retirement savings among participants who might otherwise delay or forgo saving. Because PhillySaves uses payroll deductions into IRAs, contributions are consistent and convenient, helping build retirement balances over time. The program’s governance by the Philadelphia Retirement Savings Board aims to ensure transparency, security, and prudent investment choices.

Next steps for PhillySaves include establishing program rules, selecting service providers, and rolling out employer and employee notifications. Implementation timelines and specific employer compliance details will be issued as the board organizes operations.

PhillySaves marks an important milestone in local public policy to expand retirement access. By combining automatic enrollment, payroll-deduction convenience, and local oversight, Philadelphia aims to make saving for retirement easier for thousands of workers who currently lack employer-sponsored options.

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