Philadelphia Voters Endorse Municipal Retirement Savings Initiative: Implementation Details

Key Points

On May 19, 2026, more than 78% of Philadelphia voters approved a ballot measure creating the Philadelphia Retirement Savings Board, which will administer the PhillySaves program for employees of firms that do not offer a pension, 401(k), or comparable retirement plan.

The approval clears the path for the nation’s first municipal‑level automatic IRA program, potentially delivering retirement access to over 200,000 city residents currently without employer‑sponsored options. Full implementation, including rulemaking and vendor selection, is targeted for July 1, 2027.

Image source: Getty Images.

Who is eligible?

• Businesses and nonprofits headquartered in Philadelphia that have been operating for at least two years and employ at least one worker. Sole proprietors and self‑employed individuals are currently excluded, though future expansion is possible.
• Employers that enroll eligible staff in the city program and handle payroll deductions, without any requirement to contribute funds themselves.
• Employees of Philadelphia‑based organizations who wish to save for retirement but lack an employer‑provided retirement plan.

Sidesteps ERISA

PhillySaves avoids ERISA classification by limiting employer responsibilities to enrollment and payroll processing, thereby sidestepping the extensive regulatory framework that would otherwise apply to traditional private‑sector retirement plans.

Implementation Details

• Workers are automatically enrolled and default to a contribution of 3%–6% of their wages, unless they elect to opt out.
• Contributions are withheld from payroll and deposited into an IRA that the employee owns, with the choice between a traditional or Roth IRA.
• IRAs are portable; they remain with the participant when changing jobs and can continue to receive contributions from new covered employers.
• Employers transmit payroll data and deductions to the program, while account management and investment decisions are handled by appointed vendors under the oversight of the Philadelphia Retirement Savings Board.

Why It Matters

Nearly half of Americans aged 25 to 64 lack access to an employer‑sponsored retirement plan, a gap that is especially pronounced among lower‑wage and small‑business workers. PhillySaves seeks to close this coverage gap by making retirement savings the default for eligible employees, leveraging automatic enrollment to encourage consistent saving even at modest contribution levels.

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