Panel hears bill to create state-run 'Work and Save' auto-IRA; amendment deadline set

Senators, representatives, advocates and small-business owners told the House Finance Committee on May 15 that Senate Bill 21, known as Alaska Work and Save, would give many private-sector Alaskans access to retirement accounts through a state-facilitated auto-IRA.

Sen. Bill Wilkowsky, the bill sponsor, told the committee the proposal would establish an automatic enrollment individual retirement account for eligible Alaskans, add an option to direct Permanent Fund Dividend (PFD) checks into retirement accounts, and allow the state to join a multi-state partnership to lower start-up and operating costs. "It establishes an auto IRA program for all Alaskan employees who qualify," Wilkowsky said, and the bill is intended to help workers who change jobs or work seasonally by making accounts portable.

The bill drew support from advocacy groups and small employers during invited and public testimony. Marge Stoneking, advocacy director for AARP Alaska, urged lawmakers to restore employer compliance language in the measure, arguing that automatic enrollment paired with statutory compliance helps states reach broad participation. "When workers can't save, the consequences don't stop with that individual," Stoneking said, noting research showing many households lack retirement savings and asserting that state-facilitated programs in other states have produced millions in funded accounts.

Small-business owners who testified said the program is administratively feasible and would allow them to offer a retirement benefit without taking on the full cost and complexity of an employer plan. "Adding these things on is actually very simple," said John Weddleton, who operates a retail business with about 34 employees. He advocated for automatic enrollment (opt-out) to increase participation.

Committee members pressed witnesses and sponsor staff for details about costs and mechanics. Treasury Division Director Pam Leary said Treasury's fiscal note requests about $660,000 in fiscal year 2027, declining to roughly $355,000 annually from 2028–2032; she and staff said a first‑year vendor startup fee similar to Colorado's Vestwell arrangement could be about $300,000. Genevieve Wartusic of the Permanent Fund Dividend division said that office produced a zero fiscal note for the PFD division regarding SB 21.

Staff and sponsors clarified program rules discussed in the hearing: the bill would default a nonchoosing employee's contribution to 5% of pay; it would allow PFD applicants to check off depositing their dividend into an existing investment account; it includes exemptions for businesses with five or fewer employees and businesses younger than three years; and accounts would follow workers so savings remain portable across jobs. Staff noted the bill allows the Department of Revenue to contract with a multi‑state partnership to implement the program.

Not all details are fixed in the text. Sponsor staff said participant fees and multi-state partnership arrangements are typical implementation levers in other states but are not spelled out verbatim in the bill; they said the most recent fiscal discussion factored in possible participant fees and a trajectory toward self-funding but that the bill itself focuses on enabling the Department of Revenue to enter contracts to implement the program.

The committee set an amendment deadline for SB 21 of Saturday, May 16 at 5:00 p.m. and said it will take up amendments at the committee's next scheduled meeting. The hearing adjourned at 7:04 p.m.