Automatic Retirement Savings Act of 2025

COUNCIL OF THE DISTRICT OF COLUMBIA
The John A. Wilson Building
1350 Pennsylvania Avenue, NW
Washington, D.C. 20004
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Statement of Introduction
Automatic Retirement Savings Act of 2025
April 21, 2025
Today, along with Councilmembers Charles Allen, Matthew Frumin, Brooke Pinto, Brianne K.
Nadeau, and Robert C. White, Jr., I am introducing the Automatic Retirement Savings Act of
2025. This measure was originally introduced in Council Period 25. This legislation would
establish a Retirement Savings Board which would manage a universally available and voluntary
Retirement Savings Program for employees of private businesses who are not offered a
retirement plan through their workplace and for certain self-employed individuals. Employees
would have 3% of their earnings automatically deducted from their wages to contribute to the
program, unless they make an election to not contribute or to contribute a different amount. The
program is designed to serve the employees of the small businesses who are unable to offer
retirement savings accounts to employees due to the cost and administrative burden of
maintaining them. These accounts would be portable if a participating employee changes jobs
because the accounts would be managed by the District, not the employer.
According to the Employee Benefit Research Institute, 68% of workers and 74% of retirees are
confident they will have enough money to live comfortably throughout retirement.1 Over time, a
decreasing share of the workforce has had access to an employer-sponsored retirement plan or a
defined benefit pension, and defined contribution individual accounts rely on the employee’s
initiative and offer lower savings and protections.2 Social Security’s benefits decline over time
relative to increases in the cost of living. These issues are amplified for Black and Latino
workers, whose wages and retirement savings have historically been depressed compared to
those of white workers.3
States like Maryland, California, Oregon, Illinois, and Connecticut have implemented automatic
income retirement account savings programs, and the programs in those states have accumulated
over $630 million in assets to date. A state-managed retirement program can increase
participation from individuals who have historically lacked the structure and access to retirement
savings programs that, over time, can build meaningful savings. Approximately 173,000
employees in the District do not have access to a retirement savings account through their
employer. That number will continue to grow as more small businesses establish themselves in
the city. A savings plan facilitated by the District would help alleviate the barriers that prevent
1 2024 Retirement Confidence Survey, EBRI, 2024.
2 Retirement Insecurity 2021. National Institute on Retirement Security.
3 How retirement saving incentives amplify wealth gaps in the U.S., MIT Management Sloan School, 2024.
Christina Henderson Committee Member
Councilmember, At-Large Human Services
Chairperson, Committee on Health Facilities
Transportation and the Environment
COUNCIL OF THE DISTRICT OF COLUMBIA The John A. Wilson Building 1350 Pennsylvania Avenue, NW Washington, D.C. 20004
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employees whose employers do not offer long-term retirement savings options from saving for their future retirement. A District-sponsored savings plan, funded by employees and managed by a Retirement Savings Board, is one response to the long-standing and increasingly urgent concerns about retiree’s financial security. Seniors today find Social Security alone insufficient to cover their costs.4 It is estimated that 50% of adults ages 50 and older have no retirement savings, and more than half (61%) are worried they will not have enough money to support them in retirement.5 As the cost of living increases over time, supplementing Social Security income with retirement savings will be crucial for workers to retire with dignity and financial security. Lack of adequate savings could force some retirees to try and re-enter the workforce or rely on family for support. This legislation will enable individuals to plan for their retirement and create a stronger, more resilient economy by having a source of income to help pay for living expenses and health care, among other things. I look forward to working with my colleagues to advance this bill and work together to ensure that every District resident can plan for a more secure financial future.
4 Social Security benefits increased by 2.5% in 2025. Why retirees may feel it’s not enough, CNBC, 2025. 5 New AARP Survey, AARP Press Room, 2024.

_______________________________ _______________________________ 1 Councilmember Matthew Frumin Councilmember Christina Henderson 2 3 4 _______________________________ _______________________________ 5 Councilmember Charles Allen Councilmember Brianne K. Nadeau 6 7 8 _______________________________ _______________________________ 9 Councilmember Brooke Pinto Councilmember Robert C. White, Jr. 10 11 12 13 14 A BILL 15 16 _______________ 17 18 IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 19 20 _______________________ 21 22 To establish a Retirement Savings Board, and to establish a universally available and voluntary 23 Retirement Savings Program for employees of private entities and certain self-employed 24 individuals who are not offered a retirement plan through their workplace. 25 26 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this act 27 may be cited as the “Automatic Retirement Savings Act of 2025”. 28 Sec. 2. Definitions. 29 For the purposes of this act, the term: 30 (1) “Board” means the Retirement Savings Board established pursuant to section 3. 31 (2) “Covered employee” shall mean an individual who is 18 years of age or older, 32 who is employed by a covered employer in the District or self- employed, and is not an employee 33 of the federal government, the District government or any independent agency or instrumentality of 34 the District government, or any employer that maintains an employee sponsored retirement plan. 35

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(3) “Employer” or “covered employer” shall have the same meaning as in section 2 36 of An Act To provide for the payment and collection of wages in the District of Columbia, 37 approved August 3, 1956 (70 Stat. 976; D.C. Official Code § 32-1302) and shall conform with the 38 following; 39 (A) Who is headquartered in the District; 40 (B) Employs no fewer than 5 covered employees; 41 (C) Has employed no fewer than 5 such employees without interruption for 42 the previous calendar year; 43 (D) Has been in continuous operation for at least 2 years; and 44 (E) Has not offered or maintained a retirement plan in the preceding 2 years. 45 (5) “Participant” means a covered employee enrolled in the retirement savings 46 program. 47 (6) “Retirement plan” means; 48 (A) A qualified retirement plan under section 401(a) of the Internal Revenue 49 Code, section 403(b), section 408(k), or section 408(p) of the Internal Revenue Code (I.R.C. §§ 50 401 (a), 403(b), 408 (k), 408 (p)); or 51 (B) A savings incentive match plan for employees of small employers, a 52 simplified employee pension, a salary reduction simplified employee pension, or a payroll 53 deduction IRA. 54 (7) “Program” mean the Retirement Savings Program established pursuant to section 55 4. 56 Sec. 3. Establishment of the Retirement Savings Board. 57
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(a) There is established, as an independent agency of the government of the District of 58 Columbia, a board of trustees to be known as the Retirement Savings Board (“Board”), which shall 59 have exclusive authority and discretion (subject to the requirements of this act) to manage, administer, 60 implement, and control the Program established by this act. 61 (b) The Board shall consist of the following 7 members: 62 (1) The Chief Financial Officer or their designee; 63 (2) The Commissioner of the Department of Insurance, Securities and Banking or 64 their designee; 65 (3) The Director of the Department of Small and Local Business Development or 66 their designee; 67 (4) The Executive Director of the Workforce Investment Council or their designee; 68 and 69 (5) Three public members appointed by the Mayor as follows: 70 (A) One public member who owns a business in the District; and 71 (B) Two public members with experience in providing financial advice or 72 assistance to lower- to moderate-income workers or retirees. 73 (c) A public member’s initial term shall be for 4 years. 74 (d) A vacancy on the Board shall be filled in the same manner that the original appointment 75 was made. Any person appointed to fill a vacancy shall serve for the unexpired term of the original 76 appointment. 77 (e) No member of the Board shall be appointed to serve more than 2 consecutive 4-year 78 terms of office. 79 (f) The chairperson of the Board shall be selected from among the public members. 80
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(g) Each member of the Board shall have one vote. The powers of the Board shall be 81 exercised by a majority of members present at a meeting of the Board, whether in person or 82 remotely. Four members shall constitute the necessary quorum to convene a meeting of the Board 83 and to act on any measure before it. 84 (h) The Board shall meet at a minimum of 4 times annually. 85 (i) The chairperson or the Chief Financial Officer is authorized to call and set the agenda for 86 special meetings of the Board. 87 (j) Subject to applicable federal and District law, the Board, in consultation with the Office of 88 Tax and Revenue, shall establish, design, develop, implement, maintain, and oversee the Program in 89 accordance with best practices for retirement saving vehicles. The Board shall have power to adopt 90 reasonable and proper rules and regulations necessary to implement the provisions of this chapter. 91 (k) The Board shall, through employer and employee outreach, marketing or education 92 initiatives, or publication of online resources, encourage participation, retirement saving, and sound 93 investment practices. 94 (l) The Board shall provide or make available information regarding the Program, including its 95 applicability and registration requirements, with emphasis on participation eligibility and the ability of 96 employers at any time to sponsor a specified tax-favored retirement plan that would exempt them 97 from covered employer status. 98 Sec. 4. Retirement Savings Program. 99 (a) There is established the Retirement Savings Program (“Program”), which shall be designed 100 and operated by the Board in a manner that will cause it not to constitute an employee benefit plan 101 with the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, approved 102 September 2, 1974 (88 Stat. 832; 29 U.S.C. § 1001a(3)). 103
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(b) The Program shall have such features as the Board in its discretion may adopt, subject to 104 applicable federal law, and shall: 105 (1) Provide each participant with an account within the Program, to which covered 106 employers shall remit the participant employee’s contributions within 30 days of the end of the month 107 in which the participant would have otherwise received the contributions in cash; 108 (2) Allow covered employees to open a retirement savings account established under 109 the Program through payroll deduction or any other method of contribution established by the Board; 110 (3) Require all participating employers to offer covered employees the opportunity to 111 contribute to accounts established by the Program through payroll deduction or any other method of 112 contribution established by the Board; 113 (4) Provide for the automatic enrollment of covered employees and allow such 114 employees to opt out of the Program; 115 (5) Set a default contribution rate of 3 percent of a covered employee’s wages, subject 116 to any increase or decrease of such a rate authorized by the Board; 117 (6) Permit a participant to change their contribution rate to be a percent of their wages 118 or a lump sum, which the individual may later change; 119 (7) Include a process for withdrawals by, and disbursement to, participants and provide 120 options for such withdrawals and disbursements, including lump-sum or periodic payments; 121 (8) Take measures to protect the confidentiality of account and participant information; 122 (9) Maintain separate records and accounting for each account; 123 (10) Report on the status of accounts to participants no less than once per year or upon 124 request by the participant; 125
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(11) Allow participants who have become ineligible to participate in the Program to 126 maintain or withdraw account balances or roll over such balances into other retirement accounts, 127 subject to federal law; 128 (12) Allow participants to terminate participation in the Program and maintain or 129 withdraw account balances or roll over such balances into other retirement accounts, subject to federal 130 law; and 131 (13) Allocate administrative fees to the retirement savings accounts in the Program. 132 Sec. 5. Participating employer obligations. 133 (a) A covered employer shall enroll each of its covered employees in the Program by a date 134 to be determined by the Board, provided that, the covered employee provide notice that they do not 135 wish to participate in the program. 136 (b) A participating employer shall remit funds deducted from the earnings of each 137 participant for deposit in the retirement savings program within 30 days of the end of the month in 138 which the employee would have otherwise received the contributions in cash. 139 Sec. 6. Information and disclaimers to covered employees and participants. 140 (a) In addition to any other information or disclaimers that the Board deems appropriate, the 141 Board shall make available to covered employees and covered employers the following information 142 in plain language: 143 (1) The benefits and risks associated with enrolling in the Program; 144 (2) Procedures regarding contributing to the Program and opting out; 145 (3) Procedures regarding increasing or decreasing the rate or amount of contribution; 146 (4) Options and processes for withdrawing account balances; 147 (5) Procedures regarding obtaining additional information about the Program; 148
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(6) Procedures regarding filing complaints about non-compliance by covered 149 employers or other concerns about the Program; 150 (7) Information regarding the ability of covered employees and participants to seek 151 financial advice concerning retirement savings from financial advisers, tax advisers or other 152 qualified individuals; 153 (8) Fund profiles, including fees, for each of the available investment options; and 154 (9) The following disclaimers: 155 (A) Participating employers, the Board and its members, the Office of Tax 156 and Revenue, or the District government are not authorized to provide financial advice; 157 (B) The Program is not an employee benefit plan under the Employee 158 Retirement Income Security Act of 1974, approved September 2, 1974 (88 Stat. 832; 29 U.S.C. § 159 1001 et seq.); 160 (C) Participating employers, the Board and its members, the Office of Tax 161 and Revenue, and the District government are not liable for any loss incurred by a participant from 162 investing in the Program; 163 (D) Participating employers, the Board and its members, the Office of Tax 164 and Revenue, or the District government will not monitor and are not obligated to monitor a 165 participant employee’s eligibility under federal law to make contributions to an IRA; and 166 (E) Neither the program, the principal investments, any return on investment 167 nor any interest rate is guaranteed by the Program. 168 Sec. 7. Participating employer record retention. 169 Each participating employer shall retain annual records documenting such employer’s 170 compliance with the requirements of this act for a period of 3 years. 171
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Sec. 8. Compliance. 172 (a) The Board shall have exclusive authority to ensure compliance with and enforce this act or 173 any regulation promulgated under this act. 174 (b) The Board shall establish a process for the submission of covered employee and participant 175 complaints concerning a covered employer’s alleged failure to comply with the provisions of this act. 176 All complaints concerning a covered employer’s compliance with this act received by any other 177 District agency shall be referred to the Board. The Board may, with or without a complaint, monitor 178 the status of covered employers’ compliance with this act, including through review of available data 179 and documents. 180 (c) If the Board determines that a covered employer is not in compliance with the provisions of 181 this act, the Board shall issue a notice to the employer outlining the nature and extent of the alleged 182 noncompliance, provide instructions for compliance, and specify the potential administrative penalties 183 for noncompliance. 184 (d) If the employer does not come into compliance within 90 days of the date the notice was 185 issued, the Board, in its discretion, may initiate enforcement proceedings; except, that the Board shall 186 not initiate enforcement proceedings against a covered employer until one year after the effective date 187 of this act. 188 (e) The Board may, in a final order, impose administrative penalties against a covered 189 employer who fails to comply with this chapter, or any regulation promulgated under this chapter, 190 which shall not exceed $250 per employee per year, up to a maximum total penalty of $5,000 per 191 year. 192 (f) The Board’s decision may be appealed by the covered employer within 15 days of the 193 issuance of the decision. 194
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(g) The Board shall respond to the appeal within 15 days of receiving the appeal. 195 Sec. 9. Fiscal impact statement. 196 The Council adopts the fiscal impact statement in the committee report as the fiscal impact 197 statement required by section 4a of the General Legislative Procedures Act of 1975, approved 198 October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 199 Sec. 10. Effective date. 200 This act shall take effect after approval by the Mayor (or in the event of veto by the Mayor, 201 action by the Council to override the veto) and a 30-day period of congressional review as provided 202 in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 203 Stat. 813; D.C. Official Code § 1-206.02(c)(1)). 204