Philadelphia voters have overwhelmingly approved a ballot measure authorising the creation of the Philadelphia Retirement Savings Board to oversee the new PhillySaves programme.
When implemented, PhillySaves will become the first municipal-level automatic retirement savings programme in the United States, marking a significant milestone in retirement policy.
The programme will automatically enrol eligible employees into payroll-deduction Individual Retirement Accounts unless workers affirmatively choose to opt out.
PhillySaves is expected to apply to businesses that have operated in Philadelphia for at least two years and employ at least one member of staff.
Importantly, the programme is designed to avoid classification as an employee pension benefit plan subject to ERISA by limiting employer involvement to payroll deduction functions.
Employers will not be required to make contributions to employee accounts, though covered businesses will face administrative and payroll compliance obligations once the programme launches.
The city expects PhillySaves to become operational by July 2027, following what is anticipated to be a period of regulatory guidance and implementation planning.
Philadelphia’s initiative arrives as part of a broader national trend, with 22 states having established programmes requiring covered employers to join state-facilitated retirement savings arrangements as of June 2026.
Pennsylvania does not currently maintain a statewide auto-IRA programme, meaning Philadelphia’s move could signal growing interest in government-sponsored retirement savings across the Commonwealth.
Employers that already sponsor qualified retirement plans, such as 401(k) plans, are generally expected to be exempt from PhillySaves participation requirements under the approved framework.
Businesses without existing retirement plans, however, may face new administrative responsibilities and potential penalties for noncompliance once the programme becomes operational.
Because PhillySaves will be overseen by the Philadelphia Retirement Savings Board rather than participating employers, businesses should not bear fiduciary responsibility for investment outcomes.
Legal analysts at Polsinelli PC advise that employers should now determine whether they fall within the programme’s scope based on workforce size, business operations, and existing benefit offerings.
Some employers may find that adopting a qualified retirement plan independently offers greater flexibility and employee benefit value than participating in a city-administered automatic IRA programme.
Covered employers will likely need to coordinate payroll systems, employee notices, and enrolment procedures well in advance of the programme’s anticipated launch date.