Alaska House panel hears retirement savings bill for small business workers

The Alaska House Labor and Commerce Committee heard testimony Monday on legislation that would establish an automatic retirement savings program for workers at small businesses across the state.

HB 338, sponsored by Representative Mia Costello and introduced on February 23, 2026, would create the Alaska Work and Save Program. The program would set up automatic payroll deduction IRAs for employees at businesses with five or more workers that do not already offer qualified retirement plans. The bill targets businesses that cannot afford to provide retirement benefits. Ninety-nine percent of Alaska businesses are classified as small businesses.

"Work and Save is really important for Alaska because it allows small businesses to offer their employees a retirement account," Costello said. "We know that Alaska has an aging population, the fastest-growing aging population in the country."

The Department of Revenue or a designee would administer the program. Employees would be automatically enrolled but could opt out or adjust contribution rates. A portion of Permanent Fund dividends could also be directed into the accounts.

Nearly half of private-sector employees in Alaska lack a retirement plan. Senate Bill 21, a companion measure introduced in January 2025 by State Senator Bill Wielechowski, would create a similar auto-IRA program with automatic enrollment and opt-out provisions. Seventeen other states have enacted comparable programs, with workers saving nearly $3 billion to date.

Marge Stoneking, advocacy director for AARP Alaska, told the committee that half of Alaska households have no retirement savings. She cited an AARP survey showing 70 percent of Alaska small business owners support the program.

"Without access to retirement savings at work, nearly all workers fail to save, putting them at risk of poverty and reliance on public assistance as they age," Stoneking said. "If this access gap is not addressed, it is estimated that Alaska will face $708 million in increased reliance on state-funded public assistance programs like SNAP and Medicaid through 2040."

Workers are 15 times more likely to save when they can do so through payroll deduction and 20 times more likely when automatically enrolled, she said.

Jessica Ekman, a government affairs director with AARP's national office, emphasized the importance of compliance provisions in the legislation. She said Colorado's program reached 10,000 funded accounts in five months, while Maryland's took 27 months. She attributed the difference partly to Colorado including enforcement language in its statute.

"States do not always choose to enforce, but the ability to do so is hugely important to ensuring access to retirement savings for all eligible workers," Ekman said.