Highlights
Impacted Employers: Employers that have been in business within the City of Philadelphia for at least 24 months and do not offer a qualified employer-sponsored retirement plan.
Effective Date: PhillySaves is effective immediately, with contributions set to begin on July 1, 2027.
Summary: The City of Philadelphia will require certain employers to facilitate payroll deductions for a mandatory retirement program.
Next Steps: Review the PhillySaves requirements and be on the lookout for guidance from the City of Philadelphia on its mandatory retirement program.
The Details
On May 19, 2026, voters in the City of Philadelphia approved a ballot question that formally establishes the mandatory Philadelphia Retirement Savings Program (PhillySaves). PhillySaves is effective immediately, and contributions are set to begin July 1, 2027.
Covered Employers
Employers that have been in business within the City of Philadelphia for at least 24 months and do not have a qualified employer-sponsored retirement plan must participate in PhillySaves.
Employee Enrollment
The City of Philadelphia will create a mechanism for the automatic enrollment of covered employees and allow employees to change their contribution rate or opt out of PhillySaves (if they choose to do so).
Employee Contributions
Covered employers must facilitate an employee’s contributions to PhillySaves via a payroll deduction at a default contribution rate that will be determined (initially between 3% and 6% of an employee’s wages). Contributions are set to begin July 1, 2027.
Note: The employee contribution rate may be increased annually thereafter by one or two percent (the maximum default contribution rate may not exceed 10%).
Contributions must be deposited into an IRA (employees may choose to establish a traditional IRA, a Roth IRA, or both). An employer cannot make contributions to a participating employee’s account, but may (at any time) begin offering a qualified retirement plan and end their participation in PhillySaves.
Next Steps
Review PhillySaves requirements and be on the lookout for guidance from the City of Philadelphia on enrollment, payroll deductions and other processes required for the City’s mandatory retirement program.
How ADP Can Help
The ADP TotalSource® Retirement Savings Plan (the “Plan”) is a professionally managed 401(k) Multiple Employer Plan (MEP) available to help TotalSource clients meet Philadelphia’s new retirement requirements—at no additional cost to your business. It can also enhance your overall benefits offering by reducing administrative complexity, streamlining compliance, and supporting employee participation. To learn more or explore your options, reach out to your ADP TotalSource representative to setup a call with a MEP 401(k) Plan Consultant.