Hawaii
On May 24, 2022, Governor David Ige (D) signed the Hawaii Retirement Savings Act into law, which implemented a statewide retirement savings program for all private-sector employees in the state not currently enrolled in a retirement plan to electively participate in a state-facilitated automatic enrollment individual retirement account (IRA) program.
Legislative Summary:
Senate Bill 1374 was initially introduced in January 2021, but eventually failed in 2019 – due to a legislative stalemate. On May 3, the Hawaii Senate and House of Representatives passed Senate Bill 3289, the bill that would establish the program. The Senate passed it unanimously; there was only one dissenting vote in the House.
Program Description:
The Hawaii Retirement Savings Program is administered by the Hawaii Retirement Savings Board, to provide a state-facilitated payroll-deduction individual retirement savings plan to private sector employees who do not have access to employer-sponsored retirement savings plans. It also provides a state match of up to $500 to the accounts of the first 50,000 covered employees who participate in the program for twelve consecutive months after initial enrollment.
Unique Provision: The Board may authorize matching contributions of up to $500 to the accounts of the first 50,000 covered employees, who participate in the Hawaii retirement savings program for 12 consecutive months after initial enrollment.
Affected Employers:
Employees eligible for the plan must be residents of the state, at least 18 years of age, employed and receiving wages from an employer for at least two (2) years.
General Requirement:
N/A
Launch Status:
May 24, 2022
Full Implementation:
July 1, 2024
Compliance Deadline:
To be determined
Non-Compliance Penalties:
| Deadline | MAXIMUM PENALTY |
|---|---|
| JJuly 1, 2024 | $20 per employee |
| September 1, 2025 | $50 per employee |
Employer Costs:
Undetermined
Employee Costs:
Undetermined; not to exceed 0.75%
Investments:
The program is anticipated to offer a suite of target date funds (TDFs), as the default investment option, and additional investment options – including a capital preservation, fixed-income, equity funds.