Legislation that would put in place automatic enrollment of eligible private-sector employees in the Hawaii Retirement Savings Program is one step closer to passage.
On April 9, the state House of Representatives passed SB 2553, a measure that would change that. Under the bill, employees would no longer be required to opt in to participate in the Hawaii Retirement Savings Program but rather would be automatically enrolled. The Senate had passed it on March 5.
Background
When the Hawaii Retirement Savings Program was established in 2022, one of the two features that made it stand out from its counterparts in other states that had already adopted such programs was that employees would be required to opt in if they wanted to participate instead of being automatically registered.
The Legislation
On Jan. 19, 2024, Sen. Sharon Moriwaki (D-Waikiki) introduced SB2553. On Feb. 2, the Hawaii Senate Labor and Technology recommended that it be passed with amendments and referred the bill to the Senate Ways and Means Committee, which on March 1 gave it their nod. The full Senate passed it on March 5 and referred it to the House of Representatives, which sent it to the House Labor and Government Operations Committee. On March 14 that committee recommended that the bill be passed with amendments and referred it to the House Finance Committee.
The Hawaii House Finance Committee on April 2 held a hearing on the measure. In written testimony about the bill, William Kunstman, Co-Chair of the Hawaii Retirement Savings Board—the body that administers the program—endorsed the bill and automatic enrollment of eligible employees. “The Hawaii Retirement Savings Board strongly supports this proposal to require employers to automatically enroll employees in the Hawaii Retirement Savings Program and allow employees to opt-out instead of opt-in to the program,” wrote Kunstman. He continued,
“There is an urgent need to provide a viable option for private sector employers and workers to have access to a state-facilitated retirement savings plan. An employer survey conducted by the Hawaii Retirement Savings Task Force identified that the majority of small business owners agree that being able to offer a voluntary, portable retirement savings program would help local small businesses attract and retain quality employees and stay competitive. Opt-out retirement plans also increase participation rates as too few workers would otherwise put away savings for retirement. “
And he warned of the consequences of not putting automatic enrollment in place. “The Board believes that without this change the program may not be viable, especially as aligning Hawaii’s law with most of the other states’ automatic enrollment provisions facilitates the potential for Hawaii to engage in an interstate compact agreement,” wrote Kunstman. He added that the lack of “opt-out” was impeding the Board from recruiting an executive director and also from conducting a feasibility study because it believes it would not be able to find a vendor willing to conduct the study based on the existing “opt-in” program design.
The House Finance Committee recommended that the measure be passed, with amendments.
Where it Stands Now
Since the House amended the version of SB2553 the Senate passed, the bill has been returned to the Senate so it can consider the amended version.
