Washington Saves: What Employers Need to Know

Washington Saves: What Employers Need to Kno

Washington Saves is a new state retirement savings program for workers who lack access to a workplace retirement plan. The program is set to launch in 2027 and will require some Washington employers to help employees contribute to an individual retirement account via payroll deductions.

Employees aged 18 and older are usually enrolled automatically, but participation is voluntary. Workers can opt out, adjust their contribution rate, or rejoin later. Their retirement accounts stay with them when they change jobs.
The default contribution rate will be between 3 and 7 percent of wages. The rate might increase over time, but employees can adjust their contributions within federal IRA limits.

The program generally applies to businesses that have been operating in Washington for at least two years, maintain a physical presence in the state, and do not offer a qualified retirement plan. Employers must also have accumulated at least 10,400 total employee work hours in the previous year, which is roughly equivalent to five full-time employees.
Covered employers will register for the program, provide employee information, process payroll deductions, and send contributions to Washington Saves. Employers will not need to contribute their own money, pay a program fee, choose investments, or offer financial advice.

Washington Saves could assist small businesses in providing employees with a simple retirement savings option without establishing a traditional employer-sponsored plan. Nonetheless, employers might need to update payroll procedures and inform employees about program details.
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Businesses should start reviewing their existing retirement plans, payroll systems, and employee work hours. More rules and registration details will be announced before the program starts.

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Sources

• Washington Saves
• Washington Saves Employer Information
• Washington Saves Employee Information
• Chapter 19.05 RCW, Washington Saves

​This article was written with contributions from AI to organize the information and improve its readability.

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