Washington Saves is a new state-facilitated program designed to expand access to retirement savings for workers in Washington state. Starting in 2027, most employers will be required to register their business with the program and facilitate eligible employee enrollment — unless they choose to offer an employer-sponsored qualified retirement plan.
The Benefits of Washington Saves
The Washington Saves program poses several potential benefits for employers. There are no fees involved, employers don’t have to worry about making employer contributions, and they will not have any associated fiduciary responsibilities. The program offers a simple way to help employees save for retirement and achieve financial wellbeing, which can directly impact employees’ attendance and productivity at work.
In addition, offering retirement benefits can help employers retain top talent and demonstrate their support for the overall financial wellbeing of their employees. According to Gusto, an employee without retirement benefits is 40% more likely to quit by the end of their first year than an employee with a 401(k).
Program Specifications
Employers will be required to participate if they meet all of the following criteria:
- Have operated in Washington for two years or more
- Have a physical presence in the State of Washington
- Employ workers for 10,400+ hours/year, or more (roughly equivalent to five full-time employees)
- Do not currently offer a qualified retirement plan
In order to participate, employers will need to:
- Enroll their business when the program begins
- Provide key details about the program to employees
- Facilitate enrollment for eligible employees
- Submit payroll contributions withheld from paychecks
Employers Should Act Now to Help Ensure Compliance
Several other state governments have made efforts to expand access to retirement savings by implementing similar auto-IRA programs. In response to this nationwide focus on retirement savings, some employers who don’t already offer a 401(k) program may begin considering the benefits of offering one.
Why Offer a Qualified Employer-Sponsored Retirement Plan?
Implementing a qualified employer-sponsored retirement plan offers a wide range of benefits for employers that go beyond those associated with Washington Saves, including:
- Plan design flexibility: While Washington Saves offers limited customization, an employer-sponsored plan grants the power of choice — from contribution limits and vesting schedules to eligibility rules and match structures.
- Employer contributions: With an employer-sponsored 401(k), employers can match employee contributions, helping to foster enhanced satisfaction and retention.
- Tax advantages: Employer contributions are typically tax-deductible, and certain plan types may offer additional tax credits for starting a new plan.
- Recruitment and retention: Offering more than the state minimum retirement options can help employers signal investment in employees’ long-term financial security.
- Professional support: Partnering with an experienced retirement plan provider to roll out an employer-sponsored program comes with enhanced access to fiduciary guidance, while Washington Saves offers minimal employer support.
Read more: Discover key steps you can take to attract and retain top talent with a competitive benefits plan.
Those in Washington who still choose not to offer a 401(k) should start thinking about the new processes they’ll need to implement to comply with the requirements of the Washington Saves program.
Connect with CBIZ to Start Planning Ahead
While there’s still over a year until the Washington Saves program begins, it’s never too early to start planning. Whether you’re thinking of offering a new 401(k) plan or considering how to stay compliant with Washington Saves, CBIZ is here to help.
We offer end-to-end support, from needs assessment and plan design to plan administration and ongoing service, to help you build an effective retirement plan. Connect with a professional today to learn more.
Investment advisory services provided through CBIZ Investment Advisory Services, LLC, a registered investment adviser and a wholly owned subsidiary of CBIZ, Inc.
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