Committee approves opt-out retirement savings bill with amendments; panel blanks appropriation amounts for later review

The Senate Committee on Labor and Technology voted Jan. 29 to pass Senate Bill 855, which would require covered employers to automatically enroll employees in the Hawaii Retirement Savings program unless a worker opts out and would repeal the statutory cap on program fees.

Brian Taniguchi, a member of the Hawaii Retirement Savings Board, testified in strong support and described the bill as shifting the program from opt-in to opt-out while providing start-up funds. "The thrust of the bill ... is to change the current law for the retirement savings program from opt in to an opt out," Taniguchi said. AARP Hawaii urged an amendment to allow the board to provide an option to elect contributions to a traditional IRA; the committee accepted a friendly amendment from AARP.

Business groups and small-business representatives raised implementation concerns. Tina Yamaki of Total Merchants of Hawaii opposed the bill as written, saying automatic enrollment could impose administrative burdens and costs on small, locally owned businesses still recovering from pandemic-era losses. The Tax Foundation of Hawaii also urged caution and questioned removing the fee cap before the initial program launch.

The committee accepted the Hawaii Retirement Savings Board technical amendment in section 4 (changing a reference from the program administrator to the covered employer) and agreed to move appropriation amounts out of bill text and into the committee report for later consideration. The committee added a defective date of July 1, 2050 to allow additional technical review. The recommendation to pass SB 855 with amendments was adopted; Senators Ihara and Moriwaki were excused.