What is the penalty for non-compliance with Hawaii Saves?

Hawaii Saves is currently in the implementation phase. Specific penalty amounts are to be determined (TBD) as enforcement rules are finalized. However, Hawaii's 1+ employee threshold is the lowest of any state mandate — virtually every Hawaii employer with any W-2 employees will be covered.

Who is exempt from Hawaii Saves?

Employers who already offer a qualifying retirement plan such as a 401(k), SIMPLE IRA, SEP IRA, 403(b), pension, or 457(b) are exempt from Hawaii Saves. You must file a Certificate of Exemption through the Hawaii Saves portal.

How do I enroll in Hawaii Saves?

Employers register through the official Hawaii Saves portal at hawaii.gov/dcd. You will need your EIN, employee count, and payroll information.

Hawaii Saves Employer Compliance Guide (2026) | RetirementMandate.com

Q: What is Hawaii Saves?

Hawaii Saves is Hawaii's state retirement savings mandate that will require private-sector employers with 1 or more employees to offer workers a retirement savings program. It is currently in the implementation phase.

⚠️ Implementation Phase: Hawaii Saves is currently in the implementation phase. Penalty amounts and enforcement timelines are being finalized. However, Hawaii's threshold of 1+ employees is the broadest of any state mandate — virtually every Hawaii employer with W-2 workers will be covered. Act now to establish a qualifying plan before enforcement begins.

What Is Hawaii Saves?

Hawaii Saves is Hawaii's state retirement savings mandate, one of the most expansive in the United States. Unlike other state programs that cover employers with 5 or more employees, Hawaii Saves applies to virtually all private-sector employers with 1 or more W-2 employees. The program is currently in the implementation phase, with enforcement rules being finalized.

Hawaii's mandate reflects the state's commitment to expanding retirement security for its workers, including the significant gig and hospitality workforce. With Hawaii's large tourism and service industry, many small businesses with just a handful of employees will be covered by this mandate once it is fully implemented.

As implementation details are finalized, employers should take proactive steps now. Establishing a qualifying private retirement plan (401k, SIMPLE IRA, SEP IRA) will exempt your business from the mandate requirement and provide better retirement benefits for your employees. Waiting until enforcement begins may result in rush fees and limited options.

Employee Threshold

TBD

Penalty Per Employee

IMPLEMENTING

Program Status

Default Contribution Rate

Who Is Covered Under Hawaii Saves?

The mandate applies broadly to private-sector employers in Hawaii. Below is a breakdown of which employer types are covered:

Employer Type	Covered?	Notes
For-profit businesses with 1+ W-2 employees	YES	Must enroll or have qualifying plan
Non-profit organizations with 1+ employees	YES	Non-profits are included
Sole proprietors with no W-2 employees	NO	No employees = no mandate
Employers with qualifying retirement plan	EXEMPT	Must file exemption certificate
Federal government employers	NO	State mandate does not apply
Employers with 1099 contractors only	NO	Only W-2 employees count
New businesses (under 2 years)	YES	Hawaii's 1+ threshold applies broadly; implementation details pending

Penalties for Non-Compliance

Hawaii Saves penalty amounts are currently to be determined (TBD) as the program is in implementation phase. Based on other state mandates, penalties are expected to be significant. Hawaii's 1+ employee threshold means virtually every employer will be covered:

TBD

Per employee, per year for non-compliance with Hawaii Saves

Penalty Calculator: What You Could Owe

Business Size	Year 1 Penalty	Year 2 Penalty	Year 3 Penalty
25 employees	TBD	TBD	TBD
50 employees	TBD	TBD	TBD
100 employees	TBD	TBD	TBD

Important: These penalties are in addition to any back-registration fees. The best way to avoid penalties is to either enroll in Hawaii Saves or establish a qualifying private retirement plan and file for exemption.

Exemptions & Qualifying Plans

If your business already offers one of the following qualifying retirement plans, you are exempt from Hawaii Saves — but you must still file a Certificate of Exemption through the official portal at hawaii.gov/dcd.

✅

401(k) Plan

✅

403(b) Plan

✅

SIMPLE IRA

✅

SEP IRA

✅

Pension Plan

✅

457(b) Plan

Having a qualifying plan exempts your business immediately. Note: you must actively maintain the plan and keep contributions current to maintain exempt status.

How to Enroll in Hawaii Saves: 6 Steps

If your business does not have a qualifying plan, here is how to enroll in Hawaii Saves:

Confirm your eligibility — Verify your employee count meets the 1+ threshold. Count all W-2 employees, including part-time workers.
Gather required information — Collect your Employer Identification Number (EIN), payroll schedule, and employee roster with dates of birth and hire dates.
Register on the portal — Visit hawaii.gov/dcd and create your employer account. Complete the registration form.
Set up payroll deductions — Configure your payroll system to deduct the default 3% employee contribution (employees can opt out or change their rate).
Notify your employees — Send required employee notices explaining the program, contribution rates, and their 30-day opt-out window.
Submit your first enrollment — Upload your employee roster to the portal and submit. You will receive a confirmation and registration number.

Alternatively, establish a qualifying private plan (401k, SIMPLE IRA, etc.) to bypass the state program entirely and potentially provide better benefits for your team.

State Plan vs. Private Retirement Plan: Which Is Better?

Employers required to comply with Hawaii Saves have two options: enroll in the state-administered Roth IRA, or establish a private retirement plan. Here is how they compare:

Feature	Hawaii Saves (State Plan)	Private 401(k) / SIMPLE IRA
Employer cost	$0 setup	$500–$2,000 setup; flat-fee available
Employee contribution type	Roth IRA only	Pre-tax + Roth options
2026 contribution limit	$7,000/yr (IRA limit)	$23,500/yr (401k) or $16,500/yr (SIMPLE)
Employer matching	Not available	Optional (tax-deductible)
SECURE 2.0 tax credits	Not available	Up to $15,000 over 3 years
Recruiting advantage	Limited	Strong competitive benefit
Admin burden	Low — state manages it	Low with flat-fee TPA
Satisfies mandate	YES	YES

Bottom line: For most businesses with growth ambitions, a private 401(k) or SIMPLE IRA offers better contribution limits, tax advantages, and recruiting power — often at a similar or lower net cost once SECURE 2.0 credits are factored in.

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Frequently Asked Questions: Hawaii Saves

When does Hawaii Saves enforcement begin?

Hawaii Saves is currently in the implementation phase. Specific enforcement timelines are being finalized by the Hawaii state government. Employers should monitor hawaii.gov and sign up for notifications. Establishing a qualifying plan now ensures you will be ready when enforcement begins.

Why does Hawaii have a 1+ employee threshold?

Hawaii has the broadest state retirement mandate threshold in the country. With a 1+ employee threshold, virtually every private employer with any W-2 workers will be covered. This reflects Hawaii's commitment to ensuring all workers have access to retirement savings, including those in small businesses, restaurants, and tourism-related companies.

What should Hawaii employers do right now?

Hawaii employers should: (1) Monitor the Hawaii Saves implementation timeline at hawaii.gov, (2) Review their current employee count and plan status, (3) Consider establishing a qualifying private retirement plan now to be ready for exemption when enforcement begins, and (4) Consult with a retirement plan specialist about options.

Will my existing SEP IRA exempt me from Hawaii Saves?

Based on other state mandates' patterns, qualifying plans such as 401(k), SIMPLE IRA, SEP IRA, 403(b), pension, and 457(b) are expected to qualify for exemption from Hawaii Saves. However, final implementation rules will confirm specific qualifying plan types. Establishing a qualifying plan now is the safest approach.

Does Hawaii Saves apply to my small restaurant with 2 employees?

Yes. With Hawaii's 1+ employee threshold, a restaurant with just 2 W-2 employees would be covered by Hawaii Saves. This makes Hawaii's mandate significantly broader than other states like California (5+) or New Jersey (25+). Small hospitality businesses should plan accordingly.

What are the benefits of setting up a private plan now vs. waiting for Hawaii Saves?

Setting up a private 401(k) or SIMPLE IRA now provides: immediate exemption from Hawaii Saves when enforcement begins, higher contribution limits ($23,500/year vs estimated $7,000 IRA limit), potential SECURE 2.0 tax credits up to $15,000, employer matching options, and improved employee benefits for recruiting in Hawaii's competitive labor market.

Related Resources

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Hawaii Saves Compliance Guide for Hawaii Employers