Common Questions About Hawaii Saves
How many employees trigger the Hawaii mandate?
Businesses with 1+ W-2 employees are required to comply with Hawaii Saves. Only W-2 employees count — 1099 contractors do not.
What is the penalty for non-compliance?
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.
Can I be exempt if I already have a 401(k)?
Yes. If your business already sponsors a qualified retirement plan (401k, 403b, SIMPLE IRA, SEP-IRA, or pension), you can apply for a Certificate of Exemption through the Hawaii Saves portal at hawaii.gov/dcd.
Is it better to enroll in the state plan or get a private plan?
Both options satisfy the mandate. The state plan (Hawaii Saves) has no employer setup cost but offers limited contribution limits ($7,000/year IRA limit). A private 401(k) allows contributions up to $23,500/year plus employer match, and may qualify for up to $15,000 in SECURE 2.0 federal tax credits. Many small businesses find a private plan offers better value long-term.