Hawaii residents won’t be able to sign up for a state-managed retirement fund anytime soon.
Last year, then-Gov. David Ige signed into law the Hawaii Retirement Savings Program, establishing a state-run system for private sector employees whereby workers could opt in to having a certain amount of money automatically withheld from their paychecks and saved in a Roth IRA.
The program was devised as a counter to significant financial instability among Hawaii households. AARP Hawaii Director Keali‘i Lopez last year estimated that about 216,000 Hawaii residents do not have easy access to a 401(k).
While the law went into effect as soon as it was signed, the program still isn’t up and running.
Bill Kunstman, deputy director of the state Department of Labor and Industrial Relations, said the process has been slowed in part by the transition to a new state government administration.
“The (Hawaii Retirement Savings) Board hasn’t been established yet, and Gov. Josh Green hasn’t made his nominations yet,” Kunstman said. “I think we’re expecting to get that done sometime in the spring.”
But even once the board is established, it will still be a while before the program will roll out to beneficiaries.
The law requires that before the program is implemented, the board must complete an implementation and evaluation study and use that to make a series of recommendations to the state Legislature, which Kunstman could happen by the 2024 legislative session.
Complicating matters further is the SECURE 2.0 Act of 2022, a federal bill passed at the end of last year that makes changes to how certain retirement funds work.
Since federal laws supersede state laws, Kunstman said Hawaii policymakers are taking a wait-and-see approach to determine how those federal-level changes will work before committing to a finalized state program.
Kunstman said the DLIR will inform the public when the program is ready to launch.
Under the law, the first 50,000 employees to enroll in the program for 12 consecutive months will receive a state match of up to $500 deposited into their state IRA accounts.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.