What WA Saves Means for Employers
Washington Saves is coming, and many Washington employers will need to start thinking about how it may affect their business.
In a recent Business Health Trust webinar, Saray Childs, Jen Evenson, Jason Frogett, and Ryan Anderson from Human Interest discussed what employers should know about the state’s retirement savings program, when it is expected to begin, what employer responsibilities may look like, and what choices employers have before the program goes into effect.
The purpose of the webinar was awareness. It was not legal advice. The main message was simple: employers should understand whether WA Saves may apply to them and begin deciding whether they want to use the state program or offer their own qualified retirement plan.
What is WA Saves?
WA Saves is a retirement savings program passed by the Washington legislature in 2024. Its intent is to make retirement savings more available to employees.
At a high level, covered employers will need to do one of two things:
- Offer a qualified retirement plan, such as a 401(k), SEP, SIMPLE IRA, or another eligible plan
- Participate in the Washington Saves program
The state program is expected to function as an IRA. Employees would have their own accounts, and those accounts are intended to be portable. If an employee changes jobs, the account stays with them.
When does WA Saves start?
The current target date discussed in the webinar is July 2027.
The speakers noted that the state is still developing guidance, and some details are not yet final. Even so, July 2027 is close enough that employers should begin reviewing their options now.
Which employers may be covered?
According to the webinar, employers should look at a few key factors.
WA Saves is aimed at Washington employers that have been in business for two or more years, are physically active in Washington, and meet a minimum size threshold based on employee hours.
That threshold is 10,400 total employee hours in the prior calendar year, which was described as roughly five full-time equivalents.
The webinar also highlighted some gray areas. Employers may need to think carefully about owner hours, family members who are treated as W-2 employees, seasonal workers, temporary workers, salaried employees, and employees in multiple states.
The speakers emphasized that state guidance is still developing, so employers should not assume the answer is obvious in every situation.
What will employers need to do?
For employers that use the WA Saves program, the webinar listed several expected responsibilities.
Employers will need to register for the program, provide and maintain a list of eligible employees, process payroll deductions, report and remit those deductions, and communicate with employees about the program.
The state has not yet said exactly how employer registration will work.
The webinar also noted that employers who already offer a qualified retirement plan may still need to tell the state that they have an eligible plan. The exact reporting process has not yet been released.
What happens to employees?
Employees who are eligible for WA Saves are expected to be automatically enrolled unless they opt out. The webinar described eligibility as employees who are at least 18 years old and have at least one year of employment with a covered employer.
Employees can opt out, change their contribution percentage, or stop contributing. The state has not finalized every detail, including the default contribution percentage. The webinar mentioned that a range of 3% to 7% had been discussed.
A key point for employers is the administrative work. If an employee changes their contribution rate or stops contributing, the employer may need to update payroll, withhold the correct amount, and remit those deductions to the state.
At this point, the webinar noted that the state has not announced payroll integration.
Can employers contribute or match under WA Saves?
No. The webinar stated that there is no cost to employers to participate in the state program, but employers cannot make a match under WA Saves.
That is one of the differences between the state program and offering a separate employer-sponsored retirement plan. With a qualified plan, employers may have more control over plan design, eligibility, matching, Roth or traditional features, and other plan options.
What if an employer already has a retirement plan?
The webinar made clear that WA Saves does not appear to require employers to change an existing qualified retirement plan.
If an employer sponsors an eligible retirement plan, that generally satisfies the requirement. The state is not regulating the employer’s 401(k) design, waiting periods, contribution levels, or other federally governed plan rules through WA Saves.
The basic test discussed in the webinar was whether the employer sponsors a qualified plan. If yes, the employer is outside the WA Saves program requirement. If no, and the employer meets the other requirements, the employer will need to use the state program.
What kinds of plans may count?
The webinar referenced several types of plans that may satisfy the requirement, including:
- 401(k) plans
- Qualified plans, including profit-sharing plans and defined benefit plans
- Multiple employer plans and pooled plans
- 403(b) plans
- SEP plans
- SIMPLE IRA plans
Employers should review their current retirement plan, if they have one, and watch for future state guidance on documentation and reporting.
What about enforcement?
The webinar also touched on enforcement. The speakers noted that L&I is expected to be involved and that enforcement may begin as a complaint-driven process.
They also stated that, as of the webinar, civil penalties are not expected until January 1, 2030. The speakers framed this as a period for employers to learn, prepare, and get systems in place.
Why consider a separate retirement plan?
Business Health Trust also discussed its partnership with Human Interest as an option for employers that want to explore a retirement plan instead of using the state program.
Ryan Anderson from Human Interest explained that the company focuses on retirement plans, including 401(k) and 403(b) plans. He described flexible plan options, payroll integration, plan administration support, 5500 preparation and filing, and help with other plan-related administration.
The webinar also discussed potential federal tax credits for small businesses starting a plan, including credits that may help offset administrative costs and a separate credit tied to automatic enrollment.
Saray Childs also shared that Business Health Trust uses Human Interest for its own team. She noted that the setup process was easier than expected, that the plan allowed BHT to offer both Roth and traditional features, and that payroll integration was helpful.
What should employers do now?
Employers do not need to have every answer today. The state is still developing parts of the program.
But employers should begin with a few practical steps:
- Review whether your business may meet the 10,400-hour threshold.
- Consider whether owner, seasonal, temporary, salaried, or multi-state employee hours may affect your analysis.
- Confirm whether you already sponsor a qualified retirement plan.
If you do not have a plan, compare the state program with the option of offering your own retirement plan.
Watch for future state guidance on registration, reporting, payroll deductions, and employee communication.
The main takeaway from the webinar was this: WA Saves is coming, and employers should not wait until July 2027 to understand their options.
Business Health Trust will continue to share updates as more information becomes available. Employers with questions can reach out to info@businesshealthtrust.com or get started here.