The New Washington State Saves Retirement Program

On March 28, 2024, Governor Jay Inslee signed into law SB 6069, creating the Washington Saves program. With rising living costs and the decline of traditional pensions, Washington state created the program to help workers prepare for future retirement.

Who Will Be Eligible?

Employees 18 years and older working for a covered employer that does not offer a qualifying employer-sponsored retirement plan.

Covered employers are required to participate if they meet the following:

• have been in business in Washington state for at least two years and maintain a physical presence here;
• do not offer a qualified retirement plan to their covered employees who have had continuous employment of one year or more; and
• had employees working a combined minimum of 10,400 hours during the previous calendar year.

What Will This Mean for Employees?

• Employees who do not opt out will have contributions withheld from their paychecks and submitted to the Washington Saves program by their employers. The contributions will be invested in an Individual Retirement Account (IRA) and may be made pre-tax (traditional IRA) or post-tax (Roth IRA), depending on options allowed under the program.
• Employees will be able to reallocate investment balances and contributions among different investment options offered under the program. They will also have a self-directed option for more control over the investment of their funds.
• Employees contributing to the program will contribute a specific rate set by the governing board. The governing board will set a default rate between 3% and 7% for the first year with a plan to increase by no more than 1% each year until the maximum default rate of 10% is reached.

What Will This Mean for Employers?

Covered employers will be required to do the following:

• register with Washington Saves;
• distribute Washington Saves program information to employees;
• automatically enroll covered employees in Washington Saves or in a qualified retirement plan, with an option for employees to opt out; and
• withhold employee’s contributions and remit the contributions to the program.

Employers will not be allowed to match worker’s contributions and are not responsible for the performance of the employee IRA funds.

In early 2027, Washington Labor and Industries will begin working to educate employers about their responsibilities and should begin working with payroll providers to ensure the platform is set up appropriately to withhold employee contributions to the program.

Looking Ahead

The Washington Saves Governing Board has convened to begin creating the program and will work to finalize it through 2025 and 2026. A final report, due Dec. 1, 2026, will include the program design and implementation recommendations. The estimated launch date of the program is July 1, 2027. However, the law allows a staggered implementation process, and the phases may be rolled out at varying dates.

For more information about the Washington State Saves Retirement Program, contact a Clark Nuber professional, and we’ll be happy to answer your questions.

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