Maui Business

How do small businesses in AARP Hawaiʻi survey feel about state-facilitated retirement savings plan?

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The results of a 2021 AARP Hawaiʻi small business survey found 85% of businesses that do not currently offer workplace retirement savings program would offer a state-facilitated program if one was available. Chart courtesy: AARP Hawaiʻi

Following recommendations of the Hawai‘i Retirement Savings Task Force, state lawmakers introduced legislation to create a state-facilitated automatic IRA savings program.

Senate Bill 3289 and House Bill 2046 authorize a board to oversee and implement a workplace savings program, with appropriated funds to start it. The program would be a private-public partnership similar to state college 529 savings programs.

AARP Hawaiʻi conducted a survey in the second half of 2021 about the issue, finding 83% support the creation of a state-facilitated retirement savings program. 


The AARP Hawaiʻi survey of about 300 business with 5 to 100 employees found:

  • most small businesses want to offer payroll savings retirement programs to workers, but 41% do not
  • 72% of these business owners say retirement savings plans are too costly
  • 40% are concerned about how complicated they are to operate
  • 32% say retirement savings plans would be too time-consuming to operate 

“For many small businesses like ours, a mom-pop take-out plate lunch shop, it’s hard for us to offer any retirement savings for our employees,” said Eric Wong, co-owner of Loco Moco Ewa Beach and Wiki Wiki Drive Inn. “The program proposed for Hawaiʻi makes sense for the employer and the employee.” 

The legislation proposed the state start the workplace savings program and help market it, but private financial services companies would hold and invest the money contributed.


All businesses would have to do is sign up, pass information from the program to employees, and add a line-item deduction to employees’ paychecks – with zero employer fees, no employer match and no fiduciary responsibility.   

When businesses that do not currently offer a retirement savings program were asked in the survey how likely they would be to participate in a state-facilitated retirement savings program, 85% said they would be likely to offer it to employees. 

“Small businesses recognize that there is a retirement savings crisis in Hawai‘i and want lawmakers to act to help their workers,” AARP Hawai‘i state director Keali‘i Lopez said. “The Legislature’s task force report estimates that 215,000 workers do not have access to retirement savings programs at work. If we can make it easy for all workers to save through payroll deduction, workers will save, small businesses will benefit, and taxpayers will also save money because we won’t be facing a fiscal crisis caused by the increasing numbers of kupuna who retire broke.” 


The survey also found:

  • 64% are concerned their employees will not having enough money to cover health care or living expenses when they retire
  • 34% are “very concerned” their employees will not having enough money to cover health care or living expenses when they retire
  • 75% are concerned some Hawaiʻi residents have not saved enough money for retirement and could become reliant on public assistance programs

The automatic IRA program proposal before the legislature is similar to programs already in operation in Oregon, California and Illinois. As of mid-January, the programs have enrolled more than 420,000 workers who have saved more than $398 million. Many participants are first-time savers and the average income of savers in Oregon, which has had the program since 2017, is $29,000. 

The 2021 Hawai’i Small Business Owner Survey was conducted Aug. 31 – Oct. 3, 2021.


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