HB 2197 Summary

• Clarifies the definition of "covered employer" to include any person in business in Hawaii with one or more employees, excluding the federal government, the State, and entities that have offered or maintained a tax-qualified retirement plan for any employees during the preceding two years.

• Requires covered employers to automatically enroll covered employees in the Hawaii Retirement Savings Program with payroll deduction contributions unless employees affirmatively elect to opt out.

• Changes enrollment from opt-in (employee elects to participate) to opt-out (automatic enrollment with right to decline), with employers responsible for withholding and transmitting contributions to the program.

• Establishes Roth IRAs as the default account type for enrolled employees, with the option for participants to elect traditional IRAs in addition to or instead of Roth IRAs.

• Imposes penalties on covered employers who fail to enroll covered employees without equitable justification, including liability for missed contributions plus 6% annual interest and monthly penalties of $25 or $50 depending on enrollment status.