Washington Saves Is Coming: Most Business Owners Will Be Required To Offer A Retirement Plan

If you own a business in Washington and don’t currently offer a retirement plan, a new state requirement is coming—and now is the time to start thinking about it.

Washington Saves is expected to launch in 2027.

The program is designed to help employees who don’t have access to a workplace retirement plan save through automatic payroll deductions into an IRA.

That’s good news for retirement savings. But for business owners, Washington Saves creates something else:

Another administrative responsibility.

And that raises an important question.

If you’re going to take on the responsibility of facilitating a retirement program anyway, would you be better off establishing your own 401(k)—and outsourcing much of the work to a retirement-plan provider?

For many businesses, the answer may be yes.

Does Washington Saves Apply to Your Business?

Under the current requirements, businesses generally will be required to participate if they:

• Have operated in Washington for at least two years
• Maintain a physical presence in Washington
• Employ workers for a combined 10,400 hours or more annually—roughly five full-time employees
• Do not currently offer a qualified retirement plan

Businesses that already offer a qualifying retirement plan, such as a 401(k) or Simple IRA, generally will not need to participate in Washington Saves.

“No Employer Fee” Isn’t the Same As “Nothing for the Employer to Do”

Washington Saves is being promoted as easy for employers to facilitate. There are no employer program fees, required employer contributions or employer fiduciary liability.

But the business will still have administrative responsibilities. .

Covered employers will need to register with the program, provide employee information, share required program information with employees, facilitate enrollment and manage payroll deductions.

You are required to automatically enroll all employees age 18 and older but they can opt out.

For a business owner, each individual task may sound relatively small. But small administrative tasks add up.

You’re already managing payroll, hiring, employees, customers, vendors, taxes, insurance and everything else that comes with running a business.

Now retirement-plan administration becomes another item on the list.

And that’s where comparing Washington Saves with your own 401(k) becomes an attractive alternative.

What If Someone Else Could Handle Most of the Work?

A common misconception about 401(k) plans is that they’re complicated, expensive and require the business owner to become a retirement-plan expert.

That may have been a more reasonable concern years ago.

Today, 401(k) plans can be outsourced to providers that specialize in administering them for as low as only a few thousand dollars per year.

Depending on the provider and arrangement, they can assist with plan administration, employee enrollment, recordkeeping, investment-related services, compliance support and coordination with your payroll system.

Instead of the business owner trying to manage another retirement program themselves, a professional provider can take much of that work off their plate.

Every hour spent dealing with administrative tasks is an hour you’re not spending serving customers, managing employees, developing new business or planning for the future.

If you’re going to offer access to retirement savings anyway, why not consider a solution that allows you to delegate much of the work while potentially creating a better benefit?

401(k)s Aren’t Just for Big Companies Anymore

Another outdated assumption is that a 401(k) is only practical for companies with dozens or hundreds of employees.

That simply isn’t the case anymore.

Technology, competition among plan providers and newer plan structures have made 401(k)s accessible to much smaller businesses.

Even more importantly, federal tax incentives can significantly offset the cost for eligible small businesses.

Under current federal rules, eligible employers with 50 or fewer employees may qualify for a tax credit equal to 100% of eligible retirement-plan startup costs, subject to certain limits.

The startup-cost credit can be as much as $5,000 per year for the first three years, depending on the number of eligible non-highly compensated employees and other requirements. Source: Internal Revenue Service, “Retirement Plans Startup Costs Tax Credit.”

Additional tax credits may also be available for certain employer contributions and automatic-enrollment features.

For eligible businesses, these credits may meaningfully offset the cost of starting a plan.

So before assuming, “My business is too small for a 401(k),” it may be worth actually running the numbers.

A 401(k) may be more affordable than you think.

You’re Going to Have a Retirement-Plan Responsibility Either Way

This may be the biggest reason to consider your options before Washington Saves launches.

For covered businesses without another qualified retirement plan, doing nothing won’t necessarily remain an option.

You’ll have Washington Saves responsibilities.

So the comparison shouldn’t simply be:

Washington Saves costs nothing. A 401(k) costs money.

A better comparison is:

What does each option require from me, and what does my business receive in return?

With Washington Saves, you’re facilitating employee access to a state-administered IRA program.

With a 401(k), you’re creating your own employee benefit—and you may be able to outsource much of its administration.

That difference matters.

A 401(k) Can Do More for Your Employees—and for You

Washington Saves provides employees with an IRA, but employers cannot contribute to employees’ Washington Saves accounts.

A 401(k) provides considerably more flexibility.

An employer can potentially offer matching or profit-sharing contributions, creating a meaningful benefit that may help attract and retain good employees.

Employees also have the opportunity to save substantially more.

For 2026, for example, the basic employee elective-deferral limit for a 401(k) is $24,500, compared with an IRA contribution limit of $7,500, subject to applicable eligibility rules and other limitations.

And a 401(k) can be particularly valuable for the business owner.

Depending on the plan design and individual circumstances, a 401(k) may provide owners with an opportunity to save significantly more toward their own retirement while also helping employees build theirs.

Instead of simply complying with a state requirement, you’re potentially creating a benefit for your employees, your business and yourself.

Don’t Just Check the Box

For some businesses, Washington Saves may be the right answer. It provides a straightforward way to give employees access to retirement savings without employer program fees or required contributions.

But don’t automatically assume that “free” makes it the best choice.

Consider the bigger picture.

You’re going to spend some time facilitating a retirement program. What are you getting in return?

With your own 401(k), you may be able to:

• Outsource much of the administration to a professional provider
• Integrate the plan with your payroll process
• Offer employees a more robust retirement benefit
• Provide matching or profit-sharing contributions
• Give employees higher savings limits
• Create greater retirement-saving opportunities for owners
• Potentially qualify for federal tax credits that help offset plan costs
• Use the plan as a tool to attract and retain employees

And perhaps most importantly:

You can spend less time worrying about retirement-plan administration and more time running your business.

Start the Conversation Before 2027

Washington Saves isn’t necessarily a problem for business owners.

It may actually be a good reason to finally address something that’s been sitting on the to-do list for years.

Retirement plans have changed. Costs have come down, outsourcing options have improved, and federal tax incentives have made starting a plan more attractive for many small businesses.

You don’t need to be a large company to have a 401(k).

Before Washington Saves arrives, sit down with your financial advisor, CPA and retirement-plan provider and compare your options.

Don’t ask only:

“What’s the easiest way to comply?”

Ask:

“If I have to address retirement benefits anyway, what’s the best solution for my employees, my business and me?”

You may discover that starting your own 401(k), with the right service providers, isn’t another burden. It can allow you to delegate many administrative responsibilities while creating a more robust retirement benefit.

It could actually be a way to take something off your plate.

This article is for educational and informational purposes only and is not intended as individualized investment, tax, legal or retirement-plan advice. Eligibility for tax credits and their value depends on a business’s specific circumstances. Washington Saves is still undergoing rulemaking, and program details may change before implementation. Business owners should consult appropriate financial, tax and legal professionals regarding their circumstances. Information regarding Washington Saves and federal tax rules is based on information available as of September 2026 and is subject to change.

Source: Office of the State of Treasurer