It’s an idea whose time has come: Facilitate a state-supported program to make savings for retirement a “no-brainer” for employees of small businesses, by offering automatic paycheck deductions. Hawaii Senate Bill 3289, now crossed over to the House, represents the latest effort to move forward with such a project.

Hawaii’s Legislature should act to provide this vital service, which becomes more necessary with each passing year.

Oregon was first in the nation to set up such a program, in 2017. OregonSaves offers a basic IRA retirement savings plan available to small businesses and their workers at no cost to the business, managed by a private service provider and overseen by a state-operated board.

Businesses that don’t otherwise offer a 401(k) or other qualified retirement plan must offer the service to employees. Employees automatically have a portion of their salaries deducted to the retirement account, unless they opt out.

By 2019, Oregon had signed up about 72% of eligible employees. Next, Illinois and California started up their own programs, and several others have begun moving forward.

In Hawaii, the AARP has assembled data showing that most small business owners in Hawaii — nearly two-thirds — do not offer retirement savings programs to employees, and most would offer one if the state operated it.

The impetus for this push is a growing “retirement savings gap” — a widening chasm between how much money retirees have saved and how much they need on hand to avoid sinking into poverty or facing tightly restricted budgets in their senior years.

Pensions in the private sector have become uncommon, and Social Security, with funding problems of its own, is not enough.

A whopping 7 of 10 Hawaii small business owners would support a privately-managed, ready-to-go retirement savings option, according to an AARP survey. That’s because having a retirement plan also helps attract — and keep — employees, boosting the competitive advantage of these businesses.

Place that against the backdrop of state findings, expressed in a 2021 Senate resolution establishing a task force to study the issue, that about half of the state’s private-sector workers either work for a business that does not offer a retirement plan or aren’t eligible for plans available.

That means approximately 215,000 workers could benefit.

As always, though, the devil is in the details.

SB 3289 calls for creation of a retirement savings board to set up and administer the program; the board would include representatives of the departments of Labor and Industrial Relations (DLIR) and of Budget and Finance, nonvoting representatives of the state House and Senate, and governor-appointed board members with appropriate expertise.

First, the board would evaluate the program for the costs involved and time required to set it up, reporting back to the Legislature; then, staffing and a timetable would be established; finally, the savings program would be created.

With these safeguards and provisions for due diligence, it would seem time to set the plan in motion.

As it currently stands, Hawaii’s plan would differ from Oregon’s in that employees would need to opt in to the savings plan. This troubles some advocates because an “opt out” program is likely to draw in more employees, sooner.

The DLIR has expressed qualms about being attached to the board, and there is some concern about funding to administer the program in its initial phases. But these glitches can surely be unwound, if there is resolve to serve Hawaii’s rapidly aging and financially at-risk population.