Automatic Enrollment Implementation
Is automatic enrollment permissible under law?
Yes
Explanation:
As of 2025, automatic enrollment is permissible for all public employers in Washington, including counties, municipalities, and other political subdivisions—regardless of whether they participate in the state’s deferred compensation plan. Under HB 1270, political subdivisions offering their own 457 deferred compensation plan may now automatically enroll newly hired employees, provided the employee has the option to affirmatively opt out.
This builds on a 2017 law that required automatic enrollment for all newly hired full-time state employees in the state’s 457 plan (unless the employee opted out). Political subdivisions participating in the state plan have been allowed to opt into auto enrollment since that time, but HB 1270 expands this authority to subdivisions operating their own plans.
Relevant State Laws -Wash. Rev. Code Ann. § 41.50.770
(as amended by HB 1270)
Washington’s deferred compensation statute now authorizes automatic enrollment for:
- All full-time state employees (since 2017) unless they opt out
- Political subdivisions that participate in the state’s plan
- Political subdivisions offering their own 457 plan, provided the plan document includes opt-out enrollment for eligible new hires
Employees who do not affirmatively select a deferral amount or investment option will have 3% of their taxable compensation contributed to the plan and invested in a default fund selected by the State Investment Board.
Preemption of prior limitation:
HB 1270 effectively overcomes earlier interpretations of Wash. Rev. Code Ann. § 49.48.010 that had restricted political subdivisions from implementing auto enrollment in independent plans due to wage withholding concerns. The new law provides specific statutory authority to proceed with automatic enrollment consistent with federal 457 plan requirements.