State Retirement Plan Mandates

Forcing employers to set up retirement plans for their employees through the state is supposed to be a major incentive for those companies who do not have plans but do not want to give their money to states to manage (especially in CA and NJ) to set up their own plans which, as mentioned at the last ASPPA conference, would be a boon for 401(k) TPAs.

Vestwell has a summary of which states are mandating. Here is the New Jersey law:

Name: New Jersey Secure Choice Savings Program Fund

Mandate: Companies with 25+ employees (including leased employees) that have been in business 2+ years must offer a plan or face penalties that increase annually. Employers with less than 25 employees and less than 2 years in business can join voluntarily. Governmental employers and independent contractors are excluded. NJ businesses that don’t adhere to state-mandated retirement legislation within one year will receive a written warning from the government. Each subsequent year of non-compliance will result in these penalties:

  • 2nd year: $100 per employee
  • 3rd and 4th years: $250 per employee
  • 5th year and beyond: $500 per employee

Timing: Extended to March 28, 2022.

2 responses to this post.

  1. Posted by Denis Bouchard on December 7, 2021 at 7:47 am

    Give to the state to manage ……Ha..HA

    Reply

    • Posted by qpat00 on December 8, 2021 at 10:56 am

      agree to the idiocy of this. I wonder if employers will get to only partially fund their obligations or even skip payments altogether. After all, its acceptable and a precedent set by the government for nearly 25 years. Wonder who determines the rate of return and the amount that needs to be deposited by the employer. Good idea possibly, but with wrong agents involved.

      Reply

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