NJ-Mandated Retirement Plan

Among the pieces of information doled out at the last ASPPA conference:

States (first Oregon, then CA, and 8 others) are setting up their own plans and forcing companies to be in it if they don’t have their own plans. This is good for us in that companies do not want to give their money to states (especially in CA and NJ) so they set up their own plans that need to administered by us.

This is supposed to become reality in New Jersey next month so here are some details.

ADP tracks states * that signed on with the New Jersey Secure Choice Savings Plan set up by S2891):

  • Any employer (other than a government) that has at no time during the previous calendar year employed fewer than 25 employees in the State, has been in business at least two years, and has not offered a qualified retirement plan in the preceding two years (page 2)
  • Shall establish a payroll deposit retirement savings arrangement to allow each employee to participate in the program not more than nine months after the board opens the program and automatically enroll in the program each of their employees who has not opted out of participation in the program (page 11)
  • If an enrollee fails to select a contribution level then the enrollee shall contribute three percent of the enrollee’s wages to the program, so long as the contributions do not cause the enrollee’s total contributions to IRAs for the year to exceed the deductible amount for the enrollee’s taxable year under section 219(b)(1)(A) of the Internal Revenue Code. (page 11)
  • For any employee hired by an employer more than six months after the board opens the program for enrollment, the employer shall enroll the employee in the program no later than three months following the date of hire of the employee, unless the employee opts out of enrollment in the program prior to being enrolled. (pages 11-12)
  • Employers shall retain the option at all times to set up or provide coverage under any type of employer-sponsored retirement plan or to elect to offer coverage through a plan sponsored by an employee leasing company or professional employer organization with which that employer has an employee leasing agreement or professional employer agreement, such as a defined benefit plan or a 401(k), Simplified Employee Pension (SEP) plan, or Savings Incentive Match Plan for Employees (SIMPLE) plan, or to offer an automatic enrollment payroll deduction IRA, instead of having a payroll deposit retirement savings arrangement to allow employee participation in the program. (page 12)
  • An employer who fails without reasonable cause to enroll any employee who has not opted out of participation in the program within the time prescribed shall be subject to: (1) for the first calendar year during which at any point a violation occurs, a written warning by the department; (2) for the second calendar year during which at any point a violation occurs, a fine of $100; (3) for the third and fourth calendar year during which at any point a violation occurs, a fine of $250 for each employee who was neither enrolled in nor opted out of participation in the program; and (4) for the fifth and any subsequent calendar year during which at any point a violation occurs, a fine of $500 for each employee who was neither enrolled in nor opted out of participation in the program. (pages 14-15)
  • An employer who collects employee contributions but fails to remit any portion of the contributions to the fund shall be subject to a penalty of $2,500 for a first offense, and $5,000 for the second and each subsequent offense. (page 15)
  • This section shall become operative nine months after the board notifies the department that the program has been implemented. (page 17)

As for implementation the latest I could find:

When initially passed in 2019, the effective compliance date was March 28, 2021, but was extended one year due to the COVID-19 pandemic. As a result, affected companies need to begin implementation starting on March 28, 2022, with a timeframe of nine months to complete the process. An additional 12-month grace period will be provided as needed. At this time, an official schedule has yet to be announced.

Nothing on the Department of Treasury website which might be gearing up for another extension.




Retirement legislation state by state

Active state-sponsored retirement plans

StateRetirement Legislation
IllinoisIllinois Secure Choice
MassachusettsMassachusetts Defined Contribution CORE Plan
WashingtonWashington Small Business Retirement Marketplace

Legislation passed, implementation scheduled

StateRetirement LegislationTarget Date
ColoradoColorado Secure Savings ProgramEnd of 2021-2022
MaineMaine Retirement Savings ProgramJuly 2023
MarylandMaryland Small Business Retirement Savings ProgramMid 2022
New JerseyNew Jersey Secure Choice Savings PlanMarch 2022
New MexicoNew Mexico Work and Save ActJanuary 2022
VirginiaVirginia SavesJuly 2023
VermontGreen Mountain Secure Retirement PlanTBD 2021

Legislation passed, implementation not scheduled

StateRetirement Legislation
New YorkNew York Secure Choice Savings Plan
New York CityRetirement Security for All Act

One response to this post.

  1. […] This was supposed to be a windfall for those of us in the pension administration business anticipating employers who would not trust the state to secure pensions for their employees to set up their own private plans. However, the state has been missing deadlines and according to an article in northjersey.com, it may never happen. […]


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