What happened?

Depending on their size, New Jersey businesses (for-profit or non-profit) with at least 25 employees will soon need to either provide company-sponsored retirement savings plans or register for a state-administered retirement savings program.

What are the details?

Quick Bites:

• Businesses with 40 or more employees must comply by September 15, 2024.

• Businesses with 25 to 39 employees must comply by November 15, 2024.

• Businesses will receive notification by Retire Ready NJ when their deadline is approaching.

Bites for Employers:

• The requirement originates from the New Jersey Secure Choice Savings Program Act, enacted on March 28, 2019. This legislation established the retirement savings plan obligation and created the New Jersey Secure Choice Savings Program, also known as RetireReady NJ, a state-administered retirement savings program.

• Covered Employers: The legislation applies to New Jersey businesses that:
  (1) have at least 25 employees in the State at any time during the prior calendar year.
  (2) have been in business for at least 2 years.
  (3) have not offered a qualified retirement plan in the preceding two years.

• Businesses that offer one of the following company-sponsored retirement plans are exempt.

• Employers who are not exempt must automatically enroll their currently eligible employees, who will have a choice to opt-out within 30 days. 

• Unless exempt, employers are required to automatically enroll their eligible employees. Employees have the option to opt-out within 30 days. For employees hired more than six months after RR opens for enrollment, they must be enrolled within three months of their hire date.

• Fines: employers can be penalized for not registering or providing a qualified retirement plan.

Business Considerations

• Employers should be vigilant about the notification provided by the New Jersey Government.
• Employers should Ensure that all eligible employees are informed about the program. This includes providing information about the program and distributing enrollment packets to new employees within 30 days of their hire.
• Employers should integrate the necessary payroll deductions for the retirement savings program into their payroll system. This will facilitate automatic contributions to employees’ retirement accounts.

Source References

• New Jersey Secure Choice Savings Program Act
• New Jersey Businesses With More Than 25 Employees Must Soon Offer Retirement Savings Plans (Fox Rothschild LLP)
• NJ Secure Choice Act Statement
• Urgent News on The New Jersey Secure Choice Savings Program (Wilentz, Goldman & Spitzer, P.A.)
• It’s Time for New Jersey Employers to Register for State-Administered Retirement Savings Program (Fisher & Phillips LLP.)

Resources

• Retire Ready NJ Webpage Resources

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