New Jersey will be one of the first states to launch a mandatory retirement savings program next month. The new law mandates that New Jersey business owners who have been operating for two or more years, and employ 25 or more staff members must offer a retirement plan. This mandate will be effective starting March of 2021 and requires business owners to either sponsor a 401(k) plan or other equivalent retirement plan, or they can adopt the New Jersey Secure Choice Savings Program.
The New Jersey Secure Choice Savings Program is a voluntary, state-sponsored retirement savings program for both for-profit and nonprofit organizations to help employees prepare for retirement. It is facilitated by employers and funded by employee savings.
Employers will have nine months from the confirmed program start date to fulfill program responsibilities including:
- Disseminating information about the program to employees.
- Offering an annual open enrollment period.
- Enrolling newly hired employees in the program within three months of hire date (unless they proactively opt out of the program).
- Depositing employee payroll deductions into the program fund.
Keep in mind, there can be penalties for non-compliance.
More information is on its way and Cg will keep you updated. In the meantime, reach out to us with questions.