Employers with at least 25 employees in New Jersey that do not already offer a qualified retirement plan to employees must take action to facilitate the RetireReady NJ Retirement Savings Program (“RetireReady NJ”). RetireReady NJ is New Jersey’s state-administered retirement savings program, stemming from the New Jersey Secure Choice Savings Program Act (the “Act”), which was signed into law in 2019, and about which we previously blogged here.
An employer is required to participate in RetireReady NJ if: (i) the company is registered to conduct business in New Jersey; (ii) it has at least 25 employees in the State; (iii) it has been in business for at least two (2) years; and (iv) the company does not currently offer a qualified retirement savings program to its employees.
Employees that count towards the 25-employee threshold are employees: (i) who are age 18 or older; (ii) who either live in New Jersey or are employed in New Jersey; and (iii) whose wages are subject to New Jersey income tax withholding. For purposes of RetireReady NJ, a qualified retirement savings program includes the most common forms of retirement plans such as a 401(k) under Internal Revenue Code Section 401(a), a qualified annuity plan under Section 403(a), a Simplified Employee Pension plan under Section 408(k), and a Savings Incentive Match Plan for Employees under Section 408(p). Importantly, a qualified retirement savings program does not include payroll deduction IRAs.
Imminent Deadlines under RetireReady NJ
- Employers with 40 or more employees were required to register with RetireReady NJ by September 15, 2024. According to the Secure Choice Savings Board (which administers RetireReady NJ), should these businesses fail to register before June 15, 2025, they may be subject to penalties in accordance with the statute.
- Employers with 25-39 employees were required to register with RetireReady NJ by November 15, 2024. Should these businesses fail to register before August 15, 2025, they may be subject to penalties in accordance with the statute.
- Employers that already offer a qualified retirement plan or choose to open their own qualified plan must still certify their exemption under the Act with RetireReady NJ. Employers can certify their exemption here using their access code provided by the State. Covered employers should have received an access code via email or mail and should complete the exemption certification as soon as possible.
It is free for covered employers to register with RetireReady NJ. Once the registration process is complete, employees are automatically enrolled in a payroll deduction IRA, unless they opt out of the program. Notably, employers have no fiduciary responsibilities under RetireReady NJ, meaning that they are not responsible for the investment decisions or outcomes of any employees who participate in the program. Further, employers are not responsible for matching contributions.
What To Do Now?
If they have not done so already, employers need to take action now and determine if they are covered under the Act. Employers should either register their exemption with the State if they have a qualified retirement plan or enroll their employees in RetireReady NJ as soon as possible. For more information, consult the RetireReady NJ- Secure Choice Program’s website here.
