Key insights
- New Jersey is now mandating most employers offer a retirement plan.
- This mandate applies to all organizations in business for at least two years and with at least 25 employees which do not offer a retirement program.
- A state-sponsored plan option — RetireReady NJ — is in effect with registration deadlines upcoming.
- Weigh the pros and cons of RetireReady NJ and other retirement plan options to determine what suits your needs and those of your employees.
Evaluate retirement plan options to meet NJ’s new mandate
Many New Jersey employers are now mandated to offer a retirement plan to employees.
RetireReadyNJ is a state-sponsored retirement savings initiative designed to help private sector employees save for retirement. This program became effective June 30, 2024, and is a mandated program for both for-profit and nonprofit employers who don’t currently have a retirement plan in place and who do not intend to implement an alternate retirement plan in the coming weeks.
Learn which employers need to comply and when the requirements start.
Does my organization need to offer a retirement plan?
You are subject to the retirement plan mandate if you are a New Jersey employer and:
- Have been in business for two or more years
- Employed 25 or more employees (defined as 18 years old with income regardless of hours worked) at any point during the previous calendar year
- You have no current offering of a qualified employer-sponsored retirement savings plan
When do I need to register a retirement plan?
The implementation deadline for employers with 40 or more employees was September 15, 2024 (register before June 15, 2025), and the implementation deadline for employers with 25 – 39 employees is November 15, 2024 (register before August 15, 2025). Employers that don’t register by the deadlines may be subject to penalties starting in mid-2025.
Employers with their own qualified retirement programs are exempt from registering with RetireReady NJ, but they must notify program administrators about their qualified plan. Information on registering both for RetireReady NJ and for the exemption can be found on this state website.
How does the RetireReady NJ plan work?
RetireReady NJ contributions are funded to the employee’s Roth IRA. Employees can choose to contribute a percentage of their paycheck, or they may opt out entirely. If no election is made after 30 days, the plan defaults to an automatic Roth IRA contribution of 3% of participant gross pay. The program is managed by a third-party administrator selected by the state.
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How CLA can help with New Jersey’s new retirement plan mandate
While RetireReady NJ offers many benefits, CLA can help you evaluate if this program is right for you. We can conduct a cost analysis to compare available options to find a suitable fit for your organization.
CLA created our own pooled employer plan — the 401(k) PEP Advantage — to offer a high-impact option that may be suitable for some employers. We can also help employers design a retirement savings plan meeting their specific needs and goals, including complying with state and federal regulations, evaluating investment options, and providing employee education.
Contact us
Get help evaluating retirement plan options to meet New Jersey’s new mandate. Complete the form below to connect with CLA.
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