RetireReady New Jersey: What employers need to know

In recent years, many states have established state-mandated retirement programs to help businesses provide retirement benefits to their employees and help people save for their futures. States that have introduced state-sponsored retirement programs include California, Illinois, Oregon, Washington, New York, and New Jersey.

As many as 1.7 million workers in New Jersey do not have access to a retirement savings benefit through their employer. To close that gap, New Jersey's governor signed a state-sponsored retirement plan into law in March 2019, known as the New Jersey Secure Choice Act. The program, RetireReady NJ, that allows employees to save for retirement with an Individual Retirement Account (IRA) went live in 2024.

Below we'll explain what business owners in New Jersey need to know about the program, including:

Let’s dive in:

How does RetireReady NJ work?

RetireReady NJ is a new retirement savings program, created by the New Jersey Secure Choice Savings Program Act. Employers must enroll eligible employees into the RetireReady NJ auto-IRA through an automatic payroll deposit, unless an employee opts out. The standard rate of contribution is 3% and employees can change their contribution level at any time.

Is participation in RetireReady NJ mandatory?

Yes, the RetireReady NJ is mandatory for:

While the program is mandatory for employers, eligible employees can opt out at any time. Employees are eligible for the plan if they are 18 years or older, live in New Jersey or are employed by a New Jersey employer, and their wages are subject to tax withholding.

Do part-time employees count?

Yes, when determining whether an employer is eligible for the state program, NJ counts both part-time and full-time employees.

Are there penalties for employers that don't comply with RetireReady NJ?

Yes — an employer could face fines if they don't enroll an eligible employee who hasn't opted out of the program. Fines can include a written warning in the first year and a $100 fine in year two. In years three and four, employers could receive a $250 fine for each employee who wasn't enrolled in the program or didn't opt out.

Employers can avoid penalties by enrolling eligible employees in the state-mandated program or by signing up for a retirement plan provider like Guideline.

What deadlines do I need to know?

In June of 2024, the RetireReady NJ program announced their first set of deadlines and began notifying employers.

Employers with 40+ employees: September 15, 2024

Employers with 25+ employees: November 15, 2024

The NJ Secure Choice Savings Program Board also announced that penalties would begin going to effect within the next year.

Employers with 40+ employees: June 15, 2025

Employers with 25+ employees: August 15, 2025

How much will RetireReady NJ cost?

Employees will be charged a program administration fee of .75% on assets under management. This will be in addition to any fund fees that an individual may choose to invest in, that range from .015% to 1.07%. The program is free for employers.

What alternatives can I consider?

To meet the mandate, New Jersey employers can offer a qualified retirement benefit, like a 401(k). 401(k) plans have many benefits, including:

As an employer, you have several options to comply with the new mandate. You can choose either to enroll your employees in RetireReady NJ or offer your own company-sponsored retirement benefit, like a Guideline 401(k). The decision is yours — and either way, you can help your employees save for their future.