RetireReady NJ Mandate Expands to Employers With 10 or More Employees

More than 1.7 million Garden State workers without access to a retirement plan will have the opportunity to participate in RetireReady NJ, formerly known as NJ Secure Choice. RetireReady NJ is a state-administered retirement program that gives employees a convenient way to save for retirement through the workplace.

The NJ retirement mandate requires both for-profit and non-profit businesses with 10 or more employees to offer a workplace retirement savings program. If they don’t currently offer a qualified employee retirement plan, they can choose the RetireReady NJ state-administered IRA, or a retirement plan through a qualified provider.

How Does RetireReady NJ Work?

RetireReady NJ offers employees a way to save through an Individual Retirement Account (IRA). Enrollment is automatic but employees can opt out of the program. There is a default contribution rate of 3 percent that is withheld from each employee paycheck. The RetireReady NJ savings program does not include employer matching. An employee’s IRA is portable and can move from job to job.

Have Other States Mandated Employers Offer Retirement Plans?

Yes. New Jersey is one of many states with a state-administered retirement savings program. Employer requirements and non-compliance penalties vary, but most states offer an Individual Retirement Account with automatic enrollment (auto-IRA) and an employee opt-out feature.

Who Needs to Comply with the NJ Retirement Mandate?

Unless they have a ReadyRetire NJ exemption, businesses must comply if they have:

• 10 or more eligible employees on a continuous basis in the previous calendar year
• Been in business for at least two (2) years
• Not offered a qualified retirement plan in the past two years

Please note: Employers cannot match employee contributions with ReadyRetire NJ, and SECURE Act tax credits are also not available.

Employer responsibilities include:

• Offering open enrollment periods at least once a year
• Enrolling new hires in the program within three months of their hire date
• Providing employees information about the program
• Depositing employee payroll deductions

Registration deadlines are based on employee count:

• 25-plus employees: Deadline has passed
• 20-24 employees: December 1, 2026
• 10-19 employees: February 17, 2027

What Businesses Are Exempt?

Companies are fully exempt if they are already sponsoring a qualified plan such as 401(k), 401(a), 403(b), 408(k), 408(p), 457(b), or defined benefit pension plan. Employees that have opted out of the company’s existing plan are not eligible for ReadyRetire NJ.

Please note: If you have an existing retirement plan, you must still file an exemption with the state.

What are Penalties for Noncompliance?

Employers can be subject to penalties for noncompliance based on when they were scheduled to start the program. Penalties are as follows:

• 1st calendar year: Written warning from the state.
• 2nd calendar year: $100 fine for each unenrolled employee who hasn’t opted out.
• 3rd and 4th calendar years: $250 fine for each unenrolled employee who hasn’t opted out
• 5th calendar year and up: $500 fine for each unenrolled employee who hasn’t opted out.

Employee Eligibility Requirements for RetireReady NJ

To be eligible for ReadyRetire NJ, employees must be 18 years of age or older, live in New Jersey, and receive W-2 wages subject to the state’s gross income tax.

Another Option: A Paychex 401(k) Plan

If businesses prefer not to participate in ReadyRetire NJ, they have other options. One is a 401(k) plan from a qualified provider like Paychex. 401(k) plans satisfy the NJ state mandate, are portable, and provide additional benefits such as SECURE Act tax credits, employer matching, and higher contribution limits.