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Explanation of State Retirement Mandates
State Retirement Mandate
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State Mandated Retirement Programs — Are You Ready?

State retirement savings mandates are a growing trend. Your business may soon be required to offer an employee retirement savings option. Should you participate in a state-run IRA or offer your employees a 401(k) plan? With a 401(k) plan, you could potentially get up to $16,500 in small business tax credits and an additional $1,000 per year with employer contributions1. See what your state requires, then compare your options.

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What’s Happening in Your State?

Every state is different when it comes to retirement savings mandates. Please note: if you have employees working out of state, you may need to consider that state’s requirements as well as your own.  Click on a state to see what’s required.

New York

Program Status

Program Status

In Development

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA

Employer Qualifications

Employer Qualifications

Employer Registration:

  • Launch: December 2024 (Proposed)

Qualifications:

  • Number of Employees: 10+
  • 18+ years old
  • Includes "participating individual" (freelancers & self-employed)
  • Years in Business: At least 2
  • Have not offered a qualified retirement plan in the preceding 2 years

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 3% default, flexible

Penalty

Penalty

Penalty: TBD

Learn More About The State Mandate

Learn More About The State Mandate

Ohio

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

North Dakota

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

North Carolina

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Iowa

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Voluntary

Program Type

Program Type

N/A

New Jersey

Program Status

Program Status

Open for Enrollment (Pilot)

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional IRA option for alternative election)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • Pilot: Active
  • Launch: June 30, 2024 (Proposed)


Qualifications:

  • Number of Employees: 25+
  • 18+ years old
  • Years in Business: At least 2
  • Have not offered a qualified retirement plan in the past 2 years

Program Details

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 3% default

Penalty

Penalty

Penalty: Yes

  • Year 1: Written warning
  • Year 2: $100/employee
  • Years 3 & 4: $250/employee
  • Years 5+: $500/employee

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

New Hampshire

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

District Of Columbia

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

California

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional IRA option for alternative election)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 5+ Employees: Active
  • 1-4 Employees, excludes sole proprietors and self-employed individuals: December 31, 2025 (Deadline)


Qualifications:

  • Number of Employees: 1 or more for more than 1 continuous calendar year
  • 18+ years old
  • Not currently sponsoring a qualified retirement plan

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 8%

Penalty

Penalty

Penalty: Yes

  • $250 per employee for non-compliance 90 days post-notice
  • $500 per employee for non-compliance 180 days post-notice
  • $500 per employee for each subsequent year and any nonconsecutive year of noncompliance
  • Penalties are collected by the CA Franchise Tax Board

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

Nebraska

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Indiana

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Wyoming

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Wisconsin

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Illinois

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional IRA option for alternative election)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 5+ Employees: Active

Qualifications:

  • Number of Employees: 5+
  • Years in Business: At least 2
  • Not currently sponsoring a qualified retirement plan
  • Excludes a volunteer fire department

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 10%

Penalty

Penalty

Penalty: Yes

  • $250/employee for the first year for failure to enroll
  • $500/employee for each subsequent year

Penalties are collected by the IL Dept. of Revenue (IDOR)

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

West Virginia

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Nevada

Program Status

Program Status

In Development

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 1,000+ Employees: July 1, 2025 (Proposed)
  • 500-999 Employees: January 1, 2026 (Proposed)
  • 100-499 Employees: July 1, 2026 (Proposed)
  • Fewer than 100 Employees: January 1, 2027 (Proposed)

Qualifications:

  • Number of Employees: 5+
  • 18+ Years Old
  • Employed for not less than 120 days
  • For profit & non-profit employers
  • Years in Business: At least 3
  • Has not had a qualified retirement plan within current or previous 3 calendar years

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes

Idaho

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Maryland

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Option to add a Traditional IRA)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 1+ Employees: Active


Qualifications:

  • Employs at least 1 W-2 employee
  • 18+ years old
  • Years in Business: At least 2
  • Uses an automated payroll system
  • Does not offer a qualified retirement plan

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • $300 annual credit (via waiver of MD business annual filing fee, enroll by December 1)
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 10%
  • Initial $1,000 contributed goes into emergency savings account for the employee

Penalty

Penalty

  • TBD

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

Maine

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Option to add a Traditional IRA)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 15+ Employees: Active
  • 5-14 Employees: June 30, 2024

Qualifications:

  • Number of Employees: 5+
  • 18+ years old
  • Employed for at least 120 days
  • Includes full-time, part-time, and per diem employees
  • Years in Business: At least 2
  • Has not offered a qualified retirement plan to some or all of its covered employees in the preceding 2 years

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 10%

Penalty

Penalty

Penalty: Yes

  • $20/employee from July 1, 2025 to June 30, 2026
  • $50/employee from July 1, 2026 to June 30, 2027
  • $100/employee thereafter

Learn More About The State Mandate

Learn More About The State Mandate

State Website

Washington

Program Status

Program Status

In Development

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

Auto IRA

Employer Qualifications

Employer Qualifications

Employer Registration:

  • July 1, 2027 (Proposed Launch)


Qualifications:

  • Had employees working a combined minimum of 10,400 hours during the previous calendar year
  • 18+ years old
  • Has been in business for at least 2 years
  • Maintains a physical presence in WA
  • Does not offer a qualified retirement plan to employees
  • For profit & non-profit employers

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 3-7% default, flexible
  • 1% auto-increase per year up to 10%

Penalty

Penalty

Penalty: Yes

  • $100/employee for the first violation for failure to enroll
  • $250/employee for the second violation
  • $500/employee for each subsequent violation

New Mexico

Program Status

Program Status

In Development

Employer Protection

Employer Protection

Voluntary

Program Type

Program Type

ROTH IRA or Marketplace

Employer Qualifications

Employer Qualifications

Employer Registration:

  • Launch: July 2024 (Proposed)

Qualifications:

  • 18+ years old
  • Earns taxable income from employer for at least 180 days

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: TBD

Penalty

Penalty

Penalty: N/A

Louisiana

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Utah

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional IRA option for alternative election)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 5+ Employees: Active
  • 1-4 Employees, excludes sole proprietors and self-employed individuals: December 31, 2025 (Deadline)


Qualifications:

  • Number of Employees: 1 or more for more than 1 continuous calendar year
  • 18+ years old
  • Not currently sponsoring a qualified retirement plan

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 8%

Penalty

Penalty

Penalty: Yes

  • $250 per employee for non-compliance 90 days post-notice
  • $500 per employee for non-compliance 180 days post-notice
  • $500 per employee for each subsequent year and any nonconsecutive year of noncompliance
  • Penalties are collected by the CA Franchise Tax Board

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

Hawaii

Program Status

Program Status

In Development

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional IRA option for alternative election)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • TBD

Qualifications:

  • Number of Employees: 1+
  • 18+ years old
  • Years in business: At least 2
  • Has not offered or maintained a qualified retirement plan for
  • some or all employees at any time during the past 2 years

Program Details

Program Details

  • Employee Auto-Enroll: No
  • Employer Required to Notify Employee of Opt-in: Yes
  • Employee Voluntary Opt-in: Yes
  • Contribution Amount: 5% default, flexible

Penalty

Penalty

Penalty: Yes - assessed for failing to provide written notice to employees

  • Make up missed contributions amount for each eligible employee + 6% interest rate
  • $25 for each month per employee and $50 for each month after

Texas

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Virginia

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional IRA option for alternative election)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 25+ Employees: Active


Qualifications:

  • Number of Employees: 25+
  • 18+ years old
  • Part-time EEs not eligible (less than 30 hrs./wk.)
  • Employers may exclude temporary or seasonal employees who work less than 90 days a year
  • Years in Business: At least 2
  • Not currently sponsoring a qualified retirement plan

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 10%

Penalty

Penalty

Penalty: Yes

  • $200/employee annually

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

Vermont

Program Status

Program Status

In Development

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 25+ Employees: July 1, 2025 (Proposed)
  • 15-24 Employees: January 1, 2026 (Proposed)
  • 5-14 Employees: July 1, 2026 (Proposed)


Qualifications:

  • Number of Employees: 1+
  • 18+ years old
  • Years in business: Current and preceding calendar year
  • Have not offered a specified tax-favored retirement plan within the current or 2 preceding calendar yrs

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 8%

Penalty

Penalty

Penalty: Yes

  • Prior to October 1, 2025: $10/employee
  • October 1, 2025 - September 30, 2026: $20/employee
  • On or after October 1, 2026: $75/employee

South Carolina

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Voluntary

Program Type

Program Type

N/A

Rhode Island

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

N/A

Kentucky

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Kansas

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Florida

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Voluntary

Program Type

Program Type

Georgia

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Voluntary

Program Type

Program Type

Pennsylvania

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA

Employer Qualifications

Employer Qualifications

Employer Registration:

  • TBD


Qualifications:

  • Number of Employees: 5+ (in the past 6 months)
  • 18+ years old
  • Has been in business for at least 15 months
  • Has not sponsored a qualified retirement plan within the current or three preceding calendar years

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 4% default, flexible
  • 1% auto-increase per year up to 10%

Oregon

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 1+ Employees: Active


Qualifications:

  • Number of Employees: All
  • 18+ years old
  • Employees working for more than 60 days
  • Excludes full-time students in work-study programs
  • Self-employed individuals may voluntarily participate
  • Not currently sponsoring a qualified retirement plan

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 10%

Penalty

Penalty

Penalty: Yes

  • $100/employee (up to a maximum of $5,000/year)

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

Oklahoma

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Montana

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Delaware

Program Status

Program Status

Open for Enrollment (Pilot)

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional IRA option for alternative election)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • Pilot: Active
  • Launch: July 1, 2024 (Proposed)


Qualifications:

  • Number of Employees: 5+
  • 18+ years old
  • Years in Business: At least 6 months
  • Not currently sponsoring a qualified retirement plan

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 3% to 6%
  • 1% or 2% auto-increase per year up to 15%

Penalty

Penalty

  • Penalty: Yes
  • $250/employee per year, up to a maximum of $5,000/year

State Website

State Website

Connecticut

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 5+ Employees: Active


Qualifications:

  • Number of Employees: 5+
  • 19+ years old
  • Employed for at least 60 days
  • Not currently sponsoring a qualified retirement plan

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 3% default, flexible

Penalty

Penalty

Penalty: Yes

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

Colorado

Program Status

Program Status

Open for Enrollment

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional IRA option for alternative election)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 5+ Employees: Active

Qualifications:

  • Number of Employees: 5+ at any time during calendar year
  • 18+ years old
  • Employed for at least 180 days
  • Self-employed individuals may voluntarily participate
  • Years in Business: At least 2
  • Not currently sponsoring a qualified retirement plan

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 5% default, flexible
  • 1% auto-increase per year up to 8%

Penalty

Penalty

Penalty: Yes

  • $100/employee (up to a maximum of $5,000/year) for failure to enroll
  • Penalty enforcement begins in 2024
  • Penalties will be collected by CDLE

Learn More About The State Mandate

Learn More About The State Mandate

State Website

State Website

Arkansas

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Arizona

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

N/A

Tennessee

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Missouri

Program Status

Program Status

Pending Signature

Employer Protection

Employer Protection

Voluntary

Program Type

Program Type

Open MEP

Employer Qualifications

Employer Qualifications

Employer Registration:

  • Launch: September 1, 2025 (Proposed)

Qualifications:

  • Number of Employees: 50 or less
  • 18+ Years Old
  • For profit & non-profit employers
  • Have not maintained a qualified retirement plan within the past 2 years

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes
  • Contribution Amount: 1% minimum

Penalty

Penalty

N/A

South Dakota

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Mississippi

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

N/A

Alaska

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA

Alabama

Program Status

No Recent Legislation

At this time, does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

Minnesota

Program Status

Program Status

In Development

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

ROTH IRA (Traditional Pre-Tax Option Available)

Employer Qualifications

Employer Qualifications

Employer Registration:

  • Launch: January 1, 2025 (Proposed)

Qualifications:

  • Number of Employees: 5+
  • 18+ Years Old
  • For profit & non-profit employers
  • Has been in business for at least 12 months
  • Has not sponsored a qualified retirement plan in the preceding 12 months

Program Details

Program Details

  • Employee Auto-Enroll: Yes
  • Employee Opt-Out Option: Yes

Penalty

Penalty

Penalty: TBD

Michigan

Program Status

Program Status

Proposed

Employer Protection

Employer Protection

Mandatory

Program Type

Program Type

N/A

Massachusetts

Program Status

Program Status

Open for Enrollment (Non-Profits Only)

Employer Protection

Employer Protection

Voluntary

Program Type

Program Type

Open MEP

Employer Qualifications

Employer Qualifications

Employer Registration:

  • 1-20 Employees: Active

Qualifications:

  • Number of Employees: 20 or fewer
  • Must be a registered 501(c) with the IRS
  • Have payroll administered by an eligible 3rd party

State Website

State Website

STATE

Program Status

No Recent Legislation

At this time, STATE does not have any recent legislation related to state-facilitated retirement programs. We will continue to monitor the situation. Please check back with Paychex regularly for updates.

State IRA or 401(k) Plan — Which Is Better for Your Business?

When employees participate in a retirement plan at work, they are 15 times more likely to save for retirement1. That said, not all retirement plans are created equal. A 401(k) plan from a private provider may be a better way to save for both you and your employees.

IRA vs. Paychex 401(k) Plan

State - IRA

401(k) Plan (Offered with Paychex)

Employee Contribution Max Limit (2024)

$7,000

$23,000

Employer Matching Contribution Option

No

Yes, at employer's discretion

Employer Tax Credits

Not available

Potential tax credits of up to $5,500 per year for the first 3 years.

Potential employer contribution credit of $1,000 (maximum) per employee 2

Employer Tasks

Employer processes payroll contributions, updates contribution rates, adds newly eligible, etc.

Paychex makes administration simpler as your recordkeeper

Paychex 401(k): A More Powerful Option

A state-facilitated IRA has lower employee contribution limits, more administration, and is not eligible for SECURE Act 2.0 small business tax credits. By contrast, a Paychex 401(k) plan:

  • Fulfills the state retirement mandate
  • Includes help with plan set up and administration
  • Has more than three times the annual employee contribution limit of an IRA, so employees can save more, faster
  • Offers employer tax savings opportunities, including potential tax credits
  • Integrates your 401(k) plan with Paychex payroll—one platform, one provider
  • Provides the support and experience of the nation’s largest 401(k) plan provider3
employees happy with their 401k plan

Get help setting up and managing a retirement plan that meets your state’s requirements and the needs of your employees.

How a California Plumbing Business Made Retirement a Fixture

With the state of California requiring most employers to offer an employee retirement option, Plumbing M.D. embraced the opportunity and turned to Paychex. The business saw some surprising results: 100 percent participation in their Paychex 401(k) plan, and employees under the age of 30 who are enthusiastic about the plan.

Plumbing MD
Plumbing M.D.
1:05

Reduce Your Business Taxes with SECURE Act 2.0 Tax Credits

The SECURE Act 2.0 offers businesses the ability to establish a 401(k) retirement plan and lower their tax liability. Your business may be eligible to have 100% of your startup costs covered by small business tax credits.  That’s a savings of up to $16,500 over 3 years for starting a plan. There is also the possibility of an additional $1,000 credit per employee with employer contributions2.

business owner working on taxes

The Simpler Employee 401(k) Plan

Offering a 401(k) plan to your employees doesn’t have to be complicated. As the provider for the largest number of 401(k) plans in the country3, Paychex has 401(k) administration down to a science. Our integrated payroll and benefits solution streamlines plan management and controls costs. With online enrollment, cloud-based account access, and support from retirement specialists, you and your employees can start saving today.

Retirement Insights

Recognized for Innovation, Ethics, and Performance

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Leader in Customer Satisfaction
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PLANSPONSOR Largest 401(k) Recordkeeper by Number of Plans
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State Retirement Plan FAQs

  • What is a state-mandated retirement program?

    What is a state-mandated retirement program?

    Many states are requiring businesses to participate in a state retirement savings program if they don’t currently offer an employee retirement plan. Businesses that don’t comply and register with their state’s retirement savings program timely could potentially incur state penalties. However, this varies depending on the business size and the state.

  • Why are states requiring employers to offer workplace retirement plans?

    Why are states requiring employers to offer workplace retirement plans?

    Across America, many states are experiencing a retirement savings crisis. The Federal Reserve reports that roughly a quarter of non-retired adults have no retirement savings3. To deal with this crisis, many states and some cities have enacted legislation to help employees save for retirement through their employer.

  • What type of retirement savings program is offered by the state?

    What type of retirement savings program is offered by the state?

    Most states offer Roth individual retirement accounts (IRAs), which:

    • May require employers to automatically enroll employees at a contribution of three to five percent of payroll wages
    • Allow employees to opt out of contributing or change their contribution amount.
    • May require employers to do some administration work
    • Have an investment line-up selected  by the state’s board.
  • Does my business have to participate in a state-sponsored retirement savings program?

    Does my business have to participate in a state-sponsored retirement savings program?

    No. As an alternative, employers may choose to sponsor a private-sector retirement plan (I.e. 401k plan) to satisfy the state’s requirements.

  • Why should I consider a private-sector 401(k) plan versus a state IRA?

    Why should I consider a private-sector 401(k) plan versus a state IRA?

    A 401(k) plan has substantially higher employee contribution limits than an IRA, so your employees can save more, faster. You may want to consider a plan that requires reduced  time, staff, and cost to manage, like a Pooled Employer 401(k) Plan (PEP). And, employers starting a new 401(k) plan may be eligible for SECURE Act 2.0 tax credits2, which are not available with a state-sponsored IRA. Also, 401(k) plans tend to be popular with employees and may give you an edge in recruiting. Which plan you choose depends on your business needs and the savings goals of your employees.

  • What are the penalties if I don’t comply with state requirements?

    What are the penalties if I don’t comply with state requirements?

    Penalties for employer non-compliance vary by state, but some can be steep. For example, California’s CalSavers program fines $250 per eligible employee not covered by a retirement program after 90 days of noncompliance, and $500 after 180 days. Even if you have a small number of employees, that could add up.

  • What if I already offer an employee retirement plan?

    What if I already offer an employee retirement plan?

    You may register your business for an exemption from the state’s IRA program. Check with your state for instructions on this process.

  • How do I stay up to date on my state’s retirement mandate laws?

    How do I stay up to date on my state’s retirement mandate laws?

    Many laws are still in the proposal stage or haven’t been implemented yet. Check back here periodically and click on our map to see the status of mandatory retirement in your state.

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