Smaller Companies Are Eligible for New Jersey’s Auto-IRA Program

Less than two years after enacting its retirement plan program, New Jersey has increased eligibility by expanding the program to require smaller companies—those with at least 10 employees, rather than the previous 25—to enroll.

Governor Mikie Sherrill signed the legislation on January 20, her first day in office, and it takes effect in the “third month after enactment.”

The New Jersey Secure Choice Savings Program, also known as RetireReady NJ, is a state-sponsored retirement program that requires private sector employers who do not sponsor a retirement plan to participate. Employees in those companies will then be automatically enrolled into the state-run plan, using automatic paycheck deductions to deposit money into a Roth individual retirement account. Employees may choose to opt out.

The bill also modified the New Jersey Secure Choice Savings Fund by adjusting administrative fees; establishing death benefit procedures; and shifting responsibility to the program itself—rather than employers—for distributing informational packets to eligible workers.

Additionally, the bill limits employer penalties by imposing fines only when contributions are withheld without reasonable cause. It also allows the program to reduce or waive penalties as needed.