RetireReady NJ

New Jersey has passed legislation to establish a state-sponsored retirement savings program for private-sector employees. This state program, named RetireReady NJ, will provide nearly 1.6 million workers lacking access to a retirement program the chance to build a nest egg.

How Does RetireReady NJ Work?

RetireReady NJ is a state-sponsored savings program created to help employees working in New Jersey build savings for retirement. New Jersey business owners who meet certain criteria are required by law to offer a qualified, employer-sponsored retirement plan or enroll their employees in the program.

New Jersey employees will make contributions to the program through automatic deductions from their paycheck into a Roth individual savings account (Roth IRA) unless they choose to opt out. The money in the account will grow tax-free, and employees won't have to pay income tax on any money they withdraw from their account during retirement.

The program is overseen by New Jersey’s Secure Choice Savings Board but administered by private sector partners. The program launched in July 2024.

Which Businesses Are Affected?

According to the RetireReadyNJ website, employers who meet the following criteria are required to register for the program or certify an exemption:

• Employed at least 25 workers during the previous calendar year
• Has been in business for at least 2 years
• Does not currently offer a qualified, employer-sponsored retirement plan to their employees

Registration Deadline

Program deadlines for businesses are based on company size. The breakdown is as follows:

• Companies with 40+ employees | September 15, 2024
• Companies with 25-39 employees | November 15, 2024

Penalties

Employers that don’t offer a plan or register with the program within 1 year will receive a written warning from the government. Each subsequent year of non-compliance may result in additional penalties.

Who Is Eligible to Save With the RetireReady NJ Program?

Any individual who is 18 years or older and has been employed in the state of New Jersey for at least 90 days is eligible to participate in RetireReady NJ. Both full-time and part-time employees are eligible.  The program is voluntary for employees, and they can change their contribution amount or opt-out at any time.

The RetireReady NJ program represents a notable development in retirement planning for New Jersey workers. Automatic enrollment and contributions made directly through payroll deductions simplify the process of setting aside funds for retirement.

The program requires businesses with 25 or more employees that have been operating for two or more years to either register and facilitate RetireReady NJ or certify an exemption, so it’s important for New Jersey employers to familiarize themselves with the program details and requirements.

If you have questions about the NJ program or any other type of retirement plan that may be a better fit for your business then schedule a free consultation with us today.