On June 30, 2024, the State launched Retire Ready New Jersey (“Retire Ready NJ”), the long-awaited state-run retirement savings program for private-sector employees who work for employers without qualified retirement savings plans. This e-Alert provides an overview of employers’ obligations under the program and includes which employers must register for the program, important deadlines, which employers are exempt, and penalties for failing to comply.
Which Employers Must Register
Registration is required for businesses that: (1) have 25 or more employees; (2) do not offer a qualified retirement savings plan; and (3) have been in business for at least 2 years. It is free to register. Once the registration process is complete, employees are automatically enrolled in a payroll deduction IRA, unless they opt out of the program.
Deadlines for Implementation
Employers who meet these criteria and have 40 or more employees must implement Retire Ready NJ by September 15, 2024. Employers who meet the above criteria and have 25-39 employees must implement Retire Ready NJ by November 15, 2024.
Exempt Employers
Employers are exempt from Retire Ready NJ if they offer a qualified retirement program to employees. Qualified retirement programs include a plan qualified under Internal Revenue Code sections 401(a), such as a 401(k); a qualified annuity plan under 403(a); a tax-sheltered annuity plan under 403(b); a Simplified Employee Pension (SEP) plan under 408(k); a Savings Incentive Match Plan for Employees (SIMPLE) under 408(p); and a government deferred compensation plan under section 457(b).
Employers with a qualified retirement program must certify their exemption from the program on the Retire Ready NJ website.
If an employer enrolls in Retire Ready NJ and then introduces a qualified retirement plan, the employer should certify that the business is exempt from further participation in the program.
Penalties for Failure to Comply
Employers who fail to comply with Retire Ready NJ are subject to penalties ranging from a written warning for a violation occurring during the first calendar year to a $500 fine for each employee who was neither enrolled in nor opted out of participation in the program for violations occurring in the fifth and subsequent calendar years. Additionally, employers who collect employee contributions but fail to remit them to Retire Ready NJ are subject to a $2,500 penalty for the first offense and a $5,000 penalty for subsequent offenses.
In order to comply with Retire Ready NJ, New Jersey employers must either register by the deadlines above or certify their exemption from the program. The State is holding an information session for employers on August 7, 2024 at 11:00 a.m. NFC will continue to track this law and report on any updates.
If you have any questions relating to this e-Alert or need help implementing Retire Ready New Jersey, please reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100.
