Last Updated: April 12, 2024

The Garden State is sowing the seeds of a more prosperous New Jersey.

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

In this article, we’ll answer some questions you may have about the ReitreReady NJ program and explain how it affects New Jersey businesses.

How Does RetireReady NJ Work?

RetireReady NJ is a government-sponsored savings program created to help employees working in New Jersey build savings for retirement. New Jersey business owners who meet certain criteria will be 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 is set to launch in 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

RetireReady NJ is not yet active but is set to launch in 2024. Deadlines for employers to register are not yet selected. Once RetireReady NJ is operational, private-sector employers will need to follow the provided deadlines.

Penalties

Once there is a set deadline, employers that don’t offer a plan within 1 year will receive a written warning from the government. Each subsequent year of non-compliance will result in the following penalties:

• Second calendar year with a violation: $100 fine
• Third or fourth calendar year with a violation: $250 for each violation
• Fifth and subsequent years with a violation: $500 for each violation

Who Is Eligible to Save With the RetireReady NJ Program?

Any individual who is 18 years or older and has income/W-2 wages in the state of New Jersey 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.

Conclusion

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.

Once it launches, the program will require 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.

Looking for information on the requirements for other states? Check out our resource page here.