New Jersey lawmakers sent Governor Phil Murphy a bill that creates a retirement savings program for tens of thousands of private-sector employees who work for employers that currently do not offer such a plan.
Employers with 25 or more employees in the State and that have been in business at least two years, will be required to participate in the New Jersey Secure Choice Savings Program, a retirement savings program in the form of an automatic enrollment payroll deduction for employees to contribute to an Individual Retirement Account under sections 408 or 408A of the Internal Revenue Code.
Employers must establish a payroll deposit account to allow its employees to participate in the Program. An employer will automatically enroll in the Program each of its employees who has not opted out of participation in the Program. Small employers (employing 25 or fewer employees) may, but are not required to, participate in the program.
The bill requires that employers enroll new employees within three months after the date of hire, unless the employee opts out of enrollment. Newly hired employees who have previously been enrolled are permitted to make contributions directly into their accounts, until such time as they are enrolled by their new employer or opt out of enrollment in the program.
Employers must provide information packets, notifications, disclosures, enrollment material and instructions to employees, subject to regulations issued by a Secure Choice Savings Board created by the bill. .
The bills authorizes implementation and enrollment of employees 24 months after the effective date, which is immediately upon the Governor’s signature, which he has stated he will affix.