State Retirement Program Mandate

What States Have Them, Which States Are Pending and When Do They Take Effect?

In recent years, states across the country have enacted retirement savings programs to help individuals save for retirement. As of November 2021, 14 US states and 2 cities are considering the use of state-sponsored retirement savings programs – ten of which are considering retirement plans required by law, with dozens of others considering legislation. The rules of these state mandated programs vary greatly from state to state, but they could help bridge the retirement gap for as many as 41 million U.S. workers who currently don’t have access to an employer-sponsored plan. While this is an important step in fully addressing the retirement gap and its effects on the private sector, what does it mean for business owners?

Depending on where the business operates, there are specific retirement plan adoption deadlines that companies will be required to meet to continue operating legally and avoid penalties.

At TRA we want to help close the retirement access gap, we’re incredibly excited by these new developments and the renewed interest in retirement savings. To help you decipher these mandates, we’ve broken them down by state.

California: CalSavers

  • Program: Employers with 5 or more employees are required to provide access to CalSavers or a private retirement plan.
  • Status: Active
  • Upcoming deadline: June 30, 2022 for businesses with 5+ employees.
  • Penalties: CalSavers announced on January 12, 2022 that it will begin to impose penalties on non-compliant employers with 100 + employees.
  • Click here to help business owners benefit.

Connecticut: MyCTSavings

  • Program: Employers with 5 or more employees and don’t have an existing qualifying retirement plan, are required to provide access to the Connecticut Secure Choice Savings Plan or a private retirement plan. The program will not be mandatory for businesses with fewer than five employees or those that already offer a work-based retirement savings option.
  • Status: Pilot launched in November 2021, with full launch scheduled for early 2022.
  • Upcoming deadline: The Retirement Security Authority is still refining the implementation timeline and we expect more updates to come in 2022.

Colorado: Colorado Secure Savings Programs

  • Program: The Colorado Secure Savings Program requires employers with 5 or more employees who have been in business for 2 or more years, and don’t have an existing qualifying retirement plan, to sign up for the state program or offer an employer-sponsored retirement plan. Colorado will be partnering with New Mexico’s Work and Save Act via a Memorandum of Cooperation to pursue a partnership agreement for their auto-enroll IRA programs, creating the first multi-state auto-enrollment IRA program in the nation.
  • Status: Active
  • Upcoming deadline:  The program is in creation and the pilot program is expected to launch in October 2022. Colorado’s deadline for compliance is 2023. Compliance with the program will not begin until at least one year after the program is formally established, or one year after an employer is scheduled to offer the program based on the number of employees or years in business.

Illinois: Illinois Secure Choice Retirement Program

  • Program: Employers with 16 to 24 employees, who have been in operation for at least two years, are required to provide access to the Illinois Secure Choice state retirement program or a qualified retirement plan by November 1, 2022. ​​Exempt employers include those with fewer than 5 employees, have been in business for less than two years, or who already offer an employer-sponsored retirement plan.
  • Status: Active
  • Upcoming deadline: November 1, 2022 for businesses with 16 – 24 employees and November 1, 2023 for businesses with 5 to 14 employees. The State will monitor compliance and help employers meet deadlines and requirements. Those who do not comply with the Program may be subject to penalties and fines. Enforcement for non-compliant employers with 25 or more employees will begin in 2022.

Louisiana

  • Program: Introduced Senate Bill 283 which would have established the Louisiana Retirement Savings Plan for employers who do not provide their employees with access to a retirement plan. No further legislative action was taken after it was referred to the Committee on Retirement.
  • Status: Pending
  • Upcoming deadline: None

Maryland: Small Business Retirement Savings Program (Maryland $aves)

  • Program: Maryland’s new Automatic Retirement Savings Plan, MarylandSaves, is expected to launch its pilot program in June of 2022, and offer open enrollment in September2022 to provide its workers with access to a payroll-deducted savings program if they are not eligible to participate in an existing employer plan. The State will waive the $300 annual report filing fee every year an employer participates in the State program or offers a qualified plan for their employees.
  • Status: Enacted. The program is expected to offer open enrollment  in September of 2022.
  • Upcoming deadline: None

Massachusetts: CORE Plan

  • Program: Nonprofit organizations with 20 or fewer employees must offer a retirement benefits plan through a 401(k) multiple employer plan (MEP) through the Massachusetts Defined Contribution CORE Plan or a private provider.
  • Status: Active
  • Upcoming deadline: None

New Jersey: New Jersey Secure Choice Savings Program Fund

  • Program: Both non- and for-profit businesses with 25 or more employees that have been in business for at least two years must implement the New Jersey Secure Choice Savings Program or provide access to a qualified retirement plan.
  • Status: Pending – Expected to launch in 2022
  • Upcoming deadline: Early 2022. New Jersey extended their original launch date of March 2021 (state legislation allows for up to a 12 month delay). Employers will have nine months until after the program is enacted to comply with the legislation and assume program responsibilities.

New Mexico: New Mexico Work and Save Program

  • Program: On February 26, 2021, Gov. Michelle Lujan Grisham signed the New Mexico Work and Save Act, creating a voluntary Roth IRA savings option for workers without employer-based retirement accounts, plus an online marketplace (the Retirement Savings Plan Marketplace) of private-sector providers for employers. New Mexico and Colorado entered into a formalized partnership agreement for their auto-enroll IRA programs, creating the first auto-enroll IRA multi-state program in the country.
  • Status: Enacted
  • Upcoming deadline: July 1, 2024

New York

  • Program: On October 21, 2021, Governor Hochul signed into law The New York State Secure Choice Savings Plan program, requiring all private employers who have employed at least 10 New York-based employees during the previous calendar year, and that have been in business for at least 2 years, to enroll their employees in the State program, or offer a qualified retirement plan. The State program follows a Roth IRA structure.
  • Status: Active – Expected to launch in 2022
  • Upcoming deadline: None. Although the Act was effective immediately, the program is not yet operational. Employers will have nine months until after the program is enacted to comply with the legislation and assume program responsibilities.

Oregon: OregonSaves

  • Program: All employers with employees in Oregon must offer a qualified retirement plan to their employees or implement OregonSaves.
  • Status: Active
  • Upcoming deadline: Targeted for late 2022 for 4 or fewer employees

Vermont: Green Mountain Secure Retirement Plan

  • Program: The Green Mountain Secure Retirement Plan is available as a voluntary MEP to employers with 50 employees or fewer and employers that do not currently offer a retirement plan to their employees. The plan intends to cover self-employed individuals as well.
  • Status: Pending. The Green Mountain Secure Retirement plan was set to launch in the first half of 2021 but there have been no developments.
  • Upcoming deadline: None

Virginia: VirginiaSaves Program

  • Program: The State of Virginia has passed legislation to create VirginiaSaves. The program is estimated to launch in July of 2023 and will require employers who have been in business for at least 2 years with 25 or more employees to implement the state program or offer a qualified retirement plan.
  • Status: Active
  • Upcoming deadline: None

Washington

  • Program: The Washington State Legislature created the Small Business Retirement Marketplace to provide small businesses and individuals access to a retirement plan. It is a website where employers and employees can shop and compare state-verified and low-cost retirement savings plans.
  • Status: Active – Voluntary
  • Upcoming deadline: None. The program is completely voluntary.

Alternative TRA Solutions to Consider

For businesses who want to sponsor a retirement plan, some plans to consider include:

401(k)
Safe Harbor 401(k)
Cross Tested Profit-Sharing Allocation
401(k) plus Cash Balance Plan

Other alternatives to state retirement plan mandates  include SIMPLE 401(k) Plans, Group 401(k) Plans (MEPs, PEPs and Aggregation Programs), and 403(b) Plans (for non-profits).

COMPARE PLANS

Working closely with you, TRA will create a customized plan that meets your client’s business. We partner with top recordkeepers and investment managers around the country and deliver exceptional client service. We also offer 3(16) Plan Administration Relief Services (PARS) to relieve business owners of day-to-day plan administration responsibilities and manage their fiduciary risk.

Complete the form below and a Regional Sales Consultant will be in contact with you.
  • This field is for validation purposes and should be left unchanged.

Pattern

Consider TRA's 3(16) Plan Administration Relief Services (PARS)

To alleviate the day-to-day administrative burdens of yours or your clients retirement plans.
PLAN NOW