State Retirement Plan Mandate

Which states have mandatory retirement plans?

• When states require employers to provide their employees with retirement savings opportunities, it’s known as a state mandated retirement. Businesses generally have two ways to comply with these laws – enroll their employees into a state-sponsored retirement program or sponsor a plan of their own through the private market, such as those offered by TRA.

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    California

    CalSavers

    • Program: Eligible employers with one to four employees – December 31, 2025
    • Status: Active
    • Penalties: If the business fails to comply within 90 days from receiving this notification, the state will fine it $250 per employee. After 180 days, the penalty increases by $500 per employee, for a total of $750 per employee.
    • Click here for more details to help business owners benefit.
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    Colorado

    Colorado Secure Savings Programs

    • Program: The Colorado Secure Savings Program requires businesses with five or more employees to offer a workplace retirement program. The state implemented its program and employers can begin registering.
    • Status: Active
    • Upcoming deadline: Companies with 5 or more employees. Has been in business for more than 2 years.
    • Penalties: Eligible employers must offer a plan or face up to $100 per eligible employee each year up to $5000.
    • Click here for more details to help business owners benefit.
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    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: Active
    • Upcoming deadline: The Retirement Security Authority is still refining the implementation timeline and we expect more updates to come.
    • Penalties: Non-compliance may result in an investigation and penalties.
    • Click here for more details to help business owners benefit.
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    Delaware

    Delaware EARNS

    • Program: The Delaware EARNS state-sponsored retirement plan is set to launch July 1^st of 2024.
      • Company has 5 or more employees. In business for at least 6 months.
      • Doesn’t offer a qualified employer sponsored retirement plan.
    • Status: Passed
    • Upcoming deadline: Employers have until October 15, 2024, to register or certify that they’re exempt from the EARNS requirement. Employers can be exempt if they offer a qualified retirement plan, have fewer than five employees, or have been in business less than six months.
    • Penalties: $250 per eligible employee per year up to $5000
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    Hawaii

    Hawaii Saves

    • Program: The Hawaii Saves Retirement Program will be a payroll deduction IRA. This means each employer is required to automatically enroll each employee into the program if they do not already sponsor a qualifying plan. Those who are enrolled will automatically have a portion of their salary placed in an IRA. Any employee may opt-out at any time.

    Employers must be:

    • • In business for more than two years
      • This does not apply to employers who are a part of a state or federal government agency.

    Employees must be:

    • • A resident of the state
      • At least 18 years old
      • Employed and receive wages from an employer
    • Status: Expected to be up and running by July 1st, 2024
    • Upcoming deadline: The bill passed in May of 2022. The program is expected to be operational by July 1st, 2024.
    • Penalties: If eligible employees are not automatically enrolled, employers must:
      • Deposit the amount that would have been made by the employee into the employee’s account (interest rates apply).
      • Pay a penalty of $25 for each month the covered employee was not enrolled in the program and,
      • $50 for each month the eligible employee continues to be unenrolled after the penalty has been given.
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    Illinois

    Illinois Secure Choice Retirement Program

    • Program: Employers with 5+ 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, 2023. ​​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: All deadlines have passed.
    • Penalties: Businesses with 25+ employees may face $250 per eligible employee for the first calendar year. An additional $500 per employee for each subsequent calendar of non-compliance.
    • Click here for more details to help business owners benefit.
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    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: TBD
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    Maine

    Maine: MERIT

    • Program: The Maine Saves Retirement Program, under the bill, private-sector workers would contribute to a Roth IRA from their paychecks. The bill will require employers to provide employees the choice to contribute to a payroll deduction Roth IRA by automatically enrolling them with an opportunity to opt out. Covered employees that do choose to opt out will be automatically re-enrolled with the opportunity to opt out again at regular or ad hoc intervals.  Latest expecations are that employers may voluntarily offer the program to its employees in late 2023. Additionally, employers with five or fewer employees are not required to offer the program, they may choose to do so.
    • Status: Expected to be up and running by late 2023
    • Upcoming deadline: June 30^th, 2024 (5-14 employees) –
      • Deadline for 15+ employees was April 30^th 2024
    • Penalties: New penalties go into effect July 1^st 2025.
      1. $20 per covered employee from July 1, 2025, to July 30, 2026
      2. $50 per covered employee from July 1, 2026, to July 30, 2027
      3. $100 per covered employee on or after July 1, 2027
      4. The final deadline for organizations to comply will be December 31^st, 2024 with fines starting in 2025.
    • Click here for more details to help business owners benefit.
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    Maryland

    Maryland $aves

    • Program: Maryland’s new Automatic Retirement Savings Plan, MarylandSaves automatic retirement savings program allows an employer 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: Active
    • Upcoming deadline: The state will contact the businesses that meet the criteria and give them a deadline.
    • Click here for more details to help business owners benefit.
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    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. Participants must have payroll administered by an eligible third party.
    • Status: Active
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    Minnesota

    Minnesota Establishes State-Sponsored ‘Secure Choice’

    • Program: All Minnesota employers with five or more employees that do not currently sponsor a retirement plan will be required to participate. Eligible employees will contribute a portion of their pay into IRAs (individual retirement accounts). The default retirement account will be a Roth IRA (i.e., contributions will be made after taxes), unless the covered employee elects to contribute on a pretax basis.
    • Status: The statute is immediately effective, but the obligations of employers will not be operative until the program is fully established, which looks to be January 1, 2025.
    • Upcoming deadline: Currently, no deadlines are associated with Minnesota’s state retirement program. However, the first meeting of the board of directors must happen by March 1, 2024, and the board must begin the operation of the program no earlier than January 1, 2025.
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    Missouri

    Show-Me Retirement Savings Plan

    • Program: Pending the governor’s signature, the Show-Me MyRetirement Savings Plan is a voluntary Open MEP for businesses with 50 or fewer employees. It is scheduled to launch Sept. 1, 2025, and employers (for-profit and non-profit) that have not had a plan within the past two years would be eligible to participate. Employees 18 years of age and old receiving wages in Missouri would be eligible and be automatically enrolled. There is the ability for employees to opt out, as well.
    • Status: Active with provisions currently operating or scheduled to be implemented in the coming years.
    • Penalties: $250/employee for the first violation. $500/employee for the second violation. $1,000/employee for the third and subsequent violations.
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    Nevada

    Nevada Employee Savings Trust

    • Program: The program is expected to be operational by July 1, 2025, to permit covered employees to make contributions. The board has the discretion to roll out the program in phases based on the number of employees (but not before July 1, 2025).
    • Status: This automatic enrollment payroll deduction IRA is expected to be operational July 1, 2025.
    • Employers affected: Businesses covered by legislation have more than five employees, have been in business for at least 36 months, and have not offered a tax-qualified retirement plan, such as a 401(k) or 403(b), in the three years immediately before the start date of the plan.
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    New Jersey

    RetireReady NJ

    • 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. Smaller or newer employers can join voluntarily.
    • Status: Active
    • Click here for more details to help business owners benefit.
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    New Mexico

    NM Work and Save IRA, NM Retirement Plan Marketplace

    • 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.
    • Status: Enacted
    • Upcoming deadline: Starting July 1, 2024
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    New York

    New York Secure Choice

    • 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 with provisions currently operating or scheduled to be implemented in the coming years.
    • Penalties: $250/employee for the first violation. $500/employee for the second violation. $1,000/employee for the third and subsequent violations.
    • Click here for more details to help business owners benefit.
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    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: Businesses with 3-4 employees were expected to register for the program by 3/1/23, businesses with 1-2 employees expected to register by 7/31/23.
    • Penalties: $100 per eligible employee, up to $5,000 a year.
    • Click here for more details to help business owners benefit.
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    Vermont

    VTSaves

    • Program: The VT Saves program establishes a retirement savings plan for Vermonters who are not currently offered a retirement plan through their employer. It’s designed to make saving for retirement easy and automatic, at no cost to employers and no ongoing cost to taxpayers.
    • Status: Pending. The VTSaves VT Saves will take effect in 2025.
    • Upcoming deadline:
      • July 1, 2025 (25+ employees), January 1, 2026 (15-24 employees),
      • July 1, 2026 (5-14 employees)
    • Penalties:
      • Prior to October 1, 2025: Maximum penalty is $10 per covered employee.
      • October 1, 2025 to September 30, 2026: Maximum penalty is $20 per employee.
      • After October 1, 2026: Maximum penalty is $75 per employee.
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    Virginia

    RetirePath Virginia

    • Program: In 2021, the Virginia General Assembly passed legislation directing Virginia529 to establish a state-facilitated private retirement savings program to open in 2023. The program 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: Scheduled
    • Penalties: $200 per eligible employee annually.
    • Upcoming deadline: September 18, 2023 – Early Registration Closes. February 15, 2024 – Employer Registration Deadline.
    • Click here for more details to help business owners benefit.
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    Washington

    Washington Saves

    • Program: The Washington State Legislature created the Small Business Retirement Marketplace to provide small businesses and individuals access to a retirement plan. Covered employers are any businesses located in the state of Washington in business for at least two years, whose employees worked a combined 10,400 hours the previous calendar year, and do not currently offer a workplace retirement plan. Employers must enroll any employee who has worked for one continuous year or more at the business.
    • Status: Active – Voluntary
    • Upcoming deadline: This program is anticipated to launch on January 1^st 2027.