NJ Governor Phil Murphy created the RetireReady NJ program.
State-mandated retirement savings programs, like New Jersey’s RetireReady NJ, have continued to gain momentum and bridge the gap for many small businesses struggling to afford administrative burdens. Now, NJ's state-auto-IRA retirement savings program has reached $1 million in retirement savings since the launch of the program just five months ago, announced State Treasurer Elizabeth Maher Muoio yesterday.
New Jersey businesses with 25 or more employees that have been in business for two or more years (and do not currently offer a qualified retirement plan) are required to register with the RetireReady NJ program. Employees have the opportunity to begin saving for retirement through convenient payroll deductions into a Roth or Traditional Individual Retirement Account (IRA).
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“This milestone represents a crucial step forward towards financial security in retirement for many New Jerseyans,” said Muoio.
The RetireReady NJ program was created by the New Jersey Secure Choice Savings Program Act, which Governor Phil Murphy signed in 2019. The state missed the original start date for the program of March 28, 2021, citing the COVID-19 pandemic as the cause for the delay. Another March deadline came and went in 2022.
Murphy’s administration had estimated that Secure Choice could benefit nearly 2 million New Jersey residents and manage up to $10 billion in investments. Murphy was re-elected in 2021, enabling him to stay in office to see the program debut this year.
RetireReady NJ launched a pilot program in spring 2024 with four participating employers, in coordination with Vestwell. The full program started in July, and now RetireReady NJ supports thousands of New Jersey employees in saving for retirement.
California, Colorado, Connecticut, Illinois, Maryland, Oregon and Washington have similar programs, on which New Jersey's was modeled, and New York enacted its own version in 2021, according to a database run by Georgetown University.
State-mandated retirement savings programs have continued to gain momentum and bridge the gap for many small businesses struggling to afford administrative burdens.
Since 2012, every state except Alabama has either enacted or introduced legislation that would establish state-facilitated retirement savings programs. State-facilitated plans have accumulated more than $1.78 billion in assets, according to the Center for Retirement Initiatives at Georgetown University.
“RetireReady NJ has eliminated many of the obstacles that prevent underserved communities from appreciating the benefits of retirement savings programs,” said Todd Hassler, executive director of RetireReady NJ.
Officials at the NJ state Treasury Department, which oversees the program, said participation costs nothing for employers. Companies that already offer a retirement plan, such as a 401(k), can verify that with the state.
Related: Rhode Island, partnering with Connecticut, to launch auto-IRA program
NJ state officials are hosting an informational webinar January 16 for business owners.
Vestwell, the administrator for the NJ state retirement program, estimated that at least 800,000 New Jerseyans would have access to retirement, thanks to the Secure Choice Savings Program.
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
