New Jersey Secure Choice requires all New Jersey employers who have been in business for 2+ years and who have 25+ employees to provide a retirement plan to their employees by December 31, 2021. Any employer that does not adopt its own plan by this date will have to adopt the New Jersey Secure Choice Plan; a payroll-deducted IRA run by the state of New Jersey. If an employer adopts the New Jersey Secure Choice plan, all W-2 employees are eligible to participate (including part-time workers). The program is auto-enrolled at 3%, which means that unless employees proactively opt out, they will be automatically enrolled to contribute 3% of pre-tax income into the plan. Companies who fail to comply with the New Jersey Secure Choice mandate could be subject to a fee of up to $500 per eligible employee.
Under the Secure Choice plan, employers must:
A 401(k) plan can offer significant benefits over the state-run plan.
Conclusion: Employers subject to the New Jersey Secure Choice legislation should consult with a financial professional to help determine the best approach to complying with the New Jersey law.
Jeremy D. Suarez, CExP™,CEPA®
TOMORO l Managing Partner
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Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 2111 Route 34 South, Wall, NJ 07719, (732) 528-4800. Securities products & services and advisory services offered through PAS, member FINRA, SIPC. Financial Representative, The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is a wholly-owned subsidiary of Guardian. Tomoro is not an affiliate or subsidiary of PAS or Guardian.
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