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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
Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial professional. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial professional. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.
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Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.
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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