Update: "Secure Choice" Retirement Savings Plan
Last week the Monday Morning Memo had a brief article regarding the NJ Legislature's passing a bill creating a "Secure Choice" retirement savings program targeting employees of firms who do not have a company sponsored retirement savings program. The NJSA Legal Legislative Committee is pleased to provide this update on what could have been very challenging legislation for NJ's business community.
The bill was conditionally vetoed by Governor Christie. The State Legislature has accepted his changes to the bill and passed it into law as of January 12, 2016. However the Governor's changes were significant:
1. Instead of state government getting into the Retirement Fund Management business with all the employee's retirement contributions from this program going into a state managed fund (with all of its bureaucracy and administrative expenses), the state is now only creating a "New Jersey Small Business Retirement Marketplace" to facilitate access for small NJ businesses to private plans that encourage/meet the employee's retirement savings needs.
2. Instead of making it mandatory for all employers with more than 25 employees who don't offer an employer-sponsored retirement savings plan (i.e., 401k, etc.) to offer the Secure Choice plan to employees (subject to associated fees, fines, penalties, etc.), the law now only applies to employers with less than 100 employees.
3. Instead of employers having to automatically enroll covered employees unless they individually "opt out", the law does not require automatic enrollment.