At least 40 US states have introduced, passed, or implemented legislation regarding state-sponsored retirement programs. At the time of writing, eight of these states have passed legislation, while six states have active programs.
Active Legislation
If your business is located in these states, then you are already subject to active legislation regarding state mandated retirement programs:
- California
- Connecticut
- Illinois
- Massachusetts
- Oregon
- Washington
Passed Legislation
The following states have all passed legislation, but either the legislation is not yet active, or compliance deadlines are not yet reached:
- Colorado
- Maine
- Maryland
- New Jersey
- New Mexico
- New York
- Vermont
- Virginia
Introduced Legislation
These states have introduced legislation, but it is not yet passed. That means that these states are considering a retirement plan mandate, and it could be passed in the near future:
Arizona, Arkansas, Delaware, Georgia, Hawaii, Idaho, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, West Virginia, Wisconsin, Wyoming.
Overview of the impending deadlines by state
California: Called CalSavers, the deadline has passed for employers with 50+ employees (June 30, 2021) and employers with 5-49 employees must register by June 30, 2022.
Colorado: The Colorado Secure Savings Program mandates that businesses with at least 5 employees must provide their employees with access to an IRA funded through automatic payroll deductions. Enrollment begins 2023. Coming soon.
Connecticut: MyCTSavings opened for enrollment on April 1, 2022. Employers with 100 or more employees must register by June 30, 2022. Employers with 26 to 99 employees must register by October 31, 2022. Employers with 5 – 25 employees must register by March 30, 2023.
Illinois: Known as the Illinois Secure Choice program, the deadline for companies with 16-24 employees is November 1, 2022. The deadline for businesses with 5-14 employees is November 1, 2023.
Maine: The Maine Retirement Savings Program has been implemented, but voluntary for 25+ employees. Deadline is April 2023.
Maryland: The MarylandSaves Program is required for all businesses that pay their employees through an automatic payroll system and have been in business for at least 2 years. The program is set to launch in September of 2022.
Massachusetts: The state created the CORE program for nonprofits with 20 or less employees, and is not a mandatory program.
New Jersey: The state created the New Jersey Secure Choice Savings Program Act, which requires employers with 25 or more employees who have been in business for at least two years to offer a state-sponsored retirement program. Implementation in progress. Coming soon.
New Mexico: The New Mexico Work and Save Act, expected to be live by July 1, 2024, will create an online retirement marketplace where workers 18 years and older who do not have retirement accounts can set aside a portion of their income to invest directly into a Roth IRA. Coming soon.
New York: The New York State Secure Choice Savings Program is mandatory for employers that have been in business for at least 2 years with 10 or more employees. As of early 2022, implementation of the program appears to be moving forward but final details including deadlines are to be determined. Coming soon. See our article here: New York State Mandate on Retirement Plans - What You Need to Know.
Oregon: Called OregonSaves, this state-provided IRA program requires employers with 4 or fewer employees to enroll by late 2022 (deadlines for employers with 5 or more employees have already passed).
Vermont: The Green Mountain Secure Retirement Plan has not been launched yet. It’s a voluntary MEP for employers with 50 employees or fewer.
Virginia: The VirginiaSaves program law went into effect July 1, 2021, but employer enrollment isn’t expected to begin until at least July 1, 2023.
Washington: The state created Washington’s Retirement Marketplace to offer low-cost retirement plans to businesses and individuals on a voluntary basis.
Conclusion
Some of these retirement plan mandates are still a ways off, but it is important for you to start planning early. Contact us today to learn about flexible programs that have all the benefits of a large organization’s 401(k) plan, yet is affordable and low-maintenance for small businesses. These programs often offer superior features to the state-sponsored plans, for example higher contribution limits. If you are affected by legislation, the ease of defaulting to the state-sponsored plans is attractive - but you should carefully explore alternative options as you can often find a much better deal for your business and for your employees.