State mandates are increasing, and most states now require small businesses to offer a retirement plan to stay compliant. Find out what is required from each state, key deadlines, and different plan options that will help maximize your savings.
California businesses with 1 or more employees must offer a qualified retirement plan by 12/31/25. Choose a 401(k) with greater savings potential, more control, and access to federal tax credits.
California businesses with 1 or more employees must offer a qualified retirement plan by 12/31/25. Choose a 401(k) with greater savings potential, more control, and access to federal tax credits.
Businesses with 5 or more employees and at least 12 months in operation must comply with Minnesota’s new retirement law. Understand what’s required and how a 401(k) can offer more value than the state-run IRA.
Employers with 25 or more employees must comply with the New Jersey Secure Choice Savings Program or offer an alternative. See how a 401(k) provides more control, higher contribution limits, and eligibility for federal tax credits—giving you more than the state IRA.
Maryland businesses with at least 1 W-2 employee and 2+ years in operation must participate in MarylandSaves or offer an alternative. See how a flat-fee 401(k) can simplify compliance while offering more robust savings.
Virginia employers with 25+ employees and 2+ years in business must comply with the RetirePath Virginia program or or offer an alternative. See how a 401(k) provides more control, higher contribution limits, and eligibility for federal tax credits—giving you more than the state IRA.
Employers with 25 or more employees must comply with the Vermont Saves program by 7/1/25. Discover how a 401(k) offers more than the state-run IRA with higher contribution limits, greater flexibility, and access to valuable federal tax credits.
Businesses with 5 or more employees must comply with the Delaware EARNS program beginning in 2025. See how a flat-fee 401(k) offers more than the state IRA with higher savings limits, flexible features, and access to federal tax credits.
Small businesses are being pushed to choose between choosing a state-run IRA that checks the box, or offering something with more flexibility.
Ubiquity helps you go beyond state options, keeping you compliant while offering a customized plan that works for your business. Our tailored 401(k) solutions deliver more flexibility, greater savings potential, and a smoother experience for you and your team.
Most state mandate laws apply to businesses with 5 or more employees, though the exact threshold varies by state. Some states also base eligibility on annual payroll or number of W-2s issued. To comply, employers must either enroll in their state’s IRA, certify exemption, or offer a qualified plan like a 401(k). Businesses that already offer a plan are likely exempt, but their states may still require formal documentation for proof.
Deadlines depend on your state and business size. While some states have active programs in place, others are still in pilot or planning phases, so employers should monitor their state’s program website or consult with a provider like Ubiquity.
State-run Roth IRAs have much lower contribution limits, capped at $7,000 in 2025 (or $8,000 if age 50 or older). On the other hand, 401(k)s allow employee contributions up to $23,500, plus a $7,500 catch-up for those age 50 or older, or $11,250 for those between 60-63 years old under the new super catch-up provision. Employers can also contribute up to 25% of compensation, with total combined contributions capped at $70,000 for most participants, $77,500 for those 50+, and $81,250 for those eligible for the super catch-up. Here’s a full contribution limits breakdown so you can know what to expect up front.
State IRAs are designed to be simple, but that comes with limited features and flexibility. Employers can’t control plan design, eligibility rules, or contribution types. With a 401(k), you have much more flexibility and can customize vesting schedules, eligibility, and even hardship withdrawals so you can meet your workforce where they are.
Most state IRA programs do not allow employer contributions, meaning you can’t enhance employee savings or utilize tax incentives. With a 401(k), employer contributions are optional but encouraged. Eligible businesses may receive up to $16,500 in tax credits over three years for plan start-up costs, plus a dollar-for-dollar tax credit on employer contributions for employees (up to $1,000 per employee per year) for the first five years. For businesses with 50 employees or less, these credits are especially useful for helping your team and maximizing profitability.
State programs are often one-size-fits-all, charge asset-based fees to employees and limit investment options to a small lineup of funds. Ubiquity offers flat-fee pricing, so costs don’t increase as assets grow, and provides an open investment architecture, meaning employees have more choices and control over how they save.
Failing to comply with your state’s mandates can result in major fines. These fines vary but typically range from $100 to $750 per eligible employee, depending on how long your business has been out of compliance. You could also be hit with recurring fines annually until you complete registration or exemption.
Remember: You have options beyond your state’s IRA. Adopting a 401(k) through Ubiquity not only satisfies the mandate but also offers extensive benefits for you and your employees like more tax incentives, more flexibility, and simpler admin and maintenance. You’ll stay compliant while having the foundation to build long-term success.
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Each state sets its own rules, and most of them apply to businesses with five or more employees, though some are based on payroll size or number of W-2s issued. You may be required to enroll in your state’s program or get an exemption if you don’t implement a 401(k).
Noncompliance can result in penalties like steep fines. As an example, some states issue recurring fines until you complete registration or exemption, so it’s crucial to act before your deadline.
No. You can choose a private 401(k) or other qualified plan if it meets state requirements. Ubiquity offers privately-run plans with greater flexibility, tax benefits, and savings potential.
No. Employer contributions aren’t permitted with a state IRA, but you’re able to make them with a 401(k). With a 401(k), you can make optional contributions, and if you're a small business starting a new plan, you may qualify for tax credits up to $1,000 per employee per year for those contributions, in addition to up to $5,000 per year in administrative credits.
