What is RetireReady NJ?

New Jersey is one of the many states that now requires small business owners to offer retirement plan options under the RetireReady NJ program. The state-facilitated program aims to help employers keep benefits management simple while ensuring employees can save more for their financial goals. Providing access to a Roth IRA through automatic payroll deductions, the offering can be great as a jumping off point for employers, but they might find themselves wanting to explore other options that can fit their specific business needs.

Key Deadlines and Time Frame

RetireReady NJ is being rolled out in phases, and is dependent on company size:

  • For employers with 25+ employees: Deadline is March 2024
  • For smaller businesses with 15-24 employees: Deadline is TBD
  • For owners with less than 15 employees: Not needed to comply

If you meet the threshold, you will have to either register with RetireReady NJ, claim exemption, or adopt another kind of retirement plan such as a 401(k) or SIMPLE IRA. Keep in mind that requirements and deadlines can change at any time, so be sure to check your state’s online resources regularly.

Who is Required to Participate in the RetireReady NJ Program?

Program participation is mandatory if you meet the following criteria:

  • Have 25 or more employees (requirement could change for those with less headcount)
  • Have been in business for at least two years
  • Do not already offer a retirement plan such as a 401(k) or 403(b)

Important: Even if you are qualified for an exemption, you’re not automatically exempt! You must still certify it through RetireReady’s online portal.

Attributes and Directives Employers Need to Know 

Compliance Options

Employers have two ways to meet RetireReady’s requirements and stay compliant: Enroll in the state-run plan or offer a privately-run plan. Give yourself enough time to explore private options beforehand and remember that the plan will need to meet IRS qualification standards.

Employer Responsibilities

The state will handle most of the backend management. To ensure they’re meeting requirements, employers will have to be registered by the deadline, upload and maintain their headcount, process payroll deductions, manage opt-ins/opt-outs, and keep employees informed of any changes.

Automatic Enrollment and Employee Opt-Out

Employees are automatically enrolled in your plan at a default contribution rate, unless they choose to opt out or contribute a different amount. All employers need to do is honor these changes with employee preferences.

Fees

Employers aren’t responsible for any direct fees, but employees will pay low investment fees (usually 0.25%-0.75% annually) from their accounts depending on the investment options they choose.

Payroll & Remittance

While many payroll providers are integrating with RetireReady NJ to help automate payroll, employers are still responsible for deducting contributions from employees’ paychecks, and remitting those funds to the program administrator within seven days. 

Are there Penalties for Noncompliance?

Yes, there are penalties (such as fines) if you don’t register or claim exemption. Fines can escalate quickly, and be anywhere from $250-$500 per employee. To put this into perspective, a company with 50 noncompliant employees can rack up over $25,000 in fines, so be sure to stay up to date with deadlines and rules!

What are Other Retirement Plan Options?

Thankfully, there are alternatives if you find that New Jersey’s state-run program will hold your business’ retirement strategy back instead of driving it forward. A privately-run plan, like a 401(k) or SIMPLE IRA, can offer more benefits and flexibility like: 

  • Higher contribution limits
  • Enhances tax savings, especially with tax credits (eligible businesses may qualify for up to $16,500)
  • Customizable plan designs and vesting schedules
  • Broad investment options
  • More hands-off setup and maintenance

What Do Employers Need to Do Now to Prepare for and Participate in the RetireReady NJ Program?

To stay ahead, you’ll need to:

Create a Retirement Strategy

Whether you’re starting from scratch or updating your current strategy, it’s important to review your plan, goals, deadlines, and different plan options to ensure you’ll make the most out of your program.

Confirm the Number of Employees You Have

The RetireReady program is dependent on company size, so take note of every employee on your roster. Don’t forget to include even seasonal and part-time ones!

Choose the Right Plan Provider

While exploring other providers, you might find that alternative plans like a 401(k) better meets your needs. Keep track of them, and how their different solutions can help you beyond RetireReady.

Educate Your Employees

Keeping your employees updated on any upcoming changes is key to ensuring they’re satisfied with their benefits. Depending on the plan provider you choose, they also may be able to help with educational resources you can distribute to your team.

Conclusion

For New Jersey citizens, RetireReady NJ provides an opportunity for employers and employees to get on track with their retirement future. By staying ahead of deadlines, understanding requirements, and knowing what other plan options are available, you’ll be on track to being set up for financial security success.

Ubiquity offers customizable, flat fee 401(k) solutions for owners that want a plan that offers more than the basics that the RetireReady NJ program provides. Our plans are designed to stay cost-efficient and simple, no matter how much your assets grow, so you can focus on enhancing your business from day one.