If you’re an employer, you’ve likely heard about state mandates by this point. To help combat the retirement savings crisis, many states are stepping in with legislation that requires employers to provide their employees with more benefits through state-run plans. Even more, with SECURE 2.0 offering additional advantages, state mandates are aiming to be the most beneficial retirement option for businesses.

But, while state-run plans are a good starting point, there is a lot more to mandates and plan requirements than employers likely expect. From understanding what each state is offering to comparing state-run plans with private alternatives, this guide breaks down everything employers need to know to stay ahead of the mandates curve.

Map showing which states have active mandates

States with Active Retirement Plan Mandates

These states have approved and launched mandates, and employers must comply or find an alternative, or else face penalties.

California

  • CalSavers
  • Companies with 1-4 employees are mandated to offer a plan
  • Upcoming Deadline: December 31, 2025

‍Colorado

  • Colorado SecureSavings
  • Applies to companies with 5-14 employees
  • Deadline Passed: June 20, 2023

Connecticut

  • MyCTSavings
  • Applies to all companies
  • Deadline Passed: August 31, 2023

Hawaii

  • Hawaii Saves
  • It’s to be determined which companies must comply

Illinois

  • Secure Choice
  • Applies to companies with 5-15 employees
  • Deadline Passed: November 1, 2023

Maine

  • MERIT
  • Companies with 5+ employees must comply
  • Deadline Passed: April 1, 2024

Maryland

  • Maryland Small Business Retirement Savings Program
  • Applies to all companies

Massachusetts

  • Massachusetts Defined Contribution CORE Plan
  • Applies to non-profits, but voluntarily

Nevada

  • Employee Savings Trust Program
  • All companies must comply
  • Upcoming Deadlines:
    • 1000 or more employees: July 1, 2025
    • 500-999 employees: January 1, 2026
    • 100-499 employees: July 1, 2026
    • 99 or less: January 1, 2027

New Jersey

  • Secure Choice
  • Applies to companies with 25+ employees
  • Companies with 40+ employees must have enrolled by September 15, 2024
  • Companies with 25-39 employees must have enrolled by November 15, 2024

New Mexico

  • New Mexico Work and Save
  • Applies to all companies, but voluntarily

Oregon

  • OregonSaves
  • Companies with 1-2 employees must comply
  • Deadline Passed: July 31, 2023

Vermont

  • VTSaves
  • All companies must comply
  • Upcoming Deadlines:
    • 25 employees or more: July 1, 2025
    • 15 to 24 employees: January 1, 2026
    • 5 to 14 employees: July 1, 2026

Virginia

  • RetirePath Virginia
  • Companies with 25+ employees must comply
  • Deadline Passed: February 15, 2024

Washington

  • Washington Small Business Retirement Marketplace
  • All companies must offer a retirement plan
  • No Deadline

States with In-Progress Mandates

The following states are either actively developing their plan program or have passed legislation but haven’t fully launched yet.

Alaska, Arkansas, Arizona, Delaware (Passed legislation with requirements to be determined soon), Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont (Passed legislation and required to offer a plan based on company size), West Virginia, Wisconsin, Wyoming

States with No Mandates Yet

Even though the states below don’t have mandates or have plans to implement new regulations yet, this doesn’t mean there isn’t interest as officials will likely watch what’s trending with nearby states and where federal rules are heading.

  • Alabama
  • Florida
  • Mississippi
  • South Dakota

Common State-Run Plan Features & Limitations

It’s important to remember that each state program is slightly different, and that their simple designs can serve as a decent starting off point for employers who may not be well-versed in retirement savings. The common features they include are:

  • Administrative support – usually is more basic
  • Employee-funding only – no employer match or contributions allowed
  • Limited, pre-created list of investment options
  • Roth IRA structure

What Employers Need to Know

When exploring your state’s mandates and plan options, here’s what to keep in mind:

You will likely grow out of a state-run plan

State plans are designed to be simple and one-size-fits-all, meaning it may work right now but won’t fit your needs in the long term. Be sure to think about how your business could grow years from now before choosing your plan.

You may be leaving money on the table

Depending on your eligibility, you could qualify for tens of thousands of dollars in tax credits, and this is applicable whether you have a state plan or a private one.

Don’t just check the compliance box

While you are staying compliant with a state plan, there are other benefits you’ll likely need to stay ahead of IRS requirements (and you may not get with a state plan) like 3(16) fiduciary services, document support, and more. So, make sure to find out what services are available in your state that can provide the assistance you need.

Employees are expecting more

Retirement benefits are being prioritized by employees more than ever, and you can play a big role in helping to improve their financial wellness. State plans can either make or break how you meet their needs.  

Private Plans vs. State-Run Plans

Many employers miss out on the fact that they have options beyond their state-specific retirement plan. And for many employers, a privately-run plan can offer quite a few benefits that state plans can’t, like more control, greater flexibility, and long-term profitability. Here’s what to consider if you choose to opt out of your state-run plan:

Better Employee Experience

With private plans, you have the freedom to choose your provider, vesting schedule, investment options, and more. This means you can tailor the experience to your employees’ needs and simplify saving for them, setting you apart as a forward-thinking employer.

More Cost Savings Over Time

While many providers utilize an AUM (assets under management) fee approach that grow as employees save more, Ubiquity is one of the plan sponsors that offer transparent, flat fee pricing. You and your employees can save more over time and feel more secure about the future.

Flexible Design Options

Privately-run plans can offer more plan customization options like:

  • Loan and hardship withdrawals
  • Vesting schedules
  • Pre-tax or Roth contributions
  • Profit sharing
Higher Contribution Limits

Private plans are known for having significantly higher contribution limits than state plans, giving employees the opportunity to save much more than they anticipated. Here’s a breakdown of the latest contribution limits to see what is possible.

Next Steps

Whether you plan to go with your state’s retirement plan or want to implement a privately-run one, now is the time to secure your benefits. Ubiquity can be your partner during this process. We make it simple and affordable with 401(k) solutions that fit your goals and grow with your business without the high costs or stress.

State Retirement Mandate FAQs

Can I opt out of a state-run retirement plan?

Yes, you can opt out if you implement a privately-run retirement plan instead, such as a traditional 401(k) or SIMPLE IRA. Many employers go this route to gain more flexibility and control over their retirement benefits and take advantage of additional cost savings.

Are state mandates the same across every state?

No, rules vary by state, so it’s important for you to stay up to date on what are the latest changes within your specific state. You can keep track of them with our state mandates map.

What happens if I don’t comply with my state’s mandates?

You may be faced with penalties for non-compliance, which vary by state. To avoid fines and consequences, it’s crucial for employers to take action earlier.

Can I still benefit from tax credits with state mandates?

Yes! You still may be eligible for tax credits that can help you offset set up and help with maintenance. To learn more about how much you can potentially save, check out our tax credits calculator.

‍