New Jersey Moves Forward With State-Run Retirement Program

The state Senate budget committee has approved a bill creating a mandatory retirement program for private-sector workers without employer-sponsored plans in the Garden State.

The Secure Choice Savings Act (S2831) would require companies with at least 25 employees that don’t already offer retirement accounts to offer the “Secure Choice” retirement plan. Smaller companies with fewer than 25 employees could opt in, according to a report on NJ.com.

The Senate Budget and Appropriations Committee earlier last week cleared the bill with a 9-3-1 vote Monday. The legislation has already passed the state Assembly.

Under the legislation, employers would set up a payroll deduction for employees, who automatically contribute 3% of their salaries, though they can adjust that contribution or opt out altogether, to an Individual Retirement Account (IRA). Employers are not required to match those contributions.

The program, which would take effect within two years of its passage, would be administered by a seven-member board of officials from the governor’s administration and appointees by the Senate president and Assembly speaker. Total investment and administrative fees could not exceed 0.6% of the fund balance under the bill. There would be no state contribution to the program, nor would those balances be guaranteed by the state.

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