New legislation in New Jersey creates a “retirement savings plan marketplace” so that small employers can have a simple and inexpensive way to offer private savings plans to their employees [A.B. 4275, L. 2016]. Employer participation in the marketplace will be voluntary. At least one of the plan options will use payroll deductions to fund an employee’s retirement savings account.
The New Jersey retirement savings plan marketplace will be available to employers with 100 or fewer employees. The marketplace must offer at least two types of plans:
- A retirement account funded through payroll deductions from an employee’s paycheck (the employer would not make contributions from its own funds), or
- An individual retirement account (IRA)-type plan that provides for employer contributions. The marketplace will also offer myRA in addition to any other approved plans. myRA is a program developed by the U.S. Department of the Treasury to help more people save for retirement. Employers can set up payroll deductions for employees to fund their myRA accounts. (APA PayState Update)
If you are a small employer in New Jersey, contact your payroll provider or your benefits consultant to find out more. Offering a retirement plan option, especially one that offers payroll deductions, makes you a “Good Guy” among employers.
We’ll be talking more about myRA options in our next post. Watch this space for updates on the pending legislation.