This story is being republished under a special NJ News Commons content-sharing agreement. Link to story: northjersey.com/story/news/business/2024/07/11/nj-retirement-savings-program-uncovered-workers/74356110007
New Jersey officials has formally opened a state-run retirement savings plan that proponents say will benefit over 800,000 workers in the state.
The state’s Secure Choice Savings Program will make IRA-type retirement funds available to state residents e mployed at a business with 25 or more workers.
Many workers at small businesses don’t have access to retirement savings accounts, said Todd Hassler, executive director of the program.
“It’s often referred to as a retirement gap crisis,” he has said.
The state missed the original start date for the program of March 28, 2021, citing the COVID-19 pandemic for the delay. Another March deadline came and went in 2022.
California, Colorado, Connecticut, Illinois, Maryland, Oregon and Washington have similar programs, on which New Jersey’s was modeled, and New York enacted its own version in 2021, according to a database run by Georgetown University.
NJ businesses must register with RetireReadyNJ
New Jersey businesses with at least 25 employees and that have been in business for at least two years now have to register in the program, known as RetireReadyNJ.
A smaller pilot program was run this spring, which entailed five New Jersey businesses encompassing 250 workers. State officials on Wednesday did not immediately disclose the names of those five participating businesses.
State Treasury Department officials said that participation in the program would cost nothing for employers. Companies that already offer a retirement plan, such as a 401(k), can verify that with the state.
Two webinars for business owners are being offered on the program, on July 17 and August 7 at 11 a.m.
How does the NJ state retirement program work?
Under the Secure Choice Savings program, the state sets up its own retirement fund and automatically enrolls employees at businesses that are more than two years old, have at least 25 staff members and don’t offer their own retirement benefits.
Deductions would be set at 3.0 percent of employee pay. No contributions or employer matches would come from the company—a restriction put in place to keep the program in line with federal regulations.
AARP, the advocacy group for older Americans, has estimated that more than 1.7 million people in the Garden State were employed by businesses that didn’t offer such benefits.
Vestwell, the administrator for the retirement program, estimated that at least 800,000 New Jerseyans would have access to retirement thanks to the Secure Choice Savings Program.
One key task was getting an executive director for the program. Hassler was announced over a year ago after a nationwide search, according to the Treasury Department. He receives an annual salary of $220,000, according to public records.
Gov. Phil Murphy’s administration estimated that the fund could have over $10 billion in assets once it’s fully implemented. As of April 2024, the California fund had $907 million in assets, according to the Georgetown database.
“Workers that otherwise did not have access to a retirement plan through their private employers will now have an opportunity to save, advancing our mission of making retirement accessible and supporting New Jerseyans through every stage of their careers,” Murphy said.
