Gov. Murphy Signs Retirement Savings Mandate

Gov. Phil Murphy visited a senior center in Saddle Brook Thursday where he signed into law the “New Jersey Secure Choice Savings Program Act” (A4134), legislation to mandate employers in the state provide workers with a retirement savings program.

Under the law, employees of companies that do not currently offer a qualified retirement savings program must be automatically enrolled in payroll deduction for a state-sponsored retirement account. Employees may opt-out of the program or adjust their deduction. If an employee fails to set a contribution level or opt-out of the program, the default contribution level is three-percent of the employee’s wages. An “employee” is defined as any individual who is 18 years of age or older, who is living or employed in the state, and whose wages are subject to New Jersey income tax withholding.

The law, which takes effect immediately, applies to private sector employers. Its provisions are mandatory for companies with 25 or more employees that have not had a qualified retirement plan in place for two years, and optional for companies with fewer than 25 employees or those that have been in business for less than two years.

The NJCUL actively opposed the measure for a variety of reasons, including the regulatory burden it poses for small businesses as well as governmental competition for individual savings dollars, which are more appropriately provided for by the private sector.