Key Takeaways
The law mandating the creation of the Nevada Employee Savings Trust Program passed in June 2023.
Covered employers must auto-enroll eligible employees in the state program or an acceptable alternative.
The first phase of implementation cannot begin before July 1, 2025.
In June, the Nevada Assembly passed SB305 which then passed into law, making the state the tenth to pass legislation creating a state-sponsored retirement plan. Adding to the growing list of states with active retirement plans, Senate Bill 305 establishes the Board of Trustees for the Nevada Employee Savings Trust and the Nevada Employee Savings Trust Administrative Fund.
Currently, there are few details about the plan. The Board will decide on most details before operation in 2025. Covered businesses must automatically enroll employees in the Nevada Employee Savings Trust Program or choose a qualifying plan. According to the bill, the Board has the authority to implement the program in phases, although the first phase must begin after July 1, 2025.
Nevada state retirement savings program for employers
Businesses covered by legislation have more than five employees, have been in business for at least 36 months, and have not offered a tax-qualified retirement plan, such as a 401(k) or 403(b), in the three years immediately before the start date of the plan.
Nevada state retirement savings program for employers
As proposed, the Nevada Employee Savings Trust Program will be a state-facilitated IRA-based retirement program. Contributions will be withheld from eligible employees’ compensation and contributed to the retirement plan at a rate set by the Board if participants do not opt out of participating or establishing their own deferral rate. The Board will also set any auto-escalation rates and establish options for contributions to be converted into fixed lifetime income streams.
Eligible employees will be automatically enrolled and able to opt out of the plan, change their contribution rate, and withdraw funds to meet personal financial emergencies.
Retirement law in Nevada: The bottom line
If you’re a Nevada business without a retirement plan, now is a good time to start thinking about how you’ll comply with upcoming law. While details are still forthcoming, the Nevada Employee Savings Trust Program will not be your only option as proposed.
Businesses can consider other options for their company and employees. As written, 401(k) plans can meet the requirements of SB305. Human Interest offers affordable, automated retirement plans that consider the needs of small businesses and their employees. Click here to get started today.
Article By
Trenton ReedTrenton Reed is the Manager of Content Strategy at Human Interest. He has nearly a decade of experience writing for Fortune 500 and SMB companies across finance, technology, and other verticals.
