RetireReady NJ auto-IRA: What New Jersey SMBs and their employees need to know

Approximately one million full-time workers in New Jersey lack access to an employer-sponsored retirement plan, according to the American Retirement Association. To bridge this gap, the New Jersey Secure Choice Savings Program Act was signed into law in March 2019. As of January 2026, the program’s reach has been expanded to ensure virtually all private-sector employees have access to retirement coverage.

Read more to learn about the details of RetireReady NJ, including deadlines, fines, and more.

The state of RetireReady NJ

RetireReady NJ is fully operational and mandatory for a broader range of employers. Following the signing of A5358 (P.L. 2025, c. 379) in January 2026, registration requirements now apply to New Jersey businesses with 10 or more employees (previously 25). Businesses that do not already offer a qualified retirement plan must act to avoid escalating penalties.

The program first launched in July 2024. Established by the New Jersey Secure Choice Savings Program Act, the state program is designed to help New Jersey employees save for retirement via automatic paycheck deductions into a Roth IRA.

Is RetireReady NJ mandatory for employers? 

Yes. You are required by law to facilitate RetireReady NJ (or certify an exemption via a private plan) if you meet the following criteria:

• Employed at least 10 workers during the previous calendar year.

• Have been in business for at least 2 years.

• Do not currently offer a qualified employer-sponsored retirement plan like a 401(k) or 403(b).

What are the deadlines for RetireReady NJ? 

Deadlines first started to impact businesses in July 2024. According to the program website, employers will be notified by RetireReady NJ when it's time for them to register. The state is currently in the final phase of the rollout:

• 40+ employees: Deadline was September 15, 2024.

• 25 - 39 employees: Deadline was November 15, 2024.

• 10–24 employees: The focus of 2026 compliance efforts following the recent expansion.

Are there penalties for companies that fail to comply?

Yes. Employers who do not provide a qualified retirement plan or register for the program within a year will receive a government-issued written warning. Continued non-compliance will result in escalating fines as follows:

• Second year: $100 fine

• Third and fourth years: $250 fine per violation

• Fifth and subsequent years: $500 fine per violation

How will the New Jersey state-mandated program work? 

The program is managed by the Secure Choice Savings Board and administered through partnerships with private sector entities. By law, New Jersey employers who meet specific criteria must either provide a qualified retirement plan or enroll their employees in this program. 

Employees will contribute to RetireReady NJ through automatic payroll deductions into a Roth IRA, with the option to opt out, and may change their contribution level at any time. Employers are required to implement these changes at least once per calendar quarter. Contributions grow tax-free, and withdrawals during retirement may also be tax-free. 

• Default contribution: If an employee fails to select a level, the default is 3% of wages (subject to IRS Section 219(b)(1)(A) limits).

• Auto-escalation: The contribution level increases by 1% annually until it reaches a 10% cap.

• Fees: The program charges an annual asset-based fee of approximately 0.75%, which is billed directly to savers.

• Portability: IRAs are portable, meaning they belong to the worker and move with them if they change jobs.

• Lack of employer match: Only employees can contribute to the new retirement accounts, as there is no mandate for an employer contribution or match. 

How are investments chosen and managed? 

The program’s investment options are selected by the Secure Choice Savings Board. The program offers several investment options based on investment goals and risk tolerances. Upon enrollment, savers can either stay with the default investment—a Capital Preservation Fund for the first 30 days, followed by a Target Retirement Date Fund—or choose from options such as Capital Preservation, Target Retirement Date Fund Series, Large Cap, Mid Cap, Small Cap Core, Small Cap Value, or International Equity funds.

New Jersey business owners: Consider your options

For New Jersey business owners, now is the time to prepare for upcoming deadlines and penalties. While RetireReady NJ aims to increase retirement plan access, small businesses have options. 

• For employees: While intended to address the retirement savings gap by providing more coverage, RetireReady NJ is not without its drawbacks. Compared to other options like 401(k) plans, IRAs have limited flexibility (i.e., no employer matching, a default 3% payroll deduction, and a lower contribution limit). 

• For employers: Offering employees retirement plan options can lead to improved recruiting, decreased turnover, and tax savings. Employers aren’t responsible for investment returns, program design, or program benefits—but will have to set up infrastructure and establish processes for employee payroll deductions, ensure they’re compliant with the plan rules, and move employee funds into the state fund.

Ultimately, New Jersey businesses have options to comply with state laws and should consider whether they want to offer the program or if another qualified retirement plan may better suit their needs. In addition to more flexibility and higher contribution limits for savers, a 401(k) with Human Interest comes with numerous benefits for New Jersey employers, including a “no-touch” payroll integration with over 500 payroll providers.

Considering a retirement plan for your employees, but not sure where to start? We can help.