The Retire Ready New Jersey program launched on June 30, 2024. The program requires businesses who employ 25 or more employees to adopt Retire Ready New Jersey, unless they have an employer-sponsored retirement plan in place. The first phase of implementation requires employers with 40 or more employees to register by September 15, 2024, or face potential penalties. The chart below illustrates a brief summary of the program as currently proposed.
| Feature | State IRA Plan | Employer Sponsored 401k |
| Plan Type | Payroll Deduction Roth or traditional IRA | Pre-tax, Roth AND Employer Contributions |
| Contribution Limits | Limited to $7,000 (2024) | $23,000 (plus more if over age 50) |
| Compliance | Penalties are possible | Compliant with state program |
| Eligibility | Age 18 with NJ wages | Employer controls eligibility requirements |
| Plan Costs | An administrative fee of approximately 0.75% is deducted from employee’s account | Dependent on type of plan design chosen. |
| Tax Deductible | NO | Employer contributions are tax deductible |
| Tax Credit Available | NO | Plan costs qualify for available tax credits |
| Default Contribution | 3% of annual pay unless employee opts out or elects lower amount | Employee choice |
| Auto Escalation Feature | NO | NO |
| Minimum Employees to Participate | 40 employees in 1st phase, lowering to 25 by November 15, 2024 | Any Number |
| Investments | Capital Preservation, Target Date Funds, Large and Small Cap Funds, International Equity and Fixed Income options | More than 25 funds in a variety of Morningstar categories |
