RetireReady NJ Expands to Employers With 10 or More Employees

More New Jersey employers will now be required to participate in RetireReady NJ, the state-administered retirement savings program. The employee threshold recently dropped from 25 to 10, expanding the requirement to smaller businesses that do not offer a qualified retirement plan. Since launching in June 2024, RetireReady NJ has helped about 30,000 New Jersey workers accumulate $25 million in retirement savings, according to the New Jersey Department of the Treasury.

Registration is already open for employers with 10 to 24 employees, and compliance deadlines are approaching. Businesses within those employee ranges should determine whether the requirement applies and what steps need to be taken before the applicable deadline. To help clients, prospects, and others, Klatzkin has summarized the key details below.

What Is RetireReady NJ?

RetireReady NJ is designed to give employees access to retirement savings through the workplace when an employer does not offer a qualified retirement plan. Employees save through payroll deductions into an individual retirement account administered through the state program.

Employers facilitate the program but do not sponsor the retirement accounts or make contributions on behalf of employees. The employer’s role is administrative, including registering the business, providing employee information, processing payroll deductions, and sending employee contributions to RetireReady NJ.

Employees have 30 days after being added to the program to opt out or customize an account. Employees who take no action are automatically enrolled at a default contribution rate of 3% of gross pay. The default rate increases by one percentage point each January until it reaches 10%, although employees can change the contribution rate and automatic increase settings.

RetireReady NJ defaults employees into a Roth IRA, although employees may choose a Traditional IRA instead. Contributions are subject to applicable federal IRA limits.

Who Is Required to Participate?

The 2026 expansion reduced the employee threshold from 25 employees to 10. An in-state business is generally required to participate if it has 10 or more employees in New Jersey, has been in business for at least two years, and has not offered a qualified retirement plan during the previous two years. For purposes of the employee threshold, the business must have had at least 10 New Jersey employees throughout the previous calendar year.

The current implementation deadlines are:

• 20 to 24 employees: December 1, 2026
• 10 to 19 employees: February 17, 2027

Employers with 25 or more employees were already subject to RetireReady NJ, and the implementation deadlines have passed. Businesses that already offer a qualified retirement plan generally do not need to participate, but an exemption should be certified with the program. Examples of plans that may satisfy the exemption include a defined benefit plan, 401(k), 403(b), SEP plan, or SIMPLE plan.

What the Expansion Means for Smaller Employers

RetireReady NJ is an option for smaller employers. It allows a business to meet the state requirement without establishing an employer-sponsored retirement plan. An employer may instead decide to establish a qualified retirement plan.

That decision may be particularly important for a growing business that was already considering retirement benefits. This may be an opportunity for the employer to evaluate how different retirement plan options fit within longer-term business needs.

What Employers Need to Do

Employers with 10 to 24 employees should first confirm whether they are required to participate and identify the applicable deadline, and businesses that already offer a qualified retirement plan should certify an exemption through RetireReady NJ. Those required to participate will need to register. Businesses generally need a federal Employer Identification Number (EIN) and the access code included in the program notification.

After registration, employers add eligible employees to the program. RetireReady NJ then communicates directly with employees about available options. Following the 30-day decision period, employers begin payroll deductions for employees who remain enrolled and send the contribution information and funds to the program.

Employers also have ongoing responsibilities, including transmitting payroll contributions, processing contribution-rate changes, adding new employees and identifying employees who have left the business.  Employers can handle those functions directly or work with a payroll provider. RetireReady NJ allows employers to give a payroll provider access to the employer portal to help manage employee information and payroll processing.

Employers should review these processes with an advisor before the registration deadline so there is time to make any necessary payroll changes and determine whether RetireReady NJ or another qualified retirement plan is appropriate.

Contact Us

The expansion of RetireReady NJ will bring many smaller New Jersey employers into the program for the first time. With registration open and deadlines beginning December 1, 2026, businesses with 10 to 24 employees should review current retirement plan status and determine what action is required. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Klatzkin can help. For additional information call 609-809-9189 or click here to contact us. We look forward to speaking with you soon.