New Jersey to Launch Pilot of Secure Choice Savings Program

To expand access to retirement savings, the Garden State is launching RetireReady NJ—a new retirement savings program, created by the New Jersey Secure Choice Savings Program Act. 

Secure Choice is a state-facilitated retirement plan designed to give private sector workers access to a Roth individual retirement account or a traditional IRA through automatic payroll deductions. Governor Phil Murphy signed the New Jersey Secure Choice Act in 2019. 

A pilot program is scheduled to launch this spring, with plans for the full program to open in the summer. Once fully opened, every New Jersey employer with 25 or more employees will need to register with the program if they don’t already offer their own qualified retirement savings plan. 

The state will facilitate the program, which is free to employers. In addition, employers do not have any fiduciary responsibilities, as the state is responsible for the investment decisions and administrative tasks associated with the plan. The plan does not include any employer matching contributions. 

The Murphy administration estimated that Secure Choice could benefit nearly two million New Jersey residents and manage up to $10 billion in investments. 

New Jersey selected Vestwell as the program administrator in September last year, marking the 401(k) provider’s seventh state-facilitated program partnership.

RetireReady NJ is a completely voluntary retirement program, and savers are defaulted into a Roth deferral. Savers can also opt out of the program, if they want to. 

According to AARP, more than 1.7 million private sector workers in the Garden State do not have an opportunity to save for the future out of their regular paycheck. Secure Choice will particularly help small businesses become more competitive, AARP found, because they will be able to access a retirement savings option for their employees at no cost to themselves or their bottom lines.  

Employers in New Jersey can learn more about the program at two upcoming webinars that are being held on May 9 at 2p.m. and May 22 at 11 a.m.  

The announcement of the RetireReady NJ pilot program follows Wednesday’s news that Vermont will work with Colorado to help establish VT Saves—another state-facilitated auto-IRA retirement program. Vermont Treasurer announced that VT Saves will enter negotiations with the Colorado Partnership for a Dignified Retirement and its partner states. Vermont would be the third state, after Maine’s MERIT and Delaware’s EARNS program, to enter the PDR.  

David Teykaerts, executive director of CalSavers, also announced on LinkedIn Wednesday that CalSavers, the state-sponsored plan in California, had recently achieved two major milestones. To date, 50,000 California employers have begun payroll deductions, and 500,000 savers accounts have been funded.  

According to the Center for Retirement Initiatives at Georgetown University, the state programs have collected around $1.340 billion in total retirement assets since the first such program launched in 2017.