Does the new NJ retirement law apply to my business?
New Jersey passed a retirement savings law requiring certain employers to either offer a qualified retirement plan or automatically enroll employees in a state-administered IRA program. If you have employees, here is the plain-language answer to whether it applies to you—and what the difference between the state program and a private plan means for your business.
Does it apply to your business?
The law applies to New Jersey employers with 25 or more employees who have been in operation for at least two years and do not already offer a qualifying retirement plan (401(k), SIMPLE IRA, SEP-IRA, defined benefit plan, or similar).
If you have fewer than 25 employees, the current version of the law does not require action—but the threshold has been discussed for expansion. This is worth checking annually.
If you already offer a 401(k) or similar plan with regular contributions, you are exempt. You do not need to do anything beyond maintaining that plan.
What the state program is
The New Jersey Small Business Retirement Marketplace (often called NJ RetireReady) is a state-facilitated Roth IRA program. Employees are automatically enrolled at a default contribution rate, with the option to opt out. The employer’s role is administrative: you facilitate enrollment and payroll deductions. You bear no fiduciary responsibility for the investment options.
What it is not: The state program is not a 401(k). The contribution limit for a Roth IRA is $7,500 per year (2024 limit). A 401(k) allows up to $23,000 per year in employee contributions (plus catch-up contributions for those over 50). This difference matters significantly for employees who are trying to save meaningfully for retirement.
The business case for a private plan instead
If you have 25 or more employees and are subject to the law, you have a choice: enroll in the state program or establish a qualifying plan. Here is the honest comparison:
- State program (NJ RetireReady): Low administrative burden. No employer contribution required. Limited employee savings capacity ($7,500/year).
- SIMPLE IRA: Available to businesses with 100 or fewer employees. Higher contribution limits ($16,000/year employee, plus employer match). Straightforward to set up through most financial institutions.
- 401(k): Highest savings limits ($23,000/year employee). Most flexible design. More administrative cost. Often the right choice for businesses over 10 employees who want to use retirement benefits as a recruitment tool.
For most Central NJ business owners with 25–50 employees, a SIMPLE IRA is the fastest path to compliance that also gives your employees meaningfully better savings capacity than the state program. The setup time is days, not weeks.
What to do next
If you have 25 or more employees and no retirement plan currently, you need to act. The state has been actively enforcing enrollment and the penalty structure is real.
The Business Health Review offered through CityVero is a 15-minute conversation with a Central NJ advisor who works with businesses like yours daily. They will tell you exactly which path makes sense for your headcount, your budget, and your employees—no deck, no upsell, just a clear answer.