State IRA Mandates

Stay up-to-date with the latest state-mandated IRA legislation

As a growing number of states consider and enact legislation requiring that employers offer a retirement savings plan to employees, understanding where things stand in your state can help you avoid costly fines and headaches. 

While these programs are a step in the right direction in terms of expanding access to retirement savings options, these state-sponsored programs have some notable limitations, especially if you own a business:
 
  • Owners, along with employees earning more than $144,000, may not be eligible to participate.
  • Possibility of administrative complexities if employees are in multiple states that are subject to mandates.
  • The maximum annual contribution for these state-run programs is $6,000 in 2022 ($7,000 if age 50 or older). In a 401(k), participants can contribute up to $20,500 ($27,000 if 50 or older).
  • Opting to offer a state-run program could mean losing out on up to $16,500 in tax credits available for starting a qualified plan.
  • Employer contributions are not permitted.
 
 
States w/ Mandatory Programs Status Businesses Impacted Penalties for Noncompliance
CA - CalSavers Active Currently more than 50, 5 or more 6/30/22 $250 per elgible employee after 90 days, additional $500 per employee after 6 months
CO - Colorado Secure Savings Program Passed Employers w/ 5+ employees $100/employee/year up to a maximum of $5,000/year
CT - MyCTSavings Active 5+ employees and not currently offering a qualified plan Possible investigation and penalties
IL - Illinois Secure Choice Active 25+ employees currently, 16+ on 11/1/22, 5+ on 11/1/23 $250 per eligible employee for 1st year, additional $500 per eligible employee for each year thereafter
MD - MarylandSaves Active All employers that pay employees through a payroll system or service Will not receive $300 waiver of the Maryland business annual filing fee
ME - Maine Retirement Savings Program Passed 25+ 4/1/23, 15+ 10/1/23, 5+ 4/1/24 TBD
NJ - New Jersey Secure Choice Savings Plan Passed 25+ employees, in business for 2 years - have 9 months from enactment Yr. 2: $100/employee, Yrs. 3 + 4: $250/employee, Yrs. 5+: $500/employee
NY - New York Secure Choice Savings Program Passed Private sector businesses w/ 10+ employees $250 per eligible employee for 1st year, additional $500 per eligible employee for each year thereafter
OR - OregonSaves Active Currently 5+ employees, 4 or less targeted for late 2022 $100 per eligible employee up to a maximum of $5,000 per calendar year
VA - RetirePathVA Passed Businesses w/ 25 or more employees, planned launch by 7/1/23 TBD
DE - Deleware EARNS Passed Businesses w/ 5+ employees, 6+ months in business, launching by 2025 TBD
HI Passed Businesses w/ 1 or more employees, employees must opt-in TBD
 
Where the remaining states stand:
 
  • States that have enacted voluntary programs: MA, NM, VT, WA
  • States that studied or proposed legislation within the last year: AR, GA, IA, ID, IN, KS, KY, MN, MO, MS, NC, NV, OH, OK, PA, RI, TX, WI
  • States w/ legislative efforts prior to 2021: AZ, LA, MI, MT, ND, NE, NH, SC, TN, UT, WV, WY
  • States that have not pursued an Auto-IRA: AK, AL, Washington, DC, FL, SD

Learn about your alternatives to state-run IRAs

401(k)s have a reputation for being costly, complex and time consuming, putting them out of reach for many small businesses. But thanks to the introduction of pooled employer plans, there's now a simple, affordable way for businesses to offer a 401(k).

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