The New Jersey General Assembly approved a bill that would enable the state to create a retirement savings program for certain private-sector workers whose employers lack such a plan.
The New Jersey Secure Choice Savings Program bill was approved Monday by a 53-24 vote, with three abstentions. A similar bill in the state Senate hasn't been considered by the Senate Labor Committee.
The bill authorizes individual retirement accounts that feature automatic enrollment and payroll deduction for employees of for- and non-profit employers.
The bill creates the New Jersey Secure Choice Savings Program Fund, which will be financed by participants in the program and will not depend on state aid except for startup and administrative costs.
It also creates the New Jersey Secure Choice Savings Board to manage the program and oversee the fund.
"Employees may select an investment option from the investment options provided by the board," said an explanatory note that accompanied the bill. "If an employee fails to select an investment option, that employee's contributions shall be placed in the default investment option selected by the board."
A lifecycle fund will be the initial default investment option. The program will have a maximum of five investment choices.