New Jersey Gov. Phil Murphy signed legislation Thursday creating the New Jersey Secure Choice Savings Program, which is designed to help workers whose employers don't provide defined contribution plans establish retirement savings accounts.
"Saving for retirement is paramount for all employees, but too often, those who work for small businesses don't have a simple way to set aside these savings," Mr. Murphy said in a news release.
"The increasing number of Americans with little to no retirement savings is extremely concerning," said state Treasurer Elizabeth Maher Muoio in the news release. "Treasury stands ready to help implement this new law in order to create a more secure future for all New Jerseyans."
The program is a state-administered Individual Retirement Account and is unrelated to the $74.9 billion New Jersey Pension Fund, Trenton. Employers are not fiduciaries in the program.
The law requires employers with 25 or more employees to participate in a retirement savings program administered through automatic payroll deductions, while employers with fewer than 25 employees may participate in the program.
Eligible employees may select a contribution level. If they don't, the default contribution rate will be 3% of annual wages. Workers may opt out.
The program will be managed by the New Jersey Secure Choice Savings Board, which will include the state treasurer, comptroller, and director of Office Management and Budget, plus two public representatives, a business trade organization representative and a representative of the enrollees, the news release said.