NJ Secure Choice Savings Program: Employer Duties, Deadlines, and Penalties

The New Jersey Secure Choice Savings Program, now operating under the name RetireReady NJ, is a state-facilitated retirement savings program that requires most private-sector employers in New Jersey to offer their workers a payroll-deduction Roth IRA when the business doesn’t already provide a qualified retirement plan. Signed into law in March 2019 and launched statewide in mid-2024, the program expanded in January 2026 to cover employers with as few as 10 employees. By early 2026, it had facilitated $18 million in savings for more than 25,000 workers.¹

Which Employers Must Participate

A business is covered if it has 10 or more employees, has been operating for at least two years, and does not already offer a qualified retirement plan such as a 401(k), 403(b), SEP, SIMPLE, or defined benefit plan. The 10-employee threshold took effect with the January 2026 amendments; before that, the law applied only to employers with 25 or more workers.¹

The employee count includes all W-2 workers age 18 or older, including part-timers, who live or work in New Jersey and have wages subject to state income tax withholding.²

If your business already sponsors a qualifying retirement plan, you are exempt, but you still have to certify that exemption through the RetireReady NJ portal.³

Registration Deadlines

RetireReady NJ opened to all eligible businesses on June 30, 2024, after a short pilot earlier that spring. Registration was then phased in by employer size.⁴

Employers with 40 or more employees: implementation deadline of September 15, 2024, with penalties possible for those still unregistered after June 15, 2025.
Employers with 25 to 39 employees: implementation deadline of November 15, 2024, with penalties possible after August 15, 2025.

For the newly covered group of employers with 10 to 24 employees, a specific compliance schedule had not been finalized as of February 2026. The program said it would roll out in phases and give affected businesses advance notice.¹

How the Program Works for Employees

RetireReady NJ accounts are Roth IRAs, so contributions come out of after-tax pay. Workers at a participating employer are automatically enrolled and have 30 days to opt out or change their settings. Opting out is permitted at any time, and workers who leave the program can re-enroll later.³

Contributions and Auto-Escalation

The default contribution rate is 3% of gross pay. Under the 2026 amendments, that rate automatically increases by 1% each January until it reaches 10%, unless the employee changes it.⁵ Workers can set their own rate anywhere from 1% to 100% of pay, up to the annual IRA contribution limit. For 2026 those limits are $7,500 for savers age 49 and younger and $8,600 for those 50 and older, subject to IRS income thresholds based on filing status.⁶

Employers do not contribute or match. Their job is limited to running the payroll deduction and remitting the money.³

Investment Options

For the first 30 days after enrollment, contributions sit in the Vanguard Treasury Money Market Fund (VUSXX), a capital preservation option. After that, money is moved into a Vanguard Target Retirement Date fund matched to the employee’s date of birth.⁷

Savers who want to pick their own mix can choose from additional funds: the Fidelity 500 Index Fund for large-cap exposure, Fidelity mid-cap and small-cap index funds, a Wasatch small-cap value fund, a Fidelity international equity fund, and a Baird fixed-income fund.⁸

Fees

Participants pay an annual asset-based fee of roughly 0.75% to cover program administration. That is the statutory cap for the program’s first three years; after that, the cap drops to 0.6% of total fund balances. These fees are separate from the underlying investment funds’ own operating expenses. Employers pay nothing.⁹¹⁰

Withdrawals and Portability

Because these are Roth IRAs, employees can pull out their own contributions anytime without taxes or penalties. Earnings withdrawn before age 59½ that don’t meet the IRS “qualified distribution” rules are subject to income tax on the earnings portion plus a 10% early withdrawal penalty.¹¹

The account belongs to the worker, not the employer. If you change jobs, the account goes with you, and if your next employer also participates, you can keep contributing to the same account. Direct transfers to another IRA are allowed without tax consequences, though the IRS limits rollovers to one per 12-month period across all IRAs. The program also accepts rollovers in from other IRAs or retirement plans.¹²

What Employers Have to Do

Once registered, employers add their employees to the system, process payroll deductions for anyone who hasn’t opted out, submit the contributions, and keep the roster current as workers come and go. New hires must be enrolled within three months, and there has to be an annual open enrollment window.¹³

Employers do not enroll workers in the Roth IRA itself, give investment advice, manage investment changes, or handle distributions. They carry no fiduciary duty under the program.³

RetireReady NJ integrates with several payroll providers, including Gusto, Paylocity, and QuickBooks Online. Where there is no direct integration, employers upload payroll files through the RetireReady NJ portal.¹⁴ ADP has noted that the program requires manual administration through the website or a file transfer rather than the full integration available with private 401(k) or SIMPLE plans.¹³

Penalties for Non-Compliance

Employers who fail to enroll eligible workers who haven’t opted out face escalating fines based on how long the violation continues:

First year of violation: a written warning.
Second year: $100 per non-enrolled employee.
Third and fourth years: $250 per non-enrolled employee.
Fifth year and beyond: $500 per non-enrolled employee.

Collecting payroll contributions and then failing to remit them is treated more seriously: a $2,500 penalty for the first offense and $5,000 for each one after that.¹⁵

The Department of the Treasury enforces penalties through a notice-and-protest process. After the department issues a notice of proposed penalty, the employer has 90 days to file a written protest and request a hearing. Without a protest, the penalty is assessed and payment is demanded, with a payment plan available. No penalty notice can be issued after June 30 of the fourth year following the year of the violation.¹⁵

Liability and Account Ownership

By design, RetireReady NJ is not an employer-sponsored retirement plan. Participating employers carry no fiduciary responsibility and no liability for employees’ investment decisions, participation choices, or fund performance. The State of New Jersey also assumes no liability for benefit payments or investment losses. The money in each account is owned by the individual saver and cannot be commingled with state funds.¹⁵

The Secure Choice Savings Board and its agents do carry a fiduciary duty to act solely in the interest of enrollees. Savers are entitled to annual statements showing contributions, investment income, withdrawals, and balances.¹⁵

1
State of New Jersey Department of the Treasury. RetireReady NJ Program Amended
2
Cole Schotz. RetireReady NJ Reminder About the Requirements Under the New Jersey Secure Choice Savings Program Act
3
State of New Jersey Department of the Treasury. Employer Program Details
4
State of New Jersey Department of the Treasury. RetireReady NJ Launch Announcement
5
ASPPA. RetireReady NJ Now Covers All Private Sector Employers
6
State of New Jersey Department of the Treasury. Saver Contributions
7
State of New Jersey Department of the Treasury. Saver Investments
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State of New Jersey Department of the Treasury. Saver Price and Performance
9
State of New Jersey Department of the Treasury. Saver Program Details
10
Vestwell. New Jersey Selects Vestwell to Power State-Facilitated Retirement Program
11
State of New Jersey Department of the Treasury. Saver Withdrawals
12
State of New Jersey Department of the Treasury. RetireReady NJ Homepage
13
ADP. RetireReadyNJ
14
State of New Jersey Department of the Treasury. Employer Payroll Providers
15
New Jersey Legislature. P.L. 2019, c. 56 – New Jersey Secure Choice Savings Program Act