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What States Have Retirement Plan Mandates?

November 03, 2021

State mandated retirement plans are gaining momentum throughout the U.S. As of April 2022, 6 states have mandated retirement plans in place requiring companies of specific sizes to automatically enroll employees into an IRA or another qualifying private plan. Eight other states are currently in the process of adopting similar mandates.

But what is a state retirement plan, how do state mandated retirement plans work, and which states have mandated retirement plans? Read on to discover the answers to these questions and more.

Retirement Plan Mandates Are Becoming a Reality for These 11 States:

California, Oregon, Illinois, Maryland, Colorado, Connecticut, New York , New Jersey, Virginia, Washington, and Maine.

While federal retirement plan mandates are still a ways off, 14 US states are considering the use of state-sponsored retirement savings programs - ten of which are considering retirement plans required by law. While this is an important step in fully addressing the retirement gap and its effects on the private sector, what does it mean for business owners?

Depending on where your business operates, there are specific retirement plan adoption deadlines that your company will be required to meet to continue operating legally and avoid penalties. To help you decipher these mandates, we've broken them down by state. First up, are retirement plans mandatory in California for all companies?

California: By 2022 Large and Small Companies Alike Must Have Retirement Plans

Calfornia's state mandated retirement plan, Calsavers, is already in effect for private sector workers. California launched their state-sponsored retirement plan in 2016, which allows companies to choose from a Roth IRA or a traditional IRA for employees. Since September 2020, companies in California that employ more than 100 employees must have the state’s Calsavers plan or another qualifying retirement plan in place.

As of June 30th, 2021, California companies with over 50 employees were asked to meet the same requirements. By June, 2022, retirement plans will be mandatory for companies with 50 or less employees.

If California enterprises fail to comply, they will be fined $250 per eligible employee if non-compliance continues for 90 days or more after the notice, and $500 per eligible employee if non-compliance continues for 180 days or more after the notice.

Connecticut: Active Retirement Mandate as of March, 2022

The law that created Connecticut’s state-sponsored retirement plan program, MyCTsavings, passed in 2016. The program, which exited its pilot phase in March 24, 2022, is now officially active. This program is mandatory for all employers with five or more employees who do not already offer a qualifying private plan. The program is designed, implemented, and monitored by a state-appointed board.

Similair to other retirement plan mandates, Connecticut's program is a Roth auto-IRA which relies on payroll deductions. This program will help those who desire to save retirement, but do not have proper access to a retirement plan through their employer.

Washington State: Active Retirement Plan Marketplace, Seattle Mandate not Yet Implemented

The city of Seattle enacted their mandatory retirement savings program in 2017, which is overseen by the mayor. In 2018, officials delayed the implementation of the program pending possible action by the Washington State Legislature on a statewide auto-IRA program. As of 2022, Seattle's retirement mandate has still not been implemented.

However, Washington State has implemented a retirement plan marketplace. Retirement plan marketplaces allow each employee to take charge and choose the IRA that is right for them. Employers do not have to sponsor the plan to the employees directly, as each employee can voluntarily contribute to their retirement account through the retirement marketplace.

Oregon: Companies with 4 or Fewer Employees Must Register by Late 2022

Oregon also requires employers offer retirement plans to employees, be it through their state-sponsored plan, OregonSaves, or a private qualifying plan. The state does not require employer contributions. As of January 1st, 2020, if a company is cited for non-compliance, they must pay a fine of $100 per affected employee, up to a maximum of $5,000 per calendar year.

The state’s retirement plan mandate program has been implemented in six phases, starting with private companies with the largest number of employees. Companies with four or fewer employees are the last wave to be required to adopt a plan - the deadline for registration being late 2022 according to the OregonSaves website.

Illinois: Secure Choice Savings has New Registration Waves in 2022 and 2023

Illinois' state mandated retirement plan, Secure Choice, was enacted in 2015. Administered by the Illinois Secure Choice Savings Board, the program formally rolled out in phases starting with companies that employ more than 500 employees in 2018. As of 2021, all companies with at least 25 employees are required by law to have a retirement savings plan.

There are two additional employer registration waves left: employers with 16-24 employees will be required to register by November 2022 and employers with 5-15 employees will be required to register by November, 2023. Companies that do not enroll in Illinois Secure Choice or a qualifying private plan will face a penalty of $250 per employee for the first year, and $500 per employee for each following year.

Maryland: Retirement Program Set to Enter Pilot Phase in September 2022

Maryland$aves, Maryland’s mandated retirement savings program, was enacted in 2016 and is on-schedule to enter its pilot phase in september 2022. Under this new state mandate, it will be mandatory for all employers that use a payroll system or service to opt into Maryland$aves or a qualifying private plan.

Employers may face penalties for non-compliance although the law does not detail them yet.

Colorado: Retirement Savings Program will Launch 2022

Colorado is in the process of implementing their new mandated retirement savings program, Colorado Secure Savings Program, after it’s legislation passed in 2020. The mandate applies to any Colorado company without an existing plan that employs five or more employees and has been in operation for at least two years. Employer contributions, and their resulting tax benefits for companies, are not permitted unless a qualifying private plan is adopted.

Employers found to be non-compliant will face a fine of up to $100 per year for each unenrolled eligible employee, with a maximum penalty of $5000 in a calendar year. The roll-out of the program will be done in phases, and the formal launch of the program is anticipated for October 2022.

New York City and State: More Information by Fall 2023

In 2021, New York City enacted a law that says employers with at least 5 employees that do not currently offer their workers a way to save for retirement must participate in the state’s New York Secure Choice Savings Program, which automatically enrolls employees in an Roth IRA. Businesses that do not enroll will face a penalty of $250 per employee for the first year, and $500 per employee for each following year, and the fines go up from there for each consecutive year of non-compliance.

New York’s Secure Choice Savings Program was originally enacted in 2018 and is in the process of being implemented. By law, the program will be in operation no later than August 9th 2023 and impact companies without a qualifying private plan. So, companies in New York state should expect to start seeing more information about plan deadlines soon.

While employers will be enrolled through the same state-sponsored program, employers based in New York state will now also be subject to the mandate. This bill, passed October 21st, 2021, requires employers with 10 or more employees to choose between the state-sponsored plan or a qualifying private plan. Enrollment is slated to begin before October 21st, 2023, although the bill allows for an aditional 12 months for implementation.

New Jersey: Enrollment Deadline March 2022

New Jersey enacted the New Jersey Secure Choice Savings Program in 2019, requiring companies with 25 or more employees to either opt into their state-sponsored auto-IRA retirement plan, or into another qualifying private plan. If an employer does not comply by the first year, they receive a written warning from the state; the second year, they are fined $100 per employee not enrolled; the third and fourth year, they are fined $250 per employee not enrolled; the fifth year onward, they are subject to a $500 fine per employee not enrolled in the program. Those fines increase for any employer who collects employee contributions.

Per the original bill, the program was to become effective on March 28, 2021, with the objective of enrolling everyone by the end of 2021. Due to the pandemic, however, the program won’t go into effect until March 28th, 2022. Employers with 25 or more employees will have until December 28th, 2022 to implement a retirement plan.

Virginia: Will Begin to Enroll Employers in Summer of 2023

In 2021, Virginia’s mandatory retirement savings program, the VirginiaSaves Program, was enacted into law. Under the bill, Virginia employees 18 or older working more than 30 hours per week who do not already have access to an employer-provided retirement plan will be automatically enrolled in a state-facilitated individual retirement account (Roth IRA) savings plan. Tax deductible employer contributions are prohibited without a qualifying private plan in place.

The design of the program is still being completed by the administering board, and they are also still establishing an implementation timeline. That said, the program is slated to begin operations July 1, 2023.

Maine: Auto-IRA Program Will Begin Rolling Out in 2023

As of June 24th, 2021, Maine passed legislation to establish a mandated auto-IRA plan for companies with more than 5 employees. Overseen by the Maine Retirement Savings Board, the state-sponsored program is a payroll deduction Roth IRA that must be offered by any individual or entity engaged in business in the state of Maine that has been active for at least 2 years. Employers may opt out of the state-sponsored program if they offer another qualifying plan.

The plan will be rolled out in three implementation phases:

  1. Implementation will begin on April 1, 2023, when companies with 25 or more employees must have a program for employees in place.
  2. By October 21st 2023, companies with 15 to 24 employees must have a program in place.
  3. April 1, 2024, companies with 5 to 14 employees must follow suit.


The penalties for non-compliance prior April 1, 2024 is, at maximum, $10 per employee. Between April 1st 2024 and March 31st 2025, the maximum fine per employee will be $25. From April 1, 2025 to September 30th, 2026, the maximum penalty per employee goes up to $50.

Offering a Retirement Plan is Good For Business

While complying with these mandates may seem like a hassle, offering retirement plans is a boon for business and about more than avoiding non-compliance penalties. In fact, a CNBC report highlighted that 81% of workers like companies that automatically enroll their workers in a 401(k) plan, suggesting that having quality retirement benefits in place is an effective tool for attracting and retaining industry talent.

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