As a small business owner in New Jersey, you’re constantly juggling multiple responsibilities. From managing day-to-day operations to planning for the future, your plate is always full. Now, there’s a new program on the horizon that demands your attention: RetireReady NJ. But don’t worry – we’re here to break it down for you and help you navigate this new requirement.
The Silent Crisis: Retirement Savings in New Jersey
Picture this: Your hardworking employees, dedicated to your business for years, suddenly facing a retirement with little to no savings. It’s a scenario that’s all too common, and it’s one that RetireReady NJ aims to address.
Many New Jersey business owners are waking up to the retirement savings crisis. Let’s dive into how RetireReady NJ works and what it means for you and your employees.
RetireReady NJ: The Basics
RetireReady NJ is a government-sponsored savings program designed to help New Jersey workers build a nest egg for retirement. Here’s the kicker: certain businesses are now required by law to either offer their own qualified retirement plan or enroll their employees in RetireReady NJ.
Key features of the program:
- Automatic payroll deductions into Roth IRAs for employees
- Tax-free growth and withdrawals during retirement
- Overseen by New Jersey’s Secure Choice Savings Board
- Launched in July 2024
Is Your Business Affected?
Not sure if you need to worry about RetireReady NJ? Here’s a quick checklist. You’re required to participate if:
- You employed at least 25 workers during the previous calendar year
- Your business has been operating for at least 2 years
- You don’t currently offer a qualified, employer-sponsored retirement plan
The Clock Is Ticking: Registration Deadlines
RetireReady NJ isn’t taking a one-size-fits-all approach. Registration deadlines are based on company size:
- 40+ employees: September 15, 2024
- 25-39 employees: November 15, 2024
Don’t let these deadlines sneak up on you. Procrastination can be costly when it comes to compliance.
The Price of Non-Compliance
Speaking of costly, let’s talk penalties. The state isn’t messing around:
- First year: Written warning
- Second year: $100 fine
- Third or fourth year: $250 per violation
- Fifth year and beyond: $500 per violation
The penalties add up fast, and it’s just not worth the risk.
Who’s Eligible to Participate?
The good news is that RetireReady NJ casts a wide net:
- Any New Jersey worker 18 or older
- Both full-time and part-time employees
- Must have income or W-2 wages in New Jersey
Remember, while you’re required to offer the program, participation is voluntary for your employees. They can opt-out or adjust their contributions at any time.
Your Next Steps
As we wrap up this crash course in RetireReady NJ, let’s focus on what you need to do next:
- Determine if your business is required to participate
- Mark your registration deadline on your calendar
- Start communicating with your employees about the program
- Consider consulting with a payroll expert to ensure smooth implementation
BMA Payroll: Free Consultation
At BMA Payroll, our independent retirement plan experts offer a free consultation to help determine if NJ ReadyRetire or a private plan is the right fit for your business.
