Roughly 39 million U.S. employees do not have a retirement savings plan through their employer. And even though it is possible to set up an outside plan, less than 10% of all employees do so.

Some state governments have decided to step in to ensure their residents won’t have to go without food, health care, housing, etc. as they grow older.

As reported last March, automatic enrollment plans have been set up making it mandatory for employees to enroll in a state payroll deduction savings program. These auto-enroll plans will default to a rate of around 3% per pay and often there is an option to opt out (check with your state to confirm their options).

That list has grown to eight states total including California, Illinois, Maryland, Connecticut, Massachusetts, Oregon, *Washington and New Jersey.

With this law comes new requirements for employers in these states. They include, but not limited to, remitting the payroll deductions to the state-administered retirement plan, possibly offering a retirement plan, providing their workers with information from the program, and more.

Let’s break the law down based on the requirements per state:


Fact: 7.4 million California residents work for companies that do not offer a retirement plan.
New plan: Employees without plans will now be automatically enrolled in the Secure Choice Retirement Savings Program.
State requirements for participation: Five or more employees must comply within 36 months of the effective date, 50 or more must have it within 24 months, and those companies with 100 employees or more must comply within 12 months of the effective date.

If your company has less than five employees, you are not subject to the requirement.


Fact: 600,000 workers in Connecticut currently do not have a retirement savings plan at their workplace.
New plan: The state created the Connecticut Retirement Security Program to fill the void.
State requirements for participation: If an employee is over 19 years-old, makes at least $5,000 annually and their employer of more than five employees doesn’t provide a retirement plan, they will be automatically enrolled in a state-run retirement savings plan. If your company has less than five employees, you are not subject to the requirement.


Fact: Median retirement savings for all working families in Illinois is only $3,000.
New plan: To help residents prepare and save, the Illinois Secure Choice Savings Program Act was created.
State requirements for participation: Employers must offer the Illinois operated retirement savings program if they have been in business for at least 2 years, have 25 or more employees, and do not currently offer an employer-sponsored retirement plan.


Fact: About one million Maryland residents work for companies that don’t offer a retirement savings plan.
New plan: The Maryland Small Business Retirement Savings Program Act was formed.
State requirements for participation: Employers that don’t offer an employer-sponsored plan but have 10 or more employees that work 30 hours/week will be required to participate.


Fact: Roughly 49% of MA employees’ employers don’t offer a retirement plan.
New plan: Modeled after the Illinois Secure Choice Savings Program Act, the Massachusetts Secure Choice Savings Program was established.
State requirements for participation: If business owners don’t offer their own retirement option, they must automatically enroll their employees into the state’s if they have 25 or more employees and have been in business for at least two years.

New Jersey

Fact: An estimated 1.7 million NJ employees don’t have access to a retirement plan through their employer.
New plan: New Jersey Secure Choice Savings Program, very similar to the plans in Illinois and Massachusetts.
State requirements for participation: NJ employers that have at least 25 employee and have been in business for two years are required to comply.


Fact: Similarly, 1 million OR residents don’t have access to an employer provided retirement plan.
New plan: Oregon Retirement Savings Plan
State requirements for participation: Employers that don’t provide a retirement plan must give their employees the chance to contribute to the state run option.


Fact: Less than 50% of Washington employees participate in a work-sponsored retirement plan.
New plan: Washington Small Business Retirement Marketplace is an online marketplace where low-cost retirement plans are available. 
State requirements for participation: It is voluntary for employers and employees to use the marketplace, but only those with less than 100 employees are eligible.

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