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State-Run Retirement Programs: Requirements for Employers

Several states have enacted legislation to create state-run retirement programs that workers in the private sector can join. These are typically payroll withholding savings plans using individual retirement accounts (IRAs). Even though these plans are run by the state and don't require (or even allow) employers to contribute to them, they typically still impose some obligations on employers. Here are answers to frequently asked questions about these programs and encouraging workers to save for retirement.

Q: What states have established a state-run retirement program?

A: To date, the following states have enacted legislation to establish a state-run retirement program or marketplace:








Colorado Secure Savings Program


Illinois Secure Choice


Maine Retirement Savings Program




Massachusetts Defined Contribution CORE Plan

New Jersey

New Jersey Secure Choice Savings Plan

New Mexico

New Mexico Work and Save Act

New York

New York Secure Choice Savings Plan




Green Mountain Secure Retirement Plan


Virginia Saves


Washington Small Business Retirement Marketplace

Keep in mind some of these programs are already active while others have yet to begin the implementation process. Check your state's program for details about its status.

Q: If my business is in one of these states, am I required to participate in the state-run program?

A: Many of these programs require covered employers to either enroll their employees into the state-sponsored retirement program or sponsor a qualifying plan of their own through the commercial market, such as a 401(k) plan, SIMPLE IRA, or SEP. However, these requirements are often limited to employers of a certain size. For example, in California, only employers with five or more employees must participate in CalSavers or offer a qualifying retirement plan.

A few states don't require participation even if employers don't offer a retirement plan. For example, the Massachusetts Defined Contribution CORE Plan is open to certain nonprofit organizations only and participation is voluntary.

Check your state law for details.

Q: What requirements do these programs impose on employers that don't offer a retirement program already?

A: The requirements can differ depending on the state. For example, Connecticut employers with five or more employees in the state — at least five of whom have been paid more than $5,000 in the calendar year — are required to register with and facilitate the MyCTSavings program if they don't offer a retirement plan. These employers must also provide employees with information on the state program, enroll employees in the program, and deduct and remit employee contributions.

Note: In some states, employers may be required to register with the program even if they already offer a retirement plan for the purposes of certifying that they are exempt from participating in the state-run program.

Q: When do I have to register with the state-run program if I am required to do so?

A: Each state has its own deadlines for registering, but they typically differ based on employer size. For example, Illinois has set the following deadlines for employers to register with Secure Choice:

  • November 1, 2022 (employers with 16 to 24 employees).
  • November 1, 2023 (employers with 5 to 15 employees).

The deadlines for employers with 25 or more employees have already passed.

Note: Employers are often allowed to register at any time prior to the applicable deadline.

Q: Are employees required to participate in the state-run plan?

A: When an employer doesn't already offer a retirement plan, employees are often automatically enrolled in the state-run plan, but employees may opt out of the plan or change how much they contribute.

Q: Should I participate in the state-run program or offer my own plan?

A: You should weigh the advantages and disadvantages of the state-run program and commercial plans to help make a decision that best meets your business needs.

Q: What are the advantages of offering a retirement plan?

A: The right retirement benefit can help you attract and retain talented employees and demonstrate your commitment to employees' long-term financial goals. For instance, in a tight labor market, offering a retirement plan can help make you an employer of choice among candidates contemplating multiple offers. Saving for retirement can also help reduce financial stress among employees.

Q: I offer a retirement plan but few of my employees participate. What can I do encourage more employees to save for retirement?

A: Here are some steps you can take to encourage employees to save for retirement:

  • Create awareness campaigns to provide information about the various costs they may face after they leave the workforce.
  • Remind employees about your retirement plan during open enrollment.
  • Highlight how easy it is to participate via payroll deductions.
  • Use plan features like automatic enrollment and auto escalation of contributions to encourage participation.
  • Offer tools that estimate how much employees can save by making/increasing contributions to the plan.
  • Consider plans that allow employer contributions.


Employers in the states mentioned above should review applicable laws carefully to ensure compliance. Even if you aren't located in one of these states, many other jurisdictions are considering similar programs, so watch for developments.

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