New Jersey Gov. Chris Christie signed a bill on Tuesday to create a retirement plan marketplace for New Jersey businesses with fewer than 100 employees.
The voluntary program will match small businesses to various existing private-sector retirement plans.
At minimum, the marketplace must include a payroll-deferred individual retirement account and SIMPLE IRA. The marketplace must include these options for employers. Employers can choose whether or not to offer these options to employees. The marketplace will also include the federal MyRA program.
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Participating providers must include at minimum a target-date option and a balanced fund option, and participants cannot be charged more than 100 basis points of their total assets in annual fees.
STEP FORWARD
Tuesday's bill was a compromise that differed from the original version passed by the state Legislature earlier this month. The original bill, which Mr. Christie vetoed, called for a state-run, auto-enrollment, payroll-deferred retirement savings account for private-sector employees who lacked workplace retirement plans. Participation would have been mandatory for businesses with 25 or more employees that did not already offer a retirement plan, unless their employees opted out.
In his recommendations to the Legislature following his veto, Mr. Christie called mandatory participation under the threat of fines “unnecessarily burdensome” and recommended a voluntary program to connect employers with existing retirement plans.
Vincent Prieto, speaker of the New Jersey General Assembly and one the bill's sponsors, said the modified bill was “not what I intended, but it's a step forward.” He said he plans to “revisit the issue next session.”
