State-Mandated Retirement Plans
State-mandated retirement plans require small businesses to provide retirement benefits to their employees.
Some states have already enacted that employers offer their employees a retirement savings plan to help individuals save for retirement. While the rules of these state mandated programs vary from state to state, millions of employees could gain access to an employer-sponsored retirement plan.
Employers can choose between enrolling employees into a state-sponsored program or offering a 401(k) retirement plan.
Each state has specific retirement plan adoption deadlines that companies will be required to meet to continue operating legally and avoid penalties.
Below is a listing of states that have enacted mandatory retirement plans:
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California
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Colorado
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Connecticut
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Delaware
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Hawaii (Voluntary)
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Illinois
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Maine
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Maryland
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New Jersey
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New Mexico
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New York
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Oregon
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Vermont
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Virginia
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Washington (Voluntary)
Small employers have two options to comply with these laws:
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State-sponsored retirement plan, or
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Sponsor their own retirement plan, such as Options 401K
State-sponsored retirement plans are typically Roth individual retirement accounts (IRAs). Employees sign up to participate and choose how much they wish to contribute. The employer withholds employee contributions from each paycheck and remits to the employee’s account. The state oversees the program and failure to comply with your state’s mandatory retirement plan may result in penalties, depending on the state.
Offering an Options 401(k) plan satisfies the state mandate and provides enhanced flexibility and plan design options designed for small employers.
Employer Benefits of offering Options 401K:
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Retain existing employees
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Offer a competitive employee benefits package
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Help employees save and prepare for retirement
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Secure 2.0 tax credits to pay for your plan
Options 401K plans are designed to put you in control of financial outcomes needed to reach your retirement goals.
