Employers with five or more employees who do not offer employees a retirement plan are required to enroll in the plan. Employers may not opt out of the program.
Employers will be required to deduct contributions from employees’ paychecks and remit those to the Program. Employers will be responsible for any cost associated with deducting the contributions and remitting them to the recordkeeper. The Service Provider will offer several ways to interface with current payroll software or payroll firms. We anticipate that there will be no other cost to the employer. The employer is also required to distribute information to employees. The information will be provided by the Program.
The Program will first be operational sometime on or after January 1, 2026, and employers will be given time after that to enroll in the Program and begin payroll deduction contributions. The Program will help employers get started.
The Board of Directors is proposing an initial contribution of 5%, with annual automatic escalation of 1% until it reaches 8%. Employees will be able to lower or increase contributions at any time.
If the employee does not elect otherwise, the employee’s payroll deduction contributions will be deposited into a Roth IRA. The Program will also offer traditional IRAs so the employee can elect to contribute on a pre-tax basis, and the contributions will be deposited into a traditional IRA.
Roth IRA contributions are made with after tax dollars and neither the contributions or the earnings on those contributions will be taxed when withdrawn if the account has been established for at least five years and the employee is over age 59½.
Yes, since the employer operates in Minnesota, enrollment in the Program is required. However, employees will have the choice to opt out if they prefer.
Yes, since the employer operates in Minnesota, enrollment in the Program is required. However, employees will have the choice to opt out if they prefer.
