Employers

Retirement Plans for Your Employees is Good Business Practice

Think your company is too small to invest in retirement benefits? Think again!

If you are an employer, we have good news! We don’t charge the fees that most institutions do. There are no penalties if you no longer want to offer your employees retirement benefits with us, and your employees will still be able to keep their accounts as individuals. There is minimal risk to you as an employer.

Why you should offer retirement plans to your employees

Attract and retain talented employees

Our goal is to make retirement savings accessible and affordable for everyone with reasonable pricing and the best interest returns.

Increase employee satisfaction and loyalty

A comprehensive retirement plan can also help increase employee satisfaction and loyalty. When employees feel that their employer is invested in their future, they are more likely to feel valued and committed to the company’s success.

Tax advantages for your business

Offering a retirement plan can also provide tax advantages for your business. Employer contributions to retirement plans are tax-deductible, which can help reduce your business’s tax liability.

Encourage employee savings

Retirement plans can encourage employees to save for their future, which can help them achieve financial security in retirement. When employees have a retirement plan available to them, they are more likely to participate and contribute to the plan.

Enhance your company’s reputation

Offering a retirement plan can enhance your company’s reputation as a responsible employer that cares about its employees’ long-term financial well-being. This can help attract customers and investors who value socially responsible business practices.

Employer Incentive Plan

Employer gets 6% return on the total amount invested in the plan. Employers may choose to do a matching plan (recommended) or make capital investments within the company.

FAQ

State-mandated retirement plans are the result of legislation requiring small businesses to provide retirement benefits to their employees. These employers now have the added responsibility of choosing a plan that’s right for their business and performing various administrative tasks to comply with the laws. Their employees must also find the plan beneficial – a critical aspect to retaining top talent.

Which states have mandatory retirement plans?

More than 30 states have considered enacting state-mandated retirement plan legislation. Of them, 13 have signed such programs into law. These states are listed as follows:

Retirement legislation state by state

Active state-sponsored retirement plans

State	Retirement Legislation
California	CalSavers
Connecticut	MyCTSavings
Illinois	Illinois Secure Choice
Massachusetts	Massachusetts Defined Contribution CORE Plan
Oregon	OregonSaves
Washington	Washington Small Business Retirement Marketplace

Legislation passed; implementation scheduled

State	Retirement Legislation	Target Date
Colorado	Colorado Secure Savings Program	End of 2021-2022
Maine	Maine Retirement Savings Program	July 2023
Maryland	Maryland Small Business Retirement Savings Program	Mid 2022
New Jersey	New Jersey Secure Choice Savings Plan	March 2022
New Mexico	New Mexico Work and Save Act	January 2022
Virginia	Virginia Saves	July 2023
Vermont	Green Mountain Secure Retirement Plan	TBD 2021

Legislation passed; implementation not scheduled

State	Retirement Legislation
New York	New York Secure Choice Savings Plan
New York City	Retirement Security for All Act

What are state-mandated retirement plans?

When states require employers to provide their employees with retirement savings opportunities, it’s known as a state-mandated retirement. Businesses generally have two ways to comply with these laws – enroll their employees into a state-sponsored retirement program or sponsor a plan of their own through the private market, such as those offered by ADP.

Why are states mandating these retirement plans?

Some states have begun mandating retirement plans to address the retirement savings gap in this country. Their response is based on research that shows:

The average working household has virtually no retirement savings
Employees are more likely to save when they have access to 401K Plan or similar plan by their employer
Only four in 10 businesses with less than 100 employees offer retirement benefits

What type of retirement plans are these?

State-sponsored retirement plans are commonly Roth individual retirement accounts (IRA). With this type of savings, employee contributions are deducted from post-tax income, which means their money is generally tax free at the time of withdrawal. In comparison, a traditional IRA is funded with pretax payroll deductions, thereby lowering the employee’s taxable income. When the individual draws from the account, however, the money is subject to taxes.

What are these retirement plans for?

State-mandated retirement plans are designed for low to moderate income wage earners who work for small and midsized businesses in the public sector. These plans are entirely separate from the state-funded retirement programs for public employees.

What are the requirements for employers and employees?

The requirements for state-mandated retirement benefits largely depend on individual jurisdictions, the size of the organization and how long it has been in business. Generally, employers must enroll their employees in the state-sponsored program if they don’t offer another retirement plan and perform the detailed administrative and reporting work necessary under state law. These tasks can be daunting, which is why many employers choose one of Oasis Retirement Trust easy-to-manage plans instead.

Employee requirements also may vary. In states that sponsor Roth IRAs, participants must not earn more than the IRS maximum to be eligible for such plans.

How do state-mandated retirement plans work?

The inner workings of mandatory retirement plans depend on the state, but there are some commonalities. Typically, plans are administered through payroll deductions and employees are automatically enrolled but can opt out or change how much they contribute. Employers themselves are usually prohibited from contributing to the plans.

There are, however, some exceptions to these general guidelines. For instance, Massachusetts permits Safe Harbor matching contributions by employers. Business owners should check with local authorities for specific information on how their state-sponsored retirement plan works.