BUSINESS & ECONOMY

Assembly Considers Requiring Businesses with 25+ Employees to Provide Retirement Plans for Workers

By Michael Aron
Chief Political Correspondent

Assembly Speaker Vincent Prieto is lead sponsor of The New Jersey Secure Choice Savings Program Act bill.

It would mandate that employers with more than 25 employees participate in a state-run 401K type retirement plan if they don’t already provide one.

AARP is one of the groups leading the charge for it.

When asked if most companies with more than 25 employees by and large already have some kind of retirement plan Senior Legislative Representative for AARP Sarah Mysiewicz Gill said, “A lot of the bigger companies have retirement plans already, but it’s the middle size companies that really need help and also the small ones as well which can opt in to ‘Secure Choice’ if they want to.”

The proponents say 1.7 million New Jersey workers have no retirement plan and when they get old will be forced to live on Social Security.

“The average Social Security payment of $1,377 in New Jersey is just simply not enough to live on. That can’t be it. It’s really the time for New Jersey to help lead the way in the nation out of this looming retirement security crisis. Let’s take a step forward to help level the field,” said Ann Vardeman of New Jersey Citizen Action.

“One of the biggest issues for us with this bill is that it is an employer mandate. It does mandate that employers that have 25 or more employees participate or set up 401K plans. It can be difficult to set up a 401K plan. I tried myself when I was on the board for a non-profit. It can be difficult. There can be a lot of reasons why an employer may not be able to do that,” said Stephanie Riehl of the NJBIA.

Business representatives testified that their members are already coping with new mandates: the Affordable Care Act, minimum wage and paid sick leave. But that’s only one issue.

“The second issue is that it would establish a state-run sponsored retirement plan. You’ll forgive me when I say that we don’t have a lot of faith in the state being able to implement and run a plan as effectively as the open market does,” said Paul Bent of NAIFA.

The Assembly Labor Committee voted 6 to 2 to release the bill, one Republican — Ron Dancer — joining the five Democrats. The bill has three Republican sponsors.

It appears to be on the fast track. When we asked a couple of business lobbyists to expand their arguments on camera, they begged off, one saying “we’re taking a light touch on this.” So the New Jersey Secure Choice Savings Program Act now goes to the full Assembly.