Common Questions
The RetireReady NJ threshold dropped to 10 employees — does my smaller business now have to act?
It may. In January 2026, New Jersey lowered the mandate threshold from 25 employees to 10. If you have 10 or more employees, have been in business at least two years, and don't currently offer a qualified retirement plan, you are now covered. The state has said the 10-employee expansion will reach employers in early September 2026, so if you're in the 10–24 range, this is the window to decide between the state program and sponsoring your own plan. If you'd like help weighing that decision, call our plan review line at 856.283.3959 ext. 301 — there's no charge to talk it through.
Is there a private alternative to RetireReady NJ that still keeps costs low?
Yes. For many small businesses, a Starter 401(k) — a simplified plan type created under the SECURE 2.0 Act — is a strong alternative to defaulting into the state program. It is designed to be low-cost and easy to administer, and because it is a true employer plan rather than a state-run IRA, it can qualify for SECURE 2.0 startup tax credits that may offset much of the early plan cost. It also avoids the Roth income limits that apply to the state program, so higher-earning owners are not phased out of contributing. In fairness, the state program has one edge worth knowing: its bare contribution limit is slightly higher than a Starter 401(k)'s in the first year, so the right choice depends on your goals. The real advantage of the 401(k) route is structure and room to grow — a Starter plan can later be upgraded to a full 401(k) with an employer match and higher contribution limits, something the state IRA can never do. If you'd like us to run the two side by side for your business, including the tax-credit math, call our plan review line at 856.283.3959 ext. 301 — there's no charge to talk it through.
Does my New Jersey business have to comply with RetireReady NJ?
New Jersey businesses with 10 or more employees that do not currently offer a qualified retirement plan are required to enroll in the RetireReady NJ program. If your business already sponsors a 401(k), 403(b), SEP IRA, SIMPLE IRA, or 457(b) governmental plan, you are exempt from the mandate — but the exemption is not automatic. You must certify your exemption on the RetireReady NJ website; simply having a plan in place does not remove you from the state's notices until that certification is on file. If you are unsure of your status or whether your certification has been filed, call our dedicated plan review line at 856.283.3959 ext. 301 — we will let you know where you stand at no charge.
Does having a 401(k) plan satisfy the RetireReady NJ mandate?
Yes. A properly structured 401(k) plan fully satisfies the RetireReady NJ requirement. It also delivers significantly more value to your employees than the state Roth IRA program — including higher contribution limits, the ability to add employer matching contributions, greater investment flexibility, and loan and hardship withdrawal provisions.
What are the penalties for non-compliance with RetireReady NJ?
New Jersey businesses that remain out of compliance face escalating penalties per eligible employee: $100 per employee in Year 2, $250 per employee in Years 3–4, and $500 per employee in Year 5 and beyond. Year 1 is a grace period with no penalty. These penalties apply per employee per year, so for a business with 30 employees in Year 5, the annual exposure could reach $15,000.
What is my fiduciary responsibility as a 401(k) plan sponsor?
Under ERISA, sponsoring a 401(k) makes you a plan fiduciary — legally required to act in the best interests of plan participants and their beneficiaries. This includes selecting investments prudently, ensuring fees are reasonable, maintaining proper plan documentation, and benchmarking the plan on a regular basis. Failure to meet these obligations can expose business owners to personal liability. Working with a CPFA®-credentialed advisor is one of the most effective ways to fulfill and document your fiduciary duties.
What does a complimentary 401(k) plan benchmark include?
Our complimentary plan benchmark review covers investment fund expenses, administrative fees, record-keeper costs, plan design features, and overall fee reasonableness relative to comparable plans in your industry and employee size tier. We provide a written summary of findings and specific recommendations — at no cost to you. Call 856.283.3959 ext. 301 to schedule.
What is the difference between 3(38), 3(21), and 3(16) fiduciary services?
A 3(38) investment manager has full discretionary authority over plan investment decisions and assumes liability for those choices, shifting the investment fiduciary risk away from you as the plan sponsor. Your responsibility as plan sponsor is to prudently select and monitor the 3(38) manager — a significantly lower bar than managing investments yourself. A 3(21) co-fiduciary provides investment recommendations and analysis, but the employer retains final decision-making authority and shares in the fiduciary responsibility for those decisions. A 3(16) plan administrator takes on the day-to-day administrative fiduciary functions — Form 5500 coordination, plan document compliance, participant notices, and distributions — reducing your operational burden and administrative liability. We coordinate with qualified 3(38) investment managers on your behalf, can connect you with a 3(21) co-fiduciary arrangement for employers who prefer to retain investment decision authority, and provide access to 3(16) services through our TPA relationships and bundled plan products.
Can my employees receive financial education through the plan?
Yes. As part of our plan sponsor relationships, we offer employee financial education sessions at least once annually — available on-site at your location or via virtual meeting. Topics include retirement income planning, Social Security claiming strategies, estate planning basics, investment fundamentals, and behavioral finance. These sessions are designed for plan participants and are not limited to 401(k) topics. Better-educated employees make better financial decisions and are more likely to stay with employers who invest in their financial well-being.
How do I know if my 401(k) fees are reasonable?
The only way to know is to benchmark. Fee reasonableness is evaluated relative to plans of comparable size and complexity in your industry — not against an absolute dollar figure. The DOL expects plan sponsors to conduct this review periodically. Our complimentary benchmark review does this analysis for you and provides a clear, written comparison so you have documentation that your fee review was conducted and what you found. If fees are out of line, we will tell you — and show you the alternatives.
Do you work with businesses outside New Jersey?
Yes. Our advisors are licensed in New Jersey, California, Delaware, New York, Virginia, Pennsylvania, Florida, Texas, North Carolina, Alaska, and Kentucky. Keep in mind that state auto-IRA mandates follow where your employees work, not just where your business is registered — and a growing number of states now have their own programs. If you have employees in more than one state, you may have obligations in several of them at once. A single qualified plan, such as a 401(k), can satisfy multiple state mandates simultaneously, which is often simpler than managing several separate state programs. Whether your team is in one state or many, we can help you navigate the applicable requirements and design a plan that works across your entire operation.
