43:23-26 Implementation of program, enrollment of employees.
14. The program shall be implemented, and enrollment of employees shall begin, within 24 months after the effective date of this act. The board may extend the time period within which the program is implemented and enrollment of employees begins, but not by more than 12 months. The board shall implement the program in two phases based on the size of the employers participating, as measured by the number of employees per employer, with the program implemented sooner for larger employers. The following provisions of this section shall be in force after the board opens the program for enrollment:
a. Each employer shall establish a payroll deposit retirement savings arrangement to allow each employee to participate in the program not more than nine months after the board opens the program for enrollment.
b. Employers shall automatically enroll in the program each of their employees who has not opted out of participation in the program using the form described in subsection d. of section 13 of this act and shall provide payroll deposit retirement savings arrangements for their employees and, on behalf of the employees, deposit these funds into the program. Small employers may, but are not required to, provide payroll deposit retirement savings arrangements for each employee who elects to participate in the program.
c. Enrollees shall have the ability to select a contribution level into the fund. This level may be expressed as a percentage of wages or as a dollar amount up to the deductible amount for the enrollee's taxable year under section 219(b)(1)(A) of the Internal Revenue Code. Enrollees may change their contribution level no more than once every calendar quarter, subject to rules and regulations promulgated by the board. If an enrollee fails to select a contribution level using the form described in subsection d. of section 13 of this act, then the enrollee shall contribute three percent of the enrollee's wages to the program, so long as the contributions do not cause the enrollee's total contributions to IRAs for the year to exceed the deductible amount for the enrollee's taxable year under section 219(b)(1)(A) of the Internal Revenue Code.
d. Enrollees may select an investment option from the permitted investment options listed in section 11 of this act. Enrollees may change their investment option in the manner specified by rules and regulations promulgated by the board, which shall include specifications regarding how frequently enrollees may change their investment options. In the event that an enrollee fails to select an investment option, that enrollee shall be placed in the investment option selected by the board as the default under subsection c. of section 11 of this act. If the board has not selected a default investment option under subsection c. of section 11 of this act, then an enrollee who fails to select an investment option shall be placed in the life-cycle fund investment option.
e. Following initial implementation of the program pursuant to this section, at least once every year, participating employers shall designate an open enrollment period during which employees who previously opted out of the program may enroll in the program.
f. (1) For any employee hired by an employer more than six months after the board opens the program for enrollment, the employer shall enroll the employee in the program no later than three months following the date of hire of the employee, unless the employee opts out of enrollment in the program prior to being enrolled.
(2) Any newly hired employee who has previously been enrolled in the program shall have the option of making direct contributions into that employee's existing account, provided that paragraph (1) of this subsection also applies to the employer of a newly hired employee who has been previously enrolled in the program.
g. An employee who opts out of the program who subsequently wants to participate through the participating employer's payroll deposit retirement savings arrangement may only enroll during the participating employer's designated open enrollment period or if permitted by the participating employer at an earlier time.
h. Employers shall retain the option at all times to set up or provide coverage under any type of employer-sponsored retirement plan or to elect to offer coverage through a plan sponsored by an employee leasing company or professional employer organization with which that employer has an employee leasing agreement or professional employer agreement as such terms are defined in section 1 of P.L.2001, c.260 (C. 34:8-67), such as a defined benefit plan or a 401(k), Simplified Employee Pension (SEP) plan, or Savings Incentive Match Plan for Employees (SIMPLE) plan, or to offer an automatic enrollment payroll deduction IRA, instead of having a payroll deposit retirement savings arrangement to allow employee participation in the program.
i. An employee may terminate his or her participation in the program at any time in a manner prescribed by the board.
j. The board may establish and maintain an Internet website designed to assist employers in identifying private sector providers of retirement arrangements that can be set up by the employer rather than allowing employee participation in the program under this act. The board shall provide public notice of the availability of and the process for inclusion on the Internet website before it becomes publicly available.
k. Each employer is responsible for the tasks described in subsections a. and b. of this section, but the employer is permitted to contract with a third party, such as a payroll service provider or a professional employer organization, to perform those tasks on behalf of the employer.
L.2019, c.56, s.14.