State-mandated retirement plans: What US employers need to know

Retirement plans are no longer a “nice to have” to attract and retain top talent. In many parts of the US, they’re becoming non-negotiable — not just ethically, but legally.

If you have (or plan to have) employees in certain US states, you need to be aware of these mandated retirement plans. Because if you're not paying attention, you could be missing deadlines, racking up fines, or worse — letting your team down.

In this article, we’ll explain what state-mandated retirement plans are, which states have them, and what you need to do as an employer. So let’s jump straight in.

What is a state-mandated retirement plan?

A state-mandated retirement plan is exactly what it sounds like: a retirement savings program that certain states require employers to offer. These mandates are designed to close the retirement savings gap for workers who don’t have access to employer-sponsored retirement plans.

Not all states have them, but in the ones that do, they generally work as follows:

• If you’re an employer with a certain number of employees (usually five or more), and you don’t offer a retirement plan, you’re required to enroll your team in your state’s program.

• These plans are usually Roth IRA-based, and are automatically funded through payroll deductions.

• Your employees can opt out, but you (as the employer) can’t — unless you offer an alternative qualified retirement plan like a 401(k).

It’s crucial to note that these plans are only applicable if you don’t already offer a qualified retirement plan.

Which states have mandatory retirement plans?

As of April 2025, several US states have implemented (or are in the process of implementing) mandatory retirement savings programs, many of which are structured as Automatic Individual Retirement Accounts (Auto-IRAs). Below is a comprehensive overview of these states, their program statuses, and key details.

Remember, if you have employees in any of these states, you need to adhere to the rules.

California

CalSavers is one of the most mature programs, offering a Roth IRA for employees. Employers who don’t provide a retirement plan must register, with phased deadlines based on their company size.

Status: Active

Employer coverage: Employers with five or more employees are required to participate. On December 31, 2025, this mandate will extend to all employers.​

Penalties for non-compliance: Employers can face fines starting at $250 per eligible employee if non-compliant for 90 days after notice, increasing to $500 per employee after 180 days.

Colorado

The Colorado SecureSavings Program targets employers with over five employees, and at least two years in business. Employees are automatically enrolled in a Roth IRA, and the program integrates with payroll systems.

Status: Active​

Employer coverage: Employers with five or more employees (and who have been in business for at least two years) must participate.​

Penalties for non-compliance: Fines of $100 per eligible employee, up to a maximum of $5,000 annually.​

Connecticut

Connecticut mandates employers with five or more employees to enroll in MyCTSavings, an Auto-IRA program. Contributions are made via payroll deductions and follow a default escalation unless employees opt out.

Status: Active

Employer coverage: Employers with five or more employees (who paid more than $5,000 in taxable wages in the previous calendar year) are required to participate.

Penalties for non-compliance: Penalties may be imposed; legislation is currently under consideration.​

Delaware

The Delaware EARNS program rolled out through 2024, and employers with five or more employees must facilitate retirement savings unless offering a qualified plan.

Status: Active

Employer coverage: Employers with five or more employees (and who have been in business for at least six months) must participate.​

Penalties for non-compliance: Up to $250 per affected employee, with a maximum of $5,000 annually.​

Illinois

With Illinois Secure Choice, Illinois was one of the first states to launch a mandatory plan. Funds are managed professionally, and employees can opt out.

Status: Active

Employer coverage: Employers with five or more employees (who have been in operation for at least two years) must participate.

Penalties for non-compliance: $250 per employee for the first year of non-compliance; $500 per employee for each subsequent year.

Maine

Maine's Retirement Savings Program is new, with enforcement penalties starting in mid-2025. It’s a Roth IRA-based plan for employers with five or more employees, offering automatic enrollment and voluntary contributions.

Status: Active​

Employer coverage: Employers with five or more employees are required to participate.​

Penalties for non-compliance: Penalties commence on July 1, 2025, starting at $20 per eligible employee, escalating in subsequent years.​

Maryland

Instead of fines, MarylandSaves incentivizes participation by waiving the annual business filing fee. Employers must register if they use payroll services and don’t offer a retirement plan.

Status: Active​

Employer coverage: Employers with at least one W-2 employee (and who have been in operation for at least two years, and use an automated payroll system) must participate.

Incentives for compliance: Participating employers receive a waiver of the $300 annual report filing fee.​

New Jersey

RetireReadyNJ phases in based on employer size, starting at 25 employees.

Status: Active​

Employer coverage: Employers with 25 or more employees (and who have been in business for at least two years) must participate.

Penalties for non-compliance: After a written warning in the first year, fines range from $100 per employee in the second year to $500 per employee in the fifth year and beyond.​

Oregon

The first state to launch a mandatory program, OregonSaves is now fully implemented. All businesses without a plan must register and automatically enroll employees into Roth IRAs.

Status: Active

Employer coverage: All employers who do not offer a qualified retirement plan must participate.​

Penalties for non-compliance: $100 per eligible employee, up to a maximum of $5,000 annually.​

Virginia

Virginia mandates that businesses with 25+ eligible employees and over two years in operation must offer RetirePath VA or a qualified alternative.

Status: Active​

Employer coverage: Employers with 25 or more eligible employees (and who have been in business for at least two years) must participate.​

Penalties for non-compliance: Up to $200 per eligible employee annually.​

Nevada

The Nevada Employee Savings Trust (NEST) was enacted in June 2023, and will be implemented based on employer size between July 2025 and January 2027.

Status: Implementation in progress​

Employer coverage: Employers with five or more employees who have been in business for at least three years must enrol. 

Penalties for non-compliance: Specific penalty measures are yet to be finalized.​

To see a full breakdown of the various employment laws and payroll taxes by state, check out our free US State Explorer tool:

What do you need to do as an employer?

If you have employees in one (or more) of these states and you meet the eligibility requirements listed above, you will need to comply.

To do this:

1. Register with the relevant program

Go to the program’s official website (e.g., CalSavers, OregonSaves). Each state typically has its own online portal.

Create an employer account and provide your basic business and employee information.

2. Notify your employees

Each program usually provides template materials that inform your employees about:

• The program

• Their right to opt out

• How contributions work

You’re responsible for distributing these. It’s also advisable to provide support in-house for your employees, and create a channel where they can ask questions.

3. Set up payroll deductions

Use your payroll system to:

• Automatically enroll eligible employees

• Withhold a default % of pay (often 5%) and remit to the program

Remember that employees can adjust their contributions or opt out at any time.

4. Stay compliant

Ensure you continue to meet any deadlines, and be aware of any phased rollouts or new state programs.

You must also ensure you update your program account when an eligible employee onboards or leaves.

How can Remote help?

Constantly keeping track of the nuances and legal obligations in each state you hire in is tricky, costing you time, money, and resources.

But when you run payroll through Remote, we handle all of this for you. Specifically, we:

• Ensure you are always fully compliant with all local, state, and federal employment and payroll tax laws — including state retirement plans. We don’t cut corners, and we never will.

• Calculate and withhold the correct amount for eligible employees (as well as all other multi-level withholding requirements).

• Provide expert, on-the-ground advice and support whenever you need it.

In addition, when you hire through our employer of record (EOR) platform, we also enable you to offer tailored, competitive benefits — including retirement plans. This is highly useful if you don’t want to enroll into a state-mandated program.

To learn more about how we can remove all your payroll and compliance headaches, speak to one of our friendly experts today.

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