Bill > A4562

This bill allows state, municipal, and county employers to implement automatic enrollment in deferred compensation plans (retirement savings programs where employees can voluntarily defer a portion of their salary) for their employees. Under the new provisions, employers can establish a default deferral percentage from an employee's salary that will be automatically deducted unless the employee specifically opts out or chooses a different percentage. The bill requires that employees receive notice and a reasonable opportunity to modify or terminate these automatic deductions. For unionized employees, the automatic enrollment terms must be negotiated with the union's majority representative. The bill also allows employers to set up periodic escalation of deferral percentages and default reenrollment for employees not participating or participating at low levels. Additionally, employers must designate a default investment option for employees who do not make an affirmative investment election. The legislation applies to both state employees and employees of municipalities, counties, and their authorities, with some provisions specifically addressing state employees hired on or after January 1 following the bill's enactment. The bill aims to encourage retirement savings by making participation in deferred compensation plans more automatic while still preserving employee choice.

Government Affairs

https://www.njleg.state.nj.us/bill-search/2024/A4562