skip to content

Frequently Asked Questions

Which employers will be required to participate in the Program?
Employers with 5 or more employees who do not offer employees a retirement plan are required to enroll in the plan.  Employers may not opt out of the program.

Do employers have to contribute to the Program?
No, employer contributions are not permitted. The only contributions to the Program will be wages withheld from employees’ pay checks.  

What is the employer’s responsibility and how much will it cost?
Employers will be required to deduct contributions from employees’ paychecks and remit those to the Program. Employers will be responsible for any cost associated with deducting the contributions and remitting them to the recordkeeper. The recordkeeper will offer several ways to interface with current payroll software or payroll firms. We anticipate that there will be no other cost to the employer. 

The employer is also required to distribute information to employees.  The information will be provided by the Program. 

When do employers have to start participating in the Program?
The Program will first be operational sometime on or after January 1, 2026, and employers will be given time after that to enroll in the Program and begin payroll deduction contributions. The Program will help employers get started.  

What percentage or amount of pay will employers be required to deduct from employee paychecks?
The Board of Directors will establish the percentage of pay to initially be deducted from each employee’s paycheck. However, employees will be able to change the amount or opt out of the program entirely.

What if employees do not want to contribute to the Program?
Employees may opt out of participating in the program.

What kind of individual retirement account (IRA) will employees’ contributions be deposited into?
If the employee does not elect otherwise, the employee’s payroll deduction contributions will be deposited into a Roth IRA. The Program will also offer traditional IRAs so the employee can elect to contribute on a pre-tax basis, and the contributions will be deposited into a traditional IRA. 

Roth IRA contributions are made with after tax dollars and neither the contributions or the earnings on those contributions will be taxed when withdrawn if the account has been established for at least 5 years and the employee is over age 59 ½.

Will employees be able to withdraw contributions made to the Program prior to retirement?  
Employees will be able to withdraw their funds from their IRA in the Program prior to retirement. Whether the withdrawal will be taxed depends on whether the IRA is a Roth IRA or traditional IRA, the age of the employee, and other considerations.  The Program will handle all withdrawals and provide tax information regarding the withdrawals. 

back to top