You may click the video above to watch and learn as our advisor, Jenna Witherbee, discusses the New Secure Choice Law for Minnesota employers in this 30-minute webinar.
See below for details on this presentation:
Minnesota’s Secure Choice Retirement Program Overview
The Minnesota Secure Choice Retirement Program aims to enhance retirement savings for employees without access to workplace retirement plans.
Established to encourage saving for retirement among employees of employers without a retirement plan
Effective date is January 1, 2026
Approximately 32% of Minnesota's private sector workers lack access to a retirement savings plan.
Employer Requirements for Secure Choice
Employers with five or more employees must comply with the Secure Choice program
Mandatory enrollment for employers without a retirement plan; employees can opt out
Employers must deduct 5% from employee wages, escalating by 1% annually until reaching 8%
Contributions are deposited into an IRA in the employee's name, with no employer contributions allowed
Compliance and Implementation Timeline
The Secure Choice Program will have a phased implementation approach
Soft launch and voluntary enrollment from January 19, 2026, to March 30, 2026
Mandatory compliance phase from April 1, 2026, to June 30, 2028.
Employers are responsible for deducting and remitting contributions
Investment Options and Employee Participation
Employees can choose between a Roth IRA and a Traditional IRA for their contributions
Default option is a Roth IRA, funded with after-tax dollars, allowing tax-free withdrawals after five years if the employee is 59½ or older.
Employees can opt out or adjust their contribution levels at any time
Comparison of Secure Choice and Employer-Sponsored Plans
The Secure Choice program offers a simpler alternative to traditional employer-sponsored retirement plans
Secure Choice requires minimal administration and no employer costs beyond payroll deductions
Employer-sponsored plans provide more flexibility, higher contribution limits, and the ability to offer employer contributions
Pooled Employer Plans (PEPs) Explained
PEPs allow multiple unrelated employers to join a single retirement plan, sharing administrative responsibilities
PEPs reduce fiduciary responsibilities for adopting employers and provide a professionally managed 401(k) benefit
These are cost-effective and suitable for small businesses looking to offer competitive retirement plans
Advantages of PEPs for Employers
Employers can benefit significantly from adopting a PEP.
Reduced administrative work and fiduciary burden, allowing focus on core business activities
Economies of scale can lead to a 30%-40% reduction in administrative fees
Expertise in compliance and risk management ensures adherence to regulatory requirements
Evaluation Criteria for Retirement Plan Options
Employers should consider various factors when evaluating retirement plan options
Key questions include compliance simplicity, cost to the employer, desire for employer match, and administrative capacity
Understanding workforce size and stability is crucial for selecting the right plan
Ideal Candidates for PEPs and Secure Choice
Certain employers are better suited for PEPs or the Secure Choice program
PEPs are ideal for employers overwhelmed with administrative duties or those seeking risk mitigation
Secure Choice may suit small businesses with minimal employee interest in retirement plans