State Passes Retirement Program

On May 19, 2023, Gov. Walz signed a bill creating a state-sponsored program allowing private sector employees to save for retirement. Starting January 1, 2025, the program (administered by a board) will establish individual retirement accounts (IRAs) into which eligible employees will contribute a designated portion of their pay.

Employers in Minnesota with five or more employees that do not provide retirement benefits to those employees are required to enroll its employees in the program and withhold payroll deduction contributions from each covered employee's paycheck, unless the covered employee has elected not to contribute. Those employers must also provide information prepared by the program to all covered employees. The information must be provided to each covered employee at least 30 days prior to the date of the first paycheck from which employee contributions could be deducted for transmittal to the program if the covered employee does not elect to opt out of the program.

Since this is a new program, there are not many details about how the state will administer it. We will report new information concerning the program in future editions of Compliance Corner. Employers with employees in the state should be aware of this new program.

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