The Massachusetts Defined Contribution CORE Plan (“CORE Plan”) is solely designed for the nonprofit sector. The multiple employer plan (MEP) structure enables an adopting organization to participate in a 401(k) plan, benefiting from the cost savings and reduced administrative expenses that result from pooling resources.
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What is the Massachusetts CORE Plan?
It is the first state-facilitated MEP, and oversight of the program falls to the plan sponsor—the Commonwealth of Massachusetts Office of the State Treasurer and Receiver General (Office of the State Treasurer)—which assumes most of its administrative responsibilities. It was enacted in 2012, but didn’t launch until 2017. CORE Plan is available and voluntary for small nonprofit organizations in Massachusetts with no more than 20 employees. As of the end of 2024, it has enrolled more than 232 nonprofits.
How does the Massachusetts CORE Plan work?
It is unique among state-facilitated retirement plans for a few reasons:
- It’s a 401(k), not an individual retirement account (IRA)
- It’s only for nonprofits
- It has an MEP structure
While other state-facilitated, automatic enrollment retirement savings programs are IRAs, this one is a 401(k), which is typically seen with employer-sponsored plans. Employees who don’t opt out of the program within the 60-day notice period are auto-enrolled with pre-tax contributions taken from paychecks. A Roth 401(k) option is available for employees to elect if they prefer to use after-tax dollars from their paychecks.
With both types of accounts, if money is withdrawn before age 59½—and not rolled over into another eligible 401(k) or IRA—there is a 10% Internal Revenue Service (IRS) tax penalty. When deferrals from paychecks (also known as contributions) are pre-tax, the distributions taken after age 59½ are taxed as income based on when the withdrawals are made; whereas, Roth distributions are tax-free, which is the case for the contributions along with the earnings, as long as the account is at least five years old.
Enrollment and contribution options for employees
As long as someone is a common-law employee of a nonprofit offering the CORE Plan (i.e., the employer controls what work will be done and how it’s done), that individual can participate in the program and is provided protections under ERISA (Employee Retirement Income Security Act).
Empower will notify employees about auto-enrollment with a 60-day notice. If they don’t opt out, they will be automatically enrolled at 6% of their pay on a pretax basis, with annual increases of 1% or 2% (not exceeding 15%), as determined by the employer.
Employees can also change their contribution rate at any time, as long as the maximum limit for the year is not exceeded. That 401(k) limit for 2025 is $23,500. If you’re age 50 or older, you’re allowed an additional $7,500 as a catch-up contribution, and if you’re age 60 through 63, that additional contribution can be as high as $11,250.
There is an annual $65 participation fee deducted from employee account balances, as well as other deductions for administrative, advisory, or management fees for optional services or investment options.
Understanding the investment options
For those who prefer to select and forget, there are options that cater to a hands-off approach to passive investing. Similarly, for those who prefer a hands-on approach with active investing, there are options available. These are the several choices available for how to invest retirement contributions through the CORE Plan:
- Target Date Funds, which is a diversified mix of funds with asset allocations that automatically change over time to reduce risk as someone nears their year of retirement. The specific CORE target date fund a participant is placed in is based on birthdate.
| Date of birth | CORE Plan Retirement Funds | Expected retirement date range |
| 1998 or after | CORE 2065 Retirement Fund | 2063 or after |
| 1993 to 1997 | CORE 2060 Retirement Fund | 2058 to 2062 |
| 1988 to 1992 | CORE 2055 Retirement Fund | 2053 to 2057 |
| 1983 to 1987 | CORE 2050 Retirement Fund | 2048 to 2052 |
| 1978 to 1982 | CORE 2045 Retirement Fund | 2043 to 2047 |
| 1973 to 1977 | CORE 2040 Retirement Fund | 2038 to 2042 |
| 1968 to 1972 | CORE 2035 Retirement Fund | 2033 to 2037 |
| 1963 to 1967 | CORE 2030 Retirement Fund | 2028 to 2032 |
| 1958 to 1962 | CORE 2025 Retirement Fund | 2023 to 2027 |
| 1953 to 1957 | CORE 2020 Retirement Fund | 2018 to 2022 |
| 1948 to 1952 | CORE 2015 Retirement Fund | 2013 to 2017 |
- Empower Advisory Services offers a free “Online Advice” option to help build a retirement portfolio tailored to personal and financial goals. For a fee, its “My Total Retirement” professional account management solution can create a customized portfolio based on an individual’s retirement timeframe, life stages, risk tolerance, and other financial assets.
- CORE Objective-Based Funds, which allows someone to mix four diversified investment options:
- CORE Growth Fund—designed for those who have a longer time to save before retirement and can have a higher risk tolerance
- CORE Income Fund—aims to provide consistent retirement income while preserving capital
- CORE Inflation Fund—seeks returns in excess of US inflation over a full business cycle
- CORE Capital Preservation Fund—aims to preserve principal
- A self-directed brokerage account (SDBA)—experienced investors can pay a one-time $50 initial set-up fee to choose from a wide selection of mutual funds that aren’t part of the CORE Plan’s investment options. Additional fees may also be charged.
What employers need to know about the CORE Plan
Eligibility requirements for employers
If you can answer yes to these questions, as a nonprofit business in Massachusetts, you may be eligible for the CORE Plan:
- Are you registered as a 501(c) organization?
- Is your organization established, organized, or chartered under the laws of the Commonwealth of Massachusetts?
- Is your registered and official permanent address in Massachusetts?
- Are you registered as a nonprofit corporation with the Secretary of the Commonwealth of Massachusetts?
- Is your organization in “good standing” with its annual filings?
- Do you have 20 or fewer employees?
- Is your payroll administered via an eligible third-party payroll service (e.g., Gusto)?
Employer responsibilities under the CORE Plan
The program is designed to be simple for participating employers to facilitate. The Office of the State Treasurer assumes the fiduciary responsibility for the program, so employers do not assume liability for decisions and outcomes made in connection with it. Empower is the financial services and retirement planning company that handles the administrative, recordkeeping, communications, and investment education services for the CORE Plan.
According to Georgetown University McCourt School of Public Policy’s Center for Retirement Initiatives, there are these fees for employers, including the yearly administrative charge:
Employer contributions
More than 80% of nonprofits in Massachusetts offering the CORE Plan are matching contributions from employees. If a nonprofit employer chooses to make contributions to its employees’ 401(k)s, then it can use one of these two Safe Harbor options:
- Employer-matching contributions
- Non-elective contributions
When either option is selected, a certain amount must be contributed per paycheck based on the gross compensation for that pay period. Those contributions are completely vested, meaning once they go into the employees’ accounts, those funds belong to them. For 2025, the maximum combined limit for both employee contributions and employer contributions is $70,000.
For Safe Harbor employer-matching contributions, these are the mandatory amounts:
For Safe Harbor non-elective contributions, this is what’s required from employers:
How to register your Massachusetts nonprofit business for the CORE Plan
If you’re interested in signing up for the CORE Plan for nonprofits or have enrollment inquiries, you can do one of the following:
- Visit MA-Employer-Core.com and fill out the form
- Call 617-510-4036 to speak to a representative
Note: MA-Core.com is the portal for existing CORE Plan participants only.
Benefits of the Massachusetts CORE Plan
The state of Massachusetts has a noteworthy 18% of its workforce employed in the nonprofit sector—that’s even more than the total number of workers in both the manufacturing and financial services industries in the state. Plus, according to Empower, “Nearly 85% of employers adopting the CORE Plan are startups, meaning they did not offer any retirement benefits outside Social Security prior to adopting the CORE Plan.”
It has made a difference to help increase savings for a financially secure retirement: As of the end of December 2024, there were 2,399 funded accounts in the CORE Plan with $18,580 as an average account balance. There also are operational benefits for small businesses that offer a retirement savings plan: On Gusto’s platform, workers are on average 40% less likely to leave in the first year when they have a 401(k) plan.
Retirement benefits made easy with Gusto
Eligible nonprofit employers in Massachusetts who are evaluating the CORE Plan may want to compare it to 401(k)s from other partners to determine which offers the best fit. In general, 401(k) plans can offer these benefits:
- Reduced cost with tax credits: Eligible businesses may be able to claim up to $16,500 in tax credits for the first 3 years of their 401(k)—potentially covering 100% of plan costs. (Note: This would not apply to employers participating in the CORE Plan, since they are tax-exempt nonprofits that are ineligible for these credits.)
- Flexible and affordable plan options: Gusto’s growing list of 401(k) partners means plenty of plans to choose from at low price points to fit your budget.
- Integrated to make life easier: Gusto payroll syncs with your 401(k) plan to make automatic deductions. Employees manage their own Gusto accounts, with access to their pay stubs, W-2s, 401(k) accounts, and contribution details.
- Great benefits help you build a great team: Gusto’s analysis has even found that employer-sponsored 401(k) offerings increase employee retention.
This at-a-glance guide shows what the CORE PLAN as a 401(k) specifically offers in relation to what’s typically offered through other 401(k) programs:
If you have an existing Gusto account, learn more about our 401(k) partners here.
You can also create an account with Gusto to enroll in a 401(k) plan. Gusto’s platform makes that simple.
