State retirement mandates are a growing trend across the country, with the aim to address the retirement savings gap and ensure everyone has access to an employer sponsored retirement savings program. If you're a business owner, that means the rules may not be optional anymore - and the deadlines are coming fast
You may also have heard that state-sponsored retirement savings plans that also impact small employers. If there is an active mandate or one being implemented in your state, you’re probably wondering if it applies to you.
This article provides a state-by-state breakdown of the current landscape, covering states with active mandates, pending legislation, and those with no mandates at all. With this information you can stay compliant, avoid fines, and decide if a traditional 401(k) might be a smarter fit for your team.
What are the state-mandated retirement programs?
State-mandated retirement programs are not defined benefit plans like pensions. Instead, they are defined contribution plans, such as individual retirement accounts (IRAs). The states with these mandates automatically enroll employees, who have the choice to opt out of the programs. That’s why the automatic IRAs are known as auto-IRAs, though other names for the programs are used, such as “work and save” and “secure choice.”
The state auto-IRAs are mandatory for any company that doesn’t already offer an employer-sponsored option and has met the other criteria for eligibility, such as employer size. While the auto-IRAs are typically Roth IRAs with after-tax contributions, some states also offer Traditional IRAs for pre-tax contributions through their programs.
As of January 2026, retirement mandates are no longer rare — they’re spreading across the country. More than a dozen states already require certain employers to offer a plan, and several others are in the process of launching. The common thread: states want to close the retirement savings gap by making sure workers have access to payroll-deduction savings programs.
Here are the big things employers may need to know:
This is a growing trend: More states are rolling out mandates every year, and deadlines are getting closer.
Deadlines are coming fast: Each state sets its own timeline, and some are already wrapping up final phases. In California, for example, the last deadline is December 31, 2025 - when even businesses with just one employee must comply or face fines.
Requirements vary: Every state has its own rules about which businesses are covered and what happens if you don’t comply.
Penalties can be steep: Many states fine businesses for non-compliance - sometimes hundreds of dollars per employee, per year.
Location matters: You may have to follow the rules of a state where your employees live or work, even if your company is based elsewhere.
Most programs are auto-IRAs: These give employees a way to save but come with lower contribution limits and no employer match compared to a 401(k).
A federal boost is coming: In 2027 the Saver’s Match will start putting up to $1,000 a year into eligible workers’ retirement accounts. That could make helping your team save now more valuable - and if you choose a plan that lets employees save more (like a 401(k)), they could be able to capture a bigger portion of that benefit. You may want to evaluate your business objective to determine if this type of plan is right for you.
State-by-State Breakdown
California
Mandate Status: Active for businesses with 1 or more employees. Starting December 31, 2025: Mandate expands to cover any business with at least one W-2 employee.
Program Name: CalSavers
Type of Plan: Auto-IRA
Fines for Non-compliance: Miss the deadline and it’s $250 per employee. Stay non-compliant another 90 days and the fine jumps by $500 per employee — that’s up to $750 per worker if you ignore the mandate.
California launched CalSavers back in 2019, rolling it out in stages. Larger employers went first, and now the final group - the smallest businesses - comes due at the end of 2025.
See how we compare to CalSavers here, and for more detail on this mandate, check out our detailed guide on Calsavers.
Colorado
Mandate Status: Active since October 2022. Applies to businesses with 5 or more employees that have been in business for at least two years and don’t already offer a qualified plan.
Program Name: Colorado SecureSavings Program.
Type of Plan: Auto-IRA.
Fines for Non-compliance: $100 per eligible employee per year, not to exceed $5,000 annually. Enforcement of fines will not begin until at least one year after the program is established or one year after an employer is scheduled to enter the program, whichever is later.
Connecticut
Mandate Status: Active since 2022. Applies to businesses with 5 or more employees who have paid wages for the last three months and don’t already offer a qualified plan.
Program Name: MyCTSavings.
Type of Plan: Auto-IRA.
Fines for Non-compliance: Effective July 1, 2025 there is a three-strike enforcement process, with escalating annual penalties for noncompliance. Penalties range from $500 to $1,500, depending on the size of the employer.
Delaware
Mandate Status: Active since 2024. Applies to businesses with 5 or more employees that don’t already offer a qualified plan
Program Name: Delaware EARNS (Expanding Access for Retirement and Necessary Savings).
Type of Plan: Auto-IRA.
Fines for Non-compliance: An annual penalty of $250 per employee, up to a maximum of $5,000 per year.
Illinois
Mandate Status: Active since 2018. Applies to businesses with 5 or more employees in business every quarter of the previous year, that have been in business for at least two years, and don’t already offer a qualified plan.
Program Name: Illinois Secure Choice.
Type of Plan: Auto-IRA.
Fines for Non-compliance: Fines of $250 per employee for the first year, and $500 per employee for each subsequent year.
Maine
Mandate Status: Active since 2024. Applies to businesses with 5 or more employees that have been in business for at least two years and don’t already offer a qualified plan.
Program Name: Maine Retirement Investment Trust (MERIT).
Type of Plan: Auto-IRA.
Fines for Non-compliance: Penalties will be $20 per eligible employee from July 1, 2025, to July 30, 2026, and will increase in the following years.
Maryland
Mandate Status: Active since 2022. Applies to businesses with at least one employee over the age of 18, that have been in operation for at least two calendar years, that use an automated payroll service and don’t already offer a qualified plan.
Program Name: MarylandSaves.
Type of Plan: Auto-IRA.
Fines for Non-compliance: No current penalties.
Massachusetts
Mandate Status: Active, but voluntary. Applies to non-profit employers with 20 or fewer employees as an alternative to a more traditional 401(k).
Program Name: Massachusetts Defined Contribution CORE Plan.
Type of Plan: Multiple Employer Plan (MEP).
Fines for Non-compliance: No current penalties.
Minnesota
Mandate Status: Active with voluntary enrollment between January 19 - March 30, 2026. Businesses with 100+ employees must comply by registering between April–June 2026. Businesses with 50-99 employees must comply by registering between July–Dec 2026
Program Name: Minnesota Secure Choice Retirement Program
Type of Plan: Auto-IRA.
Fines for Non-compliance: No current penalties.
Nevada
Mandate Status: Active since 2023. Applies to businesses with 6 or more employees that have been in business for at least three years and don’t already offer a qualified plan.
Program Name: Nevada Employee Savings Trust (NEST).
Type of Plan: Auto-IRA.
Fines for Non-compliance: Still being determined.
New Jersey
Mandate Status: Active. Applies to businesses with 10 or more employees that have been in operation for at least two years and don’t already offer a qualified plan.
Program Name: RetireReady NJ.
Type of Plan: Auto-IRA.
Fines for Non-compliance: Fines can include a written warning in the first year and a $100 fine in year two. In years three and four, employers could receive a $250 fine for each employee who wasn't enrolled in the program or didn't opt out.
New York
Mandate Status: Active since October 2025. Applies to businesses with 10+ employees that have been in business for at least two years and don’t already offer a qualified plan. Businesses with 30 or more employees are required to comply by March 18, 2026; 15 to 29 employees by May 15, 2026; 10 to 14 employees by July 15, 2026.
Program Name: New York State Secure Choice Savings Program
Type of Plan: Auto-IRA.
Fines for Non-compliance:
Oregon
Mandate Status: Active since 2017. Applies to businesses with 1 or more employees that don’t already offer a qualified plan.
Program Name: OregonSaves.
Type of Plan: Auto-IRA.
Fines for Non-compliance: Fines of $100 per employee, up to a maximum of $5,000 per year.
Rhode Island
Mandate Status: Active since October 2025. Applies to businesses with 5 or more employees that don’t already offer a qualified plan; .
Program Name: RISavers
Type of Plan: Auto-IRA.
Fines for Non-compliance:
Vermont
Mandate Status: Active since 2024. Applies to businesses with 5 or more employees that have been in business for at least two years and don’t already offer a qualified plan.
Program Name: VTSaves.
Type of Plan: Auto-IRA.
Fines for Non-compliance: Fines begin at $10 per employee before October 1, 2025 and increase after that.
Virginia
Mandate Status: Active since 2023. Applies to businesses with 25 or more employees that have been in operation for at least two years and do not currently offer a qualified retirement plan.
Program Name: RetirePath Virginia.
Type of Plan: Auto-IRA.
Fines for Non-compliance: Up to $200 per eligible employee each year of non-compliance.
States Without Mandates
While the majority of states have either implemented or are considering retirement mandates, some states currently have no active or pending legislation. However, it's worth noting that this landscape is frequently evolving, and some of these states have seen early discussions or legislative proposals in the past.
Here is a list of states without mandates as of September 2025:
Idaho
Kansas
Kentucky
Louisiana
Montana
Nebraska
New Hampshire
North Dakota
Ohio
Oklahoma
South Dakota
Texas
Utah
Wyoming
States with no mandates but recently considered legislation:
Alabama
Alaska
Arizona
Arkansas
District of Columbia
Florida
Georgia
Indiana
Iowa
Michigan
Mississippi
North Carolina
Pennsylvania
South Carolina
Tennessee
West Virginia
Wisconsin
States with programs under development:
Hawaii → Hawaii Retirement Savings Program
Minnesota → Minnesota Secure Choice Retirement Program
Missouri → Show-Me MyRetirement Savings Plan (MEP)
New Mexico → New Mexico Work and Save IRA Program (Currently delayed)
Washington → Washington Saves
What This Means for Employers
For many employers, navigating the ever-changing landscape of state retirement mandates can feel like a guessing game. Varying requirements from state to state can be difficult to track and manage, especially when you’re managing these changes on top of running your business. It’s understandable if you feel overwhelmed by the details.
However, staying ahead of these changes can be crucial to avoid costly penalties. For example, in states like California and Illinois, fines for non-compliance can reach up to $500 per employee for each year of non-compliance.
Beyond avoiding penalties, proactively offering a retirement plan can give you a competitive edge in attracting and retaining talent since it is considered an important benefit by many employees. A private 401(k), in particular, can help reduce administrative complexity2 and provide features like higher contribution limits, tax benefits, and even employer-matching options that state plans may often lack.
For employers who want to stay on top of the retirement savings options for their employees, Gusto offers a straightforward, low-cost 401(k). We handle the admin, like government filings and compliance, and help to empower you with a platform that scales with your business.
Meet the mandate and empower your employees with Gusto
State retirement mandates can feel like just another item on a long compliance checklist. But what if, instead of simply meeting a requirement, you could use this opportunity to offer a more modern option for employees?
State IRA programs do the job of meeting the mandate. But if you want more control and benefits - like higher savings potential, tax perks or the option to match - that's where a 401(k) makes a real difference for you and your employees.
Here’s how a Gusto 401(k) offers more:
Powerful Tax Advantages: Your business can deduct any employer contributions on its federal income tax return. Additionally, powerful tax credits introduced by the SECURE 2.0 Act can cover up to 100% of plan administration costs for the first three years, making it more affordable than ever to get started.3
Higher Contribution Limits: A 401(k) allows for significantly higher savings potential. For 2026, the 401(k) contribution limit is more than three times higher than the limit for state-mandated IRA programs, empowering your employees to save more for retirement.4
Flexible plan design: 401(k) plans, like those offered by Gusto, offer more flexibility for businesses to make changes as you grow. This puts you in control of retirement plans for your employees.
The movement toward state-mandated retirement savings is rapidly expanding, with new programs being introduced each year. Staying informed and proactive could be the key to turning a compliance requirement into a strategic advantage for your business.
Gusto is designed to be your partner in this process, helping you set up a 401(k) that both ensures your compliance and provides a powerful benefit to attract and retain your team.
