State-mandated retirement plans offer private-sector employees access to a retirement savings option through a government-required program. The number of states that have enacted state retirement savings laws is rapidly expanding, introducing new compliance requirements for small and mid-sized businesses.

For employers, simply knowing a mandate exists is only part of the equation. You also need to understand whether the law applies to your business, what steps are required to comply, and whether a private retirement plan may be a better fit for your workforce and compliance needs.

The impact goes beyond payroll deductions. Depending on where your employees work, state retirement savings mandates may require additional registration and reporting, affect onboarding and employee communications, and influence whether adopting a private retirement plan is the best path to compliance. For employers operating in multiple states, managing these requirements can quickly become more complex.

State-mandated retirement plans are state-created programs that require certain private-sector employers to offer employees access to a retirement savings option if the employer does not already provide a qualifying plan, such as a 401(k). In most cases, the state program is structured as an Individual Retirement Account (IRA) with automatic payroll deductions, although some state models vary.

For employers, the basic workflow is similar across programs:

• Confirm whether the mandate applies to your business
• Register or certify an exemption
• Begin facilitating employee access, if required

Employees usually decide whether to participate, but employers are often responsible for payroll deductions and remittance.

Keep in mind that these programs are not the same as public retirement systems for government workers. State-mandated retirement plans are designed to expand access to retirement savings for private-sector employees, especially at small- and mid-sized businesses that currently do not offer a workplace plan.

A significant number of private-sector workers lack access to a workplace retirement savings plan. This challenge is especially common in small and mid-sized businesses, where offering retirement benefits can be difficult due to limited resources or a lack of plan availability.

Key drivers behind state mandates include:

• A large retirement savings access gap: Approximately 56 million Americans do not have access to a workplace retirement savings plan.
• The decline of traditional pension plans: Private employers have shifted away from defined-benefit pension plans, placing more responsibility for retirement savings on employees.
• Concerns about retirement readiness: Policymakers continue to express concern that many workers are approaching retirement without adequate savings.
• Federal inaction: While the SECURE 2.0 Act (passed in 2022) expanded some retirement provisions, it stopped short of a national mandate.

Eligibility requirements for state-mandated retirement programs vary by state, but most mandates share common criteria. The laws are more likely to apply to you if your business:

• Does not already offer a qualifying retirement plan, such as a 401(k), SIMPLE IRA, SEP IRA, Multiple Employer Plan (MEP), or Pooled Employer Plans (PEP);
• Meets the state's employee-count threshold;
• Has been in business long enough to fall within the state's coverage rules (commonly two to three years); and
• Has employees working in a state with an active mandate.

If you already offer a qualified retirement plan, you are generally exempt from the state mandates. In some states, though, you still need to register or certify that exemption, so it is worth confirming your status directly with the program before assuming you are covered.

If you’re a multistate employer, note that if you have employees in multiple states with active mandates, you may need to comply with each state's individual requirements. In that case, review each work location separately. If you have a retirement plan option, you will need to certify/exempt your plan with each state.

When a state mandate applies to your business, you typically have two ways to comply:

1. Enroll employees in the state-run program
2. Or adopt a qualifying private plan.

Here's how these options compare:

For many SMBs, choosing a plan often comes down to which option creates the least friction. A private plan can offer higher limits and more flexibility, while a state-sponsored plan may be the quickest way to satisfy a mandate when you are not ready to sponsor your own plan.

The table below shows states with active mandates as of May 2026. Because deadlines and penalty structures change frequently, use this as a planning tool, but your business should periodically review current state laws and consult a qualified HR or legal professionals.

Important notes to keep in mind:

• Employer thresholds and registration requirements may change as programs mature.
• Many states allow you to sponsor a qualified retirement plan to claim an exemption from the state program.
• Penalty structures vary significantly and may increase over time for continued noncompliance.
• Always verify current requirements directly with the state program administrator.

If your business operates in more than one of these states, you may need to comply with more than one program at the same time. Review each work location separately rather than assuming a single policy covers employees in all locations.

Some states have passed legislation, offer voluntary programs, or are actively building programs that are not yet fully rolled out. These are not all current employer mandates, but they are worth watching to stay up to date on the compliance landscape.

Additionally, here are states that are considering legislation but don’t have active programs.

If a state mandate applies to your business, your compliance path usually comes down to one of two choices. Balance compliance, cost, and employee expectations to determine which option fits your workforce and administrative capacity.

Option 1: Enroll in the State-Sponsored Program

This option typically requires you to register with the program, facilitate payroll deductions, and remit employee contributions on schedule. It is often the simplest path if you do not already offer a qualifying retirement plan.

The tradeoff is flexibility. State-sponsored programs often use a standardized structure, have lower contribution limits than private retirement plans, and have no employer matching.

Option 2: Adopt a Qualifying Private Plan

A private plan — such as a 401(k), SIMPLE IRA, SEP IRA, MEP, or PEP — can exempt you from the state program if it meets the state’s requirements. This route often offers greater flexibility, stronger recruiting value, and access to employer contributions.

Private plans generally allow significantly higher contribution limits ($24,500 in 2026). They also come with potential tax advantages under the SECURE 2.0 Act, especially for newly established plans, which can offset setup and administration costs. This makes the private-plan route worth evaluating before defaulting to the state program.

G&A Partners offers MEP and PEP retirement plan options that can make it easier for small and mid-sized employers to offer competitive retirement benefits — without the complexity of managing a plan entirely on your own. Our retirement specialists can help you evaluate which plan makes the most sense for your workforce and business goals.

Keeping up with state-mandated retirement plan requirements can be time-consuming, especially for businesses operating across multiple states. Compliance is often easier to manage when retirement plan administration, payroll processes, and regulatory monitoring are coordinated through a single partner.

A professional employer organization such as G&A Partners can help you navigate retirement plan requirements, including:

• Evaluating your current benefits offerings to determine whether you already meet state requirements or may need to take additional action
• Comparing state-sponsored programs and private retirement plan options to identify the approach that best fits your workforce and business goals
• Implementing MEP or PEP retirement plans that can satisfy state mandate exemptions while providing employees with enhanced retirement savings opportunities
• Monitoring changing deadlines, thresholds, and requirements across multiple states to help reduce compliance risk
• Integrating retirement plan administration with payroll for a seamless employee experience

Our team works alongside you to help simplify retirement plan compliance and administration. Whether you're evaluating a state-sponsored program, exploring private plan options, or managing requirements across multiple states, we can help you build a practical approach that supports compliance and your long-term workforce goals.

What is a state-mandated retirement plan?

A state-mandated retirement plan is a government-run program that requires certain private-sector employers to offer their employees access to a retirement savings account — typically a Roth IRA. Employers who do not already offer a qualified retirement plan must either enroll employees in the state-sponsored program or set up an approved private plan.

Does my business have to offer a retirement plan?

Your business must offer a retirement plan if it meets the criteria established in a state’s program. Most states base eligibility on:

• Where your employees work
• Your employee headcount
• How long you have been in business
• Whether you already sponsor a qualifying retirement plan

Several states now require covered employers to either enroll in a state program or offer a qualifying private plan.

What happens if I don't comply with my state’s retirement plan mandate?

Penalties vary by state and may be assessed per eligible employee. In some states, penalties increase over time if an employer remains out of compliance. Missing deadlines can also expose your business to mounting fines.

If I already offer a 401(k), do I still need to register?

In most states, offering a qualified retirement plan — such as a 401(k), SEP IRA, or SIMPLE IRA — exempts you from enrolling employees in the state program. However, some states require you to register with the program to certify your exemption. Check with your state's program website or consult an HR or legal professional to confirm your obligations.

What is the difference between an Auto-IRA and a 401(k)?

An Auto-IRA, which most state programs use, is a Roth IRA with 2026 contribution limits of $7,500 per year ($8,000 for those 50+). Employers typically cannot contribute to these accounts.

A 401(k) has a much higher contribution limit ($24,500 in 2026, plus catch-up contributions), allows employer matching, and is more flexible, but comes with greater administrative responsibility and cost.

What is a Multiple Employer Plan (MEP) or Pooled Employer Plan (PEP)?

MEPs and PEPs allow multiple unrelated employers to participate in a single retirement plan, spreading administrative costs and fiduciary responsibilities. PEPs, created under the SECURE Act of 2019, are a newer and more accessible version.

G&A Partners offers MEP and PEP retirement plan solutions that satisfy state mandate exemptions while providing employees with a stronger benefits package than state-sponsored IRAs.

My business operates in multiple states. How do I manage compliance across all of them?

Multistate employers must evaluate each state's requirements individually, as deadlines, employee thresholds, and penalties differ. One efficient approach is to adopt a private retirement plan, such as a 401(k), that satisfies mandate exemptions across all states where you operate. G&A Partners can help you assess your multistate exposure and implement a plan that works for your entire workforce.

How do I get started with retirement plan compliance?

Start by identifying which states your employees are working in and whether active mandates apply to you. Then assess whether you already offer a qualifying plan or need to act. From there, you can choose between enrolling in the state program or adopting a private plan. G&A Partners can guide you through every step. Schedule a consultation today.