June 23, 2025
Several states now require retirement benefits. Here's how to avoid the fines (and the hassle).
If you’re not sure whether your state is affected, we compiled a full list of current mandates. Some states are already enforcing compliance. Others are rolling out soon.
If you do fall under one of these rules, here are the headaches you’re about to encounter, as well as what you can do to make them less painful.
1. Get Ready for a Lot of Paperwork
Even if your state offers a “simple” solution, it’s rarely seamless:
You’ll need to register through a state portal
Upload a full list of eligible employees
Track enrollment, opt-outs, and contribution settings
This isn’t a set-it-and-forget-it moment. You’re on the hook to keep it updated as people come and go.
2. Guess Who’s Running It
Spoiler: probably you. Or your bookkeeper. Or someone who already has too much on their plate.
State programs still require someone on your team to:
Upload contribution files every pay period
Answer employee questions
Stay on top of emails from state vendors and plan administrators
None of this is rocket science, but it’s enough to eat up hours each month.
3. Your Payroll System Probably Doesn’t Sync
Most state-run plans don’t integrate with your payroll provider. That means you’ll be:
Downloading files from one system
Editing them in Excel
Uploading them into another system
It’s a manual process that increases your odds of making a mistake. It is annoying, yes, but even worse is tripping a compliance violation.
4. The Risk Is Real
Missing a deadline or uploading the wrong file can trigger fines. In some states, it’s $250 per employee for each year you’re out of compliance.
No one’s trying to punish you. But the system isn’t exactly designed to help you, either.
Related: Basic Capital | Refreshing 401(k) Plans: Innovative Solutions for Employers
The Bottom Line
You can meet your state’s requirements and support your team without burning yourself out. Whether you go with the state’s default plan or explore other options, the key is to make sure your setup is easy to manage and doesn’t create more overhead than it’s worth.
