This bill allows the State, municipalities, and counties in New Jersey to implement automatic enrollment for their employees in deferred compensation plans. It introduces provisions that enable employers to automatically defer a specified percentage of an employee's salary unless the employee opts out or chooses a different percentage. For municipalities and counties, the adoption of this automatic enrollment arrangement is optional, while for the State, it becomes mandatory for employees hired after the first January following the bill's enactment. The bill also mandates that a default investment option be designated for employees' deferred salaries in the absence of an affirmative investment choice.

Additionally, the bill requires that employers whose employees are represented by a union negotiate the terms of the deferred compensation plan with the union, including aspects such as automatic enrollment and default deduction percentages. If no agreement is reached, employees represented by the union must affirmatively elect to participate in the plan. The bill ensures that the terms of any negotiated plan align with existing regulations set by the New Jersey State Employees Deferred Compensation Board. Overall, the legislation aims to streamline participation in deferred compensation plans while providing employees with options and protections regarding their salary deferrals.

Statutes affected:
Introduced: 43:15B-1, 52:18A-165