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Bill

RA

Bill

A 4562

Allows State, municipality, and county to implement automatic enrollment of their employees in deferred compensation plans.

2024-2025 Regular Session Introduced by Reginald Atkins and 6 co-sponsors

New Jersey authorizes automatic enrollment of government employees in deferred compensation retirement plans, requiring affirmative opt-out rather than opt-in participation.

Received in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee
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Bill Summary · A 4562

Legislative bill overview

Bill A 4562 permits New Jersey state, municipal, and county governments to automatically enroll their employees into deferred compensation plans (supplemental retirement savings accounts) rather than requiring employees to opt in manually. Employees would retain the right to decline participation. The bill passed the Assembly with broad support (67-9-1) and is currently in Senate committee.

Why is this important

Automatic enrollment significantly increases participation rates in retirement savings programs—research consistently shows opt-out enrollment achieves 80-90% participation versus 20-30% for opt-in models. This could substantially improve retirement security for public sector workers, though it also represents a shift in default policy that affects employee choice architecture.

Potential points of contention

  • Cost implications: Requires clarification on whether employers contribute matching funds and what fiscal impact this creates for municipal budgets already facing constraints
  • Employee autonomy concerns: Some may view automatic enrollment as paternalistic, despite the opt-out option; workers must take affirmative action to decline
  • Plan design specifics: The bill lacks detail on default contribution rates, investment options, and administrative burden on smaller municipalities implementing the program

Compiled from official sources — confirm details with the bill’s official record.

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