Minnesota Secure Choice Retirement Program Is Being Implemented

In addition to a number of relatively new Minnesota laws, employers need to also get the mandatory Minnesota Secure Choice Retirement Program on their radar.

In May 2023, the Minnesota Legislature enacted a bill establishing the Minnesota Secure Choice Retirement Program. Originally set to go into effect on Jan. 1, 2025, Secure Choice has undergone a number of updates and postponements since the bill was passed.

Which Employers Are Required to Participate?

Private employers that have been in business in Minnesota for at least 12 months with five or more employees that do not offer employees a qualified workplace retirement plan are required to enroll in the plan with no option to opt out. Additionally, self-employed individuals and employees whose employer is not registered for the program can participate on their own.

If an employer with five or more employees already offers a qualified workplace retirement plan, it will not be required to participate in Secure Choice. The Secure Choice office will provide an employer with an opportunity to explain why it qualifies for an exemption once it has been contacted about participating in the program.

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What Is the Timeline for Employers Required to Participate?

According to the Secure Choice website, the following are the required employer enrollment phases:

Employers will be required to enroll in Secure Choice by the last day of their applicable phase.

How Does Secure Choice Work?

While covered employers are required to participate in Secure Choice, employees may choose to opt out of their participation in Secure Choice. Employers are neither required nor permitted to contribute to the employee’s Secure Choice account; the only contributions to the program will be wages deducted from employee paychecks.

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Employers will be required to remit those contributions to Secure Choice. Employers will be responsible for any cost associated with this process, but Secure Choice will offer multiple ways to submit contributions as the program should be able to “interface with current payroll software or payroll firms.”

What Obligations and Liability Do Employers Have?

Employers need to upload or enter their staff list and payroll every pay period into the online employer account through Secure Choice. Employers will also be required to distribute information regarding Secure Choice to employees, which will be provided by the program.

A covered employer is not a fiduciary for any purpose under the program or in connection with Secure Choice. This means that employers are not liable to employees for damages alleged to have resulted from an employee’s participation in or failure to participate in the program.

The Secure Choice program has enforcement powers, including the ability to impose civil penalties against employers that fail to comply with the enrollment, remittance, and information requirements of the program.

Kaitlyn Schammel, SHRM-CP, is an attorney with Eckberg Lammers in Minneapolis.