The Minnesota Secure Choice Retirement Program requires employers with 5 or more employees to offer a retirement plan starting in 2026, but you can avoid the state-run IRA’s limitations by choosing an automated 401(k) plan from 401GO.
About 40% of American adults have no money set aside in a retirement savings plan. Specifically, nearly one third of employers do not offer retirement benefits in the state of Minnesota. This leaves hundreds of thousands of workers without an easy way to save or build their future.
To bridge this gap, the Minnesota Legislature passed the Secure Choice Retirement Program in 2023, mandating that most employers in the state provide a retirement savings vehicle.
What is the Minnesota retirement mandate?
The Minnesota Secure Choice Retirement Program is a state-facilitated retirement plan. It was designed specifically for workers who lack access to employer-sponsored retirement plans. This program operates through a payroll deduction Roth IRA, where employees are automatically enrolled at a default contribution rate unless they choose to opt out.
While the program is employer-supported, the business’ role is limited to administrative facilitation; they are responsible for setting up the payroll deductions and submitting them to the state’s provider. Because it is an IRA-based model, the accounts are portable and belong to the employee. However, the program offers a one-size-fits-all approach which means limited investment choices and strict regulatory caps.
Deadlines to comply with Minnesota’s retirement mandate
Compliance is determined by the number of covered employees a business has. If a business already offers a qualified plan (401k, SEP, SIMPLE IRA), they must file for an exemption during their assigned window.
Why choose 401GO instead of a state retirement program?
While the state program fulfills the legal requirements, 401GO offers a more flexible and fully automated 401(k) that turns a necessity into a competitive advantage for your business.
- Higher Contribution Limits: The state’s IRA limits employees to just $7,500 per year in contributions. With a 401(k), employees can save up to $24,500, allowing your team to build wealth significantly faster.
- Recruit Talent with Matching: Under the Minnesota mandate, employers are unable to institute matching to the state IRA. 401GO allows you to offer employer matching and profit sharing, which is one of the best tools for attracting and keeping top talent.
- SECURE Act 2.0 Tax Credits: By starting a private 401(k) plan with 401GO, small businesses can qualify for up to $5,000 per year in tax credits for three years to cover setup and admin costs, plus additional credits for employer contributions. This can make the plan essentially free for the first few years. These credits are generally not available for the state IRA.
- Full Automation: 401GO connects directly with your payroll. While the state program requires tedious manual oversight of employee status and deduction changes, 401GO automates the heavy lifting.
- No Income Restrictions: Roth IRAs (the state default) have income phase-outs. High-earning employees may find themselves ineligible for the state plan, whereas a 401GO 401(k) is open to everyone regardless of their salary level.
FAQ Section
Is the state program free for my business?
There are no direct fees paid to the state, but there is an administrative tax on your time. You are responsible for managing employee rosters, processing opt-outs, and ensuring payroll compliance. 401GO removes this burden through automation so you can focus on running your business.
What are the penalties for missing the deadline?
Minnesota plans to impose penalties for non-compliance, which can reach $500 per employee per year for continued failure to provide a retirement option.
If I sign up with 401GO, am I exempt?
Yes! Once your 401GO plan is active, you simply file for an exemption on the Minnesota Secure Choice portal using your access code. This satisfies the mandate completely.
The Minnesota retirement mandate is coming, but you don’t have to settle for a limited state-run IRA. With 401GO, you can check the compliance box while providing a world-class benefit that saves you and your employees more money. Don’t wait for the state deadline; take control of your company’s retirement strategy today.
