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New Savings Option Coming to Minnesota
Minnesota is launching a new way to help workers save for retirement.
Minnesota is launching a new way to help workers save for retirement. Secure Choice is a state-facilitated retirement savings program designed for private-sector workers who don’t have access to an employer-sponsored plan like a 401(k). A recent study found 60% of retirement savings-eligible employees were actually non-participants.
Did you know? Americans are 20 times more likely to save for retirement when contributions are automatically deducted from their paychecks. Secure Choice makes it easy for small businesses to offer this benefit—at no cost to them.
Through Secure Choice, employees will be able to contribute to an individual retirement account (IRA) through automatic payroll deductions. Businesses with five or more employees that don’t offer a retirement plan must enroll workers, unless the employee chooses to opt out.
<font color="#ec1300"> What Minnesota Employers Should Know</font>
- No employer fees – Employers pay nothing to participate, but gain the benefit of offering a retirement savings option to their employees.
- No fiduciary responsibility – State law makes it clear: employers are not responsible for managing the plan, investment performance, or employee benefits. Employers will be required to deduct contributions from employees’ paychecks and remit those to the Program.
- Automatic enrollment, employee choice – Employees will be automatically enrolled at a 5% contribution rate, with an annual increase of 1% until reaching 8%. However, employees can adjust their contribution rate, or opt out, at any time.
<font color="#ec1300"> What Minnesota Employees Should Know</font>
- A new way to save for retirement – Nearly half of U.S. private-sector workers ages 18 to 64—about 56 million people—lack access to an employer-sponsored retirement plan such as a pension or 401(k), according to a December 2024 AARP report. Additionally, low-income, African American and Hispanic workers are disproportionately affected, feeding persistent inequity in retirement security. Secure Choice helps close that gap.
- Enrollment is voluntary – If you participate Secure Choice, you’ll be automatically enrolled at a 5% contribution rate, with an annual increase of 1% until reaching 8%. You can change your contribution amount or opt out at any time.
- Start planning now – Not sure if you’re saving enough? Use the AARP Retirement Calculator to see if you’re on track.
What Is an Auto IRA?
Learn how Secure Choice and similar programs are helping workers build a more secure future.
With support from AARP, 20 states have enacted legislation to create "Work and Save" programs, like Secure Choice in Minnesota. In the 11 states with active plans, nearly 1.1 million workers have already started saving. Most of these programs use automatic IRAs (auto IRAs), which:
- Require no employer contributions
- Are managed by private financial firms
- Offer investment options like Roth IRAs and target-date funds
- Charge low administrative fees
Auto IRAs help small businesses attract and retain talent while giving workers a simple, effective way to save for retirement.
