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As States Require Employers to Provide Retirement Plans, Employers Look to PEOs for 401(k) Support

In several states, employers are now required to offer retirement plans for their employees. Options may include a state-sponsored program or a qualifying program alternative, such as 401(k) plans, but the program administration for employers is daunting, at best.

Numerous states have enacted laws concerning retirement plans, with impending registration deadlines on the horizon. Understanding the obligations imposed on your business and selecting the most suitable retirement plan for both you and your employees is now more than crucial, it's required.

Even if your state lacks a mandate for a workplace retirement plan, you could still find yourself obligated to comply if you employ a sufficient number of employees who report income in a state where such plans are required.

If your state mandates retirement savings for your workplace, consider leveraging 401(k) plans as an invaluable resource through a PEO. Collaborating with a PEO removes the risk of not providing retirement savings and assists the employer with the heavy administrative tasks.

When hiring a nationwide PEO, they will not only administer your payroll and provide employee benefits, but they can additionally offer 401(k) plans to every employee on your behalf.

How PEO's Typically Provide Retirement Savings

A common practice among PEOs is to utilize 401(k) plans to offer retirement savings to the broad range of clients and employees they support, typically with minimal costs to the employer. With a 401(k) plan, employees can allocate a portion of their pre-tax earnings into the account, where it is subsequently invested across diverse funds or assets. These funds accrue tax-deferred growth until eventual withdrawal, usually during retirement, at which point they become subject to income tax. 

For businesses partnering with PEOs, offering a 401(k) plan becomes not just a benefit but a strategic advantage. By leveraging the PEO's expertise and resources, businesses can streamline the implementation and management of 401(k) plans, relieving administrative burdens and ensuring compliance with regulatory requirements.

Employees, on the other hand, benefit from the simplicity and accessibility of 401(k) plans administered through a PEO. They gain access to retirement savings typically associated with larger corporations, along with the guidance and support needed to make informed investment decisions.

State-Mandated Retirement Savings

Several states are mandating employer-provided retirement plans to address the country’s retirement savings. This is due to the average working household having no retirement savings in the United States. Employees are more likely to save when they have access to retirement savings directly from their employer. In the past, only 40% of employers with fewer than 100 employees provided retirement benefits. Now, these states are mandating that employers raise the utilization of retirement benefits from 40% to 100%.

If you're partnered with Cornerstone PEO, reach out to your Customer Service Representative (CSR) for more details on our 401(k) plans offered, which can meet the requirements of these state mandates without having to register for these retirement plans by state.

If you're not presently affiliated with Cornerstone PEO but are seeking retirement savings options, don't hesitate to contact us via our website to explore potential partnerships with our team.

Here's a list of states currently mandating retirement savings, along with links to their state-sponsored program retirement plans:




Colorado Secure Savings Program




DE Earns


Hawaii Retirement Savings Program


Illinois Secure Choice


Maine Retirement Investment Trust (MERIT)


Maryland Small Business Retirement Savings Program


Massachusetts Defined Contribution CORE Plan


Public Employee's Retirement System of Nevada

New Jersey

The New Jersey Secure Choice Savings Program- Retire Ready NJ

New Mexico

New Mexico Work and Save Program

New York

New York Secure Choice Savings Program Board


Oregon Saves


VT Saves


Retire Path VA


Washington Small Business Retirement


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