AS NJ retirement plan cuts fees, many to pay more
Structure favors those with higher balances
By: David M. Zimmer
NorthJersey.com
USA Today Network - New Jersey
.....New Jersey workers with small balances in the state's RetreiReady NJ program are about to pay more in fees under a new structure hat lowers the percentage charged on their savings but adds a flat annual account fee.
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Beginning October 1, [2026] the program's annual administrative fee will fall from 0.75% of an account balance to 0.25%, nonparticipating will also pay a $26 yearly charge, collected in quarterly installments of $6.50.
.... The new fee structure, becomes cheaper once a participant's balance reaches $5,200. State records show that most current accounts are nowhere near that.
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RetireReady NJ is a state retirement savings program that allows workers whose employer does not prove a retirement plan to put money into an i=individual retirement account.
..... As of June 30, [2026] the state reported 30,449 funded accounts holding about $25.6 million. the average funded balance was listed at $839.60. A
NorthJersey.com analysis of those totals found that at least 25,525 accounts, or nearly 84%, had less than $5,200.
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For someone with $1,000 saved, the annual fee will rise from $7.50 to $28.50. At the state's reported average balance, the increase is from about $6.30 to $28.10.
..... The math starts working in a participant's favor as the balance grows. An August 31 [2026] notice announcing the change showed the annual fee on a $6,000 account falling slightly, from $45 to $41, while someone with $60,000 would pay $151 instead of $375.
..... The policy includes a temporary break for new participants with very small balances. According to minutes from the New Jersey Secure Choice Savings Board's July [2026] meeting the $6.50 quarterly account fee will be waived during a participant's first contribution quarter and the following quarter if the balance remains below $100. Once the balance reaches $100, the fee can begin in a prorated basis.
..... Program officials said the new fee structure is part of a larger effort to make RetireReady less dependent on state funding.
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RetireReady Executive Director Todd Hassler told the board in July [2026] that the previous arrangement would require "state subsidies for an indefinite period of time."
..... New Jersey had allocated $11 million since fiscal 2022 to develop and operate RetireREady, including about $6.6 million spent as of January 9, [2026] according to the nonpartisan Office of Legislative Services. Using June 2025 enrollment and asset totals, the nonpartisan services estimated that the old 0.75% fee would generate about $60,750 a year, compared with about $515,000 under the new formula.
..... Analysts said the higher fee collections could reduce the amount of General Fund needed for the program.
..... At the July [2026] meeting, the board also approved changes to its contract with Vestwell, the private company that administers RetireReady.
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Vestwell agreed to wave the $250,000 annual fee paid by the program in 2027, 2028 and 2029, a savings of $750,000.
..... The company also agreed to lower some per-account charges much earlier as enrollment grows, beginning at 50,000 and 75,000 funded accounts instead f waiting until the program reaches 200,000 and 350,000.
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Hassler said the new participant fees and Vestwell contract changes were expected to return about $1.3 million to the program to help cover operating costs and improve its balance sheet by about $8 million over the remaining 3.5 years of the contract.
..... RetireReady opened in 2024 for workers whose employers do not offer a qualifying retirement plan. eligible employees are automatically enrolled but can opt out.
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Workers save through individual retirement accounts funded by payroll deductions, with Roth IRA as the default.
..... The administrative fees are separate from the underlying expenses charged by the investment funds participates choose.
..... A law enacted earlier this year [2026] lowered the minimum size of employers required to participate from 25 workers to 10.
..... Hassler told the board in March [2026] that the change nearly doubled the population covered by RetireReady, bringing more than 500,000 additional people int the program.