Overview of Minnesota’s Retirement Program Requirement
Minnesota law mandates that certain “covered employers” either (1) sponsor or contribute to a retirement savings plan for their employees or (2) facilitate employee access to the Minnesota Secure Choice Retirement Program an employment law compliance requirement that affects workforce planning and payroll operations.
The Secure Choice program is a state-run individual retirement account (IRA) savings program designed for private-sector employees who do not have access to an employer-sponsored retirement plan. The program provides eligible employees with access to Roth IRAs, as well as a traditional IRA option for employees who prefer to contribute on a pre-tax basis.
Covered employers with employees enrolled in the Minnesota Secure Choice program are responsible for facilitating automatic enrollment, setting up payroll deductions, ensuring employee contributions are timely deposited into Secure Choice accounts, and maintaining employee records and contribution rates as needed.
Employers are not required to contribute to individual employee accounts. In fact, employer contributions are not permitted. Employers also do not assume the administrative responsibilities or fiduciary duties typically associated with employer-sponsored retirement plans.
Covered Employers Under the Minnesota Secure Choice Program
Employers required to offer Secure Choice access to qualified employees include all private-sector, for-profit, and nonprofit employers that:
- Have been in business in Minnesota for at least 12 months
- Employ at least five permanent (non-temporary, non-seasonal) employees receiving Minnesota taxable wages
- Do not currently sponsor, or have not sponsored in the prior 12 months a pension, profit-sharing, stock bonus, 401(k), 403(b), SEP, or SIMPLE retirement plan
Eligible Employees
Employees eligible to participate in the Minnesota Secure Choice Retirement Program must be at least 18 years of age. Temporary or seasonal employees expected to work 180 days or less are excluded.
Although eligible employees of covered employers will be automatically enrolled, participation is not mandatory. Employees may opt out of the program at any time.
Minnesota Secure Choice Program Registration Requirements and Timeline
Covered employers will eventually be required to register for the Secure Choice program. As of January 2026, participation remains voluntary.
Employers will receive advance notice of mandatory registration deadlines based on their number of employees. Employers must either register for the program or certify their exemption during the applicable registration phase.
Mandatory registration begins on June 30, 2026, for employers with 100 or more employees. Registration deadlines for other employers are as follows:
- Employers with 50–99 employees: December 31, 2026
- Employers with 25–49 employees: June 30, 2027
- Employers with 10–24 employees: December 31, 2027
- Employers with 5–9 employees: June 30, 2028
Employers that do not meet eligibility requirements must certify their exemption from the program.
Employee Contributions and Default Elections Under MN Employment Law
Unless employees opt out or elect otherwise, the default contribution rate under the Secure Choice program is 5% of the employee’s compensation, deducted directly from payroll. No employer matching or contributions are permitted.
After one year, the contribution rate will automatically increase by 1% annually, up to a maximum of 8%, unless the employee elects otherwise. Employees may change contribution levels, investment selections, or opt in or out of the program at any time.
These contribution rules intersect with broader compensation and benefits considerations, particularly for employers evaluating how retirement access fits into overall workforce strategy.
Investment Options
Employee contributions are initially invested in a Conservative Preservation Option for the first 30 days. After that period, funds are automatically reallocated to a Target Retirement Date Option based on the employee’s date of birth and anticipated retirement year.
Fees Associated with the Secure Choice Program
The Minnesota Secure Choice program imposes an annual asset-based fee ranging from 0.22% to 0.31%, depending on the selected investment options. In addition, an annual per-account fee of $24 is assessed in quarterly instalments of $6. All fees are automatically deducted from employee accounts.
Program Administration
The Secure Choice program is overseen by an independently appointed Board of Directors responsible for maintaining and administering the program. The Board works with private-sector financial service providers to handle administration, recordkeeping, custodial services, and investment management.
Enforcement and Penalties for Noncompliance
The Board will issue written warnings to covered employers that fail to register or comply with employee notice requirements during the first two years of noncompliance. After that period, statutory civil penalties may be imposed.
Failure to remit employee contributions to the Secure Choice program constitutes a misdemeanor. Employees adversely affected by employer noncompliance may bring claims seeking injunctive relief, damages, and reasonable attorney’s fees.
Key Takeaways for Minnesota Employers
Minnesota’s Secure Choice Retirement Program introduces new compliance obligations for many private-sector employers, particularly those that do not already offer retirement benefits. Employers should assess whether they qualify as covered employers, understand upcoming registration deadlines, and prepare payroll systems to ensure timely compliance. Early planning can help employers avoid penalties while providing employees with meaningful access to retirement savings.
Employers navigating Minnesota Secure Choice requirements should view compliance as part of a broader employment law strategy, particularly as it relates to compensation, benefits, and workforce transitions.
Frequently Asked Questions
Is the Minnesota Secure Choice Retirement Program mandatory for employers?
Yes, for employers that meet the definition of a “covered employer.” Participation is voluntary until mandatory registration deadlines apply, beginning June 30, 2026, with phased requirements based on employer size. Employers that already sponsor a qualifying retirement plan may be exempt but must certify that exemption.
Are employers required to contribute to employee Secure Choice accounts?
No. Under Minnesota law, employer contributions to Secure Choice accounts are not permitted. The program is funded solely through employee payroll deductions, and employers are responsible only for facilitation and administrative coordination.
Can employees opt out of the Minnesota Secure Choice program?
Yes. Although eligible employees are automatically enrolled, participation is voluntary. Employees may opt out, change contribution rates, or adjust investment selections at any time.
How does Secure Choice affect employment law compliance?
Secure Choice introduces new employment law compliance obligations related to payroll administration, employee classification, recordkeeping, and notice requirements. Employers must ensure contributions are timely deposited and employee elections are properly implemented to avoid penalties.
What happens if an employer fails to comply with Secure Choice requirements?
During the first two years of noncompliance, the Board may issue written warnings. After that, employers may face civil penalties. Failure to remit employee contributions is a misdemeanor, and affected employees may pursue injunctive relief, damages, and attorney’s fees.
