Key Points

  • State Mandate Compliance: Understand Minnesota Secure Choice Retirement Program requirements, including which employers are subject to the mandate.
  • Minnesota Secure Choice Retirement Program Overview: Explain the features of Minnesota's retirement program, including automatic enrollment, contribution rates, and employer responsibilities.
  • Alternative Qualified Options: Compare qualified retirement plan alternatives, including 401(k) plans and PEPs, and understand key differences in contribution opportunities, tax advantages, and administrative support.

Minnesota State Retirement Legislation Important FAQs

Employers with five or more employees that do not offer a retirement plan are required to enroll in the Minnesota Secure Choice Retirement Program.

Employers have three options:

  • Option 1: Participate in the Minnesota Secure Choice Retirement state-run IRA program.
  • Option 2: Sponsor a qualified retirement plan through the private sector.
  • Option 3: Join a pooled employer plan (PEP)

Impacted employers must register by the following deadlines:

Employer size Registration deadline
100 or more employees June 30, 2026
50-99 employees December 31, 2026
25-49 employees June 30, 2027
10-24 employees December 31, 2027
5-9 employees June 30, 2028

Advisors should work with eligible clients to confirm compliance and evaluate available options if action has not yet been taken.

Minnesota State-Mandated Retirement Plan Options

Millions of Americans across the United States don’t have access to an employer-sponsored retirement plan. To help address that coverage gap, many states have adopted retirement plan mandates that require eligible employers to either participate in a state-run IRA program or offer another qualifying retirement plan, such as a 401(k) plan or pooled employer plan (PEP).

Retirement Plan Options for Minnesota Employers

In Minnesota, businesses with five or more employees that do not currently offer a retirement plan have three options to meet state retirement program requirements.

Option 1 – Participate in the Minnesota Secure Choice Retirement state-run IRA program

The Minnesota Secure Choice Retirement savings program provides employees with an easy and automatic way to save part of their paychecks for retirement. For clients that choose to register in the state-run program, each enrolled employee receives a Minnesota Secure Choice Retirement account with the following features:

To enroll in the Minnesota Secure Choice Retirement state-run program:

  • When eligible, businesses should register via the https://securechoice.mn.gov/ website.2
  • Add eligible employee contact information to the portal by the deadlines provided by the program.
  • Update employee contribution rates and process contributions via payroll deduction each pay period.
  • Mark employees as inactive in the employer portal when they leave the company or are terminated.

What are the benefits of the Minnesota Secure Choice Retirement program?

  • Employers have no fees, no employer contributions, no fiduciary responsibility, and limited administrative
    responsibilities.
  • Employees are offered investments with low fees and their accounts are portable if they leave their current employer.

Option 2 – Sponsor a relative retirement plan through the private sector

Eligible employers may instead sponsor a private-sector retirement plan, such as a traditional 401(k) through a provider like Ascensus. A 401(k) can give you and your client more flexibility to design a retirement plan that fits their unique business needs while still providing a valuable benefit for their employees.

What are the advantages of a traditional 401(k) plan?

Compared to a state-run plan, a 401(k) may offer additional benefits to employers and their employees.

 

Employers can: Employees can:
  • Set vesting schedule options, which can help retain employees.
  • Choose from a range of investment options, depending on their specific goals.
  • Set eligibility requirements.
  • Choose to make employer contributions on top of deferrals.
  • Get business tax savings and credits.3
  • Get access to financial advice and professionally managed investment strategies, to help them invest wisely.
  • Employees may choose to save more, or less, in
    1% increments, or opt-out.

 

How a 401(k) compares to a state-run Roth IRA program

A 401(k) plan can also offer additional benefits in terms of higher and more flexible contribution limits, as seen in the 2026
Contribution Comparisons table below:

Feature Roth IRA (State Program) 401(k)
Participant
contributions		 Can contribute up to $7,500 with an
additional catch-up contribution of up to
$1,100 if age 50 and over.		 Can contribute up to $24,500 with an
additional catch-up contribution of up to
$8,000 if age 50+ OR catch-up contribution
of up to $11,250 for anyone aged 60-63.
Tax treatment Earnings grow tax deferred. Contributions
to Roth IRAs are not deductible, but
qualified distributions are not taxed.		 Contributions can be made pre-tax or Roth.
Pre-tax contributions reduce participant
taxable income, but are taxed when
distributed. Roth contributions are taxed up
front, but when the contribution is a qualified
distribution it is tax free.
Income caps Follow federal guidelines: To be eligible,
employees must make less than $168,000
(single household) or $252,000 (married
filing jointly).*		 Contributions may be limited for highly
compensated employees (HCEs). However,
there are no 401(k) income limits.
Employer
contributions		 Employers may not contribute to the
participant's Roth IRA.		 Employers may match a portion of participant contributions. Employers may offer profit sharing. Employer contributions are tax deductible.

*Based on modified adjusted gross income (MAGI). Roth IRA contribution eligibility phases out at certain income levels. Refer to current IRS guidance for details.

Is a 401(k) more work for my client?

Not necessarily. In a 401(k), there are a variety of ways clients can outsource processes to experts to minimize fiduciary responsibilities.

  • Clients can streamline payroll contribution submissions by working with a payroll-integrated provider.
  • Clients can help reduce fiduciary responsibilities by incorporating:
    • A 3(38) investment manager that selects and monitors the funds in the retirement plan.
    • A 3(16) administrative fiduciary service that will reduce your client’s workload and limit their responsibility with plan administration.

Option 3 – Join a pooled employer plan (PEP)

A PEP is a unique solution that enables multiple employers to join or “pool” together to offer a tax-advantaged workplace retirement plan. With a PEP, like those offered through Ascensus, participating employers simply plug into an existing plan managed by a pooled plan provider (PPP) who is responsible for daily plan operations, annual audits, and most fiduciary responsibilities.

What are the advantages of a PEP?

With a PEP, employers can enjoy all the benefits of a traditional 401(k) plan, plus:

Is a PEP more work for my client?

Not at all. With the PPP and investment managers covering most of the fiduciary and administrative responsibilities, plan sponsors do the following:

  • Submit payroll deductions via their payroll system and provide complete census information for employees.
  • Periodically evaluate the PPP and investment managers.

Client Resource: Minnesota State Retirement Plan Options

Share this client-ready resource to help Minnesota employers understand the state's retirement mandate requirements and compare available retirement plan options.

Download the client guide

1Employees may choose to save more, or less, in 1% increments, or opt-out.
2Minnesota Secure Choice is a state-run program; Ascensus is not affiliated with, does not sponsor or administer it, and this link is provided for informational purposes only.
3Certain employers may be eligible for federal tax credits related to offering a retirement plan. Read more about additional potential tax benefits. Eligibility and availability depends on your specific facts and circumstances; consult your tax advisor for guidance. Credits are not applicable to Individual(k) plans.

For informational purposes only; not legal, tax, accounting, fiduciary, or investment advice, nor a recommendation. Information may change and is not guaranteed for accuracy or completeness. Plan sponsors and financial professionals should consult their own advisors and exercise independent judgement.

Ascensus, LLC provides administrative and recordkeeping services. It is not a broker-dealer or an investment advisor and does not provide tax, legal, or accounting services. Ascensus® and the Ascensus logo are registered trademarks of Ascensus, LLC.

Talk with a Specialist

Help clients understand their options beyond the state-facilitated retirement program. Complete the form and an Ascensus specialist will connect with you to discuss retirement plan solutions that can help your clients satisfy state requirements while supporting their business goals.