ASSEMBLY STATE AND LOCAL GOVERNMENT COMMITTEE

STATEMENT TO

ASSEMBLY, No. 4562

STATE OF NEW JERSEY

DATED:  DECEMBER 12, 2024

      The Assembly State and Local Government Committee reports favorably Assembly Bill No. 4562.

      This bill permits the State and a county or municipality to adopt an automatic enrollment arrangement where a deferred compensation plan provision permits the employer to defer and deduct a specified percentage from an employee’s salary unless the employee affirmatively elects not to defer or to defer a different percentage.

      This bill provides that, for a county or municipality, such an automatic enrollment arrangement will be optional at the municipality’s or county’s discretion to adopt.  For the State, the automatic enrollment arrangement will be mandatory for employees hired on or after the first January after the bill’s effective date unless the employee makes an affirmative election not to defer or to defer at a different percentage.

      The bill provides that in the case of a plan that includes an automatic enrollment arrangement, the named fiduciary will designate a default investment into which an employee’s deferred salary will be invested in the absence of an affirmative investment election from the employee.