SENATE STATE GOVERNMENT, WAGERING, TOURISM & HISTORIC PRESERVATION COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY, No. 4562

STATE OF NEW JERSEY

DATED:  DECEMBER 1, 2025

      The Senate State Government, Wagering, Tourism & Historic Preservation Committee reports favorably Assembly Bill No. 4562 (1R).

      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.

     The bill requires an employer whose employees are represented by a union that is designated as the majority representative pursuant to the “New Jersey Employer-Employee Relations Act,” and eligible to participate in a deferred compensation plan, to negotiate the terms of a deferred compensation plan with such majority representative, including whether such employees represented by the majority representative will be automatically enrolled in the plan, the default deduction percentage from an employee’s salary, if any, and the default investment, if any.

     The bill also requires the State, and any other employer whose employees are represented by a union that is designated as the majority representative pursuant to the “New Jersey Employer-Employee Relations Act,” and eligible to participate in the New Jersey State Employees Deferred Compensation Plan, to negotiate the terms of a deferred compensation plan with such majority representative, including whether such employees represented by the majority representative will be automatically enrolled in the plan, the default deduction percentage from an employee’s salary, if any, and the default investment, if any.  The terms of a negotiated deferred compensation plan must be consistent with any applicable rules and regulations adopted by the New Jersey State Employees Deferred Compensation Board.

     The bill provides that absent a written agreement between an employer and a majority representative, in order to participate in a deferred compensation plan, an employee represented by the majority representative must be required to affirmatively elect to participate.

      As reported by the committee, Assembly Bill No. 4562 (1R) is identical to Senate Bill No. 4554, which was also reported by the committee on this date.