Compliance Alert: State Retirement Program Exemption Filings
A retirement plan client of ours based in Minnesota recently asked us an important question: Because they already sponsor a 401(k) plan, do they need to file an exemption with the state’s Secure Choice program? In many states, the answer is yes.
An employer may be exempt from state-facilitated retirement savings program because they already offer a qualified retirement plan, but that exemption usually isn't automatic. Most states require the employer to actively certify it.
In recent years, many states have passed or expanded mandatory retirement programs and several now apply to employers with as few as one employee. Generally, an employer must either register for the state's program or certify that it's exempt because it already offers a qualifying plan. Deadlines vary by state and by employee count, and many of this year's deadlines have already begun to take effect.
Missing a deadline isn't a minor paperwork slip, either. Penalties can run into the hundreds of dollars per employee. California's CalSavers program, for example, allows fines of up to $750 per employee for employers that don't register or certify an exemption.
States commonly notified employers by mail at the beginning of the year (2026) and provided an access code for registration or exemption certification. It is important to route these notices promptly to the person responsible for benefits, payroll, or retirement plan administration, and keep confirmation that the filing was completed.
States with active auto-IRA programs where employers offering a qualified plan may need to certify an exemption:
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This list is a practical starting point, not a substitute for reviewing your state’s program.
How do you know if you need to file an exemption?
If you withhold state payroll tax or pay state unemployment tax in one of the states above, it's worth checking and in most cases to file an exemption.
What should 401(k) plan sponsors do now?
Start by identifying every state in which your company has employees and confirming whether the business is subject to that state’s program. Then submit any required certification by the applicable deadline, save the confirmation, and mark your calendar future recertification dates.
Exemption procedures and recertification schedules differ and requirements can change. Many states require employers to recertify every 2-3 years, but you’ll want to verify your state’s requirements.
As of June 2026, roughly two dozen states have enacted retirement savings programs for private-sector workers, including 15 state auto-IRA programs. Because implementation dates and employer thresholds continue to evolve, plan sponsors should verify current requirements directly with the applicable state program.
If you're unsure whether an exemption filing applies to you, Integrated Financial Solutions can help you review your current plan, identify potential state obligations, and coordinate the next steps. Give us a call today.
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