New Mexico Work and Save on the Horizon

New Mexico has joined the list of states that provide a state-run retirement plan safety net. But while the legislation creating the New Mexico Work and Save program has been enacted, the state body that will implement it has some time to get it up and running.

 

Gov. Michelle Lujan Grisham (D) signed the New Mexico Work and Save Act into law on Feb. 26. But the New Mexico Work and Save Board—the body that will set up and oversee the program under the aegis of the state Treasurer’s office—has until July 1, 2021 for the New Mexico Retirement Plan Marketplace to be in place, and until Jan. 1, 2022 to make it available for covered employees to begin making contributions.

The New Mexico Work and Save Program covers individuals who are at least 18 years old and who are employed in the private sector or by nonprofits, either full time or part time, or are self-employed as a sole proprietor or an independent contractor. Through the program, employees’ payroll deductions will be invested in Roth IRAs.

 

The program is voluntary for employers and employees. Employers may automatically enroll employees, but must allow them to opt out. Covered employers are not considered to be a fiduciaries.

 

The act also creates a web-based retirement savings plan marketplace intended to connect employers and individuals with retirement savings plans and to serve as a means for employers to make more than the program available to their employees. The marketplace is to offer a financial literacy module for employers and employees; it also may offer an array of private retirement plan options, including:

 

Participation in plans offered on the New Mexico retirement plan marketplace is voluntary for covered employers and employees. Employers that offer a retirement plan through the marketplace and that use automatic enrollment and automatic escalation of contributions are to provide an employee opt-out option.

 

The New Mexico Work and Save Board that will implement and oversee the program will be composed of three members appointed by Grisham; two appointed by New Mexico Treasurer Tim Eichenberg (D), two appointed by  Speaker of the House of Representatives Brian Egolf (D-Sante Fe) and two appointed by  Senate President Pro Tempore Mary Kay Papen (D-Las Cruces). The board will then appoint an Executive Director/Chief Administrative Officer.