The Land of Enchantment, New Mexico, is the latest state to pass legislation to make it easier for workers to gain access to retirement plans.
House Bill 44, the New Mexico Work and Save Act, was signed by Gov. Michelle Lujan Grisham and will provide access to an automatic, low-cost retirement savings option for privately employed and self-employed workers who do not have employer-based retirement accounts.
The law provides a new online marketplace that will begin operation on July 1, 2021, and workers will be able to open new accounts in January 2022.
The marketplace is designed for employers to find and compare low-cost retirement savings options.
“In short, more hard-working New Mexicans will finally get the chance to take control of their futures and prepare for the secure retirement they deserve,” according to the legislation.
Plan specifics
Participation is voluntary for both employers and employees.
An analysis by Mercer notes that the act uses “an expansive definition of eligibility to determine covered employers and employees, with just a few specified exceptions”:
- Covered employers: The law applies to any private-sector or nonprofit employer with a primary place of business physically located in New Mexico. The legislation exempts any federal, state, or local government and any governmental agency, department, commission, or related entity.
- Covered employees: Covered employees include all full- and part-time employees of a covered employer who are at least 18 years old, as well as self-employed individuals. Employees covered under a multiemployer pension plan or by the federal Railway Labor Act are excluded.
“It is well past time that New Mexico steps up for its seniors, supporting their independence and providing for their needs,” Grisham said. “We can and will do better for them. I want to thank members of the House and Senate for their support on these essential pieces of legislation, helping citizens plan more effectively for retirement and providing for the best possible environment for seniors all across our state.”
FIND THE FULL MERCER ANALYSIS HERE
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
