What Is Minnesota Secure Choice?

Minnesota Secure Choice is a state-facilitated, employer-supported retirement program passed into law in 2023.

It requires covered employers to either:

        • Enroll employees in the state program, or
        • File an exemption by offering a qualified employer-sponsored retirement plan.

The program uses automatic payroll deductions into employee-owned Roth IRAs, with:

        • A default 5% contribution rate.
        • Automatic escalation up to 8%.
        • Limited employer flexibility.
        • Recordkeeping of employee owned IRAs administered by Vestwell.

Who Is Affected, and When?

Beginning in 2026, Minnesota Secure Choice will be implemented in phases based on employer size. Employers with 50 or more employees must comply starting in 2026, with the requirement expanding to employers with five or more employees beginning in 2028. Employees are defined as full-time and part-time, age 18+, and receiving Minnesota taxable wages. Employers can satisfy the mandate by participating in the state-facilitated Minnesota Secure Choice program or by offering their own qualified employer-sponsored retirement plan, giving businesses the flexibility in how they provide access to workplace retirement savings.

Key Timing:

      • Employers must either enroll or file for exemption by their compliance deadline.
      • Failure to comply can result in financial penalties per employee that increase over time.
It is important that employers act before the deadline based on the size of business:

Why Acting Now Matters

Waiting until deadlines approach can lead to rushed decisions, limited options, and unnecessary risk. Early action allows employers to:

      • Avoid compliance penalties.
      • Design a plan aligned with business goals.
      • Coordinate payroll and administration smoothly.
      • Communicate clearly with employees.

Most importantly, proactive planning gives employers control, instead of being forced into a one-size-fits-all solution.

Why Many Employers Are Choosing a 401(k) Instead

While Minnesota Secure Choice meets the legal requirement, it is a baseline solution, not a strategic benefit. A 401(k) or other qualified employer-sponsored retirement plan offers significantly more advantages for both employers and employees.

Key benefits of a 401(k) include:

      • Higher contribution limits than state-run IRAs.
      • Employer match and profit-sharing options.
      • Greater plan design flexibility.
      • Enhanced tax planning opportunities for business owners.
      • Improved employee retention and recruitment.

Potential Maximum Employee Deferral By Plan Types (2026 Limits)

How Blue Ridge Associates Supports Employers

Blue Ridge Associates partners with advisors and plan sponsors to:

With decades of experience administering retirement plans nationwide, Blue Ridge helps employers turn a state mandate into a meaningful retirement benefit for their workforce.

The Bottom Line

Minnesota Secure Choice may be mandatory, but your retirement plan strategy doesn’t have to be limited. Establishing a 401(k) now can provide better outcomes for business owners and employees alike.

The time to act is now. Contact the team at Blue Ridge Associates for a free consultation.