The New Jersey Treasury Department is reviewing responses to its request for information (RFI) from private-sector firms to provide investment products for New Jersey’s Small Business Retirement Marketplace. It issued the RFI on Jan. 9 and accepted them through Jan. 26.
The Garden State Treasury hopes the responses will help it to determine the scope of work and potential information gaps that may limit the number of successful responses to a possible future request forpProposal (RFP), and establish a distribution list of firms interested in bidding on a subsequent RFP. It said that it was looking for responses from firms that (1) have a working knowledge of the financial industry, specifically regarding retirement investments; (2) are interested in notifications regarding any future solicitations that may result from the RFI; and (3) have suggestions.
Then-Gov. Chris Christie (R) on Jan. 19, 2016 signed into law the New Jersey Small Business Marketplace Act, the measure that creates the Small Business Retirement Marketplace. The legislation progressed after the legislature agreed to cooperate with Christie on the matter.
The marketplace is to offer at least two types of plans for eligible employer participation, including:
- a SIMPLE IRA;
- a payroll deduction IRA-type plan or workplace-based IRA open to all workers in which the employer does not contribute to the employees’ account; and
- a myRA.
The law also requires that the financial services firms participating in the marketplace offer a minimum of two product options, including a target date or other similar fund, with asset allocations and maturities designed to coincide with the expected date of retirement, and a balanced fund.
The announcement about the RFI contains more specifics about the marketplace, how it will function and the roles the state of New Jersey will play:
- the state maintains all oversight and final approval of any decisions affecting the marketplace;
- the state will provide a basic webpage that will link to approved marketplace financial services firms;
- participation in the marketplace by financial services firms, employers and employees is completely voluntary;
- financial services firms selected by the state shall not charge the participating employer an administrative fee or surcharge and shall not charge enrollees more than 100 basis points in total annual fees and shall provide information about its products historical investment performance; and
- the state may establish a fee system that charges financial services firms that participate in the marketplace to cover startup and annual administrative expenses.