Minnesota Secure Choice: What Small Business Owners Need to Know Now

Minnesota has joined a growing list of states requiring employers to offer workers a way to save for retirement, and the deadlines are approaching.

Key Takeaways:

• Minnesota employers with five or more covered employees must offer a retirement savings option or certify an exemption.
• Registration deadlines are phased in by employer size, beginning June 30, 2026.
• Secure Choice satisfies the mandate, but a private qualified plan may offer more flexibility, higher contribution limits, and retention value.

The Basics

The Minnesota Secure Choice Retirement Program launched in January 2026. Any private-sector employer doing business in Minnesota for at least 12 months with five or more covered employees receiving Minnesota taxable wages is covered by the mandate. Covered employers must either enroll their workers in the state's payroll-deduction IRA program or certify an exemption if they already sponsor a qualifying plan.

The Rollout Schedule

The state is phasing in registration by employer size:

Employers receive notice of their window by email or postal letter from the program's recordkeeper, Vestwell, with login information and a unique access code.

How It Works for Employees

Secure Choice uses automatic payroll-deduction enrollment into state-managed Roth IRA accounts, and employees remain fully vested in their contributions at all times. Employees can opt out, adjust their contribution rate, or choose from a limited investment lineup. Employers are not required to contribute or match.

Why This Matters and Why a Qualified Plan May Be the Better Option

Secure Choice satisfies the state mandate, but it lacks flexibility. It's a standardized plan design with a limited investment menu and no personalized services. Contributions are capped at the IRA contribution limits ($7,500 for individuals under age 50 and $8,600 for individuals over age 50 for 2026) with no employer match. A 401(k) or other qualified plan, by contrast, allows for higher contribution limits, employer matching, and a broader range of investment options. A qualified plan also has tax advantages, plan design flexibility, and employee retention value.

The Bottom Line

Business owners don't have to choose Secure Choice and filing an exemption because you already sponsor a qualifying plan is straightforward. It is important for employers to understand the deadline, which is based on the number of employees, because noncompliant employers face graduated fines of up to $500 per employee after an initial warning period. For businesses without a plan today, now is the time to compare a 401(k), SEP, or SIMPLE IRA against the state option.If you're a Minnesota employer approaching your phase-in date and want to evaluate whether a private plan makes more sense than Secure Choice, we're happy to help you compare the options.