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Updated: May 23, 2024

Navigating New Mexico's Work and Save voluntary retirement savings program

Published By:

Jon Davis

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State lawmakers passed the New Mexico Work and Save Act because many resident employees are nearing retirement without enough savings. The details are still being finalized, but the legislation puts New Mexico’s voluntary retirement savings program firmly on the radar. The plan is scheduled to be available to nonprofit and private-sector employers, employees, and self-employed individuals by July 1, 2024.

Fast Facts

  • New Mexico Work and Save is a voluntary retirement savings plan
  • Contribution levels have not yet been set for the program
  • The program is open to full- and part-time employees, as well as self-employed individuals and independent contractors
  • New Mexico Work and Save offers a financial literacy module so that employees and employers can better understand all available retirement plan options available

In this guide, we will discuss where the program stands, how it began, and whether employers are required to offer it.

Why are programs like New Mexico Work and Save gaining traction?

First things first, New Mexico is just one of several states that have adopted legislation to make it easier for individuals to start building a nest egg for retirement. One of the reasons why mandatory and voluntary state plans continue to gain adoption is because more Americans are approaching retirement age and leaving the workforce without having enough savings to live on.


While New Mexico’s plan is voluntary, it may spark action to address a gap that many of the Land of Enchantment’s workers face. That’s because recent studies have shown that New Mexico has a low percentage of large employers participating in qualified retirement plans. As a result in New Mexico, 67% of private-sector workers have no retirement savings to speak of, and 33% of New Mexicans aged 65 and older rely on Social Security benefits for 90% of their income.


With the passing of New Mexico Work and Save Act, employers will have access to a retirement savings plan they can offer their employees at no cost, while employees can begin to save for their future.

Understanding the New Mexico Work and Save Act

In 2020, House Bill 44 established the New Mexico Work and Save Act, kicking off with the formation of a volunteer board. At the top of this board’s priority list? Developing a voluntary retirement plan and marketplace for New Mexico’s citizens.


In its original form, the New Mexico Work and Save marketplace was slated to launch by July 1, 2021, with enrollment in a state-run Roth IRA to begin on January 1, 2022. Fast forward to March 2024, and that timeline did come and go with some updates.


Time for planning

The original 2020 House Bill underwent several revisions that were enacted through Senate Bill 129. That’s because the main purpose of the Senate bill is to shore up additional time for lawmakers to develop and implement the program rules. With this extended timeline, the Board expects to design and enact all of the program particulars with a deadline of July 1, 2024.


When it’s up and running, the plan is for New Mexico Work and Save to include both:

  • Savings access to a Roth IRA for New Mexico residents
  • Web-based “retail” marketplace


The marketplace’s purpose is to allow employers to research other retirement savings options, in addition to what a traditional Roth IRA provides for savers. For instance, qualified employers should be able to shop for savings vehicles, such as 401(a) or 403(b), once this online portal is active.


In addition, the marketplace is set to include a “financial literacy module” for both employees and employers, so that they can better understand the various retirement plan choices available to them. This is simply a fancy way of saying that the marketplace’s goals extend beyond plan shopping. There will be resources available to help people learn about the various ways to save for retirement, so that they can make informed decisions.


Next, let’s find out if employers need to add this savings plan to their to-do list.

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Which employers are required to offer retirement savings access when the New Mexico Work and Save program is official?

In a nutshell, participating in New Mexico’s program is going to be optional for employers. However, those who decide to participate should be aware of the information below, which is relevant to both employees and business owners.


Employers will want to know

  • The employer is responsible for withholding the appropriate contribution amount from the employee’s paycheck and then returning those funds to the state
  • There are no fees for employers to offer Work and Save once it’s out of the planning stages


Employees may want to understand

  • Company employees are enrolled automatically once their employer opts in
  • Employees will pay a small service charge based on funds currently managed in their individual account

How will employees build savings with New Mexico Work and Save?

When a company chooses to participate in New Mexico Work and Save, all eligible employees will automatically be enrolled in a Roth Individual Retirement Account (IRA) at a predetermined contribution rate. As of this writing, that rate has yet to be determined.


Because contributions will be made through automatic payroll deductions, employers must withhold and remit payments to the state on a regular basis. We touched on it earlier, but once it launches, employees who participate in New Mexico Work and Save may want to keep in mind that they’ll be without an employer match (once the program kicks in and they are with an employer who offers it). That’s because when they are active, employers are not required or allowed to contribute to employee plans.


Prior to the July 2024 deadline, businesses that are interested in participating in New Mexico Work and Save should periodically visit the New Mexico State Treasurer’s Office for any plan updates and implementation guidelines.


More resources for employers to learn more about Work and Save

New Mexico Work and Save is a step closer to becoming a reality

After its launch, New Mexico’s retirement savings vehicle will be optional for employers. However, providing employees with the ability to save for their post-work lives may be something New Mexico employers wish to consider. That’s because this is a perk that applicants typically look for during a job search. For employers, it can be an effective way to attract talented job candidates and retain employees who are performing at a high level.

FAQs about New Mexico Work and Save employers will want to know

  • Is New Mexico Work and Save mandatory for employers?

    New Mexico Work and Save is a voluntary program — employers are not required to participate.

  • Can employees opt out of participating in the plan?

    Once the program is up and running, an employee can opt out of participating.

  • Who is eligible to participate in New Mexico Work and Save?

    New Mexico Work and Save is designed for nonprofit and private-sector employers of any size. Both full-time and part-time employees are eligible for the program, as are self-employed and independent contractors.