Carolyn Sadler-Spoletini
COO and Compliance Officer for ManagedPAY
Nevada Employers may or may not be aware of upcoming changes that are mandatory for their employees. In the 2023 legislative session SB 305 passed and is now becoming effective September 1, 2025 (originally 07/01/2025). The bill requires Nevada employers with six or more employees to either provide their own 401K program or set up/provide plan entry into the Nevada Employee Savings Trust (NEST). NEST is a state-facilitated retirement savings program targeted at private-sector employers who do not currently offer an employer-sponsored 401(k) or pension plan. It aims to provide a way for employees to save for retirement, with facilitation support for participating businesses.
While the NEST program is still finalizing plan entry details, rules and guidelines to be put in place, there are other options for employers to allow them to comply. For example, Professional Employer’s Organizations (PEO) can off load human resource needs, benefits and other burdens employers often have challenges and compliance issues with. Rolling out easy 401K plans, such as 401 GO may be another option. Any employer who currently offers a 401K program or other retirement program (IRA) for their employees will be exempt from enrolling and participating in NEST.
Under SB 305 employers who have been in operation for 36 months or more and do not currently offer a retirement program (or a program through a participating chamber of commerce or other trade association) are required to self-enroll into the NEST program. NEST will initiate contact with eligible businesses to facilitate registration by retrieving data from the Nevada Department of Employment, Training and Rehabilitation office to determine which businesses will be required to offer a retirement plan to their employees. Any employee who is 18 years of age or older will be provided with the option to contribute to the state NEST program after the employee completes the 30-day probation period from the date the employer adds the employee’s information into the system. Under SB 305, employees will be set up with a mandatory minimum contribution amount of 5 percent with an annual auto increase of 1 percent on January 1st of every year, not to exceed 10 percent. Employees will have the option to increase/decrease their deferral, opt-out from participating, and to decline the annual auto increase. This program does not offer an employer match or cause an employer to come out-of-pocket with any additional costs to maintain the retirement plan with NEST.
The IRS also passed the Secure 2.0 Act which becomes effective July 1. Per the Secure 2.0 Act, employers will be offered additional tax credits if offering 401(k)s, including a startup cost tax credit that can cover a substantial portion of administrative and employee education expenses for new plans, an employer contribution tax credit providing up to $1,000 per employee annually, and a credit for implementing auto-enrollment features. Beyond these financial gains, a 401(k) provides the option to make employer contributions, which can be a powerful tool for attracting and retaining talent. Combined with increased contribution limits, a 401(k) can boost a company’s competitiveness within their labor market, potentially fostering greater employee loyalty and reducing turnover compared to solely relying on state IRA options.
The greatest benefit to employees under the NEST program will be that their money remains in one place. This helps younger employees, who move from job to job. Their enrollment in NEST can continue and all of their money will be consolidated, unlike traditional 401K programs where the employee is required to file paperwork to consolidate or request rollovers of plans and programs.
More information on NEST is available at the state Treasurer’s website. A business can register with NEST at nest.nv.gov or at nest/vestwell.com
