INSIGHT
The Nevada Employee Savings Trust (NEST) Program officially launched on July 1, 2025, marking a pivotal moment for Nevada employers and their workforce. For business owners in the Silver State, this new requirement could significantly impact operations and employee benefits strategy.
Understanding the challenges of running a business while caring for employees’ future, this guide aims to help navigate the transition smoothly. Here’s what business owners need to know about NEST and how it might affect their operations.
What is the Nevada Employee Savings Trust Program?
The NEST Program represents Nevada’s commitment to addressing the retirement savings gap that affects an estimated 500,000 Nevadans who currently lack access to employer-sponsored retirement plans. This state-facilitated program allows employees to save post-tax dollars directly from their paychecks through state-administered individual retirement accounts (IRAs).Â
Here’s how it works: If a business has six or more employees, has operated for at least 36 months, and doesn’t currently offer a tax-favored workplace retirement plan, it’s required to either enroll workers in NEST or provide an alternative retirement savings option through a chamber of commerce or trade association.
The program features automatic enrollment for eligible employees at a default contribution rate of 5%, though workers can opt out if they choose or elect their own contribution rate. Employees maintain control over their accounts and can withdraw contributions at any time to meet financial emergencies, consistent with federal law.
Understanding obligations as a Nevada employer
Who must comply with NEST?
A business falls under the NEST mandate if it meets these criteria:
- Employs six or more workersÂ
- Has been in business for at least 36 monthsÂ
- Doesn’t currently offer a tax-favored workplace retirement planÂ
- Operates within NevadaÂ
Which employees are covered?
The program covers employees who:
- Have been employed for 120 days or moreÂ
- Are at least 18 years of ageÂ
- Receive wages or other compensationÂ
Employee exemptions
Certain employees are not covered by NEST, including those who:
- Work for federal, state, or other government entities (counties, municipal corporations)Â
- Make contributions to a Taft-Hartley multiemployer pension trust fundÂ
- Are covered under the federal Railway Labor ActÂ
Compliance options
Employers have two primary paths to meet the NEST requirement:
Option 1: Participate in NEST Automatically enroll eligible employees in the state-run program, which handles investment management and account administration.
Option 2: Offer an alternative Implement a tax-favored workplace retirement plan or join a program offered through a trade association or chamber of commerce.
Frequently asked questions about NEST
What are employers’ responsibilities?
Covered employers must automatically enroll eligible employees and share program information with their workforce. They can choose to use payroll providers or manage contributions directly through the NEST employer portal via ACH transfer or Excel file uploads.
What is the default contribution rate?
The NEST Program sets a default contribution rate of 5% of employee compensation, though employees can choose different rates or opt out entirely.
What investment options are available?
Employees can choose from several investment options based on their risk preferences, though specific details about the number and types of investments are determined by the Board of Trustees.
Are employee records confidential?
Yes, participant information is deemed confidential and not subject to public records requests.
How is the program governed?
A six-member Board of Trustees serves as fiduciary to the Trust, including the State Treasurer (Chair), Lieutenant Governor, and appointees representing employers, investment experience, retirees, and small business. The Nevada State Treasurer’s Office provides administrative support.
Do employers need payroll providers?
No, while many companies use payroll providers for NEST contributions, it’s not required. Employers can manage contributions directly through the NEST employer portal or by uploading Excel files.
Why consider an employer-sponsored plan instead
While NEST provides a valuable service for employees without retirement benefits, establishing an employer-sponsored plan offers several compelling advantages:
Greater control and customization
With their own plan, employers can tailor the program to match company culture and employee needs. This includes selecting investment options, setting contribution parameters, and designing features that align with business goals.
Higher contribution limits
Employer-sponsored 401(k) plans allow significantly higher contribution limits than IRA-based programs. For 2025, employees can contribute up to $23,500 to a 401(k), with additional catch-up contributions for those 50 and older. For 2026, employees can contribute up to $24,500 to a 401(k), with an additional $8,000 catch-up contribution available for those aged 50 and older.
Enhanced employee benefits
Employers can offer matching contributions, profit-sharing arrangements, and other features that boost employee engagement and retention. These benefits often serve as powerful recruitment and retention tools.
Tax advantages for businesses
Employer contributions to qualified retirement plans are typically tax-deductible business expenses, providing immediate tax benefits for companies.
Pre-tax contribution options
Unlike NEST’s post-tax contribution structure, employer-sponsored plans typically offer pre-tax contribution options, which can provide immediate tax benefits for employees.
Making the right choice for businesses
Deciding between NEST participation and implementing a retirement plan requires careful consideration of several factors:
- Budget for employee benefitsÂ
- Complexity willing to manageÂ
- Long-term business and workforce goalsÂ
- The competitive landscape in the industryÂ
Some businesses find NEST’s simplicity appealing, especially if they’re not ready for the administrative responsibilities of their own plan. Others view a comprehensive retirement benefit as a strategic investment in their workforce.
Implementation considerations and next steps
Regardless of which path employers choose, taking action now is crucial. Here are key steps to consider:
Assess current situation
Review employee count, business tenure, and existing benefits to determine compliance status under the six-employee threshold.
Evaluate options
Consider the costs, benefits, and administrative requirements of both NEST participation and alternative retirement plans.
Plan timeline
Factor in the 120-day employee tenure requirement, implementation time, employee communication needs, and any payroll system changes required.
Communicate with employees
Workers deserve to understand how these changes will affect them. Clear, timely communication helps build trust and participation, especially regarding the automatic enrollment feature and 5% default contribution rate.
How BPM can support retirement benefits strategy
Navigating Nevada’s new retirement savings landscape doesn’t have to be overwhelming. BPM helps businesses understand the NEST requirements and evaluate all available options.
Whether employers are leaning toward NEST participation or considering an employer-sponsored plan, BPM’s team can guide them through the decision-making process. The firm helps businesses understand the financial implications, administrative requirements, and strategic considerations for each option.
If businesses decide to implement their own retirement plan, BPM provides comprehensive support from initial design through ongoing administration. The goal is to maximize the value of the investment while minimizing the administrative burden on teams.
Employees’ financial security matters, and the decisions made today will impact their retirement readiness for decades to come. The complexity of compliance shouldn’t prevent businesses from making the best choice for their company and their team.
Ready to explore options? Contact BPM today to discuss how the firm can help navigate Nevada’s retirement savings requirements and create a benefits strategy that works. BPM can help turn this mandate into an opportunity for companies and their employees.
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