New Jersey is joining the growing list of states stepping in to address a retirement savings crisis by creating a savings plan for private-sector workers who don’t have access to an employer-sponsored plan.

Gov. Phil Murphy signed into law the New Jersey Secure Choice Savings Act Thursday to promote retirement savings by automatically enrolling workers in an IRA that is managed by the state.

The program targets some 1.7 million workers in the Garden State whose employers don’t offer a retirement plan. And while employees could contribute to IRAs on their own, when they don’t have a payroll deduction, only about 5 percent save for retirement on a consistent basis, sponsors of the bill (A4134) said.

“Today New Jersey is taking a bold step,” Murphy said.

“Nearly 1.7 million workers do not have access to an employer-sponsored retirement plan,” the Democratic governor said at a senior center in Saddle Brook. “This is a smart step for the 1.7 million New Jerseyans who deserve the peace of mind.”

The program will take up to two years to get up and running, Murphy said.

The state Legislature passed a similar bill in 2015 that was vetoed by then-Gov. Chris Christie, a Republican who said it would create a duplicative government bureaucracy while burdening small businesses. At the time, the federal government offered the myRA retirement program that’s since been ended by the Trump administration.

Instead, Christie agreed to create a marketplace that connects small businesses to existing investment vehicles.

But New Jersey is still facing a retirement crisis, experts say.

Evelyn Liebman, director of advocacy for the AARP New Jersey, has said the average cost of living for a retiree is $23,000 but the average Social Security benefit is just $19,000.

“The average near-retirement worker has only $14,500 saved for retirement, and nearly 25 percent of older residents rely on Social Security for 90 percent or more of their income. This crisis disproportionately impacts woman and minority workers who are less likely to have access to a retirement savings option at work," she said when the bill was being considered.

“Today we are taking a monumental step,” Liebman said Thursday, standing alongside Murphy for the bill-signing ceremony.

“This time it is for real,” she said. “We thank you all so much.”

The law requires employers with 25 or more employees to establish an automatic payroll deduction for their employees, who will be enrolled at 3 percent unless they opt out or choose a different contribution level. Smaller employers can offer the payroll deduction but are not required to under the law.

The funds will be managed by a board of state officials and members appointed by the governor with the Senate’s consent, and management fees cannot exceed more than 0.75 percent for the first three years and 0.6 percent thereafter.

The state is expected to front the cost of getting the plan up and running, and then the plan will take over those costs and reimburse the state. It could launch within two years.

Neither the state nor the employers contribute to the accounts nor are they intended to bear any financial risk, according to the law.

The New Jersey Business and Industry Association has opposed the program, which the organization warned would burden employers, carry steep startup costs and potentially open the state and employers to liability under the federal Employee Retirement Income Security Act.

The savings plan is modeled after the Illinois Secure Choice Program, which enrolled 100 businesses and 9,000 workers during the first wave of its three-part enrollment process, according to WSIU.

Samantha Marcus may be reached at smarcus@njadvancemedia.com. Follow her on Twitter @samanthamarcus. Find NJ.com Politics on Facebook.

Matt Arco may be reached at marco@njadvancemedia.com. Follow him on Twitter @MatthewArco or Facebook.

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