The Massachusetts Defined Contribution CORE® Plan is a multiple employer, 401(k) retirement program for non-profit organizations with 20 employees or less. It’s designed to help eligible employers provide their employees with saving opportunities that are cost effective and easy to manage.

Why was the Massachusetts CORE Plan developed?

Massachusetts state representatives created the CORE Plan because many non-profit businesses cannot afford to sponsor retirement savings programs. In fact, 56 percent of those with budgets less than $250,000 do not offer retirement benefits to their employees.1 CORE can help these workers achieve a more secure financial future.

Massachusetts CORE Plan

What types of retirement plans does MA CORE offer?

CORE functions as a 401(k), which means that employees contribute pretax dollars to the plan and generally don’t pay taxes on it until they experience a qualified distribution event. Within this plan are three investment options:

  1. Target date funds
    Asset allocations change over time and become more conservative as an employee’s expected retirement date approaches.
  2. Empowerment retirement advisory servicess
    Either online or with the aid of a professional, employees can customize their portfolio using investments available in the CORE lineup, as well as those not otherwise available to plan participants.
  3. CORE objective-based fundss
    Plan participants can mix diversified investment options to achieve objectives, like growth, consistent income, purchasing power or capital preservation.

What are the requirements for participation in the MA CORE Plan?

To be eligible for the CORE Plan, businesses must:

  • Have non-profit status
  • Employ 20 or fewer people
  • Be based in Massachusetts
  • Maintain good standing with the state

Will Mass CORE be offered to other businesses?

Only non-profit businesses with 20 or fewer employees may participate in the CORE Plan. As of 2021, however, legislators have proposed a state-mandated retirement plan that would apply to for-profit business with 25 employees or more.

What are some features of the Massachusetts CORE retirement plan?

The CORE Plan is structured in ways that make saving for retirement convenient, easy and tax advantageous. Features include:

  • Auto enrollment
    If a non-profit business elects to participate in CORE, all of its employees are automatically enrolled into the program within 60 days. The initial contribution rate is 6% of pay.
  • Auto escalation
    Employee contribution rates automatically increase by 1 or 2% annually, depending on individual preferences, up to a maximum of 15%. Plan participants also have the option to change their rate at any time.
  • Pretax savings
    CORE makes it possible for employees to generate returns on money that they would have paid in taxes if it had not been deferred.
  • Employer contributions
    Employers may choose to make Safe Harbor employer-matching contributions or Safe Harbor non-elective contributions, both of which increase the savings potential for employees.

What are the benefits of enrolling in MA CORE for organizations?

CORE helps non-profit employers offer their employees a high-qualify retirement savings plan without detracting from their ability to run their business. Participating employers may also experience these benefits:

  • Minimal administrative burdens for HR personnel
  • Potential cost savings compared to employer-sponsored plans
  • Fiduciary support and oversight by the MA State Treasury
  • Protections under the Employee Retirement Income Security Act (ERISA)

Are there disadvantages to Massachusetts CORE?

Although the CORE Plan has its merits, eligibility is limited to small non-profit organizations. Employees who participate in the program are also subject to administrative fees, depending on their investment options, as well as an annual $65 participation fee.

How does the Massachusetts CORE Plan compare to alternatives?

Massachusetts CORE Plan savers chart

Frequently asked questions about Massachusetts CORE

Is participation in Massachusetts CORE defined contribution plan mandatory?

No, even if they meet the eligibility criteria, non-profit employers may decline to participate in the CORE Plan.

Who administers the Massachusetts CORE Plan?

The MA Office of the State Treasurer and Receiver General sponsors CORE and handles most of the administrative and investment responsibilities associated with the program.

Can I opt out of Mass CORE?

Employees who are enrolled in the CORE Plan can opt out online or by calling a participant services representative. The request must be received within 60 days of the autoenrollment notice if the employee wishes to opt out before making contributions.

1Boston Foundation

This information is intended to be used as a starting point in analyzing retirement plans and is not a comprehensive resource of all requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.

Unless otherwise agreed in writing with a client, ADP, Inc. and its affiliates (ADP) do not endorse or recommend specific investment companies or products, financial advisors or service providers; engage or compensate any financial advisor or firm for the provision of advice; offer financial, investment, tax or legal advice or management services; or serve in a fiduciary capacity with respect to retirement plans. All ADP companies identified are affiliated companies.

ADP Editorial Team

ADP Editorial Team The ADP editorial team is comprised of human resource professionals with extensive experience solving complex HR challenges for businesses of all sizes.