New Jersey will move forward with a new state-runretirement program, but it won’tresemble the bill New Jersey legislators put on the Governor’s desklast week.

Gov. Chris Christie issued a conditional veto of that bill,which would have created the Secure Choice retirement program, andrequired New Jersey businesses with at least 25 employees to enrollworkers in the program at a 3 percent deferral rate.

Employers would not have been required to make contributions,and workers would have had the right to opt out of the plan.

In his conditional veto, Christie wrote, “I believe that theapproach taken by the Legislature-- mandating participation under athreat of fines for not participating-- is unnecessarily burdensomeon small businesses in New Jersey.”

Christie also said the fact that the state would bear theinitial start up costs of the program, and administrative burdens,were non-starters.

“The bill creates yet another government bureaucracy to overseeand implement the program, while there are plenty of private sectorentities with particular expertise that can perform this functioninstead,” he said.

In lieu of the original bill, which passed both chambers in theNew Jersey legislator with bipartisan support, Christie’s vetocreated the New Jersey Small Business Retirement MarketplaceAct.

It is modeled on the private exchange recently created in thestate of Washington.

The exchange is intended to educate small business owners onretirement plan options, while creating a marketplace forprivate-sector providers that will only promote, but not mandate,participation in “qualified, low-cost, low-burden” retirementplans.

Christie’s amendments to the bill also said the exchange willpromote the myRA program, the low-cost savingsvehicle rolled out by the Treasury Department this year.

Roughly 1.7 million private sector workers in New Jersey arewithout access to a workplace savings plan. In issuing hisconditional veto, which the legislature passed hours later,Christie noted that Washington’s exchange was legislated intoeffect with the blessings of the AARP.

Under New Jersey’s exchange, the state Treasurer is charged withapproving plan options from the private sector, and will overseethe marketing effort and the creation of a new website supportingthe exchange.

At least two types of plans will be offered: A SIMPLE IRA, whichallows employers to make contributions, and a plan that will allowemployers to deduct employee contributions without contributionsfrom sponsors.

Private sector providers will have to provide a minimum of twoinvestment options: a target-date fund and a balanced fund. ThemyRA plan will be offered in addition to the private plan.

Read: SIFMA backs myRA while cautioning againststate-run retirement plans

The new exchange does not put a limit on the number ofprivate-sector providers, so long as they are qualified by thestate Treasurer.

New Jersey’s Assembly voted unanimously to the changes Gov.Christie insisted. The Senate then voted its approval just beforethe legislative term expired on Tuesday.

"It's not what I intended, but it's a step forward. I plan torevisit the issue next session," said Assembly Speaker VincentPrieto, according to reporting in NJ.com.

Business interest groups were leery of the employer mandate inthe original bill.

"This was important to protecting businesses against unnecessaryadditional mandates and burdensome costs," said Mike Wallace,policy director at the New Jersey Business and IndustryAssociation, as reported in NJ.com.

The marketplace will "ensure that employers have a safe andlow-cost retirement savings option to offer their employees," hesaid.