Are you a Connecticut business owner with 5 or more employees and do not currently have a retirement plan for your employees in place?
If so, then pay attention because MyCTSavings, a Connecticut mandatory retirement program, sponsored by the State of Connecticut’s Retirement Security Authority, will require your direct action, before the extended deadline of August 31, 2023.
What is MyCTSavings Retirement Plan?
MyCTSavings is a new state-sponsored retirement savings program created to support Connecticut employees in saving and planning for a financially secure future. Over 600,000 private-sector employees have no employer-sponsored retirement savings plan in place. To combat this gap in retirement planning, this program MANDATES certain Connecticut employers to offer enrollment into MyCTSavings.
What CT Employers is MyCTSavings Mandatory for?
MyCTSavings is mandatory for Connecticut employers who meet the following criteria:
- Have 5 or more employees
- Paid 5 or more employees $5,000 or more in taxable wages in the previous calendar year
- Do not currently provide a qualified, employer-sponsored retirement savings plan
What CT Employers Are Exempt from MyCTSavings?
Employers can get an exemption for MyCTSavings if they:
- Currently provide a qualified, employer-sponsored retirement savings plan
- Were not in existence during the current and preceding calendar years
- Employ only individuals whose services are excluded under the unemployment compensation law
Are There Legal Consequences for Not Complying?
Yes!! The program is MANDATORY for qualifying businesses and will be monitored for business compliance, penalties will be assessed as warranted. It requires direct effort. Once an employee is hired, they have 30 days to opt in or out. If the employer does not inform the employee or the employee does not respond, they are automatically enrolled at the default contribution level of 3%. There is a lot at stake if employers fail to meet compliance requirements.
Registration Deadline for MyCTSavings Extended to August 31, 2023
The original deadline for MyCTSavings registration was rolled out in waves, beginning with larger employers first, with March 30, 2023 being the deadline for all businesses.
|Wave 1||Wave 2||Wave 3|
|Number Of Employees||100+||26 to 99||5 to 25|
However, as announced by the Connecticut Office of the State Comptroller on April 5, 2023, the registration deadline for MyCTSavings program will be extended to August 31, 2023, allowing more time for small businesses to utilize this opportunity to provide retirement benefits to their employees and keep improving employee well-being.
How Much Does MyCTSavings Cost?
Great news, absolutely nothing! There are no employer fees. Employers can not make employer contributions to the program.
Can MyCTSavings Program Replace 401(k)s?
No, the purpose of this program is not to substitute or compete with 401(k)s or other qualified retirement plans.
What CT Employees Should Know
Who is Eligible?
Connecticut employees are eligible for the MyCTSavings program if they meet the following requirements:
- Employees are at least 19 years old
- Employees must be scheduled to work more than 120 days to be enrolled
- Business owners and shareholders are eligible to partake
- If an employee is an H-2A Visa Holder, they will be eligible if:
- They were employed for over 120 days
- The program is able to verify their information
Are There Fees?
There are no fees in the Cash Preservation fund however there are a few other fees employees should be aware of and prompted of:
- There is an annual asset-based fee paid as a percentage of the money in your account.
- The fee for each investment option you choose is approximately 0.22% of its value per year ($0.22 for every $100 saved), which includes the investment management fee for underlying funds.
- Administration fees are $26 annually (which is charged quarterly at $6.50 each quarter).
Meet the New Deadline for MyCTSavings Registration
The extended deadline is a great opportunity for Connecticut businesses that haven't enrolled in MyCTSavings to take an action and meet compliance requirements in time. If you find yourself having questions or unable to answer employee questions promptly like:
- What if I already have a retirement account in place?
- Are employee contributions protected?
- Does the program have income limitations?
- How much should I be contributing?
- Does this impact SNAP or TANF benefits?
No worries, our experts got your back! As a Connecticut HR Consulting service provider, we are always ready to have a conversation about ensuring compliance for your company and answering all employee inquiries. Contact us with your questions concerning the new MyCTSavings program and we'll help you meet the deadline with compliance ensured.