It’s important for employers of all sizes, industries, and locations to comply with the many laws, regulations, and programs regarding business owners. And for Connecticut business owners, one of the important programs that they must be in compliance with is the Connecticut state retirement savings plan, MyCTSavings.
In an effort to encourage retirement savings for workers, the legislature in CT established the Connecticut Retirement Security Authority to provide accessible retirement savings accounts for private-sector employees through the MyCTSavings program. In addition to being a great benefit for companies, certain employers are mandated to offer employees this retirement program.
The program is mandatory for employers without an existing retirement savings plan for employees. Employers in Connecticut must comply with the MyCTSavings program to provide their employees with retirement options, or they may face some serious penalties. In this blog, we’ll discuss everything this program has to offer, its benefits, and how your Connecticut business can ensure compliance.
The MyCTSavings is a Connecticut state-sponsored retirement program created for workers who otherwise do not have access to an employer-sponsored retirement plan. Despite efforts taken to encourage retirement benefits, nearly half of the state of Connecticut's workforce is not enrolled in any retirement plan. Therefore, Public Act 16-29 established the Connecticut Retirement Security Authority to provide retirement savings accounts for private-sector employees through the MyCTSavings program. This program is only provided to businesses that do not have a qualified retirement plan that they offer their employees.
Offering MyCTSavings is mandatory for Connecticut employers who do not have another sponsored retirement program for their workers and who have five or more employees who each earn more than $5,000 in a calendar year. Employers may be exempt from participating in MyCTSavings if they offer their own retirement plan; if so, then they must certify their exemption via the employer portal. If a business doesn't comply with MyCTSavings or offer another plan, they may be penalized.
This CT retirement savings program offers Roth IRAs and traditional IRAs as an option. The MyCTSavings offers a Roth IRA upon default; however, employees can choose between a Roth IRA and a traditional IRA depending upon their preference. While MyCTSavings are mandatory for certain Connecticut employers to offer, Connecticut workers are not required to contribute to a retirement savings plan unless they choose.
This program is available to all Connecticut workers who are not offered another retirement plan by their employer, self-employed individuals, as well as those who wish to have a flexible, portable Roth IRA upon changing careers. Employees must be at least 19 years old and have worked with the employer for 120 days or more. Eligible employees are automatically enrolled with a default contribution rate of 3%, which they can adjust or opt out of.
For employers registering for MyCTSavings, there are registration deadlines that they must be aware of. Registration is mandatory for employers without an existing retirement savings plan for employees. MyCTSavings reviews state data every year to identify new employers eligible for the program. Businesses that are newly eligible will be notified that they need to sign up for MyCTSavings or certify exemption from the program.
Registration Deadlines:
MyCTSavings is an incredible program for both employers and workers—and with zero costs for employers. Let’s look at some of the many benefits this Connecticut state retirement savings plan offers for both employees and employers.
This program may be mandatory for certain Connecticut employers, but it also comes with many benefits. This program has no employer fees and does not cost employers anything to set up or register for MyCTSavings. In fact, the program is not only free but also very simple to incorporate into your business. MyCTSavings easily integrates with payroll processes and is very easy for employers to navigate and manage.
Small businesses often cannot afford to offer benefits—including retirement benefits. This program allows businesses with as few as five employees to offer their workers a retirement savings plan to help them prepare for their future. One of the biggest benefits of the MyCTSavings program is that employers are better able to attract and maintain strong employees by providing employees with this plan, and at zero cost to them.
Planning for retirement is crucial for all workers, and it is never too soon to start thinking and planning about the future. This Connecticut state retirement savings plan allows employees to start making retirement contributions whenever and wherever they are.
One of the main benefits of MyCTSavings for employees is that this retirement account is portable, meaning that their retirement contributions or savings are not affected if they change jobs or move out of the state of Connecticut. This makes navigating career changes a whole lot easier; the contributions they make to their MyCTSavings account are their money and go with them wherever they go.
Another benefit is that it does not limit their place of employment, as even the smallest of businesses are required to offer MyCTSavings. In addition, employees can easily pause or opt-out of making retirement contributions at any time. Overall, the MyCTSavings program has many benefits to workers and is a safe, secure, and easy way to save for retirement.
Employers in Connecticut must comply with the MyCTSavings program to provide retirement savings options for their employees or certify their exemption if they offer a different retirement plan. If your business has not already registered for MyCTSavings, all newly eligible businesses must register before the deadline on August 31, 2024. Employers can register on the MyCTSavings website by providing their Employer Identification Number (EIN), along with other business information.
Employer retirement plan compliance comes with no cost to business owners; however, failing to register for the MyCTSavings program and comply with providing a CT retirement savings program can result in penalties. Failure to comply may result in an investigation, paying late payroll deduction penalties, and even violating Connecticut law. Additional penalties may include fines between $500 and $1,500 for businesses failing to provide their employees with the MyCTSavings program. In fact, failure to remit contributions can even lead to civil action by the Labor Commissioner and recovery of costs and attorney's fees by the employee.
It’s essential that CT employers are aware of this program and are ensuring compliance with the MyCTSavings program to avoid any penalties.
MyCTSavings is a great retirement savings program, sponsored by the State of Connecticut's Retirement Security Authority, and is designed to help encourage workers to save for retirement. Connecticut state law mandates that certain business owners must provide their employees with the MyCTSavings program or another form of retirement plan.
Business owners in Connecticut must provide their workers with the MyCTSavings program if they are not offering another retirement plan and have more than five employees who each earn more than $5,000 in a calendar year. Employers must make sure they register before the deadline to stay compliant with the Connecticut state-run retirement plan mandate. This CT retirement savings program also provides both employees and employers with many benefits, including helping employers attract and retain employees.
Employer retirement plan compliance with MyCTSavings is crucial for business owners to avoid penalties such as investigation, payroll penalties, and large fines. All newly eligible businesses must register for this program before the MyCTSavings registration deadline on August 31, 2024.