MyCTSavings: Everything You Need to Know
On March 24, 2022, State officials announced a new retirement program, six years in the making, called MyCTSavings.
MyCTSavings will become mandatory for employers with 5 or more employees who have been paid more than $5,000 in the calendar year.
The program will roll out in waves as follows:
· Wave 1: Employers with 100 or more employees – Deadline: June 30, 2022
· Wave 2: Employers with 26 to 99 employees – Deadline: October 30, 2022
· Wave 3: Employers with 5 to 25 employees – Deadline: March 30, 2023
Employers do not have the opportunity to pick up any of the costs for their employees. Employees will be charged $26 per year, 22 basis points (.22%), plus the cost of the investment options. The accounts are ROTH IRA's, therefore do not give the employees the option to set aside money on a pre-tax basis.
Businesses are required by law to have an employer-sponsored retirement plan or join MyCTSavings. The state has not yet communicated the fines for non-compliance.
An employer-sponsored retirement plan includes a plan qualified under Internal Revenue Code sections 401(a) (including a 401(k) plan), qualified annuity plan under section 403(a), tax-sheltered annuity plan under section 403(b), Simplified Employee Pension plan under section 408(k), a SIMPLE IRA plan under section 408(p), or governmental deferred compensation plan under section 457(b). It does not include payroll deduction IRAs.
Next Steps for Employers:
1) If you have an employer-sponsored plan no action is needed at this time. At some point you will need to certify your exemption. Please keep an eye out for the email and PIN that will allow you to complete that task.
2) If you do not have an employer-sponsored plan, you need to decide which one of the qualified plans is right for your business. We can help you deterime which type of plan best fits your organization.
3) Book time to have a conversation around keeping your organization compliant!