The deadline for Connecticut employers to register with the state-run retirement plan was extended this week to Aug. 31, 2023.
Employers with five or more employees—each paid a minimum of $5,000 in the calendar year—are required to join the program if they don’t offer employees a qualified employer-sponsored retirement plan.
Businesses that offer employees a qualified retirement savings option should certify their exemption from the MyCTSavings program, which is administered by the Office of the State Comptroller.
Comptroller Sean Scanlon announced the deadline extension April 5, noting that 3,400 employers have enrolled in the program.
Scanlon said the deadline was extended “so that we can continue to build on this momentum and work with business owners to empower their employees.”
He added that the program has enrolled over 10,000 employees and has more than $3.5 million in assets.
While there currently is no penalty for not complying with registration requirements, Scanlon said earlier this year that the state legislature is considering a proposal imposing “a small penalty.”
“At the end of the day, we don’t want to get to that point,” he said. “We want to work proactively with businesses.”
Qualified employer-sponsored retirement plans include those 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).
Qualified, employer-sponsored plans do not include payroll deduction IRAs.
Eligible employees will be automatically enrolled in the program. Once employees are enrolled, they can choose to opt out of the program.
By default, employees who are enrolled will see a 3% deduction from their gross pay, but they can choose to manually adjust their contribution rate at any time.
As a Roth IRA, the state-run plan does not provide the pre-tax benefits of other retirement plans offered by numerous private sector institutions.
In addition, the state plan is not subject to the federal Employee Retirement Income Security Act, which sets minimum standards for most retirement and health plans to protect enrolled individuals.