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Deadline Extended Until August 31, 2023, for Businesses to Comply with Connecticut’s Mandatory Retirement Program

19 Apr

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Deadline Extended Until August 31, 2023, for Businesses to Comply with Connecticut’s Mandatory Retirement Program

Update Applicable to:
All employers with five or more employees do not sponsor a qualified retirement plan in Connecticut.

What happened and what are the details?
Connecticut has established a state-run employee retirement savings program (“MyCTSavings”) launched in 2022 and is administered by the Office of the State Comptroller. The individual retirement account (IRA)-based program generally requires that private-sector employers with five or more employees in Connecticut — at least five of whom have been paid $5,000 or more in the previous calendar year — join MyCTSavings if they do not currently offer a qualified, employer-sponsored retirement plan for their employees.

Employer compliance with the program has been phased in based on the number of employees a business has, starting with those with 100 or more employees. The deadline for the last phase, applicable to small businesses with between five and 25 employees, was March 30, 2023. However, the State Comptroller’s office announced an extension for all employers to register to August 31, 2023.

Covered employers may register for the MyCTSavings program directly at https://myctsavings.com/employers. After registering, the employer will receive information and instructions regarding MyCTSavings, including materials to be distributed to employees. Note that eligible employees are automatically enrolled in the program, but they may change the automatic salary deferral percentage or opt out of the program.

Employers that offer a qualified, employer-sponsored retirement plan for their employees are exempt from compliance with the program but should certify their exemption on the MyCTSavings portal – https://myctsavings.vestwell.com/register/exempt, by the August deadline. 

Employer Action Necessary
Although no employer contributions are permitted under the program, it does impose some requirements on employers. If they have not done so already, Connecticut employers with five or more employees (at least five of whom have been paid $5,000 or more in the previous calendar year) and that do not sponsor a qualified retirement plan need to take the following steps:

  • Register with MyCTSavings by August 31 (employers that offer a qualified plan for their employees are exempt and should certify their exempt status on the MyCTSavings website by that date);
  • Provide certain required program information to eligible employees;
  • Begin employee payroll deduction contributions and timely remit them to the state program; and
  • Direct employees requesting information about the program or investment options to go to www.MyCTSavings.com/savers or call 833.811.7436

Penalties for Non-Compliance
If a business fails to enroll an employee in the program, the Office of the Comptroller could bring a civil action to require enrollment. In addition, the state legislature is considering a proposal imposing “a small penalty” for not complying with registration requirements. Further, an employer that fails to remit timely payroll contributions may incur penalties, including wage and hour violations assessments.

For more information, please see the links below:

MyCTSavings Portal

https://myctsavings.com/employers

www.MyCTSavings.com/savers

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What do employers need to do?
Employers should review the links provided above and begin registering as soon as possible if they do not provide a qualified retirement plan by August 31, 2023.

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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