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CT Retirement Mandate – MyCTSavings

MyCTSavings is a retirement savings program established by the State of Connecticut to provide private-sector employees, who do not have access to an employer-sponsored retirement savings plan, with a convenient way to save for retirement. Here’s a detailed overview of how MyCTSavings works:

Employer Requirements and Responsibilities:

  • Eligibility: Employers with 5 or more employees, who do not offer a qualified retirement plan, are required to register for MyCTSavings. It is important for businesses to meet the registration deadlines to avoid penalties​​​​.
  • Registration Process: The process involves setting up an account, completing payment setup, adding employees, and sending contributions. Employers can invite a payroll representative to assist with this process​​.
  • Employer’s Role: Employers are required to enroll eligible employees in the program, automatically deduct contributions from payroll, and maintain employee records. However, they are not responsible for managing the investment options or processing distributions​​​​.

Employee Participation:

  • Automatic Enrollment: Eligible employees are automatically enrolled in the program but have the option to opt out within 30 days of being added. The default contribution rate is set at 3% of the employee’s gross pay​​​​.
  • Roth IRA Structure: MyCTSavings is a Roth IRA program, meaning contributions are made with after-tax dollars. The funds grow tax-free, and withdrawals during retirement are not subject to income tax​​​​.
  • Eligibility for Employees: The program is open to Connecticut employees who are at least 19 years old and have been employed for at least 120 days​​.

Benefits and Features:

  • For Employers: There is no cost for employers to facilitate MyCTSavings, and it requires minimal administration. This program can enhance a business’s competitive edge by offering a valuable benefit to employees​​.
  • For Employees: Employees benefit from a secure and simple way to save for retirement. They can adjust their contribution levels and have access to tools and resources to help plan their financial future. The account is portable, meaning it stays with the employee even if they change jobs​​​​.

Compliance and Penalties:

  • Deadlines and Compliance: The program has set specific deadlines for businesses of various sizes to register. Employers that fail to comply may face investigations and penalties​​​​.
  • Exemptions: Employers who already offer a qualified retirement plan can certify their exemption from the program​​​​.

General Information:

  • Administration and Oversight: MyCTSavings is overseen by the Connecticut Office of the State Comptroller and is administered by private-sector partners​​​​.

In essence, MyCTSavings is designed to be a straightforward and beneficial program for both employers and employees, ensuring a larger portion of the workforce has access to retirement savings options. For Connecticut businesses and their employees, it represents a significant step towards financial security in retirement.