What is MarylandSaves?
First, let’s introduce you to MarylandSaves. This program was established under a Maryland law that requires certain employers to facilitate an employee’s ability to save for retirement through payroll deductions. The program is designed to provide employees whose employers do not offer other company sponsored savings arrangements the opportunity to save into an individual retirement account administered by MarylandSaves.
Companies will be automatically enrolled in the program, even though the MarylandSaves website states that participation in the program is completely voluntary. As an employer or employee you can opt out of the program at any time and may be exempt from participation if you already offer a qualified plan to your employees.
What does this mean for me?
If you are an employer that offers a company sponsored retirement savings plan you can exempt yourself from MarylandSaves. Qualifying plans include the following: a traditional pension, a 401(k) plan, a 403(b) plan, a SEP plan, a SIMPLE IRA plan, or a governmental deferred compensation plan.
If MarylandSaves sent you a letter providing an access code, you can use that code to exempt your business. If you have not received a code, you can also exempt your business by using the following link: Certify Compliance & Claim Filing Fee Waiver - MarylandSaves. Both options could save your business a $300 filing fee.
Not a Maryland Company?
10 states have mandated retirement plans at some stage of activation. States like Connecticut and New Jersey currently have fully active mandated retirement programs. Others, like Maine and Virginia, have passed laws for mandated retirement programs that are in the process of rolling out.
The following states below have passed laws regarding a mandated retirement program:
California
Colorado
Connecticut
Illinois
Maine
Maryland
New Jersey
New York
Oregon
Virginia
To learn more about these other states mandated retirement plan laws, visit this link: State-Mandated Retirement Plans | Nasdaq
How we can help
At StatonWalsh we are helping our clients and prospective clients navigate the exemption process to get out in front of the State’s enforcement of this statute. If you have a plan, our team can schedule time to walk you through the exemption process. If you do not currently have a company sponsored plan, now is a great time to consider establishing one. The passage of the Secure 2.0 Act in 2022 allows businesses to claim tax credits to offset the startup costs of a new retirement plan. This article from the American Society of Pension Professionals and Actuaries (ASPPA) outlines the usage of these credits in more detail: Where Credit Is 'Due': Tax Credits for Small Employer Plans Under SECURE 2.0 | AMERICAN SOCIETY OF PENSION PROFESSIONALS & ACTUARIES (asppa.org).
For More Information about MarylandSaves please visit: www.marylandsaves.org
For more information about our retirement practice please visit: Corporate Retirement Plans (statonwalsh.com)