Connecticut
On May 27th, 2016, Governor Dannel Malloy (D) signed into law the Connecticut Retirement Security Program Act, which implemented a statewide retirement savings program for all private-sector employees in the state not currently enrolled in a retirement plan to participate in a state-facilitated automatic enrollment individual retirement account (IRA) program.
Legislative Summary:
House Bill 5591 was introduced by the Labor & Public Employees Committee on March 3rd, 2016 and approved by the House on April 27th 2016. The Senate ratified the amended bill on May 3rd, 2016 and Public Act 16-29 was signed into law on May 27th, 2016.
Program Description:
Automatic enrollment to a state-sponsored Roth or traditional IRA program; default 3% contribution rate and auto-escalation yet to be determined.
Affected Employers:
Employers with more than five (5+) W2 employees above the age of 19, who have been employed for at least 120 days, and paid more than $5,000 in a calendar year must either enroll in the state’s IRA program, or they must opt out and have another eligible program such as an employer sponsored 401(k) plan.
General Requirement:
Automatic enroll employees at 3% deferral of the enrollee’s wages.
Launch Status:
April 1, 2022
Full Implementation:
March 30, 2023
Compliance Deadline:
| Deadline | AFFECTED EMPLOYERS |
|---|---|
| October 31, 2022 | Employers with 25+ employees |
| March 30, 2023 | Employers with 5+ employees |
Non-Compliance Penalties:
| Deadline | MAXIMUM PENALTY |
|---|---|
| June 28, 2023 | 5 – 24 Employees , $500 |
| January 10, 2023 | 25 – 99 Employees, $1,000 |
| January 10, 2023 | 100+ Employees, $1,500 |
Employer Costs:
None
Employee Costs:
$26 annual account fee + 0.26% fee per investment
Investments:
The program offers a suite of 12 target date funds (TDFs), as the default investment option, and additional investment options – including cash preservation, income, income & growth, balanced funds as well as conservative, moderate or growth portfolios.
Connecticut MyCTSavings Program