Did you know that, by March 31, 2023, all employers in Connecticut with five or more employees are now required to offer a retirement plan?
To facilitate this, MyCTSavings, a ROTH IRA plan, was created by the Connecticut Retirement Security Authority and is administered by private-sector partners. The following provides a high- level summary of some of the key facts about this program:
600,000 People with no Retirement Saving
It is estimated that, in Connecticut, more than 600,000 private-sector employees have no employer-sponsored retirement savings plan. MyCTSavings was created by law to address this issue.
Employer’s Private Plans
If a company already offers a private retirement plan, it does not need to register with MyCTSavings.
Connecticut’s Labor Commissioner Action
If a qualified employer fails to enroll an eligible employee, the employee or Connecticut’s labor commissioner may take legal action.
$6,000 is the Annual Limit
MyCTSavings allows workers to contribute up to $6,000 per year from their paychecks into the MyCTSavings Roth IRA, or $7,000 if the employee is age 50 or over.
Contributions Are Made During Payroll
Contributions to the plan are made through payroll deductions, and the money grows tax-free until it is withdrawn.
No Income Tax
Because contributions are made with after-tax dollars, employees don’t have to pay income tax on any money they withdraw from this account during retirement.
MyCTSavings is Providing Support
MyCTSavings provides integration with your company’s payroll process, even if you use an external provider.
Employee Participation is Voluntary
Employee participation in the program is completely voluntary. When an eligible employee is hired, employers report employees to the MyCTSavings portal. Employees have 30 days to opt-out before being automatically enrolled at the default contribution level of 3%.
Employers are Required to Facilitate the Program
As an employer, your role is simply to facilitate the program and maintain accurate employee records. Click here to find detailed instructions on how to enroll in MyCTSavings here.
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