Mandatory state-run retirement program for employees without access
A bill passed by the General Assembly in 2016 and signed into law by Governor Larry Hogan created the framework for a state-run retirement program for all employers in Maryland. After six years, the program – MarylandSaves – is ready to launch this month.
With MarylandSaves, employees can set up a Roth IRA, what the program calls a WorkLife Account, that they can contribute to. The program is governed by the Maryland Small Business Retirement Savings Program.
Under the law, all employers who have been in operation for at least 2 calendar years, have at least one W-2 employee, and use an automated payroll system, are required to offer their employees some sort of retirement savings plan. It can be a traditional pension, a 401(k) plan, a 403(b) plan, a SEP plan, a SIMPLE IRA plan, or a WorkLife account from MarylandSaves.
The MarylandSaves has no employer fees and employers are not required nor permitted to contribute to the program. Employees will be automatically enrolled and will have 30 days to opt out.
The Maryland Department of Assessment and Taxation will waive its $300 annual reporting filing fee for every year an employer participates in MarylandSaves or can show proof they offer another qualified employee retirement savings plan. Employers who do not offer a qualified plan will be required to pay the $300 fee.
NFIB in Maryland will be offering a member webinar featuring staff from the MarylandSaves program to answer employer concerns. Stay tuned for details.