What's Happening?
Connecticut has implemented a new enforcement process for the MyCTSavings retirement program, effective July 1, 2025. The law introduces a three-strike system with escalating penalties for noncompliance, ranging from $500 to $1,500 based on employer size. Employers with five or more employees must auto-enroll in the program or certify a compliant employer-sponsored plan. The law maintains existing eligibility criteria and contribution rates, while exempting employers with qualifying retirement plans from certain requirements. The federal Saver’s Match is incorporated, allowing eligible low-income employees to receive federal contributions into their MyCTSavings accounts.
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Why It's Important?
The enforcement of the MyCTSavings program signifies Connecticut's commitment to ensuring retirement savings for employees. The penalties aim to encourage compliance among employers, potentially increasing participation in retirement savings plans. This could lead to improved financial security for workers, particularly those in small to medium-sized businesses. Employers may face financial consequences if they fail to comply, prompting them to review and update their enrollment procedures and staff training. The inclusion of the federal Saver’s Match could provide additional financial benefits to low-income employees, enhancing their retirement savings.
What's Next?
Employers in Connecticut will need to audit their enrollment procedures and update internal protocols to avoid penalties. They may also need to train staff responsible for compliance with the MyCTSavings program. The state will likely monitor compliance closely, and employers should be prepared for potential audits or inspections. The impact of the federal Saver’s Match on employee participation and savings levels will be observed, potentially influencing future policy decisions. Employers may seek guidance or assistance to ensure they meet the program's requirements and avoid financial penalties.
