Connecticut Enforces MyCTSavings Program with New Penalties for Noncompliance

What's Happening?

Connecticut has implemented a new enforcement strategy for its MyCTSavings retirement program, effective July 1, 2025. The state has introduced a three-strike process with escalating penalties for employers who fail to comply with the program's requirements. The penalties range from $500 to $1,500 annually, depending on the size of the employer. This law applies to employers with five or more employees, maintaining the same eligibility criteria and default contribution rates. Employers with qualifying retirement plans are exempt from certain requirements. The law mandates auto-enrollment in the MyCTSavings program or certification of a compliant employer-sponsored plan. Employers are encouraged to audit their enrollment procedures and update internal protocols to avoid violations and financial penalties.

Why It's Important?

The enforcement of the MyCTSavings program is significant as it underscores Connecticut's commitment to ensuring that employees have access to retirement savings plans. This move could impact a wide range of employers, particularly small to medium-sized businesses, by imposing financial penalties for noncompliance. The introduction of penalties aims to increase participation in retirement savings, potentially benefiting employees who might not otherwise have access to such plans. The law also incorporates the federal Saver’s Match, which could provide additional financial support to low-income employees. This development highlights the growing trend of state-level initiatives to enhance retirement security for workers.

What's Next?

Employers in Connecticut will need to ensure compliance with the new regulations to avoid penalties. This may involve auditing current enrollment procedures, updating internal protocols, and training staff responsible for managing these processes. As the law takes effect, there may be increased scrutiny on how employers implement these changes. Additionally, other states may observe Connecticut's approach and consider similar measures to enhance retirement savings participation among their workforce.