This month, a new law will go into effect requiring that Maryland businesses offer employees an opportunity to invest in a retirement savings plan. The plan, called MarylandSaves, has many employers wondering how the new retirement savings initiative will impact their business. If you’re one of these business owners or managers, here is what you need to know.
What is MarylandSaves?
MarylandSaves is a state-sponsored program established to give employees, whose employer does not currently offer an employer-sponsored retirement savings plan, the opportunity to enroll in a plan on their own. Ultimately, the program helps employers simplify employee participation in a retirement savings plan through automatic payroll contributions into a Roth IRA.
If a company currently offers a qualified employer-sponsored retirement plan , then that company is not required to enroll in MarylandSaves. However, each exempt company is required to certify their exemption on the program’s website.
Please be aware that all enrollment and exemption registration should only be completed directly through the MarylandSaves website.
Who is required to enroll in MarylandSaves?
At its core, the program’s mission is to allow the employees of small businesses to voluntarily contribute to a retirement savings plans. If you run a for-profit or not-for-profit business that operates in the state of Maryland, you are required to enroll in the program if you meet the following requirements:
- Have at least one W-2 employee
- Pay employees through a payroll service or system
- Have been in operation for at least two years
- Do not currently offer an employer-sponsored retirement savings plan to your employees
- Have not provided an employer-sponsored retirement savings plan in the previous two years
Employers that enroll do not have to pay a fee for the services, are not permitted or required to make contributions to the plan, and have no federal reporting requirements in relation to the program.
As an incentive, the Maryland Department of Assessment and Taxation will waive its $300 annual report filing fee for all eligible employers who enroll in the program.
What to expect next
All Maryland employers will receive a notice from the state of Maryland via mail or e-mail with an access code and must either enroll or register for exemption through the MarylandSaves website.
Employers that offer a qualified retirement plan can begin the registration process by providing their EIN and access code and then certifying that they offer a qualifying plan.
Those enrolling will also need their EIN, access code, list of employees, and payroll information to begin enrollment.
Please note that the state of Maryland is actively sending out access codes, so it may be some time before employers can begin enrollment or register for exemption. No current deadlines are set for enrollment, but we anticipate they will be released shortly.
In the interim, if you have any questions you can reach an account representative for MarylandSaves at 1-833-811-7437.
We will share more details as they are released.