If you grew your Connecticut business or nonprofit organization in 2023 and have not yet set up a workplace retirement plan, you may need to do so or take other action in 2024.
As we’ve previously covered, Connecticut law now requires most employers that do not already sponsor a qualified retirement plan to facilitate employees’ participation in a Roth (post-tax) IRA through the MyCTSavings program overseen by the State Comptroller’s office. New businesses or nonprofits that were not in existence at all times during 2022 and 2023 were not yet subject to the law in 2023. However, employers that were in existence during all of 2023, employed at least five (5) employees on October 1, 2023, and paid at least five (5) employees $5,000 in taxable wages in 2023 are generally covered by the law in 2024. Therefore, if you started a business or founded an organization in 2022 that grew in 2023, you may need to take action soon to avoid receiving notices and potential enforcement actions from the State.
Connecticut employers that already sponsor a qualified retirement plan are not required to facilitate their employees’ participation in the MyCTSavings program. For this purpose, a qualified retirement plan includes 401(k) and 403(b) plans, SEPs, SIMPLE IRAs and governmental 457(b) plans, among certain other plans. However, exempt employers must still certify their exemption at the MyCTSavings program website with their taxpayer ID number and Access Code assigned to them by the State.
For questions or additional information about the MyCTSavings program, please contact your employee benefits attorneys at Shipman & Goodwin LLP.