Get answers to frequently asked questions
MyCTSavings is a new retirement savings program created to help Connecticut’s 600,000 private-sector employees without access to employer-sponsored retirement plans. Here are answers to many of the common things we’ve been asked. If you have questions beyond these, we’re here to help. Just drop us a line.
- Do employers have to facilitate this State program?
Yes. Any employer, whether for profit or not for profit, must facilitate the State’s program if:
It employed five or more employees in Connecticut on October 1st of the previous calendar year, and;
It paid at least five employees $5000 or more in taxable wages in the previous calendar year, and;
It does not currently provide a qualified, employer-sponsored retirement savings plan
Employers who are exempt from MyCTSavings include:
Those who currently provide a qualified, employer-sponsored retirement savings plan
Those who were not in existence at all times during the current and preceding calendar years
Those employing only individuals whose services are excluded under the unemployment compensation law
- Do other states have programs like this?
Yes, similar programs are up and running in other states, including California, Oregon, and Illinois. And many other states are about to launch state-sponsored retirement savings programs or are in the process of passing legislation to support them, including Colorado and New Mexico, among others.
- How is the MyCTSavings program different from plans like a 401(k) or an IRA?
Many plans involve complex administration requirements, fiduciary liability, and high costs, all of which can keep employers like you from offering employees retirement savings plans. But MyCTSavings is different. It offers some of the best features of popular employer plans and IRAs, but without the burdensome requirements, allowing employers to focus on facilitating the program — all with no cost to you.
- Does this program replace 401(k)s?
No, this program is not meant to replace or compete with 401(k)s or other qualified retirement plans.
- What is considered to be a qualified, employer-sponsored retirement plan?
An employer-sponsored retirement plan includes a plan qualified under Internal Revenue Code sections 401(a) (including a 401(k) plan), qualified annuity plan under section 403(a), tax-sheltered annuity plan under section 403(b), Simplified Employee Pension plan under section 408(k), a SIMPLE IRA plan under section 408(p), or governmental deferred compensation plan under section 457(b). It does not include payroll deduction IRAs.
- What benefits does the program offer and why was it created?
An estimated 600,000 Connecticut employees do not have access to a qualified retirement savings plan at work. To address this urgent need, the Connecticut Legislature passed a law that created MyCTSavings to make it easier for more workers to save for their retirement. The program uses automatic enrollment and savings through payroll deductions to help employees save. Eligible employees can opt out if they don’t want to participate or prefer to save another way.
- How can facilitating MyCTSavings help my business?
It can be challenging for small businesses to provide a qualified, employer-sponsored retirement plan that helps employees reach their financial goals. MyCTSavings can help you minimize this burden. Employers that already facilitate this type of program tell us it’s a manageable way to provide retirement savings. The program can help you attract and retain employees, and there are no fees for you.
- Exactly how does the program help my employees?
MyCTSavings makes it easier for employees to save for retirement, and automatic retirement savings through the workplace can help them have a more financially secure future. The program uses automatic enrollment and savings through payroll contributions to help employees save. Eligible employees can opt out if they don’t want to participate or prefer to save another way.
- What was the legislation that created MyCTSavings?
In 2016, the Connecticut Legislature enacted Public Act 16-29, which created the Connecticut Retirement Security Authority — the authority responsible for creating MyCTSavings.