Get answers to frequently asked questions

Connecticut’s new state-sponsored retirement savings program is open right now. It was created to help the 600,000 private-sector employees without access to employer-sponsored retirement plans. We understand you’ll have questions. Here are the answers to some frequently asked questions. If you have additional questions, we’re here to help.

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.

Will services be available in other languages?

Yes, the call center will offer assistance in English and Spanish and will have access to translation services for other languages. Certain materials may also be available in Spanish.

Where should I turn if I have an issue or concern with a MyCTSavings account?

We're always available to answer any questions or concerns you may have. Whether you want to call, email, or send us something by mail, you can get our contact information here.

What steps are taken to keep my account safe from cyber threats?

MyCTSavings has processes in place to protect the security of accounts and protect your personal information.

Does MyCTSavings protect the security of funds deposited into my account?

Yes, MyCTSavings has processes in place to protect the security of contributions to your account.

Is my personal information reported to government agencies to determine immigration status?

No, reports are not made for the purpose of determining immigration status.

How does the MyCTSavings program work?

MyCTSavings lets you contribute a portion of your pay before taxes and other deductions are made (also known as “gross pay”), into your Roth Individual Retirement Account (IRA). The program is facilitated by your employer but is totally under your control.

How do I join MyCTSavings?

Actually, you don’t have to do anything once your employer facilitates MyCTSavings. You’ll be enrolled automatically and start saving right away, with the money going into a default investment selection based on your date of retirement. Participation in MyCTSavings is completely voluntary for you. You can opt out or back in whenever it works best for you.

What is a Roth IRA?

A Roth IRA is a specific type of retirement account that helps you reduce your taxes once you retire. While you’re working, you pay your usual income tax on the money you earn and deposit it into your Roth IRA. Your Roth IRA earns money (interest), and that money is constantly added to your contributions. When you retire and start taking money out of your Roth IRA (like you’re paying yourself), there are no taxes. In other words, all the interest that your account earns over the years is tax-free. And that’s a big deal. For even more details on Roth IRAs you can visit the Internal Revenue Service (IRS) website.

Why does a program like this exist?

The retirement savings crisis is a serious problem in the United States. In fact, nearly 70% of Americans are concerned that they don’t have enough money for retirement.1 In Connecticut alone, about 600,000 private-sector workers don’t have access to a qualified retirement savings plan at work, and the State moved quickly to provide expanded access to easy retirement savings through the workplace.

Reference
1. “Mind Over Money.” Capital One, 27 Jan. 2020, www.capitalone.com/about/newsroom/2020-capitalone-mindovermoneystudytips.

Why isn’t there a national program like this?

While Congress has not passed legislation for a nationwide program, several states, including Connecticut, are establishing their own retirement savings programs to help workers save now.

Is MyCTSavings the same as an employer retirement plan?

Not at all. Connecticut employers are mandated by State law to facilitate this State-sponsored savings program for employees, when the employer does not offer its own retirement plan.

What benefits does the program offer and why was it implemented?

Too many employees in Connecticut don’t have access to a qualified retirement savings plan at work. The Connecticut Legislature passed a law that created MyCTSavings to make it easier for more workers to save for their retirement. The program specifically aims to lower the barriers of participating by using automatic enrollment and allows employees to save easily through payroll contributions to a Roth IRA.

Does the program provide information and consumer protections to participants?

Yes, MyCTSavings helps ensure that employees have more choices, more information, and easier access to retirement savings accounts. Consumer protections are included in the program and may be enforced by appropriate State agencies.

Can the State use money from this program to fund other programs?

No. The money is yours, and only you can access your savings. Your assets are remitted directly to MyCTSavings on your behalf and are credited directly to your IRA account. The State cannot access your account for other purposes and your account is not tied to any other retirement plans offered by the State.

What was the legislation that created the MyCTSavings program?

In 2016, the Connecticut Legislature enacted Public Act 16-29, which authorized the Connecticut Retirement Security Authority, the authority responsible for creating MyCTSavings.

Do I have to work for a certain amount of time in order to participate?

The enrollment process takes 60 days. If you work for an employer for fewer than 120 days, you won’t be enrolled. But there is no mandatory waiting period.

What if there are only a few employees at my workplace?

The company must facilitate the MyCTSavings program if it has at least five employees — each of whom has been paid more than $5,000 in the calendar year — and doesn’t offer a qualified, employer-sponsored retirement plan.

If I do not have earned income, can I still join MyCTSavings?

No, to qualify for any IRA under IRS regulations you need earned income.

Are there income limits to participate in MyCTSavings?

Yes, you must determine if you meet federal income limits. If you don’t, you can’t contribute to Roth IRA accounts. Simply put, if you make over a certain amount of income in a given year, you may not be eligible. This income limit is determined by the IRS and is based on something called your Modified Adjusted Gross Income (MAGI). This figure is determined by certain deductions that are removed and, in some cases, added back into your gross income. You can use this worksheet from the IRS to help you calculate your MAGI. Your MAGI will determine how much you are able to contribute to your Roth IRA account. Traditional IRAs do not have an income limit.

What are the opt-out and opt-in rules for MyCTSavings?

You can opt out at any time online, by calling 1-833-811-7436, or by mailing in a completed Opt-Out Form to the program. And you can always rejoin at any time by notifying your employer that you would like to start contributing to your account again.

I’m a seasonal employee, am I eligible?

Yes, if you work for an employer for more than 120 days, which is the window for employers to enroll new hires, you are eligible. If you work for fewer than 120 days, your employer cannot enroll you.

Could joining MyCTSavings impact my eligibility for college financial aid?

Withdrawals from IRAs can jeopardize financial aid for the year following the withdrawal. But, in general, qualified retirement accounts are not counted towards federal financial aid. To be safe though, we suggest you carefully review your own circumstances with a tax expert, financial advisor, or your financial aid office.

Could joining MyCTSavings impact my eligibility for federal programs like SNAP or TANF?

In general, qualified retirement accounts are not counted as assets against a person's eligibility. For more information, check with your benefits office.

Is investing in MyCTSavings the same as putting money in a bank?

No, there are big differences. Banks offer checking and savings accounts that typically pay less interest and might offer other savings and investment products. MyCTSavings helps you save through payroll contributions to your Roth IRA and allows you to invest in various targeted, market-based investments.

Could I lose my money?

All investing involves some risk, including the risk of losing the money you invest. MyCTSavings lets you choose investments based on your age, the length of time to your retirement, and your risk tolerance. There are other factors to consider. If you don’t have sufficient retirement income you may outlive your savings, and inflation can reduce the value of traditional savings accounts.

Are my investments guaranteed to earn?

All investing involves some risk, and there is no guarantee of earnings. The MyCTSavings program offers a range of investment types to help you choose options that balance different levels of risk. Usually, a Cash Preservation Portfolio will have lower risk and potentially lower rates of return. When considering a fund’s past performance, there is no guarantee of future results.

What about market volatility?

Investing for your retirement means setting a long-term goal to grow your savings. Investments will fluctuate — there’s no way to time your investment activity only to benefit from positive gains. MyCTSavings offers investment options with various risk levels. Choose the one(s) that best fit your risk tolerance.

What about expense ratios and fees?

Each investment option for MyCTSavings is a portfolio that consists of various mutual funds, each with its own underlying expenses, otherwise known as an expense ratio. The expense ratios and other information about the underlying portfolios can be found at the following links:

Fidelity® Total Market Index Fund

Schwab Total Stock Market Index Fund® 

Fidelity® International Index Fund 

Fidelity® Emerging Markets Index Fund

Fidelity® U.S. Bond Index Fund 

Vanguard Total Bond Market Index Fund 

Vanguard Long-Term Treasury Index Fund 

Schwab Treasury Inflation Protected Securities Index Fund 

Vanguard Emerging Markets Government Bond Index Fund

Vanguard High-Yield Corporate Fund 

Vanguard Cash Reserves Federal Money Market Fund

In addition to the expense ratios, there are also Asset-Based fees and Annual Account fees for the Program, regardless of which investment option you choose. These fees and expense ratios go towards managing and running the MyCTSavings program and the underlying investment portfolios, respectively.

What if I don’t select investments for my account?

Program participants who are enrolled using the default savings choices and who do not make any investment selections will have their funds invested automatically in a money market fund until 60 days have passed after an initial contribution has been made. Then, after 60 days, all funds will be exchanged and contributed automatically to an age-appropriate Target Retirement Portfolio.

How can I learn more about investment options?

You can get general information about the portfolios here, or talk to a financial advisor about your investment options.

Who is responsible for choosing the available investment options?

The Connecticut Retirement Security Authority, whose mission is to “promote and enhance retirement savings for private sector employees in the State,” is responsible for making decisions about the investment options available in the program.

Which company is administering the program?

The Connecticut Retirement Security Authority has selected Sumday as the program’s new administrator. Sumday Administration, LLC, is a wholly owned subsidiary of the Bank of New York (BNY) Mellon. Sumday is an experienced retirement and college savings services provider and will act as the IRA trustee, manage account records, operate the website www.MyCTSavings.com, receive and process retirement contributions and distributions, and provide customer service.

What is a Target Retirement Portfolio?

A Target Retirement Portfolio is an age-based fund designed to help manage investment risk and is based on two factors: an investor’s current age and approximate estimated retirement date. This type of fund includes a mix of investments — stocks, bonds, and cash equivalents — that evolve over time to focus on growth for younger investors and to help preserve savings closer to retirement age. MyCTSavings offers a range of Target Retirement Portfolios.

Will my money be pooled with money from other city, state, or federal programs?

It will not. Your money is yours and does not belong to anyone else. During the time you participate in the MyCTSavings program, your money will be pooled with other MyCTSavings participants and invested only in the Investment Options for this program. You have complete control of your account, which is tracked individually so that you always know how much is in your account.

Where do my automatic contributions go?

They’re deposited into a Roth IRA that is yours to keep for life and that you control completely.

What is the standard contribution rate?

The standard contribution is 3% of your gross income (which is the total amount you make in your paycheck before any taxes or deductions are taken out). You can choose to save more, or less, in 1% increments.

Can I contribute a set dollar amount per paycheck instead of a percentage?

Sorry, at this time you can only contribute a percentage through payroll deductions. If you’d rather contribute a dollar amount on a recurring monthly schedule, you will have to add a bank account to your MyCTSavings account and contribute that way.

Can I have a MyCTSavings account plus another retirement savings plan?

You can contribute to more than one savings plan or account at a time. But remember, the IRS contribution limits are cumulative for all Traditional and Roth IRAs owned by an individual.

Can employers match employee contributions?

MyCTSavings does not allow employer contributions. An employer's role is limited to facilitating the program for employees.

Can I roll over another plan’s money into my MyCTSavings account?

You can, but please consult with a tax expert or financial advisor before making any changes, to better understand any steps to take and restrictions that may apply. Rollovers from pre-tax retirement plans like 401(k)s and 403(b)s will be taxed to convert them from pre-tax to post-tax status for inclusion in a Roth IRA.

How are my contributions made?

Every pay period, your employer will deduct your contribution from your paycheck, based on your set savings rate, and will send your contribution to your personal Roth IRA account. You can also make your own contributions through your bank account or by check, using a paper mail-in form.

How will I know when my MyCTSavings account is close to the annual IRA contribution limit?

MyCTSavings will monitor your account and notify your employer to stop contributions when you are nearing the limit. However, MyCTSavings will not have information on your contributions to another Roth IRA, or any other IRAs you may have. You should ensure that the total of all your retirement accounts is within the IRS’s annual limits. Please consult a tax expert or financial advisor to discuss your specific circumstances.

If I have another IRA, in addition to the State's program, does the contribution limit apply to each separately or to the combined amount?

The IRS's annual IRA contribution limits apply to the combined amount contributed to all of your IRAs, both Traditional and Roth.

Is my contribution pre-tax or post-tax?

Contributions to MyCTSavings are made on a post-tax basis. The percentage contributed is based on your gross income earned (the amount you make before any taxes or deductions have been taken out) with your facilitating employer. If you also contribute to a Traditional IRA, those contributions may be deductible on your tax return. It may be best to consult with a tax professional to determine what you can or cannot deduct.

Why don’t MyCTSavings contributions show up on my W2?

MyCTSavings acts as a payroll deduction IRA, not a retirement plan as defined for the W2, so you won’t see your contributions reflected on your W2. Your IRA trustee will file Form 5498 IRA Contributions Information with the IRS, and you will receive a copy no later than May 31. You do not need to file this form with your taxes, but you should keep it with your tax records as documentation of your contributions for a particular tax year.

Is the contribution rate based on gross or net income?

Your contribution rate is based on your gross income (total income before taxes and other regular deductions are taken).

Is there a limit to how much I can contribute?

Yes, contribution limits for IRAs are set by the federal government. For 2021, you can save up to $6,000 per year if you’re younger than 50 and $7,000 per year if you’re 50 or older, as long as you have earned at least that much. If you are contributing to a Roth IRA, you also need to meet certain income levels based on your modified adjusted gross income (MAGI). This contribution limit applies across all IRAs you may have (both Traditional IRAs and Roth IRAs with the State and elsewhere).

Is there a maximum percentage of income that can be contributed?

There is no upper limit on the percentage of income that can be contributed; however, IRAs have annual contribution limits. Roth IRA contributions may be further limited by your income if it is above certain limits. Your contributions are made post-tax, and your employer can’t deduct more than the amount of your available pay after the employer has made any other payroll deductions that have higher preference as required by law.

Can I make withdrawals if I work during my retirement?

Yes, you can make withdrawals from your account at any time. Consider whether a withdrawal from MyCTSavings is really your best option. You may want to consult with a tax expert.

Are there additional withdrawal restrictions beyond normal Roth IRA restrictions?

The only withdrawal restrictions for MyCTSavings IRAs are those set by the federal government for any Roth or Traditional IRA. Please consult a tax expert or financial advisor about your circumstances.

Can I transfer my MyCTSavings money into another retirement savings account?

Money in your Roth IRA can be transferred or rolled into another Roth IRA only. You should consult with a tax expert or financial advisor first.

Can I take money from my MyCTSavings account?

You can take money out of your Roth IRA at any time. There is no fee or penalty for withdrawing the contributions you make. However, investment earnings are subject to taxation and an additional penalty if taken out before you reach age 59½. There are penalties if you withdraw funds before you’ve had your first Roth IRA for five years. There are exceptions though. For example, if you’re a first-time homebuyer and your Roth IRA withdrawal may be tax-free if you have met the five-year requirement. Taking early withdrawals from Traditional IRAs may also be subject to income tax and penalty. That said, if you’re unsure about your status, it’s best to consult with a tax expert or financial advisor.

Is there an administrative fee or penalty for withdrawing my money?

There is no administrative fee or penalty for withdrawing the money you put into your Roth IRA. That’s your money and you already paid taxes on it. The interest your money has earned is taxable and possibly subject to a 10% penalty if withdrawn before you are age 59½. For a Traditional IRA, withdrawals may also be subject to income tax and early withdrawal penalty. Please consult with a tax expert or financial advisor to determine what steps and restrictions may apply to you.

Is there a minimum retirement age for MyCTSavings?

There is no minimum retirement age associated with the program. There is a federal tax penalty for withdrawing any investment earnings from a Roth IRA before age 59½, unless it’s for a qualifying reason. Please consult with a tax expert or financial advisor.

Is there a waiting period before I can withdraw my money?

You can take your money out of your Roth IRA at any time.

Will Connecticut state income tax be withheld from my Roth IRA withdrawals?

If you are a resident in the state, Connecticut income tax withholding applies only to the taxable portion of IRA distributions. Therefore, if your withdrawal is a qualified distribution there will be no income tax withheld.  If your withdrawal is not a qualified distribution, then a minimum of 6.99% of the taxable portion (the earnings) will be withheld in the state of Connecticut, but you may claim an exemption from withholding, if eligible, or you may elect to have an additional amount withheld, by completing and submitting a Form CT-W4P.

How long will it take to receive my money?

Please allow up to 3-5 business days. Distributions will generally be processed within 3 business days of your request. During periods of market volatility and at year-end, distribution requests may take up to 5 business days. For security purposes, there will be a hold of 15 calendar days when there is a change to your address, and a hold of 15 calendar days following a change to your banking information. Distributions of contributions made by check or ACH will not be available for withdrawal for 5 business days.

What happens to my money if I die with no named beneficiaries?

If you die and have no named beneficiaries, the account will be payable to your estate under the terms of the IRA. Accounts that become unclaimed property will be subject to applicable law.

How do I know if my employer facilitates the State's program?

If you haven’t received your automatic notification and enrollment, you should ask your employer, or call 1-833-811-7435, Monday – Friday, 11 a.m. – 6 p.m. ET.

Is my employer required to offer MyCTSavings?

Any business in Connecticut with five or more employees — each of whom has been paid more than $5,000 in the calendar year — is required to offer MyCTSavings. The only exception is if your employer already offers a qualified, employer-sponsored retirement plan to employees in Connecticut.

How do I set up my MyCTSavings account online after I’m enrolled?

If you choose to participate, set up your account here and follow the on-screen instructions. If you need help, just give us a call at 1-833-811-7436, Monday – Friday, 11 a.m. – 6 p.m. ET.

Is there another way to set up my account or opt out?

Yes. Just give us a call at 1-833-811-7436, Monday – Friday, 11 a.m. – 6 p.m. ET.

What happens to my account if I move out of state?

Your MyCTSavings IRA belongs to you. If you continue to work for an employer that facilitates MyCTSavings, you can continue to participate and continue payroll contributions. If a new employer doesn’t facilitate the program, you can make contributions directly from your bank account. You can also roll over or transfer your savings from MyCTSavings to an IRA at another investment provider, if that IRA accepts rollovers or transfers.

What happens to my account if I change employers?

Your MyCTSavings IRA belongs to you. Your money remains in your retirement savings account under your control. If your new employer facilitates the program, MyCTSavings will notify you and payroll contributions will begin at your new job. You can also opt out at any time. If your new employer offers a qualified, employer-sponsored retirement plan, that employer is not required to facilitate the program. However, you can contribute directly to your MyCTSavings account through your bank account or by check, via a paper mail-in form.

What happens if I opt out?

You can opt out at any time. If you opt out within the 30-day period after the program notifies you about being enrolled, no payroll deductions will be made from your paycheck, and your account will not be activated. If you choose to stop participating after contributions have begun, payroll deductions will end. You can leave the money in your account for your retirement savings. You can also transfer your money or roll it into another IRA. You may also request a withdrawal, which may be subject to penalties and state and federal taxes. And if you change your mind, you can always opt in again at any time by notifying MyCTSavings.

Am I eligible for the Saver's Credit from the IRS?

You may be able to take advantage of the Saver's Credit if you meet the eligibility requirements. The Saver's Credit is a federal tax credit you can get for making contributions to your retirement plan. For more information, visit here. You may also want to consult with a tax expert or financial advisor.

Is there a fee for participating in MyCTSavings?

There is an annual asset-based fee paid as a percentage of the money in your account. The fee for each investment option you choose is approximately 0.22% of its value per year ($0.22 for every $100 saved), which includes the investment management fee for underlying funds. There is also a $26 annual account fee (that is charged quarterly at $6.50 each quarter). These fees pay for the administration of the program, and the operating expenses charged by the underlying investment funds in which the program’s portfolios are invested. The asset-based fee is computed daily, and your investment returns are credited to your account minus the fee.

What does the administrative fee pay for?

It covers all administrative costs associated with the program, such as the cost of maintaining your account, oversight of the program’s investments, providing customer service, keeping records, online and phone services, and the operating expenses of the underlying investment funds in which the investment options are invested.

Do other states have programs like MyCTSavings?

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 New Jersey, Colorado, and Maryland, among others.

Do employers have to facilitate MyCTSavings?

Yes, any business in Connecticut with five or more employees — each of whom has been paid more than $5,000 in the calendar year — must facilitate the State’s program, unless the business offers an employer-sponsored qualified retirement plan.

How is MyCTSavings different from plans like a 401(k) or an IRA?

The program is designed to pull together some of the best features of popular employer plans and IRAs. We’re helping to lower barriers like complex administration and high costs that may keep employers from offering a successful retirement savings plan to their employees. With MyCTSavings, employers just have to facilitate the program – there is no cost to them.

What is a qualified, employer-sponsored retirement plan?

A qualified, 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.

Is there a minimum age to participate in the program?

Yes, the minimum age to enroll in MyCTSavings is 19.

Are H-2A visa holders eligible for MyCTSavings?

Yes, however, you can be enrolled and have an account created only if you work for more than 120 days and if enough verifiable information is available to create an account in your name. If the program is unable to verify your information, an account will not be established for you.

Does MyCTSavings have an investment consultant?

The program has a private investment consultant that provides input, monitoring, and feedback about investments to the Authority.

Can the State use money from MyCTSavings to fund other programs?

No. Your payroll contributions are deposited directly in your name into your account with MyCTSavings. Neither the State nor anyone else can access your account, and your account is not tied to any other retirement plans the State offers.