STATE AUTO-IRA PLANS
The Connecticut Retirement Security Authority (CRSA) has
announced the launch of a pilot of MyCTSavings, the state-run retirement
savings program intended to provide coverage for private-sector employees whose
employers do not offer them a plan. The pilot program is slated to begin in
September.
The CRSA, a quasi-public agency headed by co-chairs State
Comptroller Kevin Lembo and State Treasurer Denise Nappier, is the body that is
responsible for implementing MyCTSavings.
The Pilot
Before the full MyCTSavings program is rolled out across the
state, the CRSA is looking for interested employers to take part in an
exclusive pilot of the program. The CRSA bills it as a chance to be one of the
first to offer the program to employees and help influence the program for
other business owners.
Employers. Employers with more than five employees
and that do not provide a qualified retirement savings plan may participate.
Employees must be at least 19 years old, have earned income, be employed in
Connecticut, and have been employed for at least 120 days.
Employers that express interest and provide contact
information at MYCTSavings.com will receive a brief questionnaire to confirm
they are eligible to join the pilot. The questionnaire will come from the
Connecticut Retirement Security Board email, OSC.CRSA@ct.gov.
Employees. Employees whose employers choose to
participate in the pilot program will be enrolled automatically and sent
welcome notices from the program. They can choose to: (1) do nothing, (2)
customize their options to their liking, or (3) opt out. Employees will have 30
days to opt out or login to their account. If they choose to do nothing they
will automatically have 3% of their total pay (before taxes and other
deductions have been taken out) contributed to a Roth IRA account. Their
contributed funds will eventually be invested in a default Target Date
Retirement Fund that will be pre-selected based on their date of birth.
After the pilot is complete, the full launch of the
MyCTSavings program across the state will take place in early 2022.
About MyCTSavings
The program is not mandatory for employers with fewer than
five employees or that already offer a retirement plan. It is mandatory for
businesses with five or more employees; however, while it requires their
participation; it does not require that employers contribute to the program,
only that they provide a payroll deduction mechanism by which employees to
contribute.
Employees whose employers enroll in MyCTSavings will be
automatically enrolled in the program, but can opt out if they choose.
Employees who participate can adjust their savings rate, change how their funds
are invested, add beneficiaries and more.
The program provides for the establishment and maintenance
of IRAs for each program participant. Those IRAs may be established and
maintained directly by the program or by third party entities in the business
of establishing and maintaining IRAs. Program participants can choose whether
to contribute to a traditional IRA or a Roth IRA; however, if a participant
does not make an affirmative election, he or she will be enrolled in a
traditional IRA.
Lembo announced in April 2020 that after a competitive
bidding process the CRSA selected Sumday, a subsidiary of BNY Mellon, to act as
the administrator of MyCTSavings.
It appears that rollout of MyCTSavings will take place in
waves; the CRSA’s Design and Investment Committee adopted a motion at its July
1, 2021 meeting to enroll larger firms in the first wave, and smaller firms in
the second. The committee did not set nor refer to a timetable for those waves,
nor define what “larger” and “smaller” mean.
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