The Connecticut Retirement Security Authority (CRSA) is seeking businesses to volunteer to become part of a pilot program that will influence the design of Connecticut’s state-run retirement plan, which is expected to roll out in early 2022.
The CRSA said the pilot program, which is scheduled to begin next month, will help shape the retirement plan, known as MyCTSavings, that will be mandatory for all Connecticut companies that have five or more employees and don’t already offer a retirement plan. The authority is offering exclusive access to one-on-one support to help implement the plan as an incentive for companies to sign up for the pilot program.
The CRSA said it will help volunteer employers register their businesses and upload payroll and employee information, as well as schedule a time in September to go through the process together. In October, the companies will begin submitting employee payroll contributions, and after that point they’ll only need to update contributions and employee information.
Once enrolled, employees will be able to contribute to an individual retirement account (IRA) directly from their paychecks. The default savings rate is 3% of gross pay, which employees can adjust at any time.
Employees of companies that participate in the pilot will be automatically enrolled and sent notices from the program. They will have 30 days to opt out or log in to their account. If they do nothing, they will automatically have 3% of their total pay, before taxes and other deductions, taken out of their paychecks and contributed to a Roth IRA account. And those contributed funds will eventually be invested in a default target-date fund (TDF) that will be pre-selected based on a worker’s birth date.
According to the CRSA, there are more than 600,000 private-sector employees in Connecticut that have no employer-sponsored retirement savings plan.