Maryland$aves
State-Mandated Retirement Plan
vs. Employer-Sponsored Retirement Plan
BACKGROUND
According to the state of Maryland, approximately 1,000,000 employees work for an employer that does not offer an employer-sponsored retirement plan. Because of this, the Maryland$aves program was developed with the intention of offering an opportunity for those employees to save for retirement. Participation in this plan is mandatory for employers that do not offer a retirement savings plan to all their employees.
WHAT DOES THIS MEAN FOR YOU?
Currently scheduled to launch this summer (2022), the initial requirement is that any employer who does not offer a retirement plan either establish a retirement plan or sign their employees up for Maryland$aves. The plan that Maryland$aves is offering it comparable to a Roth IRA. A breakdown on the details of this program is provided on the Maryland$aves announcement that is attached to this document where it highlights various benefits for the employer and employee.
As a business owner there may be several reasons why you may not currently offer an employer-sponsored retirement plan. You could choose to opt-in to the state-run plan or offer some kind of alternative. Even though the Maryland$aves program does offer a solution for employees that currently do not have one, it provides little flexibility and control. One major difference is that the maximum contribution limits are much lower than what you may have access to with any number of other retirement plans like a 401(k). The bottom line is….let’s talk. It’s important to know your choices.
To be clear, as with most any state-mandated program, we should expect changes. We are currently monitoring all updates that are made available and will share any of that information with our clients.
