What Businesses Need to Know About the MarylandSaves Program
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In September 2022, Maryland introduced the MarylandSaves program, which is designed to help businesses comply with both federal and state laws mandating that employers offer retirement savings for employees. Here’s what business owners need to know about this program, even if you already offer a retirement plan for employees.
What is MarylandSaves?
MarylandSaves is a state-sponsored retirement savings program that helps facilitate businesses’ compliance with both federal and state laws mandating that employers offer retirement savings for employees. The program offers Roth Individual Retirement Accounts (Roth IRAs), referred to as WorkLife accounts, for the employees of enrolled companies. These WorkLife accounts enable employees to contribute to retirement savings through payroll deferrals.
Who should consider the program?
Maryland
The Maryland law requiring businesses to offer some sort of retirement savings applies to businesses that:
have been in operation for at least 2 calendar years.
have at least one W-2 employee.
use an automated payroll system.
To comply with the law, the retirement savings plan can be any of the following:
a traditional pension, a 401(k) plan.
a 403(b) plan.
a SEP plan.
a SIMPLE IRA plan.
a governmental deferred compensation plan.
WorkLife Account from MarylandSaves.
Federal
Beginning in 2025, Secure 2.0 requires that businesses, that start new retirement plans on or after December 29, 2022, to automatically enroll employees in their retirement plan at a rate of at least three percent, but not more than 10 percent of eligible wages.
What does participation in the MarylandSaves program cost my business?
Zero dollars. MarylandSaves offers the best features of an employer retirement plan with few requirements and no employer cost. This program is a free way for Maryland businesses to comply with both Maryland’s law and the federal Secure 2.0 Act of 2022.
Why should my business consider it?
Simplified Compliance: MarylandSaves simplifies compliance with retirement savings laws. It offers an easy way for your business to provide retirement benefits to our employees, even if they do not have an existing retirement plan.
Cost-Efficiency: The program has no fees, AND Maryland’s annual reporting fee of $300 is waived for businesses that enroll before December 1, 2023.
Employee Retention and Attraction: Offering retirement savings benefits through MarylandSaves can make your business more attractive to current and potential employees. Also, enhancing your employee’s financial security can lead to increased loyalty and productivity.
But what if my business already offers a retirement plan? Do I need to do anything?
Even if you already offer a retirement plan that complies with the law, enrolling in the MarylandSaves program by December 1, 2023, will save your business the $300 filing fee for Maryland’s annual reporting this year and every year that is registered with MarylandSaves simply by registering for an exemption through the MarylandSaves program.
When do I need to take action?
By enrolling in the MarylandSaves program by December 1, 2023, your business will save on the $300 filing fee for Maryland’s annual reporting this year and every year that it is registered with MarylandSaves.
Have More Questions About MarylandSaves?
Have questions about the program? Let DeLeon & Stang help you navigate this process and align it with your business and tax planning goals. Contact us to meet with one of our business advisory and tax planning experts.