The state comptroller on Wednesday reminded Connecticut businesses that they are required to participate in an employee retirement savings program known as MyCTSavings by registering with the state before a March 30 deadline.
The program, which started last year, is designed to automatically enroll private sector workers in a Roth IRA retirement savings plan if they are not already participating in a plan through their employers. Workers can choose to opt out if they do not wish to participate.
Comptroller Sean Scanlon said the program was meant to benefit workers like his mother, who did not have time when he was growing up to plan for her own retirement.
“I was raised by a single mom who ran a small business. My mom was somebody who was working every single day to put food on our table, keep the lights on, put heat in the oil tank,” Scanlon said. “She was never able to focus on retirement. It was the last thing on her mind.”
Scanlon said his mother now has no retirement savings to speak of. He said roughly half of workers are in the same boat. According to the AARP, around 55 million workers nationwide and 600,000 in Connecticut have no access to retirement plans through their employers.
Connecticut employers must register with the state if they have more than five employees and do not offer a retirement plan but participation in the program does not cost employers anything. Scanlon said about 900 employers have fully enrolled so far but another 44,000 have taken the first steps towards participating.
In the third and most recent wave of outreach, the comptroller’s office has reached out to another 22,000 small businesses which employ between five and 24 employees.
Currently there is no penalty for businesses who fail to respond to the program, though Scanlon said that state policymakers may explore a small penalty through legislation this year.
“Other states have done that. We currently do not have [a penalty] in Connecticut but we see that in California, where they do have one, it does help with compliance,” Scanlon said. “At the end of the day, we don’t want to get to that point. We want to work proactively with businesses.”
Nora Duncan, director of the state AARP, said the program will help prepare future retirees by supplementing the fixed income provided by Social Security.
“This is a mandate that is good for employees, employers, and taxpayers all around because when people have money to support themselves in retirement… they don’t need to rely on the safety net,” Duncan said.