Connecticut businesses with five or more employees have less than two weeks before a deadline to register with a state-run program intended to provide a retirement savings plan to private sector workers who do not receive such benefits from their employers.
Businesses have until Aug. 31 to register with the MyCTSavings program through the Office of the State Comptroller. The free program is designed to automatically enroll workers in a Roth IRA if they are not already enrolled in an employer-sponsored retirement plan.
Asked about the virtues of the program, Comptroller Sean Scanlon often cites the experience of his mother, a small business owner who never had access to a retirement plan and was never able to offer one to her employees.
“Fast forward to now and she’s in her seventies and can’t afford to retire,” Scanlon said Friday. “Many people in her Baby Boomer generation, they have no retirement to speak of and Social Security is just not enough, which is why you see them continuing to work… My mom is not alone and over half of the workers in our state today don’t get offered a retirement plan through their job.”
Participation in the program is mandatory in the sense that businesses must either sign up or demonstrate that they already offer a qualified retirement plan.
Scanlon said that nearly 5,000 businesses had responded to notifications from his office. That’s up from the 876 businesses that were enrolled when Scanlon, a former legislator, took office as comptroller earlier this year.
The Office of the Comptroller estimates that roughly 62% of the initially notified businesses had responded as of this week. That does not include around 11,000 new or growing employers who were notified in early August that they now fell under the program’s requirements.
The deadline to sign up for the program was initially scheduled for March 30, however Scanlon delayed the end of the sign-up period in an effort to provide businesses more time to either enroll or certify they offered a retirement plan.
As of last week, about 38% of the original group of businesses had not responded to the state notifications. Although the Office of the Comptroller has the ability to sue those businesses for lack of compliance, Scanlon has repeatedly said he has no intention of taking employers to court.
That does not mean the state has no interest in enforcing the requirement. During this year’s legislative session, lawmakers considered a proposal that would have allowed the comptroller to fine businesses that did not respond. The bill failed to pass before the legislative session concluded in June.
Scanlon said he expects to revisit the issue next year.
“We’re going to work with our partners in the legislature to try to make sure that compliance piece is fixed and that will inform the next steps of what we do,” he said.
