MarylandSaves will begin offering its new automatic workplace retirement and emergency savings program starting next summer.
Created by 2016 legislation, MarylandSaves is a state-sponsored program that requires employers with 10 or more employees that use an automated payroll system or service to either offer a retirement plan or sign their employees up for the MarylandSaves program.
Businesses that do partake in the state program will receive $300 per year via a waiver of the Maryland business annual filing fee.
All covered employees must be automatically enrolled in the program by their covered employers unless the employees have opted out. The program’s board has targeted an initial default contribution rate of 5% of pay, with an automatic escalation of 1% per year up to a maximum of 10%. Employees will be able to withdraw funds, choose investment options, or change their savings amount. Savers can also keep their accounts when they change jobs.
This is another state program that will force employers to cover their employees under a retirement plan and will be another target for those offering pooled employer plans.