CONNECTICUT RETIREMENT PLAN MANDATE: HELP BUSINESS OWNERS BENEFIT

  • Connecticut businesses with 5 or more employees that do not already offer a qualified retirement plan may be required to register for MyCTSavings or certify an exemption.

    Those who haven’t yet adopted an employer-based plan have two choices:

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      Contact your Regional Plan Consultant

What You Should Know

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      Requirements/Deadlines:

      Employers who don’t comply with the Connecticut retirement plan mandate by their deadline date are subject to civil actions and are punishable by imprisonment & fines. Compliance dates rolled out as follows:

      Size of Business Compliance Deadline Date
      >100 employees June 30, 2022
      26 – 99 employees October 31, 2022
      5 – 25 employees March 30, 2023
    • ▾
      Penalties for Non-Compliance:
      • Small employers (5–24 employees): Up to $500
      • Medium employers (25–99 employees): Up to $1,000
      • Large employers (100+ employees): Up to $1,500
      • Penalties are officially in effect following the 2025 law changes
      • Subject to civil action – brought by employee or Labor Commissioner to require employer to enroll employee
      • Punishable by imprisonment & fines – based on amount employer failed to contribute

MYCTSAVINGS OR CUSTOMIZED PLAN?

MyCTSavings is a basic, one-size-fits-all retirement savings program for businesses that do not wish to sponsor a plan for their own employees. Yet there are many businesses that would be better served with a plan from TRA that’s customized to their needs.

MyCTSavings Custom 401(k) from TRA
Pre- and Post-Tax Deferrals Roth IRA w/ auto after-tax payroll deduction Pre-tax or Roth elective deferral contributions
Contributions Employees are automatically enrolled at 5% of gross pay with an annual 1% increase up to 100% within IRS limits Lesser of 100% of compensation or $24,500
Catch-Up Contributions $1,100 (over 50) Bigger catch-up contributions – $8,000 annually for those age 50 and older
Employer Match Not available Available
Income Limit Determined by Roth IRA contribution limits No income limits
Investment Choices Only 2 standard investment options plus 9 elective options Can provide a wide variety from top asset managers
Automated Payroll Integration Payroll compatible Available
Customizable for businesses Not customizable Yes – for example, Safe Harbor, SIMPLE, Profit-Sharing & Cash Balance
Tax Credit No, since there are no start-up costs for employers Yes – a tax credit of $5,000 per year would be available for 3 years. 100% of the expenses paid up to the greater of $500 or the lesser of $250 for each non-highly compensated employee

TRA Plans to Consider

For Connecticut businesses who want to sponsor a retirement plan, some plans to consider include:

• 401(k)
• Safe Harbor 401(k)
• Cross Tested Profit-Sharing Allocation
• 401(k) plus Cash Balance Plan

Other alternatives to CTSaves include SIMPLE 401(k) Plans, Group 401(k) Plans (MEPs, PEPs and Aggregation Programs), and 403(b) Plans (for non-profits).

COMPARE PLANS

Working closely with you, TRA will create a customized plan that meets your client’s business. We partner with top recordkeepers and investment managers around the country and deliver exceptional client service. We also offer 3(16) Plan Administration Relief Services (PARS) to relieve business owners of day-to-day plan administration responsibilities and manage their fiduciary risk.

Complete the form below and one of TRA’s Regional Plan Consultants will be in contact with you.

Pattern

TRA’S 3(16) FIDUCIARY SERVICES

To alleviate your clients day-to-day administration and manage fiduciary risk.
BENEFITS