MARYLAND RETIREMENT PLAN MANDATE: HELP BUSINESS OWNERS BENEFIT

  • With statewide rollout of MarylandSaves, all for-profit and not-for-profit employers engaged in business in MD that pay employees through a payroll system or service must enroll, unless one of these exclusions apply:

    • The employer currently offers — or offered at any time in the past two calendar years — a tax-favored retirement plan or IRA separate from the state-run program.
    • The employer has not been in business for two full calendar years.

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

    • Adopt their own retirement plan
    • Register for MarylandSaves the state-sponsored retirement savings program
    • Contact a Regional Sales Consultant
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No Penalties For Non-Compliance

At this time, there are no penalties if an employer does not offer MarylandSaves or another retirement plan. However, employers that participate in the program will receive a waiver of the $300 filing fee for the annual report that business entities must file. Employers do not have fiduciary responsibility for the program, and it is not covered under ERISA.

Eligible Employees

Employees aged 18 or older are eligible for the program if they work for a covered employer, unless any of the following apply:

  • The employee is eligible for a “qualifying retirement plan” or participates in a multiemployer plan.
  • The employee is covered by the federal Railway Labor Act (which applies to certain railroad and airline employees).

Auto-enroll payroll deduction IRA program for all employees aged 18 or older are working for a covered employer, unless any of the following apply:

  • The employee is eligible for a “qualifying retirement plan” or participates in a multiemployer plan.
  • The employee is covered by the federal Railway Labor Act (which applies to certain railroad and airline employees).

MARYLANDSAVES OR CUSTOMIZED PLAN?

MarylandSaves 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.

 

MarylandSaves Custom 401(k) from TRA
Pre- and Post-Tax Deferrals IRA w/ auto pre-tax payroll deduction Pre-tax or Roth elective deferral contributions
Contributions Initial default rate of 5%, with 1% auto-escalation each year. Employees can opt in or out or choose a different deferral rate at any time. Lesser of 100% of compensation or $20,500
Catch-Up Contributions Determined by IRA contribution limits $6,500 annually for those age 50 and older
Employer Match Not available Available
Income Limit Determined by IRA contribution limits No income limits
Investment Choices Age-appropriate target date fund plus 2 elective options (after accumulating $1,000 in emergency savings) Can provide a wide variety from top asset managers
Automated Payroll Integration Available Available
Customizable for businesses Not customizable Yes – Plans are designed to meet the employer’s needs – Traditional 401(k), Safe Harbor, Profit Sharing, Cash Balance
Tax Credit and Filing Fees No, tax credit for start-up costs, but employers offering MarylandSaves can waive $300 MD annual report filing fee Yes – 50% of the expenses paid up to the greater of $500 or the lesser of $250 for each non-highly compensated employee, not to exceed $5,000

TRA Plans to Consider

For Maryland 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 MarylandSaves 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 Sales Consultants will be in contact with you.

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Pattern

Consider TRA's 3(16) Plan Administration Relief Services (PARS)

To alleviate the day-to-day administrative burdens of yours or your clients retirement plans.
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