The MarylandSaves Program was created in 2016 with HB 1378 and went into effect on September 1, 2022. The program is a state-run retirement savings program for employers who do not otherwise offer employees a savings arrangement. Such arrangements include an IRA, defined benefit plan, 401(k), Simplified Employee Pension (SEP) plan, a Savings Incentive Match Plan for Employees (SIMPLE) plan or another arrangement, if in compliance with federal law, that the state board specifies by regulation. Employers who do not sponsor such an arrangement for employees must now meet certain requirements.
Those employers must register with the MarylandSaves Program, automatically enroll employees in the program and withhold and forward five percent of each employee’s compensation each pay period. Each employee’s contribution will automatically increase by one on January 1 of each year up to the maximum 10%. Employees may opt out or change their contribution percentage at any time. All contributions will be placed in a Roth IRA. Lastly, covered employers must distribute the program description to employees, which details the program and opt-out instructions.
Importantly, employers who already sponsor a qualified savings arrangement for employees must file an exemption. Employers qualify if they have sponsored an arrangement in the current or preceding calendar year. Governmental employers are also exempt.
HB 1378, 2016 » Program Description, Employer Notice » Employer Registration » Employer Exemption »
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