Maryland Employers: Do You Have a Workplace Retirement Program?

Thursday, June 2, 2022 – To address the growing retirement crisis in the United States, Maryland is moving forward with a state-sponsored retirement program.

By David A. Wolford, CPA, LSWG Supervisor

In 2016, Maryland passed into law the Maryland Small Business Retirement Savings Program (Maryland Saves).    This program was created to address the large portion of Maryland’s workforce who do not have a retirement plan in place.  Maryland Saves requires certain employers to establish a retirement savings plans for their employees through the Maryland Saves program or their own retirement savings plans such as Traditional IRA, Roth IRA, Simple IRA, SEP IRA plans, etc.

A pilot launch of the program is scheduled for June 6, 2022, with plans to fully launch the program September 6, 2022.

Which employers are required to establish a retirement savings plan under the Maryland Saves program?  An employer is required to be compliant under the Maryland Saves program if all of the following apply:

  • An employer who uses a payroll service
  • An employer who has been in operation for at least two years
  • An employer who has not offered a retirement savings plan in the last two years

What is required for employers to do with this program?

  • Offer a retirement plan in which the employer operates
  • Or sign up their employees through the Maryland Saves program.

According to the Maryland Saves website, employers have no payment obligations, such as making contributions towards the plan, no federal reporting requirements and will not have to pay anything to the Maryland Saves program for the service.  In addition to being compliant with the program, employers will receive a waiver for the annual $300 filing fee required to be paid with filling the Annual Report with the State Department of Assessment and Taxation.

Can Employees opt out of this program?

  • Yes.  Employees can opt out of the program and choose not to have funds withdrawn from their paychecks.

Can Employers opt out of the program?

  • Yes.  Employers can opt out of this program if they already have a retirement savings plan in place, or
  • All employees individually opt out of the program.  This would require that the employees information be provided to Maryland Saves, who would then contact each employee to confirm that he or she has opted out.

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