CT Pushes Back Implementation Date for State-Run Auto-IRA Program
The Nutmeg State’s state-run auto-IRA plan for private sector workers isn’t going to be ready for business on Jan. 1, 2018 — no matter what retirement plan vendors may have told you.
In fact, Labor Commissioner Scott D. Jackson, Chair of the Connecticut Retirement Security Authority (CRSA), has asked
any employer contacted by a retirement product vendor indicating that a retirement savings plan must be offered to their employees by Jan. 1, 2018, to contact the Authority by emailing DOL.CRSAinfo@ct.gov
so that “any misinformation, errors or misrepresentation can be corrected.”
The CRSA is responsible for the design and implementation of a Connecticut Retirement Security Exchange for the state’s private sector employers and their employees. The CRSA Board of Directors voted to defer the statutory Jan. 1, 2018 implementation date of the Exchange.
“The Board agrees that because the Authority is currently in the preliminary stages of plan development, the implementation date specified in the state statute is not achievable,” Jackson said. “As the Authority continues its work on the Exchange, a realistic project timeline will be developed by the Board’s regular meeting in March of 2018.”
Jackson also stressed that at this time, no action is required on the part of employers to comply with any requirements in the legislation. “There appears to be misinformation that employers must purchase retirement savings products for their employees by Jan. 1, 2018,” Jackson said. “However, we want employers to be aware that this is inaccurate information.”
A new CRSA web page with additional information about its work, including research materials and meeting discussions, can be found at http://www.ctdol.state.ct.us/retirement%20authority/index.htm
Public Act 16-29 as amended by Public Act 16-3 establishes the Connecticut Retirement Security Authority and the Connecticut Retirement Security Exchange to “promote and enhance retirement savings for private sector employees in the state.” The Authority is charged with designing and implementing a program to provide private sector employees with retirement savings accounts if their employer does not offer one.
Connecticut was one of the first states to adopt such a program, requiring employers in the private sector over a certain size offer a retirement plan for their employees. In Connecticut, the legislation applies to any employer that has been existence for at least two years and has five or more employees, though covered employers who already offer a 401(a) plan, a 403(b) plan, a SEP, a SIMPLE plan or “any other retirement arrangement approved” by the Connecticut Retirement Security Authority created by the legislation are totally exempt from the law, so long as those plans remain active and open to new participants. Participants in the state program will be automatically enrolled at a contribution rate of 3% of pay with those contributions deposited into a Roth IRA and invested in an age-appropriate target date fund.