The Connecticut Retirement Security Authority (CRSA) has announced the launch of a pilot of MyCTSavings, the state-run retirement savings program intended to provide coverage for private-sector employees whose employers do not offer them a plan. The pilot is slated to begin in September.
The CRSA, a quasi-public agency headed by co-chairs State Comptroller Kevin Lembo and State Treasurer Denise Nappier, is the body that is responsible for implementing MyCTSavings. It was created by Public Act 16-29, codified in Conn. Gen. Stat. Chapter 574.
The Pilot
Before the full MyCTSavings program is rolled out across the state, the CRSA is looking for interested employers to take part in an exclusive pilot of the program. The CRSA bills it as a chance to be one of the first to offer the program to employees and help influence the program for other business owners.
Employers. Employers with more than five employees and that do not provide a qualified retirement savings plan may participate. Employees must be at least 19 years old, have earned income, be employed in Connecticut, and have been employed for at least 120 days.
Employers that express interest and provide contact information at MYCTSavings.com will receive a brief questionnaire to confirm they are eligible to join the pilot. The questionnaire will come from the Connecticut Retirement Security Board email, OSC.CRSA@ct.gov.
Employees. Employees whose employers choose to participate in the pilot program will be enrolled automatically and sent welcome notices from the program. They can choose to: (1) do nothing, (2) customize their options to their liking, or (3) opt out. Employees will have 30 days to opt out or login to their account. If they choose to do nothing they will automatically have 3% of their total pay (before taxes and other deductions have been taken out) contributed to a Roth IRA account. Their contributed funds will eventually be invested in a default Target Date Retirement Fund that will be pre-selected based on their date of birth.
After the pilot is complete, the full launch of the MyCTSavings program across the state will take place in early 2022.
About MyCTSavings
The program is not mandatory for employers with fewer than five employees or that already offer a retirement plan. It is mandatory for businesses with five or more employees; however, while it requires their participation; it does not require that employers contribute to the program, only that they provide a payroll deduction mechanism by which employees to contribute.
Employees whose employers enroll in MyCTSavings will be automatically enrolled in the program, but can opt out if they choose. Employees who participate can adjust their savings rate, change how their funds are invested, add beneficiaries and more.
The program provides for the establishment and maintenance of IRAs for each program participant. Those IRAs may be established and maintained directly by the program or by third party entities in the business of establishing and maintaining IRAs. Program participants can choose whether to contribute to a traditional IRA or a Roth IRA; however, if a participant does not make an affirmative election, he or she will be enrolled in a traditional IRA.
Lembo announced in April 2020 that after a competitive bidding process the CRSA selected Sumday, a subsidiary of BNY Mellon, to act as the administrator of MyCTSavings.
It appears that rollout of MyCTSavings will take place in waves; the CRSA’s Design and Investment Committee adopted a motion at its July 1, 2021 meeting to enroll larger firms in the first wave, and smaller firms in the second. The committee did not set nor refer to a timetable for those waves, nor define what “larger” and “smaller” mean.