©2024 OnPay, Inc.
Insurance offered through OnPay Insurance Agency, LLC (CA License #0L29422)
Updated: March 31, 2024
MarylandSaves is a new state-mandated retirement program designed to give businesses a way to offer their employees an option to save for retirement. Launched statewide on September 15, 2022, it gives the state’s business owners and nonprofits a way to offer their employees easy access to a retirement plan without requiring any costly fees or matching funds.
In this employer guide, we’ll go into more detail about the type of plan MarylandSaves is, what to do if you already offer employers access to retirement savings, and how the program works.
Maryland Small Business Retirement Savings Program and Trust was introduced in the Maryland House of Representatives in 2016, but wasn’t available to the public until September 2022. It was designed to ease the burden of small businesses offering an employee retirement plan, while increasing retirement savings options for an estimated one million private sector employees without access to a retirement plan. MarylandSaves offers a Roth Individual Retirement Account (Roth IRA) to eligible employees, including an emergency savings account.
Signups for MarylandSaves began September 15, 2022, and employers can register at any time. Businesses that registered before December 1, 2022, were eligible for a $300 Annual Report Filing Fee Waiver. Those that sign up in 2023 are eligible to request a waiver for 2024.
All employees of a registered company are automatically enrolled in MarylandSaves, with the choice to opt-out of the program within 30 days of their initial enrollment.
In a nutshell, Maryland employers are required by state law to actively participate in the program if the following conditions apply:
There are some exemptions for participating in the program, which we’ll cover next.
If you already offer one of the following retirement plans, you are exempt from participating in MarylandSaves:
In addition, businesses that have not been operational for a minimum of two years are exempt from the requirement, as are sole proprietors and independent contractors. However, both of the latter have the option of voluntarily participating in MarylandSaves.
If your business is exempt, it must be certified online by filling out the Certify Exemption form on the MarylandSaves website.
Let’s learn more about how the program works and how participating employees can save for retirement.
Simply put, MarylandSaves offers a traditional Roth IRA to program participants, with 5% of gross pay automatically withheld from employee paychecks upon enrollment. The initial $1,000 contributed to the plan will be directly deposited into the Emergency Savings Fund, which is invested in the Guaranteed Investment Contract issued by the Lincoln National Life Insurance Company and carries a guaranteed interest rate.
Once an employee has contributed $1,000, all subsequent invested deposits will be directed toward a Target Retirement Date option, which is based on the employee’s date of birth and expected retirement. There is also a Bond Index option and a Global Growth Stock option that employees can choose to invest their contributions in.
All employees participating in MarylandSaves must meet Roth IRA eligibility requirements, including:
In addition, Maryland citizens may be able to self-enroll in MarylandSaves without an employer, although they are required to make an initial contribution of $500 into the retirement account, or establish a recurring contribution through their bank of at least $5.
Registration for MarylandSaves began in September 2022 and currently continues, with employers able to register their business at marylandsaves.com. New registrants need to have their State Department of Assessments and Taxation (SDAT) number along with their MarylandSaves Access Code. Has your business not yet received an Access Code? You can request one here.
During the registration process, you’ll need to complete the following:
An ‘Onboarding Complete’ message is received when the registration process is finished. Once completed, employers will have access to the Employer Dashboard, where current employees can be managed, new employees added, and employee contribution details edited if or when necessary.
There are no fees for employers to participate in MarylandSaves and contributions to an employee’s Roth IRA are prohibited by Maryland statute. Employees do have to pay some administrative fees, which are automatically taken out of their retirement account. Expenses include an asset-based fee of 0.18% that is assessed annually, as well as a $30 annual account fee that is charged at $7.50 each quarter.
If you require additional information about MarylandSaves, be sure to check out these resources:
MarylandSaves provides the state’s employers with a no-cost way to offer employees access to a retirement savings account. It also offers employees a great way to start saving for retirement, with flexible savings options available to all participants.
Yes. MarylandSaves was initially passed in the Maryland House of Representatives in 2016 and was made available statewide in September of 2022.
A Maryland employer is required to sign up for the MarylandSaves program if they currently do not offer a qualified retirement savings plan to their employees. Those that do are exempt from the requirement.
Any business that has been operational for a minimum of two years and has at least one W-2 employee is required to register their business with MarylandSaves, with employees automatically enrolled in the program. In addition, any employee working for a business that is not registered with MarylandSaves, is self-employed, or an independent contractor, are also eligible to participate in the plan.