Maryland, our nation’s seventh state, is the focus of this week’s state-run retirement plan series. Check out previous blog posts: New Jersey, Washington, California, Illinois, Massachusetts, and an overview of state-run retirement programs.
HB 1378 and SB 1007 were introduced on February 12 and 15, 2016, respectively, in the Maryland House and Senate, to establish the Maryland Small Business Retirement Savings Program and Trust. The bill took effect on July 1, 2016. Maryland Small Business Retirement Savings Board members were named on October 19 and will meet for the first time on November 17. The program is expected to begin operating in 2017.
The Maryland Small Business Retirement Savings Program and Trust will provide retirement plans for about one million Maryland residents. Employers are not mandated to participate, but the state has given them an incentive through the waiving of an annual corporation and business filing fee of $300.
In order to participate, employers must use a payroll system and may automatically enroll employees into the IRA program. However, they are not required to contribute to individual employee plans. Employees who already receive ERISA or a federal retirement savings plan are not eligible and may choose to opt out of the program.