In 2016 Connecticut created a new entity under the Connecticut Department of Labor – the Connecticut Retirement Security Authority. This new department oversees the Connecticut Retirement Security Exchange program. The purpose of the Retirement Exchange is to provide a new easy way for workers to save for the future. Since its inception, the CRSA Board of Directors has been seeking a department head. Having been unable to hire anyone to date, the implementation of this program is still on hold.
The full press release can be found on the CT Department of Labor’s website. What is important to know is that this retirement exchange is coming quickly and it will require small businesses across the state to offer their employees a retirement plan or become automatically enrolled in the new Connecticut Retirement Security Program.
What we know so far is:
- Employers subject to the Connecticut Retirement Security Program had 5 or more employees the October of the prior year. So if you have at least 5 employees in October, you will be required to comply the following year.
- Non-profit companies are NOT exempt.
- Once automatically enrolled, all employees have the option to opt out.
- Employee deductions for retirement savings will be administered by the employer and submitted either to the employer’s retirement plan or to the state retirement exchange.
- Employers have the option of offering an alternative retirement program if they choose.
What does this mean for you?
Take time to learn about retirement plan options that meet state guidelines and implement a plan before being automatically enrolled into the state run exchange. There are different roles to learn about: the plan sponsor (employer), the recordkeeper (plan administrator), a third-party administrator (TPA), the financial advisor, the investments managers, the plan trustee or custodian.
I recently met with Nitame Thomas, a Fiduciary who is able to explain employer-led retirement plans and has been attending the board meetings of the Connecticut Retirement Security Authority. I would like to recommend that you check out SCORE’s (Service Core of Retired Executives) sponsored seminar by Nitame Thomas, November 27, 2018 at Groton Library. Nitame will be presenting a FREE seminar to help explain retirement plans and the roles involved. Check out the seminar at www.sect.score.org under “Take a Workshop”.