Update Applicable to:	Effective Date
All Employers with 5 or More Employees	July 1, 2025

What happened?

On June 9, 2025, Connecticut Governor Ned Lamont signed Public Act No. 25-30 / S.B. No. 1221 into law, amending the state’s Retirement Security Program and strengthening enforcement of MyCTSavings, the state-run retirement savings plan for private-sector employees whose employers do not offer a retirement plan.

Overview:

Changes to MyCTSavings (Effective July 1, 2025)

• Three-Strike Enforcement Process
  
  • Employers who fail to comply will receive:
    
    • First notice of noncompliance from the Comptroller
    • Second notice
    • Final notice
      
  • If noncompliance continues for 90+ days, annual penalties apply:
    
    • $500 for small employers (5–24 employees)
    • $1,000 for medium employers (25–99 employees)
    • $1,500 for large employers (100+ employees)

• Mandatory Auto-Enrollment
  
  • Employers with five or more employees must:
    
    • Enroll employees in MyCTSavings, or
    • Certify that their own retirement plan meets state standards.
      
  • Default contributions follow federal IRC §414A(b)(3)(A):
    
    • Minimum 3% contribution rate.
    • Automatic annual increase up to 10–15% unless the employee opts out.

• Federal Saver’s Match Integration: The Comptroller must ensure participant accounts can receive federal Saver’s Match contributions for eligible low-income workers.

Clarifications and Additions

• Contribution Defaults for New Participants: For employees enrolled on or after July 1, 2025, default contributions follow IRC §414A(b)(3)(A), with automatic escalation unless opted out.

• Personal Care Attendants as Covered Employees
  
  • Starting July 1, 2026, personal care attendants are covered if:
    
    • Employed for at least 30 days.
    • Are 19 years or older.
    • Perform services under Section 31-222
      
  • Individuals receiving services from PCAs under state-funded programs will be considered qualified employers.

• Enforcement Process – Clarified Structure: The law now clearly defines the three-step enforcement process, ensuring transparency and consistency in compliance actions.

Additional Information:

What Remains the Same

• Applies to employers with 5+ employees who paid at least $5,000 in wages to five or more workers.
• Employees become eligible after 120 days and must be at least 19 years old (except personal care attendants)
• Default contribution rate remains 3% unless the employee elects otherwise.
• Employers are not required to contribute to accounts or collect program fees.
• Employers with qualifying plans (e.g., 401(k), 403(b), SIMPLE, SEP) are exempt from enrollment and information requirements.

Historical Context

• Program Launch: March 24, 2022.
• Initial Requirement: Employers with 5+ employees must register with the Comptroller’s Office to enroll or certify an existing plan.
• Account Type: Roth IRA, funded via payroll deductions; accounts are portable, and employees may opt out or re-enroll at any time.

Source References

• Connecticut SB 1221 – AN ACT MAKING CHANGES TO THE CONNECTICUT RETIREMENT SECURITY PROGRAM
• Deadline Extended Until August 31, 2023, for Businesses to Comply with Connecticut’s Mandatory Retirement Program (VensureHR)

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