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How Maryland Saves Impacts Small Businesses

October 04, 2022


  • MarylandSaves has been made available to the public as of September 15, 2022
  • The program is an Auto-enroll Roth IRA
  • MarylandSaves includes emergency savings, Social Security delay features, and participants will automatically receive paychecks upon retirement

Maryland Saves is a state-administered retirement plan. These plans are intended to bridge the gap between those who have access to a company-sponsored retirement plan and those who don’t. Without access to retirement savings, many Maryland residents are left without the option to save for their retirement, which can severely impact their financial security in later years.

To prevent this, Maryland has joined the many other states that are offering an alternative for those who don’t have reliable retirement savings access.

What Type of Plan is Maryland Saves?

MarylandSaves, like many other state-administered programs, is an Auto-enroll Roth IRA. This means that each participant has an account, and it is invested with after-tax contributions from employee payroll.

However, MarylandSaves will be the first program that assists those who participate in the plan after they have retired. Participants’ accounts will automatically provide monthly paychecks at the time of retirement.

Also unique to Maryland is the MarylandSaves Social Security Bridge option. This feature allows participants to delay when they receive Social Security funds by opting to receive their MarylandSaves investments first. Delaying social security payments allows your payments extra time to grow.

The first $1,000 invested will go towards the participant’s emergency fund. Money placed into the account past the $1,000 mark will be invested in the participant’s choice of several funds.

Employers and participants owe nothing to the state for participating in the plan. In addition, businesses that sign up for MarylandSaves before the end of 2022 are eligible to waive their $300 annual report filing fee. Those that register will not be required to pay for future annual reporting fees.

When Can Business Enroll?

MarylandSaves is available to the public as of September 15, 2022. Any business can register on their website regardless of company size.

What Businesses are Required to Enroll?

Employers that have:

  • Operated for at least two years,
  • Have at least one W-2 employee, and
  • Use an automated payroll system.

If one or more of these criteria do not apply to your business, you can register an exemption on the MarylandSaves website.

To participate, employees must:

  • Be at least 18 years old.
  • Be employed and receive wages from their employer.
  • Not receive benefits from another retirement plan.

How Much Can Employees Contribute?

Employees that are a part of companies that are enrolled in MarylandSaves have a 30-day opt-out period. If they take no action, they will be enrolled at the default contribution rate of 5 percent of their annual pay. Contributions will increase annually by 1 percent until contributions reach 10 percent. Contributions are limited by annual IRS contribution rates.

Are There Other Retirement Plan Options?

Fortunately, employers in Maryland are not forced to enroll in the state-run program if they enroll in a qualifying retirement plan. Qualifying plans include:

  • 401(a)
  • 401(k)
  • 403(a)
  • 403(b)
  • 408(k)
  • 408(p)
  • 457(b)

Each plan type has its benefits and drawbacks. If you are unsure which plan is right for you, we will help you find the right match for your needs.

Note: qualified plans in Maryland do not include other payroll deduction IRAs.

If you are not satisfied with the offerings of the MarylandSaves program, get in contact and we will build a plan for your business.

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