Maryland law (HB 1378, 2016) requires most employers to offer their employees a payroll-deducted retirement savings plan at work.
Q: Why is the state so focused on retirement savings plans?
Simmons: It is actually a national focus being implemented at the state level. Maryland is one of 20 states with a mandatory retirement savings law, and more than 25 are in the process of exploring or establishing their own programs. The dynamic driving the focus is a phenomenon called the “silver tsunami,” which refers to the looming financial crisis when millions of Americans retire without adequate savings. This puts state and federal budgets at critical risk in terms of making up for these shortfalls with safety net programs that are funded with public dollars. AARP research shows that people are 15-20 times more likely to save when they have a payroll-deducted plan at work, and saving for their own future financial security is key to our state and national financial security.
Q: How does MarylandSaves fit into all of this?
Simmons: When the law was written, the intent was to ensure that program costs and administrative burdens were not barriers for smaller and medium-sized businesses to comply. So, as a central element of the details of the law, the state simultaneously launched a free-to-employers and simple to administer retirement savings plan called MarylandSaves in September 2022.
Q: Why should businesses consider MarylandSaves?
Simmons: The overarching intent of the legislation is to make sure all Maryland workers have access to a workplace retirement program. Regardless of whether the business owner chooses to participate in MarylandSaves or offer another qualified plan, as long as employees have the opportunity to save at work, that is success.
In addition to following the law, there are two other very significant incentives for employers to offer a retirement plan. First, studies show that employees consider it very important. It makes them feel valued and satisfied at work, and that leads to greater employee retention. Second, the state will waive an employer’s State Department of Assessment & Taxation (SDAT) Annual Report Filing Fee ($300 a year for most businesses) every year they participate in MarylandSaves or certify that they offer another qualified plan.
Q: Is there a deadline for companies to comply?
Simmons: Yes there is a deadline, it is essentially November 2025. To qualify for the $300 SDAT waiver for 2026, an employer must be making contributions to their employees’ MarylandSaves accounts by December 31, 2025, so that means they would need to start the registration process before November 2025 to accommodate a 30-day waiting period that allows employees to opt out of the program if they don’t want to participate. Businesses that begin making payroll contributions after the December 31st deadline will qualify for the 2027 fee waiver. For those business owners who already offer another qualified payroll-deducted retirement savings plan to their employees, they must certify that by completing and submitting this form by December 31, 2025, to qualify for the 2026 SDAT Annual Report Filing Fee waiver. MarylandSaves participating companies will get the waiver every year they continue to participate, employers offering other plans must submit the certification every year by December 31st to be eligible for the waiver for the following year.
Q: How is the program working?
Simmons: It’s early. MarylandSaves is still considered a start-up program, but thousands of companies have already registered, and thousands of employees are saving for their retirement and emergencies. Our satisfaction ratings from employers and employees are excellent. In addition, we know that the law has moved companies to enroll in a variety of other retirement savings programs, and when more Maryland workers are saving for retirement, with whomever they choose, we count that as a program success as well.
More information can be found at MarylandSaves.com.