Connecticut and Rhode Island have finalized their partnership to offer retirement savings accounts to all workers who do not have access to an employer-sponsored retirement program, with Rhode Island set to launch a website and its retirement program in October, according to Connecticut Comptroller Sean Scanlon who spearheaded legislation authorizing the deal.

The partnership will allow Rhode Island’s RISavers program to join Connecticut’s MyCTSavings program, thus growing the pool of participants and assets, which will then help lower the fees paid by participants and increase their savings over the long-term.

“We have made great progress on our partnership with the state of Rhode Island. Rhode Island has executed the final agreements associated with this, as have we, and they plan to launch their program in October,” Scanlon said during a meeting of the Connecticut Retirement Security Program board of directors. “This has been almost a year in the making publicly, but longer behind the scenes before that.”

“We’re very happy to have Rhode Island come aboard,” said Jessica Muirhead, executive director of MyCTSavings. “The accounts that will be added to the program by Rhode Island count toward our threshold for fees in the future. Once the newly established partnership collectively reaches those thresholds together the fees will drop for the entire program.”

Under the savings program, employers are required to register with the state and employees who do not have access to employer-sponsored retirement programs are automatically enrolled in the program, which deducts five percent of the employees pay and essentially places it in a Roth-style IRA administered by Vestwell State Savings.

Fees paid to Vestwell for administering the program, however, were high resulting in decreased savings for participants. However, as program assets and participants increase to meet thresholds, fees are lowered; adding and entire other state will help both Connecticut and Rhode Island reach that threshold more quickly.

MyCTSavings recently surpassed $50 million in assets for 34,000 savers with more than 3,700 participating employers. Other than administrative legwork, employers do not have to pay into the program; rather the deductions are solely from the employee. 

Scanlon pushed legislation over a couple of years to allow MyCTSavings to partner with other states, finally getting the bill across the finish line in 2024 during a special session, after which he and Rhode Island Gov. Dan McKee moved quickly toward securing a partnership. Scanlon had previously indicated that other states were interested in joining as well, like Maine.

Under a bill passed in 2025, the default deduction rate from savers’ paychecks will be 5 percent and that rate will automatically increase 1 percent per year until hitting the 10 percent cap. Savers’, however, can set their own rates, and opt out of the program entirely if they so choose. 

The legislation also extended to the program to personal care attendants starting in 2026, and authorized fines for employers who do not register with the program following three letters of noncompliance. The fines range from $500 to $1,500, depending on the size of the company.

State-run retirement plans for employees who don’t have access to one have been proliferating across the United States over the past decade starting with California and Oregon. Connecticut’s plan, although first approved by the legislature in 2016, faced several obstacles before finally launching in 2022 under Comptroller Scanlon. 

“There is now fourteen of these programs out there and in the absence of some real change happening in Washington, it continues to be great to see states stepping up to get these programs going and even better when the states can work together to get the best out of these programs,” Scanlon said. “I think it’s just a good thing for Connecticut, and I’m glad we got it done.”

Republish This Story

Republish our articles for free, online or in print, under a Creative Commons license.