Recounting his experience being raised by a single mother who had little time or extra money to put away for retirement, Connecticut Comptroller Sean Scanlon held his first official press conference as Comptroller announcing the third phase of MyCTSavings, a state-run retirement program for employees whose jobs do not offer retirement benefits.
“We are now in the third wave of this project and just a few weeks ago 22,000 businesses in Connecticut received a letter in the mail from us telling them that it was time for them to begin working with our office to help get their employees the retirement coverage that we know they need and they deserve,” Scanlon said during a press conference at the Capitol. “This has been a long time in the making and we’ve been working on it for some time.”
The MyCTSavings program requires employers with five or more employees who do not offer retirement benefits for employees to register for the program by March 30, 2023. Employers are not required to pay into the program, only to register and make it available to their employees. Employee enrollment is optional.
An employee in their 30s making less than $50,000 per year could amass upwards of $250,000 by saving just three percent of their pay through MyCTSavings and thus have more money for retirement and be less dependent on Social Security or work income as they get older.
“Half of the workers in this state and this country have zero retirement and that, to me, is something that speaks to the absolute need for this program and the benefit this program can provide,” Scanlon said.
The program officially launched as a pilot in April of 2022 adding hundreds of employers and thousands of employees during its first two waves of enrollment, according to Jessica Muirhead, director of MyCTSavings.
“The MyCTSavings program was created to address the gap in retirement security in Connecticut’s workforce where hundreds of thousands of people have no access to retirement through their workplace,” Muirhead said.
Connecticut is one of five states in the country with an active retirement plan for private sector workers who otherwise wouldn’t have access through their employer — largely small businesses, nonprofits, and lower-income jobs. Employees who choose to opt into the program are enrolled into an IRA, funded by a minimum 3 percent payroll deduction with different investment plans to choose from.
Nora Duncan, state director of the AARP, said the program helps “level the playing field” for employees across the state, noting that according to AARP’s research, 78 percent of businesses with fewer than ten employees offer retirement benefits.
“Social Security, obviously, is a huge part of everyone’s retirement but it is only about $1,600 per month and anybody who has ever tried to live in Connecticut for $1,600 per month knows that is not a tenable situation,” Duncan said. “This is a mandate that’s good for employers, employees and taxpayers all around.”
Gian Carl Casa, head of Connecticut’s nonprofit alliance said the program will make it easier to attract, hire and retain employees in the nonprofit sector, noting that there is a workforce shortage in the state.
The MyCTSavings program began under Gov. Dannel Malloy’s administration and was originally set to launch in 2018 but suffered ongoing setbacks, funding issues, and the loss of their executive director – Mary Fay – who ran for the position of Connecticut Comptroller against Scanlon during the 2022 election.
The program was being run by the quasi-public Connecticut Retirement Security Authority, which was also facing funding issues, before a surprise change in the 2022 budget transferred responsibility for the program to the Comptroller’s Office, a change that even surprised acting-Comptroller Natalie Braswell, who said she had no knowledge of the change prior to the budget being released.
Although there is a March 30 deadline for employers to enroll in the program, thus far, there is no penalty for not enrolling.
Scanlon says his office is hoping to work collaboratively with businesses through extended outreach campaigns but said there is a “technical fix bill” working its way through the legislature to possibly create a small penalty for failure to enroll. “At the end of the day, we don’t want it to get to that point,” Scanlon said. “We want to work proactively with these businesses.”
To date, the program has enrolled 900 businesses and amassed $1.7 million in assets. according to a press release from the Comptroller’s Office.
“Work with us. It doesn’t cost anything; it doesn’t take a lot of time. We do all the work, we do all the investing, you just need to help tell us who your employees are, and we will do the rest to make sure they have access to the quality retirement program they deserve,” Scanlon said.