New 2023 Maryland Pension Plan Mandate – Maryland Saves Compliance

Under Maryland law, any private-sector, for-profit, or nonprofit business operating in the state of Maryland that meets the following criteria must participate in the Maryland Saves Workplace Savings Program ("MarylandSaves" ):

1. Those that pay employees through a payroll system or service

2. Businesses that have at least one W-2 employee

3. Businesses in operation for at least two years, and

4. Businesses that do not currently offer an employer-sponsored retirement savings arrangement to employees*

*Payroll deduction IRAs and individual contributions to a Traditional or Roth IRA are not qualified plans and would require you to participate in MarylandSaves if you meet the above criteria

MarylandSaves, created by the State of Maryland, is designed to help businesses facilitate employee retirement savings. MarylandSaves provides a safe, trustworthy automatic WorkLife Savings Account for Marylanders to employees of eligible businesses or those who choose to open their accounts.

How MarylandSaves helps your business:

1. It helps you attract and retain employees. Most small businesses don't offer retirement savings – and almost none provide emergency savings.

2. It's easy to set up. It lets you focus on your business with no complex administration and easy integration with your payroll process.

3. There's no charge to you – it's FREE – and there are no employer contributions.

4. You'll save $300 on April 15th. Every year that you and your employees are enrolled and you recertify, the Maryland Department of Assessment and Taxation will waive its $300 annual report filing fee.

Please visit here to learn more: https://marylandsaves.com/employers

GWCPA Recommendations

If you still need to get a qualified employer-sponsored retirement plan, we recommend not participating in MarylandSaves and setting up your own retirement plan. Qualified, employer-sponsored plans include:

• A plan qualified under Internal Revenue Code sections 401(a) (including a 401(k) plan).

• Qualified annuity plan under section 403(a).

• Tax-sheltered annuity plan under section 403(b).

• Simplified Employee Pension (SEP IRA) plan under section 408(k).

• A SIMPLE IRA plan under section 408(p).

• Governmental deferred compensation plan under section 457(b).

Once you set up a plan (or if you already have a plan in place), make sure you certify your exemption at marylandsaves.com to receive your $300 filing fee waiver.

Note: Certification must be done by December 31 each year to receive the waiver. If you miss the cutoff, you should still certify now so you can get the waiver next year.

If you need assistance setting up a new pension plan, please get in touch with GWCPA.