Posted by & filed under Legislative.

It’s no surprise that Connecticut’s budget crisis dominated the legislative session. With the Legislature focused on negotiating a plan to reduce the projected $933 million deficit for fiscal year 2017, most of the issues impacting businesses were ignored and died before the end of session. One of those issues was a bill establishing a state-run retirement program. The Lumber Dealers Association of Connecticut along with the business community opposed this legislation. LDAC met with legislators on lobby day about this legislation, issued a formal memorandum in opposition, and sent an action alert to all members asking them to contact the Governor. Unfortunately, our efforts were unsuccessful, as the state-run retirement bill passed in the final days of the legislative session, after a narrow vote in the House and a tie-breaking vote in the Senate.

The bill creates the Connecticut Retirement Security Authority (CRSA), a quasi-state-agency that will establish a retirement program for private-sector employees. The CRSA will be run by a nine-member board, which is appointed by the house, senate, and Governor. The appointments to the board are required to be made by July 31. Once the board has been established, they will create the Connecticut Retirement Security Program, which will contract with financial institutions to oversee the individual Roth IRA’s. The bill authorizes the CRSA to assess administrative fees on the program participants to help defray the costs of the program. Most likely, those fees will not be in addition to the participant’s contribution but just taken out of it.

Not later than January 1, 2018, qualified employers that do not currently offer a retirement program to their employees, must provide notice about the retirement program. The legislation defines a qualified employer as a private sector employer that employs five people or more whom are paid at least $5,000 in wages in the preceding calendar year. The notice to employees about the program must be provided each year.

After 60 days of providing the notice, the employer must enroll each of its employees into the program at either the contribution the employee selects or at least three percent of the employee’s wages. The legislation requires that employees are automatically enrolled in the program by the employer. Employees are eligible for the retirement program after they have worked for a minimum of 120 days and are at least 19 years old. If the employee does not want to be enrolled, they are required to affirmatively opt-out by electing a contribution level of zero. Because the retirement program consists of individual Roth IRA’s, the contributions are after tax, meaning employees should expect at least a three percent reduction in their wages if they do not opt out of the program.

Once the legislation is signed by the Governor and the State establishes the CRSA, NRLA will know exactly what employers need to do to comply and will issue a memorandum to LDAC members. If you have any questions or concerns, please feel free to contact me at or 518.880.6350.