Maryland Adopts Private Sector Retirement Savings Program

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By Sean Forbes

May 11 — Maryland Gov. Larry Hogan (R) signed into law a bill creating a state-run IRA program for private sector workers who don't have access to a retirement plan at work.

The legislation requires employers that don't offer plans to automatically enroll their employees into payroll-deduction individual retirement accounts. Hogan signed the law May 10.

“This is a necessary expansion of retirement security for Marylanders,” Kathleen Kennedy Townsend, former lieutenant governor of Maryland, told Bloomberg BNA on May 11.

“It’s the most important expansion since Social Security. And I hope it will be the first of strides for better security for senior citizens and their families,” said Townsend, who chaired a task force established in 2014 by then-Gov. Martin O'Malley (D) to devise a program for the state.

Maryland now joins several other states that have laws in place setting up private sector programs, including California, Illinois, New Jersey, Oregon and Washington. In all, about half of the states are investigating such efforts.

The Maryland law is effective July 1.

Basic Requirements

Unlike in states such as California and Illinois, the law doesn't specify the size of employer required to participate in the program.

However, covered employers don't include government agencies, whether federal, state, county or municipal; those that currently offer, or established within the past two years, savings programs separately from the S.B. 1007 requirements; and those that haven't been continually in business during the current and preceding calendar years.

The law also doesn't set a mandatory contribution rate. Instead, the Maryland Small Business Retirement Savings Board, also established by the law, will determine contribution rates.

Employers that participate in the program, or otherwise offer a retirement savings arrangement to their employees as specified in the bill, are exempt from the state’s $300 annual filing fee for corporations and business entities after the program becomes operational.

To contact the reporter on this story: Sean Forbes in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at