Maine has enacted legislation (Legislative Document 1622) that will create a state-run retirement program for workers in the private sector. Maine will require employer participation if they have five or more employees and don’t offer a retirement plan.
Covered Employers:
Legislative Document 1622 covers employers that haven’t offered a specified tax-favored retirement plan at any time within the current calendar year or two preceding calendar years.
Implementation:
The program is scheduled to be implemented as follows:
· Beginning April 1, 2023, covered employers with 25 or more covered employees must offer the program.
· Beginning October 1, 2023, covered employers with 15 to 24 covered employees must offer the program.
· Beginning April 1, 2024, covered employers with five to 14 covered employees must offer the program.
Covered employers with fewer than five employees aren’t required to offer the program.
Note: Any covered employer may voluntarily offer the program to its covered employees on or after April 1, 2023.
Employer Requirements:
Covered employers must register for the program by the applicable deadline and automatically enroll employees in the state-run plan with the opportunity to opt out. While covered employers must facilitate the program (including withholding employee contributions), they aren’t required (or even permitted) to contribute to the plan.
Compliance Recommendations:
Maine employers with five or more employees that do not offer a qualifying retirement plan should determine whether they must participate in the program. Employers that must participate should ensure they offer the program by the applicable deadline.