In May 2016, Gov. Larry Hogan signed the Maryland Small Business Retirement Savings Program and Trust (Senate Bill 1007/House Bill 1378) into law, which made a state-run retirement savings program available to almost 1 million workers. However, the U.S. Congress recently approved legislation that would overturn a 2016 rule from the Department of Labor that encouraged such programs.
Under SB 1007/HB 1378, employees whose employers use an automatic payroll system but don’t offer a retirement plan have access to the state plan, funded by payroll deductions. Employees are automatically enrolled in the plan, but can opt out of it, and companies that already offer retirement plans or begin offering the state-run plan receive a waiver for the $300 filing fee for the Department of Assessment and Taxation. Companies aren’t required to participate, but forfeit the waiver if they don’t. Maryland is one of five states to approve one of these programs.
The action by Congress doesn’t prohibit Maryland from moving forward with its state program, so officials are intending to do so, but there are concerns that fewer businesses will take part because there could be ambiguity about their legal liability.
NFIB/MD opposed the law when Gov. Hogan signed it into law, and The Baltimore Sun reported its continued opposition: “To us, this is just the camel’s nose under the tent,” Sate Director Mike O’Halloran said. “What happens in two or three years if enrollment that proponents say will take place doesn’t happen?”
