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Delaware Enacts Mandatory Retirement Savings Program

The Delaware Expanding Access for Retirement and Necessary Saving (EARNS) program was signed into law on August 18, 2022. The program will enable covered private employees with no access to employer-sponsored retirement plans to voluntarily contribute to a state-facilitated payroll deduction individual retirement savings account program.

Covered Employers and Employees

Covered employers with are those with at least five covered employees, has been in business in Delaware for at least six months in the immediately preceding calendar year and does not offer employees certain tax-favored retirement plans.

An employee is covered and eligible to participate if they are at least age 18, have been employed by a covered employer, and have wages or other compensation allocable to Delaware.

Next Steps for Employers

After registering, covered employers will be required to make payroll deductions for participating employees and remit them as contributions to the program on the employees’ behalf. However, it is unclear when the program will be rolled out to covered employers and when they will be required to register, as the EARNS Board must first develop the program and adopt regulations for implementation. In the interim, covered employers should be aware of their future obligations and be prepared to take action once implementation is announced.

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