New Law Takes Aim At Retirement Savings; Is The Levee Breaking?

On July 1, 2016, as the new fiscal year kicked off, so did hundreds of new Maryland laws - more than 205 of them according to The Baltimore Sun. Flowing in this sea of new legislation is a law that targets the nearly one million Maryland resident workers who were previously without access to an employer-sponsored retirement savings plan. The goal of the new law, The Maryland Small Business Retirement Savings Program and Trust, is simple: to improve the retirement savings of Maryland workers by encouraging their employers to set up automatic retirement savings arrangements, or to use the new Maryland state-run IRA program. This legislation follows a string of state laws all designed to increase retirement savings of workers in small businesses. The first state to pass such legislation was Illinois, when it enacted the Illinois Secure Choice Savings Program in 2015. The roll-out of that plan is ongoing as it does not become effective until 2017. Maryland's law is important because it demonstrates a trend at the state and federal government levels to improve retirement savings by automating and mandating retirement savings.