Connecticut launched MyCTSavings, a state-sponsored retirement savings program, in 2022 because there were more than 550,000 private-sector employees in the state who did not have access to a retirement savings plan from their employers. As of February 2025, 7,057 employers were registered, along with more than 30,000 funded accounts. Connecticut employees who are saving with MyCTSavings have an average funded account balance of $1,260.78 with an average monthly contribution of $105.77.
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What is the MyCTSavings program?
If you have a Connecticut-based business, don’t offer a qualified employer-sponsored retirement savings plan, and have at least five workers (as defined by the eligibility guidelines), then you’ll need to participate in MyCTSavings, which is an automatic individual retirement account (auto-IRA). To easily register, you’ll need your federal Employer Identification Number (EIN) and access code. You’ll be sent the latter, but if you didn’t receive it, request it to get it by email.
If you offer a retirement plan to any employees, then you’ll need to certify your exemption from MyCTSavings by also using your EIN and access code. This state retirement program is also available for self-employed individuals, although it’s not mandated for them, as it is for eligible employers.
The program integrates with payroll systems, and aside from any charges that a company’s existing payroll provider might charge for the integration, the program itself is free for Connecticut employers to provide. Employers are not responsible for sending employees communications regarding their choices. Plan oversight falls on the Connecticut Office of the State Comptroller, with Vestwell State Savings, LLC, handling program operations, as the program’s administrator.
How does the MyCTSavings program work?
Once you register, employees will receive reminders from MyCTSavings about how to opt out of the program within the initial 30 days before it begins and deductions are taken out of their paychecks. After-tax contributions go into a Roth IRA, so earnings are tax-free when it’s time to take withdrawals at retirement, as long as the individual is at least 59½, and the Roth IRA is no less than five years old.
Employees can decide to participate in the program without taking any action, thanks to automatic enrollment. They’re automatically opted in at the default contribution rate of 3% of gross pay, unless they choose to opt out and have nothing from their paychecks go into the retirement account. They can also modify their contribution rate if they want to participate at a lower or higher amount.
Connecticut business owners must submit contribution information and ensure that payroll deductions are occurring for those employees who don’t opt out of MyCTSavings. Beyond that, businesses aren’t responsible for any program management. The state plan handles that, and employees must maintain their account information. This means that employers are not and should not do the following:
- Enroll employees
- Send them plan notifications
- Process employee change requests
- Handle investment options
- Process distributions
- Provide investment advice
- Contribute money to the plan
Eligibility requirements for employees
MyCTSavings has a simple set of requirements for employee participation:
- At least age 19
- Worked for no less than 120 days if a full-time employee, and more than 120 days for seasonal and part-time employees
- Employed in the state of Connecticut
- They must be eligible for a Roth IRA. For example, if someone’s modified adjusted gross income (MAGI) in 2025 is at least $150,000 when they’re single tax filers or at least $236,000 when they’re filing joint taxes, then they may only be able to contribute a limited amount to a Roth IRA or won’t be able to contribute anything at all.
Enrollment and contribution options for employees
Once an employer adds employees to the MyCTSavings portal, they’ll be informed and will have 30 days to either opt out or make changes based on available options. After this period of time, after-tax contributions are automatically deposited into a Roth IRA and calculated as 3% of gross pay.
With a 6% hypothetical annual rate of return, a 30-year-old planning to retire at age 65 who makes $50,000 and puts 3% of every paycheck toward retirement would end up with a Roth IRA balance of $253,626, providing $1,186.23 every month for 25 years. So, based on someone’s retirement goals and their salary, they’ll need to evaluate how much they can afford to save for retirement now to have enough later when they’re no longer working.
Employees can decide not to participate in the Roth IRA through MyCTSavings or choose to increase or decrease their savings rate in increments of 1%, contributing anywhere from 1% to 100% of their gross pay, based on the Roth IRA limits.
When the savings rate is adjusted, remember that the maximum contribution limit for the calendar year can’t be exceeded for the total amount of IRAs that an employee has, whether that’s just through MyCTSavings or if they have others, too. The Internal Revenue Service (IRS) says that amount is the same for 2025 as it was for 2024: $7,000 for those who are age 49 and younger and $8,000 for those 50 and up, whether single filers or married filing jointly.
Talk with a tax or financial advisor when you have an existing pre-tax retirement savings account to roll over. Before making changes or taking any distributions, discuss whether it could be considered as taxable income when that rollover changes from a pre-tax to post-tax status to be added to a Roth IRA.
There are some fees with MyCTSavings for employees, but not for employers. These fees pay for the administration of the program and the operating expenses charged by the underlying investment funds in which the program’s portfolios are invested:
- A $26 annual account fee per year ($6.50 is charged quarterly, and automatically taken from the account balance).
- An annual asset-based fee of approximately 0.26%, which includes the investment management fee of the underlying funds and the administration fee, which is 0.22% yearly of the investment’s daily net assets. This means that individuals will pay approximately $0.26 for every $100 in their account.
For a $1,000 investment, this is how much it will approximately cost from one to 10 years with MyCTSavings, excluding what individuals will pay in state and federal taxes for withdrawals:
| Investment | 1 year | 3 years | 5 years | 10 years |
| Target Retirement DatePortfolio: 2070 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: 2065 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: 2060 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: 2055 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: 2050 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: 2045 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: 2040 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: 2035 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: 2030 | $26 | $79 | $132 | $264 |
| Target Retirement DatePortfolio: Retirement Age | $26 | $79 | $132 | $264 |
| Cash Preservation Portfolio | $27 | $81 | $135 | $271 |
| Income Portfolio | $27 | $80 | $134 | $268 |
| Income & Growth Portfolio | $26 | $79 | $132 | $264 |
| Balanced Portfolio | $26 | $79 | $132 | $264 |
| Conservative GrowthPortfolio | $26 | $79 | $132 | $264 |
| Moderate Growth Portfolio | $26 | $79 | $132 | $264 |
| Growth Portfolio | $26 | $79 | $132 | $264 |
Understanding the investment options
Employees can entirely opt out of the program, but if they want to participate and aren’t sure which investment option is right for their needs, they can take the thinking out of the process and actually do nothing to begin saving. Once enrolled in MyCTSavings, they will automatically receive the standard investment option, which includes:
- Cash Preservation Portfolio (for the first 60 days)
- Target Retirement Date Portfolios (contributions automatically go into this fund after the first 60 days in the Cash Preservation Portfolio)
- The automatic investments factor in the date of birth and the anticipated year of retirement
If employees want to choose an investment other than a Target Retirement Date Portfolio, they have some other options:
- Income Portfolio
- Income and Growth Portfolio
- Balanced Portfolio
- Conservative Growth Portfolio
- Moderate Growth Portfolio
- Growth Portfolio
The Target Retirement Date Portfolios are called that because each option has an actual “target date” (e.g., 2035, 2045, 2055) for retirement or the year closest to when someone turns 65, whether that’s 2030 or 2070.
Here’s an at-a-glance view of the investments and their fees:
| Investment option | Underlying investment fee | Program administration fee | Total annualized asset-based fee |
| Target Retirement DatePortfolio: 2070 | 0.036% | 0.22% | 0.256% |
| Target Retirement DatePortfolio: 2065 | 0.036% | 0.22% | 0.256% |
| Target Retirement DatePortfolio: 2060 | 0.036% | 0.22% | 0.256% |
| Target Retirement DatePortfolio: 2055 | 0.036% | 0.22% | 0.256% |
| Target Retirement DatePortfolio: 2050 | 0.036% | 0.22% | 0.256% |
| Target Retirement DatePortfolio: 2045 | 0.035% | 0.22% | 0.255% |
| Target Retirement DatePortfolio: 2040 | 0.036% | 0.22% | 0.256% |
| Target Retirement DatePortfolio: 2035 | 0.033% | 0.22% | 0.253% |
| Target Retirement DatePortfolio: 2030 | 0.034% | 0.22% | 0.254% |
| Target Retirement DatePortfolio: Retirement Age | 0.036% | 0.22% | 0.256% |
| Cash Preservation Portfolio | 0.100% | 0.22% | 0.320% |
| Income Portfolio | 0.074% | 0.22% | 0.294% |
| Income & Growth Portfolio | 0.035% | 0.22% | 0.255% |
| Balanced Portfolio | 0.033% | 0.22% | 0.253% |
| Conservative GrowthPortfolio | 0.034% | 0.22% | 0.254% |
| Moderate Growth Portfolio | 0.035% | 0.22% | 0.255% |
| Growth Portfolio | 0.032% | 0.22% | 0.252% |
The portfolios contain a mix of different types of funds, such as stocks and bonds, depending on whether savers want to take more risk or be more conservative with the investment mix. Based on when someone expects to retire, the Target Date Portfolios are designed to become more conservative with the investments as the retirement date approaches:
| Target Date Retirement Portfolio | Cash Preservation Portfolio | Income Portfolio | Income + Growth Portfolio |
| Fidelity® Total Market Index Fund | Vanguard Cash Reserve Federal Money Market Fund | Fidelity® U.S. Bond Index Fund | Fidelity® Total Market Index Fund |
| Schwab Total Stock Market Index Fund® | Schwab U.S. Aggregate Bond Index Fund | Fidelity® International Index Fund | |
| Fidelity® International Index Fund | Fidelity® Long-Term Treasury Bond Index Fund | Fidelity® Emerging Markets Index Fund | |
| Fidelity® Emerging Markets Index Fund | Schwab Treasury Inflation Protected Securities Index Fund | Fidelity U.S. Bond Index Fund | |
| Fidelity® U.S. Bond Index Fund | Vanguard Emerging Markets Bond Fund Admiral Shares | Schwab U.S. Aggregate Bond Index Fund | |
| Schwab U.S. Aggregate Bond Index Fund | Vanguard High-Yield Corporate Fund | Fidelity® Long-Term Treasury Bond Index Fund | |
| Fidelity® Long-Term Treasury Bond Index Fund | Vanguard Cash Reserve Federal Money Market Fund | Schwab Treasury Inflation Protected Securities Index | |
| Schwab Treasury Inflation Protected Securities Index Fund | Vanguard Emerging Markets Bond Fund Admiral Shares | ||
| Vanguard Emerging Markets Bond Fund Admiral Shares | Vanguard High-Yield Corporate Fund | ||
| Vanguard High-Yield Corporate Fund | Vanguard Cash Reserve Federal Money Market | ||
| Vanguard Cash Reserves Federal Money Market Fund |
| Balanced Portfolio | Conservative Growth Portfolio | Moderate Growth Portfolio | Growth Portfolio |
| Fidelity® Total Market Index Fund | Fidelity® Total Market Index Fund | Fidelity® Total Market Index Fund | Fidelity® Total Market Index Fund |
| Schwab Total Stock Market Index Fund® | Schwab Total Stock Market Index Fund® | Schwab Total Stock Market Index Fund® | Schwab Total Stock Market Index Fund® |
| Fidelity® International Index Fund | Fidelity® International Index Fund | Fidelity® International Index Fund FSPSX | Fidelity® International Index Fund |
| Fidelity® Emerging Markets Index Fund | Fidelity® Emerging Markets Index Fund | Fidelity® Emerging Markets Index Fund | Fidelity® Emerging Markets Index Fund |
| Fidelity U.S. Bond Index Fund | Fidelity U.S. Bond Index Fund | Fidelity U.S. Bond Index Fund | Vanguard Cash Reserve Federal Money Market Fund |
| Schwab U.S. Aggregate Bond Index Fund | Fidelity® Long-Term Treasury Bond Index Fund | Fidelity® Long-Term Treasury Bond Index Fund | |
| Fidelity® Long-Term Treasury Bond Index Fund | Schwab Treasury Inflation Protected Securities Index Fund | Schwab Treasury Inflation Protected Securities Index Fund | |
| Schwab Treasury Inflation Protected Securities Index Fund | Vanguard Emerging Markets Bond Fund Admiral Shares | Vanguard Emerging Markets Bond Fund Admiral Shares | |
| Vanguard Emerging Markets Bond Fund Admiral Shares | Vanguard High-Yield Corporate Fund | Vanguard High-Yield Corporate Fund | |
| Vanguard High-Yield Corporate Fund | Vanguard Cash Reserve Federal Money Market Fund | Vanguard Cash Reserve Federal Money Market Fund | |
| Vanguard Cash Reserve Federal Money Market Fund |
What employers need to know about the MyCTSavings program
Eligibility requirements and deadlines for employers
MyCTSaving has a short list of requirements to determine eligibility for Connecticut businesses, whether they are for-profit or not-for-profit employers:
- 5 or more employees on October 1 of the previous year for employers who have existed throughout the current and prior years
- At least 5 of the employees are in Connecticut
- That minimum number of workers were paid at least $5,000 in the prior year
- A separate, qualified retirement savings program isn’t provided to any employees
Employer responsibilities under the MyCTSavings program
MyCTSavings will notify employees of the 30-day time frame to opt out of the plan if they don’t want to participate. Then the state will inform employers of their employees’ choices, at which point, those businesses will then need to submit contribution information to initiate payroll deductions for employees who did not opt out:
- Create the new deductions in payroll systems
- Create a contribution file or enter the information in the employer portal
- Enter contributions using the employer portal
- Send payroll on time for every pay period
- Update contribution rates when notified of employee changes
- Maintain employee lists, updating them with any new information and marking which employees were terminated (payroll details need to be submitted every pay period, and you can invite a payroll representative to assist with this)
The MyCTSavings employer portal has a robust collection of FAQ, covering payroll setup and integrations, as well as detailed remittance instructions for contributions.
Non-compliance penalties
According to state law, if an eligible employer doesn’t comply with MyCTSavings, the business could become subject to a civil action brought by an employee, the Labor Commissioner, or the Comptroller. Along with enrolling the employee(s), the penalty can include the recovery of reasonable attorney fees.
However, there is a bill that is being reviewed by the state’s Senate, and if it passes and is signed into state law, it would replace the civil action with fines for noncompliance with these maximum penalties based on employer size:
| Number of employees | Maximum penalty |
| 5 – 24 | $500 |
| 25 – 99 | $1,000 |
| 100+ | $1,500 |
How to register your business for the MyCTSavings program
Getting started through the MyCTSavings website is simple. Go to MyCTSavings.com, and select the “Get Started” button, which will lead you to a page where you can select that you’re an employer. Then you’ll be led to a portal where you’ll begin the registration process by doing the following:
- Set up your business with the EIN and access code
- Create a password (the username is your business email)
- Add payroll provider and payroll schedules
- Enter company bank information, including the bank name, the routing number, the bank account number, and the account type
- Include employee information, such as:
- Social Security number
- Name
- Address
- Contact details, e.g., phone or email address
MyCTSavings provides webinars, as well as previously recorded videos of them, if you need a guided explanation for how to handle payroll submission.
Benefits of the MyCTSavings program
What can have a positive impact on retirement savings and employee retention? Based on a Gusto analysis of state auto-IRAs, there was a 55% increase in retirement savings for median earners and below. Gusto has also found that among employees who receive retirement benefits from employers on Gusto’s platform, on average, they are 40% less likely to leave those businesses within their first year of working for them. For employees working in retail, food and beverage, or other personal services, that rate actually increases to 54%. So the availability of an auto-IRA like MyCTSavings can benefit both employers and employees, especially when a small business doesn’t offer an employer-sponsored retirement plan.
Do businesses have to use the MyCTSavings program?
Businesses of at least five employees do not have to enroll in MyCTSaving if they’re already providing a retirement plan that meets the requirements of Internal Revenue Code sections 401(a). Suitable employer-sponsored examples that would be appropriate and satisfy the standards for an exemption include:
- 401(k) plan or other 401(a) plan
- 403(a)—qualified annuity plan
- 403(b)—tax-sheltered annuity plan
- 408(k)—Simplified Employee Pension (SEP) plan
- 408(p)—Savings Incentive Match Plan for Employees (SIMPLE) plan
- 457(b) Governmental deferred compensation plan
For those businesses that must enroll because they meet the eligibility requirements and don’t offer an alternative qualified retirement plan, the MyCTSavings portal is designed to make administering the auto-IRA state program easy for employers.
Retirement benefits made easy with Gusto
You can talk to Gusto or your preferred payroll provider about managing your administrative tasks for the MyCTSavings retirement program. Or you can explore offering a 401(k) plan.
Colorado and Oregon, which have auto-IRA mandates, have seen an increase in 401(k) adoption amongst the smallest employers in those states, including those with at least five employees and those with one to four employees, respectively. Here are some benefits of offering a 401(k):
- Reduced cost with tax credits: Eligible businesses may be able to claim up to $16,500 in tax credits for the first 3 years of their 401(k)—potentially covering 100% of plan costs.
- Flexible and affordable plan options: Gusto’s growing list of 401(k) partners means plenty of plans to choose from at low price points to fit your budget.
- Integrated to make life easier: Gusto payroll syncs with your 401(k) plan to make automatic deductions. Employees manage their own Gusto accounts, with access to their pay stubs, W-2s, 401(k) accounts, and contribution details.
- Great employee benefits help you build a great team: Because 401(k) plans have higher contribution limits, employees can save more money with an employer-sponsored 401(k) than with state-mandated IRAs. Gusto’s own analysis has even found that employer-sponsored 401(k) offerings increase employee retention.
Not sure which choice is right for your business? This table compares the features of a 401(k) and MyCTSavings to help you decide which one could be the best fit:
| Features | 401(k) | MyCTSavings |
| Auto-enroll | Available | 3% |
| Auto-escalation | Available | No, but there is a bill with the state Senate, and if it becomes law, it will increase the contribution rate by 1% each year until it’s at least 10% but doesn’t exceed 15% |
| Payroll integration | Available | Available |
| Investment options | Large range of funds that varies based on the provider | 12 funds across a range of portfolio options |
| Employer matching and profit-sharing contributions | Available | No |
| Investment advice | Available | No |
| Taxability | Pre-tax and after-tax contributions available | Roth after-tax contributions |
| Annual contribution limit | $23,000 for employees ($30,500 for those 50 and older), plus optional employer contributions | $7,000 for employees ($8,000 for those 50 and over) |
| Participant fees | Varies, but often ranges between 0.5% and 2% of the plan balance annually | There’s an annual asset-based fee that’s about 0.26% and a $26 account fee ($6.50 of this amount is charged quarterly). |
If you have an existing Gusto account, learn more about our 401(k) partners here.
Or create an account with Gusto to enroll in a 401(k) plan. Gusto’s platform makes that simple.
