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Summary of differences between federal and state regulations
Under federal law, retirement plans are generally governed under ERISA.
If a company is being sold the chief executive must mail or deliver to each retiree written notice stating what the status of the retiree’s health and life insurance benefits will be after the sale. The notice must be mailed or delivered at least 30 days before the sale. These requirements apply to companies that have:
- At least 25 employees, and
- Retirees who are receiving health or life insurance benefits, or both, from such former employer.
A copy of such notice shall be mailed or delivered at the same time to the Labor Commissioner. §31-51s
As of October 1, 2008, Connecticut employers will be able to deduct from an employee's pay for contributions attributable to automatic enrollment in a plan such as a 401(k) plan, as established by the employer. Automatic enrollment is a plan in which an employee is treated as having elected to have the employer make a specified contribution to the plan equal to a percentage of compensation specified in the plan until the employee affirmatively elects to not have the contribution made or elects to make a contribution in another amount.
Employers who provide automatic enrollment are relieved of liability for the investment decision made on behalf of participating employees under an automatic contribution arrangement provided:
- The plan allows the participating employee at least quarterly opportunities to select investments for the employee's contributions between investment alternatives available under the plan;
- The employee is given notice of the investment decisions that will be made in the absence of the employee's direction, a description of all the investment alternatives available under the plan and a brief description of procedures available for the employee to change investments; and
- The employee is given at least annual notice of the actual investments made on behalf of the employee under the automatic contribution arrangement. §31-71e (Public Act No. 08-118, SB 157)
Mandatory IRA program
Effective January 2019, Connecticut employers that don’t offer retirement plans must enroll employees in state-run Individual Retirement Arrangements (IRAs). The requirement will be phased in over time beginning with the largest employers. Employers who employed five or more individuals on October 1 of the preceding calendar year and paid each of them at least $5,000 in taxable wages in the preceding calendar year will be required to participate in the program. Employees must be enrolled within 60 days of hire.
State
Contacts
Connecticut Insurance Department
Connecticut Department of Labor
Regulations
Federal
Contact
Employee Benefits Security Administration (EBSA), Office of the Assistant Secretary
Regulations
29 CFR chapter XXV (Parts 2509 – 2590)