As Connecticut continues to implement its retirement security framework, significant legal changes taking effect in 2026 will impact employers throughout the state—especially those that do not already offer qualified retirement plans.
These changes build on the MyCTSavings state-run program, and they reflect recent legislative updates signed by Gov. Ned Lamont in 2025.
Why these changes matter
Connecticut’s retirement initiative aims to increase access to workplace retirement savings, especially for employees of smaller businesses who historically lack employer-sponsored plans. The MyCTSavings program—a Roth IRA-based automatic enrollment approach administered by the state comptroller—was launched in 2022, and it has been gradually expanded to improve participation and compliance.
Key law changes effective in 2026
Compliance enforcement and penalties begin. Beginning in 2026, the state will enforce compliance more actively for eligible employers. Businesses that qualify but that haven’t taken steps to enroll in MyCTSavings—or adopted a private qualified retirement plan—will receive compliance notification(s) before fines are imposed.
If noncompliance continues, employers can face annual financial penalties based on workforce size:
- $500 per year for employers with 5-24 employees
- $1,000 per year for 25-99 employees
- $1,500 per year for 100+ employees
Employers will receive advance notices before fines start accruing to give businesses time to take corrective actions.
Expanded participant coverage. Legislation expands coverage under the MyCTSavings program to include certain personal care attendants employed under state-funded programs beginning Wednesday, July 1, 2026.
Employers—including the consumers who hire these PCAs—will be required to provide program information and enroll eligible attendants automatically.
This marks an important inclusion for a workforce segment that was previously excluded from the retirement program due to employment structure.
Default contribution rules adjusted
For employees enrolling on or after July 1, 2025, the program’s default contribution rate will now align with federal law—specifically the Section 414A standard that governs default automatic enrollment levels in qualified retirement plans.
Federal Saver’s Match compatibility. The law allows the comptroller to provide retirement savings vehicles capable of receiving federal Saver’s Match contributions—a federal incentive designed to match low-income employees’ retirement savings, beginning with federal implementation.
This creates additional retirement value for workers and may enhance employee engagement with saving efforts.
What employers should do now
To prepare for 2026 enforcement and avoid penalties, employers should:
Review current retirement offerings. Determine whether your existing retirement plan qualifies for exemption from MyCTSavings requirements. Qualified employer plans (e.g., 401(k), SEP, SIMPLE) still must be certified with the state to document eligibility for exemptions.
Register and enroll if needed. Eligible employers that do not sponsor an exempt retirement plan should register with MyCTSavings, and begin enrollment processes as soon as possible to avoid compliance notices.
Update internal HR and payroll procedures. Ensure payroll systems can handle withholding and transmission of employee contributions to MyCTSavings. Review automatic enrollment processes and default rate settings to align with state and federal requirements.
Train staff on compliance tracking
Given the tiered-penalty structure, employers should designate staff or consultants to track compliance deadlines, notices received and corrective actions taken.
Final takeaway
Connecticut’s retirement security law changes coming into 2026 create new employer responsibilities and potential financial risk for noncompliance.
Employers of all sizes should evaluate their retirement offerings now and take proactive steps to meet compliance requirements and support long-term financial security for their workforce.
Bradford J. Lachut, Esq.
Bradford J. Lachut, Esq., joined PIA as government affairs counsel for the Government & Industry Affairs Department in 2012 and then, after a four-month leave, he returned to the association in 2018 as director of government & industry affairs responsible for all legal, government relations and insurance industry liaison programs for the five state associations. Prior to PIA, Brad worked as an attorney for Steven J. Baum PC, in Amherst, and as an associate attorney for the law office of James Morris in Buffalo. He also spent time serving as senior manager of government affairs as the Buffalo Niagara Partnership, a chamber of commerce serving the Buffalo, N.Y., region, his hometown. He received his juris doctorate from Buffalo Law School and his Bachelor of Science degree in Government and Politics from Utica College, Utica, N.Y. Brad is an active Mason and Shriner.
