The maryland retirement plan mandate requires many Maryland employers to either offer a qualified workplace retirement plan or enroll their workers in the state-run MarylandSaves program. If you run a business in the state, this law applies to you — and the Maryland Treasurer's office has been actively enforcing registration deadlines tied to the maryland retirement plan mandate.
The problem is that many small business owners only learn about the requirement after receiving a compliance notice, which can lead to avoidable penalties. This guide explains exactly what the maryland retirement plan mandate demands, who must comply, how MarylandSaves works, what exemptions exist, and which mistakes to avoid.
By the end, you'll know precisely which path fits your business and what step to take first.
What Is the Maryland Retirement Plan Mandate?
The maryland retirement plan mandate is the law behind the Maryland Secure Choice Retirement Savings Program, branded as MarylandSaves. It was created by state legislation and rolled out in phases starting in 2022, requiring employers that do not offer a retirement plan to automatically enroll eligible employees in a state-facilitated savings program.
Here's the key mechanic behind the maryland retirement plan mandate: employers act only as a payroll facilitator. They deduct a default percentage of each employee's pay (employees can change or stop it) and remit it to the program. The money goes into an auto-escalating Roth IRA for each saver.
Importantly, the state does not require employers to contribute anything. The mandate simply says: either sponsor your own qualified plan, or connect your workers to MarylandSaves.
How to apply this: Confirm your registration status by visiting the official MarylandSaves website, where you can register or claim an exemption using your business's FEIN.
Who Must Comply With the Mandate?
Under the maryland retirement plan mandate, for-profit employers with five or more employees who have been on payroll for at least 60 days are covered. Registration deadlines were phased in based on employer size — larger employers registered first, smaller ones later.
You are covered if:
- You have 5 or more employees working in Maryland
- You have been in business for at least 2 years
- You do not currently offer a qualified retirement plan
You are likely exempt if you offer a plan such as a 401(k), 403(b), SEP IRA, or SIMPLE IRA that all eligible workers can join. The U.S. Department of Labor explains that these employer-sponsored plans fall under ERISA, which is why the state program was designed to sit outside ERISA entirely.
How to apply this: Count your Maryland employees and check whether every eligible worker has access to an existing plan — if not, the maryland retirement plan mandate gives you a compliance obligation.
How MarylandSaves Works for Employers
Once you register under the maryland retirement plan mandate, the program handles most of the heavy lifting. Employees are automatically enrolled at a default contribution rate with scheduled annual increases, but they can lower the rate, pause contributions, or opt out at any time through the MarylandSaves participant portal.
Your ongoing duties as an employer are minimal:
- Submit employee rosters when new hires reach eligibility
- Deduct contributions from each paycheck
- Remit funds on the program's schedule
A common scenario: a 10-person landscaping company registers, uploads its roster, and lets the program handle everything else. The owner never selects investments, never answers employee questions about allocations, and never touches the accounts themselves.
How to apply this: If you choose the MarylandSaves path to satisfy the maryland retirement plan mandate, designate one payroll person to manage remittances and bookmark the program's employer support resources for questions.
Deadlines, Penalties, and Enforcement
Maryland has moved into an active enforcement phase, and non-compliant employers can face civil penalties under the maryland retirement plan mandate.
State officials have announced that businesses failing to register after their deadline face a fine of $200 per employee for the first violation, escalating to $500 per employee for repeated violations — figures set by the enabling legislation and enforced by the Comptroller of Maryland.
The Comptroller's office can identify non-compliant employers through W-2 filings, so businesses with no registered plan and no exemption on file are easy to flag.
The safest position is simple: register, certify an exemption, or launch your own plan before a notice arrives.
How to apply this: Check your most recent W-2 filing against your current retirement offering today — if there's a gap, register or claim an exemption this week rather than waiting for a penalty letter.
Exemptions and Alternatives to MarylandSaves
You can certify an exemption from the maryland retirement plan mandate if you already offer a qualified plan covering all eligible employees. But many business owners use the mandate as a reason to adopt a plan that also gives the owner a tax-advantaged savings vehicle — something MarylandSaves Roth IRAs don't do for employers.
Here's how the main paths compare:
| Option | Employer cost | Owner can save? | ERISA filing burden |
|---|---|---|---|
| MarylandSaves | None | No | None |
| 401(k) w/ match | Yes (optional) | Yes | Form 5500 required |
| SEP IRA | Contributions only | Yes | None |
| SIMPLE IRA | Match or elective | Yes | Minimal |
As the IRS notes, employers can generally deduct their contributions to qualified plans, and small businesses may qualify for a start-up tax credit for establishing a plan — one reason many firms prefer a private plan over the maryland retirement plan mandate route.
How to apply this: Run the numbers with your CPA — for businesses of five or more employees, a SEP IRA or 401(k) may cost little more than MarylandSaves while benefiting you directly.
Frequently Asked Questions About maryland retirement plan mandate
How do I register my business for the state program?
Registration happens online through the MarylandSaves employer portal using your FEIN and payroll details. The process takes under an hour for most small firms. One edge case: multi-location businesses register under a single FEIN, so franchise owners should coordinate with their franchisor before filing — the maryland retirement plan mandate tracks entities, not storefronts.
What happens if my employee opts out?
Employees may opt out at any time, and their choice is handled directly in the program — not through you. You still submit their name to the roster; the program manages their zero-contribution status. This is a key feature of the maryland retirement plan mandate: you never enforce participation or answer investment questions.
Does the mandate apply to my one-person LLC?
No — the threshold is five or more employees, so a solo owner with no W-2 staff falls outside the maryland retirement plan mandate. However, self-employed individuals can open a SEP IRA or Solo 401(k) independently. If you hire your fifth employee this year, the 60-day eligibility clock and registration timeline begin.
Can I offer a 401(k) instead of joining the state program?
Yes, and it's the most common exemption path. Any qualified plan — 401(k), SIMPLE IRA, SEP IRA, 403(b) — covering your eligible employees lets you certify an exemption from the maryland retirement plan mandate. The plan must be offered to all eligible workers, not just management, or your exemption claim can be challenged.
Who holds and invests the employee money?
Contributions are invested in program-designated funds, with a principal-protected savings option as the default — accounts belong to the employees, not the employer. Because the program is designed to stay outside ERISA, your liability is limited to accurate payroll remittance under the maryland retirement plan mandate, not investment outcomes.
Conclusion: Get Compliant Before the Notice Arrives
The maryland retirement plan mandate is now fully enforceable, but staying compliant is straightforward once you know your position.
- Employers with 5+ employees must offer a plan or register for MarylandSaves
- Penalties reach $500 per employee for repeat violations
- Exemptions are easy to certify if you already sponsor a qualified plan
- Owner-friendly alternatives like SEP IRAs may cost no more than the state program
Next step: Go to MarylandSaves today, enter your FEIN, and either register, certify your exemption, or confirm you're already compliant. Handling the maryland retirement plan mandate now takes minutes — waiting for a penalty letter takes far longer to resolve.
