Update Applicable to:	Effective date
All employers with 5 or more employees and who do not offer a qualified retirement plan	Immediately – See Details Below   October 15, 2024 – Certify Exemption

What happened?

Beginning July 1, 2024, all Delaware employers with 5 or more W-2 employees who do not offer a qualified retirement plan, such as a 401(k), must either register for Delaware Expanding Access for Retirement and Necessary Savings (EARNS) or certify for an exemption by October 15, 2024, in compliance with state law.

Quick Summary:

• Starting July 1, 2024, all Delaware employers with five or more W-2 employees who do not offer a qualified retirement plan, such as a 401(k), must register for Delaware EARNS.

• All employers who can certify an exemption to the registration to the Delaware EARNS,

What are the details?

• The Delaware EARNS program is a state-mandated initiative designed to expand access to retirement savings plans for workers in Delaware.

• The program was created to ensure that more employees can save for retirement.

• The EARNS program automatically enrolls employees in a Roth IRA, with contributions made through automatic payroll deductions.

• Employees have 30 days to opt out after becoming eligible. If they take no action, they will be automatically enrolled.

• Registration for Delaware EARNS is now open for all eligible employers.

• Employers must register with the program if they:
  • Operate in Delaware.
  • Have at least five employees, and
  • Do not already provide a qualified retirement plan to their employees.

• Contribution rates start at 5% and increase by 1% annually, up to a maximum of 10%.

• Employers who do not comply with the program requirements may face penalties.

Business Considerations

• Covered employers should register in the program or certify an exemption by the due date. This will help them avoid penalties.
• Employers should coordinate with their payroll provider to ensure smooth implementation since contributions are made via automatic payroll deductions. This includes setting up the necessary systems to manage deductions and contributions.

Source References

• Registration is Now Open for Delaware EARNS Retirement Benefit Program (Delaware.gov)
• Delaware EARNS Homepage
• Delaware EARNS Program Launches July 1, 2024: What Employers Need to Know (Content Faw Casson)
• Delaware EARNS officially opens for enrollment (Delaware Business Times)

Resources

• Delaware EARNS Resources
• Delaware EARNS FAQs

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