EARNing a New Way to Save

BY MAGGIE BLAIR

DELAWARE EARNS, a new retirement savings program sponsored by the Office of the State Treasurer, officially launched on January 1, 2025. The program addresses a critical gap, as many Delaware employees previously lacked access to workplace retirement savings options. Studies show that consistent, small contributions can have a significant impact on financial security in retirement. Similar programs are already in place in neighboring states like New Jersey and Maryland.

The goal of Delaware EARNS is to empower workers to establish and increase retirement savings through an automatic, low-cost, trusted retirement plan. With EARNS, businesses can help their employees save for retirement in a Roth Individual Retirement Arrangement (IRA) through convenient payroll deductions. Once enrolled, accounts are automatically funded from employees’ wages, providing an easy way for Delawareans to prepare for the future, with the flexibility to opt out if they choose.

Delaware businesses that have been operating for at least six months and have five or more W-2 employees are required to register for the program if they do not already offer a tax-qualified retirement plan to employees. EARNS is also available to self-employed individuals.

EARNS comes at no cost to employers, making it an affordable option for businesses of all sizes. The program is easy to set up and works seamlessly with existing payroll systems, minimizing any disruptions. By offering EARNS, employers can provide a valuable retirement savings benefit to their employees, helping to attract and retain top talent. When employees feel supported in planning for their future, it can lead to higher job satisfaction and loyalty.

For employees, this is a secure and simple way to save for the future. The account stays with employees through career changes without the need for complicated rollovers. Employees can customize their contribution amounts to meet their individual needs and have the flexibility to opt out or re-enroll at any time. They also gain access to free online tools and chat support to answer retirement questions.

Delaware EARNS applies to part-time and full-time W-2 employees. If a company hires a new employee, they have 120 calendar days to enroll the new hire, should the company not have an existing plan. Seasonal workers may be excluded but have the option to enroll themselves.

Help support your employees’ future. If your company has not registered yet, we advise you to register as soon as possible to avoid potential penalties. You can register and manage your account at www.EARNSDelaware.com.

Maggie Blair is a staff accountant at AKA Advisory LLC