Over 40% of Missouri employees lack access to an employer-sponsored retirement plan, and the opportunity to save for their golden years is out of reach for many. Therefore, it’s crucial that workers in the state have accessible ways to build long-term savings.

In order to help employees who lack access to a retirement savings plan, Missouri passed legislation establishing a state-run solution. The Missouri Workplace Retirement Savings Plan was created to help small businesses in the state provide employees with the opportunity to save for their future.

In this article, we’ll answer some questions you may have about the Missouri Workplace Retirement Savings Plan and explain how it will affect Missouri businesses.

How Does the Missouri Workplace Retirement Savings Plan Work?

The Missouri Workplace Retirement Savings Plan is a retirement savings program created to serve the needs of small businesses in the state. This state-led initiative is a voluntary program for eligible employers who are seeking to offer retirement benefits for their employees.

Structured as a Multiple Employer Plan (MEP), the Missouri Workplace Retirement Savings Plan will allow participating employers to offload a number of administrative and fiduciary responsibilities to a MEP sponsor. These businesses can then focus more time and resources on their day-to-day goals and operations.

Employees of participating employers who choose to enroll in the plan will be eligible to choose between pre-tax or Roth contributions. The default savings rate is 5% of their pre-tax pay. Employees will have the ability to increase or decrease their savings rate at any time.

The program is overseen by the Missouri Workplace Retirement Savings Board within the State Treasurer’s office.

Which Businesses are Affected?

The Missouri Workplace Retirement Savings Plan was created to empower small businesses to establish a retirement savings plan. As a voluntary program, Missouri organizations with 50 employees or less may elect to participate.

Registration Deadline

The Missouri Workplace Retirement Savings Plan has not yet launched, so a registration deadline has yet to be determined.

Penalties

Since participation in the program is voluntary for both employers and employees, there are no associated penalties.

Who is Eligible to Save With the Missouri Workplace Retirement Savings Plan?

Most individuals who are 18 years or older and have earned wages in Missouri will be eligible to participate in the Missouri Workplace Retirement Savings Plan.

The program is voluntary for employees, and they can change their contribution amount or opt out at any time.

Conclusion

The Missouri Workplace Retirement Savings Plan represents a notable development in retirement planning for Missouri workers. Automatic enrollment and contributions made directly through payroll deductions simplify the process of setting aside funds for retirement.

Once it launches, the program will enable businesses with 50 employees or less to participate in the Missouri Workplace Retirement Savings Plan, so it’s important for Missouri employers to familiarize themselves with the program details and requirements.