Have You Informed Your Clients About Delaware Earns?

Financial advisors, the Delaware Earns savings program has arrived. If your business owner clients aren’t already aware of Delaware Earns, the state’s retirement savings Roth IRA program, now is the time to inform them. Certain employers who do not currently offer a retirement plan must enroll in Delaware Earns or another qualifying plan such as an ePlan Services 401(k). This helpful guide will give you the information you’ll need to ensure your clients are fully aware of their options to comply with the law.

Key Takeaways:

• Employers with five or more employees who do not currently offer a retirement plan must enroll in Delaware Earns.
• Penalties for non-compliance are $250 per employee per year, up to a maximum of $5,000 per year
• While a state-administered plan satisfies the requirement, an ePlan Services 401(k) retirement plan may prove more beneficial.
• Show your clients their potential tax savings with the ePlan Services Tax Estimator. These tax credits are not available with the Delaware Earns option.

What is Delaware Earns?

In the state of Delaware, 150,000 workers are without a retirement savings plan. As a solution to this crisis, the Office of the State Treasurer sponsored the Delaware Earns Roth IRA savings program. Employers with five or more employees who don’t currently provide a retirement savings plan must enroll their employees in this savings program. This is an automatic enrollment program, so a percentage of the participant’s wages will be automatically deducted from their paycheck and placed in their Roth IRA. Employees have the option to opt out.

Is Delaware Earns the only option?

The state’s savings program is not your clients’ only option for a retirement savings plan. Though it may seem like a straightforward plan with little maintenance required, Delaware Earns has its limitations. Because it’s a state-administered plan, employers don’t get to choose plan features, and they are not permitted to make matching or profit-sharing contributions. For greater plan flexibility, higher contribution limits, and potential tax savings, Delaware business owners may want to consider adopting an ePlan Services 401(k) retirement plan.

What are the benefits of an ePlan Services 401(k) plan?

Unlike many Roth IRA options, an ePlan Services retirement plan offers employers:

• Easy set up
• Plan management
• Payroll integration with numerous systems, and
• Tax credits of up to $5,000 for 3 years for starting a new plan, an additional $500 for 3 years by adding an auto-enrollment feature, and up to an extra $1,000 per participant for making employer contributions.

Plus, as their seasoned financial advisor, you’ll have access to our handy Tax Credit Estimator so you can show your many clients their tax savings potential in real time. You can even solidify your place as an expert they can trust by referring your clients to ePlan Services. Only you can give them the opportunity to save $1,000 on their plan setup fees just by referring them!

Conclusion:

Delaware business owners with five or more employees are now required to provide them with a retirement savings option. Make sure your clients choose the right plan for their business today. For more information on how you can team up with ePlan to help your clients stay in compliance with state mandates while also growing your book of business, reach out to our experienced sales team today!