Revolutionizing Retirement

DELAWARE EARNS OFFERS EASY WAY FOR SMALL BUSINESSES TO HELP EMPLOYEES SAVE FOR THE FUTURE

BY COLLEEN C. DAVIS AND ROB HERRERA

In Delaware, nearly 40% of private sector employees do not have access to retirement savings through work. To help solve this problem, we’ve designed and launched Delaware EARNS, an innovative program aimed at increasing access to retirement savings and closing the retirement savings gap.

As State Treasurer and a member of the Delaware EARNS Board, we’ve both had the opportunity to help EARNS grow from concept to reality. We bring to our roles unique perspectives: one an elected official already responsible for overseeing hundreds of millions of dollars in investments through statesponsored savings plans, and the other an entrepreneur working closely with fellow business owners on projects up and down the state.

EARNS is already helping scores of Delaware workers save for a better future. Over time, the program is projected to generate $1.6 billion in new savings for more than 40,000 savers, according to a study by The Pew Charitable Trusts.

What is Delaware EARNS?

Sponsored by the Office of the State Treasurer, Delaware EARNS is a workplace retirement program designed for small businesses and small nonprofits that don’t offer their own retirement plans. Modeled after similar programs successfully operating in other states, EARNS provides an easy and direct path to greater financial security and stability.

While the program is voluntary for employees, it’s required by state law for any Delaware employer with five or more W-2 employees that does not offer a qualified retirement plan, such as a 401(k).

With automatic payroll contributions to a Roth IRA, employees can choose to save 5% of their gross pay, which is the default rate, or customize that rate to better suit their needs. Since employees’ participation is voluntary, they can opt out or reenroll at any time.

How will it benefit employers?

Responsibilities for business owners are minimal and far outweighed by the benefits:

• It’s FREE to facilitate

• Getting started is fast and easy— there’s no complex administration and minimal ongoing responsibilities

• Easy integration into the payroll process

• It’s a valuable benefit to attract and retain employees

• There’s no requirement to match contributions

• Employers have no fiduciary responsibility

How do employers register?

The first step for employers is to determine if they must enroll in the program or, if they already offer a retirement plan, certify their exemption. Registration is now open at EARNSDelaware.com, and the deadline for all businesses is October 15, 2024. The website has instructions on how to register, tips for onboarding employees and remitting payroll contributions, and a comprehensive Help Center.

Before opening statewide, the program was tested in a successful pilot involving 12 employers from across the state. Among the many positive testimonials received was this one from Angie Robles, co-owner of My Sister’s Fault, a Puerto Rican–themed bakery with locations in Milford and Seaford: “EARNS is an important step forward…[and] a very positive addition to our business and any small business. We’ll now have a more level playing field with larger employers because we can offer access to a state-sponsored retirement program.”

Colleen C. Davis is Delaware Treasurer and Rob Herrera, founder of The Mill, is a member of the Delaware EARNS Board.