Frequently asked questions by employers
myRA (my Retirement Account) was developed by the United States Department of the Treasury as a new retirement savings option for anyone looking for a simple, safe, and affordable way to start saving for retirement. It is a Roth IRA account with an investment backed by the United States Treasury, where the investment carries no risk of losing money. myRA is designed for individuals without access to employer-sponsored retirement savings plans, such as part-time, seasonal, temporary, or contracted employees. myRA is not a replacement for 401(k)s or other types of employer-sponsored retirement savings plans.
Millions of Americans are not prepared for retirement. Challenges such as a lack of access to an employer-sponsored retirement savings plan, the cost of opening and maintaining a retirement savings account, and concerns about losing money keep many people from saving. myRA was designed to address many of these challenges and to help people start saving for the future.
No. myRA was primarily designed to offer a retirement savings option for workers who do not have access to or are not eligible for employer-sponsored retirement plans. In addition, myRA also lacks many features of employer-sponsored retirement plans, such as matching contributions and investment options, which remain a great benefit for those with access to such plans.
One way employees can contribute to their myRA accounts is directly from their paychecks by setting up payroll direct deposit through their employers. Employees can fund their myRA accounts as long as you, as the employer, offer direct deposit and can set up a portion of their paycheck to be directed to the account. Some other ways employees can fund their myRA accounts include transferring funds from other accounts, such as savings and checking accounts, and by directing all or part of their federal tax refund to their myRA when they file their taxes.
Employers are encouraged to speak to their employees about myRA, share and display promotional materials, and emphasize the importance of regular savings. Learn more about myRA and download employer resources such as promotional materials.
No. myRA is not considered an employee benefit by the United States Department of Labor. Simply accommodating and encouraging employees to make deposits to myRA accounts does not raise Employee Retirement Income Security Act (ERISA) concerns. For additional information on this issue, refer to the Department of Labor’s guidance letter at http://www.dol.gov/ebsa/regs/ILs/il121514.html.
If an employee is eligible to contribute to a Roth IRA, then they’re also eligible to contribute to a myRA account if they wish to do so. However, myRA is designed to be a starter retirement savings account for employees who are currently ineligible for your 401(k) or other employer-sponsored retirement savings plans. myRA lacks features of many employer-sponsored retirement plans, such as a contribution match and investment options, which remain a great benefit for employees with access to such plans.
You can share information and educate your employees about myRA without any cost to you. There are free materials and resources online for you to use as you choose. Employers do not administer employee myRA accounts, contribute to them, or match employee contributions. You simply set up payroll deductions for employees with myRA accounts or tell them about the other ways they can fund their accounts.
If you are an employer that offers direct deposit, you may have minimal operational costs in setting up payroll direct deposit for employees who choose to fund their myRA accounts from their paychecks. You would simply need to work with your payroll processor to add a new destination option in your system. To make this easy for you, the United States Treasury will provide instructions and assistance for how to work with your payroll processor to add myRA as a new destination in your pre-existing payroll deduction system. It is possible you may incur some marginal human resource “costs of doing business,” such as processing payroll direct deposit requests, or printing and distributing myRA materials depending on how you decide to utilize the online myRA employer resources.
To set up payroll direct deposit, employees would generally need to complete a direct deposit authorization form and provide it to their employer to set up the automatic contributions. Employees can download and use the myRA Direct Deposit Authorization form (PDF download) provided online or in their welcome packet. If you are an employer that has a different paper or electronic process for setting up payroll direct deposit, you may direct your employees to use that process instead. Generally, it may take up to two pay periods for the first contribution to take place once the direct deposit authorization request is processed.
If an employee decides to fund their myRA account through automatic deductions from each paycheck, the employee will likely present you with a myRA Direct Deposit Authorization form (PDF download). You can also ask the employee to fill out your own direct deposit authorization form, or even direct them to complete the authorization through your online Human Resources pay system. After that, you simply arrange the employee’s payroll deduction. There is nothing else you need to do, and there is no direct cost to you.
A myRA account is not tied to an employer – so if employees have more than one job, they can contribute from multiple sources. If they have more than one job, they can ask each of their employers to direct part of their paychecks into their myRA account. To do so, they will need to complete a direct deposit authorization for each employer.
Yes, as long as your payroll direct deposit process allows for split allotments, contributions to myRA can be made via the same payroll deduction process your company currently has in place.
Contributions to myRA are only made at the direction of the employee. Depending on how your employee and you, as the employer, have set up the direct deposit distribution of funds, it is possible that automated contributions may not reach the myRA account if the paycheck is distributed elsewhere first. Generally, direct deposit distribution of funds would be set up in a priority order, where, for example, taxes and social security would be paid first, health insurance second, followed by a deposit into a checking or savings account, and then eventually into a myRA account. Employers are not responsible for making up an employee’s missed contribution; that remains the responsibility of the employee, and only if the employee wishes to make it up.
Yes, employees can change, stop, or re-start contributions using the same process your company uses for any other payroll direct deposit change requests.
Yes. If your employees earn tips or cash income they may still open myRA accounts and fund them from other accounts, such as their checking or savings accounts. In addition, employees are also able to direct all or part of their federal tax refund to their myRA when they file their taxes. Please direct your employees to check our website to find out how they can fund their myRA from a checking or savings account or with their federal tax refund.
If you do not offer direct deposit to your employees or are unable to set up allotments to their myRA accounts, you can help your employees participate in myRA, share and display promotional materials, and emphasize the importance of regular savings. In addition to payroll direct deposit, employees can also fund their myRA accounts from their personal checking or savings account or by using all or part of their federal tax refund when they file their taxes. Learn more about myRA and download employer resources, such as promotional materials.
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