Delaware’s state-mandated retirement program is an auto-IRA program signed into law on August 18, 2022. Expected to launch in 2025, employers with five or more employees that were in business at least 6 months in the previous calendar year must enroll unless they have an employer-sponsored retirement plan in place. The initial deadline for employer participation will be phased according to the size of the employer. The chart below illustrates a brief summary of the program.
| Feature | State IRA Plan | Employer Sponsored 401k |
| Plan Type | Payroll Deduction Roth IRA | Pre-tax, Roth AND Employer Contributions |
| Contribution Limits | Limited to $7,000 (2024) | $23,000 (plus more if over age 50) |
| Compliance | Unknown at this time | Compliant with state program |
| Eligibility | Unknown at this time | Employer controls eligibility requirements |
| Plan Costs | Unknown at this time | Dependent on type of plan design chosen. |
| Tax Deductible | NO | Employer contributions are tax deductible |
| Tax Credit Available | NO | Plan costs qualify for available tax credits |
| Default Contribution | 3% of annual pay unless employee opts out or elects lower amount | Employee choice |
| Auto Escalation Feature | Yes, increases annually 1 to 2% every year, until a 15% contribution rate is achieved. | NO |
| Minimum Employees to Participate | 5 | Any Number |
| Investments | Unknown at this time | More than 25 funds in a variety of Morningstar categories |
