Delaware’s retirement mandate: don't just comply, offer a better plan

If you run a business in Delaware, there’s a good chance you’ve been focused on keeping customers happy, managing payroll, and planning for growth — not tracking state retirement legislation. But Delaware EARNS (Expanding Access for Retirement and Necessary Savings) is now a required part of doing business for employers across the state.

Many business owners are just now learning that this mandate applies to them — and that waiting to act could lead to last-minute compliance headaches.

Let’s break down what Delaware EARNS means, who it affects, and why now is the time to explore a better retirement plan option for your team.

What is Delaware EARNS?

Delaware EARNS is a state-facilitated Roth IRA program designed to help employees save for retirement through automatic payroll deductions.

Here’s how it works:

• Which employers are impacted by the retirement mandate: Delaware employers with 5 or more employees, in business for at least 6 months, and not already offering a qualified plan
• Type of account: Roth IRA
• Default contribution rate: 5% of gross pay, automatically deducted from each paycheck
• Annual IRA limit (2025): $7,000 (or $8,000 if age 50+)
• Penalties for noncompliance: Up to $250 per eligible employee per year, with a cap of $5,000 annually
• Key Registration Deadlines:

- October 15, 2024: Deadline for existing businesses (with 5+ employees) to register or certify exemption.

- June 30, 2025: Deadline for newly eligible employers to register after initial rollout.

- Ongoing: Employers that become eligible in the future (e.g., hiring their fifth employee) must register by the next applicable reporting cycle.

The trade-offs of relying on a state plan

Delaware EARNS offers simplicity, but that simplicity comes with limitations.

Employers can’t contribute, which means you lose out on potential tax deductions, and employees miss out on the motivational boost of employer matching. The plan also restricts investment choices, leaving workers with limited ways to grow their savings.

For many small businesses, it’s a compliance checkbox, not a true benefit.

A better path forward with WealthRabbit SIMPLE IRA

If your goal is to comply with state requirements and offer something more valuable, a WealthRabbit SIMPLE IRA is a smarter choice. WealthRabbit’s SIMPLE IRA is an employer-sponsored retirement plan designed for small businesses with up to 100 employees.

Key features include:

• The SIMPLE IRA is a qualified retirement plan that fulfills the state mandate, allowing you to certify your exemption from Delaware EARNS

• Employer contributions: required 3% match or 2% non-elective, which are tax-deductible

• Higher contribution limits for 2025:

- Standard: $16,500

- SECURE 2.0 - Small employers (25 or fewer employees): $17,600

- Age 50–59 or 64+ catch-up: Additional $3,500 (or $3,850 for small employers)

- Age 60–63 super catch-up: Additional $5,250

• Flexible investment choices

• Automated payroll integration with providers like QuickBooks, ADP, and Gusto

• No annual IRS filings or complex paperwork

• Compliance automation and expert support

It’s a modern, digital retirement solution that meets compliance needs while providing real financial advantages for both employers and employees.

Don’t wait, act now

By choosing a WealthRabbit SIMPLE IRA, you’re not just checking a box; you’re investing in your team’s future and taking advantage of valuable tax benefits today.

Ready to stay ahead of the mandate and build a benefit that truly works for your business?

Visit WealthRabbit.com to learn how easy it can be to get started.

*Disclaimer: This blog is for educational purposes only and is not intended as tax, legal, or financial advice. Please consult a qualified professional regarding your specific situation.