What Maryland A/E Firms Should Know About Employee Retirement Savings Plans
By Paul E. Knupp, III, Esq., and Gabriel M. Diaz, Esq., Lee/Shoemaker PLLC
Recent A/E firm survey data published by the American Institute of Architects (“AIA”), and reports by Fidelity and the AARP, reveal that smaller A/E firms may be falling behind the curve when it comes to providing employees access to a retirement savings plan. In Maryland, however, companies that have been operating for at least two years, use an automated payroll system, and have at least one W-2 employee, are legally obligated to provide their employees with access to some type of retirement plan. Md. Code Ann., Lab. & Empl. § 12-402 (2025).
In September 2022, Maryland launched a State-run auto-IRA program called MarylandSaves as a practical way to expand retirement savings plan access and address the persistent gap in participation across the State’s private-sector workforce. The impetus for the program was an AARP study, which found that 43% of Maryland’s private-sector employees (roughly 947,000 people) worked for employers with no retirement plan whatsoever. (The problem is even worse at the national level: a 2023 Small Business Retirement Index by Fidelity reported that only 34% of small businesses had active retirement savings plans in place.)
Fringe benefits, including health insurance and retirement plans, are increasingly vital to A/E firms seeking to remain competitive and attract new talent. National survey data from AIA’s 2023 Compensation & Benefits Report shows that 97% of architecture firms provide employer-sponsored health insurance to employees and that 93% offer at least some form of licensure support to their staff. Employee benefits are a key competitive factor, and early-career design professionals increasingly expect them to include a retirement savings plan component.
15 Minutes Could Save You $300 or More Per Year on Business License Renewal
In Maryland, the State has incentivized employer compliance with its retirement plan mandate using a carrot instead of a stick. Many A/E firms in Maryland may be unknowingly missing out on the carrot: an annual waiver of the $300 State Department of Assessments and Taxation (SDAT) business license renewal fee.
The waiver can be secured in one of two easy ways:
- Register and submit payroll contributions through MarylandSaves by December 31, and automatically receive a SDAT filing-fee waiver; or
- Alternatively, employers who already offer qualified plans such as a 401(k), other 401(a) plans, a 403(a) qualified annuity plan, a 403(b) tax-sheltered annuity plan, a 408(k) SEP plan, a 408(p) SIMPLE IRA plan, or a 457(b) governmental deferred compensation plan can apply for the SDAT filing-fee waiver by submitting an annual certification by December 31 of the previous year.
Conclusion
MarylandSaves and the SDAT waiver enable firms to comply with the State’s retirement plan mandate, while realizing savings on annual filing fees. While the annual savings of the waiver are modest, it represents a rare instance where it pays to comply with a law—both literally and in terms of workforce morale and retention. With the annual December 31st MarylandSaves contribution and certification deadline approaching, now is the time for Maryland A/E firm owners to get a retirement savings plan in place and file for the waiver.
Paul E. Knupp III, Esq. and Gabriel M. Diaz, Esq. are attorneys at Lee/Shoemaker PLLC, a law firm devoted exclusively to the representation of design professionals with offices in Washington, DC and Charlottesville, VA. This article was prepared to educate but is not intended to be a substitute for professional legal advice.
Lee/Shoemaker PLLC is an Educational Program Allied Member of AIA Potomac Valley.
