Live mandate
Does my Delaware business have to offer a retirement plan?
Short answer
Yes, if you have 5 or more employees, have been in business since July 1 of last year and don’t offer a retirement plan such as a 401(k). You either register for Delaware EARNS or certify that you already offer a plan. Penalties can reach $250 per employee a year, up to $5,000.
Who must comply
Delaware EARNS applies to employers with 5 or more employees that have been in business since July 1 of the previous year and don't offer a qualified retirement plan. Employers with fewer than 5 employees certify an exemption.
Deadlines
Registration opened July 1, 2024, with an October 15, 2024 deadline. Employers that still hadn’t acted by October 15, 2025 can face penalties starting in 2026. Newly eligible businesses get a notice with their date. The 2027 date isn’t published yet (2026: June 30). EARNS says businesses past their deadline should take action now.
Penalties
If the EARNS board finds you out of compliance, it sends a notice and gives you 90 days to fix it. After that, it may impose administrative penalties of up to $250 per employee per year, with a maximum of $5,000 per year. Enforcement can't start until 1 year after the date you were first required to comply.
How to get exempt
If you provide a qualified retirement plan such as a 401(k), certify your exemption on the EARNS employer portal using the Access Code from your notice. Employers with fewer than 5 employees do the same.
Delaware EARNS or a 401(k)?
Delaware EARNS accounts are Roth IRAs, so each saver is held to the IRA limit: $7,500 a year in 2026 and 2027, or $8,600 at 50 or older, across all their IRAs. Higher earners can be phased out of Roth contributions altogether, starting at $153,000 of income for single filers in 2026 and $158,000 in 2027. A 401(k) leaves far more room: employees can defer $24,500 in 2026 and $25,500 in 2027, plus catch-ups from age 50. Delaware EARNS doesn’t allow employer contributions, so you can’t add a match; a 401(k) can include one. Delaware EARNS costs employers nothing to run; savers pay the account and fund fees. New savers start at 5% of pay, rising 1% each January to 10% unless they change it.
Sources
Delaware EARNS: Program details (employers) (earnsdelaware.com) Delaware EARNS: Contributions (savers) (earnsdelaware.com) Delaware Code Online: Title 19, Chapter 38, §3805 Compliance (delcode.delaware.gov) Internal Revenue Service: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (irs.gov) Internal Revenue Service: COLA increases for dollar limitations on benefits and contributions (irs.gov) Internal Revenue Service: 401(k) plan overview (irs.gov) Georgetown University Center for Retirement Initiatives: States: 2026 state program status (as of November 6, 2026) (cri.georgetown.edu)
This page is general information, not legal or tax advice. Confirm current rules with the state program before acting.
