Why Your Business Needs Its Own Retirement Plan Before Pennsylvania Tells You To
Don't let the state call your plays. With Keystone Saves (HB 1263) gaining momentum, learn how to use SECURE 2.0 tax credits to launch a private SIMPLE IRA or 401(k) for nearly zero cost in Harrisburg and Mechanicsburg.
Pennsylvania is building a state-run retirement program called Keystone Saves. If it passes the State Senate in its current state, businesses with five or more employees that do not offer a retirement plan will be required to enroll workers in the state's program. PAC Financial, a financial advisory firm in Harrisburg, Pennsylvania, helps business owners across Central PA set up their own plans first, on their own terms, while federal tax credits cover most of the cost.
You can let the state call your plays, or you can run your own offense. Here is why running your own matters.
The Choice: Your Plan or the State's
Keystone Saves would auto-enroll employees into a state-managed Roth IRA at 4% of wages. The state picks the investments and sets the fee (capped at 0.60%). While simple, it lacks the firepower of a private plan. There is no employer match, no profit-sharing, and no ability to customize features for your specific team in Dauphin or Cumberland County. This is a critical component of comprehensive wealth planning for business owners.
The Tax Credit Math: Making "Private" Nearly Free
The SECURE 2.0 Act created dollar-for-dollar tax credits that make starting a plan a logical business move in 2026:
- 10-Employee Business: Could claim up to $15,000 in credits over the first three years for startup costs plus $10,000 in employer contribution credits in year one.
- 30-Employee Business: Could claim up to $15,000 for startup plus $30,000 in year-one contribution credits.
For many Central PA shops, these credits are actually larger than the cost of running the plan itself. Every year you wait is a year of credits left on the table. If you are also managing personal college savings through Pennsylvania 529 plans, these business tax savings can free up significant cash flow for your family.
The Competitive Edge in Harrisburg
A business in Harrisburg or Hershey that offers a 401(k) with a $24,500 limit and employer match will win the talent war against a competitor offering only the state's basic Roth IRA (limited to $7,500). Providing a private plan isn't just about compliance—it's about recruiting and retention in the 717 area code. It is also an excellent time to ensure your business succession and life insurance needs are met by Christian Joseph Marrazzo.
The Exemption Advantage
If Keystone Saves becomes law in its current form, businesses with a qualified retirement plan are exempt. By setting up a SIMPLE IRA or 401(k) today, you would avoid the state's administrative reach, keep control of your investment menu, and secure your tax credits before the 2026 window narrows.
Talk to PAC Financial
Call PAC Financial at (717) 564-6400 for a free consultation. We help business owners across Harrisburg, Mechanicsburg, Camp Hill, Hershey, and Carlisle get ahead of the mandate. Let's get your plan in place before the state makes the decision for you.
Compliance Notice
This information is for educational purposes only. Keystone Saves (HB 1263) is pending legislation. PAC Financial is a financial advisory firm serving Central Pennsylvania. Securities and advisory services offered through Osaic Wealth, Inc., member FINRA/SIPC.