VT Saves Program

Year enacted

2023

Status

The rollout is expected to occur in three phases. The registration deadline for employers depends on the size of their business:

• 25 or more employees: July 1, 2025
• 15 to 24 employees: January 1, 2026
• 5 to 14 employees: July 1, 2026
  

Employers affected

Nongovernmental for profit and not-for-profit employers that haven't offered to its employees, or is within a controlled group that maintains or contributes to, a specified tax-favored retirement plan at any time within the current calendar year or two preceding calendar years.

Specified tax-favored retirement plan means a plan, program, or arrangement that is tax qualified and satisfies the requirements of IRC section 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or 457(b), without regard to whether it constitutes an employee benefit plan under ERISA.

Excludes employers who haven't been in business during both the current calendar year and preceding calendar year.

Type of plan

Roth IRA; the state treasurer is authorized to offer a traditional IRA option

Automatic enrollment

Yes

Auto-escalation

Yes (not less than 1% and not more than 8% each year)

Default contribution rate

5%

Employer contributions

Not permitted

Investment options

A limited number of investment alternatives, including a principal preservation fund, and default investment option (such as a series of target-date funds) to be determined by the state treasurer

The treasurer may adopt rules requiring that a participant’s initial contributions (up to a specified dollar amount or for a specified period of time) be invested in a principal preservation investment fund or defaulted into such investment fund unless the participant elects a different investment option.

Fees

The state treasurer may require that annual fees (not to exceed $30 per participant) be assessed to defray program costs. Employers will not be required to fund or be responsible for collecting fees from participants.

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