VT Saves

On June 1, Vermont Governor Phil Scott signed legislation unanimously passed by state lawmakers to establish a new auto-IRA program call VT Saves.

Under the bill, Vermonters 18 and older who don’t have access to a retirement savings program through their workplace would be automatically enrolled in a Roth IRA account overseen by the state treasurer’s office.

“Unfortunately, the reality is that so many Americans are not prepared for retirement, and that’s the same for Vermonters,” State Treasurer Mike Pieciak told Vermont Public. “We’re an older state. We have a lot of individuals that work multiple jobs; and we have a lot of individuals that don’t have access to a workplace retirement plan.”

According to state data, 45% of employers in Vermont don’t currently offer retirement benefits.

Pieciak says the state estimates that there are between 88,000 and 100,000 people who could benefit from the VT Saves program.

Under VT Saves, employers with five or more employees who don’t offer retirement benefits will need to enroll in the new program or face fines.

Proponents say the program won’t cost employers anything, and the enrollment process will be phased in. Employers with 25 or more employees will need to sign up first, by July 1, 2025. Employers with 15 to 24 employees will need to sign up by Jan. 1, 2026, and employers with five to 14 workers by July 1, 2026.

Per Vermont Public, residents would be able to opt out of VT Saves at any time. But if they don’t opt out, 5% of their take home pay would be automatically deducted each pay period and put into their retirement account. Under the plan, a worker’s payroll deduction would be automatically increased by 1% a year to a maximum of 8%. Participants, however, could change the amount they save at any time to whatever works best for them.

Lawmakers have budgeted $750,000 to get the program up and running, which would pay for a director and a staff person who would handle education and outreach. These funds would also cover start-up logistics with a third-party retirement fund vendor.

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