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Vermont Creates State-Sponsored Retirement Savings Program

04/03/25

Author: ADP Admin/Tuesday, April 1, 2025/Categories: Compliance Corner

Vermont has enacted legislation (“S.135”), which creates a state-sponsored retirement savings program. Covered employers that do not offer a retirement plan must register or certify their exemption to the Vermont Saves program in a phased implementation beginning July 1, 2025 through July 1, 2026.

The Details

Vermont Saves is a state-sponsored retirement savings program that automatically enrolls employees into a Roth IRA account who do not already have access to a retirement savings plan through their employer. Once enrolled, the account is funded out of an employee’s wages unless they opt out.

Note: Employers are prohibited from making contributions under the plan.

Phase In Requirements

Under S.135, beginning July 1, 2025, the State will phase in implementation of the program, requiring employers with five or more W-2 employees to:

  • Register for the program; or
  • Certify their exemption from the program

The state has been reaching out to employers regarding the registration / certification process requirements.  As part of this outreach activity, employers should have received their unique Access code to register for the program or certify exemption from the program (if an employer already offers a 401(k) or other qualified retirement plan).  Employers will also need their Federal Employer Identification Number (EIN) to register.

The registation deadline was March 1, 2025, and the registration requirement applies to businesses with five or more W-2 employees who have been in business for at least two years and do not currently offer a qualified retirement plan.

Employer Resources

See the employer resources center for helpful resources, such as:

Next Steps

Vermont employers with five or more W-2 employees must register or certify their exemption.  They must also offer the Vermont Saves retirement program by July 1, 2026.

 

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