§ 531. Definitions
As used in this chapter:
(1) “Contribution level” means the contribution rate for the participant that may be expressed
as one of the following:
(A) A percentage of the participant’s taxable wages as is required to be reported under
Sections 6041 and 6051 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended
from time to time.
(B) A dollar amount up to the maximum deductible amount for the participant’s taxable
year under Section 219(b)(1) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended
from time to time.
(C) In the absence of an affirmative election by the participant, five percent of the
participant’s taxable wages as is required to be reported under Sections 6041 and 6051 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended
from time to time. The contribution level of a participant who customarily and regularly
receives gratuities in conjunction with the participant’s employment shall be a percentage
of such participant’s wages as is required to be reported under Sections 6041 and 6051 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended
from time to time.
(2) “Covered employee” means an individual who is 18 years of age or older who is employed
by a covered employer and who has wages or other compensation that are allocable to
the State during a calendar year. A covered employee may include a part-time, seasonal,
or temporary employee only to the extent permitted in rules adopted by the Treasurer.
A covered employee shall not include:
(A) any employee covered under the federal Railway Labor Act, 45 U.S.C § 151;
(B) any individual who is an employee of the federal government, the State or any other
state, any county or municipal corporation, or any of the State’s or any other state’s
units or instrumentalities; or
(C) any employee on whose behalf an employer makes contributions to a Taft-Hartley multiemployer
pension trust fund.
(3) “Covered employer” means a person, entity, or subsidiary engaged in a business, industry,
profession, trade, or other enterprise in the State, whether for profit or not for
profit, that does not currently offer to an employee, or is within a control group
that maintains or contributes to, a specified tax-favored retirement plan. If an employer
does not maintain a specified tax-favored retirement plan for a portion of a calendar
year ending on or after the effective date of this chapter but does adopt such a plan
for the remainder of that calendar year, the employer is not a covered employer for
the remainder of the year. A covered employer does not include:
(A) the federal government, the State or any other state, any county or municipal corporation,
or any of the State’s or any other state’s units or instrumentalities;
(B) any employer that has only been in business during the current calendar year.
(4) “ERISA” means the federal Employee Retirement Income Security Act of 1974, as amended,
29 U.S.C § 1001 et seq.
(5) “Internal Revenue Code” means the U.S. Internal Revenue Code of 1986, as amended.
(6) “IRA” means a traditional IRA or a Roth IRA.
(7) “Participant” means an individual who has an IRA under the Program.
(8) “Payroll deduction IRA or payroll deduction IRA arrangement” means an arrangement
by which an employer allows employees to contribute to an IRA by means of payroll
deduction.
(9) “Program” means the Vermont Saves Program established in accordance with this chapter.
(10) “Roth IRA” means a Roth individual retirement account or Roth individual retirement
annuity described in Section 408A of the Internal Revenue Code.
(11) “Specified tax-favored retirement plan” means a plan, program, or arrangement that
is tax qualified under or described in, and satisfies the requirements of, Section 401(a), Section 401(k), Section 403(a), Section 403(b), Section 408(k), Section 408(p), or Section 457(b) of the Internal Revenue Code, without regard to whether it constitutes an employee benefit plan under ERISA.
(12) “Traditional IRA” means a traditional individual retirement account or traditional
individual retirement annuity described in Section 408(a) or Section 408(b) of the Internal Revenue Code.
(13) “Trust” means the trust in which the assets of the Program are held.
(14)(A) “Vendor” means:
(i) a federally regulated retirement plan sponsor conducting business in the State, including
a federally regulated investment company, program administrator, custodian or trustee,
or an insurance company; or
(ii) a company conducting business in the State to:
(I) provide ancillary services, including technological, payroll, or recordkeeping services;
and
(II) offer retirement plans or payroll deposit individual retirement account arrangements
using products of regulated retirement plan sponsors.
(B) “Vendor” does not mean individual registered representatives, brokers, financial planners,
or agents.
(15) “Vermont Retirement Security Fund” means the fund established in section 534 of this
chapter for the sole purpose of paying the administrative costs and expenses of the
Program.
(16) “Wages” means any compensation within the meaning of Section 219(f)(1) of the Internal Revenue Code that is received by an employee from an employer during a calendar year. (Added 2023, No. 43, § 1, eff. July 1, 2023; amended 2025, No. 27, § E.131, eff. July 1, 2025.)
§ 532. Vermont Saves Program; establishment
(a) Establishment; purpose. There is established the Vermont Saves Program (Program), administered by the Office
of the State Treasurer, for the purpose of increasing financial security for Vermonters
by providing access to an IRA for Vermont employees of companies that do not currently
offer a retirement savings program. The Program shall be designed to facilitate portability
of benefits through withdrawals, rollovers, and direct transfers from an IRA and achieve
economies of scale and other efficiencies to minimize costs. The Program shall:
(1) allow a covered employee to contribute to an IRA under the Program, which may be contributed
through a payroll deduction; and
(2) notwithstanding any other provision of law to the contrary, require each covered employer
to offer its covered employees the choice to contribute to a payroll deduction IRA
by automatically enrolling them in the payroll deduction IRA with the opportunity
to opt out.
(b) Type of IRA. The type of IRA to which contributions are made pursuant to subsection (a) of this
section shall be a Roth IRA; provided, however, the State Treasurer is authorized
to add an option for all participants to:
(1) affirmatively elect to contribute to a traditional IRA instead of a Roth IRA; or
(2) open both a Roth IRA and a traditional IRA.
(c) Contributions.
(1) Unless otherwise specified by the covered employee, a covered employee shall automatically
initially contribute five percent of the covered employee’s salary or wages to the
Program. A covered employee may elect to opt out of the Program at any time or contribute
at any higher or lower rate, expressed as a percentage of salary or wages, or, as
permitted by the State Treasurer, expressed as a flat dollar amount, subject in all
cases to the IRA contribution and eligibility limits applicable under the Internal
Revenue Code at no additional charge.
(2) The State Treasurer shall provide for, on a uniform basis, an annual increase of each
active participant’s contribution rate, by not less than one percent, but not more
than eight percent, of salary or wages each year. Any such increases shall apply to
active participants, including participants by default with an option to opt out or
participants who are initiated by affirmative participant election, provided that
any increase is subject to the IRA contribution and eligibility limits applicable
under the Internal Revenue Code.
(3) The Treasurer shall provide for direct deposit of contributions into investments under
the Program, including a default investment such as a series of target date funds,
and a limited number of investment alternatives, including a principal preservation
option.
(4) Contributions by a covered employer are not required or permitted under the Program.
(5) Each participant owns the contributions to, and earnings on, amounts contributed to
the participant’s account under the Program. The State and covered employers have
no proprietary interest in those contributions or earnings.
(d) Administration. The Treasurer shall administer and implement the provisions of this chapter or contract
with a vendor to administer the Program and manage the investments in accordance with
this chapter, pursuant to the following:
(1) The Program shall be designed and implemented in a manner consistent with federal
law to the extent that it applies and consistent with the Program not being preempted
by, and the payroll deduction IRAs and covered employers not being subject to, ERISA.
(2) The costs and expenses incurred to initiate, implement, maintain, manage, and administer
the Program and its investments are paid or defrayed from investment returns or assets
of the Program or through fees, charges, or funds, whether account based, asset based,
per capita, or otherwise, to the extent permitted under federal and State law.
(3) The Treasurer shall establish the following processes and requirements to administer
the Program:
(A) processes for enrollment and contributions to an IRA under the Program, including:
(i) withholding by covered employers of employee payroll deduction contributions from
wages and remittance for deposit to an IRA;
(ii) automatic enrollment in a payroll deduction IRA and opt-outs by covered employees,
including self-employed individuals and independent contractors, through payroll deduction
or otherwise; and
(iii) the making of default contributions using default investments and participant selection
of alternative contribution rates or amounts and alternative investments from among
the options offered under the Program;
(B) processes for phasing in enrollment of eligible individuals, including phasing in
enrollment of covered employees by size or type of covered employer;
(C) processes for a participant to make nonpayroll contributions to accounts under the
Program;
(D) processes for an employer to be determined to be exempt from the Program because the
employer sponsors a specified tax-favored retirement plan; and
(E) requirements for the determination of whether a part-time, seasonal or temporary employee
is a covered employee eligible to participate in the Program.
(e) Records and accounting. The Treasurer shall maintain separate records and accounting for each account under
the Program and allow for participants to maintain their accounts regardless of place
of employment and to roll over funds into other IRAs or other retirement accounts.
(f) Reports. Annually, the Treasurer shall send a report to each participant detailing the status
of the participant’s account. Each participant shall also be granted frequent or continual
online access to information on the status of that participant’s account.
(g) Outreach and disclosures. The Treasurer shall conduct outreach to individuals, employers, other stakeholders,
and the public regarding the Program, including specifying the contents, frequency,
timing, and means of required disclosures from the Program to covered employees, participants,
other individuals eligible to participate in the Program, covered employers, and other
interested parties.
(h) Participant accounts.
(1) Interest, investment earnings, and investment losses shall be allocated to each participant’s
individual retirement account.
(2) A participant’s benefit under the Program shall be equal to the balance in such participant’s
individual retirement account as of any applicable measurement date prescribed by
the Program.
(i) Program assets.
(1) The Treasurer is authorized to establish a trust or custodial accounts meeting the
requirements of Section 408(a) or (c) of the Internal Revenue Code of 1986, or any
subsequent corresponding internal revenue code of the United States, as amended from
time to time, or any other applicable federal law requirements for Program participants’
investments and assets. Any trust established pursuant to this chapter shall be considered
an instrumentality of the State and shall not be subject to ERISA.
(2) No assets of the Program or Fund as set forth in section 534 of this chapter shall
be transferred to the General Fund or to any other fund of the State or otherwise
encumbered or used for any other purpose.
(3) All contributions to an IRA under the Program shall be used only to pay benefits to
participants, to pay the cost of administering the Program, or to make investments
for the benefit of the Program.
(j) Fees.
(1) The Treasurer may require that each participant be charged a fee to defray Program
costs. The amount and method of collection of such fee shall be determined by the
Treasurer, provided that the fee shall not exceed $30.00 per participant in each calendar
year.
(2) No employer shall be required to fund or be responsible for collecting fees from participants. (Added 2023, No. 43, § 1, eff. July 1, 2023; amended 2023, No. 87 (Adj. Sess.), § 78, eff. March 13, 2024; 2025, No. 27, § E.131, eff. July 1, 2025.)
§ 533. Duties of the State Treasurer
In carrying out the purposes of this chapter, the Treasurer:
(1) May adopt such rules, pursuant to the Vermont Administrative Procedure Act, as the
Treasurer determines to be necessary or advisable for the implementation and general
administration and operation of the Program, including rules governing:
(A) the distribution of funds from the Program and promoting portability of benefits,
including the ability to make tax-free rollovers or transfers from IRAs under the
Program to other IRAs or to tax-qualified plans that accept such rollovers or transfers;
and
(B) that each participant’s initial contributions, up to a specified dollar amount or
for a specified period of time, are required to be invested in a principal preservation
investment or must be defaulted into such an investment, unless the participant affirmatively
opts for a different investment for those contributions.
(2) May make and enter into contracts, agreements, memoranda of understanding, arrangements,
partnerships, or other arrangements to collaborate, cooperate, coordinate, contract,
or combine resources, investments, or administrative functions with other governmental
entities, including states or their agencies or instrumentalities that maintain or
are establishing retirement savings programs compatible with the Program, including
collective, common, or pooled investments with other funds of other states’ programs
with which the assets of the Program and Trust are permitted by law to be collectively
invested, to the extent necessary or desirable for the effective and efficient design,
administration, and implementation of the Program. The Treasurer is authorized to
use sole source or simplified bid processes as may be consistent with the purposes
of this chapter.
(3) May contract with financial institutions, a trustee, a record keeper, investment managers,
investment advisors, other administrative, professional and expert advisors and service
providers or other organizations offering or servicing retirement programs.
(4) Shall establish criteria and guidelines for the Program to offer qualified retirement
investment choices.
(5) Shall cause the Program and accounts established under the Program to be designed,
established, invested, and operated in accordance with best practices for retirement
savings accounts and to avoid preemption of the Program by federal law.
(6) May apply for and accept any grants, gifts, legislative appropriations, loans, and
other funds from the State, any unit of federal, state, or local government or any
other person, firm, or entity to defray Program costs.
(7) Shall evaluate the need for, and procure if necessary, insurance against any loss
in connection with the property, assets, or activities of the Program as well as establish
procedures for abandoned accounts pursuant to 27 V.S.A. chapter 13.
(8) Shall enter into agreement with the Vermont Department of Taxes to:
(A) facilitate the checking of Program eligibility for employers and employees; and
(B) pursuant to 32 V.S.A. § 3102(e), share tax return information sufficient to verify wages to determine the ability
of an individual to be covered by the Program.
(9) May enter into an intergovernmental agreement or memorandum of understanding with
any agency or instrumentality of the State to receive outreach, technical assistance,
enforcement, and compliance services; collection or dissemination of information pertinent
to the Program, subject to such obligations of confidentiality as may be agreed to
or required by law; or other services or assistance. The State and any agencies or
instrumentalities of the State that enter into such agreements or memoranda of understanding
shall collaborate to provide the outreach, assistance, information, and compliance
or other services or assistance to the Program. The agreements or memoranda of understanding
may cover the sharing of costs incurred in gathering and disseminating information
and the reimbursement of costs for any enforcement activities or assistance.
(10) Discharge the Treasurer’s duties as fiduciary with respect to the Program solely in
the interest of the Participants as follows: for the exclusive purpose of providing
benefits to Participants and defraying reasonable expenses of administering the Program
and with the care, skill, prudence, and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar with those matters would
use in the conduct of an enterprise of a like character and with like aims. (Added 2023, No. 43, § 1, eff. July 1, 2023.)
§ 534. Vermont Retirement Security Fund
(a) There is established the Vermont Retirement Security Fund to be administered by the
State Treasurer.
(b) The Fund shall consist of the following:
(1) any monies appropriated to the Fund by the General Assembly;
(2) any monies transferred to the Fund from the federal government, other state agencies,
or other governmental source;
(3) any monies from the payment of fees, penalties, and the payment of other money due
to the Program; and
(4) any gifts, grants, or donations made to the Fund and any gifts, grants, donations,
or investments received by the Treasurer.
(c) The Treasurer shall credit to the Fund all interest and income derived from the deposit
and investment of monies in the Fund.
(d) Any unexpended and unencumbered monies at the end of a fiscal year shall remain in
the Fund. (Added 2023, No. 43, § 1, eff. July 1, 2023.)
§ 535. Penalties
(a) Failure to comply. If a covered employer fails to be in compliance with this chapter without reasonable
cause, the covered employer is subject to a penalty for each covered employee for
each calendar year or portion of a calendar year during which the covered employee
was not enrolled in the Program or had not opted out of participation in the Program.
The amount of any penalty imposed on a covered employer for the failure to enroll
a covered employee without reasonable cause is determined as follows:
(1) prior to October 1, 2025, the maximum penalty per covered employee is $10.00;
(2) beginning on October 1, 2025 and ending on September 30, 2026, the maximum penalty
per covered employee is $20.00;
(3) on or after October 1, 2026, the maximum penalty per covered employee is $75.00.
(b) Waivers. The Treasurer is authorized to establish a rule waiving the penalty for a covered
employer that fails to be in compliance with this chapter for which it is established
that the covered employer did not know that the failure existed and exercised reasonable
diligence to meet the requirements of this chapter, provided that:
(1) no penalty shall be imposed on any failure for which it is established that the covered
employer subject to liability for the penalty did not know that the failure existed
and exercised reasonable diligence to meet the requirements of this chapter;
(2) no penalty shall be imposed on any failure if:
(A) the covered employer subject to liability for the penalty exercised reasonable diligence
to meet those requirements; and
(B) the covered employer complies with the requirements set forth in subdivision (1) of
this subsection (b) with respect to each covered employee by the end of the 90-day
period beginning on the first date the covered employer knew, or exercising reasonable
diligence would have known, that the failure existed; and
(3) in the case of a failure that is due to reasonable cause and not to willful neglect,
the Treasurer may waive all or part of the penalty to the extent that the payment
of the penalty would be excessive or otherwise inequitable relative to the failure
involved. (Added 2023, No. 43, § 1, eff. July 1, 2023; amended 2023, No. 87 (Adj. Sess.), § 78, eff. March 13, 2024; 2025, No. 18, § 11, eff. May 13, 2025.)
§ 536. Protection from liability
(a) Employer protection from liability.
(1) A covered employer shall not be considered a fiduciary in relation to the Program.
(2) A covered employer or other employer shall not be liable for and shall not bear responsibility
for:
(A) any employee’s decision to participate in or opt out of the Program;
(B) any investment decisions of any participant;
(C) the administration, investment, investment returns, or investment performance of the
Program, including any interest rate or other rate of return on any contribution or
account balance;
(D) the Program design or the benefits paid to participants;
(E) an individual’s awareness of or compliance with the conditions and other provisions
of the tax laws that determine which individuals are eligible to make tax-favored
contributions to an IRA, in what amount and in what time frame and manner; or
(F) any loss, deficiency, failure to realize any gain, or any other adverse consequences,
including any adverse tax consequences or loss of favorable tax treatment, public
assistance, or other benefits, incurred by any person as a result of participating
in the Program.
(b) Protection for the State and others. The Treasurer and Program:
(1) have no responsibility for compliance by individuals with the conditions and other
provisions of the Internal Revenue Code that determine which individuals are eligible
to make tax-favored contributions to IRAs, in what amount, and in what time frame
and manner;
(2) have no duty, responsibility, or liability to any party for the payment of any benefits
under the Program, regardless of whether sufficient funds are available under the
Program to pay such benefits;
(3) shall not guarantee any interest rate or other rate of return on or investment performance
of any contribution or account balance; and
(4) shall not be liable or responsible for any loss, deficiency, failure to realize any
gain, or any other adverse consequences, including any adverse tax consequences or
loss of favorable tax treatment, public assistance, or other benefits, incurred by
any person as a result of participating in the Program. (Added 2023, No. 43, § 1, eff. July 1, 2023.)
§ 537. Confidentiality
The Treasurer shall establish policies and procedures, consistent with the Vermont
Public Records Act and other statutory provisions, for the Program participants’ personal
and confidential information. (Added 2023, No. 43, § 1, eff. July 1, 2023.)
§ 538. Accounting and reports
Beginning on January 15, 2024, and annually thereafter, the Treasurer shall submit
a report to the Governor and the House Committees on Commerce and Economic Development
and on Government Operations and Military Affairs and the Senate Committees on Economic
Development, Housing and General Affairs and on Government Operations detailing the
activities, operations, receipts, and expenditures of the Program during the preceding
calendar year, and any other information regarding the Program. The report shall include,
as applicable, the number of participants, the investment options, rates of return,
and the projected activities of the Program for the current calendar year. (Added 2023, No. 43, § 1, eff. July 1, 2023.)