§ 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.)