(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 employ
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(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.)