The Maine MERIT Program vs. WealthRabbit SIMPLE IRA: What Maine Employers Should Know

The Maine Retirement Savings Program, known as MERIT, was created to help employees save for the future. But many small business owners are unsure how it affects them—or whether it’s the best option for their team.

Here’s what you need to know about MERIT, how it works, and why some Maine employers are choosing a SIMPLE IRA instead.

What is MERIT?

The Maine Retirement Investment Trust (MERIT) is a state-facilitated retirement savings program for employers that don’t already offer a plan. It’s administered by the Maine Retirement Savings Board and designed to make saving easy through automatic payroll deductions into employee-owned Roth IRAs.

Here’s how it works:

• Who must register: Employers with 5 or more employees, who have been in business for at least two years, and who do not currently offer a qualified retirement plan.
• Type of account: Roth Individual Retirement Account (IRA)
• Default contribution: Employees contribute 5% of their pay, with automatic annual increases of 1% (up to 10%) unless they opt out.
• Employer contributions: Not permitted under MERIT
• Administrator: Maine Retirement Savings Board (operated by Vestwell)
• Fiduciary responsibility: Employers are not fiduciaries and have no investment liability
• Portability: Employees keep their accounts if they change jobs

Covered Employees / Participation

An employee qualifies under MERIT if they:

• Are age 18 or older and have taxable wages in Maine
• Are onboarded and registered no later than their 120th day of employment
• They are automatically enrolled, unless they opt out
• Retain the ability to change their contribution rate, opt out, or re-enroll at any time

Key registration deadlines

Maine now requires eligible businesses to register for MERIT or certify an exemption if they already offer a qualified plan, such as a SIMPLE IRA.

The registration deadlines are:

• Employers with 15 or more employees: April 30, 2024
• Employers with 5–14 employees: June 30, 2024
• Employers that become eligible after December 31, 2024, must register within 12 months of becoming covered.

Employers that already offer a qualified plan are exempt but must still certify their exemption through the MERIT portal.

Penalties for non-compliance

Beginning July 1, 2025, penalties will apply for employers that fail to register or facilitate employee participation:

• $20 per covered employee from July 1, 2025 – June 30, 2026
• $50 per covered employee from July 1, 2026 – June 30, 2027
• $100 per covered employee on or after July 1, 2027

Maine may waive penalties under certain conditions, but ongoing noncompliance can become costly for small businesses.

Why some Maine employers are choosing a SIMPLE IRA

Many small business owners want to meet the state’s requirements—but also offer a benefit that goes further. That’s where the WealthRabbit SIMPLE IRA comes in.

A SIMPLE IRA is a qualified retirement plan designed specifically for small businesses with up to 100 employees. It not only satisfies Maine’s mandate but also provides stronger benefits for both employers and employees.

Key features include:

• Meets state mandate requirements: A SIMPLE IRA is a qualified plan, allowing employers to certify exemption from MERIT.
• Employer contributions: Required employer match of 3% or non-elective contribution of 2%, both tax-deductible.

• Higher contribution limits (2025):

- Standard: $16,500

- Small employers (≤25 employees): $17,600 under SECURE 2.0

- Catch-up (age 50–59 or 64+): +$3,500 (or $3,850 for small employers)

- Super catch-up (age 60–63): +$5,250

• Automated payroll integration: Works seamlessly with QuickBooks, ADP, Gusto, and Paychex.

• No annual IRS filings or complex paperwork.

• Compliance automation and expert support.

With WealthRabbit, small business owners can stay compliant while giving employees a benefit that’s flexible, modern, and easy to manage.

The clear choice for Maine employers

As a Maine employer, you’re required to offer a qualified retirement plan or enroll in MERIT. But compliance alone isn’t enough—this is your chance to offer something better. With WealthRabbit, compliance is built in, contributions are automated, and employees gain a smarter path to long-term financial security.

Ready to offer more?

Secure your team’s future and simplify compliance with a WealthRabbit SIMPLE IRA—the easy, affordable way to go beyond the mandate. Start saving with WealthRabbit SIMPLE IRA today!

*Disclaimer: This blog is for educational purposes only and is not intended as tax, legal, or financial advice. Please consult a qualified professional regarding your specific situation.