Vermont employers: there’s a better retirement
solution than Vermont Saves
Vermont Saves is the state’s mandated retirement savings program for eligible employers. However, you don’t have to settle for the state’s default option. With WealthRabbit, you can meet Vermont’s requirements while offering a SIMPLE IRA that gives your business more flexibility, more control, and meaningful tax advantages in one easy-to-manage solution your employees will appreciate.
What is Vermont Saves?
Vermont Saves is Vermont’s state-mandated retirement savings program for employers that do not already offer a qualified retirement plan. Employers with five or more employees who have been in business for at least two years and do not offer a qualified plan must register with Vermont Saves or certify an exemption. Eligible employees are those aged 18 or older who earn taxable wages from a covered employer in Vermont. The program uses a default contribution rate of 5% of gross pay via payroll deduction, which automatically increases by 1% each year, up to a maximum of 8%.
Registration deadlines
The registration deadline depends on the size of your business.
- 5+ employees : Registration and exemption deadline, March 1, 2025
- 25+ employees: Enrollment deadline, July 1, 2025
- 15–24 employees: Enrollment deadline, January 1, 2026
- 5–14 employees: Enrollment deadline, July 1, 2026
Non-compliance penalties
Failure to comply with the state mandate may result in financial penalties:
- Before October 1, 2025: up to $10 per employee
- October 1, 2025, to September 30, 2026: up to $20 per employee
- On and after October 1, 2026: up to $75 per employee
What you’re missing with Vermont Saves
Vermont Saves is designed to check a compliance box - but for businesses and employers, it often falls short:
- Limited investment optionsEmployees can't build customized retirement portfolios.
- No employer benefitsBusinesses spend time managing compliance, but don't receive tax incentives.
- One-size-fits-allEvery business is forced into the same model, regardless of size or needs.
- Minimal growth potentialLimited funds can mean lower returns for employees over time.
- Harsh penaltiesNon-compliant businesses face fines of up to $75/ employee per year, creating significant financial risk.
Ready for a retirement solution that works better for your business?
SIMPLE IRA: The Smart Alternative to Vermont Saves
A SIMPLE IRA plan offers significant advantages over the state-mandated option, providing tax benefits for employers and greater growth potential for employees. It's a powerful tool for attracting and retaining talent.
- Tax credits Qualify for up to $5,500 in tax credits for starting a new plan.
- Employer tax deductions Contributions you make are tax-deductible as a business expense.
- Higher contribution limits Both employees and employers can contribute significantly more than with Vermont Saves.
- Investment flexibilityEmployees get access to a wide range of investment options, not just a few target-date funds.
- Attract & retain talentOffering a superior retirement benefit makes your company more competitive.
See How Much You Can Save with a SIMPLE IRA
Small businesses can take advantage of tax credits to help cover setup and administrative costs. By launching a new plan with auto-enrollment, you could qualify for up to $5,500 in tax credits!
How tax credits work
Tax credits are designed to offset the cost of setting up and administering, as well as contributing to the employees retirement savings.
Employers can claim up to $5,000 per year for three years to offset plan setup and administrative costs. They may qualify for additional tax credits.
- Auto-enrollment bonusIf you make the plan automatic (employees are enrolled unless they opt out), you get an extra $500 credit for 3 years.
- Employer contributionsYou may also get credits for money you put into employees' accounts (up to $1,000 per employee in the early years).
Together, these credits can add up to thousands in savings for your business. Curious how much you could claim?
Try our calculator and see exactly how much you could save.
Estimate your tax credit
Disclosure*
The SIMPLE IRA tax credit calculator is intended to estimate the average tax credit for your business. Please note, it does not constitute tax or legal advice.
Elevate your retirement savings with WealthRabbit
Instead of enrolling in Vermont Saves, Vermont businesses can choose a qualified alternative like a WealthRabbit SIMPLE IRA — a smarter way to stay compliant
- Self-onboardingEmployers and employees sign up on their own—retirement plans are up and running in just a few clicks.
- Seamless payroll integrationWealthRabbit seamlessly connects with your payroll system to ensure accurate and timely contributions for every employee.
- Streamlined plan rolloversEasily roll funds from your existing retirement plan into WealthRabbit— no hassle, no delays.
- Automated contributionsEnjoy a hands-off approach to retirement savings. Set up automatic deposits so your team never misses a contribution.
- Employee & employer portalsManage contributions and investments anytime, anywhere — with real-time access to performance and account activity.
Vermont Saves vs. WealthRabbit
A quick look at how WealthRabbit’s SIMPLE IRA compares to Connecticut’s state program.
| Feature | Vermont Saves | WealthRabbit SIMPLE IRA |
|---|---|---|
| Administrative efforts | State-mandated with limited customization; minimal employer involvement | Streamlined process with automated setup and payroll integration |
| Retirement options | Roth IRA only; default 5% contribution with auto-escalation to 8% and no employer match | More diverse investment options, customizable based on business needs |
| Eligibility criteria | Employers in Vermont with 5 or more employees, in business at least 2 years. Employees are auto-enrolled (can opt out) | Participation is open to employers with ≤100 employees earning ≥$5,000. A required contribution is either a 3% dollar-for-dollar match or a 2% nonelective contribution |
| Flexibility | State-regulated with fixed contribution rates and minimal flexibility | Employers choose match vs nonelective, employees choose deferral amounts (within IRS limits). |
| Monthly fees | No cost to employers; employee investment fees may apply | User-friendly portals+mobile access + stronger growth Low-cost setup: $29/month + $4 per employee, no state fees |
| Employee experience | Basic account with limited tools for employees | Comprehensive dashboard, financial literacy resources, and rollover support |
Frequently asked questions
Vermont Saves is the state-mandated retirement savings program for eligible private-sector employers in Vermont that do not offer a qualified retirement plan. It requires Vermont employers with five or more employees to register (unless exempt).
An employer is required to either register for the program or certify an exemption if they meet all of the following criteria:
- Your business is registered to conduct business in the state of Vermont
- Have five or more employees who have worked for you for at least 120 days.
- Have been in business for at least 2 years
- Do not currently offer a qualified retirement plan
Employers that offer an eligible, qualified plan, such as a SIMPLE IRA through WealthRabbit, are exempt and must certify their exemption with the state.
The deadlines for existing businesses are staggered based on employee count:
- March 1, 2025: Employers with five or more employees must register or certify an exemption
- July 1, 2025: Employers with 25 or more employees must enroll their eligible workers
- January 1, 2026: Employers with 15 to 24 employees must enroll their eligible workers
- July 1, 2026: Employers with 5 to 14 employees must enroll their eligible workers
For newly established businesses or those that become freshly eligible, the employer must register or certify exemption by the date provided in the state's official notification. This deadline is generally set to be at least one year after the business first meets the eligibility criteria.
If you have questions about your specific deadline, contact WealthRabbit support for assistance.
Employers who fail to comply may face the following penalties:
- Before October 1, 2025: A fine of up to $10 per eligible employee per year
- October 1, 2025 – September 30, 2026: A fine of up to $20 per eligible employee per year
- After October 1, 2026: A fine of up to $75 per eligible employee per year
To stay compliant and offer employees greater flexibility and benefits, employers can choose a WealthRabbit SIMPLE IRA instead of enrolling in MERIT.
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