Live mandate
Does my Vermont business have to offer a retirement plan?
Short answer
Yes, if you have 2 or more employees, have been in business at least 2 years and don’t offer a retirement plan such as a 401(k). You either register for Vermont Saves or certify that you already offer a plan. The threshold dropped from 5 employees to 2 in 2026, and the maximum penalty is now $75 per covered employee a year.
Who must comply
Vermont Saves covers employers with 2 or more employees that have been in business for at least 2 years and don't offer a qualified retirement plan. The Vermont State Treasurer's rule, adopted in early 2026, lowered the threshold from 5 employees to 2.
Deadlines
Employers notified in the first round had to register by March 1, 2025. New businesses get a notice with their date. The 2027 date isn’t published yet (2026: June 30).
Penalties
Vermont sets a maximum penalty per covered employee for each calendar year, or part of a year, an employee isn't enrolled: $10 before October 1, 2025, $20 from October 1, 2025 through September 30, 2026, and $75 on or after October 1, 2026. The Treasurer can waive penalties if you used reasonable diligence and fix the problem within 90 days of learning about it.
How to get exempt
If you provide a qualified retirement plan such as a 401(k), certify your exemption on the Vermont Saves employer portal with the Access Code from your notice.
Vermont Saves or a 401(k)?
Vermont Saves accounts are Roth IRAs, so each saver is held to the IRA limit: $7,500 a year in 2026 and 2027, or $8,600 at 50 or older, across all their IRAs. Higher earners can be phased out of Roth contributions altogether, starting at $153,000 of income for single filers in 2026 and $158,000 in 2027. A 401(k) leaves far more room: employees can defer $24,500 in 2026 and $25,500 in 2027, plus catch-ups from age 50. Vermont Saves doesn’t allow employer contributions, so you can’t add a match; a 401(k) can include one. Vermont Saves costs employers nothing to run; savers pay the account and fund fees. New savers start at 5% of pay, rising 1% each January to 8% unless they change it.
Sources
Vermont Saves: Program details (employers) (vtsaves.vermont.gov) Vermont Saves: Contributions (savers) (vtsaves.vermont.gov) Vermont General Assembly: 3 V.S.A. §535 Penalties (legislature.vermont.gov) Vermont Secretary of State: Rule 25P039: Vermont Saves Program Rule (secure.vermont.gov) Internal Revenue Service: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (irs.gov) Internal Revenue Service: COLA increases for dollar limitations on benefits and contributions (irs.gov) Internal Revenue Service: 401(k) plan overview (irs.gov) Georgetown University Center for Retirement Initiatives: States: 2026 state program status (as of November 6, 2026) (cri.georgetown.edu)
This page is general information, not legal or tax advice. Confirm current rules with the state program before acting.
