Employer requirements
Register with VT Saves and facilitate payroll deductions, or certify an exemption based on a qualified plan. Previously exempt employers under the old 5-employee threshold are being re-contacted.
Active mandate
Vermont Retirement Plan Mandate: Requirements for Employers
VT Saves
VT Saves covers Vermont employers with 2 or more employees (threshold lowered from 5 in February 2026), in business 2+ years, with no qualified plan. All announced deadlines have passed; penalties are currently up to $20 per employee and rise to $75 on October 1, 2026.
The Program
How VT Saves works
VT Saves reaches further down the size scale than any other state program: effective February 2026, an administrative rule (Rule 25-P039) lowered the employer threshold from five employees to two, bringing thousands of micro-businesses into scope. All announced deadlines have passed — 25+ employees (July 1, 2025), 15–24 (January 1, 2026), 5–14 (July 1, 2026), and a June 30, 2026 outreach deadline for newly eligible 2+ employers. Penalties are currently up to $20 per eligible employee and rise to $75 per employee on or after October 1, 2026. The program reports $8.02M in assets across roughly 1,420 employers and more than 6,000 savers.
Employers that sponsor a qualified retirement plan satisfy the VT Saves requirement. Because Vermont's threshold now reaches employers with as few as two employees, many small businesses are weighing the state Roth IRA against a right-sized employer plan — a 401(k) or SIMPLE that adds employer contributions and higher limits.
At A Glance
The Vermont mandate at a glance
Registration deadlines
All announced deadlines have passed: 25+ employees (July 1, 2025), 15–24 (January 1, 2026), 5–14 (July 1, 2026); newly eligible 2+ employers were registered through a June 30, 2026 outreach deadline. Employers previously exempt under the 5-employee threshold are being re-contacted. Unregistered covered employers should act immediately.
Covered employers
Employers with 2 or more employees, in business 2+ years, with no qualified plan. The threshold was lowered from 5 to 2 effective February 2026 via administrative rule (Rule 25-P039) under the Treasurer's Act 43 authority. Statute: 3 V.S.A. Chapter 18.
Penalties / enforcement
Currently up to $20 per eligible employee; rises to $75 per employee on or after October 1, 2026. Pre-enforcement communications have been sent to non-compliant employers.
The Requirements
Who must comply in Vermont — and what is required
Employee eligibility
Eligible employees are enrolled automatically unless they opt out, with contributions auto-escalating 1% per year to 8%.
Exemptions
Employers offering a qualified plan; businesses under 2 years old.
Penalties and enforcement
Currently up to $20 per eligible employee; rises to $75 per employee on or after October 1, 2026. Pre-enforcement communications have been sent to non-compliant employers.
Your Options
Qualifying retirement plan alternatives in Vermont
Employers sponsoring a qualified retirement plan satisfy the VT Saves requirement.
Start a new 401(k)
Design a plan around your workforce — matching, Roth options, vesting, and federal startup tax credits.
Start a new planUpgrade an existing plan
Confirm your current plan qualifies, then tune its design so the mandate works in your favor.
Upgrade my company’s planFull plan administration
LRS handles compliance testing, filings, and day-to-day administration so the plan stays qualified.
Plan administration servicesRead more about state-approved qualifying retirement plans.
Common Questions
Vermont mandate FAQs
Which Vermont employers are covered by VT Saves?
Employers with two or more employees, in business two or more years, with no qualified plan. The threshold dropped from five to two in February 2026 u2014 the lowest in the nation.
Is VT Saves mandatory for small businesses?
Yes. With the two-employee threshold, VT Saves reaches nearly every Vermont employer without a qualified plan. Covered employers must register or certify an exemption.
What are the VT Saves penalties?
Currently up to $20 per eligible employee, rising to $75 per employee on or after October 1, 2026. Pre-enforcement communications have already gone to non-compliant employers.
We were exempt before u2014 are we covered now?
Likely yes. Employers previously exempt under the old five-employee threshold are now covered under the two-employee rule and are being re-contacted. Unregistered covered employers should act.
Does a 401(k) exempt us from VT Saves?
Yes. Employers that sponsor a qualified retirement plan satisfy the requirement.
What is the VT Saves plan design?
A Roth IRA with automatic enrollment at a 5% default, auto-escalating 1% per year to 8%.
Talk It Through
Not sure how the Vermont mandate applies to you?
Leading Retirement Solutions designs and administers plans that satisfy state mandates. Talk through your requirements with a consultant before your deadline.
This page is provided for general information only and is not legal or tax advice. Program details change; confirm requirements with the official state program or your advisors.