Vermont passed legislation in May 2023 to establish an auto-IRA program. The program, VTSaves, will be phased in starting mid-year 2025 for all employers who have been in business within the past two years. All employers with 25 or more employees must auto-enroll by July 1, 2025, with further phase-in dates in 2026. The chart below illustrates a brief summary of the program.
| Feature | State IRA Plan | Employer Sponsored 401k |
| Plan Type | Mandatory Roth IRA | Pre-tax, Roth AND Employer Contributions |
| Contribution Limits | Limited to $7,000 (2024) | $23,000 (plus more if over age 50) |
| Compliance | Unknown at this time | Compliant with state program |
| Eligibility | Unknown at this time | Employer controls eligibility requirements |
| Plan Costs | Unknown at this time | Dependent on type of plan design chosen. |
| Tax Deductible | Unknown at this time | Employer contributions are tax deductible |
| Tax Credit Available | Unknown at this time | Plan costs qualify for available tax credits |
| Default Contribution | 5% | Employee choice |
| Auto Escalation Feature | YES, appears will increase 1% annually up to 8% | NO |
| Minimum Employees to Participate | 25 | Any Number |
| Investments | Unknown at this time | More than 25 funds in a variety of Morningstar categories |
