Did You Know?
Vermont has introduced a new law requiring businesses with five or more employees to provide access to retirement savings—even if the employer doesn’t currently offer a plan. The initiative, called Vermont Saves, is designed to ensure workers have a retirement option, but it also comes with strict rules, limited flexibility, and state-mandated oversight.
The Rollout
Vermont Saves will launch in stages across 2025 and 2026, with deadlines tied to employer size. Businesses will need to register, share payroll data, and automatically enroll their employees into a state-managed Roth IRA—unless they opt out by sponsoring a qualified private retirement plan. Companies that don’t comply could face penalties.
While it’s positioned as a simple, “plug-and-play” program, Vermont Saves leaves employers with no control over plan design, investment choices, or engagement tools—essentially handing over retirement planning to the state.
How HWC Helps
At HWC Financial, we partner with small businesses to navigate this transition and avoid the downsides of a one-size-fits-all program. Our team:
Compares and implements private retirement plans that fit your budget and workforce needs
Provides the documentation required to certify exemption from Vermont Saves
Ensures you stay compliant while retaining control over contributions, investments, and employee engagement
With us, you check the compliance box while keeping your retirement strategy tailored and competitive.
Why This Matters for Retention
78% of employees say a retirement plan is critical to staying at a job
65% would leave for better retirement benefits
Plans with employer contributions reduce turnover by ~25%
Offering retirement benefits improves morale and engagement
Retirement plans are now a top 3 workplace benefit for employees over 30. In today’s market, not having a private plan could send the wrong signal to candidates. Employers who invest in strong retirement benefits stand out as attractive, long-term career destinations.
❌ Where Vermont Saves Falls Short vs. ✅ Private Retirement Plans
| Feature | Private Plans | Vermont Saves |
|---|---|---|
| Employer Contributions | ✅ Matching & profit-sharing allowed | ❌ Employee-only funding |
| Contribution Limits | ✅ Up to $23,000 (+$7,500 catch-up) | ❌ $7,000 (+$1,000 catch-up) |
| Tax Treatment | ✅ Pre-tax & Roth, employer match deductible | ❌ Roth only (after-tax) |
| Customization | ✅ Vesting, branding, auto-escalation | ❌ One-size-fits-all |
| Investment Options | ✅ Wide range of funds & portfolios | ❌ Limited to target date & stable funds |
| Loans/Withdrawals | ✅ Loans & hardship withdrawals possible | ❌ Not allowed |
| Employee Tools | ✅ Robust dashboards & education | ❌ Minimal resources |
| Retention Impact | ✅ Lowers turnover & boosts loyalty | ❌ No retention benefit |
| Owner Tax Efficiency | ✅ Strong tax deferral strategies | ❌ Roth-only restrictions |
👉 Bottom line: Vermont Saves meets the mandate, but falls short of supporting business goals and employee retention. With the right private plan, you can comply, save on taxes, and strengthen your team.
