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REGULATION/LEGISLATION

Vermont approves voluntary private-sector retirement plan

Vermont State House
Vermont State House

Vermont became the latest state to create a retirement savings plan for private-sector employees, with passage of legislation creating a voluntary multiple employer plan for employers with fewer than 50 employees and not currently offering a retirement plan.

Gov. Phil Scott is expected to sign the bill.

Vermont Treasurer Beth Pearce said in a statement that the legislation's passage on May 19 “will allow the state to make substantive steps toward implementing a voluntary retirement program for Vermonters who currently lack access to employer-sponsored retirement plans” and will strengthen the state's economy. Ms. Pearce said the bipartisan bill was the culmination of three years of study by her office and the Public Retirement Study Committee, which recommended the voluntary Green Mountain Secure Retirement Plan, with the goal of implementation by January 2019.

The committee estimated that 45% of working Vermonters do not have access to a retirement savings plan at work. The new plan would also be open to the self-employed. Employers that chose to participate will have employees automatically enrolled but allow for them to opt out. Funding will come from employees, but employers may be able to make voluntary contributions in the future.