The state will start deducting 5% of some workers’ wages unless they actively opt out of VT Saves
In 2023, the Vermont legislature passed a law spearheaded by Vermont State Treasurer Mike Piecack (D-VT), Act 43 – An act relating to the establishment of VT Saves. What it does is mandate that employers with more than five employees who do not otherwise offer a retirement savings plan register and enroll their employees in this state-run savings account scheme. Five percent of the employees’ salaries will be automatically deducted and invested in Vermont Saves, without the employees’ initial consent.
As the Treasurer’s Office states, “The Program… requires [emphasis added] that covered employers with five or more employees automatically [emphasis added] enroll their employees into VT Saves.” No requirement to ask or even inform the employee that this transaction is taking place. The first phase of mandatory enrollment for employers with 25 or more employees begins July 1, 2025. Today! Phase two for employers with 15-24 employees kicks in January 1, 2026, and for 5-14 employees a year from now on July 1, 2026.
Employees can opt out of the program, but have to actively do so after being forcibly enrolled. The law states:
Unless otherwise specified by the covered employee, a covered employee shall automatically initially contribute five percent of the covered employee’s salary or wages to the Program. A covered employee may elect to opt out of the Program at any time or contribute at any higher or lower rate….
In the absence of an affirmative election by the participant, five percent of the participant’s taxable wages as is required….
So, if this program sounds like it affects your place of work – meaning you (the Treasurer’s office estimates around 88,000 Vermonters will be impacted) — and you don’t want to see 5 percent of your salary automatically dumped into a state run retirement account, you need to talk to your employer, go to THIS WEBSITE and click on “Employee Opt Out” in the menu bar at the top of the screen.
It’s worth noting that government employees who would otherwise qualify are exempt from the mandate to enroll. So, do you really want to trust your retirement savings to chefs who won’t eat their own cooking? Just sayin’. But, if Vermont Saves is a good option for your financial situation, by all means do it! Saving for retirement is a wise thing to do, and if this is a helpful tool – great!
That’s not the issue. The problem here is automatically enrolling people in a program that removes a sizable chunk of their take home pay potentially by unpleasant surprise. VT Saves is going affect primarily lower income earners making $50,000 a year or less. Five percent of $50,000 is $2500 (or over $100 per two-week paycheck). Rent being what it is, egg prices being what they are, etcetera and so on ad infinitum, some folks may not be able to afford having that deducted automatically from their salary. It’s great to save for the future, but there is no future if you can’t afford today. And it is not right or fair for government to make folks jump through hoops in order to control what’s happening to their own money that they earned.
The program, if necessary at all (there’s nothing stopping someone from setting up an IRA), should have been set up as an opt-in option for employees, not an opt-out. The latter is infantilizing nanny-stateism. Pick-Pocket Piecack shouldn’t be able to snatch a working Vermonter’s money and, like a bully on the playground, dangle it high in the air while making us dance to get it back. After all, what are we celebrating this July 4th weekend?
