§ 531. Definitions

As used in this chapter:

(1) “Contribution level” means the contribution rate for the participant that may be expressed as one of the following:

(A) A percentage of the participant’s taxable wages as is required to be reported under Sections 6041 and 6051 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.

(B) A dollar amount up to the maximum deductible amount for the participant’s taxable year under Section 219(b)(1) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.

(C) In the absence of an affirmative election by the participant, five percent of the participant’s taxable wages as is required to be reported under Sections 6041 and 6051 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time. The contribution level of a participant who customarily and regularly receives gratuities in conjunction with the participant’s employment shall be a percentage of such participant’s wages as is required to be reported under Sections 6041 and 6051 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.

(2) “Covered employee” means an individual who is 18 years of age or older who is employed by a covered employer and who has wages or other compensation that are allocable to the State during a calendar year. A covered employee may include a part-time, seasonal, or temporary employee only to the extent permitted in rules adopted by the Treasurer. A covered employee shall not include:

(A) any employee covered under the federal Railway Labor Act, 45 U.S.C § 151;

(B) any individual who is an employee of the federal government, the State or any other state, any county or municipal corporation, or any of the State’s or any other state’s units or instrumentalities; or

(C) any employee on whose behalf an employer makes contributions to a Taft-Hartley multiemployer pension trust fund.

(3) “Covered employer” means a person, entity, or subsidiary engaged in a business, industry, profession, trade, or other enterprise in the State, whether for profit or not for profit, that has not offered to an employee, or is within a control group that maintains or contributes to, effective in form or operation at any time within the current calendar year or two preceding calendar years, a specified tax-favored retirement plan. If an employer does not maintain a specified tax-favored retirement plan for a portion of a calendar year ending on or after the effective date of this chapter but does adopt such a plan for the remainder of that calendar year, the employer is not a covered employer for the remainder of the year. A covered employer does not include:

(A) the federal government, the State or any other state, any county or municipal corporation, or any of the State’s or any other state’s units or instrumentalities;

(B) any employer that has not been in business during both the current calendar year and the preceding calendar year.

(4) “ERISA” means the federal Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C § 1001 et seq.

(5) “Internal Revenue Code” means the U.S. Internal Revenue Code of 1986, as amended.

(6) “IRA” means a traditional IRA or a Roth IRA.

(7) “Participant” means an individual who has an IRA under the Program.

(8) “Payroll deduction IRA or payroll deduction IRA arrangement” means an arrangement by which an employer allows employees to contribute to an IRA by means of payroll deduction.

(9) “Program” means the VT Saves Program established in accordance with this chapter.

(10) “Roth IRA” means a Roth individual retirement account or Roth individual retirement annuity described in Section 408A of the Internal Revenue Code.

(11) “Specified tax-favored retirement plan” means a plan, program, or arrangement that is tax qualified under or described in, and satisfies the requirements of, Section 401(a), Section 401(k), Section 403(a), Section 403(b), Section 408(k), Section 408(p), or Section 457(b) of the Internal Revenue Code, without regard to whether it constitutes an employee benefit plan under ERISA.

(12) “Traditional IRA” means a traditional individual retirement account or traditional individual retirement annuity described in Section 408(a) or Section 408(b) of the Internal Revenue Code.

(13) “Trust” means the trust in which the assets of the Program are held.

(14)(A) “Vendor” means:

(i) a federally regulated retirement plan sponsor conducting business in the State, including a federally regulated investment company, program administrator, custodian or trustee, or an insurance company; or

(ii) a company conducting business in the State to:

(I) provide ancillary services, including technological, payroll, or recordkeeping services; and

(II) offer retirement plans or payroll deposit individual retirement account arrangements using products of regulated retirement plan sponsors.

(B) “Vendor” does not mean individual registered representatives, brokers, financial planners, or agents.

(15) “Vermont Retirement Security Fund” means the fund established in section 534 of this chapter for the sole purpose of paying the administrative costs and expenses of the Program.

(16) “Wages” means any compensation within the meaning of Section 219(f)(1) of the Internal Revenue Code that is received by an employee from an employer during a calendar year. (Added 2023, No. 43, § 1, eff. July 1, 2023.)