New State Requirement for Retirement Savings in 2024

Starting in 2024, the Maine Retirement Investment Trust (MERIT) will provide Maine employers with a retirement savings program to help members of their teams save for their futures. All Maine employers with 5 or more employees must register with MERIT.

What is MERIT?

Maine Retirement Investment Trust (MERIT) was created by the Maine State Legislature to improve access to retirement savings programs. It is a State Sponsored Roth IRA Retirement Program.

Who will participate?

As an employer in the state of Maine, you will be considered a "covered" employer, and be required to enroll in MERIT if:

• You are a Maine business with 5 or more W2 employees AND
• You don’t already have a qualified retirement savings plan in place for your employees AND
• You have been in business for more than two calendar years

As an employee in the state of Maine, you will be considered a "covered" employee if you:

• Are 18 years of age or older
• Have taxable wages in Maine

Employees will be enrolled automatically, but then can opt out if they do not wish to participate. 

How will it work?

Covered employers will enroll their employees. The default contribution rate is 5%. Employees can opt out of the program or change the contribution rate. The contributions will be made through payroll deductions. There is no direct cost to employers.

MERIT maintains the investment accounts, provides investment options, and ensures that its retirement savings program can follow workers from job to job. 

Employers can not make contributions to employee accounts.

When will it start?

All Maine employers with 5 or more employees must register with MERIT in 2024.

In January 2024, employers will receive a letter or email, asking them to go online and either:

a) mark the organization as exempt (if you already offer a qualifying plan or have fewer than 5 employees), or 
b) enroll in the program and enter employee data.

There are a few key dates that you should know:

• Employers with 15 or more covered employees need to register or enroll in the program by April 30, 2024.
• Employers with 5 to 14 covered employees need to register or enroll in the program by June 30, 2024.
• Penalties for employer non-compliance begin July 2025.

Our organization already offers a retirement plan. Are we exempt?

Probably, but you will still need to take action. If your organization offers any of the following plans, you will still need to register through MERIT and mark your organization as exempt.

• 401(a) - including 401(k)
• 403(a) - qualified annuity plan
• 403(b) - tax-sheltered annuity plan
• 408(k) - Simplified Employee Pension plan
• 408(p) - SIMPLE IRA plan
• 457(b) - governmental deferred compensation plan

Why was this started?

More than 200,000 Maine employees — about 40% of the state’s active workforce — do not have access to an employment-based opportunity to save for their later years. Without the benefit of an automatic retirement savings option, these employees are 15 times less likely to save for retirement.

The Maine Legislature created MERIT to help employers meet this new obligation without additional costs, contribution requirements, or the administrative burdens of providing their own program.

Where can I learn more?

For details about the implementation of the program, visit Meritsaves.com.

There is a separate website for information about the Maine Retirement Savings Board, the development of the program, including the legislative history, and to receive updates about the administration of the program: Meritsaves.org.

MANP hosted an informational webinar on January 18th, 2024, which you can watch below.