A simpler, more powerful retirement plan
for Maine employers
Not all Maine employers are required to register for MERIT, but those who qualify must either join the program or offer their own plan. While MERIT helps expand access to retirement savings, it offers limited contribution options and minimal employer control. A WealthRabbit SIMPLE IRA gives businesses more flexibility, higher contribution limits, and seamless payroll integration, making it a smarter and fully compliant alternative.
What is MERIT?
The Maine Retirement Investment Trust (MERIT) is Maine’s state-mandated retirement savings program for employers that do not already offer a qualified retirement plan. Employers with five or more employees and that have been in business at least two years must register with MERIT (or certify an exemption) if they do not offer a qualified plan. Eligible employees are those age 18 or older who earn wages from a covered employer in Maine. The program uses a default contribution rate of 5% of gross pay (via payroll deduction) unless the employee opts out or selects a different amount.
Registration deadlines
The registration deadline depends on the size of your business.
- Employers with 15 or more employees: April 30, 2024
- Employers with 5 to 14 employees: June 30, 2024
- Employers that become eligible in 2025: June 30, 2025
- Employers who become subject to the mandate in later years: December 31 of the year after meeting eligibility criteria
Non-compliance penalties
Failure to comply with the state mandate may result in financial penalties:
- $20 per employee from July 1, 2025, to June 30, 2026
- $50 per employee from July 1, 2026, to June 30, 2027
- $100 per employee on or after July 1, 2027
These penalties apply annually until compliance is achieved.
What you’re missing with MERIT
MERIT is designed to check a compliance box - but for businesses and employers, it often falls short:
- Limited investment optionsEmployees can't build customized retirement portfolios.
- No employer benefitsBusinesses spend time managing compliance, but don't receive tax incentives.
- One-size-fits-allEvery business is forced into the same model, regardless of size or needs.
- Minimal growth potentialLimited funds can mean lower returns for employees over time.
- Harsh penaltiesNon-compliant businesses face fines of up to $100/ employee per year, creating significant financial risk.
Ready for a retirement solution that works better for your business?
SIMPLE IRA: The smart alternative to MERIT
A SIMPLE IRA plan offers significant advantages over the state-mandated option, providing tax benefits for employers and greater growth potential for employees. It's a powerful tool for attracting and retaining talent.
- Tax credits Qualify for up to $5,500 in tax credits for starting a new plan.
- Employer tax deductions Contributions you make are tax-deductible as a business expense.
- Higher contribution limits Both employees and employers can contribute significantly more than with MERIT.
- Investment flexibilityEmployees get access to a wide range of investment options, not just a few target-date funds.
- Attract & retain talentOffering a superior retirement benefit makes your company more competitive.
See How Much You Can Save with a SIMPLE IRA
Small businesses can take advantage of tax credits to help cover setup and administrative costs. By launching a new plan with auto-enrollment, you could qualify for up to $5,500 in tax credits!
How tax credits work
Tax credits are designed to offset the cost of setting up and administering, as well as contributing to the employees retirement savings.
Employers can claim up to $5,000 per year for three years to offset plan setup and administrative costs. They may qualify for additional tax credits.
- Auto-enrollment bonusIf you make the plan automatic (employees are enrolled unless they opt out), you get an extra $500 credit for 3 years.
- Employer contributionsYou may also get credits for money you put into employees' accounts (up to $1,000 per employee in the early years).
Together, these credits can add up to thousands in savings for your business. Curious how much you could claim?
Try our calculator and see exactly how much you could save.
Estimate your tax credit
Disclosure*
The SIMPLE IRA tax credit calculator is intended to estimate the average tax credit for your business. Please note, it does not constitute tax or legal advice.
Elevate your retirement savings with WealthRabbit
Instead of enrolling in RetirePath Virginia, Virginia businesses can choose a qualified alternative like a WealthRabbit SIMPLE IRA — a smarter way to stay compliant
- Self-onboardingEmployers and employees sign up on their own—retirement plans are up and running in just a few clicks.
- Seamless payroll integrationWealthRabbit seamlessly connects with your payroll system to ensure accurate and timely contributions for every employee.
- Streamlined plan rolloversEasily roll funds from your existing retirement plan into WealthRabbit— no hassle, no delays.
- Automated contributionsEnjoy a hands-off approach to retirement savings. Set up automatic deposits so your team never misses a contribution.
- Employee & employer portalsManage contributions and investments anytime, anywhere—with real-time access to performance and account activity.
MERIT vs. WealthRabbit
A quick look at how WealthRabbit’s SIMPLE IRA compares to Connecticut’s state program.
| Feature | MERIT | WealthRabbit SIMPLE IRA |
|---|---|---|
| Administrative efforts | State-mandated with limited customization; minimal employer involvement | Streamlined process with automated setup and payroll integration |
| Retirement options | Roth IRA only; default 3% contribution with auto-escalation to 10% and no employer match | More diverse investment options, customizable based on business needs |
| Eligibility criteria | Employers in business for 2+ years, must have 5 or more employees, employees eligible if ≥18 years old and employed 120 days | Participation is open to employers with ≤100 employees earning ≥$5,000. A required contribution is either a 3% dollar-for-dollar match or a 2% nonelective contribution |
| Flexibility | State-regulated with fixed contribution rates and minimal flexibility | Highly customizable plan with the ability to modify contribution rated and match options |
| Monthly fees | No cost to employer. Participant fees: approx. asset-based fee ~0.32% of assets + ~$22 annual account fee | User-friendly portals+mobile access + stronger growth Low-cost setup: $29/month + $4 per employee, no state fees |
| Employee experience | Basic account with limited tools for employees | Comprehensive dashboard, financial literacy resources, and rollover support |
Frequently asked questions
Private-sector employers in Maine must register for the Maine Retirement Investment Trust (MERIT) or certify an exemption if they meet all of the following criteria:
- Have five or more employees in Maine
- Have been in business for at least 2 years.
- Do not offer a qualified retirement plan (such as a SIMPLE IRA)
Eligible employees must be at least 18 years old and have been employed for at least 120 days. Employers who already offer a qualified plan must still certify their exemption through the MERIT portal.
The MERIT program launched in 2024, with phased registration deadlines that have already passed for most employers
- Employers with 15+ employees: must register by April 30, 2024
- Employers with 5–14 employees: must register by June 30, 2024
- June 30, 2025: Employers that become eligible in 2025
Newly eligible employers are required to register or certify an exemption within 12 months of meeting the eligibility criteria. If you have questions about your specific deadline, contact WealthRabbit support for assistance.
Employers in Maine are required to participate in the MERIT program if they meet specific criteria. While they are not responsible for enrollment, investment decisions, or account distributions, their key obligations include:
- Registering or certifying an exemption: Employers must register with MERIT or certify their exemption through the MERIT portal.
- Providing employee information: Employers need to supply accurate employee data, including names, Social Security numbers, and employment details.
- Payroll deductions and remittance: Employers are responsible for deducting employee contributions via payroll and remitting them promptly to the program administrator.
- Maintaining employee records: Employers must keep accurate records, including updating employee status, handling rate changes, adding new hires, and marking terminations.
For more detailed information and resources, visit the official MERIT website: meritsaves.org.
Maine employers who are required to participate in the Maine Retirement Savings Program (MERIT) and fail to register or certify an exemption may face escalating penalties:
- $20 per covered employee from July 1, 2025, through June 30, 2026
- $50 per covered employee from July 1, 2026, through June 30, 2027
- $100 per covered employee on or after July 1, 2027
To stay compliant and offer employees greater flexibility and benefits, employers can choose a WealthRabbit SIMPLE IRA instead of enrolling in MERIT.
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