Maine Retirement Investment Trust (MERIT)

Maine Retirement Investment Trust (MERIT) is a state-mandated retirement savings program for Maine employers and employees. Find out how it works
Author: Penelope Team

What is Maine's state retirement program?

Maine's state retirement program is called the Maine Retirement Investment Trust (MERIT). This program is designed to help employees who do not have access to a retirement plan through their employer.

MERIT was established under the “Act to Promote Individual Retirement Savings through a Public-Private Partnership," which was signed into law in June 2021 by Governor Janet Mills.

This program primarily functions as a state-run Roth IRA into which employees are automatically enrolled. Employers with five or more employees are required to participate unless they already offer a qualified retirement plan.

The standard contribution rate is set at 5% of an employee's wages, but employees have the option to adjust this rate or opt out entirely. Contributions are made through payroll deductions directly into the MERIT program.

The program aims to address the retirement gap. According to the MERIT website, 200,000 Mainers don’t have access to employer-sponsored retirement plans.

For employers, the registration requirements and deadlines vary based on the number of employees. Employers with 15 or more employees must register by April 30, 2024, and those with between 5 to 14 employees by June 30, 2024. There are penalties for non-compliance that will take effect starting July 1, 2025.

What is a covered employer?

In the context of Maine's state retirement program, MERIT (Maine Retirement Investment Trust), a "covered employer" refers to any employer that meets specific criteria under the program rules, making them subject to certain requirements.

Specifically, covered employers in Maine are those with five or more employees that do not already offer a qualified retirement plan to their employees. These employers must enroll in MERIT and offer the program's Roth IRA to their employees, ensuring that they have access to a retirement savings plan.

Covered employers are responsible for registering for MERIT and managing payroll deductions for contributions to the retirement accounts. They are also required to provide notifications to both the program and the employees about various aspects of participation and any changes in the status of their retirement plans.

What is a covered employee?

In the context of Maine's state retirement program, MERIT (Maine Retirement Investment Trust), a "covered employee" typically refers to an employee who meets the eligibility criteria set forth by the program and whose employer is required to offer the MERIT Roth IRA as part of their employment benefits. These criteria generally include:

  1. Employment Status: The employee works for a "covered employer," which is an employer with five or more employees that does not already offer a qualified retirement plan.
  2. Minimum Employment Duration: The employee may need to have worked for the employer for a certain amount of time to qualify to open the Roth IRA, such as at least 120 days.
  3. Age and Tax Status: Typically, the employee must be at least 18 years old and have a valid Social Security number.

Covered employees are automatically enrolled in MERIT unless they choose to opt out. A percentage of their wages is invested in the Roth IRA directly via a payroll deduction. The plan is designed to be portable, meaning if the employee leaves their job, they can continue contributing to the same Roth IRA or roll it over into another eligible retirement plan.

These criteria are designed to ensure that a wide range of workers, including full-time, part-time, and seasonal employees, can benefit from access to a retirement savings plan, particularly those who might not otherwise have the opportunity through their employer.

What are the implementation dates?

The implementation dates for Maine's retirement savings program, MERIT, are structured to gradually bring various Maine employers into compliance based on their size. Here are the key implementation dates:

  1. Pilot Program: MERIT began with a pilot program in 2023 that allowed employers with more than 25 employees to start registering voluntarily.

  2. General Implementation: Registration for all other employers opened in January 2024.

  3. Registration Deadlines:

    • Employers with 15 or more employees needed to register by April 30, 2024.
    • Employers with between 5 and 14 employees must register by June 30, 2024.

These dates are important as they mark when employers must comply with the mandate to offer retirement savings options to their employees through MERIT. Penalties for failing to meet these deadlines will start being enforced from July 1, 2025.

How will MERIT impact employees?

MERIT (Maine Retirement Investment Trust) is set to significantly impact employees in Maine, especially those who previously did not have access to employer-sponsored retirement savings plans.

Here are some of the key ways in which this state-sponsored retirement plan will affect employees:

Automatic Enrollment

Employees of covered employers are automatically enrolled in a Roth IRA through MERIT. This ensures that more employees start saving for retirement without needing to take initial steps themselves.

Contribution Flexibility

The default contribution rate is set at 5% of an employee's wages, but employees have the option to adjust this rate. They can also choose to opt out of the program entirely if they do not wish to participate. This provides flexibility depending on each individual's financial situation and retirement goals.


One significant advantage of the MERIT program is the portability of the retirement accounts. If an employee leaves their job, they can continue contributing to the same Roth IRA, which provides continuity in their retirement savings effort.

Financial Empowerment

By providing a structured way to save for retirement, MERIT empowers employees to take charge of their financial future. This is particularly beneficial in a state where a significant portion of the workforce lacked access to retirement savings plans.

Employer Non-Contribution

It's important to note that under MERIT, employers are not allowed to contribute to the employees' retirement accounts. This could be seen as a limitation for those who might expect employer matching contributions, which are common in other types of retirement plans like 401(k)s.

Minimal Fees

Employees participating in MERIT will incur some administrative fees for managing their accounts. There is a $26 annual account fee as well as annualized asset-based fees that range from 0.30-0.32%. Employees may encounter additional fees for things like requesting paper statements or rolling over their accounts.

Education and Support

MERIT provides educational resources and support to help employees understand their retirement savings options and make informed decisions about their contributions and investment choices.

Compare Penelope's 401(k) Retirement Plans to the Maine MERIT Program

Penelope offers two affordable retirement plan options for businesses of all sizes: the Safe Harbor 401(k) and the Starter 401(k). If you want to provide your employees with employer contribution matches, then the Penelope Safe Harbor 401(k) Retirement Plan may be a better plan option for you. MERIT does not allow for employer matches, which means that employees will be responsible for contributing the entire amount to their retirement savings.

Additionally, the MERIT has lower contribution limits compared to traditional 401(k) plans, meaning that businesses and employees may not be able to save as much for retirement. And Penelope plans do not charge employees any fees, so they are able to see their retirement savings grow faster. 

Talk with a Penelope 401(k) Specialist

Before setting up a retirement plan for your Maine business, make sure you consider all of your options. If you are looking to offer a retirement with higher contribution limits or have the ability to set eligibility preferences and take advantage of tax credits, get in touch with our retirement specialist to learn more about Penelope's retirement plans. 

We can help you decide which plan is the best fit for your business and provide support throughout the entire setup process. With Penelope, you can feel confident that your employees are set up for a secure financial future. 

So, if you're looking to offer a comprehensive retirement plan for your employees, consider Penelope's 401(k) options as an alternative to the Maine MERIT program.

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