Get answers to frequently asked questions

MERIT is a retirement savings program created for Maine's nearly 940,000 workers without access to employer-sponsored retirement savings plans. Here are answers to many of the common things we’ve been asked. If you have questions beyond these, we’re here to help.

Do family members who work for my business count as employees?

Yes, they can participate if they are considered to be employees for tax purposes.

If a business owner or shareholder is also an employee, are they eligible to participate?

Yes, they can participate if they are considered to be employees for tax purposes.

Do I need to facilitate the program if I only have a small number of employees?

Yes. Employers with at least five W-2 employees must facilitate the State's program if they don't offer a qualified, employer-sponsored retirement plan. 

Do I need to offer the program to work-study students?

You do not need to facilitate the program for full-time students in work-study programs.

Do payroll deduction IRAs count as a qualified, employer-sponsored retirement plan?

No. Payroll deduction IRAs are not qualified retirement plans as defined by either federal or Maine state statutes.

If I offer my employer-sponsored retirement plan only to some employees but not all, do I have to offer the State's program as well?

No, if you offer an employer-sponsored retirement plan to any of your employees, you will file a certificate of exemption and you will not need to facilitate the State's program.

Who is responsible for choosing the investment options for participants?

The MERIT Board in the Maine Department of the Treasury is responsible for making decisions about the investment options available to participants of the program.

What is the Target Retirement Date option?

A Target Retirement Date option is an age-based investment option designed to help manage investment risk and is based on two factors: an investor’s current age and approximate estimated retirement date. This type of option includes a mix of investments — stocks, bonds, and cash equivalents — that evolve over time to focus on growth for younger investors and to help preserve savings closer to retirement age. MERIT offers a range of Target Retirement Date Options.

Do I need to report contributions on my employees’ W2s?

No. The MERIT program is structured as a payroll deduction IRA and not as a traditional retirement plan that needs to be reported on your employees’ W2s. The IRA trustee for the MERIT program will file “Form 5498, IRA Contributions Information” with the IRS (as needed for your employees) and will send employees a copy for their records, no later than May 31 of each year.