| 1 | 1 | | 25 LC 56 0309 |
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| 2 | 2 | | Senate Bill 226 |
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| 3 | 3 | | By: Senators Hufstetler of the 52nd, Williams of the 25th, Burns of the 23rd, Summers of the |
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| 4 | 4 | | 13th, Albers of the 56th and others |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | To amend Title 34 of the Official Code of Georgia Annotated, relating to labor and industrial |
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| 8 | 8 | | 1 |
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| 9 | 9 | | relations, so as to provide for the creation of the Peach State Saves program, a defined2 |
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| 10 | 10 | | contribution retirement program; to provide for definitions; to provide for appointment of a3 |
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| 11 | 11 | | board of trustees; to provide for vacancies on such board; to provide for quorum, expenses,4 |
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| 12 | 12 | | authority, powers, and duties of such board; to provide for voluntary participation in the5 |
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| 13 | 13 | | program; to provide for compliance with federal law; to provide for a legal adviser; to6 |
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| 14 | 14 | | provide for membership and eligibility requirements; to provide for certain program details;7 |
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| 15 | 15 | | to provide for varied investment options; to provide for intergovernmental agreements; to8 |
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| 16 | 16 | | provide for disclosures; to provide for the allowable uses of such fund; to provide for the9 |
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| 17 | 17 | | purchasing of insurance; to provide for the hiring or retention of personnel; to provide for the10 |
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| 18 | 18 | | securing of loans; to provide for regular audits; to provide for violations of chapter and11 |
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| 19 | 19 | | penalties; to provide for limitations on liability; to provide for the confidentiality of program12 |
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| 20 | 20 | | participants; to provide for a date for the establishment of the program; to provide for related13 |
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| 21 | 21 | | matters; to repeal conflicting laws; and for other purposes.14 |
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| 22 | 22 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:15 |
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| 23 | 23 | | S. B. 226 |
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| 24 | 24 | | - 1 - 25 LC 56 0309 |
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| 25 | 25 | | SECTION 1. |
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| 26 | 26 | | 16 |
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| 27 | 27 | | Title 34 of the Official Code of Georgia Annotated, relating to labor and industrial relations,17 |
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| 28 | 28 | | is amended by adding a new chapter to read as follows:18 |
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| 29 | 29 | | "CHAPTER 11 |
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| 30 | 30 | | 19 |
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| 31 | 31 | | 34-11-1.20 |
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| 32 | 32 | | As used in this chapter, the term:21 |
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| 33 | 33 | | (1) 'Administrative expenses' means all expenses incurred in the operation of the22 |
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| 34 | 34 | | program, including investment expenses, board expenses, and expenses associated with23 |
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| 35 | 35 | | operating the Peach State Saves program.24 |
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| 36 | 36 | | (2) 'Board' means the Peach State Saves program board of trustees as provided for in25 |
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| 37 | 37 | | Code Section 34-11-3, whose purpose is to administer the program.26 |
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| 38 | 38 | | (3) 'Covered employee' means an individual who is employed by a covered employer,27 |
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| 39 | 39 | | who has wages or other compensation that is taxable by the state, and who is 18 years of28 |
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| 40 | 40 | | age or older. Such term shall not include:29 |
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| 41 | 41 | | (A) Any employee covered under the federal Railway Labor Act, 45 U.S.C.30 |
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| 42 | 42 | | Section 151;31 |
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| 43 | 43 | | (B) Any employee on whose behalf an employer makes contributions to a32 |
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| 44 | 44 | | multiemployer pension trust fund under 29 U.S.C. Section 186; or33 |
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| 45 | 45 | | (C) Any individual who is an employee of:34 |
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| 46 | 46 | | (i) The federal government;35 |
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| 47 | 47 | | (ii) Any state government in the United States;36 |
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| 48 | 48 | | (iii) Any county, municipal corporation, or political subdivision of this state or any37 |
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| 49 | 49 | | other state of the United States;38 |
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| 50 | 50 | | S. B. 226 |
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| 51 | 51 | | - 2 - 25 LC 56 0309 |
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| 52 | 52 | | (iv) Any employee for whom the employer does not pay unemployment insurance39 |
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| 53 | 53 | | premiums in this state according to the records of the Department of Labor; or40 |
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| 54 | 54 | | (v) Any employee who has been employed by a covered employer who was first41 |
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| 55 | 55 | | employed by such covered employer on or after January 1 of the current calendar42 |
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| 56 | 56 | | year.43 |
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| 57 | 57 | | (4) 'Covered employer' means any person, partnership, limited liability company,44 |
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| 58 | 58 | | corporation, or other entity engaged in a business, industry, profession, trade, or other45 |
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| 59 | 59 | | enterprise in the state, including a nonprofit entity, that employs, and during the previous46 |
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| 60 | 60 | | calendar year employed, at least five covered employees, and that has been in business47 |
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| 61 | 61 | | in this state for at least one complete calendar year. Such term shall not include:48 |
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| 62 | 62 | | (A) The federal government;49 |
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| 63 | 63 | | (B) The State of Georgia;50 |
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| 64 | 64 | | (C) Any county, municipal corporation, or political subdivision of the state; or51 |
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| 65 | 65 | | (D) Any employer that has maintained a specified tax-favored retirement plan, other52 |
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| 66 | 66 | | than the Peach State Saves program, for its employees at any time within the preceding53 |
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| 67 | 67 | | two years.54 |
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| 68 | 68 | | (5) 'ERISA' means the Employee Retirement Income Security Act of 1974, 29 U.S.C.55 |
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| 69 | 69 | | Section 1001, et seq.56 |
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| 70 | 70 | | (6) 'Internal Revenue Code' means the United States Internal Revenue Code of 1986, as57 |
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| 71 | 71 | | amended.58 |
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| 72 | 72 | | (7) 'IRA' means a traditional or Roth individual retirement account or individual59 |
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| 73 | 73 | | retirement annuity under Section 408(a), 408(b), or 408A of the Internal Revenue Code.60 |
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| 74 | 74 | | (8) 'Participant' means a covered employee or other individual who has a balance61 |
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| 75 | 75 | | credited to his or her account under the program.62 |
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| 76 | 76 | | (9) 'Participating employer' means a covered employer that is participating in the63 |
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| 77 | 77 | | program.64 |
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| 78 | 78 | | S. B. 226 |
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| 79 | 79 | | - 3 - 25 LC 56 0309 |
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| 80 | 80 | | (10) 'Payroll deduction IRA' means an arrangement by which a covered employer allows65 |
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| 81 | 81 | | covered employees to contribute to an IRA by means of payroll deduction.66 |
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| 82 | 82 | | (11) 'Program' means the Peach State Saves program provided for in this chapter.67 |
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| 83 | 83 | | (12) 'Roth IRA' means a Roth individual retirement account or individual retirement68 |
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| 84 | 84 | | annuity under Section 408A of the Internal Revenue Code.69 |
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| 85 | 85 | | (13) 'Specified tax-favored retirement plan' means a retirement plan that is tax qualified70 |
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| 86 | 86 | | under, or is described in and satisfies the requirements of, Section 401(a), 401(k), 403(a),71 |
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| 87 | 87 | | 403(b), 408(k), or 408(p) of the Internal Revenue Code.72 |
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| 88 | 88 | | (14) 'Total fees and expenses' means all fees, costs, and expenses, including, but not73 |
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| 89 | 89 | | limited to, administrative expenses, investment expenses, investment advice expenses,74 |
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| 90 | 90 | | accounting costs, actuarial costs, legal costs, marketing expenses, education expenses,75 |
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| 91 | 91 | | trading costs, insurance annuitization costs, and other miscellaneous costs.76 |
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| 92 | 92 | | (15) 'Traditional IRA' means a traditional individual retirement account or traditional77 |
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| 93 | 93 | | individual retirement annuity under Section 408(a) or (b) of the Internal Revenue Code.78 |
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| 94 | 94 | | (16) 'Wages' means any compensation, as such term is defined in Section 219(f)(1) of79 |
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| 95 | 95 | | the Internal Revenue Code, paid to a covered employee by his or her employer during a80 |
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| 96 | 96 | | calendar year.81 |
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| 97 | 97 | | 34-11-2.82 |
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| 98 | 98 | | There is created, for the purposes described in this chapter, the Peach State Saves program83 |
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| 99 | 99 | | which shall be a budget unit to which funds may be appropriated as provided in Part 1 of84 |
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| 100 | 100 | | Article 4 of Chapter 12 of Title 45, the 'Budget Act.'85 |
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| 101 | 101 | | 34-11-3.86 |
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| 102 | 102 | | (a) The administration and responsibility for the proper operation of the program and for87 |
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| 103 | 103 | | effectuating this chapter are vested in the board.88 |
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| 104 | 104 | | S. B. 226 |
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| 105 | 105 | | - 4 - 25 LC 56 0309 |
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| 106 | 106 | | (b) The board shall be composed of all members of the Board of Trustees of the89 |
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| 107 | 107 | | Employees' Retirement System of Georgia and three additional members appointed by the90 |
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| 108 | 108 | | Governor, each of whom shall have relevant expertise in retirement, investments, or small91 |
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| 109 | 109 | | business.92 |
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| 110 | 110 | | (c) To effect staggered terms of office for members of the board appointed by the93 |
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| 111 | 111 | | Governor, and effective with members appointed for terms beginning in 2025, the94 |
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| 112 | 112 | | Governor shall appoint for terms effective January 1, 2026, one member for a two-year95 |
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| 113 | 113 | | term of office, one member for a three-year term of office, and one member for a four-year96 |
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| 114 | 114 | | term of office. Thereafter, all members appointed by the Governor shall be appointed to97 |
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| 115 | 115 | | serve four-year terms of office. Members shall be eligible for reappointment.98 |
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| 116 | 116 | | (d) If a vacancy occurs on the board, the vacancy shall be filled for the unexpired term in99 |
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| 117 | 117 | | the same manner as the original appointment.100 |
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| 118 | 118 | | (e) The board members shall be reimbursed for all actual travel and other expenses101 |
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| 119 | 119 | | necessarily incurred through service on the board. State officials serving ex officio shall102 |
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| 120 | 120 | | not receive the daily expense allowance but shall be entitled to reimbursement of actual103 |
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| 121 | 121 | | expenses.104 |
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| 122 | 122 | | (f) A majority of the voting members of the board shall constitute a quorum to transact105 |
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| 123 | 123 | | business.106 |
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| 124 | 124 | | 34-11-4.107 |
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| 125 | 125 | | (a) The board shall have the authority, powers, and duties to:108 |
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| 126 | 126 | | (1) Design and implement the program consistent with the provisions of this chapter;109 |
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| 127 | 127 | | (2) Establish trusts consistent with the provisions of this chapter;110 |
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| 128 | 128 | | (3) Provide for the collection of all moneys provided for in this chapter;111 |
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| 129 | 129 | | (4) Provide for the payment of all administrative expenses;112 |
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| 130 | 130 | | S. B. 226 |
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| 131 | 131 | | - 5 - 25 LC 56 0309 |
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| 132 | 132 | | (5) Make and promulgate all necessary rules and regulations, not inconsistent with the113 |
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| 133 | 133 | | laws of this state, to carry out the provisions of this chapter and to distribute such rules114 |
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| 134 | 134 | | and regulations to program participants;115 |
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| 135 | 135 | | (6) Determine eligibility of persons to receive retirement benefits under this chapter;116 |
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| 136 | 136 | | (7) Keep an accurate account of all the activities, operations, receipts, and expenditures117 |
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| 137 | 137 | | of the program and the board;118 |
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| 138 | 138 | | (8) Cause the program to be designed, established, and operated to:119 |
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| 139 | 139 | | (A) Encourage participation, saving, sound investment practices, and appropriate120 |
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| 140 | 140 | | selection of default investments;121 |
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| 141 | 141 | | (B) Maximize simplicity and ease of administration of the program for eligible122 |
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| 142 | 142 | | employers;123 |
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| 143 | 143 | | (C) Minimize total fees and expenses;124 |
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| 144 | 144 | | (D) Minimize costs, including by collective investment and economies of scale; and125 |
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| 145 | 145 | | (E) Establish rules and procedures promoting portability of benefits, including the126 |
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| 146 | 146 | | ability to make tax-free rollovers or transfers from IRAs under the program to other127 |
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| 147 | 147 | | IRAs or to tax qualified plans that accept such rollovers or transfers, provided that any128 |
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| 148 | 148 | | such rollover is initiated by a participant;129 |
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| 149 | 149 | | (9) Design, develop, and implement the program, and, to that end, conduct market, legal,130 |
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| 150 | 150 | | and feasibility analyses;131 |
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| 151 | 151 | | (10) Establish rules and procedures governing the distribution of funds from the132 |
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| 152 | 152 | | program, including such distributions as may be permitted or required by the program and133 |
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| 153 | 153 | | any applicable provisions of tax laws, with the objectives of maximizing financial134 |
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| 154 | 154 | | security in retirement, protecting spousal rights, and assisting participants to effectively135 |
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| 155 | 155 | | manage the decumulation of their savings and to receive payment of their benefits under136 |
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| 156 | 156 | | the program. The board shall have the authority, in its discretion, to provide for one or137 |
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| 157 | 157 | | more reasonably priced distribution options to provide a source of fixed regular138 |
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| 158 | 158 | | S. B. 226 |
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| 159 | 159 | | - 6 - 25 LC 56 0309 |
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| 160 | 160 | | retirement income, including income for life or for the participant's life expectancy, or139 |
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| 161 | 161 | | for joint lives and life expectancies, as applicable;140 |
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| 162 | 162 | | (11) Arrange for collective, common, and pooled investment of assets of the program,141 |
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| 163 | 163 | | including investments in conjunction with other funds with which assets are permitted to142 |
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| 164 | 164 | | be collectively invested, to save costs through efficiencies and economies of scale;143 |
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| 165 | 165 | | (12) Employ or retain an executive director, who shall be the executive director of the144 |
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| 166 | 166 | | Employees' Retirement System of Georgia, and a program administrator, staff, trustee,145 |
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| 167 | 167 | | record keeper, investment managers, investment advisers, and other administrative,146 |
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| 168 | 168 | | professional, and expert advisers and service providers, none of whom shall be trustees147 |
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| 169 | 169 | | of the board and all of whom shall serve at the pleasure of the board, which shall148 |
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| 170 | 170 | | determine their duties and compensation. The board may authorize the executive director149 |
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| 171 | 171 | | and other officials to oversee requests for proposals or other public competitions and150 |
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| 172 | 172 | | enter into contracts on behalf of the board or conduct any business necessary for the151 |
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| 173 | 173 | | efficient operation of the program or the board;152 |
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| 174 | 174 | | (13) Arrange for and facilitate compliance by the program, or arrangements established153 |
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| 175 | 175 | | under the program, with all applicable requirements for the program under the Internal154 |
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| 176 | 176 | | Revenue Code, including requirements for favorable tax treatment of the IRAs, and under155 |
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| 177 | 177 | | any other applicable federal or state law and accounting requirements, including using156 |
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| 178 | 178 | | best efforts to implement procedures minimizing the risk that covered employees will157 |
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| 179 | 179 | | contribute more to an IRA than the amount they are eligible under the Internal Revenue158 |
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| 180 | 180 | | Code to contribute to the IRA on a tax-favored basis, and otherwise providing or159 |
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| 181 | 181 | | arranging for assistance to covered employers and covered employees in complying with160 |
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| 182 | 182 | | applicable law and tax related requirements in a cost-effective manner;161 |
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| 183 | 183 | | (14) Establish procedures for the timely and fair resolution of participant and other162 |
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| 184 | 184 | | disputes related to accounts or program operation;163 |
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| 185 | 185 | | S. B. 226 |
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| 186 | 186 | | - 7 - 25 LC 56 0309 |
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| 187 | 187 | | (15) Evaluate the need for, and procure if and as deemed necessary, insurance against164 |
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| 188 | 188 | | any and all loss in connection with the property, assets, or activities of the program. 165 |
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| 189 | 189 | | Evaluate the need for, and procure if and as deemed necessary, pooled private insurance;166 |
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| 190 | 190 | | (16) Indemnify each trustee of the board from personal loss or liability resulting from a167 |
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| 191 | 191 | | trustee's action or inaction;168 |
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| 192 | 192 | | (17) Develop and implement an investment policy defining the program's investment169 |
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| 193 | 193 | | objectives, consistent with the objectives of the program, and providing for policies and170 |
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| 194 | 194 | | procedures consistent with such investment objectives;171 |
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| 195 | 195 | | (18) Cause expenses incurred in the initiation, implementation, maintenance, and172 |
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| 196 | 196 | | administration of the program to be paid from contributions to, or investment returns or173 |
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| 197 | 197 | | assets of, the program or other funds collected by or for the program or pursuant to174 |
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| 198 | 198 | | arrangements established under the program to the extent permitted under federal and175 |
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| 199 | 199 | | state law;176 |
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| 200 | 200 | | (19) Collect application, account, or administrative fees and to accept any grants, gifts,177 |
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| 201 | 201 | | legislative appropriation, loans, and other moneys from the state; any unit of federal,178 |
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| 202 | 202 | | state, or local government; or any other person, firm, or entity to defray the costs of179 |
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| 203 | 203 | | administering and operating the program;180 |
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| 204 | 204 | | (20) Ensure that all contributions to IRAs under the program may be used only to181 |
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| 205 | 205 | | (A) Pay benefits to participants under the program;182 |
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| 206 | 206 | | (B) Pay the administrative costs the program; and183 |
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| 207 | 207 | | (C) Make investments for the benefit of the program; and184 |
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| 208 | 208 | | (21) Collaborate with, and evaluate the role of, financial advisors or other financial185 |
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| 209 | 209 | | professionals, including in assisting and providing guidance for covered employees.186 |
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| 210 | 210 | | (b) The board shall also have all other powers necessary for the proper administration of187 |
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| 211 | 211 | | this chapter.188 |
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| 212 | 212 | | S. B. 226 |
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| 213 | 213 | | - 8 - 25 LC 56 0309 |
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| 214 | 214 | | 34-11-5.189 |
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| 215 | 215 | | (a) Trustees of the board shall discharge their duties as fiduciaries with respect to the190 |
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| 216 | 216 | | program solely in the interest of the program participants as follows:191 |
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| 217 | 217 | | (1) For the exclusive purpose of providing benefits to participants and defraying192 |
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| 218 | 218 | | reasonable expenses of administering the program; and193 |
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| 219 | 219 | | (2) With the care, skill, prudence, and diligence under the circumstances then prevailing194 |
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| 220 | 220 | | that a prudent person acting in a like capacity and familiar with those matters would use195 |
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| 221 | 221 | | in the conduct of an enterprise of a like character and with like aims.196 |
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| 222 | 222 | | (b) A trustee of the board, program administrator, or other staff of the board shall not:197 |
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| 223 | 223 | | (1) Directly or indirectly, have any interest in the making of any investment under the198 |
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| 224 | 224 | | program or in any gains or profits accruing from any such investment;199 |
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| 225 | 225 | | (2) Borrow any program related funds or deposits, or use any such funds or deposits in200 |
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| 226 | 226 | | any manner, for himself or herself or as an agent or partner of others; or201 |
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| 227 | 227 | | (3) Become an endorser, surety, or obligor on investments made under the program.202 |
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| 228 | 228 | | 34-11-6.203 |
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| 229 | 229 | | The Attorney General shall be the legal adviser of the board.204 |
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| 230 | 230 | | 34-11-7.205 |
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| 231 | 231 | | The board may establish any processes to verify whether a person or entity is a covered206 |
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| 232 | 232 | | employer, including reference to online data and possible use of questions in employer tax207 |
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| 233 | 233 | | filings, consistent with the objective of avoiding to the fullest extent practicable any208 |
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| 234 | 234 | | requirement that an employer that is not a covered employer register with the program or209 |
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| 235 | 235 | | take other action to demonstrate that it maintains a specified tax-favored retirement plan210 |
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| 236 | 236 | | or is exempt for other reasons from being treated as a covered employer.211 |
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| 237 | 237 | | S. B. 226 |
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| 238 | 238 | | - 9 - 25 LC 56 0309 |
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| 239 | 239 | | 34-11-8.212 |
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| 240 | 240 | | (a) Contributions by participants shall be made through payroll deductions. Such amount213 |
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| 241 | 241 | | so deducted shall be credited to the individual account of the participant. Earnings shall214 |
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| 242 | 242 | | be credited to each participant's account pursuant to rules and regulations adopted by the215 |
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| 243 | 243 | | board.216 |
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| 244 | 244 | | (b) If the participant ceases to be a covered employee, such participant's account shall217 |
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| 245 | 245 | | continue to accrue earnings in the same manner as any participant's account.218 |
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| 246 | 246 | | (c) A participant's account balance in the program shall at all times be 100 percent vested219 |
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| 247 | 247 | | and nonforfeitable.220 |
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| 248 | 248 | | 34-11-9.221 |
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| 249 | 249 | | (a) The board shall, consistent with federal law and regulation, adopt and implement the222 |
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| 250 | 250 | | program, which shall remain in compliance with federal law and regulations once223 |
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| 251 | 251 | | implemented and shall be called the Peach State Saves program.224 |
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| 252 | 252 | | (b) In accordance with program terms and conditions and any rules and regulations225 |
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| 253 | 253 | | promulgated by the board, the program shall:226 |
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| 254 | 254 | | (1) Be set forth in documents prescribing the terms and conditions of the program;227 |
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| 255 | 255 | | (2) Allow eligible individuals in the state to choose whether or not to contribute to an228 |
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| 256 | 256 | | IRA under the program, including allowing covered employees in the state the choice to229 |
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| 257 | 257 | | contribute to an IRA through payroll deduction under the program;230 |
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| 258 | 258 | | (3) Allow for voluntary contributions by others, including self-employed individuals and231 |
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| 259 | 259 | | independent contractors, through payroll deduction or otherwise;232 |
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| 260 | 260 | | (4) Require each covered employer to offer its employees the choice whether or not to233 |
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| 261 | 261 | | contribute to a payroll deduction IRA by automatically enrolling them in the payroll234 |
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| 262 | 262 | | deduction IRA with the opportunity to opt out;235 |
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| 263 | 263 | | (5) Allow, at the discretion of the board, employers that are not covered employers236 |
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| 264 | 264 | | because they are exempt from covered employer status to participate in the program by237 |
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| 265 | 265 | | S. B. 226 |
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| 266 | 266 | | - 10 - 25 LC 56 0309 |
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| 267 | 267 | | offering program enrollment to their employees, taking into account, among other238 |
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| 268 | 268 | | considerations, the potential legal consequences and the degree of employer demand to239 |
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| 269 | 269 | | participate or facilitate participation by employees;240 |
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| 270 | 270 | | (6) Provide that the IRA to which contributions are made will be a Roth IRA, except that241 |
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| 271 | 271 | | the board shall have the authority at any time to add an option for all participants to242 |
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| 272 | 272 | | affirmatively elect to contribute to a traditional IRA as an alternative to the Roth IRA or243 |
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| 273 | 273 | | to have both a traditional and a Roth IRA through the program;244 |
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| 274 | 274 | | (7) Provide that, unless otherwise specified by a covered employee, the covered245 |
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| 275 | 275 | | employee shall automatically contribute 5 percent of his or her wages to the program,246 |
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| 276 | 276 | | subject in all cases to the IRA contribution dollar limits applicable under the Internal247 |
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| 277 | 277 | | Revenue Code. The board is authorized, in its discretion, from time to time to change,248 |
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| 278 | 278 | | the 5 percent automatic default contribution rate as provided for in paragraph (9) of this249 |
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| 279 | 279 | | subsection;250 |
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| 280 | 280 | | (8) The board shall strive to design and implement investment options available to251 |
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| 281 | 281 | | participants established as part of the program and other program features that are252 |
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| 282 | 282 | | intended to achieve maximum possible income replacement balanced with an appropriate253 |
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| 283 | 283 | | level of risk in an IRA based environment consistent with the investment objectives under254 |
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| 284 | 284 | | the policy. The investment options may encompass a range of risk and return255 |
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| 285 | 285 | | opportunities and allow for a rate of return commensurate with an appropriate level of256 |
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| 286 | 286 | | risk in view of the investment objectives under the policy. The menu of investment257 |
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| 287 | 287 | | options shall be determined taking into account the nature and objectives of the program,258 |
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| 288 | 288 | | the desirability of limiting investment choices under the program to a reasonable number,259 |
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| 289 | 289 | | and the extensive investment choices available to participants in the event that such260 |
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| 290 | 290 | | participants roll over to an IRA outside the program;261 |
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| 291 | 291 | | (9) Provide on a uniform basis, if and when the board so determines and in its discretion,262 |
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| 292 | 292 | | for annual increases of each participant's contribution rate by not more than 1 percent of263 |
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| 293 | 293 | | wages per year, up to a maximum of 10 percent. Any such increases shall apply to264 |
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| 294 | 294 | | S. B. 226 |
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| 295 | 295 | | - 11 - 25 LC 56 0309 |
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| 296 | 296 | | participants, as determined by the board, by default or only if initiated by affirmative265 |
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| 297 | 297 | | participant election, in either case subject to the IRA contribution limits applicable under266 |
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| 298 | 298 | | the Internal Revenue Code;267 |
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| 299 | 299 | | (10) Permit no employer contributions;268 |
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| 300 | 300 | | (11) Be professionally managed;269 |
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| 301 | 301 | | (12) Provide for direct deposit of contributions into investments under the program; and270 |
|---|
| 302 | 302 | | (13) Provide for reports on the status of each participant's account to be provided to each271 |
|---|
| 303 | 303 | | participant at least annually and make best efforts to provide participants frequent or272 |
|---|
| 304 | 304 | | continual online access to information on the status of their accounts.273 |
|---|
| 305 | 305 | | 34-11-10.274 |
|---|
| 306 | 306 | | (a) The board may enter into an intergovernmental agreement with the state or any agency275 |
|---|
| 307 | 307 | | thereof to receive outreach, technical assistance, enforcement and compliance services,276 |
|---|
| 308 | 308 | | collection or dissemination of information pertinent to the program, or other services or277 |
|---|
| 309 | 309 | | assistance. The state and any agencies thereof that enter into such agreements shall278 |
|---|
| 310 | 310 | | collaborate to provide the outreach, assistance, information, and compliance or other279 |
|---|
| 311 | 311 | | services or assistance to the board. The agreement may cover the sharing of costs incurred280 |
|---|
| 312 | 312 | | in gathering and disseminating information and the reimbursement of costs for any281 |
|---|
| 313 | 313 | | enforcement activities or assistance. In order to facilitate the implementation of this282 |
|---|
| 314 | 314 | | chapter, the Department of Labor and the Department of Revenue shall be required to enter283 |
|---|
| 315 | 315 | | into such agreements as are necessary to effectuate the program requirements.284 |
|---|
| 316 | 316 | | (b) The board may make and enter into competitively procured contracts, agreements,285 |
|---|
| 317 | 317 | | memoranda of understanding, arrangements, partnerships, or other arrangements to286 |
|---|
| 318 | 318 | | collaborate and cooperate with, and to retain, employ, and contract with or for any of the287 |
|---|
| 319 | 319 | | following to the extent necessary or desirable, for the effective and efficient design,288 |
|---|
| 320 | 320 | | implementation, and administration of the program consistent with the purposes set forth289 |
|---|
| 321 | 321 | | in this chapter and to maximize outreach to covered employers and covered employees:290 |
|---|
| 322 | 322 | | S. B. 226 |
|---|
| 323 | 323 | | - 12 - 25 LC 56 0309 |
|---|
| 324 | 324 | | (1) Services of private and public financial institutions, depositories, consultants,291 |
|---|
| 325 | 325 | | actuaries, counsel, auditors, investment advisers, investment administrators, investment292 |
|---|
| 326 | 326 | | management firms, other investment firms, third-party administrators, other professionals293 |
|---|
| 327 | 327 | | and service providers, and state public retirement systems;294 |
|---|
| 328 | 328 | | (2) Research, technical, financial, administrative, and other services; and295 |
|---|
| 329 | 329 | | (3) Services of other state agencies to assist the board in the exercise of its powers and296 |
|---|
| 330 | 330 | | duties.297 |
|---|
| 331 | 331 | | (c) The board may make and enter into competitively procured contracts, agreements,298 |
|---|
| 332 | 332 | | memoranda of understanding, arrangements, partnerships, or other arrangements to299 |
|---|
| 333 | 333 | | collaborate and cooperate with, coordinate, or combine resources, investments, or300 |
|---|
| 334 | 334 | | administrative functions with other governmental entities, including states or their agencies301 |
|---|
| 335 | 335 | | or instrumentalities that maintain or are establishing retirement savings programs302 |
|---|
| 336 | 336 | | compatible with the program, including collective, common, or pooled investments with303 |
|---|
| 337 | 337 | | other funds of other states' programs with which the assets of the program are permitted by304 |
|---|
| 338 | 338 | | law to be collectively invested, to the extent necessary or desirable for the effective and305 |
|---|
| 339 | 339 | | efficient design, administration, and implementation of the program consistent with the306 |
|---|
| 340 | 340 | | purposes set forth in this chapter, including the purpose of achieving economies of scale307 |
|---|
| 341 | 341 | | and other efficiencies designed to minimize costs for the program and its participants and308 |
|---|
| 342 | 342 | | the provisions of this chapter.309 |
|---|
| 343 | 343 | | (d) When possible and practicable, the board shall use employer, other private sector, and310 |
|---|
| 344 | 344 | | public infrastructure as well as common, collective, or pooled investment arrangements to311 |
|---|
| 345 | 345 | | the extent desirable, to facilitate and enhance the effectiveness and efficiency of program312 |
|---|
| 346 | 346 | | outreach, enrollment, contributions, record keeping, investment, distributions, compliance,313 |
|---|
| 347 | 347 | | and other aspects of program design, administration, and implementation consistent with314 |
|---|
| 348 | 348 | | the purposes set forth in this chapter, including the purpose of achieving economies of scale315 |
|---|
| 349 | 349 | | and other efficiencies designed to minimize costs for the program and its participants and316 |
|---|
| 350 | 350 | | the provisions of this chapter.317 |
|---|
| 351 | 351 | | S. B. 226 |
|---|
| 352 | 352 | | - 13 - 25 LC 56 0309 |
|---|
| 353 | 353 | | (e) The board shall ensure that the program is designed and implemented in a manner318 |
|---|
| 354 | 354 | | consistent with federal law, including favorable federal tax treatment, to the extent that it319 |
|---|
| 355 | 355 | | applies and consistent with the program not being preempted by ERISA.320 |
|---|
| 356 | 356 | | 34-11-11.321 |
|---|
| 357 | 357 | | (a) The board shall develop and disseminate materials designed to educate participants and322 |
|---|
| 358 | 358 | | potential participants about the benefits of planning and saving for retirement and to help323 |
|---|
| 359 | 359 | | participants decide the level of participation and savings strategies that may be appropriate,324 |
|---|
| 360 | 360 | | including information in furtherance of financial capability and financial literacy.325 |
|---|
| 361 | 361 | | (b) The board shall adopt rules that specify the contents, frequency, timing, and means of326 |
|---|
| 362 | 362 | | required disclosures from the program to covered employees, participants, other individuals327 |
|---|
| 363 | 363 | | eligible to participate in the program. Such disclosures shall include at least:328 |
|---|
| 364 | 364 | | (1) The benefits associated with tax-favored retirement saving;329 |
|---|
| 365 | 365 | | (2) The potential advantages and disadvantages associated with contributing to Roth330 |
|---|
| 366 | 366 | | IRAs and, if applicable, traditional IRAs under the program;331 |
|---|
| 367 | 367 | | (3) The eligibility rules for Roth IRAs and, if applicable, traditional IRAs;332 |
|---|
| 368 | 368 | | (4) That the individual will be solely responsible for determining whether, and, if so,333 |
|---|
| 369 | 369 | | how much, the individual is eligible to contribute on a tax-favored basis to an IRA;334 |
|---|
| 370 | 370 | | (5) The penalty for excess contributions to IRAs and the method of correcting excess335 |
|---|
| 371 | 371 | | contributions;336 |
|---|
| 372 | 372 | | (6) Instructions for enrolling, making contributions, and opting out of participation;337 |
|---|
| 373 | 373 | | (7) Instructions for opting out of the Roth IRA, the default contribution rate, and the338 |
|---|
| 374 | 374 | | default investment if the covered employee prefers a traditional IRA, a higher or lower339 |
|---|
| 375 | 375 | | contribution rate, or a different investment alternative;340 |
|---|
| 376 | 376 | | (8) The potential availability of a saver's tax credit or saver's match program, including341 |
|---|
| 377 | 377 | | the eligibility conditions for the credit and instructions on how to claim it;342 |
|---|
| 378 | 378 | | S. B. 226 |
|---|
| 379 | 379 | | - 14 - 25 LC 56 0309 |
|---|
| 380 | 380 | | (9) That employees seeking tax, investment, or other financial advice should contact343 |
|---|
| 381 | 381 | | appropriate professional advisors, and that covered employers are not in a position to344 |
|---|
| 382 | 382 | | provide such advice and are not liable for decisions individuals make in relation to the345 |
|---|
| 383 | 383 | | program;346 |
|---|
| 384 | 384 | | (10) That the payroll deduction IRAs are intended not to be employer sponsored347 |
|---|
| 385 | 385 | | retirement plans and that the program is not an employer sponsored retirement plan;348 |
|---|
| 386 | 386 | | (11) The potential implications of account balances under the program for the application349 |
|---|
| 387 | 387 | | of asset limits under certain public assistance programs;350 |
|---|
| 388 | 388 | | (12) That the account owner is solely responsible for investment performance, including351 |
|---|
| 389 | 389 | | market gains and losses, and that IRA accounts and rates of return are not guaranteed by352 |
|---|
| 390 | 390 | | any employer, the state, the board, any board member or state official, or the program;353 |
|---|
| 391 | 391 | | (13) Additional information about retirement and saving and other information designed354 |
|---|
| 392 | 392 | | to promote financial literacy and capability; and355 |
|---|
| 393 | 393 | | (14) How to obtain additional information about the program.356 |
|---|
| 394 | 394 | | 34-11-12.357 |
|---|
| 395 | 395 | | (a) The board shall annually cause an audit of activities of the board, including, operations,358 |
|---|
| 396 | 396 | | receipts, and expenditures to be maintained. Such audit shall be conducted by a certified359 |
|---|
| 397 | 397 | | public accountant and shall include, but not be limited to, direct and indirect costs360 |
|---|
| 398 | 398 | | attributable to the use of outside consultants, independent contractors, and any other361 |
|---|
| 399 | 399 | | persons who are not state employees for the administration of the program. For the362 |
|---|
| 400 | 400 | | purposes of the audit, an auditor shall have access to the properties and records of the363 |
|---|
| 401 | 401 | | program and board and may prescribe methods of accounting and the rendering of periodic364 |
|---|
| 402 | 402 | | reports in relation to projects undertaken by the program.365 |
|---|
| 403 | 403 | | (b) By six months after the end of each fiscal year, the board shall prepare and provide to366 |
|---|
| 404 | 404 | | the Governor, the state treasurer, the appropriate committees of the Senate and House of367 |
|---|
| 405 | 405 | | Representatives, and the public an audited financial report, prepared in accordance with368 |
|---|
| 406 | 406 | | S. B. 226 |
|---|
| 407 | 407 | | - 15 - 25 LC 56 0309 |
|---|
| 408 | 408 | | generally accepted accounting principles, detailing the activities, operations, receipts, and369 |
|---|
| 409 | 409 | | expenditures of the program and board during the preceding calendar year.370 |
|---|
| 410 | 410 | | 34-11-13.371 |
|---|
| 411 | 411 | | (a) If a covered employer fails without reasonable cause to enroll a covered employee as372 |
|---|
| 412 | 412 | | required under this chapter, the covered employer shall be subject to a penalty, payable to373 |
|---|
| 413 | 413 | | the state, equal to:374 |
|---|
| 414 | 414 | | (1) For the first calendar year the covered employer is noncompliant, $250.00 per375 |
|---|
| 415 | 415 | | employee; or376 |
|---|
| 416 | 416 | | (2) For each subsequent calendar year the covered employer is noncompliant, $500.00377 |
|---|
| 417 | 417 | | per employee; noncompliance does not need to be consecutive to qualify for such378 |
|---|
| 418 | 418 | | $500.00 penalty.379 |
|---|
| 419 | 419 | | (b) The Department of Labor or the board shall have authority to impose the penalty in380 |
|---|
| 420 | 420 | | subsection (a) of this Code section upon a finding that such violation has occurred.381 |
|---|
| 421 | 421 | | (c) No penalty shall be imposed under subsection (a) of this Code section for any failure382 |
|---|
| 422 | 422 | | for which it is established that the covered employer subject to liability for the penalty did383 |
|---|
| 423 | 423 | | not know the failure existed and exercised reasonable diligence to meet the requirements384 |
|---|
| 424 | 424 | | of this chapter.385 |
|---|
| 425 | 425 | | (d) No penalty shall be imposed under subsection (a) of this Code section for any failure386 |
|---|
| 426 | 426 | | if the covered employer corrects the violation within 90 days from the first date the covered387 |
|---|
| 427 | 427 | | employer knew, or exercising reasonable diligence would have known, the violation of388 |
|---|
| 428 | 428 | | subsection (a) of this Code section existed.389 |
|---|
| 429 | 429 | | (e) A covered employer shall transmit a payroll deduction contribution to the program on390 |
|---|
| 430 | 430 | | the earliest date the amount withheld from the covered employee's compensation can391 |
|---|
| 431 | 431 | | reasonably be segregated from the covered employer's assets, but not later than the fifteenth392 |
|---|
| 432 | 432 | | day of the month following the month in which the covered employee's contribution393 |
|---|
| 433 | 433 | | amounts are withheld from his or her paycheck. Failure to remit such contributions on a394 |
|---|
| 434 | 434 | | S. B. 226 |
|---|
| 435 | 435 | | - 16 - 25 LC 56 0309 |
|---|
| 436 | 436 | | timely basis shall be subject to a penalty, payable to the state, equal to $500.00 per395 |
|---|
| 437 | 437 | | violation. The Department of Labor or the board shall have authority to impose such396 |
|---|
| 438 | 438 | | penalty, upon a finding that such violation has occurred.397 |
|---|
| 439 | 439 | | 34-11-14.398 |
|---|
| 440 | 440 | | (a) An eligible employer, a participating employer, or other employer is not and shall not399 |
|---|
| 441 | 441 | | be liable for or bear responsibility for:400 |
|---|
| 442 | 442 | | (1) An employee's decision as to which investments to choose;401 |
|---|
| 443 | 443 | | (2) Investment decisions of the board or participants;402 |
|---|
| 444 | 444 | | (3) The administration, investment, investment returns, or investment performance of the403 |
|---|
| 445 | 445 | | program, including, but not limited to, any interest rate or other rate of return on any404 |
|---|
| 446 | 446 | | contribution or account balance, provided that the eligible employer, participating405 |
|---|
| 447 | 447 | | employer, or other employer is not involved in the administration or investment of the406 |
|---|
| 448 | 448 | | program;407 |
|---|
| 449 | 449 | | (4) Individuals' awareness of or compliance with the conditions and other provisions of408 |
|---|
| 450 | 450 | | the tax laws that determine which individuals are eligible to make tax-favored409 |
|---|
| 451 | 451 | | contributions to IRAs, in what amount, and in what time frame and manner;410 |
|---|
| 452 | 452 | | (5) The program design or the benefits paid to participants; or411 |
|---|
| 453 | 453 | | (6) Any loss, failure to realize any gain, or any other adverse consequences, including,412 |
|---|
| 454 | 454 | | but not limited to, any adverse tax consequences or loss of favorable tax treatment, public413 |
|---|
| 455 | 455 | | assistance, or other benefits incurred by any person solely and directly as a result of414 |
|---|
| 456 | 456 | | participating in the program.415 |
|---|
| 457 | 457 | | (b) No covered employer or other employer shall be, or shall be considered to be, a416 |
|---|
| 458 | 458 | | fiduciary in relation to the program or any arrangement under the program.417 |
|---|
| 459 | 459 | | S. B. 226 |
|---|
| 460 | 460 | | - 17 - 25 LC 56 0309 |
|---|
| 461 | 461 | | 34-11-15.418 |
|---|
| 462 | 462 | | (a) The state, the board, each trustee of the board, any other state official, state board,419 |
|---|
| 463 | 463 | | commission, and agency, any member, officer, and employee thereof, and the program420 |
|---|
| 464 | 464 | | shall:421 |
|---|
| 465 | 465 | | (1) Have no responsibility for compliance by individuals with the conditions and other422 |
|---|
| 466 | 466 | | provisions of the Internal Revenue Code that determine which individuals are eligible to423 |
|---|
| 467 | 467 | | make tax-favored contributions to IRAs, in what amount, and in what time frame and424 |
|---|
| 468 | 468 | | manner;425 |
|---|
| 469 | 469 | | (2) Have no duty, responsibility, or liability to any party for the payment of any benefits426 |
|---|
| 470 | 470 | | under the program, regardless of whether sufficient funds are available under the program427 |
|---|
| 471 | 471 | | to pay such benefits;428 |
|---|
| 472 | 472 | | (3) Not guarantee any interest rate or other rate of return on or investment performance429 |
|---|
| 473 | 473 | | of any contribution or account balance; and430 |
|---|
| 474 | 474 | | (4) Not be liable or responsible for any loss, deficiency, failure to realize any gain, or any431 |
|---|
| 475 | 475 | | other adverse consequences, including, but not limited to, any adverse tax consequences432 |
|---|
| 476 | 476 | | or loss of favorable tax treatment, public assistance, or other benefits, incurred by any433 |
|---|
| 477 | 477 | | person as a result of participating in the program.434 |
|---|
| 478 | 478 | | (b) Nothing in this chapter shall be construed to guarantee any interest rate or other rate435 |
|---|
| 479 | 479 | | of return on or investment performance of any contribution or account balance.436 |
|---|
| 480 | 480 | | 34-11-16.437 |
|---|
| 481 | 481 | | (a) Individual account information relating to accounts under the program and relating to438 |
|---|
| 482 | 482 | | individual participants, including, but not limited to, names, addresses, telephone numbers,439 |
|---|
| 483 | 483 | | email addresses, personal identification information, investments, contributions, and440 |
|---|
| 484 | 484 | | earnings shall be confidential and shall be maintained as confidential, provided that such441 |
|---|
| 485 | 485 | | information may be disclosed:442 |
|---|
| 486 | 486 | | S. B. 226 |
|---|
| 487 | 487 | | - 18 - 25 LC 56 0309 |
|---|
| 488 | 488 | | (1) To the extent necessary to administer the program in a manner consistent with this443 |
|---|
| 489 | 489 | | chapter, the Internal Revenue Code, or any other federal or state law; or444 |
|---|
| 490 | 490 | | (2) If the individual who provides the information or who is the subject of the445 |
|---|
| 491 | 491 | | information expressly agrees in writing to the disclosure of the information.446 |
|---|
| 492 | 492 | | (b) Information required to be confidential under subsection (a) of this Code section shall447 |
|---|
| 493 | 493 | | not be subject to Article 4 of Chapter 18 of Title 50, relating to open records.448 |
|---|
| 494 | 494 | | 34-11-17.449 |
|---|
| 495 | 495 | | The board may, in its discretion, phase in the program so that the ability to contribute first450 |
|---|
| 496 | 496 | | applies on different dates for different classes of individuals, including employees of451 |
|---|
| 497 | 497 | | employers of different sizes or types and individuals who are not employees, provided that452 |
|---|
| 498 | 498 | | any such staged or phased-in implementation schedule shall be substantially completed on453 |
|---|
| 499 | 499 | | or before January 1, 2028. Reserved."454 |
|---|
| 500 | 500 | | SECTION 2.455 |
|---|
| 501 | 501 | | All laws and parts of laws in conflict with this Act are repealed.456 |
|---|
| 502 | 502 | | S. B. 226 |
|---|
| 503 | 503 | | - 19 - |
|---|