Iowa Senate Bill SF185

Iowa 2025-2026 Regular Session

• Introduced: 2/3/25
• Refer: 2/3/25

Caption

A bill for an act establishing a retirement savings plan trust, and including implementation provisions.

Impact

The introduction of SF185 is expected to address the concerning retirement savings statistics in Iowa, where a significant portion of residents rely solely on Social Security and lack substantial other savings. By creating this trust, the bill aims to enhance the public's capacity to secure financial stability in their retirement years, thereby serving a public interest. However, the bill includes provisions like confidentiality of account information and prohibits local governments from establishing alternative retirement plans, centralizing retirement savings efforts at the state level.

Summary

Senate File 185 establishes the Iowa Retirement Savings Plan Trust aimed at helping Iowans save for retirement. The legislation mandates the automatic enrollment of eligible employees with a default contribution rate of 5%, which they can adjust or opt out of at any time. The state treasurer is tasked with administering the trust and is granted various powers, including the ability to enter into agreements, invest funds, and provide participants with annual reports regarding their accounts. The bill aligns with the federal SECURE 2.0 Act, ensuring compliance with required regulations for retirement savings plans.

Contention

While SF185 is designed to provide individuals with better retirement options, the limitations placed on local governments may be subject to debate. Critics may argue that constraining local control over retirement plans could prevent communities from tailoring solutions that best fit their specific economic contexts. Additionally, the bill notably does not guarantee any minimum rate of return or assume liability for losses, which could raise concerns for potential participants about the trust's safety. The financial health and management of the trust will also be closely watched to ensure it meets the expectations of Iowans relying on it for their retirement.