One significant impact of this bill is that it allows the state treasurer or their designee to seek reductions in operating expenses through private donations or grants. This could lead to a better-funded and more efficient 401(k) CORE plan, as reduced costs could make the program more attractive to potential participants. Allowing for private funding streams can enhance the plan's sustainability and could lead to additional resources dedicated to employee education and outreach regarding retirement savings.
Summary
Senate Bill S2025 addresses the 401(k) CORE plan in the Commonwealth of Massachusetts. The bill aims to amend Section 64E of chapter 29 of the General Laws by removing the cap that restricts participation to employers with not more than 20 employees. This change is intended to make the 401(k) CORE plan accessible to a wider range of organizations, potentially increasing its usage among small and medium-sized businesses across the state. By doing so, the bill also seeks to promote retirement savings among a larger number of employees in Massachusetts.
Contention
While the bill has clear benefits in expanding access to the 401(k) CORE plan, there may be some contention regarding the reliance on private donations and grants for operational funding. Critics may argue that dependence on external funding could lead to volatility in the program's sustainability. Furthermore, there may be concerns about the implications of accepting private funds, particularly regarding oversight and the potential influence of donors on the management of the 401(k) CORE plan.