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HOUSE DOCKET, NO. 895 FILED ON: 1/13/2025
HOUSE . . . . . . . . . . . . . . . No. 1226
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Meghan K. Kilcoyne
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act relative to secure choice retirement savings plan.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Meghan K. Kilcoyne12th Worcester1/13/2025Paul McMurtry11th Norfolk2/26/2025 1 of 14
HOUSE DOCKET, NO. 895 FILED ON: 1/13/2025
HOUSE . . . . . . . . . . . . . . . No. 1226
By Representative Kilcoyne of Clinton, a petition (accompanied by bill, House, No. 1226) of
Meghan K. Kilcoyne and Paul McMurtry for legislation to establish secure choice retirement
savings plans. Financial Services.
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Fourth General Court
(2025-2026)
_______________
An Act relative to secure choice retirement savings plan.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Chapter 29 of the General Laws, as appearing in the 2016 Official Edition,
2is hereby amended by inserting after section 64E the following new sections:-
3 Section 64F. Definitions
4 For the purposes of this section, the following definitions shall apply:
5 “Board” means the Secure Choice Retirement Savings Board
6 “Eligible employee”, a person who is employed by an eligible employer and who for any
7calendar year has provided (or is expected to provide) 750 or more hours of service to the
8eligible employer, with eligibility continuing even if service in later years is less than 750 hours.
9The term does not include: (i) any employee who is an “active participant: as described in IRC
10Section 219(g)(5), without regard to the exclusions for plans described in IRC Section 457(b);
11(ii) any employee who is enrolled in a payroll deduction IRA maintained or offered by the 2 of 14
12employee’s employer; (iii) Any employee who is covered by a collective bargaining agreement
13that does not provide for participation in the IRAP; (iv) Any employee who has not attained the
14age of 18 before the beginning of the calendar year.
15 “Eligible employer”, a person or entity engaged in a specific business, industry,
16profession, trade, or other enterprise in the Commonwealth, whether for profit or not for profit
17excluding the federal government, the Commonwealth, any county, any municipality, or any of
18the Commonwealth’s units or instrumentalities, with the exception that the Commonwealth is
19deemed an eligible employer with regard to Personal Care Attendants, Family Child Care
20Providers, and other direct or indirect employees of the Commonwealth, including a joint
21relationship, who are not eligible to participate in a public employee pension fund within the
22Commonwealth. The term does not include any employer that has not been in business at all
23during the preceding calendar year.
24 “Participating employer”, an eligible employer that provides a payroll deposit retirement
25savings arrangement provided for by this title for eligible employees.
26 “Payroll deduction IRA”, an arrangement by which an employer makes contributions on
27behalf of participating employees by remitting a specified portion of the employee’s pay to an
28IRA at the same time and manner as other payroll deductions.
29 “IRAP”, the Secure Choice Individual Retirement Account Program.
30 “MERP”, the Secure Choice Multiple-Employer Retirement Account Program.
31 “ERISA”, the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.
32§ 1001 et seq. 3 of 14
33 “Code” or “IRC”, the Internal Revenue Code of 1986, as amended, 26 U.S.C. § 1 et seq.
34 “PRIM Board”, the Massachusetts Pension Reserves Investment Management Board.
35 “Qualified Plan”, any plan described in IRC Sections 401(a), 403(a), 403(b), or 457(b).
36 “IRA”, any account of annuity described in IRC Section 408(a) or 408 (b).
37 Section 64G. Responsibilities of Eligible Employers and Exemptions
38 (a) Each eligible employer is required to automatically enroll its eligible employees in the
39IRAP.
40 (b) An eligible employer is exempted from subsection a to the extent that it offers each of
41its eligible employees the opportunity to participate in a qualified plan or a payroll deduction
42IRA.
43 Section 64H. IRAP
44 (a) The Board is responsible for developing and establishing the IRAP.
45 (b) The IRAP shall:
46 (i) Allow eligible individuals employed for compensation in this state to contribute to an
47individual account established under the program through payroll deductions
48 (ii) Provide for automatic enrollment of employees and allow employees to opt out of the
49plan.
50 (iii) Have a default contribution rate set by the Board by rule. 4 of 14
51 (iv) Offer default escalation and contribution levels that can be increased or decreased
52within the limits allowed by the IRC.
53 (v) Pool accounts established under the plan for investment purposes.
54 (vi) Be professionally managed.
55 (vii) Allow the use of private sector partnerships to administer and invest the
56contributions to the plan under the supervision and guidance of the Board. Monies in the IRAP
57may be invested or reinvested by the Treasurer or may be invested in whole or in part under
58contract with the PRIM Board or private money managers, or both, as determined by the Board.
59 (viii) Maintain a separate trust.
60 (ix) Provide for the program’s administration in an efficient and cost-effective manner.
61 (x) Be structured so that it is not governed by ERISA.
62 (xi) Provide the Board with the authority to establish such rules and regulations as it
63considers appropriate for the administration of the IRAP, including with regard to the selection
64of investment options, the manner of safeguarding contributions and other plan assets, the
65payment of administrative expenses, and the purchase of insurance.
66 (xii) Provide for the manner of the payment of benefits, which may include annuities
67and/or lump sums.
68 Section 64I. MERP
69 (a) The Board is responsible for developing and establishing the MERP. 5 of 14
70 (b) The MERP shall:
71 (i) Be qualified under IRC Section 401(a).
72 (ii) Be a profit sharing plan as described in IRC Section 401(a)(27)(B).
73 (iii) Be a defined contribution plan as described in IRC Section 414(i).
74 (iv) Be governed by ERISA.
75 (v) Be a multiple employer plan permitting the voluntary participation of employers with
76employees working in the Commonwealth.
77 (vi) Permit employee contributions, as provided in IRC Section 401(k), through payroll
78deductions.
79 (vii) Allow for employer contributions as matching contributions, fixed contributions, or
80a combination of the two.
81 (viii) Have a default, automatic contribution rate for both employees and employers.
82 (ix) Offer default escalation of contribution levels that can be increased or decreased
83within the limits allowed by the IRC.
84 (x) Pool accounts established under the plan for investment.
85 (xi) Be professionally managed.
86 (xii) Allow the use of private sector partnerships to administer and invest the
87contributions to the plan under the supervision and guidance of the Board. Monies in the IRAP 6 of 14
88may be invested or reinvested by the Treasurer or may be invested in whole or in part under
89contract with the PRIM Board of private money managers, or both, as determined by the Board.
90 (xiii) Maintain a separate trust.
91 (xiv) Provide for the Plan’s administration in an efficient and cost-effective manner.
92 (xv) Designate the Board as the named fiduciary, within the meaning of ERISA Section
93402(a), and provide that the Board may delegate fiduciary authority as permitted under ERISA.
94 (xvi) Designate the Board as the plan sponsor and administrator, as defined under ERISA
95Section (3)(16).
96 (xvii) Provide the Board with the authority to establish such rules and regulations as it
97considers appropriate for the administration of the MERP, including with regard to the selection
98of investment options, the manner of safeguarding contributions and other plan assets, the
99payment of the administrative expenses, and the purchase of insurance.
100 (xviii) Provide for the manner of the payment of benefits, which may include annuities
101and/or lump sums.
102 Section 64J. Composition of the Board
103 (a) There is hereby created within the government of the Commonwealth the Secure
104Choice Retirement Savings Board, which shall initially consist of seven members, with the
105Treasurer serving as chair, as follows:
106 i. The Treasurer, or his or her designee
107 ii. The Secretary of Administration and Finance, or his or her designee 7 of 14
108 iii. An individual with retirement savings or investment expertise appointed by the Senate
109President
110 iv. A small business representative appointed by the governor
111 v. Two public members appointed by the Treasurer
112 vi. An employee representative appointed by the Speaker of the House
113 (b) Within one year of the date the Board opens the IRAP and MERP for participation,
114the Treasurer will remain as Board member and will conduct elections to elect Representative
115Board members to represent the interest of participating employers and employees. The
116Treasurer will conduct an election among participating employees to elect four of their number
117to be Representative Board members from among themselves to represent the interests of
118participating employers solely with respect to the MERP. These additional Board members shall
119be designated as Representative Board Members, and must continue to participate in the Plan in
120order to serve on the Board. If any such Representative Board members ceases to participate in
121the Plan, his or her eligibility to continue as a Representative Board member shall cease as well,
122and the Board shall make arrangements to hold an election to elect a replacement. The terms of
123Representative Board members shall be for three years.
124 Section 64K. Risk Management
125 The Board shall annually prepare and adopt a written statement of investment policy that
126includes a risk management and oversight program. The investment policy or policies shall
127mitigate risk by maintaining a balanced investment portfolio that provides assurance that no
128single investment or class of investments will have a disproportionate impact on the total 8 of 14
129portfolio. The policy and policies shall also address hedging against longevity risk through the
130purchase of annuities or other longevity hedging products. The risk management system is in
131place to monitor the risk levels of the Secure Choice Retirement Savings Plan investment
132portfolios and ensure that the risks taken are prudent and properly managed. The Board shall be
133allowed to decide investment policy for each program while making different investment
134decisions with each program within these guidelines. The Board shall decide whether to offer a
135choice of investment vehicles to participants.
136 Section 64L. Benefit Amount
137 Interest, earnings, and/or losses, and administrative expenses shall be allocated to
138program accounts as prescribed by the Board. An individual’s retirement savings benefit under
139the program shall be an amount equal to the balance in the individual’s program account on the
140date the retirement savings benefit becomes payable. The Commonwealth shall have no liability
141for the payment of any benefit to any participant in either the IRAP or the MERP.
142 Section 64M. Board Duties
143 (a) In addition to any duties described above, the Board shall have the power and the
144authority to do all of the following:
145 (1) Establish one or more payroll deposit retirement savings arrangements for use by
146participating employers.
147 (2) Employ staff and/or appoint record keeper, investment managers, custodians, trustees,
148consultants, attorneys, and such other advice and assistance as may necessary or desirable to
149administer the Plan, and determine the duties of the Plan administer and other staff as necessary 9 of 14
150and set their compensation. The Board shall have the authority to make rules and regulations not
151inconsistent with this Act.
152 (3) Make provisions for the payment of costs of administration and operation of the
153trusts.
154 (4) Evaluate and establish the process by which an eligible employee may contribute a
155portion of his or her salary or wages to the Plan for automatic deposit of those contributions. This
156may include, but is not limited to, existing processes and arrangements used for the deposit and
157administration of tax required to be deducted and withheld relating to the collection of income
158tax at source on wages or for the deposit of tax required to be paid under the unemployment
159insurance system. This also may include, but is not limited to, financial services companies and
160their-party administrators with the capability to receive and process employee information and
161contributions for payroll deposit retirement savings arrangements or other arrangements
162authorized by this title.
163 (5) Evaluate and establish the process by which a participating employee is able to
164contributions for the benefit of its employees to the MERP.
165 (6) Design and establish the process for the enrollment of Plan participants.
166 (7) Procure insurance in connection with the property, assets, or activities of the trust,
167including private underwriting and/or reinsurance, to manage risk and insure the retirement
168savings rate of return. 10 of 14
169 (8) The Commonwealth shall procure insurance indemnifying each member of the Board
170from personal loss or liability resulting from a member’s actions or inaction as a member of the
171Board, to the extent permitted by ERISA and other governing law.
172 (9) Set default, minimum and maximum contribution levels as well as auto-escalation
173policies whereby participating employees’ contributions automatically escalate from year to year
174until they each a maximum contribution rate unless the employee changes his or her contribution
175rate. Participants will be immediately bested in their account balances.
176 (10) Accept contributions from participating employers for the benefit of their
177employees. These contributions shall be in cash or cash equivalents only; securities shall not be
178accepted as contributions.
179 (11) Design and establish the process for the enrollment of those self-employed
180individuals and employers who do not qualify as eligible employers who choose to voluntarily
181participate in the MERP.
182 (12) Arrange for collective, common, and pooled investment of assets of the Plan,
183including investments in conjunction with other funds with which those assets are permitted to
184be collectively invested, with a view to savings costs through efficiencies and economies of
185scale.
186 (13) Allocate administrative fees to each participating employee’s account balance on a
187pro rata basis, or such other basis as the Board determines to be fair and equitable. The Board
188shall keep annual administrative expenses low, but in no event shall they exceed one percent of
189the total trust balance. 11 of 14
190 (14) Explore and establish investment options that offer employees ways to secure
191retirement income without incurring debt or liabilities to the state.
192 (15) Exercise discretionary authority with regard to:
193 i. If necessary, making determinations of the eligibility of an employer, employee, or
194other individual to participate in the Plan;
195 ii. Making factual determinations regarding the Plan;
196 iii. Interpreting the Plan’s governing documents; and
197 iv. Such other matters as are necessary for the administration of the Plan.
198 (b) The Board shall publish separate annual audited financial reports, prepared in
199accordance with generally accepted accounting principles, on the operations of the IRAP and the
200MERP. The annual audit shall be made by an independent certified public accountant and shall
201include, but not be limited to, direct and indirect costs attributable to the use of outside
202consultants, independent contractors, and any other persons who are not state employees.
203 (c) The Board shall ensure that all reports required under the Code and ERISA are
204properly filed for the IRAP and MERP.
205 Section 64N. Employee Information Packet
206 Prior to opening either the IRAP or the MERP for enrollment, the Board shall design and
207disseminate to employers an employee information packet for such program. The packet shall
208include background information on the programs and appropriate disclosures for employees.
209 Section 64O. Disclosure Form 12 of 14
210 The disclosures shall include, but not be limited to, all of the following:
211 (1) The benefits and risks associated with participating in the relevant program.
212 (2) The mechanics of how to join the respective program.
213 (3) How to opt out of the program.
214 (4) The process for applying for payment of retirement benefits.
215 (5) How to obtain additional information.
216 In addition, the disclosure form shall clearly articulate the following:
217 (1) Employers are not liable for decision employees make pursuant to this bill.
218 (2) The Plan fund is not guaranteed by the Commonwealth.
219 Section 64P. Enforcement
220 (a) The Massachusetts Attorney General shall have the power to enforce the provisions of
221this Act.
222 (b) The Attorney General may impose, after due process, penalties against eligible
223employers for failure to comply with section 64g of Section 12 of up to $250 per eligible
224employee. Proceeds for such penalties, after deducting enforcing expenses, shall be deposited for
225the benefit of the IRAP.
226 (c) The Attorney General shall impose, after due process, penalties against employers
227equal to lost earnings and interest on contributions made alter than the deadlines prescribed by
228the Board. The Attorney General shall prescribe a methodology for calculating such lost earnings 13 of 14
229and interest. Proceeds for such penalties shall be deposited for the benefit of the Trust and
230credited to the accounts of the affected employee(s) on a pro rata basis.
231 Section 64Q. Liability
232 (a) Employers shall not have any liability for an employee’s decision to participate in, or
233opt out of, the Secure Choice Retirement Savings Plan.
234 (b) A participating employer shall not be a fiduciary, or considered a fiduciary, with
235regard to the operation of the MERP, except with respect to contribution amounts for remitted in
236a timely fashion. Participating employers shall not bear responsibility for the administration,
237investment, or investment performance of the IRAP or the MERP. Such employers shall not be
238liable with regard to investment returns, Plan design, and benefits paid to Plan participants.
239 Section 64R. Savings Clause
240 The provision of this Act are severable. In the event that portions of this Act are declared
241invalid or unenforceable, the remaining terms and provisions that are not affected thereby shall
242remain in force and effect.
243 Section 64S. Taxes
244 The IRAP and MERP are exempt from Massachusetts securities law and are tax exempt
245under the law of the Commonwealth.
246 SECTION 2. (a) The effective date of this act shall be January 1, 2020.
247 (b) Notwithstanding the forgoing, Section 64G shall be effective as follows: 14 of 14
248 i. For each eligible employer with 100 or more eligible employees, three months after the
249Board opens the Plan for enrollment.
250 ii. For each eligible employer with 50 or more but fewer than 100 eligible employees, six
251months after the Board opens the Plan for enrollment.
252 iii. For each eligible employer with fewer than 50 eligible employees, nine months after
253the Board opens the Plan for enrollment.
254 iv. The Board may delay these effective dates in its discretion for no more than 12
255additional months.