Maryland 2023 Regular Session

Maryland Senate Bill SB6 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3	3		EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4		[Brackets] indicate matter deleted from existing law.
5		-	Underlining indicates amendments to bill.
6		-	Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7		-	amendment.
8	5		sb0006
9	6
10	7		SENATE BILL 6
11	8		P6 3lr0695
12		-	(PRE–FILED) ~~CF HB 296~~
	9	+	(PRE–FILED)
13	10		By: Senator McCray
14	11		Requested: November 4, 2022
15	12		Introduced and read first time: January 11, 2023
16	13		Assigned to: Budget and Taxation
17		-	Committee Report: Favorable with amendments
18		-	Senate action: Adopted
19		-	Read second time: March 11, 2023
20	14
21		-	~~CHAPTER ______~~
	15	+	A BILL ENTITLED
22	16
23	17		AN ACT concerning 1
24	18
25	19		Maryland Teachers and State Employees Supplemental Retirement Plans – 2
26		-	Automatic Enrollment ~~– Study~~ 3
	20	+	Automatic Enrollment 3
27	21
28	22		FOR the purpose of requiring the State Board of Trustees of the Maryland Teachers and 4
29		-	State Employees Supplemental Retirement Plans to ~~study options and develop~~ 5
30		-	~~recommendations to implement an automatic~~ enrollment arrangement for certain 6
31		-	~~State employees; requiring an eligible employer~~ to deduct wages of an employee for 7
32		-	~~contribution to a supplemental retirement plan~~ in accordance with an automatic 8
33		-	~~enrollment arrangement, unless the employee has~~ elected to withdraw from or cease 9
34		-	~~to contribute to the supplemental retirement plan;~~ and generally relating to the 10
35		-	~~automatic enrollment of State employees into~~ supplemental retirement plans. 11
	23	+	State Employees Supplemental Retirement Plans to implement an automatic 5
	24	+	enrollment arrangement for certain State employees; requiring an eligible employer 6
	25	+	to deduct wages of an employee for contribution to a supplemental retirement plan 7
	26	+	in accordance with an automatic enrollment arrangement, unless the employee has 8
	27	+	elected to withdraw from or cease to contribute to the supplemental retirement plan; 9
	28	+	and generally relating to the automatic enrollment of State employees into 10
	29	+	supplemental retirement plans. 11
36	30
37	31		BY repealing and reenacting, with amendments, 12
38	32		Article – State Personnel and Pensions 13
39	33		Section 35–101 14
40	34		Annotated Code of Maryland 15
41	35		(2015 Replacement Volume and 2022 Supplement) 16
42	36
43	37		BY adding to 17
44	38		Article – State Personnel and Pensions 18
45	39		Section 35–206 19
46	40		Annotated Code of Maryland 20
47	41		(2015 Replacement Volume and 2022 Supplement) 21
48		-	2 SENATE BILL 6
49	42
	43	+	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
	44	+	That the Laws of Maryland read as follows: 23
50	45
51		-	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
52		-	That the Laws of Maryland read as follows: 2
	46	+	Article – State Personnel and Pensions 24
53	47
54		-	Article – State Personnel and Pensions 3
55		-
56		-	35–101. 4
57		-
58		-	(a) In this title the following words have the meanings indicated. 5
59		-
60		-	(B) “AUTOMATIC ENROLLMENT ARRANGEMENT ” MEANS A SUPPLEMENTAL 6
61		-	PLAN PROVISION THAT REQUIRES AN ELIGIBLE E MPLOYER TO DEDUCT EL ECTIVE 7
62		-	DEFERRALS FROM AN EM PLOYEE’S WAGES FOR CONTRIBU TION TO A 8
63		-	SUPPLEMENTAL RETIREM ENT PLAN UNLESS THE EMPLOYEE MAKES AN EL ECTION 9
64		-	NOT TO CONTRIBUTE OR TO CONTRIBUTE A DIFF ERENT AMOUNT . 10
65		-
66		-	[(b)] (C) “Board” means the State Board of Trustees of the Maryland Teachers 11
67		-	and State Employees Supplemental Retirement Plans. 12
68		-
69		-	(D) “ELIGIBLE EMPLOYER ” MEANS THE EMPLOYER O F AN INDIVIDUAL 13
70		-	ELIGIBLE TO PARTICIP ATE IN A SUPPLEMENTA L RETIREMENT PLAN . 14
71		-
72		-	[(c)] (E) “Supplemental retirement plans” means the deferred compensation, 15
73		-	tax sheltered annuity, salary reduction savings plans, and any other plans authorized by 16
74		-	this title. 17
75		-
76		-	35–206. 18
77		-
78		-	(A) THE BOARD SHALL IMPLEMENT AN AUTOMATIC ENROLLM ENT 19
79		-	ARRANGEMENT TO AUTOM ATICALLY ENROLL ALL STATE EMPLOYEES HIRED ON OR 20
80		-	AFTER JANUARY 1, 2024, IN A SUPPLEMENTAL RE TIREMENT PLAN . 21
81		-
82		-	(B) (1) NOTWITHSTANDING ANY O THER PROVISION OF LA W, AN ELIGIBLE 22
83		-	EMPLOYER SHALL DEDUC T AN AMOUNT FROM THE WAGES OF AN EMPLOYEE FOR 23
84		-	CONTRIBUTION TO A SU PPLEMENTAL RETIREMEN T PLAN AS PART OF AN 24
85		-	AUTOMATIC ENROLLMENT ARRANGEMENT , UNLESS THE EMPLOYEE HAS ELECTED 25
86		-	TO WITHDRAW FROM THE SUPPLEMENTAL RETIREM ENT PLAN OR CEASE MA KING 26
87		-	CONTRIBUTIONS TO THE SUPPLEMENTAL RETIREM ENT PLAN. 27
88		-
89		-	(2) THE AMOUNT DEDUCTED F ROM THE WAGES OF AN EMPLOYEE 28
90		-	EACH PAY PERIOD SHALL BE THE MINIMUM AMOUN T SET BY THE BOARD, UNLESS 29
91		-	THE EMPLOYEE ELECTS TO: 30
92		-
93		-	(I) HAVE A DIFFERENT AMO UNT DEDUCTED ; 31
94		-	SENATE BILL 6 3
95		-
96		-
97		-	(II) CEASE MAKING CONTRIB UTIONS TO THE SUPPLE MENTAL 1
98		-	RETIREMENT PLAN ; OR 2
99		-
100		-	(III) WITHDRAW FROM THE SU PPLEMENTAL RETIREMENT PLAN . 3
101		-
102		-	(C) AN EMPLOYEE ENROLLED IN A SUPPLEMENTAL RE TIREMENT PLAN 4
103		-	UNDER AN AUTOMATIC E NROLLMENT ARRANGEMEN T SHALL BE: 5
104		-
105		-	(1) PROVIDED A NOTICE WI TH AN EXPLANATION OF : 6
106		-
107		-	(I) THE TERMS OF THE EMP LOYEE’S ENROLLMENT IN THE 7
108		-	SUPPLEMENTAL RETIREM ENT PLAN, INCLUDING THE CURREN T CONTRIBUTION 8
109		-	AMOUNT PROVIDED FOR UNDER THE AUTOMATIC ENROLLMENT ARRANGEME NT; 9
110		-
111		-	(II) THE EMPLOYEE ’S RIGHT TO INCREASE , DECREASE, OR 10
112		-	CEASE CONTRIBUTIONS TO THE SUPPLEMENTAL RETIREMENT PLAN ; 11
113		-
114		-	(III) THE EMPLOYEE ’S RIGHT TO DIS CONTINUE PARTICIPATI ON 12
115		-	IN THE SUPPLEMENTAL RETIREMENT PLAN WITH IN 90 DAYS AFTER THE START OF 13
116		-	EMPLOYMENT ; 14
117		-
118		-	(IV) THE EMPLOYEE ’S RIGHT TO RECEIVE A REFUND OF THEIR 15
119		-	ACCOUNT CONTRIBUTION S AS SOON AS PRACTIC ABLE AFTER DISCONTIN UING 16
120		-	PARTICIPATION WITHIN 90 DAYS AFTER THE START OF EMPLOYMENT ; AND 17
121		-
122		-	(V) THE EMPLOYEE ’S RIGHTS REGARDING T HE INVESTMENT OF 18
123		-	THE EMPLOYEE ’S ACCOUNT AND THE IN VESTMENT OPTIONS AVA ILABLE UNDER THE 19
124		-	SUPPLEMENTAL RETIREM ENT PLAN; AND 20
125		-
126		-	(2) TREATED AS EXERCISIN G CONTROL OF THE ASS ETS IN THE 21
127		-	SUPPLEMENTAL RETIREM ENT PLAN ACCOUNT REG ARDING THE AMOUNT OF 22
128		-	CONTRIBUTIONS AND EA RNINGS. 23
129		-
130		-	(D) IF A PARTICIPANT IS E NROLLED IN A SUPPLEM ENTAL RETIREMENT 24
131		-	PLAN UNDER AN AUTOMA TIC ENROLLMENT ARRAN GEMENT, THE BOARD SHALL 25
132		-	INVEST THE PARTICIPA NT’S CONTRIBUTIONS IN A DESIGNATED DEFA ULT 26
133		-	INVESTMENT OPTION IN ACCORDANCE WITH EACH APPLICABLE SUPPLEMEN TAL 27
134		-	RETIREMENT PLAN . 28
135		-
136		-	(E) EACH UNIT THAT HIRES AN ELIGIBLE EMPLOYEE WHO IS NOT ALREADY 29
137		-	ENROLLED IN A SUPPLE MENTAL RETIREMENT PL AN SHALL PROVIDE THE BOARD 30
138		-	WITH THE INFOR MATION NECESSARY TO COMPLETE THE ENROLLM ENT OF THE 31
139		-	EMPLOYEE UNDER THE A UTOMATIC ENROLLMENT ARRANGEMENT . 32
140		-	4 SENATE BILL 6
141		-
142		-
143		-	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply only to 1
144		-	individuals eligible to participate in a supplemental retirement plan who commence 2
145		-	employment or who are reinstated on or after January 1, 2024. 3
146		-
147		-	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
148		-	That: 5
149		-
150		-	(a) (1) In this section the following words have the meanings indicated. 6
151		-
152		-	(2) “Board” means the State Board of Trustees of the Maryland Teachers 7
153		-	and State Employees Supplemental Retirement Plans. 8
154		-
155		-	(3) “Eligible employee” means an individual eligible to participate in the 9
156		-	Maryland Teachers and State Employees Supplemental Retirement Plans. 10
157		-
158		-	(4) “Eligible employer” means the employer of an individual eligible to 11
159		-	participate in the Maryland Teachers and State Employees Supplemental Retirement 12
160		-	Plans. 13
161		-
162		-	(5) “Plan” means the Maryland Teachers and State Employees 14
163		-	Supplemental Retirement Plans. 15
164		-
165		-	(b) (1) The Board shall study options for establishing an automatic enrollment 16
166		-	process for eligible employees into the Plan. 17
167		-
168		-	(2) In conducting the study under paragraph (1) of this subsection, the 18
169		-	Board shall: 19
170		-
171		-	(i) review the implementation of au tomatic enrollment into 20
172		-	supplemental retirement savings plans in other states for public employees who are also 21
173		-	enrolled in a defined benefit retirement plan; 22
174		-
175		-	(ii) consult with the Department of Budget and Management and 23
176		-	eligible employers regarding options to provide: 24
177		-
178		-	1. tutorials and education sessions for benefit coordinators 25
179		-	and eligible employees; and 26
180		-
181		-	2. necessary disclosures to eligible employees regarding 27
182		-	automatic enrollment in the Plan; 28
183		-
184		-	(iii) review options for default Plan investment options under 29
185		-	automatic enrollment of eligible employees; 30
186		-
187		-	(iv) examine the impact of automatic enrollment on Plan 31
188		-	administrative and investment management fees for Plan enrollees; 32
189		-	SENATE BILL 6 5
190		-
191		-
192		-	(v) review best practices for providing information, tutorials, and 1
193		-	education sessions to eligible employees regarding automatic enrollment in the Plan; and 2
194		-
195		-	(vi) consult with any exclusive bargaining representatives of eligible 3
196		-	employees regarding the process for determining default contribution amounts at the time 4
197		-	of automatic enrollment. 5
198		-
199		-	(c) (1) The Board shall make findings and recommendations regarding: 6
200		-
201		-	(i) the feasibility of requiring automatic enrollment of eligible 7
202		-	employees in the Plan; 8
203		-
204		-	(ii) default contribution rates and investment opti ons for 9
205		-	automatically enrolled eligible employees; 10
206		-
207		-	(iii) necessary disclosures and education information for eligible 11
208		-	employees; and 12
209		-
210		-	(iv) statutory changes needed to implement automatic enrollment of 13
211		-	eligible employees into the Plan. 14
212		-
213		-	(2) On or before November 1, 2023, the Board shall report its findings and 15
214		-	recommendations to the Joint Committee on Pensions in accordance with § 2–1257 of the 16
215		-	State Government Article. 17
216		-
217		-	SECTION 3. 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 18
218		-	October 1, 2023. 19
	48	+	35–101. 25 2 SENATE BILL 6
219	49
220	50
221	51
	52	+	(a) In this title the following words have the meanings indicated. 1
222	53
223		-	Approved:
224		-	________________________________________________________________________________
225		-	Governor.
226		-	________________________________________________________________________________
227		-	President of the Senate.
228		-	________________________________________________________________________________
229		-	Speaker of the House of Delegates.
	54	+	(B) “AUTOMATIC ENROLLMENT ARRANGEMENT ” MEANS A SUPPLEMENTAL 2
	55	+	PLAN PROVISION THAT REQUIRES AN ELIGIBLE EMPLOYER TO DEDUCT ELECTIVE 3
	56	+	DEFERRALS FROM AN EM PLOYEE’S WAGES FOR CONTRIBU TION TO A 4
	57	+	SUPPLEMENTAL RETIREM ENT PLAN UNLESS THE EMPLOYEE MAKES AN ELECTION 5
	58	+	NOT TO CONTRIBUTE OR TO CONTRIBUTE A DIFF ERENT AMOUNT . 6
	59	+
	60	+	[(b)] (C) “Board” means the State Board of Trustees of the Maryland Teachers 7
	61	+	and State Employees Supplemental Retirement Plans. 8
	62	+
	63	+	(D) “ELIGIBLE EMPLOYER ” MEANS THE EMPLOYER O F AN INDIVIDUAL 9
	64	+	ELIGIBLE TO PARTICIP ATE IN A SUPPLEMENTAL RETIREM ENT PLAN. 10
	65	+
	66	+	[(c)] (E) “Supplemental retirement plans” means the deferred compensation, 11
	67	+	tax sheltered annuity, salary reduction savings plans, and any other plans authorized by 12
	68	+	this title. 13
	69	+
	70	+	35–206. 14
	71	+
	72	+	(A) THE BOARD SHALL IMPLEMENT AN AUTOMATIC ENROLLM ENT 15
	73	+	ARRANGEMENT TO AUTOM ATICALLY ENROLL ALL STATE EMPLOYEES HIRED ON OR 16
	74	+	AFTER JANUARY 1, 2024, IN A SUPPLEMENTAL RE TIREMENT PLAN . 17
	75	+
	76	+	(B) (1) NOTWITHSTANDING ANY O THER PROVISION OF LA W, AN ELIGIBLE 18
	77	+	EMPLOYER SHALL DEDUCT AN AMOUNT FROM THE WAGES OF AN EMPLOYEE FOR 19
	78	+	CONTRIBUTION TO A SU PPLEMENTAL RETIREMEN T PLAN AS PART OF AN 20
	79	+	AUTOMATIC ENROLLMENT ARRANGEMENT , UNLESS THE EMPLOYEE HAS ELECTED 21
	80	+	TO WITHDRAW FROM THE SUPPLE MENTAL RETIREMENT PL AN OR CEASE MAKING 22
	81	+	CONTRIBUTIONS TO THE SUPPLEMENTAL RETIREM ENT PLAN. 23
	82	+
	83	+	(2) THE AMOUNT DEDUCTED F ROM THE WAGES OF AN EMPLOYEE 24
	84	+	EACH PAY PERIOD SHALL BE THE MINIMUM AMOUNT SET BY THE BOARD, UNLESS 25
	85	+	THE EMPLOYEE ELECTS TO: 26
	86	+
	87	+	(I) HAVE A DIFFERENT AMOUNT D EDUCTED; 27
	88	+
	89	+	(II) CEASE MAKING CONTRIB UTIONS TO THE SUPPLE MENTAL 28
	90	+	RETIREMENT PLAN ; OR 29
	91	+
	92	+	(III) WITHDRAW FROM THE SU PPLEMENTAL RETIREMEN T PLAN. 30
	93	+
	94	+	(C) AN EMPLOYEE ENROLLED IN A SUPPLEMENTAL RE TIREMENT PLAN 31 SENATE BILL 6 3
	95	+
	96	+
	97	+	UNDER AN AUTOM ATIC ENROLLMENT ARRA NGEMENT SHALL BE : 1
	98	+
	99	+	(1) PROVIDED A NOTICE WI TH AN EXPLANATION OF : 2
	100	+
	101	+	(I) THE TERMS OF THE EMP LOYEE’S ENROLLMENT IN THE 3
	102	+	SUPPLEMENTAL RETIREM ENT PLAN, INCLUDING THE CURREN T CONTRIBUTION 4
	103	+	AMOUNT PROVIDED FOR UNDER THE AUTOMATIC ENROLLMENT ARRANGEMENT ; 5
	104	+
	105	+	(II) THE EMPLOYEE’S RIGHT TO INCREASE , DECREASE, OR 6
	106	+	CEASE CONTRIBUTIONS TO THE SUPPLEMENTAL RETIREMENT PLAN ; 7
	107	+
	108	+	(III) THE EMPLOYEE ’S RIGHT TO DISCONTIN UE PARTICIPATION 8
	109	+	IN THE SUPPLEMENTAL RETIREMENT PLAN WITH IN 90 DAYS AFTER THE START OF 9
	110	+	EMPLOYMENT ; 10
	111	+
	112	+	(IV) THE EMPLOYEE ’S RIGHT TO RECEIVE A REFUND OF THEIR 11
	113	+	ACCOUNT CONTRIBUTIONS AS SOON AS PRACTICAB LE AFTER DISCONTINUI NG 12
	114	+	PARTICIPATION WITHIN 90 DAYS AFTER THE START OF E MPLOYMENT ; AND 13
	115	+
	116	+	(V) THE EMPLOYEE ’S RIGHTS REGARDING T HE INVESTMENT OF 14
	117	+	THE EMPLOYEE ’S ACCOUNT AND THE INVESTMENT O PTIONS AVAILABLE UND ER THE 15
	118	+	SUPPLEMENTAL RETIREM ENT PLAN; AND 16
	119	+
	120	+	(2) TREATED AS EXERCISIN G CONTROL OF THE ASS ETS IN THE 17
	121	+	SUPPLEMENTAL RETIREM ENT PLAN ACCOUNT REG ARDING THE AMOUNT OF 18
	122	+	CONTRIBUTIONS AND EA RNINGS. 19
	123	+
	124	+	(D) IF A PARTICIPANT IS ENROLLED IN A SUPPLE MENTAL RETIREMENT 20
	125	+	PLAN UNDER AN AUTOMA TIC ENROLLMENT ARRAN GEMENT, THE BOARD SHALL 21
	126	+	INVEST THE PARTICIPANT ’S CONTRIBUTIONS IN A D ESIGNATED DEFAULT 22
	127	+	INVESTMENT OPTION IN ACCORDANCE WITH EACH APPLICABLE SUPPLEMEN TAL 23
	128	+	RETIREMENT PLAN . 24
	129	+
	130	+	(E) EACH UNIT THAT HIRES AN ELIGIBLE EMPLOYEE WHO IS NOT ALREADY 25
	131	+	ENROLLED IN A SUPPLE MENTAL RETIREMENT PL AN SHALL PROVIDE THE BOARD 26
	132	+	WITH THE INFORMATION NECE SSARY TO COMPLETE TH E ENROLLMENT OF THE 27
	133	+	EMPLOYEE UNDER THE AUTOMATIC ENROLL MENT ARRANGEMENT . 28
	134	+
	135	+	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply only to 29
	136	+	individuals eligible to participate in a supplemental retirement plan who commence 30
	137	+	employment or who are reinstated on or after January 1, 2024. 31
	138	+
	139	+	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 32
	140	+	October 1, 2023. 33