EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0006*
SENATE BILL 6
P6 3lr0695
(PRE–FILED) CF HB 296
By: Senator McCray
Requested: November 4, 2022
Introduced and read first time: January 11, 2023
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 11, 2023
CHAPTER ______
AN ACT concerning 1
Maryland Teachers and State Employees Supplemental Retirement Plans – 2
Automatic Enrollment – Study 3
FOR the purpose of requiring the State Board of Trustees of the Maryland Teachers and 4
State Employees Supplemental Retirement Plans to study options and develop 5
recommendations to implement an automatic enrollment arrangement for certain 6
State employees; requiring an eligible employer to deduct wages of an employee for 7
contribution to a supplemental retirement plan in accordance with an automatic 8
enrollment arrangement, unless the employee has elected to withdraw from or cease 9
to contribute to the supplemental retirement plan; and generally relating to the 10
automatic enrollment of State employees into supplemental retirement plans. 11
BY repealing and reenacting, with amendments, 12
Article – State Personnel and Pensions 13
Section 35–101 14
Annotated Code of Maryland 15
(2015 Replacement Volume and 2022 Supplement) 16
BY adding to 17
Article – State Personnel and Pensions 18
Section 35–206 19
Annotated Code of Maryland 20
(2015 Replacement Volume and 2022 Supplement) 21
2 SENATE BILL 6
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 1
That the Laws of Maryland read as follows: 2
Article – State Personnel and Pensions 3
35–101. 4
(a) In this title the following words have the meanings indicated. 5
(B) “AUTOMATIC ENROLLMENT ARRANGEMENT ” MEANS A SUPPLEMENTAL 6
PLAN PROVISION THAT REQUIRES AN ELIGIBLE E MPLOYER TO DEDUCT EL ECTIVE 7
DEFERRALS FROM AN EM PLOYEE’S WAGES FOR CONTRIBU TION TO A 8
SUPPLEMENTAL RETIREM ENT PLAN UNLESS THE EMPLOYEE MAKES AN EL ECTION 9
NOT TO CONTRIBUTE OR TO CONTRIBUTE A DIFF ERENT AMOUNT . 10
[(b)] (C) “Board” means the State Board of Trustees of the Maryland Teachers 11
and State Employees Supplemental Retirement Plans. 12
(D) “ELIGIBLE EMPLOYER ” MEANS THE EMPLOYER O F AN INDIVIDUAL 13
ELIGIBLE TO PARTICIP ATE IN A SUPPLEMENTA L RETIREMENT PLAN . 14
[(c)] (E) “Supplemental retirement plans” means the deferred compensation, 15
tax sheltered annuity, salary reduction savings plans, and any other plans authorized by 16
this title. 17
35–206. 18
(A) THE BOARD SHALL IMPLEMENT AN AUTOMATIC ENROLLM ENT 19
ARRANGEMENT TO AUTOM ATICALLY ENROLL ALL STATE EMPLOYEES HIRED ON OR 20
AFTER JANUARY 1, 2024, IN A SUPPLEMENTAL RE TIREMENT PLAN . 21
(B) (1) NOTWITHSTANDING ANY O THER PROVISION OF LA W, AN ELIGIBLE 22
EMPLOYER SHALL DEDUC T AN AMOUNT FROM THE WAGES OF AN EMPLOYEE FOR 23
CONTRIBUTION TO A SU PPLEMENTAL RETIREMEN T PLAN AS PART OF AN 24
AUTOMATIC ENROLLMENT ARRANGEMENT , UNLESS THE EMPLOYEE HAS ELECTED 25
TO WITHDRAW FROM THE SUPPLEMENTAL RETIREM ENT PLAN OR CEASE MA KING 26
CONTRIBUTIONS TO THE SUPPLEMENTAL RETIREM ENT PLAN. 27
(2) THE AMOUNT DEDUCTED F ROM THE WAGES OF AN EMPLOYEE 28
EACH PAY PERIOD SHALL BE THE MINIMUM AMOUN T SET BY THE BOARD, UNLESS 29
THE EMPLOYEE ELECTS TO: 30
(I) HAVE A DIFFERENT AMO UNT DEDUCTED ; 31
SENATE BILL 6 3
(II) CEASE MAKING CONTRIB UTIONS TO THE SUPPLE MENTAL 1
RETIREMENT PLAN ; OR 2
(III) WITHDRAW FROM THE SU PPLEMENTAL RETIREMENT PLAN . 3
(C) AN EMPLOYEE ENROLLED IN A SUPPLEMENTAL RE TIREMENT PLAN 4
UNDER AN AUTOMATIC E NROLLMENT ARRANGEMEN T SHALL BE: 5
(1) PROVIDED A NOTICE WI TH AN EXPLANATION OF : 6
(I) THE TERMS OF THE EMP LOYEE’S ENROLLMENT IN THE 7
SUPPLEMENTAL RETIREM ENT PLAN, INCLUDING THE CURREN T CONTRIBUTION 8
AMOUNT PROVIDED FOR UNDER THE AUTOMATIC ENROLLMENT ARRANGEME NT; 9
(II) THE EMPLOYEE ’S RIGHT TO INCREASE , DECREASE, OR 10
CEASE CONTRIBUTIONS TO THE SUPPLEMENTAL RETIREMENT PLAN ; 11
(III) THE EMPLOYEE ’S RIGHT TO DIS CONTINUE PARTICIPATI ON 12
IN THE SUPPLEMENTAL RETIREMENT PLAN WITH IN 90 DAYS AFTER THE START OF 13
EMPLOYMENT ; 14
(IV) THE EMPLOYEE ’S RIGHT TO RECEIVE A REFUND OF THEIR 15
ACCOUNT CONTRIBUTION S AS SOON AS PRACTIC ABLE AFTER DISCONTIN UING 16
PARTICIPATION WITHIN 90 DAYS AFTER THE START OF EMPLOYMENT ; AND 17
(V) THE EMPLOYEE ’S RIGHTS REGARDING T HE INVESTMENT OF 18
THE EMPLOYEE ’S ACCOUNT AND THE IN VESTMENT OPTIONS AVA ILABLE UNDER THE 19
SUPPLEMENTAL RETIREM ENT PLAN; AND 20
(2) TREATED AS EXERCISIN G CONTROL OF THE ASS ETS IN THE 21
SUPPLEMENTAL RETIREM ENT PLAN ACCOUNT REG ARDING THE AMOUNT OF 22
CONTRIBUTIONS AND EA RNINGS. 23
(D) IF A PARTICIPANT IS E NROLLED IN A SUPPLEM ENTAL RETIREMENT 24
PLAN UNDER AN AUTOMA TIC ENROLLMENT ARRAN GEMENT, THE BOARD SHALL 25
INVEST THE PARTICIPA NT’S CONTRIBUTIONS IN A DESIGNATED DEFA ULT 26
INVESTMENT OPTION IN ACCORDANCE WITH EACH APPLICABLE SUPPLEMEN TAL 27
RETIREMENT PLAN . 28
(E) EACH UNIT THAT HIRES AN ELIGIBLE EMPLOYEE WHO IS NOT ALREADY 29
ENROLLED IN A SUPPLE MENTAL RETIREMENT PL AN SHALL PROVIDE THE BOARD 30
WITH THE INFOR MATION NECESSARY TO COMPLETE THE ENROLLM ENT OF THE 31
EMPLOYEE UNDER THE A UTOMATIC ENROLLMENT ARRANGEMENT . 32
4 SENATE BILL 6
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply only to 1
individuals eligible to participate in a supplemental retirement plan who commence 2
employment or who are reinstated on or after January 1, 2024. 3
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
That: 5
(a) (1) In this section the following words have the meanings indicated. 6
(2) “Board” means the State Board of Trustees of the Maryland Teachers 7
and State Employees Supplemental Retirement Plans. 8
(3) “Eligible employee” means an individual eligible to participate in the 9
Maryland Teachers and State Employees Supplemental Retirement Plans. 10
(4) “Eligible employer” means the employer of an individual eligible to 11
participate in the Maryland Teachers and State Employees Supplemental Retirement 12
Plans. 13
(5) “Plan” means the Maryland Teachers and State Employees 14
Supplemental Retirement Plans. 15
(b) (1) The Board shall study options for establishing an automatic enrollment 16
process for eligible employees into the Plan. 17
(2) In conducting the study under paragraph (1) of this subsection, the 18
Board shall: 19
(i) review the implementation of au tomatic enrollment into 20
supplemental retirement savings plans in other states for public employees who are also 21
enrolled in a defined benefit retirement plan; 22
(ii) consult with the Department of Budget and Management and 23
eligible employers regarding options to provide: 24
1. tutorials and education sessions for benefit coordinators 25
and eligible employees; and 26
2. necessary disclosures to eligible employees regarding 27
automatic enrollment in the Plan; 28
(iii) review options for default Plan investment options under 29
automatic enrollment of eligible employees; 30
(iv) examine the impact of automatic enrollment on Plan 31
administrative and investment management fees for Plan enrollees; 32
SENATE BILL 6 5
(v) review best practices for providing information, tutorials, and 1
education sessions to eligible employees regarding automatic enrollment in the Plan; and 2
(vi) consult with any exclusive bargaining representatives of eligible 3
employees regarding the process for determining default contribution amounts at the time 4
of automatic enrollment. 5
(c) (1) The Board shall make findings and recommendations regarding: 6
(i) the feasibility of requiring automatic enrollment of eligible 7
employees in the Plan; 8
(ii) default contribution rates and investment opti ons for 9
automatically enrolled eligible employees; 10
(iii) necessary disclosures and education information for eligible 11
employees; and 12
(iv) statutory changes needed to implement automatic enrollment of 13
eligible employees into the Plan. 14
(2) On or before November 1, 2023, the Board shall report its findings and 15
recommendations to the Joint Committee on Pensions in accordance with § 2–1257 of the 16
State Government Article. 17
SECTION 3. 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 18
October 1, 2023. 19
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.