North Carolina 2025-2026 Regular Session

North Carolina House Bill H79 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		GENERAL ASSEMBLY OF NORTH CAROLINA
2	2		SESSION 2025
3		-	H 1
4		-	HOUSE BILL 79
	3	+	H D
	4	+	HOUSE BILL DRH40064-MCa-6A
	5	+
5	6
6	7
7	8		Short Title: North Carolina Work and Save. (Public)
8		-	Sponsors: Representatives Lowery, McNeely, and Warren (Primary Sponsors).
9		-	For a complete list of sponsors, refer to the North Carolina General Assembly web site.
10		-	Referred to: Appropriations, if favorable, Rules, Calendar, and Operations of the House
11		-	February 11, 2025
12		-	H79-v-1
	9	+	Sponsors: Representative Lowery.
	10	+	Referred to:
	11	+
	12	+	DRH40064 -MCa-6A
13	13		A BILL TO BE ENTITLED 1
14	14		AN ACT TO CREATE THE SMALL BUSINESS RETIREMENT SAVINGS PROGRAM AND 2
15	15		TO APPROPRIATE FUNDS. 3
16	16		Whereas, the General Assembly finds that too many North Carolina citizens have no 4
17	17		or inadequate savings for retirement, and an estimated 1.7 million North Carolina working 5
18	18		families, including employees, independent contractors, and the self-employed, have no access 6
19	19		to an employer-sponsored retirement plan or program or any other easy way to save at work; and 7
20	20		Whereas, it is the policy of the State to assist the North Carolina private-sector 8
21	21		workforce, including in particular moderate- and lower-income working households, to 9
22	22		voluntarily save for retirement, including by facilitating saving in individual retirement accounts 10
23	23		(IRAs) as well as by encouraging employers to adopt retirement savings and other retirement 11
24	24		plans for employees in the State; and 12
25	25		Whereas, more adequate, portable, low-cost, and consumer-protective retirement 13
26	26		saving by North Carolina households will enhance their retirement security and ultimately reduce 14
27	27		the pressure on State public assistance programs for retirees and other elderly citizens and the 15
28	28		potential burden on North Carolina taxpayers to finance such programs; and 16
29	29		Whereas, the General Assembly intends to establish a North Carolina Work and Save 17
30	30		Program that will use the services of competent and qualified private-sector entities selected by 18
31	31		the North Carolina Small Business Retirement Savings Program Board to administer the Program 19
32	32		and manage the funds on behalf of the Program participants; and 20
33	33		Whereas, the North Carolina Department of State Treasurer manages the State's 21
34	34		finances, including pensions, healthcare, investments, and unclaimed property; Now, therefore, 22
35	35		The General Assembly of North Carolina enacts: 23
36	36		SECTION 1. Article 10 of Chapter 143B of the General Statutes is amended by 24
37	37		adding a new Part to read: 25
38	38		"Part 2K. North Carolina Small Business Retirement Savings Program. 26
39	39		"§ 143B-437.120. Title. 27
40	40		This Part shall be known as the "North Carolina Small Business Retirement Savings 28
41	41		Program" or "North Carolina Work and Save." 29
42	42		"§ 143B-437.121. Definitions. 30
43	43		The following definitions apply in this Part: 31
44	44		(1) Administrative Fund. – The North Carolina Small Business Retirement 32
45	45		Savings Administrative Fund established in G.S. 143B-437.130. 33
46	46		(2) Board. – The North Carolina Small Business Retirement Savings Program 34
47		-	Board. 35 General Assembly Of North Carolina Session 2025
48		-	Page 2 House Bill 79-First Edition
	47	+	Board. 35
	48	+	H.B. 79
	49	+	Feb 10, 2025
	50	+	HOUSE PRINCIPAL CLERK General Assembly Of North Carolina Session 2025
	51	+	Page 2 DRH40064-MCa-6A
49	52		(3) Covered employee. – An individual who is employed by a covered employer, 1
50	53		who has wages or other compensation that is allocable to the State, and who 2
51	54		is at least 18 years of age. A covered employee does not include any of the 3
52	55		following: 4
53	56		a. Any employee covered under the federal Railway Labor Act (45 5
54	57		U.S.C. § 151). 6
55	58		b. Any employee on whose behalf an employer makes contributions to a 7
56	59		Taft-Hartley multiemployer pension trust fund. 8
57	60		c. Any individual who is an employee of the federal government, the 9
58	61		State or any other state, any county or municipal corporation, or any 10
59	62		of the State's, any other state's, or the federal government's units or 11
60	63		instrumentalities. 12
61	64		(4) Covered employer. – A person or entity engaged in a business, industry, 13
62	65		profession, trade, or other enterprise in the State, whether for profit or not for 14
63	66		profit, excluding the federal government, the State, any county, any 15
64	67		municipality, or any political subdivision of the State, and provided that 16
65	68		covered employer does not include an employer that maintains a specified 17
66	69		tax-favored retirement plan for its employees or has done so effective in form 18
67	70		and operation at any time within the current or two preceding calendar years. 19
68	71		If an employer does not maintain a specified tax-favored retirement plan for a 20
69	72		portion of a calendar year ending on or after the effective date of this Article 21
70	73		and adopts such a plan effective for the remainder of that calendar year, the 22
71	74		employer is exempt from covered employer status for that remainder of the 23
72	75		year. 24
73	76		(4a) Department. – The North Carolina Department of Commerce. 25
74	77		(5) ERISA. – The Employee Retirement Income Security Act of 1974, as 26
75	78		amended (29 U.S.C. § 1001 et seq.). 27
76	79		(6) Internal Revenue Code. – The Internal Revenue Code of 1986, as amended 28
77	80		(Title 26 of the United States Code). 29
78	81		(7) IRA. – A traditional or Roth individual retirement account or individual 30
79	82		retirement annuity. 31
80	83		(8) Participant. – An individual who is contributing to an IRA under the Program 32
81	84		or has an IRA account balance under the Program. 33
82	85		(9) Participating employer. – A covered employer that provides for covered 34
83	86		employees a payroll deduction IRA provided for by this Article. 35
84	87		(10) Payroll deduction IRA arrangement or payroll deduction IRA. – An 36
85	88		arrangement by which an employer allows employees to contribute to an IRA 37
86	89		by means of payroll deduction. 38
87	90		(11) Program or North Carolina Work and Save Program. – The Small Business 39
88	91		Retirement Savings Program established by this Article. 40
89	92		(12) Roth IRA. – A Roth individual retirement account or individual retirement 41
90	93		annuity under section 408A of the Internal Revenue Code. 42
91	94		(13) Specified tax-favored retirement plan. – A retirement plan that is tax-qualified 43
92	95		under or is described in and satisfies the requirements of subsection 401(a), 44
93	96		401(k), 403(a), 403(b), 408(k) (Simplified Employee Pension), or 408(p) 45
94	97		(SIMPLE-IRA) of the Internal Revenue Code. 46
95	98		(14) Total fees and expenses. – All fees, costs, and expenses, including, but not 47
96	99		limited to, administrative expenses, investment expenses, investment advice 48
97	100		expenses, accounting costs, actuarial costs, legal costs, marketing expenses, 49
98	101		education expenses, trading costs, insurance annuitization costs, and other 50
99	102		miscellaneous costs. 51 General Assembly Of North Carolina Session 2025
100		-	~~House Bill 79-First Edition~~ Page 3
	103	+	DRH40064-MCa-6A Page 3
101	104		(15) Traditional IRA. – A traditional individual retirement account or traditional 1
102	105		individual retirement annuity under subsection 408(a) or (b) of the Internal 2
103	106		Revenue Code. 3
104	107		(16) Trust. – The trust in which the assets of the Program are held. Where 4
105	108		applicable, except as may be otherwise specified, references throughout this 5
106	109		Article to the Program generally are intended to refer also to the Trust, 6
107	110		including the assets, facilities, costs and expenses, receipts, expenditures, 7
108	111		activities, operations, administration, or management. 8
109	112		"§ 143B-437.122. Establishment of Board. 9
110	113		(a) The North Carolina Small Business Retirement Savings Board is established for 10
111	114		administrative purposes in the Department of Commerce, but the Board shall exercise its powers 11
112	115		and duties independently of the Department. The Department shall provide administrative 12
113	116		support for the Board in carrying out its duties pursuant to this Article. 13
114	117		(b) The Board shall consist of 12 members. 14
115	118		(1) Ten voting members shall be appointed as follows: 15
116	119		a. The State Treasurer shall appoint a member who has a favorable 16
117	120		reputation for skill, knowledge, and experience in retirement 17
118	121		investment products or retirement plan designs. 18
119	122		b. Five members appointed by the Governor as follows: 19
120	123		1. One member who has a favorable reputation for skill, 20
121	124		knowledge, and experience in retirement investment products 21
122	125		or retirement plan designs. 22
123	126		2. One member who has a favorable reputation for skill, 23
124	127		knowledge, and experience relating to small business or 24
125	128		covered employers. 25
126	129		3. One member from the Office of State Budget and Management 26
127	130		or other designee knowledgeable about fiscal impacts. 27
128	131		4. One member who is an employee of the Department of 28
129	132		Commerce. 29
130	133		5. One member of the public. 30
131	134		c. Two members appointed by the General Assembly upon the 31
132	135		recommendation of the Speaker of the House of Representatives as 32
133	136		follows: 33
134	137		1. One member who is a retired individual or an individual who 34
135	138		represents persons retired to be a representative of the interests 35
136	139		of retirees. 36
137	140		2. One member who has a favorable reputation for skill, 37
138	141		knowledge, and experience in the interests of employers in 38
139	142		retirement saving. 39
140	143		d. Two members appointed by the General Assembly upon the 40
141	144		recommendation of the President Pro Tempore of the Senate as 41
142	145		follows: 42
143	146		1. One member who is a representative of an association 43
144	147		representing employees or who has a favorable reputation for 44
145	148		skill, knowledge, and experience in the interests of employees 45
146	149		in retirement saving. 46
147	150		2. One member who has a favorable reputation for skill, 47
148	151		knowledge, and experience in retirement investment products 48
149	152		or retirement plan designs. 49 General Assembly Of North Carolina Session 2025
150		-	Page 4 ~~House Bill 79-First Edition~~
	153	+	Page 4 DRH40064-MCa-6A
151	154		(2) In addition to the 10 voting members, the President Pro Tempore of the Senate 1
152	155		and the Speaker of the House of Representatives shall each appoint one 2
153	156		nonvoting advisory member. 3
154	157		(c) All initial appointments shall be made no later than October 1, 2025. Of the initial 4
155	158		five appointments made by the Governor, two shall be appointed for four-year terms, two shall 5
156	159		be appointed for two-year terms, and one shall be appointed for a one-year term, with all terms 6
157	160		to begin on October 1, 2025. Of the initial two appointments made by the General Assembly 7
158	161		upon the recommendation of the President Pro Tempore of the Senate, one shall be appointed for 8
159	162		a four-year term and one shall be appointed for a two-year term, with both terms to begin on 9
160	163		October 1, 2025. Of the initial two appointments made by the General Assembly upon the 10
161	164		recommendation of the Speaker of the House of Representatives, one shall be appointed for a 11
162	165		four-year term and one shall be appointed for a two-year term, with both terms to begin on 12
163	166		October 1, 2025. The initial appointment by the State Treasurer shall be for a term of three years 13
164	167		to begin on October 1, 2025. All successors shall be appointed for four-year terms. All members 14
165	168		of the Board shall serve at the pleasure of the appointing authority. 15
166	169		(d) Members of the Board shall serve without compensation and shall receive per diem, 16
167	170		subsistence, and travel allowances as provided in G.S. 138-5 and G.S. 138-6 as applicable. 17
168	171		(e) The Governor shall convene the first meeting of the Board no later than October 15, 18
169	172		2025. A majority of the voting members of the Board constitutes a quorum. The first order of 19
170	173		business before the Board shall be to elect a chair from among the Board's membership. A 20
171	174		vacancy in the membership of the Board shall not impair the right of a quorum to exercise the 21
172	175		powers and duties of the Board. 22
173	176		"§ 143B-437.123. Powers and duties of the Board. 23
174	177		(a) The Board shall have the following powers and duties, subject to its authority and 24
175	178		fiduciary duty: 25
176	179		(1) Design, develop, implement, maintain, govern, and promulgate rules with 26
177	180		respect to a payroll deduction retirement savings program for covered 27
178	181		employers and, to that end, may conduct market, legal, and feasibility 28
179	182		analyses. 29
180	183		(2) Elect a chair and other officers it deems necessary. 30
181	184		(3) Meet as necessary to perform its duties. 31
182	185		(4) Appoint an executive director, who shall be the chief administrative officer of 32
183	186		the Board. 33
184	187		(5) Retain trustees, record keepers, investment managers, investment advisors, 34
185	188		and other administrative, professional, expert advisors and service providers, 35
186	189		none of whom shall be members of the Board and all of whom shall serve at 36
187	190		the pleasure of the Board, and determine their duties and compensation. The 37
188	191		Board may authorize the executive director and other officials to oversee 38
189	192		requests for proposals or other public competitions and enter into contracts on 39
190	193		behalf of the Board and conduct any business necessary for the efficient 40
191	194		operation of the Board. 41
192	195		(6) Cause the Program, Trust, and arrangements and accounts established under 42
193	196		the Program to be designed, established, and operated: 43
194	197		a. In accordance with best practices for retirement saving vehicles. 44
195	198		b. To encourage participation, saving, sound investment practices, and 45
196	199		appropriate selection of investment options, including any default 46
197	200		investments. 47
198	201		c. To maximize simplicity and ease of administration for covered 48
199	202		employers. 49
200	203		d. To arrange for collective, common, and pooled investment of assets of 50
201	204		the Program and Trust, including investments in conjunction with 51 General Assembly Of North Carolina Session 2025
202		-	~~House Bill 79-First Edition~~ Page 5
	205	+	DRH40064-MCa-6A Page 5
203	206		other funds with which these assets are permitted by law to be 1
204	207		collectively invested, with a view to achieving economies of scale and 2
205	208		other efficiencies designed to minimize costs for the Program and its 3
206	209		participants, to promote portability of benefits. 4
207	210		e. To avoid preemption of the Program by federal law (Employee 5
208	211		Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.). 6
209	212		(7) Develop and implement an investment policy that defines the Program's 7
210	213		investment objectives, consistent with the objectives of the Program, and that 8
211	214		provides for policies and procedures consistent with those investment 9
212	215		objectives. The Board shall designate appropriate default investments that 10
213	216		include a mix of asset classes, such as target date and balanced funds. The 11
214	217		Board shall seek to minimize participant fees and expenses of investment and 12
215	218		administration. The Board shall strive to design and implement investment 13
216	219		options available to holders of accounts established as part of the Program and 14
217	220		other Program features that are intended to achieve maximum possible income 15
218	221		replacement balanced with an appropriate level of risk in an IRA-based 16
219	222		environment consistent with the investment objectives under the policy. The 17
220	223		investment options may encompass a range of risk and return opportunities 18
221	224		and allow for a rate of return commensurate with an appropriate level of risk 19
222	225		in view of the investment objectives under the policy. The menu of investment 20
223	226		options shall be determined taking into account the nature and objectives of 21
224	227		the Program, the desirability based on behavioral research findings of limiting 22
225	228		investment choices under the Program to a reasonable number, and the 23
226	229		extensive investment choices available to participants in the event that they 24
227	230		roll over to an IRA outside the Program. 25
228	231		(8) Set and collect necessary fees from covered employees for application, 26
229	232		account, or administrative processing and accept any grants, gifts, legislative 27
230	233		appropriations, loans, and other moneys from the State, any unit of federal, 28
231	234		State, or local government, or any other person, firm, or entity to defray the 29
232	235		costs of administering and operating the Program. 30
233	236		(9) If necessary, determine the eligibility of an employer, employee, or other 31
234	237		individual to participate in the Program. 32
235	238		(10) Adopt rules it deems necessary or advisable for the implementation of this 33
236	239		Article and the administration and operation of the Program. 34
237	240		(11) Cause expenses incurred to initiate, implement, maintain, and administer the 35
238	241		Program to be paid from contributions to, or investment returns or assets of, 36
239	242		the Program or other money collected by or for the Program or pursuant to 37
240	243		arrangements established under the Program to the extent permitted under 38
241	244		federal and State law. 39
242	245		(12) Invest and reinvest its funds in the Administrative Fund in accordance with 40
243	246		applicable State and federal laws. 41
244	247		(13) Make and enter into competitively procured contracts, agreements, 42
245	248		memoranda of understanding, partnerships, or other arrangements, to 43
246	249		collaborate and cooperate with, and to retain, employ, and contract with or for 44
247	250		any of the following to the extent necessary or desirable, for the effective and 45
248	251		efficient design, implementation, and administration of the Program 46
249	252		consistent with the purposes set forth in this Article and to maximize outreach 47
250	253		to covered employers and covered employees: 48
251	254		a. Services of private and public financial institutions, depositories, 49
252	255		consultants, actuaries, counsel, auditors, investment advisers, 50
253	256		investment administrators, investment management firms, other 51 General Assembly Of North Carolina Session 2025
254		-	Page 6 ~~House Bill 79-First Edition~~
	257	+	Page 6 DRH40064-MCa-6A
255	258		investment firms, third-party administrators, other professionals and 1
256	259		service providers, and State public retirement systems. 2
257	260		b. Research, technical, financial, administrative, and other services. 3
258	261		c. Services of other State agencies to assist the Board in the exercise of 4
259	262		its powers and duties. 5
260	263		(14) The Board may enter into an intergovernmental agreement or memorandum 6
261	264		of understanding with the State and any agency of the State to receive 7
262	265		outreach, technical assistance, enforcement and compliance services, 8
263	266		collection or dissemination of information pertinent to the Program subject to 9
264	267		such obligations of confidentiality as may be agreed to or required by law, or 10
265	268		other services or assistance. The State and any agencies of the State that enter 11
266	269		into such agreements or memoranda of understanding shall collaborate to 12
267	270		provide the outreach, assistance, information, and compliance or other 13
268	271		services or assistance to the Board. The memoranda of understanding may 14
269	272		cover the sharing of costs incurred in gathering and disseminating information 15
270	273		and the reimbursement of costs for any enforcement activities or assistance. 16
271	274		(15) Make and enter into contracts, agreements, memoranda of understanding, 17
272	275		arrangements, partnerships, or other arrangements to collaborate, cooperate, 18
273	276		coordinate, contract, or combine resources, investments, or administrative 19
274	277		functions with other governmental entities, including other states or their 20
275	278		agencies or instrumentalities that maintain or are establishing retirement 21
276	279		savings programs compatible with the Program, including collective, 22
277	280		common, or pooled investments with other funds of other states' programs 23
278	281		with which the assets of the Program and Trust are permitted by law to be 24
279	282		collectively invested, to the extent necessary or desirable for the effective and 25
280	283		efficient design, administration, and implementation of the Program 26
281	284		consistent with the purposes set forth in this Article, including the purpose of 27
282	285		achieving economies of scale and other efficiencies designed to minimize 28
283	286		costs for the Program. 29
284	287		(16) Develop and implement an education and outreach plan to gain input and 30
285	288		disseminate information regarding the North Carolina Work and Save 31
286	289		Program and retirement savings and financial literacy in general. 32
287	290		(17) Establish procedures for the timely and fair resolution of participant and other 33
288	291		disputes related to accounts or Program operation. 34
289	292		(18) Evaluate the need for, and procure if and as deemed necessary, pooled private 35
290	293		insurance against any and all loss in connection with the property, assets, or 36
291	294		activities of the Program. 37
292	295		(19) Borrow from the State, any unit of federal, State, or local government, or any 38
293	296		other person, firm, partnership, corporation, or other entity working capital 39
294	297		funds and other funds as may be necessary for this purpose, provided that such 40
295	298		funds are borrowed in the name of the Program and Board only and that any 41
296	299		such borrowings shall be payable solely from the revenues of the Program. 42
297	300		(20) Enter into long-term procurement contracts with one or more financial 43
298	301		providers that provide a fee structure that would assist the Program in avoiding 44
299	302		or minimizing the need to borrow or to rely upon general assets of the State. 45
300	303		(b) In addition to the applicable prohibitions contained in Article 4 of Chapter 138A of 46
301	304		the General Statutes, a Board member, executive director, and other staff of the Board shall not 47
302	305		do any of the following: 48
303	306		(1) Directly or indirectly have any interest in the making of any investment under 49
304	307		the Program or in gains or profits accruing from any such investment. 50 General Assembly Of North Carolina Session 2025
305		-	~~House Bill 79-First Edition~~ Page 7
	308	+	DRH40064-MCa-6A Page 7
306	309		(2) Borrow any Program-related funds or deposits or use any such funds or 1
307	310		deposits in any manner, for himself or herself or as an agent or partner of 2
308	311		others. 3
309	312		(3) Become an endorser, surety, or obligor on investments made under the 4
310	313		Program. 5
311	314		"§ 143B-437.124. Standard of conduct; fiduciary duty. 6
312	315		The Board, individual members of the Board, all persons serving as staff to the Program, and 7
313	316		any other agents appointed or engaged shall discharge their duties for the exclusive purpose of 8
314	317		providing benefits to the Program participants and administering the Program with discharge of 9
315	318		its duties and shall: 10
316	319		(1) Defray reasonable expenses in the administration of the Program. 11
317	320		(2) Govern Program investors with the care, skill, prudence, and diligence as a 12
318	321		prudent person acting in a like capacity would. 13
319	322		(3) Comply with all State ethics laws and regulations. 14
320	323		"§ 143B-437.125. Requirements for the North Carolina Small Business Retirement Savings 15
321	324		Program. 16
322	325		The Program developed and established by the Board shall: 17
323	326		(1) Provide a process to facilitate voluntary enrollment into the Program for 18
324	327		covered employers, covered employees, and self-employed persons. 19
325	328		(2) Provide that the IRA to which contributions are made will be a Roth IRA, 20
326	329		except that the Board shall have the authority at any time to add an option for 21
327	330		all participants to affirmatively elect to contribute to a traditional IRA as an 22
328	331		alternative to the Roth IRA. 23
329	332		(3) Provide that the standard package shall be a Roth IRA with a target date fund 24
330	333		investment, and a contribution rate that begins at five percent (5%) of salary 25
331	334		or wages; provided, however, that the covered employee can choose to stop 26
332	335		participation altogether, to use a traditional IRA and a different investment 27
333	336		from among the options available, and to contribute at a higher or lower 28
334	337		contribution rate, subject to the IRA contribution dollar limits applicable 29
335	338		under the Internal Revenue Code. 30
336	339		(4) Provide on a uniform basis, if and when the Board so determines, in its 31
337	340		discretion, for annual increases of each participant's contribution rate, by not 32
338	341		more than one percent (1%) of salary or wages per year up to a maximum of 33
339	342		eight percent (8%). Any such increases shall apply to participants, as 34
340	343		determined by the Board, by default or only if initiated by affirmative 35
341	344		participant election included as part of the standard package, in either case 36
342	345		subject to the IRA contribution limits applicable under the Internal Revenue 37
343	346		Code. 38
344	347		(5) Allow a covered employer to withhold payroll deductions from a covered 39
345	348		employee's paycheck for the express purpose of making a covered employee 40
346	349		contribution to the Program funds. 41
347	350		(6) Include a process for direct deposit of contributions into covered employee 42
348	351		investments in the Program. 43
349	352		(7) Covered employers are not allowed to make employer contributions to the 44
350	353		covered employee's accounts. 45
351	354		(8) Allow for covered employees to make non-payroll contributions into an 46
352	355		account in addition to the covered employer payroll deducted amounts. 47
353	356		(9) Include an account reporting system that requires separate records and 48
354	357		accounting for each covered employer and covered employee enrolled. 49
355	358		(10) Include an account status notification process for covered employees to be 50
356	359		notified about and track their investments pursuant to this Article. 51 General Assembly Of North Carolina Session 2025
357		-	Page 8 ~~House Bill 79-First Edition~~
	360	+	Page 8 DRH40064-MCa-6A
358	361		(11) Allow portability of benefits, including the ability to make tax-free rollovers 1
359	362		or transfers from accounts under the Program to other non-Program retirement 2
360	363		accounts or to tax-qualified plans that accept such rollovers or transfers 3
361	364		provided any rollover is initiated by the employee. 4
362	365		(12) Establish rules and procedures governing the distribution of funds from the 5
363	366		Program, including such distributions as may be permitted or required by the 6
364	367		Program and any applicable provisions of tax laws, with the objectives of 7
365	368		maximizing financial security in retirement, helping to protect spousal rights, 8
366	369		and assisting participants with the challenges of decumulation of savings. The 9
367	370		Board shall have the authority, in its discretion, to provide for one or more 10
368	371		reasonably priced distribution options to provide a source of fixed retirement 11
369	372		income, including income for life or for the participant's life expectancy (or 12
370	373		for joint lives and life expectancies, as applicable). 13
371	374		(13) Pool accounts as necessary under the Program for optimum investment 14
372	375		opportunity and return on investment outcomes. 15
373	376		(14) Be professionally managed. 16
374	377		(15) Provide a report on the status of each Program participant's account to each 17
375	378		Program participant at least annually. 18
376	379		(16) Provide that each Program participant owns the contributions to and earnings 19
377	380		on amounts contributed to the participant's account under this Article and that 20
378	381		the State, the Board, and covered employers have no proprietary interest, 21
379	382		whether legal or equitable, in those contributions or earnings. 22
380	383		(17) Keep total fees and expenses as low as practicable. 23
381	384		(18) Be designed and implemented in a manner consistent with federal law, 24
382	385		including favorable federal tax treatment, to the extent that it applies and is 25
383	386		consistent with the Program not being preempted by ERISA. 26
384	387		(19) Ensure that the North Carolina Small Business Retirement Savings Program 27
385	388		is designed to be financially self-sustaining over time. 28
386	389		(20) Provide that, if a covered employer fails to transmit a payroll deduction 29
387	390		contribution to the Program on the earliest date the amount withheld from the 30
388	391		covered employee's compensation can reasonably be segregated from the 31
389	392		covered employer's assets, but not later than the fifteenth day of the month 32
390	393		following the month in which the covered employee's contribution amounts 33
391	394		are withheld from his or her paycheck, the failure to remit such contributions 34
392	395		on a timely basis shall be subject to the same sanctions as employer 35
393	396		misappropriation of employee wage withholdings and to penalties. 36
394	397		"§ 143B-437.126. Rules for the North Carolina Work and Save Program. 37
395	398		The Board shall adopt rules to implement the Program that: 38
396	399		(1) Establish the processes for enrollment and contributions to Payroll Deduction 39
397	400		IRAs under the Program, including elections by covered employees, 40
398	401		withholding by covered employers of employee payroll deduction 41
399	402		contributions from wages and remittance for deposit to IRAs, and voluntary 42
400	403		enrollment and contributions by others, including self-employed individuals 43
401	404		and independent contractors, through payroll deduction or otherwise. 44
402	405		(2) Establish the processes for withdrawals, rollovers, and direct transfers from 45
403	406		IRAs under the Program in the interest of facilitating portability and 46
404	407		maximization of benefits. 47
405	408		(3) Establish processes for phasing in enrollment of eligible individuals. 48
406	409		(4) Conduct outreach to individuals, employers, other stakeholders, and the public 49
407	410		regarding the Program. Specify the contents, frequency, timing, and means of 50
408	411		required disclosures from the Program to covered employees, participants, 51 General Assembly Of North Carolina Session 2025
409		-	~~House Bill 79-First Edition~~ Page 9
	412	+	DRH40064-MCa-6A Page 9
410	413		other individuals eligible to participate in the Program, covered employers, 1
411	414		and other interested parties. These disclosures shall include, but need not be 2
412	415		limited to: 3
413	416		a. The benefits associated with tax-favored retirement saving. 4
414	417		b. The potential advantages and disadvantages associated with 5
415	418		contributing to Roth IRAs and, if applicable, traditional IRAs under 6
416	419		the Program. 7
417	420		c. The eligibility rules for Roth IRAs and, if applicable, traditional IRAs. 8
418	421		d. That the individual and not the employer, the State, the Board, any 9
419	422		Board member or other State official, or the Program will be solely 10
420	423		responsible for determining whether and, if so, how much the 11
421	424		individual is eligible to contribute on a tax-favored basis to an IRA. 12
422	425		e. The penalty for excess contributions to IRAs and the method of 13
423	426		correcting excess contributions. 14
424	427		f. Instructions for enrolling, making elections to contribute or to decline 15
425	428		to contribute, and making elections regarding contribution rates, type 16
426	429		of IRA, and investments. 17
427	430		g. Instructions for implementing and for changing the elections. 18
428	431		h. The potential availability of a saver's tax credit, including the 19
429	432		eligibility conditions for the credit and instructions on how to claim it. 20
430	433		i. That employees seeking tax, investment, or other financial advice 21
431	434		should contact appropriate professional advisors, and that covered 22
432	435		employers are not in a position to provide such advice and are not 23
433	436		liable for decisions individuals make in relation to the Program. 24
434	437		j. That the payroll deduction IRAs are intended not to be 25
435	438		employer-sponsored retirement plans and that the Program is not an 26
436	439		employer-sponsored retirement plan. 27
437	440		k. The potential implications of account balances under the Program for 28
438	441		the application of asset limits under certain public assistance 29
439	442		programs. 30
440	443		l. That the account owner is solely responsible for investment 31
441	444		performance, including market gains and losses, and that IRA 32
442	445		accounts and rates of return are not guaranteed by any employer, the 33
443	446		State, the Board, any Board member or State official, or the Program. 34
444	447		m. Additional information about retirement and saving and other 35
445	448		information designed to promote financial literacy and capability 36
446	449		which may take the form of links to, or explanations of how to obtain, 37
447	450		such information. 38
448	451		n. How to obtain additional information about the Program. 39
449	452		"§ 143B-437.127. Protection from liability for covered employers. 40
450	453		(a) A covered employer or other employer is not and shall not be liable for or bear 41
451	454		responsibility for any of the following: 42
452	455		(1) An employee's decision to participate in or not to participate in the Program 43
453	456		or a participant's specific elections under the Program. 44
454	457		(2) Participants' or the Board's investment decisions. 45
455	458		(3) The administration, investment, investment returns, or investment 46
456	459		performance of the Program, including, without limitation, any interest rate or 47
457	460		other rate of return on any contribution or account balance, provided they play 48
458	461		no role. 49
459	462		(4) The Program design or the benefits paid to participants. 50 General Assembly Of North Carolina Session 2025
460		-	Page 10 ~~House Bill 79-First Edition~~
	463	+	Page 10 DRH40064-MCa-6A
461	464		(5) Individuals' awareness of or compliance with the conditions and other 1
462	465		provisions of the tax laws that determine which individuals are eligible to 2
463	466		make tax-favored contributions to IRAs, in what amount, and in what time 3
464	467		frame and manner. 4
465	468		(6) Any loss, failure to realize any gain, or any other adverse consequences, 5
466	469		including, without limitation, any adverse tax consequences or loss of 6
467	470		favorable tax treatment, public assistance, or other benefits, incurred by any 7
468	471		person as a result of participating in the Program. 8
469	472		(b) No covered employer or other employer shall be, or shall be considered to be, a 9
470	473		fiduciary in relation to the Program or Trust or any other arrangement under the Program. 10
471	474		"§ 143B-437.128. Protection from liability for the State. 11
472	475		The State has no duty or liability to any party for the payment of any retirement savings 12
473	476		benefits accrued by any individual under the Program. The State, the Board, each member of the 13
474	477		Board, and the Program: 14
475	478		(1) Shall have no responsibility for compliance by individuals with the conditions 15
476	479		and other provisions of the Internal Revenue Code that determine which 16
477	480		individuals are eligible to make tax-favored contributions to IRAs, in what 17
478	481		amount, and in what time frame and manner. 18
479	482		(2) Shall have no duty, responsibility, or liability to any party for the payment of 19
480	483		any benefits under the Program, regardless of whether sufficient funds are 20
481	484		available under the Program to pay such benefits. 21
482	485		(3) Do not and shall not guarantee any interest rate or other rate of return on or 22
483	486		investment performance of any contribution or account balance. 23
484	487		(4) Shall have no liability or responsibility for any loss, deficiency, failure to 24
485	488		realize any gain, or any other adverse consequences incurred by any person as 25
486	489		a result of participating in the Program. 26
487	490		"§ 143B-437.129. Confidentiality of participant and account information. 27
488	491		Individual account information relating to accounts under the Program and relating to 28
489	492		individual participants, including, but not limited to, names, addresses, telephone numbers, email 29
490	493		addresses, personal identification information, investments, contributions, and earnings, is 30
491	494		confidential, is not a public record as defined in G.S. 132-1, and may not be disclosed except as 31
492	495		follows: 32
493	496		(1) To the extent necessary to administer the Program in a manner consistent with 33
494	497		this Article, the tax laws of this State, and the Internal Revenue Code; or 34
495	498		(2) To the extent that the individual who provides the information or is the subject 35
496	499		of the information expressly agrees in writing to the disclosure of the 36
497	500		information. 37
498	501		"§ 143B-437.130. Funding of Program. 38
499	502		The North Carolina Small Business Retirement Savings Administrative Fund is established, 39
500	503		to be held in trust separate and distinct from the General Fund. Interest earned by the 40
501	504		Administrative Fund shall be credited to the Administrative Fund. Moneys in the Administrative 41
502	505		Fund are continuously appropriated to the Board. The Administrative Fund consists of: 42
503	506		(1) Moneys appropriated to the Administrative Fund by the General Assembly. 43
504	507		(2) Moneys transferred to the Administrative Fund from the federal government, 44
505	508		other State agencies, or local governments. 45
506	509		(3) Moneys from the payment of application, account, administrative, or other 46
507	510		fees and the payment of other moneys due the Board. 47
508	511		(4) Any gifts, donations, or grants made to the State for deposit in the 48
509	512		Administrative Fund. 49
510	513		(5) Earnings on moneys in the Administrative Fund. 50
511	514		"§ 143B-437.131. Annual report. 51 General Assembly Of North Carolina Session 2025
512		-	~~House Bill 79-First Edition~~ Page 11
	515	+	DRH40064-MCa-6A Page 11
513	516		(a) The Board shall cause an accurate account of all of the Program's, Trust's, and Board's 1
514	517		activities, operations, receipts, and expenditures to be maintained. By October 1 of each year, the 2
515	518		Board shall submit to the Governor and the Joint Legislative Commission on Governmental 3
516	519		Operations a report detailing the activities, operations, receipts, and expenditures of the Program 4
517	520		and Board during the preceding calendar year. The report shall also include projected activities 5
518	521		of the Program for the current calendar year and any necessary statutory recommendations and 6
519	522		appropriations. 7
520	523		(b) Each year, a full audit of the books and accounts of the Board pertaining to those 8
521	524		activities, operations, receipts and expenditures, personnel, services, or facilities shall be 9
522	525		conducted by a certified public accountant and shall include, but not be limited to, direct and 10
523	526		indirect costs attributable to the use of outside consultants, independent contractors, and any other 11
524	527		persons who are not State employees for the administration of the Program. For the purposes of 12
525	528		the audit, the auditors shall have access to the properties and records of the Program and Board 13
526	529		and may prescribe methods of accounting and the rendering of periodic reports in relation to 14
527	530		projects undertaken by the Program. 15
528	531		"§ 143B-437.132. Implementation. 16
529	532		(a) The Board shall establish the Program so that individuals can begin contributing 17
530	533		under the Program not later than July 1, 2027. 18
531	534		(b) The Board shall not implement the Program if and to the extent the Board determines 19
532	535		that the Program is preempted by ERISA. Accordingly, the Board shall implement the Program 20
533	536		in a severable fashion to the extent practicable if and to the extent that the Board determines: 21
534	537		(1) That a portion or aspect of the Program is preempted by ERISA, in which 22
535	538		event the Board shall not implement that portion or aspect of the Program but 23
536	539		shall proceed to implement the remainder of the Program to the extent 24
537	540		practicable; or 25
538	541		(2) That some but not all of the payroll deduction IRA arrangements or other 26
539	542		arrangements under the Program are or would be employee benefit plans 27
540	543		under ERISA, in which event the Board shall proceed to implement the 28
541	544		Program with respect to the other arrangements under the Program to the 29
542	545		extent practicable." 30
543	546		SECTION 2. There is appropriated from the General Fund to the Department of 31
544	547		Commerce the sum of four hundred thousand dollars ($400,000) in nonrecurring funds for the 32
545	548		2025-2026 fiscal year and the sum of six hundred thousand dollars ($600,000) in nonrecurring 33
546	549		funds for the 2026-2027 fiscal year. The Department shall allocate the funds to the North Carolina 34
547	550		Small Business Retirement Savings Program Board (Board) to be used for the following: 35
548	551		(1) To enable or facilitate the start-up and continuing operation, maintenance, 36
549	552		administration, and management of the North Carolina Small Business 37
550	553		Retirement Savings Program (Program) until the Program accumulates 38
551	554		sufficient balances and can generate sufficient funding through fees assessed 39
552	555		on Program accounts for the Program to become financially self-sustaining. 40
553	556		(2) To hire an individual to serve as the initial executive director pursuant to 41
554	557		G.S. 143B-437.123(a)(4). The position shall be filled on a time-limited basis, 42
555	558		and the individual filling the position shall not be considered a State employee. 43
556	559		SECTION 3. This act becomes effective July 1, 2025. 44