New Jersey Assembly Bill A1974

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Requires certain boards of education to select minimum of three financial institutions or pension management organizations to provide tax sheltered annuity plans.

Impact

The implementation of Bill A1974 represents a significant shift in how educational institutions manage retirement plans. By requiring a minimum number of providers, the bill aims to foster a competitive environment that can potentially lower fees and provide better investment options for school employees. This change is expected to enhance the retirement security of educators, making it easier for them to navigate their retirement savings and investments. Additionally, the bill calls for financial institutions to provide comprehensive data needed to operate these plans effectively, promoting transparency in the fees and costs associated with these annuities.

Summary

Bill A1974 mandates that certain boards of education in New Jersey select a minimum of three financial institutions or pension management organizations to provide tax sheltered annuity plans, specifically 403(b) plans, for school district employees. This requirement applies to school districts with a student enrollment of at least 1,000 students, ensuring that employees have multiple options when it comes to their retirement savings. The bill emphasizes the importance of choice and competitive pricing in retirement investment options for educators.

Contention

While Bill A1974 is generally met with support for its goals of increasing choice and transparency, there may also be concerns about the administrative burden placed on school boards in selecting and managing multiple financial institutions. Stakeholders may worry about the complexity introduced by having numerous providers, which could lead to confusion among employees regarding their options. Further debate may focus on how the bill could impact smaller school districts that may struggle to find three qualified providers, potentially limiting their ability to comply with the new requirements.