Oklahoma House Bill HB2302

Oklahoma 2022 Regular Session

• Introduced: 2/1/21
• Refer: 2/2/21

Caption

Public finance; Oklahoma Prosperity Act; definitions; State Treasurer; Individual Retirement Accounts; effective date.

Impact

The program is designed to provide favorable federal income tax treatment for these IRAs, thus promoting retirement savings among the workforce. The State Treasurer is granted the authority to implement and manage the program, including the hiring of third-party service providers and ensuring compliance with federal regulations. Additionally, the act creates a trust to manage the IRAs, separate from state assets, relieving the state from any liabilities associated with investment losses incurred by participants. This ensures a clear delineation between state financial responsibilities and employee retirement savings.

Summary

House Bill 2302 introduces the Oklahoma Prosperity Act, aimed at enhancing retirement savings for employees across the state by establishing an automatic Individual Retirement Account (IRA) program. The act mandates that covered employers must offer their employees the opportunity to contribute to an IRA through automatic payroll deductions unless the employee opts out. This system ensures that employees are enrolled in the retirement savings program automatically, contributing a minimum of 3% from their wages, which benefits both employees and state finance as tax-free savings grow within these accounts.

Contention

While the bill aims to encourage broader participation in retirement savings among employees, there is potential contention around its mandatory enrollment feature which could be viewed as limiting individual autonomy. Critics may argue that automatic enrollment may lead to employees not fully understanding their retirement options or the implications of their contributions. Moreover, the act's focus on automatic deductions may raise concerns for lower-income employees who may struggle with the immediate impact on their take-home pay. Additionally, the fiduciary duties imposed on trustees and investment advisers raise questions about the adequacy of protections and oversight for employee savings.