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Rhode Island Senate Bill S0089

Rhode Island 2023 Regular Session

Rhode Island Senate Bill S0089 Compare Versions

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55 2023 -- S 0089
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77 LC000941
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99 S TATE OF RHODE IS LAND
1010 IN GENERAL ASSEMBLY
1111 JANUARY SESSION, A.D. 2023
1212 ____________
1313
1414 A N A C T
1515 RELATING TO PUBLIC FINANCE -- RHODE ISLAND SECURE CHOICE RETIREMENT
1616 SAVINGS PROGRAM ACT
1717 Introduced By: Senators Kallman, DiPalma, Murray, Ruggerio, Euer, Acosta, Miller,
1818 Gallo, Gu, and Felag
1919 Date Introduced: February 01, 2023
2020 Referred To: Senate Finance
2121
2222
2323 It is enacted by the General Assembly as follows:
2424 SECTION 1. Title 35 of the General Laws entitled "PUBLIC FINANCE" is hereby 1
2525 amended by adding thereto the following chapter: 2
2626 CHAPTER 23 3
2727 RHODE ISLAND SECURE CHOICE RETIREMENT SAVINGS PROGRAM ACT 4
2828 35-23-1. Short title. 5
2929 This chapter shall be known and may be cited as the "Rhode Island Secure Choice 6
3030 Retirement Savings Program Act." 7
3131 35-23-2. Definitions. 8
3232 As used in this chapter: 9
3333 (1) "Board" means the Rhode Island secure choice retirement savings board. 10
3434 (2) "Eligible employee" means a person age eighteen (18) years or older who is employed 11
3535 by an eligible employer. "Eligible employee" does not include: 12
3636 (i) Any employee covered under the federal Railway Labor Act (45 U.S.C. ch. 8 §§ 151-13
3737 165 and 45 U.S.C §§ 181-188), or any employee engaged in interstate commerce not subject to the 14
3838 legislative powers of the state, except insofar as application of this chapter is authorized under the 15
3939 United States Constitution or laws of the United States; or 16
4040 (ii) Any employee on whose behalf an employer makes contributions to a Taft-Hartley 17
4141 pension trust fund. 18
4242
4343
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4545 (3) "Eligible employer" means a person or entity engaged in a business, industry, 1
4646 profession, trade, or other enterprise in the state, whether for-profit or not-for-profit, excluding the 2
4747 federal government, the state, any municipal corporation, or any of the state's units or 3
4848 instrumentalities, that has five (5) or more employees and that satisfies the requirements to establish 4
4949 or participate in a payroll deposit retirement savings arrangement. "Eligible employer" does not 5
5050 include an employer that provides a tax-qualified retirement savings program as described in § 35-6
5151 23-10. 7
5252 (4) "IRA" means an individual retirement account or individual retirement annuity under 8
5353 26 U.S.C §§ 408 or 408A (the federal Internal Revenue Code). 9
5454 (5) "Participating employer" means an eligible employer that provides a payroll deposit 10
5555 retirement savings arrangement provided for by this chapter for eligible employees. 11
5656 (6) "Payroll deposit retirement savings arrangement" means an arrangement by which an 12
5757 employer allows employees to remit payroll deduction contributions to the RISavers retirement 13
5858 savings program. 14
5959 (7) "RISavers retirement savings program" or "program" means a retirement savings 15
6060 program offered by the Rhode Island secure choice retirement savings program. 16
6161 (8) "State investment commission" or "commission" means the state investment 17
6262 commission as defined in § 35-10-1. 18
6363 35-23-3. Creation, membership, and terms of the Rhode Island secure choice 19
6464 retirement savings board. 20
6565 (a) There is authorized, created, and established in the office of the general treasurer, a 21
6666 public corporation of the state, with the politic and corporate powers set forth in this chapter, to be 22
6767 known as the Rhode Island secure choice retirement savings board (the "board"), to carry out the 23
6868 provisions of this chapter. The board is constituted as a public instrumentality and agency 24
6969 exercising public and essential governmental functions, and the exercise by the board of the powers 25
7070 conferred by this chapter shall be deemed and held to be the performance of an essential 26
7171 governmental function of the state. 27
7272 (b) It is the intent of the general assembly by the passage of this chapter to create and 28
7373 establish a public corporation and instrumentality and agency of the state for the purpose of the 29
7474 activities authorized by this chapter, and to vest the corporation with all powers, authority, rights, 30
7575 privileges, and titles that may be necessary to enable it to accomplish those purposes. This chapter 31
7676 shall be liberally construed in conformance with the purpose expressed in this subsection. 32
7777 (c) The powers of the corporation shall be vested in seven (7) members, appointed by the 33
7878 governor subject to advice and consent of the senate. One member shall be a current or former 34
7979
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8282 member of the office of the general treasurer appointed with the advice and consent of the senate, 1
8383 who shall act as chairperson and shall serve for an initial term of three (3) years; one member shall 2
8484 be a current or former member of the department of business regulation, appointed with the advice 3
8585 and consent of the senate and shall serve for an initial term of three (3) years; two (2) members of 4
8686 the public shall be appointed by the governor with the advice and consent of the senate, one of 5
8787 whom shall serve for an initial term of two (2) years, and one of whom shall serve for an initial 6
8888 term of one year; one member shall be an individual with small business administration experience 7
8989 appointed by the governor after consultation with the general treasurer with the advice and consent 8
9090 of the senate, for an initial term of two (2) years; one member shall be an individual with expertise 9
9191 in retirement planning to be appointed by the governor after consultation with the general treasurer 10
9292 with the advice and consent of the senate, who shall serve for an initial term of one year; and one 11
9393 member of the public shall be appointed by the governor after consultation with the general 12
9494 treasurer with the advice and consent of the senate, who shall serve for an initial term of two (2) 13
9595 years. 14
9696 (d) After the initial term, all appointed members shall serve staggered three (3) year terms 15
9797 or until their respective successors are appointed and qualified after expiration of the appointed 16
9898 term. 17
9999 (e) Any vacancy occurring in the office of a member by death, resignation, or otherwise 18
100100 shall be filled in the same manner as the original appointment. 19
101101 (f) Members shall receive no compensation for the performance of their duties; however, 20
102102 they may be reimbursed necessary expenses. 21
103103 (g) The members of the board shall at regular intervals at least four (4) times a year conduct 22
104104 business meetings for the purpose of carrying out its general business. The board shall be 23
105105 considered a "public body" for purposes of, and shall be subject to, the provisions of chapter 46 of 24
106106 title 42 ("open meetings") and to the provisions of title 38 concerning public records. 25
107107 (h) The board shall continue until its existence is terminated by law. 26
108108 (i) The state shall indemnify and hold harmless every past, present, or future member, 27
109109 officer, or employee of the board who is made a party to or is required to testify in any action, 28
110110 investigation, or other proceeding in connection with or arising out of the performance or alleged 29
111111 lack of performance of that person's duties on behalf of the corporation. These persons shall be 30
112112 indemnified and held harmless, whether they are sued individually or in their capacities as 31
113113 members, officers, or employees of the board, for all expenses, legal fees and/or costs incurred by 32
114114 them during or resulting from the proceedings, and for any award or judgment arising out of their 33
115115 service to the corporation that is not paid by the board and is sought to be enforced against a person 34
116116
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119119 individually, as expenses, legal fees, costs, awards or judgments occur. Provided, however, that 1
120120 neither the state nor the corporation shall indemnify any member, officer, or employee: 2
121121 (1) For acts or omissions not in good faith or which involve intentional misconduct or a 3
122122 knowing violation of law; 4
123123 (2) For any transaction from which the member derived an improper personal benefit; or 5
124124 (3) For any malicious act. 6
125125 (j) No person shall be eligible for appointment to the board unless they are a resident of the 7
126126 state. 8
127127 35-23-4. Rhode Island secure choice retirement savings program. 9
128128 (a) There is hereby established a retirement savings program known as the Rhode Island 10
129129 secure choice retirement savings program to be administered by the board for the purpose of 11
130130 promoting greater retirement savings for Rhode Island private sector employees in a convenient, 12
131131 voluntary, low-cost, and portable manner. 13
132132 (b) The secure choice retirement savings program is a program in which retirement savings 14
133133 are accumulated in individual accounts for the exclusive benefit of the participants or their 15
134134 beneficiaries. The program is established effective upon receipt of funds pursuant to the provisions 16
135135 of this chapter. 17
136136 35-23-5. Investments. 18
137137 (a) The board may select an appropriate third-party administrator for the program and shall 19
138138 adopt such plan, trust and/or custodial documents, with such features and attributes as the board 20
139139 determines necessary or advisable in its discretion to effectuate the provisions of this chapter in 21
140140 accordance with the following: 22
141141 (1) The board may select one or more firm(s) or company(ies) to provide retirement 23
142142 program investments, program administration, and communication services to employees who 24
143143 participate in the retirement savings program. The program shall provide for appropriate long-term 25
144144 retirement-oriented investments and shall include investment options as determined by the state 26
145145 investment commission. In determining the firm or the company to provide these services, the 27
146146 board shall consider the following: 28
147147 (i) The financial stability of the company or firm; 29
148148 (ii) The cost of the investments, program administration, and services to the members; 30
149149 (iii) The experience of the company or firm in administering retirement savings plans; 31
150150 (iv) The experience of the company or firm in providing education, counseling, and advice 32
151151 to participants of retirement savings plans; and 33
152152 (v) Any criminal convictions, securities or antitrust law violations, material civil or 34
153153
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156156 regulatory fines or judgments against the company or firm which the company or firm shall be 1
157157 required to disclose to the board and the commission as part of the selection process. 2
158158 (2) The program shall provide education, counseling, and objective employee-specific plan 3
159159 advice to participants. 4
160160 (3) The program shall include a limited number of investment options which shall include 5
161161 either: 6
162162 (i) Investment portfolio options that are constructed to reflect different risk profiles such 7
163163 as conservative, moderate and aggressive; and/or 8
164164 (ii) Options constructed to reflect different risk profiles that automatically reallocate and 9
165165 rebalance contributions as an employee ages. There may be investment options that prioritize the 10
166166 securities of companies that demonstrate good governance, efficient use of environmental resources 11
167167 and thoughtful management of social impact. All investment offerings shall be approved by the 12
168168 state investment commission. 13
169169 (b) The Rhode Island secure choice retirement savings program is an instrumentality of the 14
170170 state. Any security issued, managed, or invested by the state investment commission within the 15
171171 Rhode Island secure choice retirement savings program on behalf of an individual participating 16
172172 within the RISavers retirement savings program shall be state income tax deferred for investment 17
173173 earnings to include interest, dividends and capital gains until such time as withdrawal pursuant to 18
174174 the terms of this chapter. 19
175175 (c) The state investment commission shall adopt a written statement of investment policy 20
176176 that includes a risk management and oversight program. The commission shall consider the 21
177177 statement of investment policy and any changes in the investment policy at a public meeting. 22
178178 35-23-6. Payroll deduction. 23
179179 The RISavers retirement savings program shall include, as determined by the board, one 24
180180 or more payroll deduction IRA arrangements. 25
181181 35-23-7. Powers of the board. 26
182182 (a) The board shall have the power and authority to do all of the following: 27
183183 (1) Adopt a seal and change and amend it from time to time; 28
184184 (2) The general treasurer shall, on behalf of the board, appoint an executive director, who 29
185185 shall not be a member of the board and who shall serve at the pleasure of the board. The general 30
186186 treasurer shall determine the duties of the executive director and other staff as appropriate and set 31
187187 their compensation. The board may authorize the executive director to enter into contracts on behalf 32
188188 of the board or conduct any business necessary for the efficient operation of the board; 33
189189 (3) Make provisions for the payment of costs of administration and operation of the 34
190190
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193193 program; 1
194194 (4) Employ staff; 2
195195 (5) Retain and contract with a Rhode Island public retirement system, consultants, 3
196196 actuaries, counsel, auditors, and other professionals as necessary; 4
197197 (6) Procure insurance against any loss in connection with the property, assets, or activities 5
198198 of the program; 6
199199 (7) Procure insurance indemnifying each member of the board from personal loss or 7
200200 liability resulting from a member's action or inaction as a member of the board; 8
201201 (8) Set minimum and maximum contribution levels in accordance with contribution limits 9
202202 set for IRAs by the Internal Revenue Code; 10
203203 (9) Collaborate and cooperate with a public retirement system, private financial 11
204204 institutions, service providers, and business, financial, trade, membership, and other organizations 12
205205 to the extent necessary or desirable for the effective and efficient design, implementation, and 13
206206 administration of the program and to maximize outreach to eligible employers and eligible 14
207207 employees; 15
208208 (10) Collaborate with, and evaluate the role of, licensed insurance agents and financial 16
209209 advisors in assisting and providing guidance for eligible employees; 17
210210 (11) Cause expenses incurred to initiate, implement, maintain, and administer the program 18
211211 to be paid from contributions to, or investment returns or assets of, the program or arrangements 19
212212 established under the program, to the extent permitted under state and federal law; 20
213213 (12) Facilitate compliance by the retirement savings program or arrangements established 21
214214 under the program with all applicable requirements for the program under the Internal Revenue 22
215215 Code of 1986, including tax qualification requirements or any other applicable law and accounting 23
216216 requirements, including providing or arranging for assistance to program sponsors and individua ls 24
217217 in complying with applicable law and tax qualification requirements in a cost-effective manner; 25
218218 (13) Carry out the duties and obligations of the Rhode Island secure choice retirement 26
219219 savings program pursuant to this title and exercise any and all other powers as appropriate for the 27
220220 effectuation of the purposes, objectives, and provisions of this title pertaining to the program; 28
221221 (14)(i) Enter into intergovernmental agreements with any state agency to further the 29
222222 successful implementation and operation of the program and all such agencies and instrumentalities 30
223223 shall cooperate with the board. 31
224224 (ii) All state agencies shall cooperate as requested by the program in the performance of its 32
225225 duties under this chapter, including, unless otherwise prohibited, the sharing of relevant data as the 33
226226 parties shall mutually agree; 34
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230230 (15) Make and enter into contracts, agreements, memoranda of understanding, 1
231231 arrangements, partnerships, or other arrangements to collaborate, cooperate, coordinate, contract, 2
232232 or combine resources, investments, or administrative functions with other governmental entities, 3
233233 including any states or their agencies or instrumentalities that maintain or are establishing 4
234234 retirement savings programs compatible with the program, including collective, common, or pooled 5
235235 investments with other funds of other states’ programs with which the assets of the program and 6
236236 trust are permitted by law to be collectively invested, to the extent necessary or desirable for the 7
237237 effective and efficient design, administration, and implementation of the program consistent with 8
238238 the purposes set forth in this title, including the purpose of achieving economies of scale and other 9
239239 efficiencies designed to minimize costs for the program and its participants; and 10
240240 (16) Develop and implement an investment policy that defines the program’s investment 11
241241 objectives, consistent with the objectives of the program, and that provides for policies and 12
242242 procedures consistent with those investment objectives. The board shall designate appropriate 13
243243 default investments that include a mix of asset classes, such as target date and balanced funds. The 14
244244 board shall seek to minimize participant fees and expenses of investment and administration. The 15
245245 board shall strive to design and implement investment options available to holders of accounts 16
246246 established as part of the program and other program features that are intended to achieve maximum 17
247247 possible income replacement balanced with an appropriate level of risk in an IRA-based 18
248248 environment consistent with the investment objectives under the policy. The investment options 19
249249 may encompass a range of risk and return opportunities and allow for a rate of return commensurate 20
250250 with an appropriate level of risk in view of the investment objectives under the policy. The menu 21
251251 of investment options shall be determined taking into account the nature and objectives of the 22
252252 program, the desirability (based on behavioral research findings) of limiting investment choices 23
253253 under the program to a reasonable number, and the extensive investment choices available to 24
254254 participants in the event that they roll over to an IRA outside the program. 25
255255 (b) The board shall adopt rules and regulations it deems necessary to implement this 26
256256 chapter consistent with the Internal Revenue Code and regulations issued pursuant to that Code to 27
257257 ensure that the program meets all criteria for federal tax-deferral or tax-exempt benefits, or both. 28
258258 35-23-8. Additional authority of the board. 29
259259 In addition to the powers and authority granted to the board pursuant to § 35-23-7, the 30
260260 board shall have the power and authority to do the following: 31
261261 (1) Cause the retirement savings program or arrangements established under the program 32
262262 to be designed, established, and operated, in a manner consistent with all of the following: 33
263263 (i) In accordance with best practices for retirement savings vehicles; 34
264264
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267267 (ii) To encourage participation, saving, and sound investment practices; and 1
268268 (iii) With simplicity, ease of administration for participating employers, and portability of 2
269269 benefits. 3
270270 (2) Disseminate educational information designed to educate participants about the benefits 4
271271 of planning and saving for retirement and information to help them decide the level of RISavers 5
272272 retirement savings program participation and savings strategies that may be appropriate for them; 6
273273 (3) Disseminate information concerning state and federal tax credits available to small 7
274274 business owners for allowing their employees to participate in the program, and any relevant state 8
275275 or federal tax credits available for participating employees; 9
276276 (4) Submit progress and status reports to participating employers and eligible employees; 10
277277 (5) If necessary, determine the eligibility of an employer, employee, or other individual to 11
278278 participate in the program; 12
279279 (6) Evaluate and establish the process by which an eligible employee of an eligible 13
280280 employer is able to contribute a portion of their salary or wages to the program for automatic deposit 14
281281 of those contributions and the participating employer provides a payroll deposit retirement savings 15
282282 arrangement to forward the employee contribution and related information to the program or its 16
283283 agents. This evaluation and process may include, but is not limited to, financial services companies 17
284284 and third-party administrators with the capability to receive and process employee information and 18
285285 contributions for payroll deposit retirement savings arrangements or other arrangements authorized 19
286286 by this chapter; 20
287287 (7) Design and establish the process for the enrollment of program participants; 21
288288 (8) Allow participating employers to use the program to remit employees' contributions to 22
289289 their IRAs on their employees' behalf; and 23
290290 (9) Evaluate and establish the process by which an individual or an employee of a 24
291291 nonparticipating employer may enroll in and make contributions to the program. 25
292292 35-23-9. Disclosure of information. 26
293293 (a) Prior to opening the RISavers retirement savings program for enrollment, the board 27
294294 shall design and disseminate to employers an employee information packet that shall be made 28
295295 available in an electronic format. The packet shall include background information on the program 29
296296 and appropriate disclosures for employees. 30
297297 (b) The disclosure form shall include, but not be limited to, all of the following: 31
298298 (1) The benefits and risks associated with making contributions to the program; 32
299299 (2) The mechanics of how to make contributions to the program; 33
300300 (3) How to opt out of the program; 34
301301
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304304 (4) The process for withdrawal of retirement savings; and 1
305305 (5) How to obtain additional information on the program. 2
306306 (c) In addition, the disclosure form shall clearly articulate the following: 3
307307 (1) Employees seeking financial advice should contact financial advisors in that employers 4
308308 do not provide financial advice, that employees are not to contact their employers for financial 5
309309 advice, and that employers are not liable for employee investment decisions; 6
310310 (2) This retirement program is not sponsored by the employer, and therefore, the employer 7
311311 is not responsible for the program or liable as a program sponsor; and 8
312312 (3) The program fund is not guaranteed by the state. 9
313313 (d) The employee information packet shall also include an opt-out form for an eligible 10
314314 employee to note their decision to opt out of participation in the program. The opt-out form shall 11
315315 be simple and concise and drafted in a manner that the board deems necessary to appropriately 12
316316 evidence the employee's understanding that they are choosing not to automatically deduct earnings 13
317317 to save for retirement. 14
318318 (e) The employee information packet with the disclosure and opt-out forms shall be 15
319319 supplied to existing employees when the program is initially launched for a participating employer. 16
320320 35-23-10. Employer participation. 17
321321 (a) After the board opens the RISavers retirement savings program for enrollment, eligible 18
322322 employers shall have a payroll deposit retirement savings arrangement to allow employee 19
323323 participation in the program under the terms and conditions prescribed by the board. 20
324324 (b) Within twenty-four (24) months after the board opens the program for enrollment, 21
325325 eligible employers with more than fifty (50) eligible employees and that do not offer a retirement 22
326326 savings program pursuant to subsection (f) of this section shall have a payroll deposit retirement 23
327327 savings arrangement to allow employee participation in the program. 24
328328 (c) Within thirty-six (36) months after the board opens the program for enrollment, all other 25
329329 eligible employers that do not offer a retirement savings program pursuant to subsection (f) of this 26
330330 section shall have a payroll deposit retirement savings arrangement to allow employee participation 27
331331 in the program. 28
332332 (d) The board, in its discretion, may extend the time limits defined in subsections (b) and 29
333333 (c) of this section. 30
334334 (e)(1) Each eligible employee shall be enrolled in the program unless the employee elects 31
335335 not to participate in the program. An eligible employee may elect to opt out of the program at any 32
336336 time by making a notation on the opt-out form. 33
337337 (2) Following initial implementation of the program pursuant to this section, at least once 34
338338
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341341 every year, the board shall designate an open enrollment period during which eligible employees 1
342342 that previously opted out of the program may enroll in the program. 2
343343 (3) An employee who elects to opt out of the program who subsequently wishes to 3
344344 participate through the employer's payroll deposit retirement savings arrangement may enroll at 4
345345 any time. 5
346346 (f)(1) An employer that provides an employer-sponsored retirement plan, such as a defined 6
347347 benefit plan or a 401(k), 403(b), 457(b), simplified employee pension (SEP) plan, or savings 7
348348 incentive match plan for employees (SIMPLE) plan, or that offers an automatic enrollment payroll 8
349349 deduction IRA, shall be exempt from the requirements of the RISavers retirement savings program, 9
350350 if the plan or IRA qualifies for favorable federal income tax treatment under the federal Internal 10
351351 Revenue Code. 11
352352 (2) An employer shall retain the option at all times to set up and offer a tax-qualified 12
353353 retirement plan, instead of facilitating employee participation in the RISavers retirement savings 13
354354 program. 14
355355 (g) By regulation, the board may set a default contribution rate which, unless otherwise 15
356356 specified by the employee, shall be the amount of the employee’s annual salary or wages 16
357357 contributed to the program. Employees shall have the ability to elect to change their contribution 17
358358 rate at any time with thirty (30) days’ notice provided to the program administrator. 18
359359 (h) The board may implement annual automatic escalation of employee contributions. 19
360360 (i) Employee contributions subject to automatic escalation shall not exceed eight percent 20
361361 (8%) of salary. 21
362362 (1) Automatic escalation shall result in no more than a one-percent-of-salary (1%) increase 22
363363 in employee contributions per calendar year. 23
364364 (2) A participating employee may elect to opt out of automatic escalation and may set their 24
365365 contribution percentage rate at a level determined by the participating employee. 25
366366 35-23-11. Employer liability protection. 26
367367 (a) Employers shall not have any liability for an employee's decision to participate in, or 27
368368 opt out of, the RISavers retirement savings program, or for the investment decisions of employees 28
369369 whose assets are deposited in the program. 29
370370 (b) Employers shall not be a fiduciary, or considered to be a fiduciary, over the Rhode 30
371371 Island secure choice retirement savings program. The program is a state-administered program, not 31
372372 an employer-sponsored program. If the program is subsequently found to be preempted by any 32
373373 federal law or regulation, employers shall not be liable as program sponsors. An employer shall not 33
374374 bear responsibility for the administration, investment, or investment performance of the program. 34
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378378 An employer shall not be liable with regard to investment returns, program design, and benefits 1
379379 paid to program participants. 2
380380 (c) An employer shall not have civil liability, and no cause of action shall arise against an 3
381381 employer, for acting pursuant to the regulations prescribed by the board defining the roles and 4
382382 responsibilities of employers that have a payroll deposit retirement savings arrangement to allow 5
383383 employee participation in the program. 6
384384 35-23-12. State immunity. 7
385385 The state shall not have any liability for the payment of the retirement savings benefit 8
386386 earned by program participants pursuant to this chapter. The state, and any of the funds of the state, 9
387387 shall have no obligation for payment of the benefits arising from this chapter. 10
388388 35-23-13. Annual audited financial report. 11
389389 (a) The board shall submit, no later than December 31, an annual audited financial report, 12
390390 prepared in accordance with generally accepted accounting principles, on the operations of the 13
391391 Rhode Island secure choice retirement savings program to the governor, and the finance committees 14
392392 of the house and senate. The annual audit shall be made by an independent certified public 15
393393 accountant and shall include, but not be limited to, direct and indirect costs attributable to the use 16
394394 of outside consultants, independent contractors, and any other persons who are not state employees. 17
395395 (b) The annual audit shall be supplemented by the following information prepared by the 18
396396 board: 19
397397 (1) Any studies or evaluations prepared in the preceding year; 20
398398 (2) A summary of the benefits provided by the program including the number of 21
399399 participants in the program; and 22
400400 (3) Any other information that is relevant in order to make a full, fair, and effective 23
401401 disclosure of the operations of the Rhode Island secure choice retirement savings program. 24
402402 35-23-14. Required favorable federal tax treatment. 25
403403 (a) The board shall not implement the program if the IRA arrangements offered fail to 26
404404 qualify for the favorable federal income tax treatment ordinarily accorded to IRAs under the 27
405405 Internal Revenue Code, or if it is determined that the program is an employee benefit plan under 28
406406 the federal Employee Retirement Income Security Act. 29
407407 (b) Prior to opening the program for enrollment, the board shall report to the governor and 30
408408 the finance committees of the house and senate the specific date on which the program will start to 31
409409 enroll program participants and that the following prerequisites and requirements for the program 32
410410 have been met: 33
411411 (1) The program is structured in a manner to keep the program from being classified as an 34
412412
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415415 employee benefit plan subject to the federal Employee Retirement Income Security Act; 1
416416 (2) The payroll deduction IRA arrangements offered by the program qualify for the 2
417417 favorable federal income tax treatment ordinarily accorded to IRA arrangements under the Internal 3
418418 Revenue Code; 4
419419 (3) The board has defined in regulation the roles and responsibilities of employers in a 5
420420 manner to keep the program from being classified as an employee benefit plan subject to the federal 6
421421 Employee Retirement Income Security Act; and 7
422422 (4) The board has adopted a third-party administrator operational model that limits 8
423423 employer interaction and transactions with the employee to the extent feasible. 9
424424 35-23-15. Prohibited conduct. 10
425425 A board member, program administrator, and other staff of the board shall not do any of 11
426426 the following: 12
427427 (1) Directly or indirectly have any interest in the making of any investment made for the 13
428428 program, or in the gains or profits accruing from any investment made for the program; 14
429429 (2) Borrow any funds or deposits of the program, or use those funds or deposits in any 15
430430 manner, for themselves or as an agent or partner of others; or 16
431431 (3) Become an endorser, surety, or obligor on investments by the board. 17
432432 35-23-16. Duties of board and staff. 18
433433 The board, commission, and the program administrator and staff, including contracted 19
434434 administrators and consultants, shall discharge their duties as fiduciaries with respect to the 20
435435 program for the exclusive purposes of providing benefits to program participants and defraying 21
436436 reasonable expenses of administering the program. 22
437437 35-23-17. Penalties. 23
438438 (a) The board shall have the power and duties necessary to administer the enforcement of 24
439439 employer compliance with this chapter, including the ability to impose penalties. 25
440440 (b)(1) The board shall issue a notice of noncompliance to each employer that fails to allow 26
441441 its eligible employees to participate in the Rhode Island secure choice savings retirement program 27
442442 pursuant to this title. 28
443443 (2) Each eligible employer that, without good cause, fails to allow its eligible employees 29
444444 to participate in the program within thirty (30) days from the date the notice of penalty was issued, 30
445445 shall be subject to a penalty of two hundred fifty dollars ($250) per eligible employee. Proceeds of 31
446446 such penalties, after deducting enforcement expenses, shall be deposited for the benefit of the 32
447447 program. 33
448448 (c) The director of the department of labor and training shall assist the board in its 34
449449
450450
451451 LC000941 - Page 13 of 14
452452 enforcement of this chapter. 1
453453 35-23-18. Rules and regulations. 2
454454 (a) The board shall adopt rules and regulations to implement this chapter. 3
455455 (b) The tax administrator in consultation with the board shall adopt rules and regulations 4
456456 regarding the reporting and the deferral of taxes in accordance with the provisions of this chapter. 5
457457 35-23-19. Effect on benefit means test. 6
458458 A payroll deposit IRA arrangement offered pursuant to the RISavers retirement savings 7
459459 program shall have the same status as, and be treated consistently with, any other IRA for the 8
460460 purpose of determining eligibility or benefit level for a program that uses a means test. 9
461461 35-23-20. Liberal construction. 10
462462 This chapter shall be construed liberally in order to effectuate its purpose. The purposes of 11
463463 this chapter and all of its provisions with respect to the powers granted shall be broadly interpreted 12
464464 to effectuate that intent and purposes and not as to any limitation of powers. 13
465465 SECTION 2. This act shall take effect upon passage. 14
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467467 LC000941
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469469
470470
471471 LC000941 - Page 14 of 14
472472 EXPLANATION
473473 BY THE LEGISLATIVE COUNCIL
474474 OF
475475 A N A C T
476476 RELATING TO PUBLIC FINANCE -- RHODE ISLAND SECURE CHOICE RETIREMENT
477477 SAVINGS PROGRAM ACT
478478 ***
479479 This act would establish a public corporation with a seven (7) member board regarding the 1
480480 creation of the Rhode Island secure choice retirement savings program. The board would oversee 2
481481 its operations and provide for the creation of IRA-type retirement investments managed by the 3
482482 board. Employers in noncompliance with the provisions of this chapter would be subject to a two 4
483483 hundred fifty dollar ($250) penalty per employee. 5
484484 This act would take effect upon passage. 6
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486486 LC000941
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488488