Texas 2017 - 85th Regular

Texas House Bill HB3601 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R10036 LED-D
2	2	By: Alonzo H.B. No. 3601
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the creation of a state-administered retirement plan.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subtitle D, Title 2, Labor Code, is amended by
10	10	adding Chapter 83 to read as follows:
11	11	CHAPTER 83. SECURE RETIREMENT PLAN FOR TEXANS
12	12	SUBCHAPTER A. GENERAL PROVISIONS
13	13	Sec. 83.001. PURPOSE. (a) The secure retirement plan for
14	14	Texans is established for the purpose of promoting greater
15	15	retirement savings for Texans in a convenient, voluntary, low-cost,
16	16	and portable manner.
17	17	(b) The secure retirement plan for Texans is an agency of
18	18	the state.
19	19	Sec. 83.002. DEFINITIONS. In this chapter:
20	20	(1) "Board" means the governing board of the secure
21	21	retirement plan for Texans.
22	22	(2) "Eligible employee":
23	23	(A) means an individual who resides in this state
24	24	and:
25	25	(i) whose employer reports to the Texas
26	26	Workforce Commission for the purpose of paying unemployment taxes;
27	27	or
28	28	(ii) is self-employed; and
29	29	(B) does not include, except to the extent
30	30	authorized under the United States Constitution or federal law, an
31	31	employee who is:
32	32	(i) covered under the federal Railway Labor
33	33	Act (45 U.S.C. Section 151 et seq.); or
34	34	(ii) engaged in interstate commerce not
35	35	subject to the legislative powers of this state.
36	36	(3) "Eligible employer" means a person engaged in a
37	37	business, industry, profession, trade, or other enterprise in this
38	38	state, whether for profit or not for profit. The term includes
39	39	state agencies and political subdivisions, whose employees are not
40	40	participating in a public retirement system. The term does not
41	41	include any agency or entity of the federal government.
42	42	(4) "Governing body of a public retirement system" has
43	43	the meaning assigned by Section 802.001, Government Code.
44	44	(5) "Individual retirement account" means an
45	45	individual retirement account or individual retirement annuity
46	46	within the meaning of Section 408 or a Roth IRA described by Section
47	47	408A, Internal Revenue Code of 1986.
48	48	(6) "Normal retirement age" has the meaning assigned
49	49	by 26 C.F.R. Section 1.401(a)-1 as interpreted under board rule.
50	50	(7) "Participant" means an individual who is
51	51	contributing to the plan.
52	52	(8) "Participating employer" means an eligible
53	53	employer that provides a payroll deposit retirement savings
54	54	arrangement under this chapter for an eligible employee.
55	55	(9) "Plan" means the secure retirement plan for Texans
56	56	authorized by this chapter.
57	57	(10) "Public retirement system" has the meaning
58	58	assigned by Section 802.001, Government Code.
59	59	(11) "Vendor" means a registered investment company or
60	60	admitted life insurance company qualified to do business in this
61	61	state that provides retirement investment products. The term
62	62	includes a company that is registered to do business in this state
63	63	that provides payroll services or recordkeeping services and
64	64	offers retirement plans or payroll deduction individual retirement
65	65	account arrangements using products of regulated investment
66	66	companies and insurance companies qualified to do business in this
67	67	state. The term does not include individual registered
68	68	representatives, brokers, financial planners, or agents.
69	69	Sec. 83.003. COMPOSITION OF BOARD. (a) The plan's
70	70	governing board consists of:
71	71	(1) the comptroller, who serves as chair;
72	72	(2) an individual with retirement savings and
73	73	investment expertise appointed by the comptroller at the
74	74	recommendation of the chair of the Senate Committee on State
75	75	Affairs;
76	76	(3) an employee representative appointed by the
77	77	comptroller at the recommendation of the speaker of the house;
78	78	(4) a public interest member appointed by the attorney
79	79	general; and
80	80	(5) a business representative appointed by the
81	81	governor.
82	82	(b) A member appointed under Subsection (a) serves for a
83	83	term of two years.
84	84	Sec. 83.004. BOARD MEMBER COMPENSATION. A member of the
85	85	board serves without compensation but is entitled to receive
86	86	reimbursement of travel expenses incurred by the member while
87	87	conducting the business of the board as provided in the General
88	88	Appropriations Act.
89	89	Sec. 83.005. FIDUCIARY DUTY. Each board member, plan
90	90	administrator, plan employee, and contracted administrator or
91	91	consultant shall discharge the person's duties as a fiduciary with
92	92	respect to the plan solely in the interest of the participants by:
93	93	(1) providing benefits in an actuarially sound manner
94	94	to participants and defraying reasonable expenses of administering
95	95	the plan; and
96	96	(2) investing with the care, skill, prudence, and
97	97	diligence under the prevailing circumstances that a prudent person
98	98	acting in a like capacity and familiar with those matters would use
99	99	in the conduct of an enterprise of a like character and with like
100	100	aims.
101	101	Sec. 83.006. POWERS AND DUTIES OF BOARD. (a) The board
102	102	may:
103	103	(1) enter into contracts necessary or appropriate for
104	104	the administration of the plan;
105	105	(2) adopt and amend a seal;
106	106	(3) hold, invest, and reinvest money in the plan fund;
107	107	(4) accept any grant, gift, legislative
108	108	appropriation, and other money from the state, a unit of federal,
109	109	state, or local government, or any other person for deposit to the
110	110	administrative fund or the plan fund;
111	111	(5) contract with a plan administrator and determine
112	112	the duties of the plan administrator;
113	113	(6) provide for the payment of costs of administration
114	114	and operation of the plan;
115	115	(7) hire employees;
116	116	(8) retain and contract with the governing body of a
117	117	public retirement system, private financial institution, other
118	118	financial and service provider, consultant, actuary, counsel,
119	119	auditor, third-party administrator, and other professionals as
120	120	necessary or appropriate;
121	121	(9) obtain insurance against loss in connection with
122	122	the property, assets, or activities of the plan;
123	123	(10) obtain insurance indemnifying each member of the
124	124	board from personal loss or liability resulting from a member's
125	125	action or inaction as a member of the board;
126	126	(11) set minimum and maximum investment levels in
127	127	accordance with contribution limits for individual retirement
128	128	accounts and 401(k) plans under the Internal Revenue Code of 1986;
129	129	(12) collaborate and cooperate with the governing body
130	130	of a public retirement system, a private financial institution, a
131	131	service provider, or a business, financial, trade, membership, or
132	132	other organization to the extent necessary or desirable for the
133	133	effective and efficient design, implementation, and administration
134	134	of the plan and to maximize outreach to eligible employers and
135	135	eligible employees;
136	136	(13) pay expenses incurred to initiate, implement,
137	137	maintain, and administer the plan from contributions to, or
138	138	investment returns or assets of, the plan or arrangements
139	139	established under the plan, to the extent permitted under state and
140	140	federal law;
141	141	(14) facilitate compliance by the plan or arrangements
142	142	established under the plan with all applicable requirements for the
143	143	plan under the Internal Revenue Code of 1986, including tax
144	144	qualification requirements or any other applicable law and
145	145	accounting requirements, including providing or arranging for
146	146	assistance to plan sponsors and individuals in complying with
147	147	applicable law and tax qualification requirements in a
148	148	cost-effective manner; and
149	149	(15) carry out the duties and obligations of the plan
150	150	and exercise any other power appropriate to accomplish the
151	151	purposes, objectives, and provisions of this chapter.
152	152	(b) The board also may:
153	153	(1) design, establish, and operate the plan in a
154	154	manner that:
155	155	(A) is in accordance with best practices for
156	156	retirement savings mechanisms;
157	157	(B) encourages participation; and
158	158	(C) provides ease of administration for
159	159	participating employers and portability of benefits;
160	160	(2) arrange for collective, common, or pooled
161	161	investment of assets of the plan, including investments in
162	162	conjunction with other funds with which the assets are permitted to
163	163	be collectively invested, to save costs through efficiencies of
164	164	economies of scale;
165	165	(3) distribute educational information to educate
166	166	participants about the benefits of planning and saving for
167	167	retirement and information to help decide the appropriate level of
168	168	plan participation;
169	169	(4) distribute information concerning:
170	170	(A) tax credits available to small business
171	171	owners for allowing employees to participate in the plan; and
172	172	(B) the federal retirement savings contribution
173	173	credit available to lower and moderate-income households for
174	174	qualified savings contributions;
175	175	(5) submit progress and status reports to
176	176	participating employers and eligible employees;
177	177	(6) if necessary, determine the eligibility of an
178	178	employer, employee, or other individual to participate in the plan;
179	179	(7) evaluate and establish the process by which an
180	180	eligible employee may contribute a portion of the employee's salary
181	181	or wages to the plan for automatic deposit and the participating
182	182	employer may provide a payroll deposit retirement savings
183	183	arrangement to forward the employee contribution and related
184	184	information to the plan or its agents, including financial services
185	185	companies and third-party administrators with the capability to
186	186	receive and process employee information and contributions for
187	187	payroll deposit retirement savings arrangements or other
188	188	arrangements authorized by this chapter;
189	189	(8) design and establish the process for the
190	190	enrollment of participants;
191	191	(9) allow a participating employer to use the plan to
192	192	remit an employee's contributions to the employee's individual
193	193	retirement account on the employee's behalf;
194	194	(10) allow a participating employer to make
195	195	contributions to an employee's individual retirement account,
196	196	provided that the contributions are permitted under the Internal
197	197	Revenue Code of 1986 and do not cause the plan to be treated as an
198	198	employee benefit plan under the federal Employee Retirement Income
199	199	Security Act of 1974 (29 U.S.C. Section 1001 et seq.); and
200	200	(11) evaluate and establish the process by which an
201	201	individual or an employee of a nonparticipating employer may enroll
202	202	in and make contributions to the plan.
203	203	Sec. 83.007. EXECUTIVE DIRECTOR. The comptroller shall,
204	204	with the consent of the board, hire an executive director who is not
205	205	a member of the board and who shall serve at the pleasure of the
206	206	board. The comptroller shall determine the duties and set the
207	207	compensation of the executive director and other employees as
208	208	appropriate. The board may authorize the executive director to
209	209	enter into contracts on behalf of the board or conduct any business
210	210	necessary for the efficient operation of the board.
211	211	Sec. 83.008. PROHIBITED ACTIVITIES. A board member, plan
212	212	administrator, or plan employee may not:
213	213	(1) directly or indirectly have an interest in the
214	214	making of a plan investment or in the gains or profits accruing from
215	215	a plan investment;
216	216	(2) borrow or use any funds or deposits of the plan for
217	217	personal use or as an agent or partner of others; or
218	218	(3) become an endorser, surety, or obligor on an
219	219	investment by the board.
220	220	Sec. 83.009. RULES. The board shall adopt rules necessary
221	221	to implement this chapter consistent with the Internal Revenue Code
222	222	of 1986 and regulations issued under that code to ensure that the
223	223	plan meets all criteria for federal tax-deferral or tax-exempt
224	224	benefits, or both.
225	225	Sec. 83.010. ENFORCEMENT. The board may request that the
226	226	attorney general bring an enforcement action against an eligible
227	227	employer in violation of this chapter.
228	228	SUBCHAPTER B. PLAN DESIGN AND OPERATION
229	229	Sec. 83.051. PLAN DESIGN. (a) The board shall design and
230	230	implement the plan.
231	231	(b) The plan consists of a state-administered automatic
232	232	individual retirement account savings program and a
233	233	state-sponsored open multiple employer plan, as permitted by
234	234	Sections 401(k) and 413(c), Internal Revenue Code of 1986.
235	235	(c) The plan is a lifetime investment intended to provide
236	236	participants with a source of retirement income for life.
237	237	(d) In designing the plan, the board shall:
238	238	(1) consider whether:
239	239	(A) the plan meets all state and federal
240	240	requirements;
241	241	(B) the appropriate employer of record is
242	242	identified for the purpose of satisfying all the plan's employer
243	243	requirements; and
244	244	(C) the payroll deduction can be implemented at a
245	245	reasonable cost; and
246	246	(2) ensure that:
247	247	(A) the plan does not create a financial
248	248	liability for the state or employer of record; and
249	249	(B) the state is prohibited from incurring
250	250	liabilities associated with administering the plan and that the
251	251	state has no liability for the plan or plan investments.
252	252	(e) The board shall determine necessary costs associated
253	253	with outreach, customer service, enforcement, staffing,
254	254	consultants, and all other costs necessary to administer the plan.
255	255	(f) The board shall consult with employer representatives
256	256	to create an administrative structure that facilitates employee
257	257	participation while addressing employer needs, including clearly
258	258	defining an employer's duties and liability.
259	259	(g) The board shall establish the minimum amount of savings
260	260	required to create an adequate lifetime annuity.
261	261	Sec. 83.052. INVESTMENT AND RISK MANAGEMENT; ANNUAL
262	262	STATEMENT. (a) The board shall develop investment recommendations
263	263	that address risk sharing and smoothing of market losses and gains.
264	264	Investment requirements include creating a reserve to guarantee
265	265	that participants do not lose the principal amount of their
266	266	contributions.
267	267	(b) The board shall annually prepare and adopt a written
268	268	statement of investment policy that includes a risk management and
269	269	oversight program. The board shall consider the statement of
270	270	investment policy and any changes in the investment policy at a
271	271	public hearing.
272	272	(c) The risk management and oversight program must include
273	273	an effective risk management system to monitor the risk levels of
274	274	the plan investment portfolio and ensure that the risks taken are
275	275	prudent and properly managed. The majority of invested funds must
276	276	be maintained in market-indexed funds. The board shall manage the
277	277	program to provide an integrated process for overall risk
278	278	management on a pooling of funds basis and to monitor investment
279	279	returns as well as risk to determine if the risks taken are
280	280	adequately compensated compared to applicable performance
281	281	benchmarks and standards.
282	282	(d) The board shall approve one or more investment
283	283	management entities, the costs of which shall be paid out of funds
284	284	held in the plan and may not be attributed to the administrative
285	285	costs of the board in operating the plan. Not later than the 30th
286	286	day after the last day of each month, the board shall make available
287	287	for public inspection during business hours a report of investments
288	288	made under this chapter and a report of deposits in financial
289	289	institutions.
290	290	Sec. 83.053. USE OF PLAN FUNDS. (a) After sufficient money
291	291	is available for the plan to be operative, the plan must, as a
292	292	self-sustaining trust, pay all costs of administration only from
293	293	money on deposit in the plan.
294	294	(b) The board shall hold contributions to the plan in trust
295	295	and segregate money received by the plan as the plan fund and the
296	296	administrative fund.
297	297	(c) Money in the plan fund may be invested or reinvested by
298	298	the comptroller or may be invested in whole or in part under
299	299	contract with the governing body of a statewide public retirement
300	300	system, private money managers, or a combination of these entities
301	301	as determined by the board.
302	302	(d) Transfers may be made from the plan fund to the
303	303	administrative fund to pay operating costs associated with
304	304	administering the plan and as required by this chapter, including
305	305	board operations, plan administrator and investment expenses, and
306	306	enforcement and compliance costs.
307	307	(e) Costs of administering the plan may only be paid from
308	308	the administrative fund. Expenditures from the administrative fund
309	309	may not exceed 0.5 percent of the total plan fund.
310	310	(f) Employee and employer contributions to the plan may be
311	311	used only for the purpose of paying benefits to the participants of
312	312	the plan, for the cost of administration of the plan, and for
313	313	investments made for the benefit of the plan.
314	314	Sec. 83.054. PLAN OPERATIONS. (a) Not later than September
315	315	1, 2018, the board shall:
316	316	(1) develop and implement an investment policy that
317	317	defines the plan's investment objectives;
318	318	(2) establish policies and procedures enabling
319	319	investment objectives to be met in a prudent manner; and
320	320	(3) seek to minimize participant fees and strive to
321	321	implement plan features that provide maximum possible income
322	322	replacement.
323	323	(b) Contributions to the plan are deposited into a pooled or
324	324	common fund, which is managed under the direction of the board. The
325	325	participants' rate of return is set annually by the board to provide
326	326	maximum benefits to the participants while maintaining an
327	327	appropriate reserve. The plan contribution mechanisms include:
328	328	(1) a payroll deduction individual retirement account
329	329	arrangement for employees of eligible employers;
330	330	(2) a multiple employer plan to permit employer
331	331	contributions; and
332	332	(3) direct contributions by self-employed persons.
333	333	(c) Participants are not responsible for choosing
334	334	investments through the plan.
335	335	Sec. 83.055. BENEFITS. The board shall:
336	336	(1) one year in advance of a participant's normal
337	337	retirement age, provide to each participant a disclosure
338	338	explaining:
339	339	(A) the rights and features of the lifetime
340	340	income investment;
341	341	(B) that the participant may elect to invest a
342	342	higher percentage of the participant's account balance in the
343	343	lifetime income option; and
344	344	(C) that the participant may elect to have a
345	345	variable annuity that increases over time, and that the annuity may
346	346	not be transferred or liquidated during the participant's lifetime,
347	347	except as required by state law;
348	348	(2) on the date a participant reaches the
349	349	participant's normal retirement age, invest 50 percent of the
350	350	participant's account balance, or a higher amount specified by the
351	351	participant, in the lifetime income investment;
352	352	(3) begin making distributions not later than the 90th
353	353	day after the date the participant reaches the participant's normal
354	354	retirement age, unless the participant elects a later date on which
355	355	to begin receiving distributions; and
356	356	(4) establish a procedure by which each participant
357	357	may elect to invest a higher percentage of the participant's
358	358	account balance in the lifetime income investment.
359	359	Sec. 83.056. EDUCATION AND OUTREACH. (a) The board shall
360	360	provide comprehensive worker education and outreach. The board may
361	361	collaborate with state and local government agencies,
362	362	community-based and nonprofit organizations, foundations, vendors,
363	363	and other entities the board considers appropriate to develop and
364	364	secure ongoing resources for education and outreach that reflect
365	365	the cultures and languages of the state's diverse workforce
366	366	population.
367	367	(b) The board shall provide comprehensive employer
368	368	education and outreach, with an emphasis on employers with fewer
369	369	than 100 employees, developed in consultation with employer
370	370	representatives, that includes:
371	371	(1) an Internet website to assist the employers of
372	372	participating employees;
373	373	(2) a toll-free help line for employers with live and
374	374	automated assistance;
375	375	(3) online web-based training;
376	376	(4) live presentations to business associations; and
377	377	(5) targeted outreach to small businesses with 10 or
378	378	fewer employees.
379	379	Sec. 83.057. REQUIRED INFORMATION FOR PARTICIPANTS. (a)
380	380	Before opening the plan for enrollment, the board shall design and
381	381	disseminate to employers an employee information packet that is
382	382	available in an electronic format. The packet must include
383	383	background information on the plan and appropriate disclosures for
384	384	employees.
385	385	(b) The disclosure form must include a description of:
386	386	(1) the benefits and risks associated with making
387	387	contributions to the plan;
388	388	(2) how to make contributions to the plan;
389	389	(3) how to opt out of the plan;
390	390	(4) the process for withdrawal of retirement savings;
391	391	and
392	392	(5) how to obtain additional information on the plan.
393	393	(c) The disclosure form must clearly state that:
394	394	(1) the plan is not sponsored by the employer, and the
395	395	employer is not responsible for the plan or liable as a plan
396	396	sponsor; and
397	397	(2) the plan fund is not guaranteed by the state.
398	398	(d) The disclosure form must include a method for the
399	399	employee to acknowledge that the employee has read all of the
400	400	disclosures and understands the content.
401	401	(e) The employee information packet must include an opt-out
402	402	form for an eligible employee to note the employee's decision to opt
403	403	out of participation in the plan. The opt-out notation must be
404	404	simple, concise, and drafted in a manner that the board considers
405	405	necessary to appropriately demonstrate evidence of the employee's
406	406	understanding that the employee is choosing not to deduct earnings
407	407	automatically to save for retirement.
408	408	(f) An employer shall provide the employee information
409	409	packet with the disclosure and opt-out forms to an employee at the
410	410	time of hiring. All new employees shall review the packet and
411	411	acknowledge having received it.
412	412	(g) An employer shall provide the employee information
413	413	packet with the disclosure and opt-out forms to an existing
414	414	employee when the plan is initially open for enrollment for that
415	415	participating employer.
416	416	(h) The board shall inform participants about their right to
417	417	withdraw money in conformity with the plan's provisions.
418	418	Sec. 83.058. REQUIRED PARTICIPATION; EXCEPTION. (a) After
419	419	the board opens the plan for enrollment, an employer may choose to
420	420	have a payroll deposit retirement savings arrangement to allow
421	421	employee participation in the plan under the terms and conditions
422	422	prescribed by the board.
423	423	(b) Not later than the first anniversary of the date the
424	424	board opens the plan for enrollment, an eligible employer with more
425	425	than 100 eligible employees shall provide for automatic payroll
426	426	deduction to the plan.
427	427	(c) Not later than the second anniversary of the date the
428	428	board opens the plan for enrollment, an eligible employer with more
429	429	than 50 eligible employees shall provide for automatic payroll
430	430	deduction to the plan.
431	431	(d) Not later than the third anniversary of the date the
432	432	board opens the plan for enrollment, all eligible employers shall
433	433	provide for automatic payroll deduction to the plan.
434	434	(e) The board, in its discretion, may extend the time limits
435	435	established by Subsections (b), (c), and (d) for unforeseen
436	436	circumstances.
437	437	(f) Each eligible employee shall be enrolled in the plan
438	438	unless the employee elects not to participate in the plan. An
439	439	eligible employee may elect to opt out of the plan by signing the
440	440	opt-out form provided with the employee information packet
441	441	described by Section 83.057.
442	442	(g) The board shall designate an open enrollment period
443	443	during which an eligible employee who previously opted out of the
444	444	plan may enroll in the plan.
445	445	(h) An employee who has elected to opt out of the plan and
446	446	subsequently wants to participate through the employer's payroll
447	447	deposit retirement savings arrangement may enroll only during the
448	448	board's designated open enrollment period or, if permitted by the
449	449	board, at an earlier time.
450	450	(i) An employer retains the option at all times to offer a
451	451	tax-qualified retirement plan other than the plan established by
452	452	this chapter.
453	453	(j) An eligible employee may terminate participation in the
454	454	plan but may not withdraw the employee's contributions unless the
455	455	employee becomes eligible for disability benefits administered by
456	456	the United States Social Security Administration or reaches
457	457	retirement age.
458	458	(k) A participating employee shall contribute a percentage
459	459	of the employee's wages, by pay period, to the plan.
460	460	(l) The board shall adopt rules allowing an employee to
461	461	choose the percentage amount of the employee's wages to contribute
462	462	to the plan. The contribution must be at least two percent and not
463	463	more than the annual limit established by Section 401(k), Internal
464	464	Revenue Code of 1986.
465	465	(m) The board may implement annual automatic escalation of
466	466	employee contributions. An employee's contribution subject to
467	467	automatic escalation may not exceed five percent of the employee's
468	468	wages. Automatic escalation may not result in an increase in
469	469	contribution of more than one percent of the employee's wages for
470	470	each calendar year. A participating employee may elect to opt out
471	471	of automatic escalation and, subject to Subsection (l), may set the
472	472	employee's contribution percentage rate at a level determined by
473	473	the employee.
474	474	(n) Employees who are contributing members of a public
475	475	retirement system are not required to participate in the plan.
476	476	(o) A participant who moves out of state may elect to
477	477	continue participating in the plan by making direct contributions.
478	478	Sec. 83.059. EMPLOYER LIABILITY. (a) An employer may not
479	479	be held liable for an employee's decision to participate in or opt
480	480	out of the plan.
481	481	(b) An employer is not a fiduciary and may not be considered
482	482	a fiduciary in relation to the plan. If the plan is found to be
483	483	preempted by federal law or regulation, an employer may not be held
484	484	liable as a plan sponsor and may not be held liable with regard to
485	485	investment returns, plan design, or benefits paid to participants.
486	486	An employer does not bear responsibility for the administration,
487	487	investment, or investment performance of the plan.
488	488	(c) An employer's voluntary contribution does not affect
489	489	the employer's liability under this section or change the
490	490	employer's relationship to the plan or the employer's obligations
491	491	to employees.
492	492	(d) An employer may not be held civilly liable for any
493	493	action in accordance with rules adopted by the board under this
494	494	chapter.
495	495	Sec. 83.060. STATE LIABILITY. (a) The state is not liable
496	496	for payment of the retirement savings benefit earned by
497	497	participants under this chapter. The state has no obligation for
498	498	payment of the benefits arising from this chapter.
499	499	(b) This chapter does not waive the state's immunity from
500	500	suit or liability.
501	501	Sec. 83.061. CONFORMITY WITH FEDERAL LAW. (a) The board
502	502	may not implement the plan if the individual retirement account
503	503	arrangements offered do not qualify for the favorable federal
504	504	income tax treatment ordinarily accorded to individual retirement
505	505	accounts under the Internal Revenue Code of 1986, or if it is
506	506	determined that the plan is an employee benefit plan under the
507	507	federal Employee Retirement Income Security Act of 1974 (29 U.S.C.
508	508	Section 1001 et seq.).
509	509	(b) Before opening the plan for enrollment, the board shall
510	510	report to the governor and legislature that the following
511	511	prerequisites and requirements for the plan have been met:
512	512	(1) the United States Department of Labor has
513	513	finalized a regulation establishing a safe harbor for savings
514	514	arrangements established by states for nongovernmental employees
515	515	for the purposes of the federal Employee Retirement Income Security
516	516	Act of 1974 (29 U.S.C. Section 1001 et seq.), and that the plan is
517	517	structured in a manner that meets the criteria of the United States
518	518	Department of Labor regulation;
519	519	(2) the payroll deduction offered by the plan
520	520	qualifies for the favorable federal income tax treatment ordinarily
521	521	accorded to individual retirement account arrangements under the
522	522	Internal Revenue Code of 1986;
523	523	(3) the board has adopted rules defining the roles and
524	524	responsibilities of employers under the criteria outlined in the
525	525	United States Department of Labor regulation described by
526	526	Subdivision (1) and any associated guidance; and
527	527	(4) the board has adopted a third-party administrator
528	528	operational model that limits employer interaction and
529	529	transactions with employees to the extent feasible.
530	530	Sec. 83.062. INDIVIDUAL RETIREMENT ACCOUNT STATUS. A
531	531	payroll deposit individual retirement account arrangement offered
532	532	under the plan has the same status as, and is to be treated
533	533	consistently with, any other individual retirement account for the
534	534	purpose of determining eligibility or benefit level for a program
535	535	that uses a means test.
536	536	Sec. 83.063. UNCLAIMED FUNDS. (a) The board shall adopt
537	537	rules regarding disposition of the proceeds from an account earned
538	538	on behalf of a participant who has reached normal retirement age
539	539	plus three years but has not made an election under Section 83.055.
540	540	(b) The plan administrator shall contact the participant,
541	541	and if the participant does not respond, the plan administrator
542	542	shall contact the participant's beneficiaries. If the
543	543	administrator is unable to verify the existence of either the
544	544	participant or the participant's beneficiaries, the proceeds of the
545	545	participant's account shall be tendered as unclaimed property to
546	546	the comptroller as provided by Chapter 74, Property Code.
547	547	SECTION 2. The legislature may appropriate money from the
548	548	general revenue fund to the board of the secure retirement plan for
549	549	Texans established by this Act for initial expenses of the plan and
550	550	first-year administrative costs. Not later than September 1, 2019,
551	551	the board shall repay to the credit of the general revenue fund the
552	552	amount appropriated plus interest calculated at the rate earned by
553	553	the economic stabilization fund.
554	554	SECTION 3. Not later than September 1, 2018, the governing
555	555	board of the secure retirement plan for Texans shall open the plan
556	556	for enrollment in accordance with Chapter 83, Labor Code, as added
557	557	by this Act.
558	558	SECTION 4. This Act takes effect September 1, 2017.