Establishing a retirement savings plan trust, providing penalties, and including implementation provisions

The bill provides that individuals who are employed for compensation in this state must be automatically enrolled in the trust by the individual’s employer with a default contribution rate set by the treasurer of state. A participant may opt out of the trust at any time and may at any time choose a different contribution rate or investment option. The bill requires employers to designate an open enrollment period for the trust at least once per year. The bill permits the treasurer of state to establish a low-risk investment portfolio and a target date portfolio, which is the default investment option. The treasurer of state must distribute informational packets to employers and employees about the trust and provide participating employers and participants with reports on the trust fund at least once per year. The bill also requires that all participant account information be maintained as confidential, except as necessary to administer the trust or as agreed to in writing by the person who provides the information or is the subject of the information. The bill allows the treasurer of state to enter into agreements with other states for the administration of the trust. The bill creates civil penalties for employers who fail to enroll an employee in the trust without reasonable cause, enforced by the treasurer of state. A penalty shall not exceed $250 for each employee that an employer fails to enroll each year. Civil penalties collected under the bill are deposited in the general fund of the state. The bill provides that the state, the treasurer of state, and the trust may not guarantee any rate of return on any contributions to the trust and are not liable for any loss incurred by any person as a result of participating in the trust. The bill requires the treasurer to submit an annual audited financial report on the operations of the trust. The bill provides that when the requirements of the bill are enacted, the treasurer shall not allow individuals to make contributions to the trust earlier than July 1, 2025. During the first year of the trust’s operation, the bill applies to employers that employed 100 or more employees at any time during the prior year. In the second year, the bill applies to employers that employed or more employees at any time during the prior year. After the second year, the bill applies to all employers with five or more employees during the prior calendar year.