Bill > S1637

This bill, titled "Providing retirement options for private sector employees," aims to expand retirement savings opportunities for individuals working in the private sector within the Commonwealth. It proposes the creation of a new section within Chapter 29 of the General Laws, which will empower the state treasurer to research and potentially establish a state-sponsored retirement program for private sector employees. This program would be a qualified defined contribution plan, meaning it's a retirement savings plan where contributions are defined, and the ultimate retirement benefit depends on investment performance, as defined by sections 414(i) and 401(a) of the Internal Revenue Code (the Code). The bill clarifies that "private sector" generally includes eligible organizations under the Code, but excludes certain non-profit organizations. To participate, private sector employers must agree to the plan's terms and comply with federal laws like the Employee Retirement Income Security Act of 1974 (ERISA), which sets standards for most voluntarily established retirement plans. The state treasurer will oversee the program, appointing a director to manage enrollment and assist employers and employees, while the Pension Reserves Investment Management Board will continue its asset management responsibilities. An advisory committee, composed of state officials, an investment expert, employee and small business representatives, and public members, will guide the program's development. Employees of participating employers will be automatically enrolled unless they choose to opt out, and employers can arrange for payroll deductions for contributions. The director will report on the program's effectiveness, and enrollment may be limited if expenditures exceed available funds, with the treasurer authorized to create rules and regulations to implement the program.