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A04982 Summary:

BILL NOA04982B
 
SAME ASSAME AS S04344-B
 
SPONSORRodriguez
 
COSPNSRLupardo, Cook, Montesano, Sepulveda, Richardson, Mayer, Solages, Dilan, Pretlow, Pichardo, Rivera, Blake, O'Donnell, Nolan, Benedetto, Rozic, Arroyo, Titone, Davila, Joyner, Hooper, DenDekker, Walker, Gottfried, Aubry, Santabarbara, Gunther, Perry, Hunter, Bichotte, Crespo, Jean-Pierre, Braunstein, Lavine, Hevesi, Dinowitz, Jenne, Brindisi, Barron, Mosley, Stirpe, Fahy, Castorina, Raia, Rosenthal L, Skoufis, Lifton, Weprin, Ramos, Ortiz, Quart, Galef, Seawright, Simotas, Ryan, Bronson, Peoples-Stokes, Titus, Kim, Williams, Colton, Hyndman, Woerner, Carroll, Finch, Magnarelli, McDonald, D'Urso, Murray, Wallace, Jaffee, Palmesano
 
MLTSPNSRBuchwald, Curran, Englebright, Glick, Lentol, McDonough, Ra, Simon, Skartados, Stec, Steck, Thiele
 
Add Art 14-C 570 - 585, R & SS L; add 99-bb & 99-cc, St Fin L
 
Creates a self-sufficient retirement savings program in the form of an automatic enrollment payroll deduction IRA, and establishes an administrative board responsible for promoting greater retirement savings for private sector employees in a convenient, low-cost, and transferable manner.
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A04982 Actions:

BILL NOA04982B
 
02/06/2017referred to governmental employees
03/22/2017reported referred to codes
06/05/2017amend and recommit to codes
06/05/2017print number 4982a
06/13/2017reported referred to ways and means
06/15/2017amend and recommit to ways and means
06/15/2017print number 4982b
06/21/2017reported referred to rules
01/03/2018referred to ways and means
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A04982 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4982B
 
SPONSOR: Rodriguez (MS)
  TITLE OF BILL: An act to amend the retirement and social security law and the state finance law, in relation to enacting the New York state secure choice savings program act   PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to create a self-sufficient retirement savings program in the form of an automatic enrollment payroll deduction IRA, and establish an administrative board responsible for promoting greater retirement savings for private sector employees in a convenient, low-cost, and transferable manner.   SUMMARY OF PROVISIONS: Section 1 titles the Act the "New York State Secure Choice Savings Program Act". Section 2 amends the retirement and social security law to add a new article, 14-C. Section 570 defines terms: Board, superintendent, comptroller, employee, employer, enrollee, fund, internal revenue code, IRA, participating employer, payroll deposit retirement savings arrangement, program and wages. Section 571 establishes the New York State Secure Choice Savings Program, in the form of an automatic enrollment payroll deduction IRA, administered by the New York Secure Choice Savings Board. Section 572 Establishes the New York state secure choice savings board, composed of 8 appointed members. Section 573 outlines the fiduciary responsibilities and duties of the savings board. Section 574 outlines the responsibilities and other duties of the savings board. Section 575 requires the board to annually prepare and adopt a written statement outlining the provisions associated with risk management. Section 576 outlines the Investment Firm selection process and duties of investment manager. Section 577 outlines Investment Options. Section 578 outlines benefits Section 579 provides for the creation and distribution of employer and employee information packets and disclosure forms. Section 580 implements the New York state secure savings program within twenty four months after the effective date of this article. Section 581 outlines Employee contributions and payments Section 582 maintains that the state of New York shall have no duty or liability to any party for the payment of any retirement savings bene- fits accrued by any individual under the program. Section 584 requires the board to submit annual financial reports and audits. Section 585 delayed implementation. Section 99-x amends the state finance law to create the New York state secure choice savings program fund and the New York state secure choice administrative fund.   DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE): The amended version references the applicable provisions in labor law relat- ing to civil remedies for employees and penalties and fines for employ- ers under section five hundred and eighty of the bill.   JUSTIFICATION: According to a survey by the Bureau of Labor Statistics, 97% of private- ly owned establishments, employing 500 workers or more, offer retirement and health benefits. That percentage is halved when compared to estab- lishments with less than 49 workers. Moreover, in 2014 President Barrack Obama suggested that states need to do more to provide workers with options to fund retirement plans due to congressional inaction. This legislation would provide employees of smaller establishment's access to retirement saving options.   PRIOR LEGISLATIVE HISTORY: A8332f/S6045- 2015/16-reported to cal. 494   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: To be determined.   EFFECTIVE DATE: Immediately
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A04982 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4982--B
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 6, 2017
                                       ___________
 
        Introduced  by  M. of A. RODRIGUEZ, LUPARDO, COOK, MONTESANO, SEPULVEDA,
          RICHARDSON, MAYER, SOLAGES, DILAN, PRETLOW, PICHARDO,  RIVERA,  BLAKE,
          O'DONNELL,  NOLAN,  BENEDETTO,  ROZIC, ARROYO, TITONE, DAVILA, JOYNER,
          FARRELL, HOOPER, DenDEKKER, WALKER,  GOTTFRIED,  AUBRY,  SANTABARBARA,
          GUNTHER,  PERRY, HUNTER, BICHOTTE, CRESPO, HARRIS, JEAN-PIERRE, BRAUN-
          STEIN, LAVINE, HEVESI,  DINOWITZ,  JENNE,  BRINDISI,  BARRON,  MOSLEY,
          STIRPE,  FAHY,  CASTORINA,  RAIA,  ROSENTHAL, SKOUFIS, LIFTON, WEPRIN,
          RAMOS,  ORTIZ,  QUART,  GALEF,  SEAWRIGHT,  SIMOTAS,  RYAN,   BRONSON,
          PEOPLES-STOKES, TITUS, KIM, KAVANAGH, WILLIAMS, COLTON, MOYA, HYNDMAN,
          WOERNER, CARROLL, FINCH, MAGNARELLI, McDONALD, D'URSO, GRAF, MURRAY --
          Multi-Sponsored  by -- M.  of A. BUCHWALD, CURRAN, ENGLEBRIGHT, GLICK,
          KEARNS, LENTOL, LOPEZ, LUPINACCI, McDONOUGH, McLAUGHLIN, RA,  SIMANOW-
          ITZ,  SIMON,  SKARTADOS, STEC, STECK, THIELE -- read once and referred
          to the Committee on Governmental Employees -- reported and referred to
          the Committee on Codes -- committee discharged, bill amended,  ordered
          reprinted as amended and recommitted to said committee -- reported and
          referred  to  the Committee on Ways and Means -- committee discharged,
          bill amended, ordered reprinted as amended  and  recommitted  to  said
          committee
 
        AN  ACT  to  amend  the retirement and social security law and the state
          finance law, in relation to enacting the New York state secure  choice
          savings program act
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "New York state secure choice savings program act".
     3    § 2. The retirement and social security law is amended by adding a new
     4  article 14-C to read as follows:
     5                                ARTICLE 14-C
     6                NEW YORK STATE SECURE CHOICE SAVINGS PROGRAM
     7  Section 570. Definitions.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05116-06-7

        A. 4982--B                          2
 
     1          571. Program established.
     2          572. Composition of the board.
     3          573. Fiduciary duty.
     4          574. Duties of the board.
     5          575. Risk management.
     6          576. Investment firms.
     7          577. Investment options.
     8          578. Benefits.
     9          579. Employer  and  employee  information packets and disclosure
    10                 forms.
    11          580. Program implementation and enrollment.
    12          581. Payments.
    13          582. Duty and liability of the state.
    14          583. Duty and liability of participating employers.
    15          584. Audit and reports.
    16          585. Delayed implementation.
    17    § 570. Definitions. All terms shall have the same meaning as when used
    18  in a comparable context in the Internal Revenue Code. As  used  in  this
    19  article, the following terms shall have the following meanings:
    20    1. "Board" shall mean the New York secure choice savings program board
    21  established under this article.
    22    2. "Superintendent" shall mean the superintendent of the department of
    23  financial services.
    24    2-a. "Comptroller" shall mean the comptroller of the state.
    25    3.  "Employee"  shall mean any individual who is eighteen years of age
    26  or older, who is employed by an employer, and who earned  wages  working
    27  for an employer in New York state during a calendar year.
    28    4.  "Employer"  shall  mean  a person or entity engaged in a business,
    29  industry, profession, trade, or other  enterprise  in  New  York  state,
    30  whether  for  profit or not for profit, that has not offered a qualified
    31  retirement plan, including, but not limited to, a plan  qualified  under
    32  sections 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or 457(b) of the
    33  Internal Revenue Code of 1986 in the preceding two years.
    34    5. "Enrollee" shall mean any employee who is enrolled in the program.
    35    6.  "Fund" shall mean the New York state secure choice savings program
    36  fund.
    37    7. "Internal Revenue Code" shall mean the  Internal  Revenue  Code  of
    38  1986, or any successor law, in effect for the calendar year.
    39    8. "IRA" shall mean a Roth IRA (individual retirement account).
    40    9.  "Participating  employer"  shall  mean an employer that provides a
    41  payroll deposit retirement savings arrangement as provided for  by  this
    42  article for its employees who are enrollees in the program.
    43    10.  "Payroll  deposit  retirement  savings arrangement" shall mean an
    44  arrangement by which a participating employer allows enrollees to  remit
    45  payroll deduction contributions to the program.
    46    11.  "Program"  shall  mean  the  New York state secure choice savings
    47  program.
    48    12. "Wages" means any  compensation  within  the  meaning  of  section
    49  219(f)(1)  of  the Internal Revenue Code that is received by an enrollee
    50  from a participating employer during the calendar year.
    51    § 571. Program established. There is hereby established  a  retirement
    52  savings program in the form of an automatic enrollment payroll deduction
    53  IRA,  known  as  the  New  York state secure choice savings program. The
    54  general administration and responsibility for the  proper  operation  of
    55  the  program  shall  be  administered  by  the  board for the purpose of

        A. 4982--B                          3

     1  promoting greater retirement savings for private-sector employees  in  a
     2  convenient, low-cost, and portable manner.
     3    §  572. Composition of the board. There is hereby created the New York
     4  state secure choice savings program board.
     5    1. The board shall consist of the following eight members:
     6    (a) the state comptroller, or his or her designee, who shall serve  as
     7  chair;
     8    (b) the superintendent, or his or her designee;
     9    (c)  two  public  representatives with expertise in retirement savings
    10  plan administration or  investment,  or  both,  one  of  whom  shall  be
    11  appointed  by  the  speaker  of  the  assembly  and one of whom shall be
    12  appointed by the temporary president of the senate;
    13    (d) a representative of  participating  employers,  appointed  by  the
    14  governor;
    15    (e) a representative of enrollees, appointed by the governor;
    16    (f) the chair of the assembly governmental employees committee; and
    17    (g) the chair of the senate civil service and pension committee.
    18    2.  Members  of  the board shall serve without compensation but may be
    19  reimbursed for necessary travel expenses  incurred  in  connection  with
    20  their board duties from funds appropriated for the purpose.
    21    3.  The initial appointments shall be as follows: one public represen-
    22  tative for four years; the representative of participating employers for
    23  three years; and the representative of enrollees for three years.  Ther-
    24  eafter, all the governor's appointees shall be for terms of four years.
    25    4. A vacancy in the term of an appointed board member shall be  filled
    26  for the balance of the unexpired term in the same manner as the original
    27  appointment.
    28    5.  Each  appointment  by the governor shall be subject to approval by
    29  the comptroller, who, upon approval, shall certify his or  her  approval
    30  to the secretary of state.
    31    § 573. Fiduciary duty. The board, the individual members of the board,
    32  the  trustees,  any  other agents appointed or engaged by the board, and
    33  all persons serving as program staff shall discharge their  duties  with
    34  respect to the program solely in the interest of the program's enrollees
    35  and beneficiaries as follows:
    36    1.  for  the exclusive purposes of providing benefits to enrollees and
    37  beneficiaries and defraying reasonable  expenses  of  administering  the
    38  program;
    39    2.  by  investing  with the care, skill, prudence, and diligence under
    40  the prevailing circumstances that a prudent  person  acting  in  a  like
    41  capacity  and familiar with those matters would use in the conduct of an
    42  enterprise of a like character and with like aims; and
    43    3. by using any contributions paid by employees and  employers  remit-
    44  ting  employees'  own  contributions  into the trust exclusively for the
    45  purpose of paying benefits to the enrollees of the program, for the cost
    46  of administration of the program, and for investments made for the bene-
    47  fit of the program.
    48    § 574. Duties of the board.  In  addition  to  the  other  duties  and
    49  responsibilities stated in this article, the board shall:
    50    1.  Cause  the  program  to be designed, established and operated in a
    51  manner that:
    52    (a) accords with best practices for retirement savings vehicles;
    53    (b) maximizes participation, savings, and sound  investment  practices
    54  including  considering  the use of automatic enrollment as allowed under
    55  federal law;

        A. 4982--B                          4
 
     1    (c) maximizes simplicity, including ease of administration for partic-
     2  ipating employers and enrollees;
     3    (d)  provides  an efficient product to enrollees by pooling investment
     4  funds;
     5    (e) ensures the portability of benefits; and
     6    (f) provides for the deaccumulation of enrollee  assets  in  a  manner
     7  that maximizes financial security in retirement.
     8    2. Appoint a trustee to the IRA fund in compliance with section 408 of
     9  the Internal Revenue Code.
    10    3.  Explore and establish investment options, subject to this article,
    11  that offer enrollees returns on  contributions  and  the  conversion  of
    12  individual  retirement  savings  account  balances  to secure retirement
    13  income without incurring debt or liabilities to the state.
    14    4. Establish the process by which interest, investment  earnings,  and
    15  investment  losses are allocated to individual program accounts on a pro
    16  rata basis and are computed at the interest rate on the  balance  of  an
    17  individual's account.
    18    5.  Make  and enter into contracts necessary for the administration of
    19  the program and fund, including,  but  not  limited  to,  retaining  and
    20  contracting  with  investment  managers, private financial institutions,
    21  other financial and service providers, consultants, actuaries,  counsel,
    22  auditors,  third-party administrators, and other professionals as neces-
    23  sary.
    24    6. Conduct a review of the performance of any investment vendors every
    25  four years, including, but not limited to, a review  of  returns,  fees,
    26  and  customer  service. A copy of reviews shall be posted to the board's
    27  Internet website.
    28    7. Determine the number and duties of staff members needed to adminis-
    29  ter the program and assemble such a staff, including, as needed, employ-
    30  ing staff, and appointing a program administrator.
    31    8. Cause moneys in the fund to be held and invested as pooled  invest-
    32  ments  described  in this article, with a view to achieving cost savings
    33  through efficiencies and economies of scale.
    34    9. Evaluate and establish the process by which an enrollee is able  to
    35  contribute  a  portion  of his or her wages to the program for automatic
    36  deposit of those contributions and the process by which the  participat-
    37  ing  employer  provides a payroll deposit retirement savings arrangement
    38  to forward those contributions and related information to  the  program,
    39  including, but not limited to, contracting with financial service compa-
    40  nies  and  third-party administrators with the capability to receive and
    41  process employee  information  and  contributions  for  payroll  deposit
    42  retirement savings arrangements or similar arrangements.
    43    10.  Design  and  establish  the  process for enrollment including the
    44  process by which an employee can opt not to participate in the  program,
    45  select  a contribution level, select an investment option, and terminate
    46  participation in the program.
    47    11. Evaluate and establish the process by which an employee may volun-
    48  tarily enroll in and make contributions to the program.
    49    12. Accept any grants, appropriations, or other moneys from the state,
    50  any unit of federal, state, or local government, or  any  other  person,
    51  firm,  partnership,  or  corporation  solely  for deposit into the fund,
    52  whether for investment or administrative purposes.
    53    13. Evaluate the need for, and procure as  needed,  insurance  against
    54  any  and all loss in connection with the property, assets, or activities
    55  of the program, and indemnify as needed each member of  the  board  from

        A. 4982--B                          5
 
     1  personal  loss or liability resulting from a member's action or inaction
     2  as a member of the board.
     3    14.  Make  provisions  for  the  payment  of  administrative costs and
     4  expenses for the creation, management, and  operation  of  the  program.
     5  Subject to appropriation, the state may pay administrative costs associ-
     6  ated  with  the  creation and management of the program until sufficient
     7  assets are available in the  fund  for  that  purpose.  Thereafter,  all
     8  administrative  costs  of  the fund, including repayment of any start-up
     9  funds provided by the state, shall be paid only out of moneys on deposit
    10  therein. However, private funds or federal funding received in order  to
    11  implement  the  program  until  the fund is self-sustaining shall not be
    12  repaid unless those funds were offered contingent upon  the  promise  of
    13  such  repayment.  The board shall keep annual administrative expenses as
    14  low as possible, but in no event shall they exceed 0.75%  of  the  total
    15  trust balance.
    16    15.  Allocate administrative fees to individual retirement accounts in
    17  the program on a pro rata basis.
    18    16. Set minimum and maximum contribution  levels  in  accordance  with
    19  limits established for IRAs by the Internal Revenue Code.
    20    17. Facilitate education and outreach to employers and employees.
    21    18.  Facilitate compliance by the program with all applicable require-
    22  ments for the program under the Internal  Revenue  Code,  including  tax
    23  qualification  requirements  or  any other applicable law and accounting
    24  requirements.
    25    19. Carry out the duties and obligations of the program in  an  effec-
    26  tive, efficient, and low-cost manner.
    27    20.  Exercise  any  and  all other powers reasonably necessary for the
    28  effectuation of the purposes, objectives, and provisions of this article
    29  pertaining to the program.
    30    21. Deposit into the New York state secure choice administrative  fund
    31  all  grants,  gifts, donations, fees, and earnings from investments from
    32  the New York state secure choice savings program fund that are  used  to
    33  recover  administrative  costs.  All expenses of the board shall be paid
    34  from the New York state secure choice administrative fund.
    35    22. Determine  withdrawal  provisions,  such  as  economic  hardships,
    36  portability and leakage.
    37    23. Determine employee rights and enforcement of penalties.
    38    §  575.  Risk management. The board shall annually prepare and adopt a
    39  written statement of investment policy that includes a  risk  management
    40  and  oversight program. This investment policy shall prohibit the board,
    41  program, and fund from  borrowing  for  investment  purposes.  The  risk
    42  management  and  oversight  program  shall be designed to ensure that an
    43  effective risk management system is in place to monitor the risk  levels
    44  of  the  program  and fund portfolio, to ensure that the risks taken are
    45  prudent and properly managed, to provide an integrated process for over-
    46  all risk management, and to assess investment returns as well as risk to
    47  determine if the risks taken  are  adequately  compensated  compared  to
    48  applicable performance benchmarks and standards. The board shall consid-
    49  er  the statement of investment policy and any changes in the investment
    50  policy at a public hearing.
    51    § 576. Investment firms. 1. The board shall engage, after an open  bid
    52  process,  an  investment  manager or managers to invest the fund and any
    53  other assets of the program. Moneys in the fund may be invested or rein-
    54  vested by the comptroller or may be invested in whole  or  in  part.  In
    55  selecting  the investment manager or managers, the board shall take into

        A. 4982--B                          6
 
     1  consideration and give weight  to  the  investment  manager's  fees  and
     2  charges in order to reduce the program's administrative expenses.
     3    2.  The  investment  manager or managers shall comply with any and all
     4  applicable federal and state laws, rules, and regulations,  as  well  as
     5  any  and  all  rules,  policies, and guidelines promulgated by the board
     6  with respect to the program and the investment of the  fund,  including,
     7  but not limited to, the investment policy.
     8    3.  The  investment  manager or managers shall provide such reports as
     9  the board deems necessary for  the  board  to  oversee  each  investment
    10  manager's performance and the performance of the fund.
    11    §  577. Investment options. 1. The board shall establish as an invest-
    12  ment option a life-cycle fund with a target date based upon the  age  of
    13  the  enrollee. This shall be the default investment option for enrollees
    14  who fail to elect an investment option unless and until the board desig-
    15  nates by rule a new investment option as the default.
    16    2. The board may also establish any or all of the following additional
    17  investment options:
    18    (a) a conservative principal protection fund;
    19    (b) a growth fund;
    20    (c) a secure return fund whose primary objective is  the  preservation
    21  of  the  safety  of principal and the provision of a stable and low-risk
    22  rate of return; if the board elects to establish a secure  return  fund,
    23  the board may procure any insurance, annuity, or other product to insure
    24  the  value  of  enrollees'  accounts and guarantee a rate of return; the
    25  cost of such funding mechanism shall be paid out of the fund;  under  no
    26  circumstances  shall the board, program, fund, the state, or any partic-
    27  ipating employer assume any liability for investment or actuarial  risk;
    28  the  board  shall determine whether to establish such investment options
    29  based upon an analysis of  their  cost,  risk  profile,  benefit  level,
    30  feasibility, and ease of implementation; or
    31    (d) an annuity fund.
    32    3.  If  the  board elects to establish a secure return fund, the board
    33  shall then determine whether such option shall replace the  target  date
    34  or life-cycle fund as the default investment option for enrollees who do
    35  not  elect an investment option. In making such determination, the board
    36  shall consider the cost,  risk  profile,  benefit  level,  and  ease  of
    37  enrollment  in  the secure return fund. The board may at any time there-
    38  after revisit this question and, based upon an analysis of these  crite-
    39  ria,  establish  either the secure return fund or the life-cycle fund as
    40  the default for enrollees who do not elect an investment option.
    41    § 578. Benefits. Interest, investment earnings, and investment  losses
    42  shall  be allocated to individual program accounts as established by the
    43  board pursuant to this article. An individual's retirement savings bene-
    44  fit under the program shall be an amount equal to  the  balance  in  the
    45  individual's  program account on the date the retirement savings benefit
    46  becomes payable. The state shall have no liability for  the  payment  of
    47  any benefit to any enrollee in the program.
    48    § 579. Employer and employee information packets and disclosure forms.
    49  1.  Prior  to the opening of the program for enrollment, the board shall
    50  design and disseminate to all employers an employer  information  packet
    51  and  an  employee  information  packet,  which  shall include background
    52  information on the program, appropriate disclosures for  employees,  and
    53  information regarding the vendor Internet website described.
    54    2.  The  board  shall  provide  for  the contents of both the employee
    55  information packet and the employer information packet.    The  employee
    56  information  packet shall be made available in English, Spanish, Haitian

        A. 4982--B                          7

     1  Creole, Chinese, Korean, Russian, Arabic, and  any  other  language  the
     2  comptroller deems necessary.
     3    3.  The  employee  information packet shall include a disclosure form.
     4  The disclosure form shall explain, but not be limited  to,  all  of  the
     5  following:
     6    (a) the benefits and risks associated with making contributions to the
     7  program;
     8    (b) the mechanics of how to make contributions to the program;
     9    (c) how to opt out of the program;
    10    (d)  how  to  participate  in  the  program  with  a level of employee
    11  contributions other than three percent;
    12    (e) that they are not required to participate or contribute more  than
    13  three percent;
    14    (f) that they can opt out after they have enrolled;
    15    (g) the process for withdrawal of retirement savings;
    16    (h)  the  process  for  selecting  beneficiaries  of  their retirement
    17  savings;
    18    (i) how to obtain additional information about the program;
    19    (j) that employees seeking financial advice should  contact  financial
    20  advisors,  that participating employers are not in a position to provide
    21  financial advice, and that participating employers are  not  liable  for
    22  decisions employees make pursuant to this article;
    23    (k)  information  on  how  to  access  any financial literacy programs
    24  implemented by the comptroller;
    25    (l) that the program is not an employer-sponsored retirement plan; and
    26    (m) that the program fund is not guaranteed by the state.
    27    4. The employee information packet shall also include a  form  for  an
    28  employee  to note his or her decision to opt out of participation in the
    29  program or elect to participate with a level of  employee  contributions
    30  other than three percent.
    31    5. Participating employers shall supply the employee information pack-
    32  et  to  existing employees at least one month prior to the participating
    33  employers' launch of the program. Participating employers  shall  supply
    34  the  employee information packet to new employees at the time of hiring,
    35  and new employees may opt out of participation in the program  or  elect
    36  to  participate  with a level of employee contributions other than three
    37  percent at that time.
    38    § 580. Program implementation  and  enrollment.  Except  as  otherwise
    39  provided  in this article, the program shall be implemented, and enroll-
    40  ment of employees shall  begin,  within  twenty-four  months  after  the
    41  effective  date of this article. The provisions of this section shall be
    42  in force after the board opens the program for enrollment.
    43    1. Each participating employer may establish a payroll deposit retire-
    44  ment savings arrangement to allow each employee to  participate  in  the
    45  program  and  begin  employee  enrollment  at most nine months after the
    46  board opens the program for enrollment.
    47    2. Enrollees shall have the ability to  select  a  contribution  level
    48  into  the  fund. This level may be expressed as a percentage of wages or
    49  as a dollar amount up to the deductible amount for the enrollee's  taxa-
    50  ble year under section 219(b)(1)(A) of the Internal Revenue Code. Enrol-
    51  lees  may  change their contribution level at any time, subject to rules
    52  promulgated by the board. If an enrollee fails to select a  contribution
    53  level  using  the  form  described in this article, then he or she shall
    54  contribute three percent of his or her wages to  the  program,  provided
    55  that  such  contributions  shall not cause the enrollee's total contrib-
    56  utions to IRAs for the year to exceed  the  deductible  amount  for  the

        A. 4982--B                          8

     1  enrollee's  taxable  year  under  section  219(b)(1)(A)  of the Internal
     2  Revenue Code. Notwithstanding any other provision of  law,  any  partic-
     3  ipating  enrollee,  whose  employer fails to make employee deductions in
     4  accordance  with  the  provisions in section one hundred ninety-three of
     5  the labor law, may bring an action,  pursuant  to  section  one  hundred
     6  ninety-eight  of  the  labor  law,  to recover such monies. Further, any
     7  participating employer, who fails to make employee deductions in accord-
     8  ance with the provisions in section  one  hundred  ninety-three  of  the
     9  labor  law,  shall be subject to the penalties and fines provided for in
    10  section one hundred ninety-eight-a of the labor law.
    11    3. Enrollees may  select  an  investment  option  from  the  permitted
    12  investment  options  listed  in this article. Enrollees may change their
    13  investment option at any time,  subject  to  rules  promulgated  by  the
    14  board.  In  the  event  that  an  enrollee fails to select an investment
    15  option, that enrollee shall be placed in the investment option  selected
    16  by  the  board  as  the default under this article. If the board has not
    17  selected a default investment option under this article, then an  enrol-
    18  lee  who  fails  to  select  an investment option shall be placed in the
    19  life-cycle fund investment option.
    20    4. Following initial implementation of the program  pursuant  to  this
    21  section,  at least once every year, participating employers shall desig-
    22  nate an open enrollment period during  which  employees  who  previously
    23  opted out of the program may enroll in the program.
    24    5.  An  employee who opts out of the program who subsequently wants to
    25  participate through the participating employer's payroll deposit retire-
    26  ment savings  arrangement  may  only  enroll  during  the  participating
    27  employer's  designated  open  enrollment  period  or if permitted by the
    28  participating employer at an earlier time.
    29    6. Employers shall retain the option at all times to set up  any  type
    30  of employer-sponsored retirement plan instead of having a payroll depos-
    31  it retirement savings arrangement to allow employee participation in the
    32  program.
    33    7.  An  enrollee may terminate his or her participation in the program
    34  at any time in a manner prescribed by the board.
    35    8. (a) The state comptroller shall establish a website  regarding  the
    36  secure  choice  savings  program  which  shall be accessible through the
    37  state comptroller's own website.
    38    (b) The board shall, in conjunction with the office of the state comp-
    39  troller, establish and maintain a secure website wherein  enrollees  may
    40  log  in  and  acquire information regarding contributions and investment
    41  income allocated to, withdrawals from, and  balances  in  their  program
    42  accounts for the reporting period. Such website must also include infor-
    43  mation  for  the  enrollees  regarding  other  options  available to the
    44  employee and how they can transfer  their  accounts  to  other  programs
    45  should  they  wish to do so. Such website may include any other informa-
    46  tion regarding the program as the board may determine.
    47    § 581. Payments. Employee contributions deducted by the  participating
    48  employer  through  payroll  deduction shall be paid by the participating
    49  employer to the fund  using  one  or  more  payroll  deposit  retirement
    50  savings  arrangements  established  by  the  board  under  this article,
    51  either:
    52    1. on or before the last day of the month following the month in which
    53  the compensation otherwise would have been payable to  the  employee  in
    54  cash; or
    55    2.  before such later deadline prescribed by the board for making such
    56  payments, but not later than  the  due  date  for  the  deposit  of  tax

        A. 4982--B                          9
 
     1  required  to  be  deducted and withheld relating to collection of income
     2  tax at source on wages or for the deposit of tax  required  to  be  paid
     3  under  the unemployment insurance system for the payroll period to which
     4  such payments relate.
     5    §  582.  Duty  and  liability of the state. 1. The state shall have no
     6  duty or liability to any party for the payment of any retirement savings
     7  benefits accrued by  any  enrollee  under  the  program.  Any  financial
     8  liability  for  the  payment of retirement savings benefits in excess of
     9  funds available under the program shall be borne solely by the  entities
    10  with  whom the board contracts to provide insurance to protect the value
    11  of the program.
    12    2. No state board, commission, or agency, or any officer, employee, or
    13  member thereof is liable for  any  loss  or  deficiency  resulting  from
    14  particular  investments  selected  under  this  article,  except for any
    15  liability that arises out of a breach of fiduciary duty.
    16    § 583. Duty and liability of participating employers. 1.   Participat-
    17  ing employers shall not have any liability for an employee's decision to
    18  participate  in,  or opt out of, the program or for the investment deci-
    19  sions of the board or of any enrollee.
    20    2. A participating employer shall not be a fiduciary, or considered to
    21  be a fiduciary, over the program. A  participating  employer  shall  not
    22  bear  responsibility  for  the administration, investment, or investment
    23  performance of the program. A participating employer shall not be liable
    24  with regard to investment returns, program design, and benefits paid  to
    25  program participants.
    26    § 584. Audit and reports. 1. The board shall annually submit:
    27    (a) an audited financial report, prepared in accordance with generally
    28  accepted  accounting principles, on the operations of the program during
    29  each calendar year by July first of the following year to the  governor,
    30  the comptroller, the superintendent of financial services and the senate
    31  and assembly; and
    32    (b)  a  report  prepared by the board, which shall include, but is not
    33  limited to, a summary of the benefits provided by the program, including
    34  the number of enrollees in the program, the percentage  and  amounts  of
    35  investment  options and rates of return, and such other information that
    36  is relevant to make a full, fair, and effective disclosure of the  oper-
    37  ations of the program and the fund. The annual audit shall be made by an
    38  independent  certified  public  accountant and shall include, but is not
    39  limited to, direct and indirect costs attributable to the use of outside
    40  consultants, independent contractors, and any other persons who are  not
    41  state employees for the administration of the program.
    42    2. In addition to any other statements or reports required by law, the
    43  board  shall  provide  periodic  reports at least annually to enrollees,
    44  reporting contributions and investment income allocated to,  withdrawals
    45  from,  and  balances in their program accounts for the reporting period.
    46  Such reports may include any other information regarding the program  as
    47  the board may determine.
    48    §  585.  Delayed implementation. If the board does not obtain adequate
    49  funds to implement the program within the time  frame  set  forth  under
    50  this  article  and  is subject to appropriation, the board may delay the
    51  implementation of the program.
    52    § 3. The state finance law is amended by adding two new sections 99-bb
    53  and 99-cc to read as follows:
    54    § 99-bb. New York state secure choice savings program fund. 1.   There
    55  is  hereby  established  within the joint custody of the commissioner of
    56  taxation and finance and the state comptroller in consultation with  the

        A. 4982--B                         10
 
     1  New  York  state  secure  choice savings program board, a new fund to be
     2  known as the New York state secure choice savings program fund.
     3    2. The fund shall include the individual retirement accounts of enrol-
     4  lees, which shall be accounted for as individual accounts.
     5    3.  Moneys in the fund shall consist of moneys received from enrollees
     6  and participating employers pursuant to automatic payroll deductions and
     7  contributions to savings made under the New  York  state  secure  choice
     8  savings  program  pursuant  to  article fourteen-C of the retirement and
     9  social security law.
    10    4. The fund shall be operated in a manner determined by the  New  York
    11  state  secure  choice  savings  program board, provided that the fund is
    12  operated so that the accounts of enrollees established under the program
    13  meet the requirements for IRAs under the Internal Revenue Code.
    14    5. The amounts deposited in the fund shall not constitute property  of
    15  the state and the fund shall not be construed to be a department, insti-
    16  tution, or agency of the state. Amounts on deposit in the fund shall not
    17  be  commingled  with state funds and the state shall have no claim to or
    18  against, or interest in, such funds.
    19    § 99-cc. New York state secure choice administrative fund. 1.    There
    20  is  hereby  established  within the joint custody of the commissioner of
    21  taxation and finance and the state comptroller in consultation with  the
    22  New  York  state  secure  choice savings program board, a new fund to be
    23  known as the New York state secure choice administrative fund.
    24    2. The New York state secure choice savings program  board  shall  use
    25  moneys  in the administrative fund to pay for administrative expenses it
    26  incurs in the performance of its duties under the New York state  secure
    27  choice  savings program pursuant to article fourteen-C of the retirement
    28  and social security law.
    29    3. The New York state secure choice savings program  board  shall  use
    30  moneys  in  the  administrative  fund  to  cover start-up administrative
    31  expenses it incurs in the performance of its duties under article  four-
    32  teen-C of the retirement and social security law.
    33    4.  The  administrative  fund  may  receive any grants or other moneys
    34  designated for administrative purposes from the state, or  any  unit  of
    35  federal  or local government, or any other person, firm, partnership, or
    36  corporation. Any interest earnings that are attributable  to  moneys  in
    37  the administrative fund must be deposited into the administrative fund.
    38    § 4. This act shall take effect immediately.
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