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S04344 Summary:

BILL NOS04344B
 
SAME ASSAME AS A04982-B
 
SPONSORSAVINO
 
COSPNSRADDABBO, ALCANTARA, AVELLA, BAILEY, BOYLE, CARLUCCI, FUNKE, GALLIVAN, HAMILTON, HOYLMAN, KAMINSKY, KAVANAGH, KRUEGER, LANZA, MAYER, ORTT, PERALTA, RANZENHOFER, SANDERS, SEPULVEDA, STAVISKY, VALESKY
 
MLTSPNSR
 
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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S04344 Actions:

BILL NOS04344B
 
02/10/2017REFERRED TO CIVIL SERVICE AND PENSIONS
06/09/2017AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
06/09/2017PRINT NUMBER 4344A
06/16/2017AMEND AND RECOMMIT TO CIVIL SERVICE AND PENSIONS
06/16/2017PRINT NUMBER 4344B
01/03/2018REFERRED TO CIVIL SERVICE AND PENSIONS
01/29/2018REPORTED AND COMMITTED TO FINANCE
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S04344 Memo:

Memo not available
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S04344 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4344--B
 
                               2017-2018 Regular Sessions
 
                    IN SENATE
 
                                    February 10, 2017
                                       ___________
 
        Introduced  by Sens. SAVINO, ADDABBO, ALCANTARA, AVELLA, BAILEY, CARLUC-
          CI, GALLIVAN, HAMILTON, HOYLMAN,  KRUEGER,  LANZA,  LATIMER,  PERALTA,
          RANZENHOFER,  SANDERS,  STAVISKY,  VALESKY  --  read twice and ordered
          printed, and when printed to be committed to the  Committee  on  Civil
          Service  and  Pensions  -- committee discharged, bill amended, ordered
          reprinted as amended and recommitted to said  committee  --  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.
     8          571. Program established.
     9          572. Composition of the board.
    10          573. Fiduciary duty.
    11          574. Duties of the board.
    12          575. Risk management.
    13          576. Investment firms.
    14          577. Investment options.
    15          578. Benefits.
    16          579. Employer  and  employee  information packets and disclosure
    17                 forms.
    18          580. Program implementation and enrollment.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05116-07-7

        S. 4344--B                          2

     1          581. Payments.
     2          582. Duty and liability of the state.
     3          583. Duty and liability of participating employers.
     4          584. Audit and reports.
     5          585. Delayed implementation.
     6    § 570. Definitions. All terms shall have the same meaning as when used
     7  in  a  comparable  context in the Internal Revenue Code. As used in this
     8  article, the following terms shall have the following meanings:
     9    1. "Board" shall mean the New York secure choice savings program board
    10  established under this article.
    11    2. "Superintendent" shall mean the superintendent of the department of
    12  financial services.
    13    2-a. "Comptroller" shall mean the comptroller of the state.
    14    3. "Employee" shall mean any individual who is eighteen years  of  age
    15  or  older,  who is employed by an employer, and who earned wages working
    16  for an employer in New York state during a calendar year.
    17    4. "Employer" shall mean a person or entity  engaged  in  a  business,
    18  industry,  profession,  trade,  or  other  enterprise in New York state,
    19  whether for profit or not for profit, that has not offered  a  qualified
    20  retirement  plan,  including, but not limited to, a plan qualified under
    21  sections 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or 457(b) of the
    22  Internal Revenue Code of 1986 in the preceding two years.
    23    5. "Enrollee" shall mean any employee who is enrolled in the program.
    24    6. "Fund" shall mean the New York state secure choice savings  program
    25  fund.
    26    7.  "Internal  Revenue  Code"  shall mean the Internal Revenue Code of
    27  1986, or any successor law, in effect for the calendar year.
    28    8. "IRA" shall mean a Roth IRA (individual retirement account).
    29    9. "Participating employer" shall mean an  employer  that  provides  a
    30  payroll  deposit  retirement savings arrangement as provided for by this
    31  article for its employees who are enrollees in the program.
    32    10. "Payroll deposit retirement savings  arrangement"  shall  mean  an
    33  arrangement  by which a participating employer allows enrollees to remit
    34  payroll deduction contributions to the program.
    35    11. "Program" shall mean the New  York  state  secure  choice  savings
    36  program.
    37    12.  "Wages"  means  any  compensation  within  the meaning of section
    38  219(f)(1) of the Internal Revenue Code that is received by  an  enrollee
    39  from a participating employer during the calendar year.
    40    §  571.  Program established. There is hereby established a retirement
    41  savings program in the form of an automatic enrollment payroll deduction
    42  IRA, known as the New York state  secure  choice  savings  program.  The
    43  general  administration  and  responsibility for the proper operation of
    44  the program shall be administered  by  the  board  for  the  purpose  of
    45  promoting  greater  retirement savings for private-sector employees in a
    46  convenient, low-cost, and portable manner.
    47    § 572. Composition of the board. There is hereby created the New  York
    48  state secure choice savings program board.
    49    1. The board shall consist of the following eight members:
    50    (a)  the state comptroller, or his or her designee, who shall serve as
    51  chair;
    52    (b) the superintendent, or his or her designee;
    53    (c) two public representatives with expertise  in  retirement  savings
    54  plan  administration  or  investment,  or  both,  one  of  whom shall be
    55  appointed by the speaker of the  assembly  and  one  of  whom  shall  be
    56  appointed by the temporary president of the senate;

        S. 4344--B                          3

     1    (d)  a  representative  of  participating  employers, appointed by the
     2  governor;
     3    (e) a representative of enrollees, appointed by the governor;
     4    (f) the chair of the assembly governmental employees committee; and
     5    (g) the chair of the senate civil service and pension committee.
     6    2.  Members  of  the board shall serve without compensation but may be
     7  reimbursed for necessary travel expenses  incurred  in  connection  with
     8  their board duties from funds appropriated for the purpose.
     9    3.  The initial appointments shall be as follows: one public represen-
    10  tative for four years; the representative of participating employers for
    11  three years; and the representative of enrollees for three years.  Ther-
    12  eafter, all the governor's appointees shall be for terms of four years.
    13    4. A vacancy in the term of an appointed board member shall be  filled
    14  for the balance of the unexpired term in the same manner as the original
    15  appointment.
    16    5.  Each  appointment  by the governor shall be subject to approval by
    17  the comptroller, who, upon approval, shall certify his or  her  approval
    18  to the secretary of state.
    19    § 573. Fiduciary duty. The board, the individual members of the board,
    20  the  trustees,  any  other agents appointed or engaged by the board, and
    21  all persons serving as program staff shall discharge their  duties  with
    22  respect to the program solely in the interest of the program's enrollees
    23  and beneficiaries as follows:
    24    1.  for  the exclusive purposes of providing benefits to enrollees and
    25  beneficiaries and defraying reasonable  expenses  of  administering  the
    26  program;
    27    2.  by  investing  with the care, skill, prudence, and diligence under
    28  the prevailing circumstances that a prudent  person  acting  in  a  like
    29  capacity  and familiar with those matters would use in the conduct of an
    30  enterprise of a like character and with like aims; and
    31    3. by using any contributions paid by employees and  employers  remit-
    32  ting  employees'  own  contributions  into the trust exclusively for the
    33  purpose of paying benefits to the enrollees of the program, for the cost
    34  of administration of the program, and for investments made for the bene-
    35  fit of the program.
    36    § 574. Duties of the board.  In  addition  to  the  other  duties  and
    37  responsibilities stated in this article, the board shall:
    38    1.  Cause  the  program  to be designed, established and operated in a
    39  manner that:
    40    (a) accords with best practices for retirement savings vehicles;
    41    (b) maximizes participation, savings, and sound  investment  practices
    42  including  considering  the use of automatic enrollment as allowed under
    43  federal law;
    44    (c) maximizes simplicity, including ease of administration for partic-
    45  ipating employers and enrollees;
    46    (d) provides an efficient product to enrollees by  pooling  investment
    47  funds;
    48    (e) ensures the portability of benefits; and
    49    (f)  provides  for  the  deaccumulation of enrollee assets in a manner
    50  that maximizes financial security in retirement.
    51    2. Appoint a trustee to the IRA fund in compliance with section 408 of
    52  the Internal Revenue Code.
    53    3. Explore and establish investment options, subject to this  article,
    54  that  offer  enrollees  returns  on  contributions and the conversion of
    55  individual retirement savings  account  balances  to  secure  retirement
    56  income without incurring debt or liabilities to the state.

        S. 4344--B                          4
 
     1    4.  Establish  the process by which interest, investment earnings, and
     2  investment losses are allocated to individual program accounts on a  pro
     3  rata  basis  and  are computed at the interest rate on the balance of an
     4  individual's account.
     5    5.  Make  and enter into contracts necessary for the administration of
     6  the program and fund, including,  but  not  limited  to,  retaining  and
     7  contracting  with  investment  managers, private financial institutions,
     8  other financial and service providers, consultants, actuaries,  counsel,
     9  auditors,  third-party administrators, and other professionals as neces-
    10  sary.
    11    6. Conduct a review of the performance of any investment vendors every
    12  four years, including, but not limited to, a review  of  returns,  fees,
    13  and  customer  service. A copy of reviews shall be posted to the board's
    14  Internet website.
    15    7. Determine the number and duties of staff members needed to adminis-
    16  ter the program and assemble such a staff, including, as needed, employ-
    17  ing staff, and appointing a program administrator.
    18    8. Cause moneys in the fund to be held and invested as pooled  invest-
    19  ments  described  in this article, with a view to achieving cost savings
    20  through efficiencies and economies of scale.
    21    9. Evaluate and establish the process by which an enrollee is able  to
    22  contribute  a  portion  of his or her wages to the program for automatic
    23  deposit of those contributions and the process by which the  participat-
    24  ing  employer  provides a payroll deposit retirement savings arrangement
    25  to forward those contributions and related information to  the  program,
    26  including, but not limited to, contracting with financial service compa-
    27  nies  and  third-party administrators with the capability to receive and
    28  process employee  information  and  contributions  for  payroll  deposit
    29  retirement savings arrangements or similar arrangements.
    30    10.  Design  and  establish  the  process for enrollment including the
    31  process by which an employee can opt not to participate in the  program,
    32  select  a contribution level, select an investment option, and terminate
    33  participation in the program.
    34    11. Evaluate and establish the process by which an employee may volun-
    35  tarily enroll in and make contributions to the program.
    36    12. Accept any grants, appropriations, or other moneys from the state,
    37  any unit of federal, state, or local government, or  any  other  person,
    38  firm,  partnership,  or  corporation  solely  for deposit into the fund,
    39  whether for investment or administrative purposes.
    40    13. Evaluate the need for, and procure as  needed,  insurance  against
    41  any  and all loss in connection with the property, assets, or activities
    42  of the program, and indemnify as needed each member of  the  board  from
    43  personal  loss or liability resulting from a member's action or inaction
    44  as a member of the board.
    45    14. Make provisions  for  the  payment  of  administrative  costs  and
    46  expenses  for  the  creation,  management, and operation of the program.
    47  Subject to appropriation, the state may pay administrative costs associ-
    48  ated with the creation and management of the  program  until  sufficient
    49  assets  are  available  in  the  fund  for that purpose. Thereafter, all
    50  administrative costs of the fund, including repayment  of  any  start-up
    51  funds provided by the state, shall be paid only out of moneys on deposit
    52  therein.  However, private funds or federal funding received in order to
    53  implement the program until the fund is  self-sustaining  shall  not  be
    54  repaid  unless  those  funds were offered contingent upon the promise of
    55  such repayment. The board shall keep annual administrative  expenses  as

        S. 4344--B                          5
 
     1  low  as  possible,  but in no event shall they exceed 0.75% of the total
     2  trust balance.
     3    15.  Allocate administrative fees to individual retirement accounts in
     4  the program on a pro rata basis.
     5    16. Set minimum and maximum contribution  levels  in  accordance  with
     6  limits established for IRAs by the Internal Revenue Code.
     7    17. Facilitate education and outreach to employers and employees.
     8    18.  Facilitate compliance by the program with all applicable require-
     9  ments for the program under the Internal  Revenue  Code,  including  tax
    10  qualification  requirements  or  any other applicable law and accounting
    11  requirements.
    12    19. Carry out the duties and obligations of the program in  an  effec-
    13  tive, efficient, and low-cost manner.
    14    20.  Exercise  any  and  all other powers reasonably necessary for the
    15  effectuation of the purposes, objectives, and provisions of this article
    16  pertaining to the program.
    17    21. Deposit into the New York state secure choice administrative  fund
    18  all  grants,  gifts, donations, fees, and earnings from investments from
    19  the New York state secure choice savings program fund that are  used  to
    20  recover  administrative  costs.  All expenses of the board shall be paid
    21  from the New York state secure choice administrative fund.
    22    22. Determine  withdrawal  provisions,  such  as  economic  hardships,
    23  portability and leakage.
    24    23. Determine employee rights and enforcement of penalties.
    25    §  575.  Risk management. The board shall annually prepare and adopt a
    26  written statement of investment policy that includes a  risk  management
    27  and  oversight program. This investment policy shall prohibit the board,
    28  program, and fund from  borrowing  for  investment  purposes.  The  risk
    29  management  and  oversight  program  shall be designed to ensure that an
    30  effective risk management system is in place to monitor the risk  levels
    31  of  the  program  and fund portfolio, to ensure that the risks taken are
    32  prudent and properly managed, to provide an integrated process for over-
    33  all risk management, and to assess investment returns as well as risk to
    34  determine if the risks taken  are  adequately  compensated  compared  to
    35  applicable performance benchmarks and standards. The board shall consid-
    36  er  the statement of investment policy and any changes in the investment
    37  policy at a public hearing.
    38    § 576. Investment firms. 1. The board shall engage, after an open  bid
    39  process,  an  investment  manager or managers to invest the fund and any
    40  other assets of the program. Moneys in the fund may be invested or rein-
    41  vested by the comptroller or may be invested in whole  or  in  part.  In
    42  selecting  the investment manager or managers, the board shall take into
    43  consideration and give weight  to  the  investment  manager's  fees  and
    44  charges in order to reduce the program's administrative expenses.
    45    2.  The  investment  manager or managers shall comply with any and all
    46  applicable federal and state laws, rules, and regulations,  as  well  as
    47  any  and  all  rules,  policies, and guidelines promulgated by the board
    48  with respect to the program and the investment of the  fund,  including,
    49  but not limited to, the investment policy.
    50    3.  The  investment  manager or managers shall provide such reports as
    51  the board deems necessary for  the  board  to  oversee  each  investment
    52  manager's performance and the performance of the fund.
    53    §  577. Investment options. 1. The board shall establish as an invest-
    54  ment option a life-cycle fund with a target date based upon the  age  of
    55  the  enrollee. This shall be the default investment option for enrollees

        S. 4344--B                          6
 
     1  who fail to elect an investment option unless and until the board desig-
     2  nates by rule a new investment option as the default.
     3    2. The board may also establish any or all of the following additional
     4  investment options:
     5    (a) a conservative principal protection fund;
     6    (b) a growth fund;
     7    (c)  a  secure return fund whose primary objective is the preservation
     8  of the safety of principal and the provision of a  stable  and  low-risk
     9  rate  of  return; if the board elects to establish a secure return fund,
    10  the board may procure any insurance, annuity, or other product to insure
    11  the value of enrollees' accounts and guarantee a  rate  of  return;  the
    12  cost  of  such funding mechanism shall be paid out of the fund; under no
    13  circumstances shall the board, program, fund, the state, or any  partic-
    14  ipating  employer assume any liability for investment or actuarial risk;
    15  the board shall determine whether to establish such  investment  options
    16  based  upon  an  analysis  of  their  cost, risk profile, benefit level,
    17  feasibility, and ease of implementation; or
    18    (d) an annuity fund.
    19    3. If the board elects to establish a secure return  fund,  the  board
    20  shall  then  determine whether such option shall replace the target date
    21  or life-cycle fund as the default investment option for enrollees who do
    22  not elect an investment option. In making such determination, the  board
    23  shall  consider  the  cost,  risk  profile,  benefit  level, and ease of
    24  enrollment in the secure return fund. The board may at any  time  there-
    25  after  revisit this question and, based upon an analysis of these crite-
    26  ria, establish either the secure return fund or the life-cycle  fund  as
    27  the default for enrollees who do not elect an investment option.
    28    §  578. Benefits. Interest, investment earnings, and investment losses
    29  shall be allocated to individual program accounts as established by  the
    30  board pursuant to this article. An individual's retirement savings bene-
    31  fit  under  the  program  shall be an amount equal to the balance in the
    32  individual's program account on the date the retirement savings  benefit
    33  becomes  payable.  The  state shall have no liability for the payment of
    34  any benefit to any enrollee in the program.
    35    § 579. Employer and employee information packets and disclosure forms.
    36  1. Prior to the opening of the program for enrollment, the  board  shall
    37  design  and  disseminate to all employers an employer information packet
    38  and an employee  information  packet,  which  shall  include  background
    39  information  on  the program, appropriate disclosures for employees, and
    40  information regarding the vendor Internet website described.
    41    2. The board shall provide for  the  contents  of  both  the  employee
    42  information  packet  and  the employer information packet.  The employee
    43  information packet shall be made available in English, Spanish,  Haitian
    44  Creole,  Chinese,  Korean,  Russian,  Arabic, and any other language the
    45  comptroller deems necessary.
    46    3. The employee information packet shall include  a  disclosure  form.
    47  The  disclosure  form  shall  explain, but not be limited to, all of the
    48  following:
    49    (a) the benefits and risks associated with making contributions to the
    50  program;
    51    (b) the mechanics of how to make contributions to the program;
    52    (c) how to opt out of the program;
    53    (d) how to participate  in  the  program  with  a  level  of  employee
    54  contributions other than three percent;
    55    (e)  that they are not required to participate or contribute more than
    56  three percent;

        S. 4344--B                          7
 
     1    (f) that they can opt out after they have enrolled;
     2    (g) the process for withdrawal of retirement savings;
     3    (h)  the  process  for  selecting  beneficiaries  of  their retirement
     4  savings;
     5    (i) how to obtain additional information about the program;
     6    (j) that employees seeking financial advice should  contact  financial
     7  advisors,  that participating employers are not in a position to provide
     8  financial advice, and that participating employers are  not  liable  for
     9  decisions employees make pursuant to this article;
    10    (k)  information  on  how  to  access  any financial literacy programs
    11  implemented by the comptroller;
    12    (l) that the program is not an employer-sponsored retirement plan; and
    13    (m) that the program fund is not guaranteed by the state.
    14    4. The employee information packet shall also include a  form  for  an
    15  employee  to note his or her decision to opt out of participation in the
    16  program or elect to participate with a level of  employee  contributions
    17  other than three percent.
    18    5. Participating employers shall supply the employee information pack-
    19  et  to  existing employees at least one month prior to the participating
    20  employers' launch of the program. Participating employers  shall  supply
    21  the  employee information packet to new employees at the time of hiring,
    22  and new employees may opt out of participation in the program  or  elect
    23  to  participate  with a level of employee contributions other than three
    24  percent at that time.
    25    § 580. Program implementation  and  enrollment.  Except  as  otherwise
    26  provided  in this article, the program shall be implemented, and enroll-
    27  ment of employees shall  begin,  within  twenty-four  months  after  the
    28  effective  date of this article. The provisions of this section shall be
    29  in force after the board opens the program for enrollment.
    30    1. Each participating employer may establish a payroll deposit retire-
    31  ment savings arrangement to allow each employee to  participate  in  the
    32  program  and  begin  employee  enrollment  at most nine months after the
    33  board opens the program for enrollment.
    34    2. Enrollees shall have the ability to  select  a  contribution  level
    35  into  the  fund. This level may be expressed as a percentage of wages or
    36  as a dollar amount up to the deductible amount for the enrollee's  taxa-
    37  ble year under section 219(b)(1)(A) of the Internal Revenue Code. Enrol-
    38  lees  may  change their contribution level at any time, subject to rules
    39  promulgated by the board. If an enrollee fails to select a  contribution
    40  level  using  the  form  described in this article, then he or she shall
    41  contribute three percent of his or her wages to  the  program,  provided
    42  that  such  contributions  shall not cause the enrollee's total contrib-
    43  utions to IRAs for the year to exceed  the  deductible  amount  for  the
    44  enrollee's  taxable  year  under  section  219(b)(1)(A)  of the Internal
    45  Revenue Code. Notwithstanding any other provision of  law,  any  partic-
    46  ipating  enrollee,  whose  employer fails to make employee deductions in
    47  accordance with the provisions in section one  hundred  ninety-three  of
    48  the  labor  law,  may  bring  an action, pursuant to section one hundred
    49  ninety-eight of the labor law, to  recover  such  monies.  Further,  any
    50  participating employer, who fails to make employee deductions in accord-
    51  ance  with  the  provisions  in  section one hundred ninety-three of the
    52  labor law, shall be subject to the penalties and fines provided  for  in
    53  section one hundred ninety-eight-a of the labor law.
    54    3.  Enrollees  may  select  an  investment  option  from the permitted
    55  investment options listed in this article. Enrollees  may  change  their
    56  investment  option  at  any  time,  subject  to rules promulgated by the

        S. 4344--B                          8
 
     1  board. In the event that an  enrollee  fails  to  select  an  investment
     2  option,  that enrollee shall be placed in the investment option selected
     3  by the board as the default under this article. If  the  board  has  not
     4  selected  a default investment option under this article, then an enrol-
     5  lee who fails to select an investment option  shall  be  placed  in  the
     6  life-cycle fund investment option.
     7    4.  Following  initial  implementation of the program pursuant to this
     8  section, at least once every year, participating employers shall  desig-
     9  nate  an  open  enrollment  period during which employees who previously
    10  opted out of the program may enroll in the program.
    11    5. An employee who opts out of the program who subsequently  wants  to
    12  participate through the participating employer's payroll deposit retire-
    13  ment  savings  arrangement  may  only  enroll  during  the participating
    14  employer's designated open enrollment period  or  if  permitted  by  the
    15  participating employer at an earlier time.
    16    6.  Employers  shall retain the option at all times to set up any type
    17  of employer-sponsored retirement plan instead of having a payroll depos-
    18  it retirement savings arrangement to allow employee participation in the
    19  program.
    20    7. An enrollee may terminate his or her participation in  the  program
    21  at any time in a manner prescribed by the board.
    22    8.  (a)  The state comptroller shall establish a website regarding the
    23  secure choice savings program which  shall  be  accessible  through  the
    24  state comptroller's own website.
    25    (b) The board shall, in conjunction with the office of the state comp-
    26  troller,  establish  and maintain a secure website wherein enrollees may
    27  log in and acquire information regarding  contributions  and  investment
    28  income  allocated  to,  withdrawals  from, and balances in their program
    29  accounts for the reporting period. Such website must also include infor-
    30  mation for the  enrollees  regarding  other  options  available  to  the
    31  employee  and  how  they  can  transfer their accounts to other programs
    32  should they wish to do so. Such website may include any  other  informa-
    33  tion regarding the program as the board may determine.
    34    §  581. Payments. Employee contributions deducted by the participating
    35  employer through payroll deduction shall be paid  by  the  participating
    36  employer  to  the  fund  using  one  or  more payroll deposit retirement
    37  savings arrangements  established  by  the  board  under  this  article,
    38  either:
    39    1. on or before the last day of the month following the month in which
    40  the  compensation  otherwise  would have been payable to the employee in
    41  cash; or
    42    2. before such later deadline prescribed by the board for making  such
    43  payments,  but  not  later  than  the  due  date  for the deposit of tax
    44  required to be deducted and withheld relating to  collection  of  income
    45  tax  at  source  on  wages or for the deposit of tax required to be paid
    46  under the unemployment insurance system for the payroll period to  which
    47  such payments relate.
    48    §  582.  Duty  and  liability of the state. 1. The state shall have no
    49  duty or liability to any party for the payment of any retirement savings
    50  benefits accrued by  any  enrollee  under  the  program.  Any  financial
    51  liability  for  the  payment of retirement savings benefits in excess of
    52  funds available under the program shall be borne solely by the  entities
    53  with  whom the board contracts to provide insurance to protect the value
    54  of the program.
    55    2. No state board, commission, or agency, or any officer, employee, or
    56  member thereof is liable for  any  loss  or  deficiency  resulting  from

        S. 4344--B                          9
 
     1  particular  investments  selected  under  this  article,  except for any
     2  liability that arises out of a breach of fiduciary duty.
     3    §  583. Duty and liability of participating employers. 1.  Participat-
     4  ing employers shall not have any liability for an employee's decision to
     5  participate in, or opt out of, the program or for the  investment  deci-
     6  sions of the board or of any enrollee.
     7    2. A participating employer shall not be a fiduciary, or considered to
     8  be  a  fiduciary,  over  the program. A participating employer shall not
     9  bear responsibility for the administration,  investment,  or  investment
    10  performance of the program. A participating employer shall not be liable
    11  with  regard to investment returns, program design, and benefits paid to
    12  program participants.
    13    § 584. Audit and reports. 1. The board shall annually submit:
    14    (a) an audited financial report, prepared in accordance with generally
    15  accepted accounting principles, on the operations of the program  during
    16  each  calendar year by July first of the following year to the governor,
    17  the comptroller, the superintendent of financial services and the senate
    18  and assembly; and
    19    (b) a report prepared by the board, which shall include,  but  is  not
    20  limited to, a summary of the benefits provided by the program, including
    21  the  number  of  enrollees in the program, the percentage and amounts of
    22  investment options and rates of return, and such other information  that
    23  is  relevant to make a full, fair, and effective disclosure of the oper-
    24  ations of the program and the fund. The annual audit shall be made by an
    25  independent certified public accountant and shall include,  but  is  not
    26  limited to, direct and indirect costs attributable to the use of outside
    27  consultants,  independent contractors, and any other persons who are not
    28  state employees for the administration of the program.
    29    2. In addition to any other statements or reports required by law, the
    30  board shall provide periodic reports at  least  annually  to  enrollees,
    31  reporting  contributions and investment income allocated to, withdrawals
    32  from, and balances in their program accounts for the  reporting  period.
    33  Such  reports may include any other information regarding the program as
    34  the board may determine.
    35    § 585. Delayed implementation. If the board does not  obtain  adequate
    36  funds  to  implement  the  program within the time frame set forth under
    37  this article and is subject to appropriation, the board  may  delay  the
    38  implementation of the program.
    39    § 3. The state finance law is amended by adding two new sections 99-bb
    40  and 99-cc to read as follows:
    41    §  99-bb. New York state secure choice savings program fund. 1.  There
    42  is hereby established within the joint custody of  the  commissioner  of
    43  taxation  and finance and the state comptroller in consultation with the
    44  New York state secure choice savings program board, a  new  fund  to  be
    45  known as the New York state secure choice savings program fund.
    46    2. The fund shall include the individual retirement accounts of enrol-
    47  lees, which shall be accounted for as individual accounts.
    48    3.  Moneys in the fund shall consist of moneys received from enrollees
    49  and participating employers pursuant to automatic payroll deductions and
    50  contributions to savings made under the New  York  state  secure  choice
    51  savings  program  pursuant  to  article fourteen-C of the retirement and
    52  social security law.
    53    4. The fund shall be operated in a manner determined by the  New  York
    54  state  secure  choice  savings  program board, provided that the fund is
    55  operated so that the accounts of enrollees established under the program
    56  meet the requirements for IRAs under the Internal Revenue Code.

        S. 4344--B                         10

     1    5. The amounts deposited in the fund shall not constitute property  of
     2  the state and the fund shall not be construed to be a department, insti-
     3  tution, or agency of the state. Amounts on deposit in the fund shall not
     4  be  commingled  with state funds and the state shall have no claim to or
     5  against, or interest in, such funds.
     6    §  99-cc.  New York state secure choice administrative fund. 1.  There
     7  is hereby established within the joint custody of  the  commissioner  of
     8  taxation  and finance and the state comptroller in consultation with the
     9  New York state secure choice savings program board, a  new  fund  to  be
    10  known as the New York state secure choice administrative fund.
    11    2.  The  New  York state secure choice savings program board shall use
    12  moneys in the administrative fund to pay for administrative expenses  it
    13  incurs  in the performance of its duties under the New York state secure
    14  choice savings program pursuant to article fourteen-C of the  retirement
    15  and social security law.
    16    3.  The  New  York state secure choice savings program board shall use
    17  moneys in the  administrative  fund  to  cover  start-up  administrative
    18  expenses  it incurs in the performance of its duties under article four-
    19  teen-C of the retirement and social security law.
    20    4. The administrative fund may receive  any  grants  or  other  moneys
    21  designated  for  administrative  purposes from the state, or any unit of
    22  federal or local government, or any other person, firm, partnership,  or
    23  corporation.  Any  interest  earnings that are attributable to moneys in
    24  the administrative fund must be deposited into the administrative fund.
    25    § 4. This act shall take effect immediately.
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