An Act To Create a Public Option Pension System
Sec. 1. 5 MRSA §12004-F, sub-§19 is enacted to read:
|Maine Secure Choice Retirement Savings Investment Board||Expenses Only||26 MRSA §3503|
This subsection is repealed December 31, 2017.
Sec. 2. 26 MRSA §42, first ¶, as amended by PL 1999, c. 649, §1, is further amended to read:
The bureau shall collect, assort and arrange statistical details relating to all departments of labor and industrial pursuits in the State; to trade unions and other labor organizations and their effect upon labor and capital; to the number and character of industrial accidents and their effect upon the injured, their dependent relatives and upon the general public; to other matters relating to the commercial, industrial, social, educational, moral and sanitary conditions prevailing within the State, including the names of firms, companies or corporations, where located, the kind of goods produced or manufactured, the time operated each year, the number of employees classified according to age and sex and the daily and average wages paid each employee; and the exploitation of such other subjects as will tend to promote the permanent prosperity of the industries of the State. The director is authorized and empowered, subject to the approval of the Governor, to accept from any other agency of government, individual, group or corporation such funds as may be available in carrying out this section, and meet such requirements with respect to the administration of such funds, not inconsistent with this section, as are required as conditions precedent to receiving such funds. An accounting of such funds and a report of the use to which they were put must be included in the biennial report to the Governor. Each agency of government shall cooperate fully with the bureau's efforts to compile labor and industrial statistics. The director shall cause to be enforced all laws regulating the employment of minors; all laws established for the protection of health, lives and limbs of operators in workshops and factories, on railroads and in other places; all laws regulating the payment of wages; and all laws enacted for the protection of the working classes ; and all laws regarding employer compliance with the Maine Secure Choice Retirement Savings Trust created pursuant to chapter 43. During an investigation to enforce those laws, the director may request records and other information relating to an employer's compliance with unemployment compensation and workers' compensation laws, including information needed to determine whether the employer has properly classified a worker as an independent contractor, and shall report suspected violations of those laws to the state or federal agency responsible for enforcing them. The director may adopt, in accordance with the Maine Administrative Procedure Act, rules regarding all such laws, except where this authority is granted to a board or commission. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A 2-A. The director shall, on or before the first day of July, biennially, report to the Governor, and may make such suggestions and recommendations as the director may deem consider necessary for the information of the Legislature. The director may from time to time cause to be printed and distributed bulletins upon any subject that is of public interest and benefit to the State and may conduct a program of research, education and promotion to reduce industrial accidents. The director may review various data, such as workers' compensation records, as well as other information relating to any public or private employer's safety experience. When any individual public or private employer's safety experience causes the director to question seriously the safe working environment of that employer, the director may offer any safety education and consultation programs to that employer that may be beneficial in providing a safer work environment. If the employer refuses this assistance or is in serious noncompliance which that may lead to injuries, or if serious threats to worker safety continue, then the director shall communicate concerns to appropriate agencies, such as the United States Occupational Safety and Health Administration. As used in this section, the term "noncompliance" means a lack of compliance with any applicable health and safety regulations of the United States Occupational Safety and Health Administration or other federal agencies. The bureau is responsible for the enforcement of indoor air quality and ventilation standards with respect to state-owned buildings and buildings leased by the State. The bureau shall enforce air quality standards in a manner to ensure that corrections to problems found in buildings be made over a reasonable period of time, using consent agreements and other approaches as necessary and reasonable.
Sec. 3. 26 MRSA c. 43 is enacted to read:
MAINE SECURE CHOICE RETIREMENT SAVINGS TRUST ACT
§ 3501. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
§ 3502. Maine Secure Choice Retirement Savings Trust
The Maine Secure Choice Retirement Savings Trust is established within the Department of Labor and administered by the board for the purpose of offering the Maine Secure Choice Retirement Savings Program to promote greater retirement savings for private employees in a convenient, voluntary, low-cost and portable manner.
§ 3503. Maine Secure Choice Retirement Savings Investment Board
The trust is administered by the Maine Secure Choice Retirement Savings Investment Board, as established in Title 5, section 12004-F, subsection 19, in accordance with this chapter.
§ 3504. Board-approved investment managers; report to the board
The board shall approve and contract with one or more investment managers, the costs of which must be paid out of the program fund described under section 3502.
§ 3505. Authority of the board as trustee
§ 3506. Gain and loss reserve account
The board may establish a segregated gain and loss reserve account within the program fund. If established, the board has sole authority over the gain and loss reserve account.
In determining whether to allocate liability gains and losses to the gain and loss reserve account, the board shall consider the matters described in paragraphs B, C and D.
§ 3507. IRA arrangements
The program must include, as determined by the board, one or more payroll deduction IRA arrangements.
§ 3508. Indemnity
The board shall ensure that an insurance, annuity or other funding mechanism is in place at all times that protects the value of individuals' accounts. The costs of the funding mechanism must be paid out of the program funds held in the trust and may not be attributed to the administrative costs of the board in operating the trust. In accordance with section 3519, the State is not liable for payment of any benefit pursuant to this chapter.
§ 3509. Employee information
Prior to opening the program for enrollment, the board shall design and disseminate to eligible employers through the bureau an employee information packet. The packet must include background information on the program and appropriate disclosures for employees.
(1) The benefits and risks associated with making contributions to the program;
(2) The mechanics of how to make contributions to the program;
(3) How to opt out of the program;
(4) The process for withdrawal of retirement savings; and
(5) How to obtain additional information on the program;
(1) That employees seeking financial advice should contact financial advisors, that employers are not in a position to provide financial advice and that employers are not liable for decisions employees make pursuant to section 3518;
(2) That the program is not an employer-sponsored retirement plan; and
(3) That the program fund is privately insured and is not guaranteed by the State; and
§ 3510. Retirement investments clearinghouse
§ 3511. Retirement investments clearinghouse vendors
The board shall prescribe the format for information submitted by vendors pursuant to this subsection.
§ 3512. Vendor registration and renewal
The board shall open registration to vendors under section 3511 annually and shall require renewal of registration at least once every 5 years. The board shall provide prior public notice of each annual registration and of the required registration renewal period.
§ 3513. Removal of a vendor
§ 3514. Fees charged by vendors
A vendor may not charge a fee that is not disclosed.
§ 3515. Funding sources; vendor fees
§ 3516. Board liability
The board and the program, and its officers and employees, are not responsible for, and may not be held liable for, the adequacy of the information provided by the participating vendors and contained in the clearinghouse. The clearinghouse maintained by the board serves only to provide information supplied by the participating vendors for the consideration of the selection of retirement investment products. The board and the program may not be held liable for the actions of registered vendors.
Vendors participating in the program may not use the program's logo or claim or infer endorsement or recommendation by the board or the program with respect to products and services identified by the vendors in the clearinghouse. At the discretion of the board, a violation of this section may lead to a vendor's registration being revoked.
§ 3517. Schedule to allow employee participation in the program
After the board opens the program for enrollment, an eligible employer may choose to have a payroll deposit retirement savings arrangement to allow eligible employee participation in the program.
§ 3518. Employer liability
An eligible employer's voluntary contribution under section 3505, subsection 3, paragraph K does not change the employer's relationship to the program, including as specified in this subsection, or an employer's obligations to employees.
§ 3519. State liability
The State is not liable for the payment of the retirement savings benefit earned by program participants pursuant to this chapter. Financial liability for the payment of benefits in excess of funds available under the program are borne by the entities with whom the board contracts to provide an insurance, annuity or other funding mechanism to protect the value of individuals' accounts pursuant to section 3508. The State, and any of the funds of the State, has no obligation for payment of the benefits arising from this chapter.
§ 3520. Audited financial report
§ 3521. Construction
This chapter must be liberally construed and broadly interpreted to effectuate its purposes and intent and not as to any limitation of powers.
§ 3522. Bureau of Labor Standards; administration and enforcement
Penalties collected pursuant to this subsection must be deposited in the program fund established by the board pursuant to section 3502, subsection 2.
§ 3523. Repeal
This chapter is repealed December 31, 2017.
Sec. 4. Market analysis
1. Initial market analysis. The Maine Secure Choice Retirement Savings Investment Board, as established in the Maine Revised Statutes, Title 5, section 12004-F, subsection 19 and referred to in this section as "the board," shall conduct an initial market analysis to determine whether the necessary conditions for implementation of Title 26, chapter 43 can be met, including, but not limited to, likely participation rates, participants' comfort with various investment vehicles and degree of risk, contribution levels and the rate of account closures and rollovers. The board shall conduct this analysis only if sufficient funds to initiate and complete the required market analysis are made available through a nonprofit or private entity, federal funding or an annual appropriation.
2. Maine Secure Choice Retirement Savings Program Market Analysis Fund. The Maine Secure Choice Retirement Savings Program Market Analysis Fund, referred to in this section as "the fund," is established. Funds available to conduct the market analysis required under subsection 1 must be deposited in the fund. The fund is administered by the board and is nonlapsing. The fund must be used to conduct the analysis required under subsection 1, with any remaining funds to be transferred to the Maine Secure Choice Retirement Savings Trust program fund established by the board pursuant to the Maine Revised Statutes, Title 26, section 3502, subsection 2 in the event of a positive determination by the board pursuant to subsection 3 or to the General Fund in the event of a determination by the board pursuant to subsection 4, in accordance with any restrictions placed on the funds by a funding source. The board shall submit a report on its findings to the joint standing committee of the Legislature having jurisdiction over labor matters and the joint standing committee of the Legislature having jurisdiction over retirement matters.
3. Maine Secure Choice Retirement Savings Investment Board determination. The board shall determine, based on the market analysis under this section, whether the provisions of the Maine Revised Statutes, Title 26, chapter 43 will be self-sustaining and funds are available through a nonprofit or other private entity, federal funding or an annual appropriation in amounts sufficient to allow the board to implement Title 26, chapter 43 until the trust has sufficient funds to be self-sustaining. The board, no later than January 2, 2017, shall report to the joint standing committee of the Legislature having jurisdiction over retirement matters its determination and any necessary legislation based on the board's determination. The joint standing committee may report out legislation to the First Regular Session of the 128th Legislature in accordance with the report of the board.
4. Implementation prohibited. Notwithstanding any provision of law to the contrary, the board may not implement the program if the board determines the individual retirement account arrangements offered fail to qualify for the favorable federal income tax treatment ordinarily accorded to individual retirement accounts under the Internal Revenue Code, or if the board determines that the program is an employee benefit plan under the federal Employee Retirement Income Security Act of 1974, 29 United States Code, Section 1001 et seq.
This bill establishes the Maine Secure Choice Retirement Savings Trust within the Department of Labor and does the following.
1. It requires eligible employers to offer a payroll deposit retirement savings arrangement so that eligible employees can contribute a portion of their salary or wages to a retirement savings program account in the Maine Secure Choice Retirement Savings Program, also created by the bill.
2. It requires an eligible employee to participate in the Maine Secure Choice Retirement Savings Program, unless the employee specifically opts out of the program. The Bureau of Labor Standards within the department is required to provide forms to employers for employees to opt out of the program.
3. It creates the 7-member Maine Secure Choice Retirement Savings Investment Board to administer the trust.
4. It specifies risk management and investment policies that the board must follow in administering the program.
5. It requires a specific percentage of the annual salary or wages of an eligible employee participating in the program to be deposited in the trust, which is divided into a program fund and an administrative fund. It authorizes the board to establish a gain and loss revenue account within the program fund.
6. It requires the board, contingent upon sufficient interest and funding by vendors, to establish a retirement investment clearinghouse on its publicly accessible website and a vendor registration process through which information about employer-sponsored retirement plans and payroll deposit individual retirement accounts and annuities offered by private sector providers is available for consideration by eligible employers.
7. It requires the Department of Labor, Bureau of Labor Standards to assess a penalty on an eligible employer that fails to make the program available to eligible employees.
8. It provides that the State has no liability for the payment of benefits under the program.
9. It directs the board to conduct a market analysis to determine whether the necessary conditions needed to implement the provisions of the trust can be achieved. The analysis may be conducted only when sufficient funding from the nonprofit or private sector or from the State or Federal Government is available. The provisions of the bill establishing the Maine Secure Choice Retirement Savings Investment Board and the trust are repealed December 31, 2017 unless the board reports to the Legislature the board's determination, through the market analysis, that those provisions of the trust are self-sustaining and that funds exist to allow the board to implement the program until sufficient funds become available to make it self-sustaining and the Legislature takes action based on the board's determination. It requires the board to ensure that insurance, annuity or other funding mechanisms are in place to protect the value of individuals' accounts.
10. It prevents the board from implementing the trust if the individual retirement account arrangements offered fail to qualify for favorable federal income tax treatment ordinarily accorded to individual retirement accounts under the Internal Revenue Code or if the program is determined to be an employee benefit plan under the federal Employee Retirement Income Security Act of 1974.