Bill Summary for H 899 (2021-2022)
|View NCGA Bill Details||2021|
AN ACT TO CREATE THE SMALL BUSINESS RETIREMENT SAVINGS PROGRAM AND TO APPROPRIATE FUNDS.Intro. by Hardister, Hanig, Warren, Harris.
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Includes whereas clauses.
Adds new Part 2L to Article 10 of GS Chapter 143B, known as the North Carolina Small Business Retirement Savings Program (Program). Sets out and defines terms that are used in the Program. Defines a covered employer as a person or entity engaged in a business, industry, profession, trade, or other enterprise in the state, whether for profit or not for profit and provided that the covered employer does not include an employer that maintains a specified tax-favored retirement plan for its employees or has done so effective in form and operation at any time within the current or two preceding calendar years; excludes the federal government, the State, any county, any municipality, or any political subdivision of the State. Defines a participating employer as a covered employer that provides for covered employees a payroll deduction IRA provided for by this Article.
Establishes the 12-member North Carolina Small Business Retirement Savings Board (Board) housed for administrative purposes in the Department of Commerce (Department). Provides that 10 members are voting and two are nonvoting advisory members, with initial appointments to be made by October 1, 2021. Provides for the appointment of members; members serve for four-year terms with terms staggered. Requires the Governor to convene the first meeting of the Board by October 15, 2021. Provides for electing a chair and appointing vacancies. Sets out the Board's 20 duties, including: (1) design, develop, implement, maintain, govern, and promulgate rules with respect to a payroll deduction retirement savings program for covered employers that do not provide a retirement program and, to that end conduct market, legal, and feasibility analyses; (2) develop and implement an investment policy that meets specified requirements, that defines the Program's investment objectives, consistent with the objectives of the Program, and that provides for policies and procedures consistent with those investment objectives; (3) adopt rules it deems necessary or advisable for the implementation of this Article and the administration and operation of the Program; (4) invest and reinvest its funds in accordance with applicable State and federal laws; and (5) evaluate the need for, and procure if and as deemed necessary, pooled private insurance against any and all loss in connection with the property, assets, or activities of the Program. Prohibits a Board member, program administrator, and other Board staff from: (1) having any interest in the making of any investment under the Program or in gains or profits accruing from any such investment; (2) borrowing any Program-related funds or deposits or use any such funds or deposits in any manner, for himself or herself or as an agent or partner of others; or (3) becoming an endorser, surety, or obligor on investments made under the Program. Sets out provisions governing the standard of conduct for Board members and Program staff.
Sets out 20 requirements that the Program must meet, including: (1) provide a process to facilitate voluntary enrollment into the Program for covered employers, covered employees, and self-employed persons; (2) provide that the IRA to which contributions are made will be a Roth IRA, with the Board allowed to add an option for participants to affirmatively elect to contribute to a traditional IRA as an alternative to the Roth IRA; (3) provide that the standard package must be a Roth IRA with a target date fund investment, and a contribution rate that begins at 5% of salary or wages; (4) provide for a uniform annual increase in the participant's contribution rate of up to 1%; (5) allow a covered employer to withhold payroll deductions from a covered employee's paycheck for making a covered employee contribution to the Program funds; (6) include an account status notification process for covered employees to be notified about and track their investments; and (7) ensure that the Program is designed to be financially self-sustaining over time.
Requires the Board to adopt rules on four specified items related to implementing the Program, including conducting outreach to individuals, employers, other stakeholders, and the public regarding the Program.
Provides covered employers with protection from liability in seven specified areas, including an employee's decision to participate in or not to participate in the Program or a participant's specific elections under the Program; participants' or the Board's investment decisions; and any loss, failure to realize any gain, or any other adverse consequences incurred by any person as a result of participating in the Program.
Provides that the State has no duty or liability to any party for the payment of any retirement savings benefits accrued by any individual under the Program and sets out additional protections.
Prohibits disclosing, except in specified circumstances, individual account information relating to accounts under the Program and relating to individual participants including, but not limited to, specified information such as email addresses, personal identification information, investments, contributions, and earnings. Makes these items confidential and specifies they are not public record.
Establishes the North Carolina Small Business Retirement Savings Administrative Fund (Fund) with moneys in the Fund continuously appropriated to the Board. Provides that the Fund consists of (1) moneys appropriated to the Fund by the NCGA; (2) moneys transferred to the Fund from the federal government, other State agencies, or local governments; (3) moneys from the payment of application, account, administrative, or other fees and payment of money due to the Board; (4) gifts, donations, or grants made to the State for deposit in the Fund; and (5) earnings on moneys in the Fund.
Requires the Board to submit an annual report to the Governor and specified NCGA committee; specifies the required content of the report. Requires an annual audit of the Board's books and accounts.
Requires the Board to establish the Program so that individuals can begin contributing under the Program no later than July 1, 2023. Prohibits the Board from implementing the Program if and to the extent the Board determines that the Program is preempted by ERISA; sets out how the Program is to implemented in that situation.
Appropriates $400,000 for 2021-22 and $600,000 for 2022-23 from the General Fund to the Department of Commerce to be allocated to the Board and used to: (1) enable or facilitate the start-up and continuing operation, maintenance, administration, and management of the Program until the Program accumulates sufficient balances and can generate sufficient funding through fees assessed on Program accounts for the Program to become financially self-sustaining and (2) hire an individual to serve as the initial executive director (prohibits the individual filling the position from being considered a State employee).
Effective July 1, 2021.