BILL REQ. #:  H-1250.1 


State of Washington61st Legislature2009 Regular Session

By Representatives Pettigrew, Ericks, Kagi, Darneille, Appleton, Ormsby, Dunshee, Nelson, Conway, Hunt, Simpson, Dickerson, Alexander, Morrell, Moeller, Santos, Kenney, and Wood

Read first time 02/02/09.   Referred to Committee on Ways & Means.

     AN ACT Relating to creating the Washington voluntary retirement accounts program; and adding new sections to chapter 41.50 RCW.


NEW SECTION.  Sec. 1   The legislature finds that small and medium sized businesses find it difficult to offer retirement plans because of the complexity and costs. Businesses offering retirement plans have a better ability to recruit and retain employees. The Washington voluntary retirement accounts program provides a simple and cost-effective way for employers to offer an important employee benefit. The legislature also finds that many workers do not have access to an employment-based retirement plan. Workers who are unable to build up pensions and savings risk living on low incomes in their old age and are more likely to become dependent on state services. The Washington voluntary retirement accounts program provides a simple and inexpensive way for workers to save for retirement.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this subchapter unless the context clearly requires otherwise.
     (1) "Director" means the director of retirement systems.
     (2) "Enrollee" means any worker in this state that is enrolled in the program.
     (3) "Participating employer" means any private employer, with a place of business in this state, and with employees that have enrolled in the program.
     (4) "Program" means the Washington voluntary retirement accounts program created under section 3 of this act.

NEW SECTION.  Sec. 3   The Washington voluntary retirement accounts program is created. The director is responsible for the implementation and operation of the program, directly or by contract.

NEW SECTION.  Sec. 4   Prior to the enrollment of individuals or businesses in the program, the director shall design a plan for the operation of the program. The program shall consist of a two-tier system with one or more of the following: A deferred compensation 401(k)-type program; SIMPLE IRA-type program; or other internal revenue service approved employer plan, open to all employers who choose to participate for their employees, and workplace-based individual retirement accounts open to all workers. The director shall then seek approval if necessary from the federal internal revenue service to offer the plans and accounts to Washington employers and workers on a tax-qualified basis. The plans and accounts must include the option for enrollees to roll pretax contributions into an individual retirement account or another eligible retirement plan after ceasing participation in the program. A range of investment options must be provided to meet the needs of investors with various levels of risk tolerance and various ages. One option must be life-cycle funds. Other options should include the following, in whole or in part, index funds, bond funds, United States treasury securities, or other investments as appropriate. The Washington state investment board, with respect to the program, shall invest the contributions of participants, in accordance with federal law, and to the extent permissible under federal law, in accordance with RCW 43.84.150, 43.33A.140, and 41.50.780, and pursuant to investment policy established by the state investment board for the program. The state investment board shall provide investment options for participants to choose from, and shall establish an investment plan for participants who choose not to self-direct investments.

NEW SECTION.  Sec. 5   Enrollment in the program is not an entitlement and must not result in expenditures that exceed the amount available in the Washington voluntary retirement accounts partnership program account. If it appears that continued enrollment will result in expenditures exceeding the amount available for a particular fiscal year, the director may freeze new enrollments in the program and establish a waiting list of eligible workers, or reduce enrollments.

NEW SECTION.  Sec. 6   Following the design and approval of the program under section 4 of this act, the director shall adopt all rules necessary for the implementation and operation of the program. As part of the rule development process, the director shall consult with employers, workers, private sector retirement plan administrators and providers, and any other individuals or entities that the director determines relevant to the development of an effective and efficient method for operating the program.

NEW SECTION.  Sec. 7   The Washington voluntary retirement accounts partnership program account is hereby established in the custody of the state treasurer. Any state or nonstate funds collected for the program must be deposited in the account. Moneys in the account must be used exclusively for the purposes of administering the program, including for the design and qualification of the program, supporting the administrative cost of enrolling individuals, and providing information about the program. Only the director or a designee may authorize expenditures from the account. The account is subject to the allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION.  Sec. 8   Private employers shall provide employees with the opportunity to enroll in the program, including providing for payroll deductions for those employees that enroll in the program. Employers with employees enrolled in the program are authorized to contract with the enrolled employees to defer or contribute a portion of the enrolled employees' compensation, in accordance with the program rules.

NEW SECTION.  Sec. 9   The director shall report biennially to the relevant committees of the legislature on the effectiveness and efficiency of the program, including the levels of enrollment, the financial status of the program, and the retirement savings levels of participating enrollees.

NEW SECTION.  Sec. 10   No state board, commission, or agency, or any officer, employee, or member is liable for any loss or deficiency resulting from investments by any enrollee.

NEW SECTION.  Sec. 11   Sections 1 through 10 of this act are each added to chapter 41.50 RCW under the new subchapter heading "Washington voluntary retirement accounts program."

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