BILL REQ. #: S-1115.1
| State of Washington | 61st Legislature | 2009 Regular Session |
Read first time 02/02/09. Referred to Committee on Financial Institutions, Housing & Insurance.
AN ACT Relating to creating the Washington voluntary retirement accounts program; and adding new sections to chapter 41.50 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
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