House File 2417 - Introduced
HOUSE FILE
BY HUNTER, STAED,
BENNETT, BEARINGER,
STUTSMAN, ISENHART,
KEARNS, BROWN=POWERS,
THEDE, HANSON,
MASCHER, BERRY,
STECKMAN, OURTH,
ABDUL=SAMAD, GASKILL,
WINCKLER, and LENSING
A BILL FOR
1 An Act establishing a retirement savings plan trust, and
2 including implementation and effective date provisions.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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1 1 Section 1. NEW SECTION. 12J.1 Purpose and definitions.
1 2 1. The general assembly finds that the general welfare and
1 3 well=being of the state are directly related to the ability
1 4 of the citizens of the state to save for their retirement
1 5 years, and that a vital and valid public purpose is served by
1 6 the creation and implementation of programs which encourage
1 7 and make possible the attainment of financial security by
1 8 the greatest number of citizens of the state. In order to
1 9 make available to the citizens of the state an opportunity to
1 10 fund future retirement savings needs, it is necessary that a
1 11 public trust be established in which moneys may be invested for
1 12 retirement.
1 13 2. As used in this chapter, unless the context otherwise
1 14 requires:
1 15 a. "Administrative fund" means the administrative fund
1 16 established under section 12J.4.
1 17 b. "Employer" means a person or entity engaged in a
1 18 business, industry, profession, trade, or other enterprise in
1 19 Iowa.
1 20 c. "Internal Revenue Code" means the same as defined in
1 21 section 422.3.
1 22 d. "Iowa retirement savings plan trust" or "trust" means the
1 23 trust created under section 12J.2.
1 24 e. "Participant" means an individual that has entered into a
1 25 participation agreement under this chapter to contribute to an
1 26 Iowa retirement savings plan.
1 27 f. "Participation agreement" means an agreement between a
1 28 participant and the trust entered into under this chapter.
1 29 g. "Program fund" means the program fund established under
1 30 section 12J.4.
1 31 Sec. 2. NEW SECTION. 12J.2 Creation of the Iowa retirement
1 32 savings plan trust.
1 33 An Iowa retirement savings plan trust as allowed by the
1 34 Internal Revenue Code is created for the purpose of helping
1 35 Iowans save for retirement. The treasurer of state is the
2 1 trustee of the trust, and has all powers necessary to carry out
2 2 and effectuate the purposes, objectives, and provisions of this
2 3 chapter pertaining to the trust, including the power to do all
2 4 of the following:
2 5 1. Make and enter into contracts necessary for the
2 6 administration of the trust.
2 7 2. Enter into agreements with any financial institution,
2 8 the state, or any federal or other state agency, or other
2 9 entity as required to implement this chapter.
2 10 3. Carry out the duties and obligations of the trust
2 11 pursuant to this chapter.
2 12 4. Accept any grants, gifts, legislative appropriations,
2 13 and other moneys from the state, any unit of federal, state, or
2 14 local government, or any other person, firm, partnership, or
2 15 corporation which the treasurer of state shall deposit into the
2 16 administrative fund or the program fund.
2 17 5. Carry out studies and projections so the treasurer of
2 18 state may advise participants regarding present and estimated
2 19 future retirement needs and levels of financial participation
2 20 in the trust required in order to enable participants to
2 21 achieve their retirement funding objectives.
2 22 6. Participate in any federal, state, or local governmental
2 23 program for the benefit of the trust.
2 24 7. Procure insurance against any loss in connection with the
2 25 property, assets, or activities of the trust.
2 26 8. Enter into agreements with participants and employers.
2 27 9. Make distributions and refunds to participants pursuant
2 28 to participation agreements as prescribed by the Internal
2 29 Revenue Code.
2 30 10. Invest moneys from the program fund in any investments
2 31 which are determined by the treasurer of state to be
2 32 appropriate.
2 33 11. Engage investment advisors, if necessary, to assist in
2 34 the investment of trust assets.
2 35 12. Contract for goods and services and engage personnel
3 1 as necessary, including consultants, actuaries, managers,
3 2 legal counsel, and auditors for the purpose of rendering
3 3 professional, managerial, and technical assistance and advice
3 4 to the treasurer of state regarding trust administration and
3 5 operation.
3 6 13. Establish, impose, and collect administrative fees
3 7 and charges in connection with transactions of the trust, and
3 8 provide for reasonable service charges, including penalties for
3 9 cancellations and late payments with respect to participation
3 10 agreements.
3 11 14. Administer the funds of the trust.
3 12 15. Adopt rules pursuant to chapter 17A for the
3 13 administration of the trust.
3 14 Sec. 3. NEW SECTION. 12J.3 Limitation of liability.
3 15 The trust, the treasurer of state, and the state of Iowa may
3 16 not guarantee any rate of return or any interest rate on any
3 17 contribution to the trust. The trust, treasurer of state, and
3 18 the state of Iowa are not liable for any loss incurred by any
3 19 person as a result of participating in the trust.
3 20 Sec. 4. NEW SECTION. 12J.4 Program and administrative funds
3 21 ==== investment and payments.
3 22 1. The treasurer of state shall segregate moneys received
3 23 by the trust into two funds: the program fund and the
3 24 administrative fund.
3 25 2. All moneys paid by participants in connection with
3 26 participation agreements shall be deposited as received into
3 27 separate accounts within the program fund.
3 28 3. Contributions to the trust made by participants may only
3 29 be made in the form of cash.
3 30 Sec. 5. NEW SECTION. 12J.5 Cancellation of agreements.
3 31 A participant may cancel a participation agreement at will.
3 32 Upon cancellation of a participation agreement, a participant
3 33 shall be entitled to the return of the participant's account
3 34 balance subject to penalties prescribed by the Internal Revenue
3 35 Code.
4 1 Sec. 6. NEW SECTION. 12J.6 Annual audited financial report
4 2 to governor and general assembly.
4 3 1. The treasurer of state shall submit an annual audited
4 4 financial report, prepared in accordance with generally
4 5 accepted accounting principles, on the operations of the trust
4 6 by January 1 to the governor and the general assembly.
4 7 2. The annual audit shall be made either by the auditor
4 8 of state or by an independent certified public accountant
4 9 designated by the auditor of state and shall include direct and
4 10 indirect costs attributable to the use of outside consultants,
4 11 independent contractors, and any other persons who are not
4 12 state employees.
4 13 3. The annual audit shall be supplemented by all of the
4 14 following information prepared by the treasurer of state:
4 15 a. Any related studies or evaluations prepared in the
4 16 preceding year.
4 17 b. A summary of the benefits provided by the trust including
4 18 the number of participants in the trust.
4 19 c. Any other information which is relevant in order to make
4 20 a full, fair, and effective disclosure of the operations of the
4 21 trust.
4 22 Sec. 7. NEW SECTION. 12J.7 Tax considerations.
4 23 For federal tax purposes, the Iowa retirement savings plan
4 24 trust shall conform to the requirements established by the
4 25 Internal Revenue Code to be able to operate as a retirement
4 26 plan. The plan may conform to the requirements under section
4 27 401(a), section 408, or another section of the Internal Revenue
4 28 Code which allows Iowans the best retirement option under the
4 29 trust as determined by the treasurer of state.
4 30 Sec. 8. NEW SECTION. 12J.8 Property rights to assets in
4 31 trust.
4 32 1. The assets of the trust shall at all times be preserved,
4 33 invested, and expended solely and only for the purposes of the
4 34 trust and shall be held in trust for the participants.
4 35 2. No property rights in the trust shall exist in favor of
5 1 the state.
5 2 3. The assets of the trust shall not be transferred or used
5 3 by the state for any purposes other than the purposes of the
5 4 trust.
5 5 Sec. 9. NEW SECTION. 12J.9 Construction.
5 6 This chapter shall be construed liberally in order to
5 7 effectuate its purpose.
5 8 Sec. 10. IMPLEMENTATION PROVISION. The treasurer of state
5 9 shall provide that when the requirements of chapter 12J are
5 10 enacted, individuals may begin making contributions to the Iowa
5 11 retirement savings plan trust, as created by section 12J.2, as
5 12 enacted in this Act, no earlier than July 1, 2018.
5 13 Sec. 11. EFFECTIVE DATE. This Act takes effect on July 1,
5 14 2017.
5 15 EXPLANATION
5 16 The inclusion of this explanation does not constitute agreement with
5 17 the explanation's substance by the members of the general assembly.
5 18 This bill creates the Iowa retirement savings plan trust
5 19 under the office of treasurer of state for the purpose of
5 20 helping Iowans save for retirement. The bill provides that
5 21 the trust be operated so that, for federal tax purposes, it
5 22 meets the requirements of a retirement plan as provided by the
5 23 Internal Revenue Code.
5 24 The state treasurer is the trustee of the trust and has
5 25 numerous powers, as specified in the bill, for the purpose of
5 26 carrying out the purpose of the trust. Powers granted the
5 27 treasurer of state to effectuate the purpose of the trust
5 28 include entering into agreements with trust participants and
5 29 employers, investing moneys in the trust, and entering into any
5 30 agreements or contracts necessary to carry out the purposes of
5 31 the trust.
5 32 The bill provides that the state, the treasurer of state,
5 33 and the trust may not guarantee any rate of return on any
5 34 contributions to the trust and are not liable for any loss
5 35 incurred by any person as a result of participating in the
6 1 trust. The bill requires the treasurer to submit an annual
6 2 audited financial report on the operations of the trust.
6 3 The bill provides that when the requirements of the bill
6 4 are enacted, the treasurer shall not allow individuals to make
6 5 contributions to the trust earlier than July 1, 2018.
6 6 The bill provides that the bill takes effect July 1, 2017.
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