Bill Text: NY S08087 | 2023-2024 | General Assembly | Introduced

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Bill Title: Relates to enrollees in the New York state secure choice savings program.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2024-01-26 - SIGNED CHAP.20 [S08087 Detail]

Download: New_York-2023-S08087-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          8087

                    IN SENATE

                                     January 5, 2024
                                       ___________

        Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules

        AN  ACT  to  amend the general business law, in relation to enrollees in
          the New York state  secure  choice  savings  program;  and  to  repeal
          section 1310-a of such law relating thereto

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Subdivisions 5, 9, 10, 11 and 12 of  section  1300  of  the
     2  general business law, as amended by a chapter of the laws of 2023 amend-
     3  ing  the  general  business  law  relating  to the secure choice savings
     4  program and participating individuals, as proposed in legislative  bills
     5  numbers S. 2399 and A. 4529, are amended to read as follows:
     6    5.  "Enrollee"  shall  mean any employee or [participating] individual
     7  who is enrolled in the program.
     8    9. ["Participating individual" means any individual  who  is  eighteen
     9  years  of  age  or  older  and has New York taxable income as defined in
    10  section six hundred eleven of the tax law within a  calendar  year,  who
    11  enrolls in the program independent of an employment relationship with an
    12  eligible  employer,  maintains  an  account in the program, and is not a
    13  participating employee.
    14    10.] "Payroll deduction IRA" shall mean  an  arrangement  by  which  a
    15  participating  employer  facilitates access for [employees] enrollees to
    16  remit payroll deduction contributions to the program.
    17    [11.] 10. "Program" shall  mean  the  New  York  state  secure  choice
    18  savings program.
    19    [12.] 11. "Wages" means any compensation within the meaning of section
    20  219(f)(1)  of  the Internal Revenue Code that is received by an enrollee
    21  from a participating employer [or by a participating individual]  during
    22  the calendar year.
    23    § 2. Section 1301 of the general business law, as amended by a chapter
    24  of  the  laws  of 2023 amending the general business law relating to the
    25  secure choice savings program and participating individuals, as proposed
    26  in legislative bills numbers S. 2399 and A. 4529, is amended to read  as
    27  follows:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01813-02-4
        S. 8087                             2

     1    §  1301. Program established. There is hereby established a retirement
     2  savings program in the form of an automatic enrollment payroll deduction
     3  IRA [for private-sector employees and a retirement  savings  program  in
     4  the form of a personal IRA as established by the board for participating
     5  individuals], known as the New York state secure choice savings program.
     6  The  general  administration and responsibility for the proper operation
     7  of the program shall be administered by the board  for  the  purpose  of
     8  promoting  greater  retirement savings for private-sector employees [and
     9  participating individuals]  in  a  convenient,  low-cost,  and  portable
    10  manner. The board may delegate such authority and responsibility for the
    11  development and implementation of the program to the department of taxa-
    12  tion and finance as the board deems proper.
    13    §  3.  Subdivision  3  of section 1303 of the general business law, as
    14  amended by a chapter of the laws of 2023 amending the  general  business
    15  law  relating  to  the  secure  choice savings program and participating
    16  individuals, as proposed in legislative bills numbers  S.  2399  and  A.
    17  4529, is amended to read as follows:
    18    3.  by  using  any  contributions paid by [participating individuals,]
    19  employees, and employers remitting employees' own contributions into the
    20  fund exclusively for the purpose of paying benefits to the enrollees  of
    21  the  program,  for  the  cost  of administration of the program, and for
    22  investments made for the benefit of the program.
    23    § 4. Subdivisions 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21 of
    24  section 1304 of the general business law, as amended by a chapter of the
    25  laws of 2023 amending the general business law relating  to  the  secure
    26  choice  savings  program  and  participating individuals, as proposed in
    27  legislative bills numbers S. 2399 and A. 4529, are  amended  and  a  new
    28  subdivision 7-a is added to read as follows:
    29    7-a.  Evaluate  and establish or authorize a process by which an indi-
    30  vidual or an employee of a nonparticipating employer may enroll in, make
    31  contributions to and otherwise participate in the program.
    32    10. [Evaluate and establish or authorize the process for  the  partic-
    33  ipation and enrollment of any participating individual.
    34    11.]  Evaluate, or cause to be evaluated, the need for, and procure as
    35  needed, insurance against any and all loss in connection with the  prop-
    36  erty, assets, or activities of the program, and indemnify as needed each
    37  member  of  the  board  from personal loss or liability resulting from a
    38  member's action or inaction as a member of the board.
    39    [12.] 11. Make provisions for the payment of administrative costs  and
    40  expenses  for  the  creation,  management, and operation of the program.
    41  Subject to appropriation, the state may pay administrative costs associ-
    42  ated with the creation and management of the  program  until  sufficient
    43  assets  are  available  in the program for that purpose. Thereafter, all
    44  administrative costs of the program, including repayment of any start-up
    45  funds provided by the state, shall be paid only out of moneys on deposit
    46  therein. However, private funds or federal funding received in order  to
    47  implement  the  program  until it is self-sustaining shall not be repaid
    48  unless those funds were offered contingent  upon  the  promise  of  such
    49  repayment.  The  board  shall keep its annual administrative expenses as
    50  low as possible.
    51    [13.]  12.  Allocate  administrative  fees  to  individual  retirement
    52  accounts in the program on a pro rata basis.
    53    [14.]  13. Set or authorize minimum and maximum contribution levels in
    54  accordance with limits established for  IRAs  by  the  Internal  Revenue
    55  Code.
        S. 8087                             3

     1    [15.] 14. Facilitate education and outreach to employers and employees
     2  [and facilitate the development of educational materials for participat-
     3  ing individuals].
     4    [16.]  15.  Facilitate  compliance  by the program with all applicable
     5  requirements for the program under the Internal Revenue Code,  including
     6  tax  qualification requirements or any other applicable legal, financial
     7  reporting and accounting requirements.
     8    [17.] 16. Carry out the duties and obligations of the  program  in  an
     9  effective, efficient, and low-cost manner.
    10    [18.]  17.  Exercise any and all other powers reasonably necessary for
    11  the effectuation of the purposes, objectives,  and  provisions  of  this
    12  article.
    13    [19.]  18.  Determine  or  authorize  withdrawal  provisions,  such as
    14  economic hardships, portability and leakage.
    15    [20.] 19. Determine [enrollee]  employee  rights  and  enforcement  of
    16  penalties.
    17    [21.]  20. Delegate such authority and responsibility for the develop-
    18  ment and implementation of the program to the department of taxation and
    19  finance as the board deems proper.
    20    § 5. Section 1309 of the general business law, as amended by a chapter
    21  of the laws of 2023 amending the general business law  relating  to  the
    22  secure choice savings program and participating individuals, as proposed
    23  in  legislative bills numbers S. 2399 and A. 4529, is amended to read as
    24  follows:
    25    § 1309. Employer and employee [and participating individual]  informa-
    26  tional  materials  and  disclosure forms. 1. Prior to the opening of the
    27  program for enrollment [for  employees],  the  board  shall  design  and
    28  disseminate,  or cause to be designed and disseminated, to all employers
    29  employer informational materials and employee  informational  materials,
    30  which shall include background information on the program, and necessary
    31  disclosures as required by law for employees.
    32    2. [Prior to the opening of the program for enrollment for participat-
    33  ing  individuals,  the  board  shall  design and make publicly available
    34  informational materials which shall include  background  information  on
    35  the  program  and  how  to  participate  as  a participating individual,
    36  including but not limited to, information  on  the  benefits  and  risks
    37  associated  with  making  contributions  to the program, the process for
    38  making contributions, the contribution levels they may  contribute,  the
    39  process  for  withdrawal  of  retirement  savings,  and  the process for
    40  selecting beneficiaries.
    41    3.] The employee [and participating individual] informational  materi-
    42  als  shall  be  made  available  in  English,  Spanish,  Haitian Creole,
    43  Chinese, Korean, Russian, Arabic, and any other language the board deems
    44  necessary.
    45    [4.] 3. The  employee  [and  participating  individual]  informational
    46  materials  shall  include  a disclosure form.  The disclosure form shall
    47  explain, but not be limited to, all of the following:
    48    (a) the benefits and risks associated with making contributions to the
    49  program;
    50    (b) the process for making contributions to the program;
    51    (c) how to opt out of the program;
    52    (d) the process by which an employee can participate  in  the  program
    53  with a level of employee contributions other than three percent;
    54    (e) [the process by which an individual can participate in the program
    55  as a participating individual;
        S. 8087                             4

     1    (f)] that [employees] they are not required to participate or contrib-
     2  ute more than three percent;
     3    [(g)] (f) the process for withdrawal of retirement savings;
     4    [(h)]  (g) the process for selecting beneficiaries of their retirement
     5  savings;
     6    [(i)] (h) how to obtain additional information about the program;
     7    [(j)] (i)  that  employees  [and  participating  individuals]  seeking
     8  financial  advice  should contact financial advisors, that participating
     9  employers are not in a position to provide financial  advice,  and  that
    10  participating  employers  are  not  liable  for decisions employees make
    11  pursuant to this article;
    12    [(k)] (j) information on how to access any available financial litera-
    13  cy programs;
    14    [(l)] (k) that the program fund is not guaranteed by the state; and
    15    [(m)] (l) that they can opt out after they have been enrolled.
    16    [5.] 4. The employee informational materials shall also include a form
    17  for an employee to note his or her decision to opt out of  participation
    18  in the program or elect to participate with a level of employee contrib-
    19  utions other than three percent.
    20    [6.]  5.  Participating  employers  shall supply the employee informa-
    21  tional materials to existing employees at least one month prior  to  the
    22  participating employers' facilitation of access to the program.  Partic-
    23  ipating  employers  shall supply the employee informational materials to
    24  new employees at the time of hiring and new employees  may  opt  out  of
    25  participation in the program.
    26    §  6.  Subdivision  2  of section 1310 of the general business law, as
    27  amended by a chapter of the laws of 2023 amending the  general  business
    28  law  relating  to  the  secure  choice savings program and participating
    29  individuals, as proposed in legislative bills numbers  S.  2399  and  A.
    30  4529, is amended to read as follows:
    31    2.  [Employees]  Enrollees shall have the ability to select a contrib-
    32  ution level into the program. This level may be expressed as a  percent-
    33  age  of  wages or as a dollar amount up to the deductible amount for the
    34  [employee's] enrollee's taxable year under section 219(b)(1)(A)  of  the
    35  Internal  Revenue Code.  [Employees] Enrollees may change their contrib-
    36  ution level at any time, subject to rules promulgated by the  board.  If
    37  an  [employee]  enrollee  fails to select a contribution level using the
    38  form described in this article, then he or she  shall  contribute  three
    39  percent  of his or her wages to the program, provided that such contrib-
    40  utions shall not cause the [employee's] enrollee's  total  contributions
    41  to  IRAs  for  the year to exceed the deductible amount for the [employ-
    42  ee's] enrollee's taxable year under section 219(b)(1)(A) of the Internal
    43  Revenue Code. The deduction of contributions from  an  employee's  wages
    44  shall  not  begin  until  the thirtieth day after such employee has been
    45  enrolled in the program.
    46    § 7. Section 1310-a of the general business law, as added by a chapter
    47  of the laws of 2023 amending the general business law  relating  to  the
    48  secure choice savings program and participating individuals, as proposed
    49  in legislative bills numbers S. 2399 and A. 4529, is REPEALED.
    50    §  8.  This  act  shall  take  effect on the same date and in the same
    51  manner as a chapter of the laws of 2023 amending  the  general  business
    52  law  relating  to  the  secure  choice savings program and participating
    53  individuals, as proposed in legislative bills numbers  S.  2399  and  A.
    54  4529, takes effect.