Bill Text: MS SB2798 | 2023 | Regular Session | Introduced
Bill Title: Mississippi Work and Save Program; create.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2023-01-31 - Died In Committee [SB2798 Detail]
Download: Mississippi-2023-SB2798-Introduced.html
MISSISSIPPI LEGISLATURE
2023 Regular Session
To: Economic and Workforce Development; Appropriations
By: Senator(s) Chassaniol
Senate Bill 2798
AN ACT TO CREATE THE MISSISSIPPI WORK AND SAVE PROGRAM, WHICH IS A RETIREMENT SAVINGS PROGRAM SPONSORED BY THE STATE FOR CERTAIN EMPLOYERS WHO DO NOT ALREADY OFFER A RETIREMENT PLAN THAT WILL ALLOW THOSE EMPLOYERS TO OFFER ELIGIBLE EMPLOYEES THE VOLUNTARY CHOICE TO CONTRIBUTE TO AN INDIVIDUAL RETIREMENT ACCOUNT (IRA) THROUGH A PAYROLL DEDUCTION; TO ESTABLISH THE MISSISSIPPI WORK AND SAVE BOARD IN THE OFFICE OF THE STATE TREASURER TO ADMINISTER THE PROGRAM; TO PROVIDE FOR THE APPOINTMENT OF THE MEMBERS OF THE BOARD; TO PROVIDE THE POWERS, AUTHORITY AND DUTIES OF THE BOARD; TO PRESCRIBE THE REQUIREMENTS FOR THE PROGRAM; TO PROVIDE THAT THE IRA TO WHICH CONTRIBUTIONS ARE MADE WILL BE A ROTH IRA AND THE STANDARD PACKAGE WILL BE A ROTH IRA WITH A TARGET DATE FUND INVESTMENT AND A SPECIFIED CONTRIBUTION PERCENTAGE; TO PROVIDE CERTAIN PROTECTION FROM LIABILITY FOR EMPLOYERS IN THE PROGRAM AND FOR THE STATE; TO PROVIDE FOR THE CONFIDENTIALITY OF PARTICIPANT AND ACCOUNT INFORMATION; TO CREATE THE MISSISSIPPI WORK AND SAVE ADMINISTRATIVE FUND AS A SPECIAL FUND IN THE STATE TREASURY; TO PROVIDE THAT MONIES IN THE FUND SHALL BE EXPENDED BY THE BOARD, UPON APPROPRIATION OF THE LEGISLATURE, FOR THE PURPOSES AUTHORIZED IN THIS ACT; AND FOR RELATED PURPOSES.
WHEREAS, the Legislature finds that too many Mississippi citizens have no or inadequate savings for retirement, and many Mississippi working families, including employees, independent contractors, and the self-employed, have no access to an employer-sponsored retirement plan or program or any other easy way to save at work; and
WHEREAS, it is the policy of the state to assist the Mississippi private-sector workforce, including in particular moderate- and lower-income working households, to voluntarily save for retirement, including by facilitating saving in individual retirement accounts (IRAs) as well as by encouraging employers to adopt retirement savings and other retirement plans for employees in the state; and
WHEREAS, more adequate, portable, low-cost, and consumer-protective retirement saving by Mississippi households will enhance their retirement security and ultimately reduce the pressure on state public assistance programs for retirees and other elderly citizens and the potential burden on Mississippi taxpayers to finance such programs; and
WHEREAS, the Legislature intends to establish the Mississippi Work and Save Program that will use the services of competent and qualified private-sector entities to administer the program and manage the funds on behalf of the program participants and that shall, to the extent necessary or desirable, endeavor to collaborate, cooperate, coordinate, contract, and combine resources, investments, and administrative functions with other entities, including retirement savings programs of other states that are compatible with the program, through contracts, agreements, memoranda of understanding, arrangements, partnerships, or similar arrangements as appropriate to achieve economies of scale and other efficiencies designed to minimize costs for the program and its participants; and
WHEREAS, the Mississippi Affordable College Savings Program (MACS) has demonstrated the feasibility of a public-private partnership that outsources investment and administration to assist private citizens of the state to save on a voluntary and cost-efficient basis; NOW, THEREFORE,
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Title. This act shall be known and may be cited as the Mississippi Work and Save Program.
SECTION 2. Definitions. For purposes of this act, the following terms shall be defined as provided in this section: (a) "Board" means the Mississippi Work and Save Board.
(b) "Covered employee" means an individual who is employed by a covered employer, who has wages or other compensation that is allocable to the state, and who is at least eighteen (18) years of age. The term "covered employee" does not include:
(i) Any employee covered under the federal Railway Labor Act (45 USC Section 151).
(ii) Any employee on whose behalf an employer makes contributions to a Taft-Hartley multiemployer pension trust fund.
(iii) Any individual who is an employee of the federal government, the state or any other state, any county or municipality, or any of the state's, any other state's, or the federal government's units or instrumentalities.
(c) "Covered employer" means a person or entity engaged in a business, industry, profession, trade, or other enterprise in the state, whether for profit or not for profit, excluding the federal government, the state, any county, any municipal corporation, or any of the state's or the federal government's units or instrumentalities. The term "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 (2) preceding calendar years. If an employer does not maintain a specified tax-favored retirement plan for a portion of a calendar year ending on or after the effective date of this act and adopts such a plan effective for the remainder of that calendar year, the employer is exempt from "covered employer" status for that remainder of the year.
(d) "ERISA" means the Employee Retirement Income Security Act of 1974, as amended (29 USC Section 1001 et seq.).
(e) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended (Title 26 of the United States Code).
(f) "IRA" means a traditional or Roth individual retirement account or individual retirement annuity under Section 408(a), 408(b) or 408A of the Internal Revenue Code.
(g) "Mississippi Work and Save Administrative Fund," "administrative fund" or "fund" is the fund established in Section 11 of this act that is established for the sole purpose of paying the administrative costs and expenses of the board and the program.
(h) "Mississippi Work and Save Program" or "program" means the retirement savings program established by this act.
(i) "Participant" means an individual who is contributing to an IRA under the program or has an IRA account balance under the program.
(j) "Participating employer" means a covered employer that provides for covered employees a payroll deduction IRA provided for by this act.
(k) "Payroll deduction IRA arrangement" or "payroll deduction IRA" means an arrangement by which an employer allows employees to contribute to an IRA by means of payroll deduction.
(l) "Roth IRA" means a Roth individual retirement account or individual retirement annuity under Section 408A of the Internal Revenue Code.
(m) "Specified tax-favored retirement plan" means a retirement plan that is tax-qualified under or is described in and satisfies the requirements of Section 401(a), 401(k), 403(a), 403(b), 408(k)(Simplified Employee Pension), or 408(p)(SIMPLE-IRA) of the Internal Revenue Code.
(n) "Total fees and expenses" means all fees, costs, and expenses, including, but not limited to, administrative expenses, investment expenses, investment advice expenses, accounting costs, actuarial costs, legal costs, marketing expenses, education expenses, trading costs, insurance annuitization costs, and other miscellaneous costs.
(o) "Traditional IRA" means a traditional individual retirement account or traditional individual retirement annuity under Section 408(a) or (b) of the Internal Revenue Code.
(p) "Trust" means the trust in which the assets of the program are held. Where applicable, except as may be otherwise specified, references throughout this act to the program generally are intended to refer also to the trust (including the assets, facilities, costs and expenses, receipts, expenditures, activities, operations, administration, or management).
SECTION 3. Establishment of board. (1) The Mississippi Work and Save Board is established in the Office of the State Treasurer to administer the Mississippi Work and Save Program. The board shall consist of the following nine (9) members, with the State Treasurer or the designee of the State Treasurer serving as chair:
(a) The State Treasurer or the designee of the State Treasurer.
(b) An individual, appointed by the Governor, who has a favorable reputation for skill, knowledge, and experience in the field of retirement saving and investments.
(c) An individual, appointed by the Governor, who has a favorable reputation for skill, knowledge, and experience relating to small business.
(d) An individual, appointed by the Governor, who is a representative of an association representing employees or who has a favorable reputation for skill, knowledge, and experience in the interests of employees in retirement saving.
(e) An individual, appointed by the Lieutenant Governor, who has a favorable reputation for skill, knowledge, and experience in the interests of employers in retirement saving.
(f) A retired individual, appointed by the Lieutenant Governor, to be a representative of the interests of retirees.
(g) An individual, appointed by the Lieutenant Governor, who has a favorable reputation for skill, knowledge, and experience in retirement investment products or retirement plan designs.
(h) A member of the House of Representatives appointed by the Speaker of the House of Representatives to be a nonvoting advisory member of the board.
(i) A member of the Senate appointed by the Lieutenant Governor to be a nonvoting advisory member of the board.
(2) The Governor and the Lieutenant Governor shall first make appointments to the board for terms of office beginning on July 1, 2023. The term of office of each member of the board appointed under subsection (1)(b) through (g) of this section is four (4) years, except that the initial terms of those members shall be as follows: The members appointed under subsection (1)(b) and (e) of this section shall serve for an initial term of one (1) year ending on July 1, 2024; the members appointed under subsection (1)(c) and (f) of this section shall serve for an initial term of two (2) years ending on July 1, 2025; and the members appointed under subsection (1)(d) and (f) of this section shall serve for an initial term of three (3) years ending on July 1, 2026. After the expiration of the initial terms, all later appointments shall be for terms of four (4) years from the expiration date of the previous term. A member is eligible for reappointment. If there is a vacancy for any reason, the appropriate appointing authority shall make an appointment to become immediately effective for the unexpired term.
(3) All members of the board shall serve without compensation, and shall be reimbursed from the administrative fund for necessary travel expenses incurred in carrying out their board duties.
(4) A majority of the voting members of the board constitutes a quorum for the transaction of business.
SECTION 4. Powers, authority, and duties of the board. (1) The board, subject to its authority and fiduciary duty, shall design, develop and implement the program, and, to that end, may conduct market, legal and feasibility analyses.
(2) The board shall have the powers, authority, and duties to:
(a) Establish, implement and maintain the program;
(b) Cause the program, trust, and arrangements and accounts established under the program to be designed, established, and operated:
(i) In accordance with best practices for retirement saving vehicles;
(ii) To encourage participation, saving, sound investment practices, and appropriate selection of investment options, including any default investments;
(iii) To maximize simplicity and ease of administration for covered employers;
(iv) To minimize costs, including by collective investment and other measures to achieve economies of scale and other efficiencies in program design and administration;
(v) To promote portability of benefits; and
(vi) To avoid preemption of the program by federal law;
(c) Arrange for collective, common, and pooled investment of assets of the program and trust, including investments in conjunction with other funds with which these assets are permitted by law to be collectively invested, with a view to achieving economies of scale and other efficiencies designed to minimize costs for the program and its participants;
(d) Develop and disseminate educational information designed to educate participants and citizens about the benefits of planning and saving for retirement and information to help them decide the level of participation and savings strategies that may be appropriate for them, including information in furtherance of financial capability and financial literacy;
(e) If necessary, determine the eligibility of an employer, employee, or other individual to participate in the program;
(f) Adopt rules and regulations it deems necessary or advisable for the implementation of this act and the administration and operation of the program consistent with the Internal Revenue Code and regulations thereunder, including to ensure that the program and arrangements established under the program satisfy all criteria for favorable federal tax treatment and complies, to the extent necessary, with any other applicable federal or state law;
(g) Arrange for and facilitate compliance by the program or arrangements established under the program with all applicable requirements for the program under the Internal Revenue Code, including requirements for favorable tax treatment of the IRAs, and under any other applicable federal or state law and accounting requirements, including using its best efforts to implement procedures minimizing the risk that covered employees will contribute more to an IRA than the amount they are eligible for under the Internal Revenue Code to contribute to the IRA on a tax-favored basis, and otherwise providing or arranging for assistance to covered employers and covered employees in complying with applicable law and tax-related requirements in a cost-effective manner. The board may establish any processes that the board reasonably deems to be necessary or advisable to verify whether an employer is a covered employer (including reference to online data and possible use of questions in employer state tax filings);
(h) Employ or retain a program administrator, executive director, staff, trustee, recordkeeper, investment managers, investment advisors, other administrative, professional, expert advisors and service providers, none of whom shall be members of the board and all of whom shall serve at the pleasure of the board, and determine their duties and compensation. The board may authorize the executive director and other officials to oversee requests for proposals or other public competitions and enter into contracts. The board may authorize the executive director to enter into contracts, as described in paragraph (n) of this subsection (2), on behalf of the board or conduct any business necessary for the efficient operation of the board;
(i) Establish procedures for the timely and fair resolution of participant and other disputes related to accounts or program operation;
(j) Develop and implement an investment policy 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. The board shall designate appropriate default investments that include a mix of asset classes, such as target date and balanced funds. The board shall seek to minimize participant fees and expenses of investment and administration. The board shall strive to design and implement investment options available to holders of accounts established as part of the program and other program features that are intended to achieve maximum possible income replacement balanced with an appropriate level of risk in an IRA-based environment consistent with the investment objectives under the policy. The investment options may encompass a range of risk and return opportunities and allow for a rate of return commensurate with an appropriate level of risk in view of the investment objectives under the policy. The menu of investment options shall be determined taking into account the nature and objectives of the program, the desirability (based on behavioral research findings) of limiting investment choices under the program to a reasonable number, and the extensive investment choices available to participants if they roll over to an IRA outside the program. In accordance with paragraph (h) of this subsection (2), the board, to the extent it deems it necessary or advisable, in its discretion, in carrying out its responsibilities and exercising its powers under this and other paragraphs and provisions of this act, shall employ or retain appropriate entities or personnel to assist or advise it or to whom to delegate the carrying out of such responsibilities and exercise of such powers;
(k) Discharge its duties and see to it that the members of the board discharge their duties as fiduciaries with respect to the program solely in the interest of the participants as follows:
(i) For the exclusive purpose of providing benefits to participants and defraying reasonable expenses of administering the program; and
(ii) With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an enterprise of a like character and with like aims;
(l) Cause expenses incurred to initiate, implement, maintain, and administer the program to be paid from contributions to, or investment returns or assets of, the program or other money collected by or for the program or pursuant to arrangements established under the program to the extent permitted under federal and state law;
(m) Collect application, account, or administrative fees and to accept any grants, gifts, legislative appropriation, loans, and other monies from the state, any unit of federal, state, or local government, or any other person, firm, or entity to defray the costs of administering and operating the program;
(n) Make and enter into competitively procured contracts, agreements, memoranda of understanding, arrangements, partnerships, or other arrangements, to collaborate and cooperate with, and to retain, employ, and contract with or for any of the following to the extent necessary or desirable, for the effective and efficient design, implementation, and administration of the program consistent with the purposes set forth in this act and to maximize outreach to covered employers and covered employees:
(i) Services of private and public financial institutions, depositories, consultants, actuaries, counsel, auditors, investment advisors, investment administrators, investment management firms, other investment firms, third-party administrators, other professionals and service providers, and state public retirement systems;
(ii) Research, technical, financial, administrative, and other services; and
(iii) Services of other state agencies to assist the board in the exercise of its powers and duties;
(o) Make and enter into contracts, agreements, memoranda of understanding, arrangements, partnerships, or other arrangements to collaborate, cooperate, coordinate, contract, or combine resources, investments, or administrative functions with other governmental entities, including states or their agencies or instrumentalities that maintain or are establishing retirement savings programs compatible with the program, including collective, common, or pooled investments with other funds of other states' programs with which the assets of the program and trust are permitted by law to be collectively invested, to the extent necessary or desirable for the effective and efficient design, administration, and implementation of the program consistent with the purposes set forth in this act, including the purpose of achieving economies of scale and other efficiencies designed to minimize costs for the program and its participants and the provisions of Section 5(j) of this act and subsection (l) of this section.
(p) Develop and implement an outreach plan to gain input and disseminate information regarding the program and retirement savings in general, including timely information to covered employers regarding the program and how it applies to them, with special emphasis on their ability at any time to sponsor a specified tax-favored retirement plan that would exempt them from any responsibilities under the program;
(q) Cause monies to be held and invested and reinvested under the program;
(r) Ensure that all contributions to IRAs under the program may be used only to:
(i) Pay benefits to participants under the program;
(ii) Pay the cost of administering the program; and
(iii) Make investments for the benefit of the program, and that no assets of the program or trust are transferred to the State General Fund or to any other fund of the state or are otherwise encumbered or used for any purpose other than those specified in this subsection (2);
(s) Make provision for the payment of costs of administration and operation of the program and trust;
(t) Consider whether or not procedures should be promulgated to allow employers that are not covered employers because they are exempt from covered employer status to voluntarily participate in the program by enrolling their employees in payroll deduction IRAs, taking into account, among other considerations, the potential legal consequences and the degree of employer demand to participate or facilitate participation by employees;
(u) Evaluate the need for, and procure if and as needed, insurance against any and all loss in connection with the property, assets, or activities of the program, and evaluate the need for, and procure if and as deemed necessary, pooled private insurance;
(v) Indemnify, including procurement of insurance if and as needed for this purpose, each member of the board from personal loss or liability resulting from a member's action or inaction as a member of the board;
(w) Collaborate with, and evaluate the role of, financial advisors or other financial professionals, including in assisting and providing guidance for covered employees; and
(x) Carry out its powers and duties under the program pursuant to this act and exercise any and all other powers as are appropriate for the effectuation of the purposes, objectives and provisions of this act pertaining to the program.
(3) A board member, program administrator, and other staff of the board shall not:
(a) Directly or indirectly have any interest in the making of any investment under the program or in gains or profits accruing from any such investment;
(b) Borrow 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
(c) Become an endorser, surety, or obligor on investments made under the program.
SECTION 5. Requirements for the Mississippi Work and Save Program. The program developed and established by the board under this act must:
(b) Allow each covered employer to offer its employees the voluntary choice whether or not to contribute to a payroll deduction IRA by permitting automatic enrollment where employees may opt-out of participation;
(c) Provide that the IRA to which contributions are made will be a Roth IRA, except that the board shall have the authority at any time, to add an option for all participants to affirmatively elect to contribute to a traditional IRA as an alternative to the Roth IRA;
(d) Provide that the standard package shall be a Roth IRA with a target date fund investment, and a contribution rate that begins at five percent (5%) of salary or wages (unless the board in regulations specifies three percent (3%), four percent (4%), or six percent (6%)), provided that the covered employee can choose to stop participation altogether, to use a traditional IRA and a different investment from among the options available, and to contribute at a higher or lower contribution rate, subject to the IRA contribution dollar limits applicable under the Internal Revenue Code;
(e) Provide on a uniform basis, if and when the board so determines, in its discretion, for annual increases of each participant's contribution rate, by not more than one percent (1%) of salary or wages per year up to a maximum of eight percent (8%). Any such increases shall apply to participants, as determined by the board, by default or only if initiated by affirmative participant election (including as part of the standard package), in either case subject to the IRA contribution limits applicable under the Internal Revenue Code;
(f) Provide for direct deposit of contributions into investments under the program;
(g) Be professionally managed;
(h) Permit no employer contributions by covered employers;
(i) Provide for reports on the status of each participant's account to be provided to each participant at least annually;
(j) When possible and practicable, use existing or new employer, other private-sector, and public infrastructure and common, collective, or pooled investment arrangements to the extent desirable to facilitate and enhance the effectiveness and efficiency of program outreach, enrollment, contributions, recordkeeping, investment, distributions, compliance, and other aspects of program design, administration and implementation consistent with the purposes set forth in this act, including the purpose of achieving economies of scale and other efficiencies designed to minimize costs for the program and its participants and the provisions of Section 6(1) of this act;
(k) Provide that each account holder owns the contributions to or earnings on amounts contributed to his or her account under the program and that the state and employers have no proprietary interest in those contributions or earnings;
(l) Be designed and implemented in a manner consistent with federal law, including favorable federal tax treatment, to the extent that it applies and consistent with the program not being preempted by ERISA;
(m) Make provision for the participation in the program of individuals who are not employees, as provided in Section 6(1) of this act;
(n) Keep total fees and expenses as low as practicable and in any event each year not in excess of seventy-five hundredths of one percent (0.75%) of the total assets of the program, except that this limit shall not apply during a start-up period of three (3) years beginning with the initial implementation of the program;
(o) Establish rules and procedures governing the distribution of funds from the program, including such distributions as may be permitted or required by the program and any applicable provisions of tax laws, with the objectives of maximizing financial security in retirement, helping to protect spousal rights, and assisting participants with the challenges of decumulation of savings. The board shall have the authority, in its discretion, to provide for one or more reasonably priced distribution options to provide a source of fixed regular retirement income, including income for life or for the participant's life expectancy (or for joint lives and life expectancies, as applicable);
(p) Establish rules and procedures promoting portability of benefits, including the ability to make tax-free rollovers or transfers from IRAs under the program to other IRAs or to tax-qualified plans that accept such rollovers or transfers provided any roll-over is initiated by participants and not solicited by agents or brokers;
(q) (i) Provide that, if a covered employer fails without reasonable cause to enroll a covered employee as required under paragraph (b) of this section:
1. The covered employer shall be subject to a penalty equal to Two Hundred Fifty Dollars ($250.00) for each covered employee for each calendar year or portion thereof during which the covered employee neither was enrolled in the program nor had elected out of participation in the program; and the covered employee or any appropriate official of the state may bring a civil action to require the covered employer to enroll the covered employee and shall recover such costs and reasonable attorney's fees as may be allowed by the court; and
2. For each calendar year beginning after the date on which a penalty has been assessed with respect to a covered employee, Five Hundred Dollars ($500.00) for any portion of that calendar year during which the covered employee continues to be unenrolled without electing out of participation in the program.
(ii) No penalty shall be imposed under subparagraph (i) of this paragraph (q) on any failure for which it is established that the covered employer subject to liability for the penalty did not know that the failure existed and exercised reasonable diligence to meet the requirements of paragraph (b) of this section.
(iii) No penalty shall be imposed under subparagraph (i) of this paragraph (q) on any failure if:
1. The covered employer subject to liability for the penalty exercised reasonable diligence to meet those requirements; and
2. The covered employer complies with those requirements with respect to each covered employee by the end of the ninety-day period beginning on the first date the covered employer knew, or exercising reasonable diligence would have known, that the failure existed.
(iv) In the case of a failure that is due to reasonable cause and not to willful neglect, all or part of the penalty may be waived to the extent that the payment of the penalty would be excessive or otherwise inequitable relative to the failure involved; and
(r) Provide that, if a covered employer fails to transmit a payroll deduction contribution to the program on the earliest date the amount withheld from the covered employee's compensation can reasonably be segregated from the covered employer's assets, but not later than the fifteenth day of the month following the month in which the covered employee's contribution amounts are withheld from his or her paycheck, the failure to remit such contributions on a timely basis shall be subject to the same sanctions as employer misappropriation of employee wage withholdings and to the penalties specified in paragraph (q) of this section.
SECTION 6. Rules for the Mississippi Work and Save Program. The board shall adopt rules to implement the program that:
(a) Establish the processes for enrollment and contributions to payroll deduction IRAs under the program, including elections by covered employees, withholding by covered employers of employee payroll deduction contributions from wages and remittance for deposit to IRAs, and voluntary enrollment and contributions by others, including self-employed individuals and independent contractors, through payroll deduction or otherwise;
(b) Establish the processes for withdrawals, rollovers, and direct transfers from IRAs under the program in the interest of facilitating portability and maximization of benefits;
(c) Establish processes for phasing in enrollment of eligible individuals;
(d) Conduct outreach to individuals, employers, other stakeholders, and the public regarding the program. Specify the contents, frequency, timing, and means of required disclosures from the program to covered employees, participants, other individuals eligible to participate in the program, covered employers, and other interested parties. These disclosures shall include, but need not be limited to:
(i) The benefits associated with tax-favored retirement saving;
(ii) The potential advantages and disadvantages associated with contributing to Roth IRAs and, if applicable, traditional IRAs under the program;
(iii) The eligibility rules for Roth IRAs and, if applicable, traditional IRAs;
(iv) That the individual (and not the employer, the state, the board, any board member or other state official, or the program) will be solely responsible for determining whether, and, if so, how much, the individual is eligible to contribute on a tax-favored basis to an IRA;
(v) The penalty for excess contributions to IRAs and the method of correcting excess contributions;
(vi) Instructions for enrolling, making elections to contribute or to decline to contribute, and making elections regarding contribution rates, type of IRA, and investments;
(vii) Instructions for implementing and for changing the elections;
(viii) The potential availability of a saver's tax credit, including the eligibility conditions for the credit and instructions on how to claim it;
(ix) That employees seeking tax, investment, or other financial advice should contact appropriate professional advisors, and that covered employers are not in a position to provide such advice and are not liable for decisions individuals make in relation to the program;
(x) That the payroll deduction IRAs are intended not to be employer-sponsored retirement plans and that the program is not an employer-sponsored retirement plan;
(xi) The potential implications of account balances under the program for the application of asset limits under certain public assistance programs;
(xii) That the account owner is solely responsible for investment performance, including market gains and losses, and that IRA accounts and rates of return are not guaranteed by any employer, the state, the board, any board member or state official, or the program;
(xiii) Additional information about retirement and saving and other information designed to promote financial literacy and capability (which may take the form of links to, or explanations of how to obtain, such information); and
(xiv) How to obtain additional information about the program.
SECTION 7. Protection from liability for employers. (1) A covered employer or other employer is not and shall not be liable for or bear responsibility for:
(a) An employee's decision to participate in or not to participate in the program or a participant's specific elections under the program;
(b) Participants' or the board's investment decisions;
(c) The administration, investment, investment returns, or investment performance of the program, including, without limitation, any interest rate or other rate of return on any contribution or account balance, provided they play no role;
(d) The program design or the benefits paid to participants;
(e) Individuals' awareness of or compliance with the conditions and other provisions of the tax laws that determine which individuals are eligible to make tax-favored contributions to IRAs, in what amount, and in what time frame and manner; or
(f) Any loss, failure to realize any gain, or any other adverse consequences, including without limitation any adverse tax consequences or loss of favorable tax treatment, public assistance, or other benefits, incurred by any person as a result of participating in the program.
(2) No covered employer or other employer shall be, or shall be considered to be, a fiduciary in relation to the program or trust or any other arrangement under the program.
SECTION 8. Protection from liability for the state. (1) The state, the board, each member of the board or other state official, other state boards, commissions, or agencies, any member, officer, or employee thereof, and the program:
(a) Have no responsibility for compliance by individuals with the conditions and other provisions of the Internal Revenue Code that determine which individuals are eligible to make tax-favored contributions to IRAs, in what amount, and in what time frame and manner;
(b) Have no duty, responsibility, or liability to any party for the payment of any benefits under the program, regardless of whether sufficient funds are available under the program to pay such benefits;
(c) Do not and shall not guarantee any interest rate or other rate of return on or investment performance of any contribution or account balance; and
(d) Are not and shall not be liable or responsible for any loss, deficiency, failure to realize any gain, or any other adverse consequences, including without limitation any adverse tax consequences or loss of favorable tax treatment, public assistance or other benefits, incurred by any person as a result of participating in the program.
(2) The debts, contracts, and obligations of the program or the board are not the debts, contracts, and obligations of the state, and neither the faith and credit nor the taxing power of the state is pledged directly or indirectly to the payment of the debts, contracts, and obligations of the program or the board.
SECTION 9. Confidentiality of participant and account information. Individual account information relating to accounts under the program and relating to individual participants (including but not limited to names, addresses, telephone numbers, email addresses, personal identification information, investments, contributions, and earnings) is confidential and must be maintained as confidential:
(a) Except to the extent necessary to administer the program in a manner consistent with this act, the tax laws of this state, and the Internal Revenue Code; or
(b) Unless the individual who provides the information or is the subject of the information expressly agrees in writing to the disclosure of the information.
SECTION 10. Intergovernmental collaboration and cooperation. The board may enter into an intergovernmental agreement or memorandum of understanding with the state and any agency of the state to receive outreach, technical assistance, enforcement and compliance services, collection or dissemination of information pertinent to the program (subject to such obligations of confidentiality as may be agreed or required by law), or other services or assistance. The state and any agencies of the state that enter into such agreements or memoranda of understanding shall collaborate to provide the outreach, assistance, information, and compliance or other services or assistance to the board. The memoranda of understanding may cover the sharing of costs incurred in gathering and disseminating information and the reimbursement of costs for any enforcement activities or assistance.
SECTION 11. Funding of program. (1) The Mississippi Work and Save Administrative Fund is created as a special fund in the State Treasury. Monies in the administrative fund shall be expended by the board, upon appropriation of the Legislature, for the purposes authorized in this act. The administrative fund shall consist of:
(a) Monies appropriated to or transferred into the administrative fund by the Legislature;
(b) Monies transferred to the administrative fund from the federal government, other state agencies, or local governments;
(c) Monies from the payment of application, account, administrative, or other fees and the payment of other monies due the board;
(d) Any gifts, donations or grants made to the state for deposit in the administrative fund;
(e) Monies collected for the administrative fund from contributions to, or investment returns or assets of, the program or other monies collected by or for the program or pursuant to arrangements established under the program to the extent permitted under federal and state law; and
(f) Earnings on monies in the administrative fund.
(2) The board shall accept any grants, gifts, appropriations, or other monies from the state, any unit of federal, state, or local government, or any other person, firm, partnership, corporation, or other entity solely for deposit into the administrative dund, whether for investment or administrative expenses.
(3) Unexpended amounts remaining in the administrative fund at the end of a fiscal year shall not lapse into the State General Fund, and any interest earned or investment earnings on amounts in the fund shall be deposited into such fund.
(4) To 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: (a) The board may borrow from the state, any unit of federal, state, or local government, or any other person, firm, partnership, corporation, or other entity working capital funds and other funds as may be necessary for this purpose, provided that such funds are borrowed in the name of the program and board only and that any such borrowings shall be payable solely from the revenues of the program; and
(b) The board may enter into long-term procurement contracts with one or more financial providers that provide a fee structure that would assist the program in avoiding or minimizing the need to borrow or to rely upon general assets of the state.
(5) The state may pay administrative costs associated with the creation, maintenance, operation, and management of the program and trust until sufficient assets are available in the administrative fund for that purpose. Thereafter, all administrative costs of the administrative fund, including any repayment of start-up funds provided by the state, shall be repaid only out of monies on deposit in the fund. However, private funds or federal funding received in order to implement the program until the administrative fund is self-sustaining shall not be repaid unless those funds were offered contingent upon the promise of such repayment.
(6) The board may use the monies in the administrative fund solely to pay the administrative costs and expenses of the program and the administrative costs and expenses the board incurs in the performance of its duties under this act.
SECTION 12. Audits and annual reports. (1) The board shall cause an accurate account of all of the program's, trust's, and board's activities, operations, receipts, and expenditures to be maintained. Each year, a full audit of the books and accounts of the board pertaining to those activities, operations, receipts and expenditures, personnel, services, or facilities shall be conducted by a certified public accountant and shall include, but not be limited to, direct and indirect costs attributable to the use of outside consultants, independent contractors, and any other persons who are not state employees for the administration of the program. For the purposes of the audit, the auditors shall have access to the properties and records of the program and board and may prescribe methods of accounting and the rendering of periodic reports in relation to projects undertaken by the program.
(2) By August 1 of each year, the board shall submit to the Governor, the State Treasurer, and the appropriate committees of the Senate and House an audited financial report, prepared in accordance with generally accepted accounting principles, detailing the activities, operations, receipts, and expenditures of the program and board during the preceding calendar year. The report shall also include projected activities of the program for the current calendar year.
(3) The board shall prepare an annual report on the operation of the program to be available to all citizens and provided to appropriate state officials.
SECTION 13. Applicability dates. (1) The board shall establish the program so that individuals can begin contributing under the program not later than the first of the month following the second anniversary of the effective date of this act.
(2) The board may, in its discretion, phase in the program so that the ability to contribute first applies on different dates for different classes of individuals, including employees of employers of different sizes or types and individuals who are not employees (self-employed, independent contractors, etc.). However, any such staged or phased-in implementation schedule must be substantially completed not later than twenty-four (24) months after the effective date of this act.
(3) The board shall not implement the program if and to the extent that it determines that the program is preempted by ERISA. Accordingly, if and as needed, the board shall implement the program in a severable fashion to the extent practicable if and to the extent that the board determines:
(a) That a portion or aspect of the program is preempted by ERISA, the board shall not implement that portion or aspect of the program but shall proceed to implement the remainder of the program to the extent practicable; or
(b) That some but not all of the payroll deduction IRA arrangements or other arrangements under the program are or would be employee benefit plans under ERISA, the board shall proceed to implement the program with respect to the other arrangements under the program to the extent practicable.
SECTION 14. This act shall take effect and be in force from and after its passage.
