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Senate
File
185
-
Introduced
SENATE
FILE
185
BY
PETERSEN
,
DONAHUE
,
BISIGNANO
,
TRONE
GARRIOTT
,
TOWNSEND
,
STAED
,
QUIRMBACH
,
WINCKLER
,
WEINER
,
DOTZLER
,
BLAKE
,
and
BENNETT
A
BILL
FOR
An
Act
establishing
a
retirement
savings
plan
trust,
and
1
including
implementation
provisions.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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185
Section
1.
NEW
SECTION
.
12L.1
Purpose
and
definitions.
1
1.
The
general
assembly
finds
that
the
general
welfare
and
2
well-being
of
the
state
are
directly
related
to
the
ability
3
of
the
citizens
of
the
state
to
save
for
their
retirement
4
years,
and
that
a
vital
and
valid
public
purpose
is
served
by
5
the
creation
and
implementation
of
programs
which
encourage
6
and
make
possible
the
attainment
of
financial
security
by
7
the
greatest
number
of
citizens
of
the
state.
According
to
8
a
study
conducted
in
2019
by
the
Iowa
insurance
division
in
9
conjunction
with
other
partners,
thirty-nine
percent
of
people
10
in
this
state
are
relying
on
social
security
for
retirement
11
and
thirty-seven
percent
have
less
than
five
thousand
dollars
12
saved
or
invested
for
retirement.
In
order
to
make
available
13
to
the
citizens
of
the
state
an
opportunity
to
fund
future
14
retirement
savings
needs,
it
is
necessary
that
a
public
trust
15
be
established
in
which
moneys
may
be
invested
for
retirement.
16
2.
As
used
in
this
chapter,
unless
the
context
otherwise
17
requires:
18
a.
“Administrative
fund”
means
the
administrative
fund
19
established
under
section
12L.8.
20
b.
“Employer”
means
a
person
or
entity
engaged
in
a
21
business,
industry,
profession,
trade,
or
other
enterprise
in
22
Iowa.
23
c.
“Internal
Revenue
Code”
means
the
same
as
defined
in
24
section
422.3.
25
d.
“Iowa
retirement
savings
plan
trust”
or
“trust”
means
the
26
trust
created
under
section
12L.2.
27
e.
“Participant”
means
an
individual
that
has
entered
into
a
28
participation
agreement
under
this
chapter
to
contribute
to
an
29
Iowa
retirement
savings
plan.
30
f.
“Participation
agreement”
means
an
agreement
between
a
31
participant
and
the
Iowa
retirement
savings
plan
trust
entered
32
into
under
this
chapter.
33
g.
“Program
fund”
means
the
program
fund
established
under
34
section
12L.8.
35
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Sec.
2.
NEW
SECTION
.
12L.2
Creation
of
Iowa
retirement
1
savings
plan
trust.
2
An
Iowa
retirement
savings
plan
trust
for
persons
employed
3
for
compensation
in
this
state,
as
allowed
by
the
Internal
4
Revenue
Code,
is
created
for
the
purpose
of
helping
Iowans
save
5
for
retirement.
The
trust
shall
function
according
to
the
6
provisions
of
the
federal
SECURE
2.0
Act
of
2022,
Pub.
L.
No.
7
117-328.
The
treasurer
of
state
is
the
trustee
of
the
trust,
8
and
has
all
powers
necessary
to
carry
out
and
effectuate
the
9
purposes,
objectives,
and
provisions
of
this
chapter
pertaining
10
to
the
trust,
including
the
power
to
do
all
of
the
following:
11
1.
Make
and
enter
into
contracts
necessary
for
the
12
administration
of
the
trust.
13
2.
Enter
into
agreements
with
any
financial
institution,
14
the
state,
or
any
federal
or
other
state
agency,
or
other
15
entity
as
required
to
implement
this
chapter.
16
3.
Carry
out
the
duties
and
obligations
of
the
trust
17
pursuant
to
this
chapter.
18
4.
Accept
any
grants,
gifts,
legislative
appropriations,
19
and
other
moneys
from
the
state,
any
unit
of
federal,
state,
or
20
local
government,
or
any
other
person,
firm,
partnership,
or
21
corporation
which
the
treasurer
of
state
shall
deposit
into
the
22
administrative
fund
or
the
program
fund.
23
5.
Carry
out
studies
and
projections
so
the
treasurer
of
24
state
may
advise
participants
regarding
present
and
estimated
25
future
retirement
needs
and
levels
of
financial
participation
26
in
the
trust
required
in
order
to
enable
participants
to
27
achieve
their
retirement
funding
objectives.
28
6.
Participate
in
any
federal,
state,
or
local
governmental
29
program
for
the
benefit
of
the
trust.
30
7.
Procure
insurance
against
any
loss
in
connection
with
the
31
property,
assets,
or
activities
of
the
trust.
32
8.
Enter
into
agreements
with
participants
and
employers.
33
9.
Make
distributions
and
refunds
to
participants
pursuant
34
to
participation
agreements
as
prescribed
by
the
Internal
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Revenue
Code.
1
10.
Invest
moneys
from
the
program
fund
in
any
investments
2
which
are
determined
by
the
treasurer
of
state
to
be
3
appropriate.
4
11.
Engage
investment
advisors,
if
necessary,
to
assist
in
5
the
investment
of
trust
assets.
6
12.
Contract
for
goods
and
services
and
engage
personnel
7
as
necessary,
including
consultants,
actuaries,
managers,
8
legal
counsel,
and
auditors,
for
the
purpose
of
rendering
9
professional,
managerial,
and
technical
assistance
and
advice
10
to
the
treasurer
of
state
regarding
trust
administration
and
11
operation.
12
13.
Establish,
impose,
and
collect
administrative
fees
13
and
charges
in
connection
with
transactions
of
the
trust,
and
14
provide
for
reasonable
service
charges,
including
penalties
for
15
cancellations
and
late
payments
with
respect
to
participation
16
agreements.
17
14.
Administer
the
funds
of
the
trust.
18
15.
Adopt
rules
pursuant
to
chapter
17A
for
the
19
administration
of
the
trust.
20
Sec.
3.
NEW
SECTION
.
12L.3
Enrollment
and
contributions.
21
1.
The
treasurer
of
state
shall
automatically
enroll
an
22
individual
employed
for
compensation
in
this
state,
whose
wages
23
are
subject
to
withholding
by
the
state,
in
the
Iowa
retirement
24
savings
plan
trust
with
a
default
contribution
rate
of
five
25
percent.
A
participant’s
contribution
rate
shall
be
adjusted
26
at
the
participant’s
request.
Participants
shall
be
able
to
27
maintain
an
account
regardless
of
place
of
employment
and
shall
28
be
able
to
roll
over
moneys
into
other
retirement
accounts.
A
29
participant
may
opt
out
of
the
trust
at
any
time.
30
2.
Participants
shall
deposit
contributions
to
the
trust
31
directly
with
the
treasurer
of
state.
An
individual
employed
32
for
compensation
in
this
state
may
contribute
to
the
trust
33
through
payroll
deductions.
An
employer
need
not
offer
its
34
employees
the
opportunity
to
contribute
to
the
trust
through
35
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185
payroll
deductions
if
the
employer
has
fewer
than
five
1
employees
or
offers
a
qualified
retirement
plan,
including
but
2
not
limited
to
a
plan
qualified
under
section
401(a),
401(k),
3
403(a),
403(b),
408(k),
408(p),
or
457(b)
of
the
Internal
4
Revenue
Code.
Employer
contributions
to
employee
accounts
5
are
not
required.
An
employer
that
participates
in
the
trust
6
shall
have
no
proprietary
interest
in
the
contributions
to
or
7
earnings
on
amounts
contributed
to
accounts
established
under
8
the
trust.
9
Sec.
4.
NEW
SECTION
.
12L.4
Participant
reports.
10
The
treasurer
of
state
shall
provide
reports
on
the
status
of
11
trust
accounts
to
participants
at
least
annually.
12
Sec.
5.
NEW
SECTION
.
12L.5
Confidentiality
of
account
13
information.
14
Except
to
the
extent
necessary
to
administer
the
Iowa
15
retirement
savings
plan
trust,
a
participant’s
account
16
information
for
accounts
in
the
trust,
including
but
not
17
limited
to
names,
addresses,
telephone
numbers,
personal
18
identification
information,
amounts
contributed,
and
earnings
19
on
amounts
contributed,
is
confidential.
The
treasurer
of
20
state
shall
maintain
the
information
as
confidential
unless
the
21
person
who
provides
the
information
or
is
the
subject
of
the
22
information
expressly
agrees
in
writing
that
the
information
23
may
be
disclosed.
24
Sec.
6.
NEW
SECTION
.
12L.6
Preemption.
25
A
local
government
shall
not
establish
or
offer
any
26
retirement
plan
for
persons
other
than
public
employees.
27
Sec.
7.
NEW
SECTION
.
12L.7
Limitation
of
liability.
28
The
Iowa
retirement
savings
plan
trust,
the
treasurer
of
29
state,
and
the
state
of
Iowa
shall
not
guarantee
any
rate
of
30
return
or
any
interest
rate
on
any
contribution
to
the
trust.
31
The
trust,
treasurer
of
state,
and
the
state
of
Iowa
are
not
32
liable
for
any
loss
incurred
by
any
person
as
a
result
of
33
participating
in
the
trust.
34
Sec.
8.
NEW
SECTION
.
12L.8
Program
and
administrative
funds
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——
investment
and
payments.
1
1.
The
treasurer
of
state
shall
segregate
moneys
received
2
by
the
Iowa
retirement
savings
plan
trust
into
two
funds:
the
3
program
fund
and
the
administrative
fund.
4
2.
All
moneys
paid
by
participants
in
connection
with
5
participation
agreements
shall
be
deposited
as
received
into
6
separate
accounts
within
the
program
fund.
7
3.
Contributions
to
the
trust
made
by
participants
shall
8
only
be
made
in
the
form
of
cash
and
shall
be
made
pretax.
9
Sec.
9.
NEW
SECTION
.
12L.9
Cancellation
of
agreements.
10
A
participant
may
cancel
a
participation
agreement
at
will.
11
Upon
cancellation
of
a
participation
agreement,
a
participant
12
shall
be
entitled
to
the
return
of
the
participant’s
account
13
balance
subject
to
penalties
prescribed
by
the
Internal
Revenue
14
Code.
15
Sec.
10.
NEW
SECTION
.
12L.10
Annual
audited
financial
16
report.
17
1.
The
treasurer
of
state
shall
submit
an
annual
audited
18
financial
report,
prepared
in
accordance
with
generally
19
accepted
accounting
principles,
on
the
operations
of
the
Iowa
20
retirement
savings
plan
trust
by
January
1
to
the
governor
and
21
the
general
assembly.
22
2.
The
annual
audit
shall
be
made
either
by
the
auditor
23
of
state
or
by
an
independent
certified
public
accountant
24
designated
by
the
auditor
of
state
and
must
include
direct
and
25
indirect
costs
attributable
to
the
use
of
outside
consultants,
26
independent
contractors,
and
any
other
persons
who
are
not
27
state
employees.
28
3.
The
annual
audit
must
be
supplemented
by
all
of
the
29
following
information
prepared
by
the
treasurer
of
state:
30
a.
Any
related
studies
or
evaluations
prepared
in
the
31
preceding
year.
32
b.
A
summary
of
the
benefits
provided
by
the
trust,
33
including
the
number
of
participants
in
the
trust.
34
c.
A
list
of
the
companies
that
are
participating
in
the
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trust
and
the
contributions
the
companies
made.
1
d.
Any
other
information
which
is
relevant
in
order
to
make
2
a
full,
fair,
and
effective
disclosure
of
the
operations
of
the
3
trust.
4
Sec.
11.
NEW
SECTION
.
12L.11
Tax
considerations.
5
For
federal
tax
purposes,
the
Iowa
retirement
savings
plan
6
trust
shall
conform
to
the
requirements
established
by
the
7
Internal
Revenue
Code
to
be
able
to
operate
as
a
retirement
8
plan.
The
plan
may
conform
to
the
requirements
under
section
9
401(a),
section
408,
or
another
section
of
the
Internal
Revenue
10
Code
which
allows
Iowans
the
best
retirement
option
under
the
11
trust
as
determined
by
the
treasurer
of
state.
12
Sec.
12.
NEW
SECTION
.
12L.12
Property
rights
to
assets
in
13
trust.
14
1.
The
assets
of
the
Iowa
retirement
savings
plan
trust
15
shall
at
all
times
be
preserved,
invested,
and
expended
solely
16
and
only
for
the
purposes
of
the
trust
and
shall
be
held
in
17
trust
for
the
participants.
18
2.
No
property
rights
in
the
trust
shall
exist
in
favor
of
19
the
state.
20
3.
The
assets
of
the
trust
shall
not
be
transferred
or
used
21
by
the
state
for
any
purposes
other
than
the
purposes
of
the
22
trust.
23
Sec.
13.
NEW
SECTION
.
12L.13
Exemption
from
execution
and
24
other
process
or
assignment
——
exceptions.
25
The
right
of
any
person
to
any
future
payment
under
this
26
chapter
is
not
transferable
or
assignable,
at
law
or
in
27
equity,
and
the
moneys
paid
or
payable
or
rights
existing
under
28
this
chapter
are
not
subject
to
execution,
levy,
attachment,
29
garnishment,
or
other
legal
process,
or
to
the
operation
of
30
any
bankruptcy
or
insolvency
law
except
for
the
purposes
of
31
enforcing
child,
spousal,
or
medical
support
obligations
or
32
marital
property
orders.
For
the
purposes
of
enforcing
child,
33
spousal,
or
medical
support
obligations,
the
garnishment
or
34
attachment
of
or
the
execution
against
compensation
due
a
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person
under
this
chapter
shall
not
exceed
the
amount
specified
1
in
15
U.S.C.
§1673(b).
2
Sec.
14.
NEW
SECTION
.
12L.14
Construction.
3
This
chapter
shall
be
construed
liberally
in
order
to
4
effectuate
its
purpose.
5
Sec.
15.
IMPLEMENTATION
PROVISION.
The
treasurer
of
state
6
shall
provide
that
when
the
requirements
of
chapter
12L
are
7
enacted,
individuals
may
begin
making
contributions
to
the
Iowa
8
retirement
savings
plan
trust,
as
created
by
section
12L.2,
as
9
enacted
in
this
Act,
no
earlier
than
July
1,
2026.
10
EXPLANATION
11
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
12
the
explanation’s
substance
by
the
members
of
the
general
assembly.
13
This
bill
creates
the
Iowa
retirement
savings
plan
trust
14
under
the
office
of
treasurer
of
state
for
the
purpose
of
15
helping
Iowans
save
for
retirement.
The
bill
provides
that
16
the
trust
be
operated
so
that,
for
federal
tax
purposes,
it
17
meets
the
requirements
of
a
retirement
plan
as
provided
by
the
18
Internal
Revenue
Code
and
functions
according
to
other
federal
19
law.
20
The
state
treasurer
is
the
trustee
of
the
trust
and
has
21
numerous
powers,
as
specified
in
the
bill,
for
the
purpose
of
22
carrying
out
the
purpose
of
the
trust.
Powers
granted
the
23
treasurer
of
state
to
effectuate
the
purpose
of
the
trust
24
include
entering
into
agreements
with
trust
participants
and
25
employers,
investing
moneys
in
the
trust,
and
entering
into
any
26
agreements
or
contracts
necessary
to
carry
out
the
purposes
of
27
the
trust.
28
The
bill
provides
that
individuals
who
are
employed
for
29
compensation
in
this
state
and
whose
wages
are
subject
to
30
withholding
by
the
state
are
automatically
enrolled
in
the
31
trust
by
the
treasurer
of
state
with
a
default
contribution
32
rate
of
5
percent,
which
can
be
adjusted
at
the
participant’s
33
request.
A
participant
may
opt
out
of
the
trust
at
any
time.
34
Employers
may
allow
employees
to
have
their
contributions
35
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185
deducted
from
their
paychecks.
Employer
contributions
to
the
1
trust
are
not
required,
and
if
an
employer
chooses
to
make
2
contributions,
the
employer
has
no
proprietary
right
to
the
3
moneys
in
the
trust.
4
The
bill
requires
the
treasurer
of
state
to
provide
5
participants
with
reports
on
the
trust
fund
at
least
once
per
6
year.
The
bill
also
requires
that
all
participant
account
7
information
be
maintained
as
confidential,
except
as
necessary
8
to
administer
the
trust
or
as
agreed
to
in
writing
by
the
9
person
who
provides
the
information
or
is
the
subject
of
the
10
information.
11
The
bill
prohibits
local
governments
from
establishing
12
or
offering
retirement
plans
for
anyone
other
than
public
13
employees.
14
The
bill
provides
that
the
state,
the
treasurer
of
state,
15
and
the
trust
shall
not
guarantee
any
rate
of
return
on
any
16
contributions
to
the
trust
and
are
not
liable
for
any
loss
17
incurred
by
any
person
as
a
result
of
participating
in
the
18
trust.
The
bill
requires
the
treasurer
to
submit
an
annual
19
audited
financial
report
on
the
operations
of
the
trust.
20
The
bill
provides
that
when
the
requirements
of
the
bill
21
are
enacted,
the
treasurer
shall
not
allow
individuals
to
make
22
contributions
to
the
trust
earlier
than
July
1,
2026.
23
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