North Carolina Work and Save.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 110

Short Title: North Carolina Work and Save. (Public)
Sponsors: Senators Hanig, Moffitt, and Adcock (Primary Sponsors).
Referred to: Rules and Operations of the Senate
February 18, 2025
*S110-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO CREATE THE SMALL BUSINESS RETIREMENT SAVINGS PROGRAM AND 2
TO APPROPRIATE FUNDS. 3
Whereas, the General Assembly finds that too many North Carolina citizens have no 4
or inadequate savings for retirement, and an estimated 1.7 million North Carolina working 5
families, including employees, independent contractors, and the self -employed, have no access 6
to an employer-sponsored retirement plan or program or any other easy way to save at work; and 7
Whereas, it is the policy of the Sta te to assist the North Carolina private -sector 8
workforce, including in particular moderate - and lower -income working households, to 9
voluntarily save for retirement, including by facilitating saving in individual retirement accounts 10
(IRAs) as well as by enc ouraging employers to adopt retirement savings and other retirement 11
plans for employees in the State; and 12
Whereas, more adequate, portable, low -cost, and consumer -protective retirement 13
saving by North Carolina households will enhance their retirement security and ultimately reduce 14
the pressure on State public assistance programs for retirees and other elderly citizens and the 15
potential burden on North Carolina taxpayers to finance such programs; and 16
Whereas, the General Assembly intends to establish a North Carolina Work and Save 17
Program that will use the services of competent and qualified private -sector entities selected by 18
the North Carolina Small Business Retirement Savings Program Board to administer the Program 19
and manage the funds on behalf of the Program participants; and 20
Whereas, the North Carolina 529 College Savings Program has demonstrated the 21
feasibility of a public-private partnership that outsources investment and administration to assist 22
private citizens of the State to save on a voluntary and cost-efficient basis; Now, therefore, 23
The General Assembly of North Carolina enacts: 24
SECTION 1. Article 6 of Chapter 147 of the General Statutes is amended by 25
designating G.S. 147-65 through G.S. 147-86.6 as Part 1 with the heading "General Provisions, 26
Powers, and Duties; Investment; and Funds." 27
SECTION 2. Article 6 of Chapter 147 of the General Statutes is amended by adding 28
a new Part to read: 29
"Part 2. North Carolina Small Business Retirement Savings Program. 30
"§ 147-86.7A. Title. 31
This Part shall be known as the " North Carolina Small Business Retirement Savings 32
Program" or "North Carolina Work and Save." 33
"§ 147-86.7B. Definitions. 34
The following definitions apply in this Part: 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 110-First Edition
(1) Administrative Fund. – The North Carolina Small Business Retirement 1
Savings Administrative Fund established in G.S. 147-86.7V. 2
(2) Board. – The North Carolina Small Business Retirement Savings Program 3
Board. 4
(3) Covered employee. – An individual who is employed by a covered employer, 5
who has wages or other compensation tha t is allocable to the State, and who 6
is at least 18 years of age. A covered employee does not include any of the 7
following: 8
a. Any employee covered under the federal Railway Labor Act (45 9
U.S.C. § 151). 10
b. Any employee on whose behalf an employer makes contributions to a 11
Taft-Hartley multiemployer pension trust fund. 12
c. Any individual who is an employee of the federal government, the 13
State or any other state, any county or municipal corporation, or any 14
of the State 's, any other state's, or the federal government's units or 15
instrumentalities. 16
(4) Covered employer. – A person or entity engaged in a business, industry, 17
profession, trade, or other enterprise in the State, whether for-profit or not for 18
profit, excluding the federal government, the State, any c ounty, any 19
municipality, or any political subdivision of the State , and provided that 20
covered employer does not include an employer that maintains a specified 21
tax-favored retirement plan for its employees or has done so effective in form 22
and operation at any time within the current or two preceding calendar years. 23
If an employer does not maintain a specified tax-favored retirement plan for a 24
portion of a calendar year ending on or after the effective date of this Part and 25
adopts such a plan effective for the remainder of that calendar year, the 26
employer is exempt from covered employer status for that remainder of the 27
year. 28
(4a) Department. – The Department of State Treasurer. 29
(5) ERISA. – The Employee Retirement Income Security Act of 1974, as 30
amended (29 U.S.C. § 1001 et seq.). 31
(6) Internal Revenue Code. – The Internal Revenue Code of 1986, as amended 32
(Title 26 of the United States Code). 33
(7) IRA. – A traditional or Roth individual reti rement account or individual 34
retirement annuity. 35
(8) Participant. – An individual who is contributing to an IRA under the Program 36
or has an IRA account balance under the Program. 37
(9) Participating employer. – A covered employer that provides for covered 38
employees a payroll deduction IRA provided for by this Part. 39
(10) Payroll deduction IRA arrangement or payroll deduction IRA. – An 40
arrangement by which an employer allows employees to contribute to an IRA 41
by means of payroll deduction. 42
(11) Program or North Carolina Work and Save Program. – The Small Business 43
Retirement Savings Program established by this Part. 44
(12) Roth IRA. – A Roth individual retirement account or individual retirement 45
annuity under section 408A of the Internal Revenue Code. 46
(13) Specified tax-favored retirement plan. – A retirement plan that is tax-qualified 47
under or is described in and satisfies the requirements of subsection 401(a), 48
401(k), 403(a), 403(b), 408(k) (Simplified Employee Pension), or 408(p) 49
(SIMPLE-IRA) of the Internal Revenue Code. 50
General Assembly Of North Carolina Session 2025
Senate Bill 110-First Edition Page 3
(14) Total fees and expenses. – All fees, costs, and expenses, including , but not 1
limited to, administrative expenses, investment expenses, investment advice 2
expenses, accounting costs, actuarial costs, legal costs, marketing expenses, 3
education expenses, trading costs, insurance annuitization costs, and other 4
miscellaneous costs. 5
(15) Traditional IRA. – A traditional individual retirement account or traditional 6
individual retirement annuity under subsection 408(a) or (b) of the Internal 7
Revenue Code. 8
(16) Trust. – The trust in which the assets of the Program are held. Where 9
applicable, except as may be otherwise specified, references throughout this 10
Part to the Program generally are intended to refer also to the Trust, including 11
the asset s, facilities, costs and expenses, receipts, expenditures, activities, 12
operations, administration, or management. 13
"§ 147-86.7C. Establishment of Board. 14
(a) The North Carolina Small Business Retirement Savings Board is established for 15
administrative purposes in the Department of State Treasurer, but the Board shall exercise its 16
powers and duties independently of the Department. The Department shall provide 17
administrative support for the Board in carrying out its duties pursuant to this Part. 18
(b) The Board shall consist of 12 members. 19
(1) Ten voting members shall be appointed as follows: 20
a. The State Treasurer shall appoint a member who has a favorable 21
reputation for skill, knowledge, and experience in retirement 22
investment products or retirement plan designs. 23
b. Five members appointed by the Governor as follows: 24
1. One member who has a favorable reputation for skill, 25
knowledge, and experience in retirement investment products 26
or retirement plan designs. 27
2. One member who has a favorable reputation for skill, 28
knowledge, and experience relating to small business or 29
covered employers. 30
3. One member from the Office of State Budget and Management 31
or other designee knowledgeable about fiscal impacts. 32
4. One member who is an employee of the Department of State 33
Treasurer. 34
5. One member of the public. 35
c. Two members appointed by the General Assembly upon the 36
recommendation of the Speaker of the House of Representatives as 37
follows: 38
1. One member who is a retired individual or an individual who 39
represents persons retired to be a representative of the interests 40
of retirees. 41
2. One member who has a favorable reputation for skill, 42
knowledge, and experience in the interests of employers in 43
retirement saving. 44
d. Two members appointed by the General Assembly upon the 45
recommendation of the President Pro Tempore of the Senate as 46
follows: 47
1. One member who is a representative of an association 48
representing employees or who has a favorable reputation for 49
skill, knowledge, and experience in the interests of employees 50
in retirement saving. 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 110-First Edition
2. One member who has a favorable reputation for skill, 1
knowledge, and experience in retirement investment products 2
or retirement plan designs. 3
(2) In addition to the 10 voting members, the President Pro Tempore of the Senate 4
and the Speaker of the House of Representatives shall each appoint one 5
nonvoting advisory member. 6
(c) All initial appointments shall be made no later than October 1, 202 5. Of the initial 7
five appointments made by the Governor, two shall be appointed for four -year terms, two shall 8
be appointed for two-year terms, and one shall be appointed for a one -year term, with all terms 9
to begin on October 1, 202 5. Of the initial two appointments made by the General Assembly 10
upon the recommendation of the President Pro Tempore of the Senate, one shall be appointed for 11
a four-year term and one shall be appointed for a two -year term, with both terms to begin on 12
October 1, 202 5. Of the initial two appointments made by the General Assembly upon the 13
recommendation of the Speaker of the House of Representatives, one shall be appointed for a 14
four-year term and one shall be appointed for a two -year term, with both terms to begin on 15
October 1, 2025. The initial appointment by the State Treasurer shall be for a term of three years 16
to begin on October 1, 2025. All successors shall be appointed for four-year terms. All members 17
of the Board shall serve at the pleasure of the appointing authority. 18
(d) Members of the Board shall serve without compensation and shall receive per diem, 19
subsistence, and travel allowances as provided in G.S. 138-5 and G.S. 138-6 as applicable. 20
(e) The Governor shall convene the first meeting of the Board no later than October 15, 21
2025. A majority of the voting members of the Board constitutes a quorum. The first order of 22
business before the Board shall be to elect a chair from among the Board 's membership. A 23
vacancy in the membership of the Board shall not impair the right of a quorum to exercise the 24
powers and duties of the Board. 25
"§ 147-86.7D. Powers and duties of the Board. 26
(a) The Board shall have the following powers and duties, subject to its authority and 27
fiduciary duty: 28
(1) Design, develop, implement, maintain, govern , and promulgate rules with 29
respect to a payroll deduction retirement savings program for covered 30
employers and, to that end, may conduct market, legal, and feasibility 31
analyses. 32
(2) Elect a chair and other officers it deems necessary. 33
(3) Meet as necessary to perform its duties. 34
(4) Appoint an executive director, who shall be the chief administrative officer of 35
the Board. 36
(5) Retain trustee s, record keepers, investment managers, investment advisors, 37
and other administrative, professional, expert advisors and service providers, 38
none of whom shall be members of the Board and all of whom shall serve at 39
the pleasure of the Board, and determine their duties and compensation. The 40
Board may authorize the executive director and other officials to oversee 41
requests for proposals or other public competitions and enter into contracts on 42
behalf of the Board and conduct any business necessary for the efficient 43
operation of the Board. 44
(6) Cause the Program, Trust, and arrangements and account s established under 45
the Program to be designed, established, and operated: 46
a. In accordance with best practices for retirement saving vehicles. 47
b. To encourage participation, saving, sound investment practices, and 48
appropriate selection of investment optio ns, including any default 49
investments. 50
General Assembly Of North Carolina Session 2025
Senate Bill 110-First Edition Page 5
c. To maximize simplicity and ease of administration for covered 1
employers. 2
d. To arrange for collective, common, and pooled investment of assets of 3
the Program and Trust, including investments in conjunction with 4
other funds with which these assets are permitted by law to be 5
collectively invested, with a view to achieving economies of scale and 6
other efficiencies designed to minimize costs for the Program and its 7
participants, to promote portability of benefits. 8
e. To avoid preemption of the Program by federal law (Employee 9
Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.). 10
(7) Develop and implement an investment policy that defines the Program 's 11
investment objectives, consistent with the objectives of the Program, and that 12
provides for policies and procedures consistent with those investment 13
objectives. The Board shall designate appropriate default investments that 14
include a mix of asset classes, such as target date and balanced funds. The 15
Board shall seek to minimize participant fees and expenses of investment and 16
administration. The Board shall strive to design and implement investment 17
options available to holders of accounts established as part of the Program and 18
other Program features that are intended to achieve maximum possible income 19
replacement balanced with an appropriate level of risk in an IRA -based 20
environment consistent with the investment objectives under the policy. The 21
investment options may encompass a range of risk and return opportuniti es 22
and allow for a rate of return commensurate with an appropriate level of risk 23
in view of the investment objectives under the policy. The menu of investment 24
options shall be determined taking into account the nature and objectives of 25
the Program, the desirability based on behavioral research findings of limiting 26
investment choices under the Program to a reasonable number, and the 27
extensive investment choices available to participants in the event that they 28
roll over to an IRA outside the Program. 29
(8) Set and collect necessary fees from covered employees for application, 30
account, or administrative processing and accept any grants, gifts, legislative 31
appropriations, loans, and other moneys from the State, any unit of federal, 32
State, or local government, or a ny other person, firm, or entity to defray the 33
costs of administering and operating the Program. 34
(9) If necessary, determine the eligibility of an employer, employee, or other 35
individual to participate in the Program. 36
(10) Adopt rules it deems necessary or advisable for the implementation of this 37
Part and the administration and operation of the Program. 38
(11) Cause expenses incurred to initiate, implement, maintain, and administer the 39
Program to be paid from contributions to, or investment returns or assets of, 40
the Program or other money collected by or for the Program or pursuant to 41
arrangements established under the Program to the extent permitted under 42
federal and State law. 43
(12) Invest and reinvest its funds in the Adminis trative Fund in accordance with 44
applicable State and federal laws. 45
(13) Make and enter into competitively procured contracts, agreements, 46
memoranda of understanding, partnerships, or other arrangements, to 47
collaborate and cooperate with, and to retain, employ, and contract with or for 48
any of the following to the extent necessary or desirable, for the effective and 49
efficient design, implementation, and administration of the Program 50
General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 110-First Edition
consistent with the purposes set forth in this Part and to maximize outreach to 1
covered employers and covered employees: 2
a. Services of private and p ublic financial institutions, depositories, 3
consultants, actuaries, counsel, auditors, investment advis ors, 4
investment administrators, investment management firms, other 5
investment firms, third -party administrators, other professionals and 6
service providers, and State public retirement systems. 7
b. Research, technical, financial, administrative, and other services. 8
c. Services of other State agencies to assist the Board in the exercise of 9
its powers and duties. 10
(14) The Board may enter into an interg overnmental agreement or memorandum 11
of understanding with the State and any agency of the State to receive 12
outreach, technical assistance, enforcement and compliance services, 13
collection or dissemination of information pertinent to the Program subject to 14
such obligations of confidentiality as may be agreed to or required by law, or 15
other services or assistance. The State and any agencies of the State that enter 16
into such agreements or memoranda of understanding shall collaborate to 17
provide the outreach, ass istance, information, and compliance or other 18
services or assistance to the Board. The memoranda of understanding may 19
cover the sharing of costs incurred in gathering and disseminating information 20
and the reimbursement of costs for any enforcement activities or assistance. 21
(15) Make and enter into contracts, agreements, memoranda of understanding, 22
arrangements, partnerships, or other arrangements to collaborate, cooperate, 23
coordinate, contract, or combine resources, investments, or administrative 24
functions with other governmental entities, including other s tates or their 25
agencies or instrumentalities that maintain or are establishing retirement 26
savings programs compatible with the Program, including collective, 27
common, or pooled investments with other funds of other states' programs 28
with which the assets of the Program and Trust are permitted by law to be 29
collectively invested, to the extent necessary or desirable for the effective and 30
efficient design, administration, and implementation of the Program 31
consistent with the purposes set forth in this Part, including the purpose of 32
achieving economies of scale and other efficiencies designed to minimize 33
costs for the Program. 34
(16) Develop and implement an education and outreach plan to gain input and 35
disseminate information regarding the North Carolina Work and Save 36
Program and retirement savings and financial literacy in general. 37
(17) Establish procedures for the timely and fair resolution of participant and other 38
disputes related to accounts or Program operation. 39
(18) Evaluate the need for, and procure if and as deemed necessary, pooled private 40
insurance against any and all loss in connection with the property, assets, or 41
activities of the Program. 42
(19) Borrow from the State, any unit of federal, State, or local government, or any 43
other person, firm, partnership, corporation, or other entity working capital 44
funds and other funds as may be necessary for this purpose, provided that such 45
funds are borrowed in the name of the Program and Board only and that any 46
such borrowings shall be payable solely from the revenues of the Program. 47
(20) Enter into long -term procurement contracts with one or more financial 48
providers that provide a fee structure that would assist the Program in avoiding 49
or minimizing the need to borrow or to rely upon general assets of the State. 50
General Assembly Of North Carolina Session 2025
Senate Bill 110-First Edition Page 7
(b) In addition to the applicable prohibitions contained in Article 4 of Chapter 138A of 1
the General Statutes, a Board member, executive director, and other staff of the Board shall not 2
do any of the following: 3
(1) Directly or indirectly have any interest in the making of any investment under 4
the Program or in gains or profits accruing from any such investment. 5
(2) Borrow any Program -related funds or deposits or use any such funds or 6
deposits in any manner, for himself or herself or as an agent or partner of 7
others. 8
(3) Become an endorser, surety, or obligor on investments made under the 9
Program. 10
"§ 147-86.7G. Standard of conduct; fiduciary duty. 11
The Board, individual members of the Board, all persons serving as staff to the Program, and 12
any other agents appointed or engaged shall discharge their duties for the exclusive purpose of 13
providing benefits to the Program participants and administering the Program with discharge of 14
its duties and shall: 15
(1) Defray reasonable expenses in the administration of the Program. 16
(2) Govern Program investors with the care, skill, prudence, and diligence as a 17
prudent person acting in a like capacity would. 18
(3) Comply with all State ethics laws and regulations. 19
"§ 147-86.7J. Requirements for the North Carolina Small Business Retirement Savings 20
Program. 21
The Program developed and established by the Board shall: 22
(1) Provide a process to facilitate voluntary enrollment into the Program for 23
covered employers, covered employees, and self-employed persons. 24
(2) Provide that the IRA to which contributions are made will be a Roth IRA, 25
except that the Board shall have the authority at any time to add an option for 26
all participants to affirmatively elect to contribute to a traditional IRA as an 27
alternative to the Roth IRA. 28
(3) Provide that the standard package shall be a Roth IRA with a target date fund 29
investment, and a contribution rate that begins at five percent (5%) of salary 30
or wages; provided, however, that the covered employee can choose to stop 31
participation altogether, to use a traditional IRA and a different investment 32
from among the options available, and to contribute at a higher or lower 33
contribution rate, subject to the IRA contribution dollar limits applicable 34
under the Internal Revenue Code. 35
(4) Provide on a uniform basis, if and when the Board so determines, in its 36
discretion, for annual increases of each participant's contribution rate, by not 37
more than one percent (1%) of salary or wages per year up to a maximum of 38
eight percent ( 8%). Any such increases shall apply to participants, as 39
determined by the Board, by default or only if initiated by affirmative 40
participant election included as part of the standard package, in either case 41
subject to the IRA contribution limits ap plicable under the Internal Revenue 42
Code. 43
(5) Allow a covered employer to withhold payroll deductions from a covered 44
employee's paycheck for the express purpose of making a covered employee 45
contribution to the Program funds. 46
(6) Include a process for direct deposit of contributions into covered employee 47
investments in the Program. 48
(7) Covered employers are not allowed to make employer contributions to the 49
covered employee's accounts. 50
General Assembly Of North Carolina Session 2025
Page 8 Senate Bill 110-First Edition
(8) Allow for covered employees to make non -payroll contributions into an 1
account in addition to the covered employer payroll deducted amounts. 2
(9) Include an account reporting system that requires separate records and 3
accounting for each covered employer and covered employee enrolled. 4
(10) Include an account status notification process for covered employees to be 5
notified about and track their investments pursuant to this Part. 6
(11) Allow portability of benefits, including the ability to make tax -free rollovers 7
or transfers from accounts under the Program to other non-Program retirement 8
accounts or to tax -qualified plans that accept such rollovers or transfers 9
provided any rollover is initiated by the employee. 10
(12) Establish rules and procedures governing the distribution of funds from the 11
Program, including such distributions as may be permitted or required by the 12
Program and any applicable provisions of tax laws, with the objectives of 13
maximizing financial security in retirement, helping to protect spousal rights, 14
and assisting participants with the challenges of decumulation of savings. The 15
Board shall have the authority, in its discretion, to provide for one or more 16
reasonably priced distribution options to provide a source of fixed retirement 17
income, including income for life or for the participant's life expectancy (or 18
for joint lives and life expectancies, as applicable). 19
(13) Pool accounts as necessary under the Program for optimum investment 20
opportunity and return on investment outcomes. 21
(14) Be professionally managed. 22
(15) Provide a report on the status of each Program participant 's account to each 23
Program participant at least annually. 24
(16) Provide that each Program participant owns the contributions to and earnings 25
on amounts contributed to the participant's account under this Part and that the 26
State, the Board, and covered employers have no proprietary interest, whether 27
legal or equitable, in those contributions or earnings. 28
(17) Keep total fees and expenses as low as practicable and in any event each year 29
not in excess of 100 basis points of the total assets of the Program, except that 30
this limit shall not apply during a start-up period of three years beginning with 31
the initial implementation of the Program. 32
(18) Be designed and implemented in a manner consistent with federal law, 33
including favorable federal tax treatment, to the extent that it applies and is 34
consistent with the Program not being preempted by ERISA. 35
(19) Ensure that the North Carolina Small Business Retirement Savings Program 36
is designed to be financially self-sustaining over time. 37
(20) Provide that, if a covered employer fails to transmit a payroll deduction 38
contribution to the Program on the earliest date the amount withheld from the 39
covered employee's compensation can reasonably be segregated from the 40
covered employer's assets, but not later than the fifteenth day of the month 41
following the month in which the covered employee's contribution amounts 42
are withheld from his or her paycheck, the failure to remit such contributions 43
on a timely basis shall be subject to the same sanctions as employer 44
misappropriation of employee wage withholdings and to penalties. 45
"§ 147-86.7M. Rules for the North Carolina Work and Save Program. 46
The Board shall adopt rules to implement the Program that: 47
(1) Establish the processes for enrollment and contributions to Payroll Deduction 48
IRAs under the Program, including elections by covered employees, 49
withholding by covered employers of employee payroll deduction 50
contributions from wages and remittance for depos it to IRAs, and voluntary 51
General Assembly Of North Carolina Session 2025
Senate Bill 110-First Edition Page 9
enrollment and contributions by others, including self -employed individuals 1
and independent contractors, through payroll deduction or otherwise. 2
(2) Establish the processes for withdrawals, rollovers, and direct transfers from 3
IRAs under the Program in the interest of facilitating portability and 4
maximization of benefits. 5
(3) Establish processes for phasing in enrollment of eligible individuals. 6
(4) Conduct outreach to individuals, employers, other stakeholders, and the public 7
regarding the Program. Specify the contents, frequency, timing, and means of 8
required disclosures from the Program to covered employees, participants, 9
other individuals eligible to participate in the Program, covered employers, 10
and other interested parties. Th ese disclosures shall include, but need not be 11
limited to: 12
a. The benefits associated with tax-favored retirement saving. 13
b. The potential advantages and disadvantages associated with 14
contributing to Roth IRAs and, if applicable, traditional IRAs under 15
the Program. 16
c. The eligibility rules for Roth IRAs and, if applicable, traditional IRAs. 17
d. That the individual and not the employer, the State, the Board, any 18
Board member or other State official, or the Program will be solely 19
responsible for determining whether and, if so, how much the 20
individual is eligible to contribute on a tax-favored basis to an IRA. 21
e. The penalty for excess contributions to IRAs and the method of 22
correcting excess contributions. 23
f. Instructions for enrolling, making elections to contribute or to decline 24
to contribute, and making elections regarding contribution rates, type 25
of IRA, and investments. 26
g. Instructions for implementing and for changing the elections. 27
h. The potential availability of a saver 's tax credit, including the 28
eligibility conditions for the credit and instructions on how to claim it. 29
i. That employees seeking tax, investment, or other financial advice 30
should contact appropriate professional advisors, and that covered 31
employers are not in a position to provide suc h advice and are not 32
liable for decisions individuals make in relation to the Program. 33
j. That the payroll deduction IRAs are intended not to be 34
employer-sponsored retirement plans and that the Program is not an 35
employer-sponsored retirement plan. 36
k. The potential implications of account balances under the Program for 37
the application of asset limits under certain public assistance 38
programs. 39
l. That the account owner is solely responsible for investment 40
performance, including market gains and losses, and tha t IRA 41
accounts and rates of return are not guaranteed by any employer, the 42
State, the Board, any Board member or State official, or the Program. 43
m. Additional information about retirement and saving and other 44
information designed to promote financial liter acy and capability 45
which may take the form of links to, or explanations of how to obtain, 46
such information. 47
n. How to obtain additional information about the Program. 48
"§ 147-86.7P. Protection from liability for covered employers. 49
(a) A covered employer or other employer is not and shall not be liable for or bear 50
responsibility for any of the following: 51
General Assembly Of North Carolina Session 2025
Page 10 Senate Bill 110-First Edition
(1) An employee's decision to participate in or not to participate in the Program 1
or a participant's specific elections under the Program. 2
(2) Participants' or the Board's investment decisions. 3
(3) The administration, investment, investment returns, or investment 4
performance of the Program, including, without limitation, any interest rate or 5
other rate of return on any contribution or account balance, provided they play 6
no role. 7
(4) The Program design or the benefits paid to participants. 8
(5) Individuals' awareness of or compliance with the conditions and other 9
provisions of the tax laws that determine which individuals are eligible to 10
make tax-favored contributions to IRAs, in what amount, and in what time 11
frame and manner. 12
(6) Any loss, failure to realize any gain, or any other adverse consequences, 13
including, without limitation , any adverse tax consequences or loss of 14
favorable tax treatment, public assistance, or other benefits, incurred by any 15
person as a result of participating in the Program. 16
(b) No covered employer or other employer shall be, or shall be considered to be, a 17
fiduciary in relation to the Program or Trust or any other arrangement under the Program. 18
"§ 147-86.7R. Protection from liability for the State. 19
The State has no duty or liability to any party for the payment of any retirement savings 20
benefits accrued by any individual under the Program. The State, the Board, each member of the 21
Board, and the Program: 22
(1) Shall have no responsibility for compliance by individuals with the conditions 23
and other provisions of the Internal Revenue Code that determine which 24
individuals are eligible to make tax -favored contributions to IR As, in what 25
amount, and in what time frame and manner. 26
(2) Shall have no duty, responsibility, or liability to any party for the payment of 27
any benefits under the Program, regardless of whether sufficient funds are 28
available under the Program to pay such benefits. 29
(3) Do not and shall not guarantee any interest rate or other rate of return on or 30
investment performance of any contribution or account balance. 31
(4) Shall have no liability or responsibility for any loss, deficiency, failure to 32
realize any gain, or any other adverse consequences incurred by any person as 33
a result of participating in the Program. 34
"§ 147-86.7T. Confidentiality of participant and account information. 35
Individual account information relating to accounts under the Program and relating to 36
individual participants, including, but not limited to, names, addresses, telephone numbers, email 37
addresses, personal identification information, investments, contributions, and earnings , is 38
confidential, is not a public record as defined in G.S. 132-1, and may not be disclosed except as 39
follows: 40
(1) To the extent necessary to administer the Program in a manner consistent with 41
this Part, the tax laws of this State, and the Internal Revenue Code; or 42
(2) To the extent that the individual who provides the information or is the subject 43
of the information expressly agrees in writing to the disclosure of the 44
information. 45
"§ 147-86.7V. Funding of Program. 46
The North Carolina Small Business Retirement Savings Administrative Fund is established, 47
to be held in trust separate and distinct from the General Fund. Interest earned by the 48
Administrative Fund shall be credited to the Administrative Fund. Moneys in the Administrative 49
Fund are continuously appropriated to the Board. The Administrative Fund consists of: 50
(1) Moneys appropriated to the Administrative Fund by the General Assembly. 51
General Assembly Of North Carolina Session 2025
Senate Bill 110-First Edition Page 11
(2) Moneys transferred to the Administrative Fund from the federal government, 1
other State agencies, or local governments. 2
(3) Moneys from the payment of application, account, administrative, or other 3
fees and the payment of other moneys due the Board. 4
(4) Any gifts, donations, or grants made to the State for deposit in the 5
Administrative Fund. 6
(5) Earnings on moneys in the Administrative Fund. 7
"§ 147-86.7X. Annual report. 8
(a) The Board shall cause an accurate account of all of the Program's, Trust's, and Board's 9
activities, operations, receipts, and expenditures to be maintained. By October 1 of each year, the 10
Board shall submit to the Governor and the Joint Legislative Commission on Governmental 11
Operations a report detailing the activities, operations, receipts, and expenditures of the Program 12
and Board during the preceding calendar year. The report shall also include projected activities 13
of the Program for the current calendar year and any necessary statutory recommendations and 14
appropriations. 15
(b) Each year, a full audit of the books and accounts of the Board pertaining to those 16
activities, operations, receipts and expenditures, personnel, services, or facilities shall be 17
conducted by a certified public accountant and shall include, but no t be limited to, direct and 18
indirect costs attributable to the use of outside consultants, independent contractors, and any other 19
persons who are not State employees for the administration of the Program. For the purposes of 20
the audit, the auditors shall have access to the properties and records of the Program and Board 21
and may prescribe methods of accounting and the rendering of periodic reports in relation to 22
projects undertaken by the Program. 23
"§ 147-86.7Z. Implementation. 24
(a) The Board shall establish the Program so that individuals can begin contributing 25
under the Program not later than July 1, 2027. 26
(b) The Board shall not implement the Program if and to the extent the Board determines 27
that the Program is preempted by ERISA. Accordingly, the Board sha ll implement the Program 28
in a severable fashion to the extent practicable if and to the extent that the Board determines: 29
(1) That a portion or aspect of the Program is preempted by ERISA, in which 30
event the Board shall not implement that portion or aspect of the Program but 31
shall proceed to implement the remainder of the Program to the extent 32
practicable; or 33
(2) That some but not all of the payroll deduction IRA arrangements or other 34
arrangements under the Program are or would be employee benefit plans 35
under ERISA, in which event the Board shall proceed to implement the 36
Program with respect to the other arrangements under the Program to the 37
extent practicable." 38
SECTION 3. There is appropriated from the General Fund to the Department of 39
State Treasurer the sum of four hundred thousand dollars ($400,000) in nonrecurring funds for 40
the 2025-2026 fiscal year and the sum of six hundred thousand dollars ($600,000) in nonrecurring 41
funds for the 2026-2027 fiscal year. The Department shall allocate the funds to the North Carolina 42
Small Business Retirement Savings Program Board (Board) to be used for the following: 43
(1) To enable or facilitate the start -up and continuing operation, maintenance, 44
administration, and management of the North Carolina Small Business 45
Retirement Savings Program (Program) until the Program accumulates 46
sufficient balances and can generate sufficient funding through fees assessed 47
on Program accounts for the Program to become financially self-sustaining. 48
(2) To hire an individual to serve as the in itial executive director pursuant to 49
G.S. 147-86.7D(a)(4). The position shall be filled on a time-limited basis, and 50
the individual filling the position shall not be considered a State employee. 51
General Assembly Of North Carolina Session 2025
Page 12 Senate Bill 110-First Edition
SECTION 4. This act becomes effective July 1, 2025. 1