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Wisconsin Legislature: SB1137: Bill Text
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SB1137: Bill Text
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2025 - 2026 LEGISLATURE
LRB-6529/1
EKL&MIM:cdc
2025 SENATE BILL 1137
March 19, 2026 - Introduced by Senators
Hesselbein
,
Carpenter
,
Larson
,
Ratcliff
,
Roys
and
Spreitzer
, cosponsored by Representatives
Bare
,
Mayadev
,
Roe
,
Arney
,
Joers
,
Sheehan
,
Sinicki
,
Stroud
,
Stubbs
,
Udell
,
Anderson
,
Subeck
,
Prado
and
Vining
. Referred to Committee on Government Operations, Labor and Economic Development.
SB1137,1,6
1
An Act
to amend
16.705 (9), 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4.,
2
71.34 (1k) (g) and 71.45 (2) (a) 10.;
to create
14.57, 14.69, 20.517, 20.923 (4) (c)
3
8., 25.52, 71.07 (4s), 71.07 (4w), 71.10 (4) (ct) and (cu), 71.28 (4s), 71.28 (4w),
4
71.30 (3) (ct) and (cu), 71.47 (4s), 71.47 (4w), 71.49 (1) (ct) and (cu) and 230.08
5
(2) (en) of the statutes;
relating to:
creating WisEARNS, granting rule-
6
making authority, and making an appropriation.
Analysis by the Legislative Reference Bureau
WisEARNS retirement savings program
This bill creates a program called “WisEARNS” to provide a defined contribution retirement savings plan for employees of private employers in this state that do not offer an employer-sponsored retirement plan or that do not offer such a plan to all employees. A defined contribution retirement savings plan is one that pays retirement benefits based on an individual’s account balance, rather than a prescribed formula.
The bill creates a WisEARNS Board that is attached to the Office of the State Treasurer. Under the bill, the board consists of the following nine members: the state treasurer or his or her designee; the secretary of financial institutions or his or her designee; two members appointed by the governor; two members appointed, respectively, by the speaker of the assembly and president of the senate; one member appointed by the state treasurer; one member appointed by the State of Wisconsin Investment Board; and one member appointed by the other members. The bill requires certain members to possess specified attributes or experience. All members serve four-year terms.
Under the bill, the state treasurer recommends a candidate for executive director of the plan to the board, with the board approving the executive director. The executive director serves outside the classified service and appoints staff outside the classified service. The executive director serves at the pleasure of the board.
Under the bill, the board is required to establish the savings plan under which employees may contribute to retirement savings accounts through payroll deductions. Before establishing the plan, the board must conduct a legal analysis of the applicability of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974 to the proposed plan, and must issue a request for information from prospective vendors of a variety of defined-contribution retirement accounts authorized under the Internal Revenue Code.
Under the bill, the default account type is a Roth IRA. The bill requires the board to design the plan and contract with third-party investment administrators to operate the plan. Among other requirements, the plan must do at least all of the following: 1) require automatic participation by private employers in this state; 2) require automatic enrollment for employees, but allow employees to opt out before any payroll deduction is made; 3) prohibit employer contributions to employee retirement accounts; and 4) allow an employee to roll over the amounts in an account to a different IRS-qualified retirement account.
Also under the bill, unless the employee directs otherwise, during the employee’s first year of enrollment in the plan, the employer must make a payroll deduction each pay period at a rate of 5 percent of the employee’s gross wages, with this rate increasing by 1 percent per year until the rate is the maximum rate allowed under the Internal Revenue Code. Under the plan, the eligible employee must have certain investment options within each account type, including a stable value or capital preservation fund and a target date index fund or age-based fund. An eligible employee’s first $400 of contributions must be deposited in a savings account that is not a retirement savings account, and thereafter, unless the employee selects a different investment option, the employee’s contributions must be deposited in a target date index fund or age-based fund. An employee must be allowed to opt out of this provision before the first $400 is deposited. The bill requires the board to establish a policy for emergency withdrawals from a WisEARNS savings account that is not a retirement savings account.
Under current law, the Department of Administration is authorized to purchase contractual services for most bodies of state government. Under the bill, the board is exempted from some of the requirements of contracting through DOA and instead must do all of the following before awarding the contract: 1) conduct a cost-benefit analysis of contracting with different vendors; 2) review and ensure the independence of the vendor and the vendor’s employees; and 3) require proof of background checks of the vendor and the vendor’s employees. The bill also requires the board to maintain a list of any vendor or party to the contract that violates the contract or requirements of the law, and to provide that list to DOA for inclusion on the ineligible list for state contracts.
Tax credits for retirement plan startup costs and automatic enrollment
The bill creates two income and franchise tax credits that may be claimed by small businesses that have 100 or fewer employees who received at least $5,000 in compensation during the preceding year. Both credits are based on similar federal tax credits. The first credit may be claimed by small businesses for the costs of setting up and administering a retirement plan and educating employees about the plan. The credit is 50 percent of the costs, limited to the greater of $500 or the lesser of $5,000 or $250 multiplied by the number of non-highly compensated employees who are eligible to participate in the plan. The credit may be claimed for three consecutive years and may be not be claimed for any costs that were deducted under federal law. The second credit may be claimed by small businesses that provide for automatic enrollment in their retirement plans. The credit is $500 and may be claimed for three consecutive years, beginning with the year in which the small business first provides for automatic enrollment.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
SB1137,1
1
Section
1
.
14.57 of the statutes is created to read:
SB1137,2,2
2
14.57
Same; attached boards.
SB1137,3,2
3
(1)
WisEARNS board.
There is created a WisEARNS board that is attached
4
to the state treasurer under s. 15.03. Of the members appointed under pars. (a) to
5
(e), at least one must have experience in the field of investments, at least one must
6
have experience as the owner of a business that employs between 5 and 50 people,
7
and at least one must be an employee who is not eligible for or does not have access
1
to an employer-sponsored retirement plan. The board shall consist of the following
2
members appointed for 4-year terms:
SB1137,3,3
3
(a) The state treasurer or his or her designee.
SB1137,3,4
4
(b) The secretary of financial institutions or his or her designee.
SB1137,3,7
5
(c) One member who has a favorable reputation for skill, knowledge, and
6
experience in the field of retirement saving and investments, appointed by the
7
governor.
SB1137,3,9
8
(d) One member who has a favorable reputation for skill, knowledge, and
9
experience relating to small business, appointed by the governor.
SB1137,3,13
10
(e) One member who is a representative of an association representing
11
employees or who has a favorable reputation for skill, knowledge, and experience in
12
the interests of employees in retirement saving, appointed by the speaker of the
13
assembly.
SB1137,3,16
14
(f) One member who has a favorable reputation for skill, knowledge, and
15
experience in the interests of employers in retirement saving, appointed by the
16
president of the senate.
SB1137,3,19
17
(g) One member who has a favorable reputation for skill, knowledge, and
18
experience in retirement investment products or retirement plan designs,
19
appointed by the state treasurer.
SB1137,3,20
20
(h) One member appointed by the investment board.
SB1137,3,22
21
(i) One member appointed, notwithstanding s. 15.07 (4), by a majority vote of
22
all of the members identified in pars. (a) to (h).
SB1137,4,3
23
(2)
Membership prohibited.
No individual appointed under sub. (1) (a) to
1
(h) may be a dealer or broker in securities, or be employed by an entity that is
2
primarily a dealer or broker in securities, and any member who accepts such
3
employment shall vacate his or her membership.
SB1137,2
4
Section
2
.
14.69 of the statutes is created to read:
SB1137,4,5
5
14.69
WisEARNS program.
(1)
Definitions.
In this section:
SB1137,4,6
6
(a) “Board” means the WisEARNS board.
SB1137,4,9
7
(b) “Earnings” means all remuneration for employment or services provided to
8
an individual in this state, including salary, fees, bonuses, and including the cash
9
value of all remuneration paid in any medium other than cash.
SB1137,4,13
10
(c) “Eligible employee” means an employee who is 18 years of age or older who
11
works in this state and whose private employer does not offer a retirement savings
12
plan or who is not eligible to participate in a qualified retirement savings plan
13
offered by his or her private employer.
SB1137,4,14
14
(d) “Investment administrator” means the vendor selected under sub. (3) (e).
SB1137,4,15
15
(e) “Plan” means the WisEARNS plan established under sub. (3).
SB1137,4,20
16
(f) “Private employer” means any person engaging in any activity, enterprise
17
or business in this state that has conducted such activity, enterprise, or business in
18
this state for at least 2 years after the effective date of this paragraph .... [LRB
19
inserts date], and did not offer a retirement plan qualified under the Internal
20
Revenue Code during those 2 years.
SB1137,4,22
21
(g) “WisEARNS retirement account” means a retirement savings account
22
established under the plan.
SB1137,5,2
1
(h) “WisEARNS savings account” means a savings account established under
2
the plan that is not a retirement savings account.
SB1137,5,6
3
(2)
Duties of treasurer, executive director, and board.
(a) The
4
treasurer shall recommend an executive director of the plan to the board, which
5
shall appoint an executive director outside the classified service, to serve at the
6
pleasure of the board. The executive director may not be a member of the board.
SB1137,5,8
7
(b) The executive director appointed under par. (a) shall appoint staff for the
8
plan outside the classified service.
SB1137,5,13
9
(3)
Establishment of plan.
The board shall establish, implement, and
10
oversee a plan that meets the requirements specified in sub. (8) that shall enroll
11
eligible employees beginning not more than 2 years after the effective date of this
12
subsection .... [LRB inserts date]. Before establishing and implementing the plan,
13
the board shall do all of the following:
SB1137,5,16
14
(a) Conduct a legal analysis regarding the applicability of the federal
15
Employee Retirement Income Security Act of 1974,
29 USC 1001
to
1461
, and the
16
Internal Revenue Code to the proposed plan.
SB1137,5,20
17
(b) Enter into interagency agreements with the department of revenue, the
18
department of financial institutions, and the department of workforce development
19
to assist the board in providing outreach services to private employers and
20
employees.
SB1137,6,2
21
(c) Prepare and issue a request for information from prospective vendors of
22
retirement savings accounts described in
26 USC 408
(a), individual retirement
23
annuities described in
26 USC 408
(b), individual retirement bonds, and individual
1
savings accounts to determine the feasibility of the proposed plan and the existence
2
of plans in the private market that meet the requirements set forth in sub. (8).
SB1137,6,5
3
(d) Investigate means of allowing individuals who are not automatically
4
enrolled in the plan to enroll in the plan and make contributions to retirement
5
savings accounts.
SB1137,6,12
6
(e) Based on the results of the request for information under par. (c), prepare
7
and issue a request for proposals from prospective vendors and select a vendor. The
8
board shall determine the factors to be considered in selecting a vendor for the plan,
9
which shall include the ability of the vendor to meet all of the requirements of the
10
plan set forth in sub. (8) (a) to (z). Sections 16.705 and 16.75 do not apply to a
11
contract entered into under this section. Before awarding a contract under this
12
section, the board shall do all of the following:
SB1137,6,14
13
1. Conduct a cost-benefit analysis to identify and compare the total cost,
14
quality, and technical expertise of the vendors that submitted proposals.
SB1137,6,21
15
2. Review the independence and relationship, if any, of the vendors that
16
submitted proposals to employees of the board and the disclosure of any former
17
employment of the vendor or employees of the vendor with the board, to minimize
18
the likelihood of selection of a vendor that provides or is likely to provide services to
19
industries, client groups, or individuals who are the object of state regulation or the
20
recipients of state funding to a degree that the vendor’s independence would be
21
compromised.
SB1137,7,5
22
3. If the vendor or employees of the vendor have access to federal tax
23
information received directly from the federal internal revenue service or from a
1
source that is authorized by the federal internal revenue service, for the
2
performance of services under the contract under this section, require proof of a
3
background investigation on each individual performing the services. Such a
4
background check shall meet the standards established by the federal internal
5
revenue service under
26 USC 610
3 (p) (4) (C).
SB1137,7,7
6
(f) Ensure compliance by the plan with all applicable provisions of the
7
Internal Revenue Code and U.S. department of treasury regulations.
SB1137,7,12
8
(5)
Ineligible vendor list.
The board shall maintain a list of persons that
9
are or have been a party to a contract under this section that have violated a
10
provision of this section or a contract under this section. The board shall annually
11
forward this list to the department of administration for inclusion in the ineligible
12
vendor list under s. 16.705 (9).
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