Source: https://www.cga.ct.gov/2013/FC/2013SB-00054-R000309-FC.htm
Timestamp: 2019-08-19 13:56:48
Document Index: 691584817

Matched Legal Cases: ['§1', '§2', '§14', '§3', '§7', '§ 14', '§4', '§3', '§ 6', '§ 8', '§ 10', '§ 11', '§ 12', '§ 13', '§ 16', '§ 17']

Senate, April 3, 2013
Section 1. (NEW) (Effective July 1, 2013) As used in this section and sections 2 to 14, inclusive, of this act:
(3) "Eligible employee" means any individual who is employed by a qualified employer and who is not eligible to participate in a qualifying plan or arrangement described in Section 219(g)(5) of Internal Revenue Code, except (A) any individual who is seventeen years of age or younger on January first of each year, and (B) any individual who is included in a unit of employees covered by a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers;
(8) "Public retirement plan" or "plan" means a retirement plan designed by the Connecticut Retirement Security Trust Fund Board and offered through the Connecticut Retirement Security Trust Fund to eligible employees and qualified employers in the state; and
(9) "Qualified employer" means any person, corporation, limited liability company, firm, partnership, voluntary association, joint stock association or other entity that employs five or more persons in the state. "Qualified employer" does not include: (A) The federal government, (B) the state or any political subdivision thereof, or (C) any municipality, unit of a municipality or municipal housing authority.
Sec. 2. (NEW) (Effective July 1, 2013) (a) There is established a fund to be known as the "Connecticut Retirement Security Trust Fund" the purpose of which shall be to promote and enhance retirement savings for private sector employees in the state. The Connecticut Retirement Security Trust Fund shall be a nonlapsing fund held by the Treasurer separate and apart from all other moneys, funds and accounts. Investment earnings credited to the fund shall become part of the trust.
(d) The State Treasurer shall be responsible for the receipt and investment of moneys held by the trust. The trust shall not receive deposits in any form other than cash, except in the case of a rollover contribution described in Section 402(c), 403(a)(4), 403(b)(8) or 457 (e)(16) of the Internal Revenue Code. No depositor or designated beneficiary may direct the investment of any contributions or amounts held in the trust other than the specific fund options provided for by the trust.
(1) One appointed by the speaker of the House of Representatives, who shall represent an organization whose principle purpose is advocacy for seniors and who shall serve an initial term of four years;
(2) One appointed by the president pro tempore of the Senate, who shall be an academic expert on retirement plan designs and who shall serve an initial term of four years;
(3) One appointed by the majority leader of the House of Representatives, who shall be a representative of the business community who manages employee retirement plan options and who shall serve an initial term of four years;
(4) One appointed by the majority leader of the Senate, who shall be an organized labor representative and who shall serve an initial term of four years;
(5) One appointed by the minority leader of the House of Representatives, who shall be a representative of the business community with expertise in consumer retirement planning and who shall serve an initial term of three years;
(6) One appointed by the minority leader of the Senate, who shall be an expert in designing retirement plan options for businesses and who shall serve an initial term of three years;
(c) All appointments to the board shall be made not later than thirty calendar days after the effective date of this section. Following the expiration of their initial terms, subsequent trustees appointed by members of the General Assembly shall serve three-year terms. Any vacancy shall be filled by the appointing authority not later than thirty calendar days after the office becomes vacant. Any trustee previously appointed to the board may be reappointed.
(h) The board shall be within the Retirement Division of the office of the Comptroller for administrative purposes only.
(1) Establish consistent terms for each individual retirement account, including, but not limited to, (A) the method of payment into the trust by payroll deduction, or rollover contribution described in Section 402(c), 403(a)(4), 403(b)(8) or 457(e)(16) of the Internal Revenue Code, transfer from bank accounts or otherwise, (B) the termination, withdrawal or transfer of payments under the trust, including the purchase of an annuity product upon retirement, (C) changing of the identity of the designated beneficiary, (D) any charges or fees in connection with the administration of the plan, and (E) interest allocated to individual retirement accounts for a given calendar year based upon the performance of the trust;
(2) Each year the Treasurer shall publish and forward to the board a consolidated report showing the fiscal transactions of the trust for the preceding fiscal year, including gain or loss by category of security, a reconciliation of assets showing the progression of the trust from one year to the next, the amount of the accumulated cash and securities of the system and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of its assets and liabilities. Assets shall be shown at book and market value and by type or term of investment. Gain or loss shall be reported by category of security type.
Sec. 4. (NEW) (Effective July 1, 2013) Each individual retirement account shall include design features prescribed by the Connecticut Retirement Security Trust Fund Board. The board may amend such features from time to time to serve the interests of eligible employees, plan participants, qualified employers and other stakeholders. Each individual retirement account shall:
(1) Provide automatic roll-over of a plan participant's individual retirement savings balance upon any change of employment. Participants shall not liquidate their individual retirement accounts upon changes in employer;
(2) Transition to an inflation-indexed annuity with options for spousal benefits and lump-sum distribution upon the plan participant's retirement;
(3) Assure plan portability through maintenance of separate accounts for each plan participant. Each qualified employer shall allow eligible employees to contribute to the plan through payroll deduction and through any other means prescribed by the board;
(4) Offer a guaranteed interest rate to plan participants upon the board analyzing expected rates of return on trust assets;
(5) Include a written quarterly report detailing: (A) The individual retirement savings balance of such plan participant's individual retirement account, (B) the estimated value of assets available upon such plan participant's retirement, (C) an estimate of such plan participant's expected monthly retirement income, and (D) the total assets in the trust including an accounting of contributions by plan participants and qualified employers and investment returns. This information shall be made available through a secure Internet web site. The report shall comply with all federal regulations regarding reporting;
Sec. 5. (NEW) (Effective July 1, 2013) The Treasurer, on behalf of the Connecticut Retirement Security Trust Fund and for purposes of the trust, shall:
Sec. 6. (NEW) (Effective July 1, 2013) Notwithstanding sections 3-13 to 3-13h, inclusive, of the general statutes, the Treasurer shall invest the amounts on deposit in the trust in a manner reasonable and appropriate to achieve the objectives of the trust, exercising the discretion and care of a prudent person in similar circumstances with similar objectives. The Treasurer shall give due consideration to rate of return, risk, term or maturity, diversification of the total portfolio within the trust, liquidity, the projected disbursements and expenditures and the expected payments, deposits, contributions and gifts to be received. The Treasurer shall not require the trust to invest directly in obligations of the state or any political subdivision of the state or in any investment or other fund administered by the Treasurer. The assets of the trust shall be continuously invested and reinvested in a manner consistent with the objectives of the trust until disbursed upon order of the board or expended on expenses incurred by the operations of the trust.
Sec. 7. (NEW) (Effective July 1, 2013) The Connecticut Retirement Security Trust Fund Board, shall establish and evaluate procedures necessary to implement the public retirement plan. The board shall:
(1) Design, establish and operate the plan to: (A) Increase access and enrollment in quality retirement plans that provide an annuitized benefit; (B) provide a guaranteed rate of return; (C) reduce the need for public assistance through a system of prefunded retirement-income; (D) offer low administrative costs and streamlined enrollment; (E) minimize the need for financial sophistication for plan participants; and (F) ensure trust and transparency in the management of retirement funds through oversight and ethics review of plan fiduciaries;
(2) Explore and establish investment options that offer plan participants the conversion of individual retirement account balances to secure retirement income without incurring debt or liabilities to the state;
(3) Establish the process for plan enrollees to switch from the default of lifetime annuity to lump-sum payout upon retirement;
(5) Disseminate information concerning the tax credits available to small business owners for establishing new retirement plans and the federal retirement savings contribution credit available to lower and moderate-income households for qualified savings contributions;
(6) Determine the eligibility of an employer, employee or any other individual to participate in the program;
(10) Design and establish the process for the enrollment of eligible employees in the plan and design and establish the process by which an individual or employee of a nonparticipating employer may enroll in or make contributions to the program. This process shall include, but not be limited to, the creation of an information packet including the necessary paperwork for an eligible employee to enroll in or opt-out of the plan;
Sec. 8. (NEW) (Effective July 1, 2013) (a) Not later than August 1, 2014, or ninety days following the date on which the conditions required by section 17 of this act have been met, whichever is later, the Connecticut Retirement Security Trust Fund Board shall open the public retirement plan to enrollment.
(b) On or before December 1, 2014, and annually thereafter, the board shall declare the rate at which interest shall be allocated to individual retirement accounts for the following calendar year commencing January first. Any interest accrued on moneys held in the plan from the plan's opening until January 1, 2015, shall be used to establish a reserve fund held by the Treasurer.
(f) All expenses, including employee costs, incurred to implement, maintain, advertise and administer the plan shall be paid from money collected by or for the trust.
Sec. 9. (NEW) (Effective July 1, 2013) (a) Not later than ninety calendar days after the Connecticut Retirement Security Trust Fund Board opens the plan for enrollment, qualified employers shall offer eligible employees a payroll deposit option to facilitate participation in the plan.
(c) (1) A qualified employer shall retain the option at all times to set up any type of employer-sponsored retirement plan.
(2) A qualified employer may establish an employer-sponsored retirement plan provided such qualified employer notifies each eligible employee and plan participant, within a reasonable amount of time and in a manner prescribed by the board.
Sec. 10. (NEW) (Effective July 1, 2013) From time to time, the Connecticut Retirement Security Trust Fund Board shall consider the opinions of eligible employees, plan participants, qualified employers and other stakeholders in making modifications to the public retirement plan by: (1) Holding public hearings to allow eligible employees, plan participants, qualified employers and other stakeholders to comment on the plan, including the default contribution amounts, guaranteed interest rates and fees charged; (2) surveying plan participants and qualified employers to assess their experience with the plan; and (3) assessing the marketplace of employer-sponsored retirement plan offerings to determine what is otherwise available to employees and residents in the state.
Sec. 11. (NEW) (Effective July 1, 2013) (a) Qualified employers shall not be liable for an eligible employee's decision to participate in or opt- out of the public retirement plan, or for the investment performance of assets deposited in the trust.
(c) A qualified employer's voluntary contribution made in accordance with the process established under section 7 of this act may not contradict the provisions of this section or change the qualified employer's relationship to the plan or such qualified employer's obligations to eligible employees.
Sec. 12. (NEW) (Effective July 1, 2013) (a) The state shall not be liable for the payment of the individual retirement account balance earned by plan participants.
Sec. 13. (NEW) (Effective July 1, 2013) (a) No qualified employer shall, without good cause, fail to allow an eligible employee to participate in the plan. The Labor Commissioner shall administer this section.
(b) Qualified employers shall remit all moneys intended for the trust not later than fourteen calendar days after the date such moneys were deducted from each plan participant's wages.
(c) Any eligible employee or plan participant aggrieved by a violation of the provisions of sections 2 to 14, inclusive, of this act and section 3-13c of the general statutes, as amended by this act, may file a complaint with the Labor Commissioner. Upon receipt of any such complaint, the commissioner may hold a hearing. After the hearing, any qualified employer who is found by the Labor Commissioner, by a preponderance of the evidence, to have violated the provisions of this section shall be liable to the Labor Department for a civil penalty of six hundred dollars for each eligible employee employed by the qualified employer. Any party aggrieved by the decision of the commissioner may appeal the decision to the Superior Court in accordance with the provisions of chapter 54 of the general statutes.
(d) Penalties collected in accordance with this section shall be deposited in the trust.
Sec. 14. (NEW) (Effective July 1, 2013) (a) Each trustee of the Connecticut Retirement Security Trust Fund Board shall file, with the board and with the Office of State Ethics, a statement of financial interests, as described in section 1-83 of the general statutes. Such statement shall be a public record.
(b) The board shall submit, in accordance with the provisions of section 11-4a of the general statutes: (1) An annual audit, prepared in accordance with generally-accepted accounting principles by an independent certified accountant, on the operations of the trust and plan not later than January first of each year, following its first full year of implementation, to the Governor, president pro tempore of the Senate and the speaker of the House of Representatives, and (2) a report prepared by the board, which shall include, but not be limited to, a summary of the plan design and operation, the number of plan participants and the average contribution of said plan participants, and the rates of return and administrative costs as a percentage of total assets of the plan.
Sec. 15. Section 3-13c of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
Trust funds as used in sections 3-13 to 3-13e, inclusive, and 3-31b shall be construed to include Connecticut Municipal Employees' Retirement Fund A, Connecticut Municipal Employees' Retirement Fund B, Soldiers, the Connecticut Retirement Security Trust Fund, Sailors and Marines Fund, State's Attorneys' Retirement Fund, Teachers' Annuity Fund, Teachers' Pension Fund, Teachers' Survivorship and Dependency Fund, School Fund, State Employees Retirement Fund, the Hospital Insurance Fund, Policemen and Firemen Survivor's Benefit Fund and all other trust funds administered, held or invested by the Treasurer.
Sec. 16. (Effective July 1, 2013) (a) The Connecticut Retirement Security Trust Fund Board shall conduct a market feasibility study to determine whether the necessary conditions for implementation of this act can be met, including: (1) Likely participation rates; (2) contribution levels; (3) rate of account closures and rollovers; and (4) ability to provide employers with a payroll deposit system for remitting contributions from employees.
Sec. 17. (NEW) (Effective July 1, 2013) (a) Prior to the implementation of any plan, trust, administrative arrangement or investment offering under the provisions of sections 2 to 14, inclusive, of this act and section 3-13c of the general statutes, as amended by this act, the Connecticut Retirement Security Trust Fund Board shall determine that, based on the market analysis, the provisions of sections 2 to 14, inclusive, of this act and section 3-13c of the general statutes, as amended by this act, will be self–sustaining, and funds are made available through a nonprofit or other private entity, federal funding, or appropriations by the General Assembly in amounts sufficient to allow the board to implement this act until the board has sufficient funds to be self–sustaining.
(b) Prior to the implementation of any plan, trust, administrative arrangement or investment offering under the provisions of sections 2 to 14, inclusive, of this act and section 3-13c of the general statutes, as amended by this act, the arrangements for individual retirement accounts shall qualify for the favorable federal income tax treatment ordinarily accorded to individual retirement accounts under the Internal Revenue Code, and the public retirement plan shall be determined not to be an employee benefit plan under the federal Employee Retirement Income Security Act.
Comptroller; Treasurer
Treasurer; Comptroller
Connecticut Retirement Security Trust Fund - Cost
Connecticut Retirement Security Trust Fund - Revenue Gain
The bill establishes and requires the Connecticut Retirement Security Trust Fund Board to conduct a market feasibility study, which is expected to be contracted with an expert and to cost approximately $100,000. The source of funding for the study is not specified. There will be a cost of $100,000 to the General Fund if the Office of the State Comptroller or the Office of the State Treasurer, who are co-chairs of the Board, provide funding for the study. In addition, it is unclear whether members of the Board would be reimbursed for travel expenses for meetings that occur prior to the establishment of the Connecticut Retirement Security Trust Fund. The source of funding for potential board expenses is also unspecified.
If the market feasibility study indicates that the plan will be self-sustaining, the bill requires the Board to set-up the Trust Fund. The resources of the Fund will be held in a separate account that is invested by the Office of the Treasurer. The plan is administered by the Office of the State Comptroller and overseen by the Board. This is not expected to have a state fiscal impact because it is anticipated that all costs associated with the Fund and the plan will be paid by contributions made by participants and investment income on those contributions.
§1—DEFINITIONS
§2—TRUST
§14 —Board Ethics
§3 —BOARD DUTIES
§7—BOARD POLICIES AND PROCEDURES
§ 14—BOARD ANNUAL AUDIT REPORT
§4 —IRA FEATURES
§3—TREASURER'S ANNUAL REPORT
§§ 6 & 15—INVESTMENT GUIDELINES
§§ 8 & 9—PLAN ENROLLMENT, INTEREST RATES, EMPLOYEE CONTRIBUTIONS & FEES
§ 10—STAKEHOLDER INPUT
§ 11—PROTECTIONS FOR EMPLOYERS
§ 12—PROTECTIONS FOR THE STATE
§ 13—COMPLAINT PROCESS
§ 16—MARKET FEASIBILITY STUDY
§ 17—DETERMINATION OF TRUST AS FINANCIALLY SELF SUSTAINING AND EXEMPT FROM ERISA