An Act To Create a Public Option Pension System
Maine Legislature, Session 126, LD 1473
Committee: Appropriations and Financial Affairs
Sponsors: RUSSELL
Amends: 5 MRSA §12004-F, 26 MRSA §42, 26 MRSA §3303

Legislative Document 
No. 1473 
H.P. 1054 
House of Representatives, April 30, 2013 
An Act To Create a Public Option Pension System 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative RUSSELL of Portland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §12004-F, sub-§19 is enacted to read: 
19.   
Sec. 2.  26 MRSA §42, first ¶, as amended by PL 1999, c. 649, §1, is further 
amended to read: 
The bureau shall collect, assort and arrange statistical details relating to all 
departments of labor and industrial pursuits in the State; to trade unions and other labor 
organizations and their effect upon labor and capital; to the number and character of 
industrial accidents and their effect upon the injured, their dependent relatives and upon 
the general public; to other matters relating to the commercial, industrial, social, 
educational, moral and sanitary conditions prevailing within the State, including the 
names of firms, companies or corporations, where located, the kind of goods produced or 
manufactured, the time operated each year, the number of employees classified according 
to age and sex and the daily and average wages paid each employee; and the exploitation 
of such other subjects as will tend to promote the permanent prosperity of the industries 
of the State. The director is authorized and empowered, subject to the approval of the 
Governor, to accept from any other agency of government, individual, group or 
corporation such funds as may be available in carrying out this section, and meet such 
requirements with respect to the administration of such funds, not inconsistent with this 
section, as are required as conditions precedent to receiving such funds. An accounting of 
such funds and a report of the use to which they were put must be included in the biennial 
report to the Governor. Each agency of government shall cooperate fully with the 
bureau's efforts to compile labor and industrial statistics. The director shall cause to be 
enforced all laws regulating the employment of minors; all laws established for the 
protection of health, lives and limbs of operators in workshops and factories, on railroads 
and in other places; all laws regulating the payment of wages; and all laws enacted for the 
protection of the working classes; and all laws regarding employer compliance with the 
Maine Secure Choice Retirement Savings Trust.  During an investigation to enforce those 
laws, the director may request records and other information relating to an employer's 
compliance with unemployment compensation and workers' compensation laws, 
including information needed to determine whether the employer has properly classified a 
worker as an independent contractor, and shall report suspected violations of those laws 
to the state or federal agency responsible for enforcing them.  The director may adopt, in 
accordance with the Maine Administrative Procedure Act, rules regarding all such laws, 
except where this authority is granted to a board or commission.  Rules adopted pursuant 
to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 
II-A 2-A.  The director shall, on or before the first day of July, biennially, report to the 
Governor, and may make such suggestions and recommendations as the director may 
deem consider necessary for the information of the Legislature. The director may from 
time to time cause to be printed and distributed bulletins upon any subject that is of public 
Maine Secure Choice 
Retirement Savings Investment 
Board 
Expenses Only 
MRSA §3303
interest and benefit to the State and may conduct a program of research, education and 
promotion to reduce industrial accidents.  The director may review various data, such as 
workers' compensation records, as well as other information relating to any public or 
private employer's safety experience.  When any individual public or private employer's 
safety experience causes the director to question seriously the safe working environment 
of that employer, the director may offer any safety education and consultation programs 
to that employer that may be beneficial in providing a safer work environment.  If the 
employer refuses this assistance or is in serious noncompliance which that may lead to 
injuries, or if serious threats to worker safety continue, then the director shall 
communicate concerns to appropriate agencies, such as the United States Occupational 
Safety and Health Administration.  As used in this section, the term "noncompliance" 
means a lack of compliance with any applicable health and safety regulations of the 
United States Occupational Safety and Health Administration or other federal agencies.  
The bureau is responsible for the enforcement of indoor air quality and ventilation 
standards with respect to state-owned buildings and buildings leased by the State.  The 
bureau shall enforce air quality standards in a manner to ensure that corrections to 
problems found in buildings be made over a reasonable period of time, using consent 
agreements and other approaches as necessary and reasonable. 
Sec. 3.  26 MRSA c. 39 is enacted to read: 
CHAPTER 39 
MAINE SECURE CHOICE RETIREMENT SAVINGS TRUST ACT 
§3301.  Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1.  Board.  "Board" means the Maine Secure Choice Retirement Savings Investment 
Board under section 3303. 
2.  Eligible employee.  "Eligible employee" means a person who is employed by an 
eligible employer. "Eligible employee" does not include: 
A.  Any employee covered under the federal Railway Labor Act, 45 United States 
Code, Section 151, et seq. (Supplement V 2006), or any employee engaged in 
interstate commerce so as not to be subject to the legislative powers of the State, 
except insofar as application of this chapter is authorized under the United States 
Constitution or laws of the United States; and 
B.  Any employee covered by a valid collective bargaining agreement that expressly 
provides for a multiemployer pension plan allowed under 29 United States Code, 
Section 186(c)(5), commonly referred to as a "Taft-Hartley plan." 
3.  Eligible employer.  "Eligible employer" means a person or entity engaged in a 
business, industry, profession, trade or other enterprise in the State, whether or not for 
profit, excluding the Federal Government, the State, any county, any municipal 
corporation or any of the State's units or instrumentalities, that has 5 or more employees 
and that satisfies the requirements of this chapter to establish or participate in a payroll 
deposit retirement savings arrangement. 
4.  Internal Revenue Code.  "Internal Revenue Code" means the United States 
Internal Revenue Code of 1986, as amended. 
5.  IRA.  "IRA" means an individual retirement account or individual retirement 
annuity under 26 United States Code, Section 408(a) or 408(b). 
6.  Participating employer.  "Participating employer" means an eligible employer 
that provides a payroll deposit retirement savings arrangement under this chapter for 
eligible employees. 
7.  Payroll deposit retirement savings arrangement.  "Payroll deposit retirement 
savings arrangement" means an arrangement by which an employer allows employees to 
remit payroll deduction contributions to a retirement savings program. 
8.  Program.  "Program"  means the Maine Secure Choice Retirement Savings 
Program offered by the trust. 
9.  Stated interest rate.  "Stated interest rate" means the rate of interest allocated to 
program accounts as determined by the board pursuant to section 3307, subsection 1. 
10.  Trust.  "Trust" means the Maine Secure Choice Retirement Savings Trust 
established by section 3302. 
11.  Vendor.  "Vendor" means an investment company or life insurance company 
qualified to do business in the State that provides retirement investment products. 
"Vendor" also includes a company that is registered to do business in the State that 
provides payroll services or record-keeping services and offers retirement plans or payroll 
deposit IRA arrangements using products of regulated investment companies and 
insurance companies qualified to do business in the State.  "Vendor" does not include 
individual registered representatives, brokers, financial planners or agents. 
§3302.  Maine Secure Choice Retirement Savings Trust 
The Maine Secure Choice Retirement Savings Trust is established within the 
Department of Labor and administered by the board for the purpose of promoting greater 
retirement savings for private employees in a convenient, voluntary, low-cost and 
portable manner. 
1.  Program and administrative funds.  The board shall segregate money received 
by the trust into a program fund under subsection 2 and an administrative fund under 
subsection 3.  The funds in the trust are nonlapsing and must be carried forward to the 
next fiscal year. 
2.  Program fund.  Funds in the program fund may be invested or reinvested by the 
Treasurer of State or may be invested in whole or in part under contract with the Board of 
Trustees of the Maine Public Employees Retirement System or investment managers, or 
both, as determined by the board. 
3.  Administrative fund.  All costs of administration of the trust must be paid out of 
the administrative fund.  Transfers may be made from the program fund to the 
administrative fund for the purpose of paying operating costs associated with 
administering the trust and as required by this chapter.  Expenditures from the 
administrative fund may not exceed 1% of the total program fund annually.  Operating 
costs associated with administering the trust do not include the procurement of private 
underwriting for the retirement savings' return. 
4.  Employee and employer contributions.  Contributions paid by an employee and 
an employer into the trust must be used exclusively for the purpose of paying benefits to 
the participants of the program, for the administration of the program and for investments 
made for the benefit of the program. 
§3303.  Maine Secure Choice Retirement Savings Investment Board 
The trust is administered by the Maine Secure Choice Retirement Savings Investment 
Board, as established in Title 5, section 12004-F, subsection 19, in accordance with this 
chapter. 
1.  Membership.  The board consists of 7 members as follows: 
A.  The Treasurer of State, who is the chair of the board; 
B.  The Commissioner of Administrative and Financial Services, or the 
commissioner's designee; 
C.  The State Controller, or the State Controller's designee; 
D.  An individual with retirement savings and investment expertise appointed by the 
President of the Senate; 
E.  An employee representative appointed by the Speaker of the House; 
F.  A public member appointed by the Governor; and 
G.  A small business representative appointed by the Governor. 
2.  Terms of service.  Members of the board appointed by the Governor, the 
President of the Senate and the Speaker of the House serve at the pleasure of the 
appointing authority.  All members of the board serve without compensation.  Members 
of the board must be reimbursed for necessary travel expenses incurred in connection 
with their board duties. 
3.  Board restrictions.  A board member or the program administrator or other staff 
of the board employed pursuant to section 3305 may not: 
A.  Directly or indirectly have an interest in the making of any investment made for 
the program, or in the gains or profits accruing from any investment made for the 
program;  
B.  Borrow any funds or deposits of the trust, or use those funds or deposits in any 
manner, for that board member or as an agent or partner of others; or 
C.  Become an endorser, surety or obligor on investments by the board. 
4.  Duties.  The board members, individually and collectively as a board, and the 
program administrator and staff shall discharge their duties with respect to the trust solely 
in the interest of the program participants as follows: 
A.  For the exclusive purposes of providing benefits to program participants and 
defraying reasonable expenses of administering the program; and 
B.  By investing 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. 
5.  Investment policy.  The board shall annually prepare and adopt a written 
statement of investment policy that includes a risk management and oversight program.  
The board shall consider the statement of investment policy and any changes in the 
investment policy at a public hearing.  The investment policy must adhere to the 
following guiding principles. 
A.  The primary objective of the investment policy is to preserve the safety of 
principal and provide a stable and low-risk rate of return. 
B.  The investment policy must mitigate risk by maintaining a balanced investment 
portfolio that provides assurance that no single investment or class of investments 
will have a disproportionate impact on the total portfolio. 
6.  Investment policy restrictions.  The board may not adopt an investment policy 
that includes any of the following: 
A.  Borrowing for investment purposes, or for leverage; 
B.  Investing in instruments known as variable rate demand notes, floaters, inverse 
floaters, leveraged floaters and equity-linked securities;  
C.  Investing in any instrument that is commonly considered a derivative instrument, 
including, but not limited to, options, futures, swaps, caps, floors and collars; or 
D.  Contracting to sell securities not yet acquired in order to purchase other securities 
for purposes of speculating on developments or trends in the market. 
7.  Available investment options.  The board may only consider the following 
categories of asset and investment types for the investment of funds: 
A.  Domestic equities and international equities; 
B.  Medium-term and long-term debt obligations of domestic corporations; 
C.  United States government and government-sponsored entity debt obligations; 
D.  Real estate commingled funds that invest in publicly traded real estate securities; 
E.  Money market instruments, cash and money market mutual funds that are 
registered in the United States and denominated in United States dollars; 
F.  Investments in mutual funds limited to existing, rated mutual funds that are 
registered in the United States and denominated in United States dollars; 
G.  Insurance agreements; and 
H.  Bank products insured by the Federal Deposit Insurance Corporation. 
8.  Equity limit.  Equities may not exceed 50% of the overall asset allocation of the 
fund. 
9.  Risk management and oversight program.  The board shall establish a risk 
management and oversight program designed to ensure that an effective risk management 
system is in place to monitor the risk levels of the program investment portfolio and 
ensure that the risks taken are prudent and properly managed.  The program must be 
managed to provide an integrated process for overall risk management on both a 
consolidated and disaggregated basis and to monitor investment returns as well as risk to 
determine if the risks taken are adequately compensated compared to the prudent 
performance benchmarks and standards established by the board.  
§3304.  Board-approved investment managers; report to the board 
The board shall approve and contract with one or more investment managers, the 
costs of which must be paid out of the program fund as described under section 3302. 
1.  Investment and deposit report.  No later than 30 days after the close of each 
month, the board must place on file for public inspection during business hours a report 
with respect to all investments of the trust and a report of all deposits of trust funds in 
financial institutions. 
2.  Content of report.  The investment manager or managers shall report the 
following information to the board within 20 days following the end of the each month: 
A.  The type of investment, name of the issuer, date of maturity and the par and dollar 
amount invested in each security investment, and the money within the program fund; 
B.  The weighted average maturity of the investments within the program fund; 
C.  The amounts in the program fund that are under the management of private 
money managers; 
D.  The amounts in the program fund that are under the management of the Board of 
Trustees of the Maine Public Employees' Retirement System; 
E.  The market value as of the date of the report and the source of this valuation for 
each security within the program fund; and 
F.  A description of compliance with the board's investment policy established under 
section 3303. 
§3305.  Authority of the board as trustee 
1.  Authorizations.  The board, in its capacity as trustee, is authorized to: 
A.  Make and enter into contracts necessary for the administration of the trust; 
B.  Adopt a seal and change and amend it from time to time; 
C.  Cause money in the program fund to be held and invested and reinvested; 
D.  Accept grants, gifts, legislative appropriations and other money from the State, 
any unit of federal, state or local government or any other person, firm, partnership or 
corporation for deposit to the administrative fund or the program fund; 
E.  Appoint a program administrator, the costs of which must be paid out of funds 
held in the trust and may not be attributed to the administrative costs of the board in 
operating the trust, and determine the duties of the program administrator and other 
staff as necessary and set their compensation; 
F.  Make provisions for the payment of costs of administration and operation of the 
trust; 
G.  Employ staff; 
H.  Contract with the Board of Trustees of the Maine Public Employees Retirement 
System, private financial institutions, other financial and service providers, 
consultants, actuaries, counsel, auditors, 3rd-party administrators and other 
professionals as necessary; 
I.  Procure insurance against any loss in connection with the property, assets or 
activities of the trust, and secure private underwriting and reinsurance to manage risk 
and insure the retirement savings rate of return; 
J.  Procure insurance indemnifying each member of the board from personal loss or 
liability resulting from a member's action or inaction as a member of the board; 
K.  Set minimum and maximum investment levels in accordance with contribution 
limits set for IRAs by the Internal Revenue Code; 
L.  Collaborate and cooperate with the Board of Trustees of the Maine Public 
Employees Retirement System, private financial institutions, service providers and 
business, financial, trade, membership and other organizations to the extent necessary 
or desirable for the effective and efficient design, implementation and administration 
of the program and to maximize outreach to eligible employers and eligible 
employees; 
M.  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 arrangements established under the program, to the extent permitted 
under state and federal law; 
N.  Facilitate compliance by the program or arrangements established under the 
program with all applicable requirements for the program under the Internal Revenue 
Code, including, but not limited to, tax qualification requirements or any other 
applicable law and accounting requirements, including providing or arranging for 
assistance to program sponsors and individuals in complying with applicable law and 
tax qualification requirements in a cost-effective manner; and 
O.  Carry out the duties and obligations of the trust pursuant to this chapter and 
exercise all other powers as may be reasonably necessary for the effectuation of the 
purposes, objectives and provisions of this chapter pertaining to the trust. 
2.  Rules.  The board may adopt rules it considers necessary to implement this 
chapter, consistent with the Internal Revenue Code and regulations issued pursuant to the 
Internal Revenue Code to ensure that the program meets all criteria for federal tax-
deferral or tax-exempt benefits, or both.  Rules adopted pursuant to this subsection are 
routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
3.  Additional powers of the board.  In addition to the powers and authority granted 
to the board pursuant to subsections 1 and 2, the board shall: 
A.  In accordance with best practices for retirement savings vehicles, design, establish 
and operate the program or arrangements established under the program to maximize 
participation; 
B.  Arrange for collective, common and pooled investment of assets of the program 
or arrangements established under the program, including, but not limited to, 
investments in conjunction with other funds with which those assets are permitted to 
be collectively invested to effectuate costs savings through efficiencies and 
economies of scale; 
C.  Explore and establish investment options that offer employees returns on 
contributions and the conversion of individual retirement savings account balances to 
secure retirement income without incurring debt or liabilities to the State; 
D.  Disseminate educational information concerning saving and planning for 
retirement; 
E.  Disseminate information concerning the tax credits available to small business 
owners for establishing new retirement plans and a federal retirement savings 
contribution tax credit pursuant to the Internal Revenue Code available to lower-
income and moderate-income households for qualified savings contributions; 
F.  Submit progress and status reports to participating employers and eligible 
employees; 
G.  If necessary, determine the eligibility of an employer, employee or other 
individual to participate in the program; 
H.  Establish and evaluate the process by which an eligible employee of an eligible 
employer is able to contribute a portion of the employee's salary or wages to the 
program and the employer, through a payroll deposit retirement savings arrangement, 
forwards that employee contribution and related information to the program or its 
agents.  This process may include, but is not limited to, financial services companies 
and 3rd-party administrators with the capability to receive and process employee 
information and contributions for payroll deposit retirement savings arrangements or 
other arrangements authorized by this chapter; 
I.  Design and establish the process for the enrollment of program participants; 
J.  Allow a participating employer to use the program to remit employee 
contributions to an employee's individual retirement accounts; 
K.  Allow a participating employer to make that employer's own contributions to an 
employee's individual retirement accounts, as long as the contribution is permitted 
under the Internal Revenue Code and does not cause the program to be treated as an 
employee benefit plan under the federal Employee Retirement Income Security Act 
of 1974, 29 United States Code, Section 1001, et seq. (Supplement V 2006); and 
L.  Establish and evaluate a process by which an individual or an employee of a 
nonparticipating employer may enroll in and make contributions to the program. 
§3306.  Gain and loss reserve account 
The board may establish a segregated gain and loss reserve account within the 
program fund. If established, the board has sole authority over the gain and loss reserve 
account. 
1.  Allocation of interest.  The gain and loss reserve account may be used to allocate 
interest at the stated interest rate for program years in which the board determines that the 
stated interest rate cannot be met from investment earnings. 
2.  Review of reserve account.  The board shall establish a goal for the balance of 
the gain and loss reserve account and shall periodically review the sufficiency of the gain 
and loss reserve account based on the recommendations of the board's actuary. 
3.  Allocation of earnings and gains.  The board may allocate excess earnings of the 
program with respect to assets attributable to the program to the gain and loss reserve 
account.  In addition, the board may allocate any liability gains and losses to the gain and 
loss reserve account.  Based on an actuarial valuation following each program year, the 
board shall determine annually the amount, if any, that is to be allocated to the gain and 
loss reserve account for that program year.  In determining whether to allocate excess 
earnings to the gain and loss reserve account, the board must consider all of the 
following: 
A.  Whether or not the program has excess earnings; 
B.  The sufficiency of the gain and loss reserve account in light of the goal 
established pursuant to subsection 2; 
C.  The amount required for the program's administrative costs; and 
D.  The amount required for making allocations to individuals' accounts at the stated 
interest rate. 
In determining whether to allocate liability gains and losses to the gain and loss reserve 
account, the board shall consider the matters described in paragraphs B, C and D. 
§3307.  IRA arrangements 
The program must include, as determined by the board, one or more payroll 
deduction IRA arrangements. 
1.  Program amendment.  Prior to July 1st of the initial program year, and prior to 
the beginning of each program year thereafter, the board shall adopt a program 
amendment in coordination with its investment manager with respect to the program to 
declare the stated rate at which interest must be allocated to program accounts for the 
following program year.  Interest must be allocated to program accounts and must be 
computed at the stated interest rate on the balance of an individual's account compounded 
daily. 
2.  Individual retirement savings.  An individual's retirement savings benefit under 
the program must be an amount equal to the balance in the individual's program account 
on the date the retirement savings benefit becomes payable. 
§3308.  Indemnity 
The board shall ensure that an insurance, annuity or other funding mechanism is in 
place at all times that protects the value of individuals' accounts.  The costs of the funding 
mechanism must be paid out of the program funds held in the trust and may not be 
attributed to the administrative costs of the board in operating the trust.  In accordance 
with section 3319, the State is not liable for payment of any benefit pursuant to this 
chapter. 
§3309.  Employee information 
Prior to opening the program for enrollment, the board shall design and disseminate 
to employers through the bureau an employee information packet.  The packet must 
include background information on the program and appropriate disclosures for 
employees. 
1.  Disclosure form.  The packet must contain a disclosure form that: 
A.  Includes, but is not limited to: 
(1)  The benefits and risks associated with making contributions to the program; 
(2)  The mechanics of how to make contributions to the program; 
(3)  How to opt out of the program; 
(4)  The process for withdrawal of retirement savings; and 
(5)  How to obtain additional information on the program; 
B.  Clearly articulates the following: 
(1)  That employees seeking financial advice should contact financial advisors, 
that employers are not in a position to provide financial advice and that 
employers are not liable for decisions employees make pursuant to section 3318; 
(2)  That the program is not an employer-sponsored retirement plan; and 
(3)  That the program fund is privately insured and is not guaranteed by the State; 
and 
C.  Includes a signature line for the employee to sign and date acknowledging that the 
employee has read all of the disclosures and understands their content. 
2.  Opt-out option.  The employee information packet must also include an opt-out 
form for an eligible employee to note the employee's decision to opt out of participation 
in the program.  The opt-out form must be simple and concise and drafted in a manner 
that the board determines necessary to appropriately evidence the employee's 
understanding that the employee is choosing not to automatically deduct earnings to save 
for retirement. 
3.  Review of employee packet.  The employee information packet must be made 
available and reviewed by employers and employees as follows. 
A.  The packet must be made available to employers through the bureau and supplied 
to employees at the time of hiring. The packet must include an acknowledgment form 
for new employees to acknowledge having read the packet.  The form must include a 
signature line for the employee to sign and date.  All new employees must review the 
packet and acknowledge having read it by signing the signature line. 
B.  The employee information packet must be supplied to existing employees when 
the program is initially launched for that participating employer pursuant to section 
3317 and those employees shall review and sign the disclosure form described in 
subsection 1 at that time. 
§3310.  Retirement investments clearinghouse 
1.  Retirement investments clearinghouse established by the board.  The board 
shall maintain a retirement investments clearinghouse containing the information required 
in section 3317 about the retirement investment products offered by each vendor and 
objective comparisons of vendors and types of products.  The clearinghouse must include 
information on investment performance based upon the investment's average annual total 
return as measured by a nationally recognized rating service selected by the board for 
standard periods of time of not less than one year. 
2.  Retirement investments clearinghouse publicly accessible website.  The 
board's publicly accessible website must include a table showing, for each investment 
option, the total fee cost in dollars incurred by a shareholder who initially invested 
$5,000, earned a 5% rate of return for one-year, 5-year, 10-year, 15-year and 20-year time 
periods.  This table must be accompanied by a disclaimer that the rate of return is for 
purposes of illustrating the respective impacts of different fee amounts on each 
investment, and is not to predict future investment returns. 
3.  Notice of retirement investments clearinghouse.  The board shall include a 
notice of the existence of, and the Internet address for, the retirement investments 
clearinghouse in a notice disseminated to eligible employers through the bureau. 
§3311.  Retirement investments clearinghouse vendors 
1.  Enrollment into the program.  Prior to opening the program for enrollment, the 
board shall establish: 
A.  A retirement investments clearinghouse in accordance with section 3310; and 
B.  A vendor registration process through which information about employer-
sponsored retirement plans and payroll deduction IRAs offered by private sector 
providers is made available for consideration by eligible employers. 
2.  Vendor registration.  In order to be registered by the board and listed on the 
board's publicly accessible website, vendors must provide the following information to 
the board: 
A.  A statement of experience in providing employer-sponsored retirement plans and 
payroll deduction IRAs; 
B.  A description of the types of retirement investment products offered; 
C.  A disclosure of all expenses paid directly or indirectly by retirement plan 
participants, including, but not limited to, penalties for early withdrawals, declining 
or fixed withdrawal charges, surrender or deposit charges, management fees and 
annual fees, supported by documentation as required for prospectus disclosure by the 
National Association of Securities Dealers or a successor organization and the federal 
Securities and Exchange Commission.  Vendors must provide information regarding 
the impact of product fees upon a hypothetical investment, as described in section 
3310; 
D.  The types of products, product features, services offered to participants and 
information about how to obtain product prospectuses or other relevant product 
information; 
E.  A narrative of the ability, experience and commitment of the vendor to provide 
retirement counseling and education services, including, but not limited to, access to 
group meetings and individual counseling by various means, including telephone and 
telecommunications devices for the deaf, Internet and face-to-face consultations with 
registered representatives of the vendor; 
F.  A statement of the vendor's financial strength that identifies its ratings assigned by 
nationally recognized rating services that evaluate the financial strength of similar 
companies; 
G.  The location of offices and counselors, vendor representatives, brokers, financial 
planners, agents or others that would serve employers and their employees; 
H.  A description of the ability of the vendor to comply with all applicable provisions 
of federal and state law governing retirement plans, including minimum distribution 
requirements and contribution limits; 
I.  To the extent applicable, the demonstrated ability of the vendor to offer an 
appropriate array of accumulation funding options, including, but not limited to, 
investment options that offer guaranteed returns on contributions and the conversion 
of retirement savings account balances to secure retirement income, a diversified mix 
of value, growth, growth and income, hybrid and index funds or accounts across 
large, medium and small capitalization asset classes, both domestic and international; 
J.  A description of the range of administrative and customer services provided, 
including asset allocation, accounting and administration of benefits for individual 
participants, record keeping for individual participants, asset purchase, control and 
safekeeping, execution of a participant's instructions as to asset and contribution 
allocation, calculation of daily net asset values, direct access for participants to their 
account information, periodic reporting that is not less than quarterly to active 
participants on their account balances and transactions and compliance with the 
standard of care required by applicable law to the provision of investment services; 
and 
K.  Certification by the vendor that the information provided to the board accurately 
reflects the provisions of the retirement investment products it registers. 
The board shall prescribe the format for information submitted by vendors pursuant to 
this subsection. 
§3312.  Vendor registration and renewal 
The board shall open registration to vendors under section 3311 annually and shall 
require renewal of registration at least once every 5 years.  The board shall provide prior 
public notice of each annual registration and of the required registration renewal period. 
§3313.  Removal of a vendor 
1.  Discretionary removal.  The board may remove a vendor registered under section 
3311, subsection 2 if the vendor submits materially inaccurate information to the board, 
does not remit assessed fees within 60 days or fails to submit notice of material changes 
to its registered investment products.  Vendors found to have submitted materially 
inaccurate information to the board have 60 days to correct the information. 
2.  Mandatory removal.  The board shall revoke a vendor's registration and remove 
the vendor from the publicly accessible website if investments offered by the vendor are 
products of a regulated investment company or insurance company that is not licensed or 
has had its license revoked by the Financial Industry Regulatory Authority or a successor 
organization or the Department of Professional and Financial Regulation, Bureau of 
Insurance for engaging in conduct prohibited by those entities. 
3.  Appeals.  The board shall establish an appeals process for a vendor that is denied 
registration or whose registration is revoked. 
§3314.  Fees charged by vendors 
A vendor may not charge a fee that is not disclosed. 
§3315.  Funding sources; vendor fees 
1.  Cost of establishing the vendor registration system and the retirement 
investments clearinghouse.  The cost of establishing the vendor registration system and 
the retirement investments clearinghouse must be borne equally by registered vendors, 
based on the total number of registered vendors.  Each registered vendor must pay a one-
time establishment fee equal to a pro rata share of the establishment costs charged to 
vendors that register with the board prior to the close of the initial registration period, as 
determined by the board.  The one-time establishment fee charged to vendors that register 
with the board after the completion of the initial registration period must be distributed 
equally among registered vendors that have paid the establishment fee and credited 
toward subsequent maintenance and administrative fees charged to each vendor. 
2.  Cost of maintaining the vendor registration system and the retirement 
investments clearinghouse.  The cost of maintaining the vendor registration system and 
the retirement investments clearinghouse, and the costs associated with publicizing the 
availability of the clearinghouse to eligible employers, must be borne equally by 
registered vendors, based on the total number of registered vendors.  Each registered 
vendor must pay a renewal fee equal to a pro rata share of the maintenance costs, as 
determined by the board. 
3.  Administrative fee.  Each registered vendor must pay an administrative fee for 
each retirement investment product it offers to employers.  The administrative fee must 
represent the actual costs associated with processing the information related to the 
investment option and presenting it on the retirement investments clearinghouse, as 
determined by the board. 
4.  Use of trust funds.  The board may not divert trust funds to establish or maintain 
the vendor registration system or the retirement investments clearinghouse. 
§3316.  Board liability 
The board and the program, and its officers and employees, are not responsible for, 
and may not be held liable for, the adequacy of the information provided by the 
participating vendors and contained in the clearinghouse.  The clearinghouse maintained 
by the board serves only to provide information supplied by the participating vendors for 
the consideration of the selection of retirement investment products.  The board and the 
program may not be held liable for the actions of registered vendors. 
Vendors participating in the program may not use the program's logo or claim or infer 
endorsement or recommendation by the board or the program with respect to products 
and services identified by the vendors in the clearinghouse. At the discretion of the board, 
a violation of this section may lead to a vendor's registration being revoked. 
§3317.  Schedule to allow employee participation in the program 
After the board opens the program for enrollment, an employer may choose to have a 
payroll deduction retirement savings arrangement to allow employee participation in the 
program. 
1.  Three months after program is open for enrollment.  Beginning 3 months after 
the board opens the program for enrollment, eligible employers with more than 100 
eligible employees that do not offer an employer-sponsored retirement plan or automatic 
enrollment payroll deduction IRA shall have a payroll deduction retirement savings 
arrangement to allow employee participation in the program. 
2.  Six months after program is open for enrollment.  Beginning 6 months after the 
board opens the program for enrollment, eligible employers with more than 50 eligible 
employees that do not offer an employer-sponsored retirement plan or automatic 
enrollment payroll deduction IRA shall have a payroll deduction retirement savings 
arrangement to allow employee participation in the program. 
3.  Nine months after program is open for enrollment.  Beginning 9 months after 
the board opens the program for enrollment, all eligible employers that do not offer an 
employer-sponsored retirement plan or automatic enrollment payroll deduction IRA shall 
have a payroll deduction retirement savings arrangement to allow employee participation 
in the program. 
4.  Employee opt-out option.  An eligible employee must be enrolled in the program 
unless the employee elects not to participate in the program.  An eligible employee may 
elect to opt out of the program by submitting the opt-out form in the employee 
information packet distributed by employers pursuant to section 3309. 
A.  An eligible employee who elects to opt out of the program who subsequently 
wants to participate may enroll during the employer's designated open enrollment 
period under subsection 5 or if permitted by the employer at an earlier time. 
B.  An eligible employee may also terminate that employee's participation in the 
program at any time in a manner prescribed by the board by submitting the opt-out 
form. 
5.  Open enrollment period.  Following initial implementation of the program 
pursuant to this section and at least once every 2 years, participating employers must 
designate an open enrollment period during which eligible employees that previously 
opted out of the program must be enrolled in the program unless the eligible employee 
again elects to opt out as provided in this section. 
6.  Employer-sponsored retirement plan.  In accordance with rules adopted by the 
board pursuant to section 3305, subsection 2, an eligible employer may retain the option 
to set up any type of employer-sponsored retirement plan or offer an automatic 
enrollment payroll deduction IRA instead of having a payroll deduction retirement 
savings arrangement to allow employee participation in the program. 
7.  Employee contribution.  Unless otherwise specified by the employee, an 
employee participating in the program must contribute 3% of the employee's annual 
salary or wages to the program.  The board may, by rules adopted pursuant to section 
3305, subsection 2, adjust the contribution amount to no less than 2% and no more than 
4% of the employee's annual salary or wages and may vary that amount within that 2% to 
4% range for employees according to the length of time the employee has contributed to 
the program. 
8.  Opt-out forms to be used by an employer; requirement.  An eligible employer 
must use the opt-out form in the employee information packet disseminated by the bureau 
pursuant to section 3309 to create an option for an eligible employee to note that 
employee's decision to opt out of utilizing the program. 
§3318.  Employer liability 
1.  Employee's decisions.  An employer may not be held liable for an employee's 
decision to participate in or opt out of the program, or for the investment decisions of an 
employee whose assets are deposited in the program. 
2.  Employer fiduciary liability.  An employer is not a fiduciary of the trust or the 
program and has no legal responsibility for and incurs no liability arising from the 
administration, investment or investment performance of the program, program design or 
benefits paid to employees participating in the program. 
An employer's voluntary contribution under section 3305, subsection 3, paragraph J does 
not change the employer's relationship to the program, including as specified in this 
subsection, or an employer's obligations to employees. 
§3319.  State liability 
The State is not liable for the payment of the retirement savings benefit earned by 
program participants pursuant to this subchapter.  Financial liability for the payment of 
benefits in excess of funds available under the program are borne by the entities with 
whom the board contracts to provide an insurance, annuity or other funding mechanism to 
protect the value of individuals' accounts pursuant to section 3308.  The State, and any of 
the funds of the State, has no obligation for payment of the benefits arising from this 
chapter. 
§3320.  Audited financial report 
1.  Audit of the trust.  The board shall submit an annual audited financial report, 
prepared in accordance with generally accepted accounting principles, on the operations 
of the trust no later than July 1st to the Governor, the State Controller, the State Auditor 
and the Legislature.  The annual audit must be made by an independent certified public 
accountant and must include, but is not limited to, direct and indirect costs attributable to 
the use of outside consultants, independent contractors and any other persons employed 
by the trust who are not state employees. 
2.  Supplemental information.  The board must prepare the following supplemental 
information for the annual audit: 
A.  Any studies or evaluations prepared in the preceding year; 
B.  A summary of the benefits provided by the trust including the number of 
participants in the trust; and 
C.  Any other information that is relevant in order to make a full, fair and effective 
disclosure of the operations of the trust. 
§3321.  Construction 
This chapter must be liberally construed and broadly interpreted to effectuate its 
purposes and intent and not as to any limitation of powers. 
§3322.  Bureau of Labor Standards; administration and enforcement 
1.  Authorization.  The bureau shall enforce employer compliance with this chapter. 
2.  Employer compliance; violation.  An eligible employer that, without good cause, 
fails to allow its eligible employee to participate in the program within 90 days after 
service of notice by the bureau of the employer's failure to comply with this chapter 
commits a civil violation for which a fine of not less than $250 per eligible employee may 
be adjudged.  If the employer remains in noncompliance for 180 days or more, the court 
may impose an additional penalty of $500 per eligible employee. 
Penalties collected pursuant to this subsection must be deposited in the program fund 
established by the board pursuant to section 3302, subsection 2. 
3.  Reimbursement of costs.  If the bureau participates in the implementation and 
administration of the program, it may charge the board a reasonable fee for costs it incurs 
for implementing and administering the program. 
§3323.  Repeal 
This chapter is repealed December 31, 2015. 
Sec. 4.  Market analysis. 
1.  Initial market analysis.  The Maine Secure Choice Retirement Savings 
Investment Board, referred to in this section as "the board," shall conduct an initial 
market analysis to determine whether the necessary conditions for implementation of the 
Maine Revised Statutes, Title 26, chapter 39 can be met, including, but not limited to, 
likely participation rates, participants' comfort with various investment vehicles and 
degree of risk, contribution levels and the rate of account closures and rollovers.  The 
board shall conduct this analysis only if sufficient funds to initiate and complete the 
required market analysis are made available through a nonprofit or private entity, federal 
funding or an annual appropriation. 
2.  Maine Secure Choice Retirement Savings Program Market Analysis Fund.  
The Maine Secure Choice Retirement Savings Program Market Analysis Fund, referred 
to in this section as "the fund," is established.  Funds available to conduct the market 
analysis required under subsection 1 must be deposited in the fund.  The fund is 
administered by the board and is nonlapsing.  The fund must be used to conduct the 
analysis required under subsection 1, with any remaining funds to be transferred to the 
Maine Secure Choice Retirement Savings Trust program fund established by the board 
pursuant to Title 26, section 3302, subsection 2 in the event of a positive determination 
by the board pursuant to subsection 3, or to the General Fund in the event of a negative 
determination by the board pursuant to subsection 4, in accordance with any restrictions 
placed on the funds by a funding source.  The board shall submit a report on its findings 
to the joint standing committee of the Legislature having jurisdiction over labor matters 
and the joint standing committee of the Legislature having jurisdiction over retirement 
matters. 
3.  Maine Secure Choice Retirement Savings Investment Board determination.  
The board shall determine, based on the market analysis under this section, whether the 
provisions of the Maine Revised Statutes, Title 26, chapter 39 will be self-sustaining and 
funds are available through a nonprofit or other private entity, federal funding or an 
annual appropriation in amounts sufficient to allow the board to implement Title 26, 
chapter 39 until the trust has sufficient funds to be self-sustaining.  The board, no later 
than January 2, 2015, shall report to the joint standing committee of the Legislature 
having jurisdiction over retirement matters its determination and any necessary legislation 
based on the board's determination.  The joint standing committee may report out 
legislation to the First Regular Session of the 127th Legislature in accordance with the 
report of the board. 
4.  Implementation prohibited.  Notwithstanding any provision of law to the 
contrary, the board may not implement the program if the IRA arrangements offered fail 
to qualify for the favorable federal income tax treatment ordinarily accorded to IRAs 
under the Internal Revenue Code, or if it is determined that the program is an employee 
benefit plan under the federal Employee Retirement Income Security Act, 29 United 
States Code, Section 1001 et seq. 
SUMMARY 
This bill establishes the Maine Secure Choice Retirement Savings Trust within the 
Department of Labor and does the following. 
1.  It requires eligible employers to offer a payroll deduction retirement savings 
arrangement so that eligible employees can contribute a portion of their salary or wages 
to a retirement savings program account in the Maine Secure Choice Retirement Savings 
Program, also created by the bill. 
2. It requires an eligible employee to participate in the Maine Secure Choice 
Retirement Savings Program, unless the employee specifically opts out of the program.  
The Bureau of Labor Standards is required to provide forms to employers for employees 
to opt out of the program. 
3. The bill creates the 7-member Maine Secure Choice Retirement Savings 
Investment Board to administer the trust. 
4.  It specifies risk management and investment policies that the board must follow in 
administering the program.  
5. The bill requires a specific percentage of the annual salary or wages of an eligible 
employee participating in the program to be deposited in the trust, which is divided into a 
program fund and an administrative fund.  It authorizes the board to establish a gain and 
loss revenue account within the program fund. 
6.  The bill, contingent upon sufficient interest and funding by vendors, requires the 
board to establish a retirement investment clearinghouse on the Internet and a vendor 
registration process through which information about employer-sponsored retirement 
plans and payroll deduction individual retirement accounts and annuities offered by 
private sector providers is available for consideration by eligible employers. 
7.  It requires the Bureau of Labor Standards to assess a penalty on an eligible 
employer that fails to make the program available to eligible employees. 
8.  It provides that the State has no liability for the payment of benefits under the 
program.  
9.  The bill directs the board to conduct a market analysis to determine whether the 
necessary conditions needed to implement the provisions of the trust can be achieved.  
The analysis may be conducted only when sufficient funding from the nonprofit or 
private sector or from state or federal government is available.  The provisions of the bill 
establishing the Maine Secure Choice Retirement Savings Investment Board and the trust 
are repealed December  31, 2015 unless the board reports to the Legislature the board's 
determination, through the market analysis, that those provisions of the trust are self-
sustaining and that funds exist to allow the board to implement the program until 
sufficient funds become available to make it self-sustaining and the Legislature takes 
action based on the board's determination.  It requires the board to ensure that insurance, 
annuity or other funding mechanisms are in place to protect the value of individuals' 
accounts. 
10.  The bill prevents the board from implementing the trust if the IRA arrangements 
offered fail to qualify for favorable federal income tax treatment ordinarily accorded to 
IRAs under the Internal Revenue Code or if the program is determined to be an employee 
benefit plan under the federal Employee Retirement Income Security Act.