An Act to Advance the Maine Retirement Savings Program
Maine Legislature, Session 131, LD 1082
Committee: Health Coverage, Insurance and Financial Services
Sponsors: VITELLI, TERRY, BAILEY, DAUGHTRY, STEWART, CLUCHEY
Amends: 5 MRSA §172, 5 MRSA §173, 5 MRSA §174, 5 MRSA §177, 5 MRSA §178, 5 MRSA §179, 5 MRSA §285, 5 MRSA §17103

Legislative Document
No. 1082
S.P. 451
In Senate, March 9, 2023
An Act to Advance the Maine Retirement Savings Program
(EMERGENCY)
Reference to the Committee on Health Coverage, Insurance and Financial Services 
suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator VITELLI of Sagadahoc.
Cosponsored by Representative TERRY of Gorham and
Senators: BAILEY of York, DAUGHTRY of Cumberland, STEWART of Aroostook, 
Representative: CLUCHEY of Bowdoinham.
Emergency preamble.  Whereas, acts and resolves of the Legislature do not 
become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, current law requires that by April 1, 2023 a covered employer with 25 or 
more covered employees must offer the Maine Retirement Savings Program to its covered 
employees; and
Whereas, current law requires that by October 1, 2023 a covered employer with 15 
to 24 covered employees must offer the Maine Retirement Savings Program to its covered 
employees; and
Whereas, current law sets forth penalties for covered employers that fail to comply 
with the law; and
Whereas, the Maine Retirement Savings Program will not be implemented in time 
for employers to offer the program on April 1, 2023 or October 1, 2023; and
Whereas, in the judgment of the Legislature, these facts create an emergency within 
the meaning of the Constitution of Maine and require the following legislation as 
immediately necessary for the preservation of the public peace, health and safety; now, 
therefore,
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA §172, first ¶, as enacted by PL 2021, c. 356, §1, is amended to 
read:
The Maine Retirement Savings Board is established as a body corporate and politic and 
a public instrumentality of the State pursuant to section 12004‑G, subsection 33‑G to 
develop and maintain the Maine Retirement Savings Program for individuals employed or 
self-employed for wages or other compensation in this State.
Sec. 2.  5 MRSA §172, sub-§8, as enacted by PL 2021, c. 356, §1, is amended to 
read:
8.  Meetings.  The board shall meet monthly at such times as established by policy of 
the board, but at least quarterly, beginning no later than May 2022 and may also meet at 
other times at the call of the chair. All meetings of the board are public proceedings within 
the meaning of Title 1, chapter 13, subchapter 1.
Sec. 3.  5 MRSA §173, sub-§1, ¶A, as enacted by PL 2021, c. 356, §1, is amended 
to read:
A.  Develop, establish, implement and maintain the program and, to that end, may 
conduct market, legal and feasibility analyses if the board considers them advisable 
and may determine a name for the program;
Sec. 4.  5 MRSA §173, sub-§1, ¶E, as enacted by PL 2021, c. 356, §1, is amended 
to read:
E.  Develop and implement an investment policy that defines the program's investment 
objectives consistent with the objectives of the program and that provides for policies 
and procedures consistent with those investment objectives. The board shall strive to 
select and offer investment options available to participants and other program features 
that are intended to achieve maximum possible income replacement balanced with an 
appropriate level of risk in an IRA-based environment consistent with the investment 
objectives under the policy. The investment options may encompass a range of risk and 
return opportunities and allow for a rate of return commensurate with an appropriate 
level of risk in view of the investment objectives under the policy. The menu of 
investment options must be determined by considering the nature and objectives of the 
program, the desirability based on behavioral research findings of limiting investment 
options under the program to a reasonable number and the extensive investment options 
available to participants in the event that they roll over funds in an IRA established 
under the program to an IRA outside the program.  In accordance with paragraphs K 
and O, the board, in carrying out its responsibilities and exercising its powers under 
this chapter, shall employ or retain appropriate entities or personnel to assist or advise 
it and to whom to delegate the carrying out of such responsibilities and exercise of such 
powers;
Sec. 5.  5 MRSA §173, sub-§2, as enacted by PL 2021, c. 356, §1, is amended to 
read:
2.  Required elements of program.  In accordance with the implementation dates 
schedule set forth in subsection 3, the program must:
A.  Allow an eligible individual in this State to choose whether or not to contribute to 
an IRA under the program, including allowing a covered employee in the State the 
choice to contribute to an IRA under the program through a payroll deduction IRA 
arrangement;
B.  Notwithstanding any provision of state law related to payroll deduction to the 
contrary, require each covered employer to offer its covered employees the choice 
whether or not to contribute to a payroll deduction IRA by automatically enrolling them 
in the payroll deduction IRA with the opportunity to opt out.  A covered employee who 
is not a participant because that employee has opted out will be automatically 
reenrolled with the opportunity to opt out again at regular or ad hoc intervals 
determined by the board in its discretion, but not more frequently than annually;
C.  Provide that the IRA to which contributions are made is a Roth IRA, except that 
the board has the authority at any time, in its discretion, to add an option for all 
participants to affirmatively elect to contribute to a traditional IRA as an alternative to 
the Roth IRA;
D.  Provide that, unless otherwise specified by the covered employee, a covered 
employee must automatically initially contribute 5% of the covered employee's salary 
or wages to the program and may elect to opt out of the program at any time or 
contribute at any higher or lower rate, expressed as a percentage of salary or wages, or, 
if the board in its discretion permits, expressed as a flat dollar amount, subject in all 
cases to the IRA contribution and income eligibility limits applicable under the Internal 
Revenue Code at no additional charge. The board is authorized to change, from time 
to time, the 5% automatic initial default contribution rate for all covered employees in 
its discretion;
E.  Provide on a uniform basis, if and when the board so determines in its discretion, 
for an annual increase of each participant's contribution rate, by not more than 1% of 
salary or wages per year up to a maximum of 8% 10%.  Any such increases must apply 
to participants, as determined by the board in its discretion, either by default or only if 
initiated by affirmative participant election and are in either case subject to the IRA 
contribution and income eligibility limits applicable under the Internal Revenue Code;
F.  Provide for direct deposit of contributions into investments under the program, 
including, but not limited to, a default investment such as a series of target date funds 
and a limited number of investment alternatives including a principal preservation 
option determined by the board. In addition, the board may provide that each 
participant's initial contributions, up to a specified dollar amount or for a specified 
period of time, are required to be invested in a principal capital preservation investment 
or, in the board's discretion, must be defaulted into such an investment unless the 
participant affirmatively opts for a different investment for those contributions. The 
board shall determine how often participants will have the opportunity to change their 
selections of investments for future contributions or existing balances or both;
G.  Provide that employer contributions by a covered employer are not required or 
permitted;
H.  Be professionally managed;
I.  When possible and practicable, use existing employer and public infrastructure to 
facilitate contributions, record keeping and outreach and use pooled or collective 
investment arrangements for amounts contributed to the program;
J.  Require the maintenance of separate records and accounting for each account under 
the program and allow for participants to maintain their accounts regardless of place of 
employment and to roll over funds into other IRAs or other retirement accounts;
K.  Provide for reports on the status of each participant's account to be provided to each 
participant at least annually and make best efforts to provide each participant frequent 
or continual online access to information on the status of that participant's account;
L.  Provide that each participant owns the contributions to and earnings on amounts 
contributed to the participant's account under the program and that the State and 
covered employers have no proprietary interest in those contributions or earnings;
M.  Be designed and implemented in a manner consistent with federal law to the extent 
that it applies and consistent with the program not being preempted by, and the payroll 
deduction IRAs and covered employers not being subject to, ERISA;
N.  Promote expanded retirement saving by encouraging employers in the State that 
would otherwise be covered employers to instead adopt a specified tax-favored 
retirement plan;
O.  Make provision for participation in the program by individuals who are not 
employees, such as self-employed individuals and independent contractors, as 
provided in rules adopted pursuant to section 174, subsection 2;
P.  Seek to keep fees, costs and expenses of the program as low as practicable, except 
that any administrative fee imposed on a covered employee for participating in the 
program may not exceed a reasonable amount relative to fees charged by similar 
established programs in other states.  The fee may be an asset-based or investment 
return fee, flat fee or hybrid of the permissible fee structures identified in this 
paragraph;
Q.  Adopt rules and establish procedures governing the distribution of funds from the 
program, including such distributions as may be permitted or required by the program 
and any applicable provisions of tax laws, with the objectives of maximizing financial 
security in retirement, helping to protect spousal rights and assisting participants with 
the challenges of decumulation of savings. The board has the authority to provide for 
one or more reasonably priced distribution options to provide a source of regular 
retirement income, including income for life or for the participant's life expectancy or 
for joint lives and life expectancies, as applicable;
R.  Adopt rules and establish procedures promoting portability of benefits, including 
the ability to make tax-free rollovers or transfers from IRAs under the program to other 
IRAs or to tax-qualified plans that accept such rollovers or transfers;
S.  Establish penalties in accordance with subsection 4 for a covered employer that fails 
without reasonable cause to enroll a covered employee in the program as required or 
that fails to transmit a payroll deduction IRA contribution to the program as required. 
A lack of reasonable cause is established by the failure to enroll after the program 
communicates with the employer 3 times;
T.  In accordance with subsection 1, paragraph C, use private sector entities to 
administer the program and invest the contributions to the program under the 
supervision and guidance of the board; and
U.  Allow the board to provide for the establishment, maintenance, administration, 
operation and implementation of the program to be carried out jointly with, or in 
partnership, collaboration, coordination or alliance with one or more other states, the 
Federal Government or any federal, state or local agencies or instrumentalities.
Sec. 6.  5 MRSA §173, sub-§3, as enacted by PL 2021, c. 356, §1, is repealed and 
the following enacted in its place:
3.  Implementation.  The board may implement the program in stages, which may 
include a pilot program and phasing in the program based on the size of employers, or other 
factors.  A covered employer shall offer the program to its covered employees no later than 
December 31, 2024.
A covered employer with fewer than 5 employees is not required to offer the program to 
its covered employees but may offer the program to its employees at the option of the 
employer and in accordance with rules established by the board.
Sec. 7.  5 MRSA §173, sub-§4, ¶A, as enacted by PL 2021, c. 356, §1, is amended 
to read:
A.  If a covered employer fails to enroll a covered employee without reasonable cause, 
the covered employer is subject to a penalty for each covered employee for each 
calendar year or portion of a calendar year during which the covered employee was not 
enrolled in the program or had not opted out of participation in the program and, for 
each calendar year beginning after the date on which a penalty has been assessed with 
respect to a covered employee, is subject to a penalty for any portion of that calendar 
year during which the covered employee continues to be unenrolled without opting out 
of participation in the program. The amount of any penalty imposed on a covered 
employer for the failure to enroll a covered employee without reasonable cause is 
determined as follows:
(1)  Prior to April 1, 2024 From July 1, 2025 to June 30, 2026, the maximum 
penalty per covered employee is $10 $20;
(2)  From April 1, 2024 to March 31, 2025 July 1, 2026 to June 30, 2027, the 
maximum penalty per covered employee is $20 $50; and
 (3)  From April 1, 2025 to September 30, 2026, the maximum penalty per covered 
employee is $50; and
(4)  On or after October 1, 2026 July 1, 2027, the maximum penalty per covered 
employee is $100.
Sec. 8.  5 MRSA §173, sub-§4, ¶C, as enacted by PL 2021, c. 356, §1, is amended 
to read:
C.  A penalty may not be imposed on a covered employer for any failure to enroll a 
covered employee if the covered employer exercised reasonable diligence to meet the 
requirements of this chapter and the covered employer complies with those 
requirements with respect to each covered employee by the end of the 90-day period 
beginning on the first date the covered employer knew, or exercising reasonable 
diligence would have known, that the failure existed. The covered employer is deemed 
to have known that the failure existed after receiving 3 communications from the 
program.
Sec. 9.  5 MRSA §174, sub-§2, ¶C, as enacted by PL 2021, c. 356, §1, is amended 
to read:
C.  Establish processes for phasing in enrollment of eligible individuals, including 
phasing in enrollment of covered employees by size or type of covered employer 
implementing the program in accordance with section 173, subsection 3;
Sec. 10.  5 MRSA §177, as enacted by PL 2021, c. 356, §1, is amended to read:
§177.  Intergovernmental collaboration and cooperation
The board may enter into an intergovernmental agreement or memorandum of 
understanding with the State and any agency or instrumentality of the State in order to 
further the successful implementation and operation of the program through the provision, 
receipt or other sharing of data, technical assistance, enforcement, compliance, collection 
and other services or assistance to the program, and all such agencies and instrumentalities 
shall cooperate with the board in achieving those ends. The board may enter into an 
intergovernmental agreement or memorandum of understanding with the State and any 
agency or instrumentality of the State to receive outreach, technical assistance, enforcement 
and compliance services, collection or dissemination of information pertinent to the 
program, subject to such obligations of confidentiality as may be agreed to or required by 
law, or other services or assistance.  The State and any agencies or instrumentalities of the 
State that enter into such agreements or memoranda of understanding shall collaborate to 
provide the outreach, assistance, information and compliance or other services or assistance 
to the board. The agreements or memoranda of understanding may cover the sharing of 
costs incurred in gathering and disseminating information and the reimbursement of costs 
for any enforcement activities or assistance.
Sec. 11.  5 MRSA §178, sub-§1, as enacted by PL 2021, c. 356, §1, is amended to 
read:
1.  Fund established.  The Maine Retirement Savings Program Enterprise Fund is 
established as an enterprise fund.  The board shall use funds deposited in the enterprise 
fund in accordance with this section.  The enterprise fund may receive grants, gifts, 
donations, appropriations, loans or other funds designated for administrative expenses or 
otherwise transferred to the enterprise fund from or deposited in the enterprise fund by the 
State or a unit of federal, state or local government or any other person, firm, partnership 
or corporation, including appropriations to the enterprise fund by the Legislature and funds 
from the payment of application, account, administrative or other fees and the payment of 
other funds due the board.  Interest or other investment earnings or returns that are 
attributable to funds in the enterprise fund must be deposited into or retained in the 
enterprise fund.  The enterprise fund may not lapse but must be carried forward to carry 
out the purposes of this chapter. The board shall amortize any amounts appropriated to the 
enterprise fund by the Legislature to ensure that those amounts are paid back to the funding 
sources based on an amortization schedule determined by the board, but no later than 5 
years after the program is fully implemented.  
Sec. 12.  5 MRSA §178, sub-§3, as enacted by PL 2021, c. 356, §1, is amended to 
read:
3.  Administrative costs.  Subject to appropriation by the Legislature, the State may 
pay administrative costs associated with the creation, maintenance, operation and 
management of the program and provide funding for the program until sufficient assets are 
available in the enterprise fund for that purpose. Thereafter, all administrative costs of the 
enterprise fund, including any repayment of start-up funds provided by the State, must be 
repaid only out of money on deposit in the enterprise fund. However, private funds or 
federal funding received in order to implement the program until the enterprise fund is self-
sustaining may not be repaid unless those funds were offered contingent upon the promise 
of such repayment.
Sec. 13.  5 MRSA §179, sub-§2, as enacted by PL 2021, c. 356, §1, is amended to 
read:
2.  Submission of report.  Beginning February 1, 2024 2026 and annually thereafter, 
the board shall submit to the Governor, the Treasurer of State and the Legislature an audited 
financial report, prepared in accordance with generally accepted accounting principles, 
detailing the activities, operations, receipts and expenditures of the program and board 
during the preceding calendar year. The report must include the number of participants, the 
investment options and their rates of return and other information regarding the program 
and must also include projected activities of the program for the current calendar year.  
Sec. 14.  5 MRSA §285, sub-§1, ¶F-12 is enacted to read:
F-12.  Any employee of the Maine Retirement Savings Board;
Sec. 15.  5 MRSA §17103, sub-§12, as amended by PL 2021, c. 548, §17, is further 
amended to read:
12.  Defined contribution, deferred compensation and tax sheltered annuity plans.  
The board shall establish one or more defined contribution, deferred compensation or tax 
sheltered annuity plans consistent with the applicable requirements of the Internal Revenue 
Code and may, with employer agreement, offer participation in such plans to employees 
eligible for membership in a retirement program of the retirement system and to employees 
of the Maine Retirement Savings Board.
Sec. 16. PL 2021, c. 356, §3, first ¶ is amended to read:
Sec. 3. Implementation of Maine Retirement Savings Program. Except as 
provided in this section, the Maine Retirement Savings Board shall establish the Maine 
Retirement Savings Program as required under this Act so that individuals may begin 
making contributions under the program no later than April 1, 2023 January 1, 2025.
Sec. 17. PL 2021, c. 356, §3, sub-§1 is amended to read:
1. Phase in of program; implementation. The board shall phase in the program with 
regard to covered employers and accept contributions from covered employees employed 
by those covered employers as required under this Act and may in its discretion phase in 
the program for individuals who are not employees, such as self-employed individuals or 
independent contractors, except that any implementation schedule set by the board must be 
such that all individuals may begin making contributions under the program no later than 
January 1, 2025 2026. The board may not implement the program if and to the extent that 
the board determines that the program is preempted by the federal Employee Retirement 
Income Security Act of 1974, as amended, 29 United States Code, Section 1001 et seq. If 
and to the extent that the board determines that a portion or aspect of the program is 
preempted by the federal Employee Retirement Income Security Act of 1974, the board 
may not implement that portion or aspect of the program but shall proceed to implement 
the remainder of the program to the extent practicable.
Emergency clause.  In view of the emergency cited in the preamble, this legislation 
takes effect when approved.
SUMMARY
This bill makes the following changes to the Maine Retirement Savings Program.  
1. It provides that the program may establish a name other than the Maine Retirement 
Savings Program for the operation of the program.
2. It establishes that the Maine Retirement Savings Board must meet as established by 
policy of the board, but no less than quarterly.
3. It increases the maximum amount that employees may contribute to the program 
from 8% to 10% of salary or wages per year.
4. It amends the laws governing the program to postpone the dates by which covered 
employers are required to participate in the program and similarly postpones the dates when 
the board may begin assessing penalties to covered employers who fail to participate.
5. It identifies the board as a body corporate and politic and a public instrumentality of 
the State.
6. It specifies that covered employers are deemed to have reasonable notice of the need 
to participate in the program after the program has communicated the need to participate 3 
times.
7. It authorizes the board to enter into an intergovernmental agreement or memorandum 
of understanding with the State and any agency or instrumentality of the State in order to 
further the successful implementation and operation of the program.
8. It clarifies that the funds transferred from the State in the enabling legislation are not 
an appropriation subject to repayment. 
9. It authorizes employees of the board to participate in the state health insurance plan.
10. It authorizes employees of the board to participate in the defined contribution plans 
offered by the Maine Public Employees Retirement System without requiring participation 
in the defined benefit plan offered by the retirement system.