Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas As Engrossed: H3/9/21
2 93rd General Assembly A Bill
3 Regular Session, 2021 HOUSE BILL 1349
4
5 By: Representatives Warren, F. Allen, Barker, Boyd, Brooks, Christiansen, Coleman, A. Collins, Cozart,
6 Crawford, Dalby, Deffenbaugh, Eubanks, Evans, C. Fite, L. Fite, Gazaway, Godfrey, M. Gray, Holcomb,
7 Hollowell, Jett, L. Johnson, Lundstrum, Maddox, McClure, M. McElroy, McGrew, McNair, S. Meeks,
8 Milligan, Perry, Richardson, Rye, Slape, S. Smith, Vaught, Wardlaw, Watson, Wing
9 By: Senators K. Hammer, Caldwell, L. Chesterfield, L. Eads, K. Ingram, Irvin, M. Johnson, G. Leding, B.
10 Sample, G. Stubblefield, J. Sturch, Teague, D. Wallace
11
12 For An Act To Be Entitled
13 AN ACT TO ESTABLISH THE EVERY ARKANSAN RETIREMENT
14 PLAN OPPORTUNITY ACT; AND FOR OTHER PURPOSES.
15
16
17 Subtitle
18 TO ESTABLISH THE EVERY ARKANSAN
19 RETIREMENT PLAN OPPORTUNITY ACT.
20
21
22 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
23
24 SECTION 1. Arkansas Code Title 11 is amended to add an additional
25 chapter to read as follows:
26
27 CHAPTER 16
28 EVERY ARKANSAN RETIREMENT PLAN OPPORTUNITY
29
30 11-16-101. Title.
31 This chapter shall be known and may be cited as the Every Arkansan
32 Retirement Plan Opportunity Act.
33
34 11-16-102. Findings.
35 The General Assembly finds that:
36 (1) Many citizens in Arkansas do not have retirement savings or
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1 have inadequate retirement savings;
2 (2) An estimated five hundred thirty thousand (530,000) private
3 sector workers, including employees of private sector employers, independent
4 contractors, and the self-employed, do not have access to an employer-
5 sponsored retirement plan or program, or another method of saving at work;
6 (3) It is the policy of this state to assist the Arkansas
7 private-sector workforce, particularly middle income and lower income working
8 households, in voluntarily saving for retirement by encouraging and making it
9 easier for employers to adopt a retirement savings plan for employees in
10 Arkansas;
11 (4) Providing an additional adequate, portable, low-cost, and
12 consumer-protective retirement savings option to Arkansas households will
13 ultimately:
14 (A) Enhance the retirement security of households in this
15 state;
16 (B) Reduce reliance on public assistance programs offered
17 by the state; and
18 (C) Reduce the potential burden on taxpayers in Arkansas
19 to finance public assistance programs;
20 (5) The Arkansas 529 GIFT Plan demonstrates the feasibility of a
21 public-private partnership that outsources investment and administration to
22 assist the citizens of this state in saving on a voluntary and cost-efficient
23 basis; and
24 (6) The General Assembly intends to establish the "Every
25 Arkansan Retirement Plan Opportunity" which will use the services of
26 competent and qualified private-sector entities that are selected by the
27 "Every Arkansan Retirement Plan Opportunity Board" to operate, administer,
28 manage, and oversee the plan on behalf of the participants.
29
30 11-16-103. Creation.
31 A multipleemployer voluntary retirement savings plan that shall be
32 known and may be cited as the "Every Arkansan Retirement Plan Opportunity" is
33 established.
34
35 11-16-104. Definitions.
36 As used in this chapter:
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1 (1)(A) "Eligible employee" means an individual who:
2 (i) Is employed by a participating employer;
3 (ii)(a) Meets the service requirements of the plan
4 documentation.
5 (b) The service requirements of the plan
6 documentation shall comply with federal and state law;
7 (iii) Earns a wage or other compensation paid by a
8 participating employer in the State of Arkansas; and
9 (iv) Is at least eighteen (18) years of age.
10 (B) "Eligible employee" does not include an employee:
11 (i) Covered under the Railway Labor Act, 45 U.S.C.
12 151 et seq., as it existed on January 1, 2021;
13 (ii) On whose behalf an employer makes a
14 contribution to a Taft-Hartley multiemployer pension trust fund; or
15 (iii) Of the federal government, state government, a
16 county, a municipal corporation, or a state unit or instrumentality;
17 (2)(A) "Eligible employer" means a person or entity that is
18 engaged in a business, industry, profession, trade, or other enterprise in
19 Arkansas, whether for profit or nonprofit.
20 (B) "Eligible employer" does not include:
21 (i) The federal government, a state, a county, a
22 municipal corporation, or a state unit or instrumentality; or
23 (ii) An employer that maintains or has maintained
24 within the most current preceding two (2) years a Specified Tax-Favored
25 Retirement Plan for its employees;
26 (3) "Participant" means an eligible employee or other individual
27 who has a balance credited to his or her account under the Every Arkansan
28 Retirement Plan Opportunity;
29 (4) "Participating employer" means an eligible employer that is
30 participating in the Every Arkansan Retirement Plan Opportunity;
31 (5) "Self-employed" means an individual who:
32 (A) Is self-employed;
33 (B) Has self-employment income or other compensation from
34 self-employment that is allocable to this state; and
35 (C) Is at least eighteen (18) years of age;
36 (6) "Specified tax-favored retirement plan" means a retirement
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1 plan that is tax-qualified under or is described in and satisfies the
2 requirements of 26 U.S.C. 401, 403(b), 408(k), or 408(p), as they existed
3 on January 1, 2021;
4 (7) "Total fees and expenses" means all fees, costs, and
5 expenses of the plan, including without limitation administrative expenses,
6 investment expenses, investment advice expenses, accounting costs, actuarial
7 costs, legal costs, marketing expenses, education expenses, trading costs,
8 insurance annuitization costs, and other miscellaneous costs; and
9 (8) "Trust" means the trust in which the assets of the plan are
10 maintained.
11
12 11-16-105. Every Arkansan Retirement Plan Opportunity Plan
13 requirements.
14 (a) The Every Arkansan Retirement Plan Opportunity shall be treated as
15 a single plan under Title 1 of the Employee Retirement Income Security Act of
16 1974, 29 C.F.R. 2509 et seq., and as described in 26 U.S.C. 401(a),
17 401(k), and 413(c), as they existed on January 1, 2021.
18 (b) The Every Arkansan Retirement Plan Opportunity shall:
19 (1) Be overseen by the Every Arkansan Retirement Plan
20 Opportunity Board and its designees;
21 (2) Be set out in a document that describes the terms and
22 conditions of the Every Arkansan Retirement Plan Opportunity;
23 (3) Be designed and implemented in a manner that is consistent
24 with applicable federal and state law;
25 (4) Be professionally managed and administered by one (1) or
26 more trustees, fiduciaries, custodians, third-party administrators,
27 investment managers, record keepers, and any other service providers;
28 (5) Be available on a voluntary basis to eligible employers and
29 eligible self-employed individuals;
30 (6) Provide that after a participating employer provides written
31 notice to an eligible employee, the participating employer shall
32 automatically enroll an eligible employee who elects to participate in the
33 Every Arkansan Retirement Plan Opportunity unless the eligible employee opts
34 out of the Every Arkansan Retirement Plan Opportunity;
35 (7) Enroll a self-employed individual who elects to participate
36 in the Every Arkansan Retirement Plan Opportunity;
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1 (8) Provide a plan participant with the option to terminate his
2 or her participation in the Every Arkansan Retirement Plan Opportunity at any
3 time;
4 (9) Permit voluntary pre-tax or Roth 401k deferrals by an
5 eligible employee in accordance with federal law;
6 (10) Prohibit an initial contribution to the Every Arkansas
7 Retirement Plan Opportunity that:
8 (A) Is rolled over from one (1) or more savings accounts
9 by a participant; and
10 (B) Exceeds a combined total of seventy-five thousand
11 dollars ($75,000) ;
12 (11) Allow voluntary employer contributions;
13 (12) Require an eligible employee to automatically contribute
14 five percent (5%) of his or her salary to the Every Arkansan Retirement Plan
15 Opportunity unless the eligible employee elects to:
16 (A) Opt out of the Every Arkansan Retirement Plan
17 Opportunity; or
18 (B) Contribute a higher or lower percentage rate of his or
19 her salary to the Every Arkansan Retirement Plan Opportunity;
20 (13) Provide for the possible increase of the contribution rate
21 paid by a participant in the Every Arkansan Retirement Plan Opportunity;
22 (14) Provide for the direct deposit of contributions into
23 investments under the Every Arkansan Retirement Plan Opportunity;
24 (15) In a manner that is consistent with the Employee Retirement
25 Income Security Act of 1974, 29 C.F.R. 2509 et seq., as it existed on
26 January 1, 2021, and other federal law, provide for the automatic investment
27 of a participant's contributions if the participant does not elect a
28 particular investment option;
29 (16) Provide quarterly reports on the status of each
30 participant's account to the participant;
31 (17) When necessary and feasible, use existing employer and
32 public infrastructure to facilitate contributions, recordkeeping, and
33 outreach and use pooled or collective investment arrangements;
34 (18) Provide that each participant who is one hundred (100%)
35 percent vested in the Every Arkansan Retirement Plan Opportunity owns the
36 contributions to or earnings on the amounts contributed to his or her account
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1 under the Every Arkansan Retirement Plan Opportunity;
2 (19) Provide that the state and employers do not have a
3 proprietary interest in the contributions owned by a participant or in the
4 earnings on the amounts contributed that are owned by a participant;
5 (20) Make provisions for participation in the Every Arkansan
6 Retirement Plan Opportunity by an individual who is self-employed;
7 (21) After a three-year start-up period of the Every Arkansan
8 Retirement Plan Opportunity that begins with the initial implementation of
9 the plan, keep total fees and expenses below three-fourths of one percent
10 (0.75%) of the total assets of the Every Arkansan Retirement Plan
11 Opportunity;
12 (22) Require a participating employer that accumulates assets
13 valued at a combined total of six-hundred thousand dollars ($600,000) in the
14 Every Arkansan Retirement Plan Opportunity to withdraw as a participating
15 employer and employ a private organization to manage the accumulated assets;
16 (23) Establish rules and procedures that govern the distribution
17 of funds in the Every Arkansan Retirement Plan Opportunity Administrative
18 Trust and promote the portability of benefits; and
19 (24) Encourage employers to adopt a specified tax-favored
20 retirement plan, including the Every Arkansan Retirement Plan Opportunity.
21
22 11-16-106. Every Arkansan Retirement Plan Opportunity Board Creation
23 Members.
24 (a) The Every Arkansan Retirement Plan Opportunity Board is
25 established in the office of the Treasurer of State.
26 (b) The board shall consist of the following members:
27 (1)(A) The Treasurer of State or his or her designee.
28 (B) The Treasurer of State or his or her designee shall be
29 the plan administrator;
30 (2) An individual who is appointed by the Treasurer of State and
31 has skill, knowledge, and experience in the field of retirement savings and
32 investment;
33 (3) An individual who is appointed by the Governor and has
34 skill, knowledge, and experience in small business;
35 (4) The Secretary of the Department of Finance and
36 Administration or his or her designee;
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1 (5) The Executive Director of the Arkansas Public Employees'
2 Retirement System or his or her designee;
3 (6) A retired individual who shall represent the interest of
4 retirees and is appointed by the Speaker of the House of Representatives; and
5 (7) A retired individual who shall represent the interest of
6 retirees and is appointed by the President Pro Tempore of the Senate.
7 (c)(1) A member of the board who is appointed by the Treasurer of
8 State, President Pro Tempore of the Senate, or the Speaker of the House of
9 Representatives shall serve as a member of the board at the pleasure of the
10 appointing authority.
11 (2) A member of the board may be reappointed.
12 (3)(A) The appropriate appointing authority shall appoint a
13 representative to fill a vacancy on the board within thirty (30) days of the
14 date on which the vacancy occurs.
15 (B) An appointment to fill a vacancy on the board is
16 effective immediately.
17 (d) A majority of the voting members of the board constitutes a quorum
18 for the transaction of business before the board.
19 (e)(1) Each member of the board who is a voting member of the board
20 shall have one (1) vote on each question before the board.
21 (2) At least four (4) concurring votes shall be necessary for a
22 decision by the board at a meeting where all members of the board are
23 present.
24 (3) At least three (3) concurring votes shall be necessary for a
25 decision by the board at a meeting where a quorum of the members of the board
26 are present.
27 (f) The Treasurer of State or his or her designee shall serve as the
28 Chair of the Every Arkansas Retirement Plan Opportunity Board.
29 (g) The members of the board shall serve without compensation.
30
31 11-16-107. Every Arkansan Retirement Plan Opportunity Board Powers,
32 authority, and duties.
33 (a) The Every Arkansan Retirement Plan Opportunity Board:
34 (1) Shall be the sponsor of the Every Arkansan Retirement Plan
35 Opportunity under the Employee Retirement Income Security Act of 1974, 29
36 C.F.R. 2509 et seq., as it existed on January 1, 2021;
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1 (2) Shall develop and implement the Every Arkansan Retirement
2 Plan Opportunity; and
3 (3) May conduct market, legal, and feasibility research for the
4 purpose of developing and implementing the plan.
5 (b) Each member of the board or his or her designee shall be
6 fiduciaries of the plan under the Employee Retirement Income Security Act of
7 1974, 29 C.F.R. 2509 et seq., as it existed on January 1, 2021, and shall
8 have the power, authority, and duty to:
9 (1) Establish, implement, and maintain the plan;
10 (2) Design, establish, and operate the plan and any trust,