This bill amends the State Employees' Retirement Act of 1943 by updating several sections related to the Tier 2 retirement plan for state employees. Key changes include the definition of terms such as "qualified participant," "refund beneficiary," and "tax-deferred account," as well as the introduction of new provisions regarding employer contributions and participant contributions. Notably, the bill specifies that a qualified participant's employer must contribute 4% of the participant's compensation to their Tier 2 account, and participants may elect to contribute additional amounts based on their years of service. The bill also establishes an automatic enrollment feature for contributions and outlines the conditions under which employer matching contributions can be made.

Additionally, the bill introduces new requirements for annuity providers selected to offer retirement income options to participants, ensuring they meet specific financial stability criteria and provide a range of suitable annuity options. It also clarifies that distributions from employer and employee contributions are exempt from local taxes and subject to the public employee retirement benefit protection act. The state treasurer is granted authority to recover overpayments and correct errors related to Tier 2 accounts. Overall, these amendments aim to enhance the retirement benefits for state employees while ensuring the financial integrity of the retirement system.

Statutes affected:
Senate Introduced Bill: 38.55