HB 559-FN establishes a new retirement plan, called the Group III Defined Contribution Plan, for new state employee members of the retirement system starting on or after July 1, 2024. All new state employees on and after this date will be required to join the Group III plan, and any other employees may join as well. The plan is a defined contribution plan, with both the member and the employer making contributions. The bill also includes provisions for the administration and investment of the plan, as well as rules for the withdrawal of funds in certain circumstances.

The bill also makes changes to existing law regarding membership in the retirement system. It specifies that membership in the retirement system will be optional for certain officials and employees, and clarifies that employees beginning service on or after July 1, 2024 will be required to participate in the Group III Defined Contribution Plan. The bill includes definitions and provisions for the administration and investment of the plan, as well as rules for contributions, limitations on contributions, and vesting of contributions and investment returns. It also allows for the withdrawal of funds in certain circumstances. The bill has a fiscal impact, with increased expenditures in FY 2025 and FY 2026, and raises concerns about ambiguities and conflicting language that may require the engagement of qualified professionals for compliance.