S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8654
 
                             I N  S E N A T E
 
                              March 25, 2022
                                ___________
 
 Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
   printed to be committed to the Committee on Consumer Protection
 
 AN ACT to amend the general business law,  in  relation  to  the  secure
   choice savings program and participating individuals
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Section 1300 of the  general  business  law,  as  added  by
 section 2 of part X of chapter 55 of the laws of 2018 and subdivisions 4
 and  8 as amended by chapter 452 of the laws of 2021, is amended to read
 as follows:
   § 1300. Definitions. All terms shall have the  same  meaning  as  when
 used  in  a  comparable context in the Internal Revenue Code. As used in
 this article, the following terms shall have the following meanings:
   1. "Board" shall mean the New York secure choice savings program board
 established under this article.
   2. "Superintendent" shall mean the superintendent of the department of
 financial services.
   2-a. "Commissioner"  shall  mean  the  commissioner  of  taxation  and
 finance.
   2-b. "Comptroller" shall mean the comptroller of the state.
   3.  "Employee"  shall mean any individual who is eighteen years of age
 or older, who is employed by an employer, and who earned  wages  working
 for an employer in New York state during a calendar year.
   4.  "Employer"  shall  mean  a person or entity engaged in a business,
 industry, profession, trade, or other  enterprise  in  New  York  state,
 whether  for  profit or not for profit, that (i) has at all times during
 the previous calendar year employed at least ten employees in the state,
 (ii) has been in business at least two years, and (iii) has not  offered
 a qualified retirement plan, including, but not limited to, a plan qual-
 ified  under  sections 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) or
 457(b) of the Internal Revenue Code of 1986 in the preceding two years.
   5. "Enrollee" shall mean any employee who is enrolled in the program.
   6. "Internal Revenue Code" shall mean the  Internal  Revenue  Code  of
 1986, or any successor law, in effect for the calendar year.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD15020-02-2
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   7. "IRA" shall mean a Roth IRA (individual retirement account).
   8.  "Participating  employer"  shall mean an employer that facilitates
 access to the program's payroll deduction IRA as provided  for  by  this
 article for its employees who are enrollees in the program.
   9.  "PARTICIPATING INDIVIDUAL" MEANS ANY INDIVIDUAL WHO ENROLLS IN THE
 PROGRAM INDEPENDENT OF  AN  EMPLOYMENT  RELATIONSHIP  WITH  AN  ELIGIBLE
 EMPLOYER,  MAINTAINS AN ACCOUNT IN THE PROGRAM, AND IS NOT A PARTICIPAT-
 ING EMPLOYEE.
   10. "Payroll deduction IRA" shall  mean  an  arrangement  by  which  a
 participating employer facilitates access for enrollees to remit payroll
 deduction contributions to the program.
   [10.]  11.  "Program"  shall  mean  the  New  York state secure choice
 savings program.
   [11.] 12. "Wages" means any compensation within the meaning of section
 219(f)(1) of the Internal Revenue Code that is received by  an  enrollee
 from a participating employer during the calendar year.
   §  2.  Section 1301 of the general business law, as amended by chapter
 452 of the laws of 2021, is amended to read as follows:
   § 1301. Program established. There is hereby established a  retirement
 savings program in the form of an automatic enrollment payroll deduction
 IRA  AND  A  RETIREMENT SAVINGS PROGRAM IN THE FORM OF A PERSONAL IRA AS
 ESTABLISHED BY THE BOARD FOR PARTICIPATING INDIVIDUALS, known as the New
 York state secure choice savings program. The general administration and
 responsibility for the proper operation of the program shall be adminis-
 tered by the board for  the  purpose  of  promoting  greater  retirement
 savings  for private-sector employees AND PARTICIPATING INDIVIDUALS in a
 convenient, low-cost, and portable manner. The board may  delegate  such
 authority  and  responsibility for the development and implementation of
 the program to the department of taxation and finance as the board deems
 proper.
   § 3. Section 1303 of the general business law, as added by  section  2
 of  part  X  of  chapter  55  of the laws of 2018, is amended to read as
 follows:
   § 1303. Fiduciary duty. The  board,  the  individual  members  of  the
 board, the trustees, any other agents appointed or engaged by the board,
 and  all  persons  serving as program staff shall discharge their duties
 with respect to the program solely in  the  interest  of  the  program's
 enrollees, PARTICIPATING INDIVIDUALS, and beneficiaries as follows:
   1.  for  the  exclusive  purposes  of providing benefits to enrollees,
 PARTICIPATING INDIVIDUALS, and beneficiaries  and  defraying  reasonable
 expenses of administering the program;
   2.  by  investing  with the care, skill, prudence, and diligence under
 the prevailing circumstances 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; and
   3. by using  any  contributions  paid  by  PARTICIPATING  INDIVIDUALS,
 employees  and employers remitting employees' own contributions into the
 fund exclusively for the purpose of paying benefits to the enrollees  of
 the  program,  for  the  cost  of administration of the program, and for
 investments made for the benefit of the program.
   § 4. Section 1304 of the general business law, as added by  section  2
 of  part X of chapter 55 of the laws of 2018 and subdivisions 7 and 9 as
 amended by chapter 452 of the laws  of  2021,  is  amended  to  read  as
 follows:
 S. 8654                             3
 
   §  1304.  Duties  of  the  board.  In addition to the other duties and
 responsibilities stated in this article,  the  board  shall,  itself  or
 through the use of appropriate financial organizations as managers:
   1.  Cause  the  program  to be designed, established and operated in a
 manner that:
   (a) accords with best practices for retirement savings vehicles;
   (b) maximizes participation, savings, and sound  investment  practices
 including  considering  the use of automatic enrollment as allowed under
 federal law;
   (c) maximizes simplicity, including ease of administration for partic-
 ipating employers [and] enrollees, AND PARTICIPATING INDIVIDUALS;
   (d) provides an efficient product to enrollees AND PARTICIPATING INDI-
 VIDUALS by pooling investment funds;
   (e) ensures the portability of benefits; and
   (f) provides for the deaccumulation of  enrollee    AND  PARTICIPATING
 INDIVIDUAL  assets  in  a  manner  that  provides a financial benefit in
 retirement.
   2. Explore and establish or authorize investment options,  subject  to
 this  article, that offer enrollees AND PARTICIPATING INDIVIDUAL returns
 on contributions and the conversion  of  individual  retirement  savings
 account  balances  to secure retirement income without incurring debt or
 liabilities to the state.
   3. Establish or authorize the process by  which  interest,  investment
 earnings,  and  investment  losses  are  allocated to individual program
 accounts on a pro rata basis and are computed at the  interest  rate  on
 the balance of an individual's account.
   4.  Make  and enter into contracts necessary for the administration of
 the program and fund, including,  but  not  limited  to,  retaining  and
 contracting  with  investment  managers,  financial organizations, other
 financial and service providers, consultants, actuaries, counsel,  audi-
 tors, third-party administrators, and other professionals as necessary.
   5.  Conduct  a  periodic  review  of  the performance of any financial
 organizations, including, but not limited to, a review of returns, fees,
 and customer service. A copy of reviews shall be posted to the program's
 Internet website.
   6. Cause moneys in the program to  be  held  and  invested  as  pooled
 investments  or otherwise, with a view to achieving cost savings through
 efficiencies and economies of scale.
   7. Evaluate and establish or authorize the process for:
   (a) an enrollee to contribute a portion of his or  her  wages  to  the
 program via payroll deduction; and
   (b) the enrollment of participating employers in the program.
   8. The board may contract with financial organizations and third-party
 administrators  with  the  capability  to  receive  and process employee
 information and contributions  for  payroll  deduction  IRA  or  similar
 arrangements.
   9.  Evaluate  and  establish  or  authorize the process for enrollment
 including the process by which an employee may opt not to participate in
 the program, select a contribution level, select an  investment  option,
 and terminate participation in the program.
   10.  EVALUATE  AND  ESTABLISH OR AUTHORIZE THE PROCESS FOR THE PARTIC-
 IPATION AND ENROLLMENT OF ANY PARTICIPATING INDIVIDUAL WHO IS  AT  LEAST
 EIGHTEEN  YEARS OF AGE AND HAS NEW YORK TAXABLE INCOME WITHIN THE CALEN-
 DAR YEAR. SUCH PROCESS MAY INCLUDE THE ABILITY TO MAKE PERSONAL CONTRIB-
 UTIONS FROM A BANK ACCOUNT. THE BOARD SHALL ALSO  CONSIDER  THE  ABILITY
 FOR  PARTICIPATING  INDIVIDUALS TO SELECT THEIR CONTRIBUTION LEVEL WHICH
 S. 8654                             4
 
 MAY BE EXPRESSED AS A SET DOLLAR AMOUNT UPON ENROLLMENT,  THE  FREQUENCY
 OF  SUCH CONTRIBUTIONS, THE ABILITY TO MAKE SUCH CONTRIBUTIONS BY DIRECT
 DEPOSIT, ABILITY TO SELECT INVESTMENT OPTIONS, AND THE TERMINATION PROC-
 ESS.
   11.  Evaluate,  or cause to be evaluated, the need for, and procure as
 needed, insurance against any and all loss in connection with the  prop-
 erty, assets, or activities of the program, and indemnify as needed each
 member  of  the  board  from personal loss or liability resulting from a
 member's action or inaction as a member of the board.
   [11.] 12. Make provisions for the payment of administrative costs  and
 expenses  for  the  creation,  management, and operation of the program.
 Subject to appropriation, the state may pay administrative costs associ-
 ated with the creation and management of the  program  until  sufficient
 assets  are  available  in the program for that purpose. Thereafter, all
 administrative costs of the program, including repayment of any start-up
 funds provided by the state, shall be paid only out of moneys on deposit
 therein. However, private funds or federal funding received in order  to
 implement  the  program  until it is self-sustaining shall not be repaid
 unless those funds were offered contingent  upon  the  promise  of  such
 repayment.  The  board  shall keep its annual administrative expenses as
 low as possible.
   [12.]  13.  Allocate  administrative  fees  to  individual  retirement
 accounts in the program on a pro rata basis.
   [13.]  14. Set or authorize minimum and maximum contribution levels in
 accordance with limits established for  IRAs  by  the  Internal  Revenue
 Code.
   [14.]  15.  Facilitate education and outreach to employers and employ-
 ees[.] AND FACILITATE  THE  DEVELOPMENT  OF  EDUCATIONAL  MATERIALS  FOR
 PARTICIPATING INDIVIDUALS.
   [15.]  16.  Facilitate  compliance  by the program with all applicable
 requirements for the program under the Internal Revenue Code,  including
 tax  qualification requirements or any other applicable legal, financial
 reporting and accounting requirements.
   [16.] 17. Carry out the duties and obligations of the  program  in  an
 effective, efficient, and low-cost manner.
   [17.]  18.  Exercise any and all other powers reasonably necessary for
 the effectuation of the purposes, objectives,  and  provisions  of  this
 article.
   [18.]  19.  Determine  or  authorize  withdrawal  provisions,  such as
 economic hardships, portability and leakage.
   [19.] 20. Determine employee rights and enforcement of penalties.
   [20.] 21. Delegate such authority and responsibility for the  develop-
 ment and implementation of the program to the department of taxation and
 finance as the board deems proper.
   §  5.  Section 1307 of the general business law, as added by section 2
 of part X of chapter 55 of the laws of  2018,  is  amended  to  read  as
 follows:
   §  1307. Investment options. 1. The board shall establish or authorize
 a default investment option for enrollees AND PARTICIPATING  INDIVIDUALS
 who  fail  to  elect an investment option. In making such determination,
 the board shall consider the cost, risk profile, benefit level and  ease
 of  enrollment.  The  board  may  change the default option if the board
 determines that such change is in the best interests of the enrollees.
   2. The board may establish  or  authorize  any  additional  investment
 options that the board deems appropriate including but not limited to:
   (a) a conservative principal protection fund;
 S. 8654                             5
 
   (b) a growth fund;
   (c)  a  secure return fund whose primary objective is the preservation
 of the safety of principal and the provision of a  stable  and  low-risk
 rate  of  return; if the board elects to establish a secure return fund,
 the board may procure any insurance, annuity, or other product to insure
 the value of enrollees'  AND  PARTICIPATING  INDIVIDUALS'  accounts  and
 guarantee  a rate of return; the cost of such funding mechanism shall be
 paid out of the fund; under no circumstances shall the  board,  program,
 fund,  the state, or any participating employer assume any liability for
 investment or actuarial risk;  the  board  shall  determine  whether  to
 establish or authorize such investment options based upon an analysis of
 their cost, risk profile, benefit level, feasibility, and ease of imple-
 mentation;
   (d) an annuity fund;
   (e) a growth and income fund; or
   (f) a life cycle fund with a target date based upon factors determined
 by the board.
   §  6.  Section 1308 of the general business law, as added by section 2
 of part X of chapter 55 of the laws of 2018, is amended as follows:
   § 1308. Benefits. Interest, investment earnings, and investment losses
 shall be allocated to individual program accounts as authorized  by  the
 board pursuant to this article. An individual's retirement savings bene-
 fit  under  the  program  shall be an amount equal to the balance in the
 individual's program account on the date the retirement savings  benefit
 becomes  payable.  The  state shall have no liability for the payment of
 any benefit to any enrollee OR PARTICIPATING INDIVIDUAL in the program.
   § 7. Section 1309 of the general business law, as added by  section  2
 of  part X of chapter 55 of the laws of 2018 and subdivisions 3, 4 and 5
 as amended by chapter 452 of the laws of 2021, is  amended  to  read  as
 follows:
   §  1309.  Employer  and employee AND PARTICIPATING INDIVIDUAL informa-
 tional materials and disclosure forms. 1. Prior to the  opening  of  the
 program for enrollment, the board shall design and disseminate, or cause
 to be designed and disseminated, to all employers employer informational
 materials  and  employee  informational  materials,  which shall include
 background information on the  program,  and  necessary  disclosures  as
 required by law for employees.
   2.  PRIOR TO THE OPENING OF THE PROGRAM FOR ENROLLMENT FOR PARTICIPAT-
 ING INDIVIDUALS, THE BOARD SHALL  DESIGN  AND  MAKE  PUBLICLY  AVAILABLE
 INFORMATIONAL  MATERIALS  WHICH  SHALL INCLUDE BACKGROUND INFORMATION ON
 THE PROGRAM AND  HOW  TO  PARTICIPATE  AS  A  PARTICIPATING  INDIVIDUAL,
 INCLUDING  BUT  NOT  LIMITED  TO,  INFORMATION ON THE BENEFITS AND RISKS
 ASSOCIATED WITH MAKING CONTRIBUTIONS TO THE  PROGRAM,  THE  PROCESS  FOR
 MAKING  CONTRIBUTIONS,  THE CONTRIBUTION LEVELS THEY MAY CONTRIBUTE, THE
 PROCESS FOR WITHDRAWAL  OF  RETIREMENT  SAVINGS,  AND  THE  PROCESS  FOR
 SELECTING BENEFICIARIES.
   3.  The  employee AND PARTICIPATING INDIVIDUAL informational materials
 shall be made available in English, Spanish,  Haitian  Creole,  Chinese,
 Korean,  Russian,  Arabic, and any other language the board deems neces-
 sary.
   [3.] 4. The employee AND PARTICIPATING INDIVIDUAL informational  mate-
 rials  shall  include  a  disclosure  form.    The disclosure form shall
 explain, but not be limited to, all of the following:
   (a) the benefits and risks associated with making contributions to the
 program;
   (b) the process for making contributions to the program;
 S. 8654                             6
 
   (c) how to opt out of the program;
   (d)  the  process  by which an employee AND A PARTICIPATING INDIVIDUAL
 can participate in the program with a level  of  employee  contributions
 other than three percent;
   (e)  that they are not required to participate or contribute more than
 three percent;
   (f) the process for withdrawal of retirement savings;
   (g) the  process  for  selecting  beneficiaries  of  their  retirement
 savings;
   (h) how to obtain additional information about the program;
   (i)  that  employees  AND  PARTICIPATING INDIVIDUALS seeking financial
 advice should contact financial advisors, that  participating  employers
 are  not in a position to provide financial advice, and that participat-
 ing employers are not liable for decisions employees  make  pursuant  to
 this article;
   (j)  information  on  how  to  access any available financial literacy
 programs;
   (k) that the program fund is not guaranteed by the state; and
   (l) that they can opt out after they have been enrolled.
   [4.] 5. The employee informational materials shall also include a form
 for an employee to note his or her decision to opt out of  participation
 in the program or elect to participate with a level of employee contrib-
 utions other than three percent.
   [5.]  6.  Participating  employers  shall supply the employee informa-
 tional materials to existing employees at least one month prior  to  the
 participating employers' facilitation of access to the program.  Partic-
 ipating  employers  shall supply the employee informational materials to
 new employees at the time of hiring and new employees  may  opt  out  of
 participation in the program.
   §  8.  The  general  business  law  is amended by adding a new section
 1310-a to read as follows:
   § 1310-A. PROGRAM IMPLEMENTATION AND ENROLLMENT.  EXCEPT AS  OTHERWISE
 PROVIDED  IN THIS ARTICLE, THE PROGRAM SHALL BE IMPLEMENTED, AND ENROLL-
 MENT OF PARTICIPATING INDIVIDUALS SHALL BEGIN  NO  LATER  THAN  DECEMBER
 THIRTY-FIRST,  TWO  THOUSAND  TWENTY-TWO. THE PROVISIONS OF THIS SECTION
 SHALL BE IN FORCE AFTER THE BOARD OPENS THE PROGRAM FOR ENROLLMENT.
   1. PARTICIPATING INDIVIDUALS SHALL HAVE THE ABILITY TO  MAKE  CONTRIB-
 UTIONS INTO THE PROGRAM BY PERSONAL CONTRIBUTIONS FROM A BANK ACCOUNT OR
 BY  OTHER MEANS AS DETERMINED BY THE BOARD. THE PARTICIPATING INDIVIDUAL
 SHALL BE ABLE TO SELECT THE FREQUENCY AND THE CONTRIBUTION  LEVEL  WHICH
 MAY  BE EXPRESSED AS A SET DOLLAR AMOUNT UP TO THE DEDUCTIBLE AMOUNT FOR
 THE PARTICIPATING INDIVIDUAL'S TAXABLE YEAR UNDER  SECTION  219(B)(1)(A)
 OF  THE INTERNAL REVENUE CODE SUBJECT TO RULES PROMULGATED BY THE BOARD.
 PARTICIPATING INDIVIDUALS MAY CHANGE THEIR  CONTRIBUTION  LEVEL  AT  ANY
 TIME, SUBJECT TO RULES PROMULGATED BY THE BOARD.
   2.  PARTICIPATING  INDIVIDUALS MAY SELECT AN INVESTMENT OPTION OFFERED
 UNDER THE PROGRAM. PARTICIPATING INDIVIDUALS MAY CHANGE THEIR INVESTMENT
 OPTION AT ANY TIME, SUBJECT TO RULES PROMULGATED BY THE  BOARD.  IN  THE
 EVENT  THAT  A  PARTICIPATING  INDIVIDUAL  FAILS TO SELECT AN INVESTMENT
 OPTION, THAT PARTICIPATING INDIVIDUAL SHALL BE PLACED IN THE  INVESTMENT
 OPTION  SELECTED  OR  AUTHORIZED  BY THE BOARD AS THE DEFAULT UNDER THIS
 ARTICLE.
   3. A PARTICIPATING INDIVIDUAL MAY TERMINATE HIS OR HER  ENROLLMENT  IN
 THE PROGRAM AT ANY TIME IN A MANNER PRESCRIBED BY THE BOARD.
   4.  THE BOARD SHALL ESTABLISH AND MAINTAIN OR AUTHORIZE THE ESTABLISH-
 MENT AND MAINTENANCE OF A SECURE WEBSITE WHEREIN PARTICIPATING  INDIVID-
 S. 8654                             7

 UALS  MAY  LOG  IN  AND  ACQUIRE INFORMATION REGARDING CONTRIBUTIONS AND
 INVESTMENT INCOME ALLOCATED TO, WITHDRAWALS FROM, AND BALANCES IN  THEIR
 PROGRAM  ACCOUNTS  FOR  THE  REPORTING  PERIOD.  SUCH  WEBSITE MUST ALSO
 INCLUDE  INFORMATION  FOR  THE  PARTICIPATING INDIVIDUAL REGARDING OTHER
 OPTIONS AVAILABLE TO THE INDIVIDUAL AND  HOW  THEY  CAN  TRANSFER  THEIR
 ACCOUNTS  TO  OTHER PROGRAMS SHOULD THEY WISH TO DO SO. SUCH WEBSITE MAY
 INCLUDE ANY OTHER INFORMATION REGARDING THE PROGRAM  AS  THE  BOARD  MAY
 DETERMINE.
   § 9. This act shall take effect immediately.