S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4529
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 16, 2023
                                ___________
 
 Introduced  by M. of A. STIRPE, DICKENS, LUPARDO, REYES, HEVESI, BURGOS,
   GLICK, SIMON, JEAN-PIERRE, FAHY, MAGNARELLI, McMAHON, COLTON  --  read
   once and referred to the Committee on Governmental Employees
 
 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-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01813-01-3
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 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 OR PARTICIPATING INDIVIDUAL 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.
   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 IS EIGHTEEN
 YEARS OF AGE OR OLDER AND HAS NEW YORK  TAXABLE  INCOME  AS  DEFINED  IN
 SECTION  SIX  HUNDRED  ELEVEN OF THE TAX LAW WITHIN A CALENDAR YEAR, WHO
 ENROLLS IN THE PROGRAM INDEPENDENT OF AN EMPLOYMENT RELATIONSHIP WITH AN
 ELIGIBLE EMPLOYER, MAINTAINS AN ACCOUNT IN THE PROGRAM,  AND  IS  NOT  A
 PARTICIPATING EMPLOYEE.
   10.  "Payroll  deduction  IRA"  shall  mean  an arrangement by which a
 participating employer facilitates access for [enrollees]  EMPLOYEES  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 OR BY A PARTICIPATING INDIVIDUAL 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 FOR PRIVATE-SECTOR EMPLOYEES 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 administered 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 taxa-
 tion 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 and beneficiaries as follows:
   1.  for  the exclusive purposes of providing benefits to enrollees 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
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 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:
   § 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;
   (d)  provides  an efficient product to enrollees by pooling investment
 funds;
   (e) ensures the portability of benefits; and
   (f) provides for the deaccumulation of enrollee  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  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] EMPLOYEE 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.
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   10. EVALUATE AND ESTABLISH OR AUTHORIZE THE PROCESS  FOR  THE  PARTIC-
 IPATION AND ENROLLMENT OF ANY PARTICIPATING INDIVIDUAL.
   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]  ENROLLEE  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 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 FOR EMPLOYEES, the board shall design and dissem-
 inate,  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
 A. 4529                             5
 
 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;
   (c) how to opt out of the program;
   (d)  the  process  by which an employee can participate in the program
 with a level of employee contributions other than three percent;
   (e) THE PROCESS BY WHICH AN INDIVIDUAL CAN PARTICIPATE IN THE  PROGRAM
 AS A PARTICIPATING INDIVIDUAL;
   (F)  that [they] EMPLOYEES are not required to participate or contrib-
 ute more than three percent;
   [(f)] (G) the process for withdrawal of retirement savings;
   [(g)] (H) the process for selecting beneficiaries of their  retirement
 savings;
   [(h)] (I) how to obtain additional information about the program;
   [(i)]  (J) that employees AND PARTICIPATING INDIVIDUALS seeking finan-
 cial  advice  should  contact  financial  advisors,  that  participating
 employers  are  not  in a position to provide financial advice, and that
 participating employers are not  liable  for  decisions  employees  make
 pursuant to this article;
   [(j)] (K) information on how to access any available financial litera-
 cy programs;
   [(k)] (L) that the program fund is not guaranteed by the state; and
   [(l)] (M) 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.
   § 6. Subdivision 2 of section 1310 of the  general  business  law,  as
 amended  by  chapter  452  of  the  laws  of 2021, is amended to read as
 follows:
   2. [Enrollees] EMPLOYEES shall have the ability to select  a  contrib-
 ution  level into the program. This level may be expressed as a percent-
 age of wages or as a dollar amount up to the deductible amount  for  the
 [enrollee's]  EMPLOYEE'S  taxable year under section 219(b)(1)(A) of the
 Internal Revenue Code.  [Enrollees] EMPLOYEES may change their  contrib-
 ution  level  at any time, subject to rules promulgated by the board. If
 A. 4529                             6
 
 an [enrollee] EMPLOYEE fails to select a contribution  level  using  the
 form  described  in  this article, then he or she shall contribute three
 percent of his or her wages to the program, provided that such  contrib-
 utions  shall  not cause the [enrollee's] EMPLOYEE'S total contributions
 to  IRAs  for  the  year  to  exceed  the  deductible  amount  for   the
 [enrollee's]  EMPLOYEE'S  taxable year under section 219(b)(1)(A) of the
 Internal Revenue Code. The deduction of contributions from an employee's
 wages shall not begin until the thirtieth day after  such  employee  has
 been enrolled in the program.
   §  7.  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-FOUR. 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-
 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.
   § 8. This act shall take effect immediately.