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| To enact sections 113.51 to 113.78 of the Revised | 1 |
| Code to create, if certain conditions are met, the | 2 |
| Ohio Secure Choice Retirement Savings Program | 3 |
| under which certain private employers must offer | 4 |
| employees a payroll deposit retirement savings | 5 |
| arrangement, to establish the Ohio Secure Choice | 6 |
| Retirement Savings Trust from which retirement | 7 |
| benefits are to be paid to Program participants, | 8 |
| and to create the Ohio Secure Choice Retirement | 9 |
| Savings Investment Board, chaired by the Treasurer | 10 |
| of State, to oversee the operation of the Program. | 11 |
| Section 1. That sections 113.51, 113.52, 113.53, 113.54, | 12 |
| 113.55, 113.56, 113.57, 113.58, 113.59, 113.60, 113.61, 113.62, | 13 |
| 113.63, 113.64, 113.65, 113.66, 113.67, 113.68, 113.69, 113.70, | 14 |
| 113.71, 113.72, 113.73, 113.74, 113.75, 113.76, 113.77, and 113.78 | 15 |
| of the Revised Code be enacted to read as follows: | 16 |
| Sec. 113.51. As used in sections 113.51 to 113.78 of the | 17 |
| Revised Code: | 18 |
| (A)(1) "Eligible employee" means a person who is employed by | 19 |
| an eligible employer. | 20 |
| (2) "Eligible employee" does not include: | 21 |
| (a) Any employee covered under the "Railway Labor Act," 44 | 22 |
| Stat. 577, 45 U.S.C. 151, as amended, or any employee engaged in | 23 |
| interstate commerce so as not to be subject to the legislative | 24 |
| powers of the state, except insofar as application of sections | 25 |
| 113.51 to 113.77 of the Revised Code is authorized under the | 26 |
| United States Constitution or the laws of the United States; | 27 |
| (b) Any employee covered by a valid collective bargaining | 28 |
| agreement that expressly provides for a multiemployer Taft-Hartley | 29 |
| pension plan. | 30 |
| (B) "Eligible employer" means a person or entity engaged in a | 31 |
| business, industry, profession, trade, or other enterprise in this | 32 |
| state, whether for profit or not for profit, excluding any | 33 |
| governmental entity, that has twenty or more employees and that | 34 |
| satisfies the requirements to establish or participate in a | 35 |
| payroll deposit retirement savings arrangement. | 36 |
| (C) "IRA" means an individual retirement account or | 37 |
| individual retirement annuity under 26 U.S.C. 408(a) or 408(b). | 38 |
| (D) "Participating employer" means an eligible employer that | 39 |
| provides a payroll deposit retirement savings arrangement for | 40 |
| eligible employees under sections 113.51 to 113.77 of the Revised | 41 |
| Code. | 42 |
| (E) "Payroll deposit retirement savings arrangement" means an | 43 |
| arrangement by which an employer allows employees to remit payroll | 44 |
| deduction contributions to a retirement savings program. | 45 |
| (F) "Stated interest rate" means the rate of interest | 46 |
| allocated to participants' program accounts as determined by the | 47 |
| Ohio secure choice retirement savings investment board under | 48 |
| section 113.59 of the Revised Code. | 49 |
| (G) "Vendor" means a registered investment company or life | 50 |
| insurance company qualified to do business in this state that | 51 |
| provides retirement investment products. "Vendor" also includes a | 52 |
| company registered to do business in this state that provides | 53 |
| payroll services or recordkeeping services and offers retirement | 54 |
| plans or payroll deposit IRA arrangements using products of | 55 |
| regulated investment companies and insurance companies qualified | 56 |
| to do business in this state. "Vendor" does not include individual | 57 |
| registered representatives, brokers, financial planners, or | 58 |
| agents. | 59 |
| Sec. 113.52. (A) There is hereby established the Ohio secure | 60 |
| choice retirement savings program for the purpose of promoting | 61 |
| greater retirement savings for Ohio private employees in a | 62 |
| convenient, voluntary, low-cost, and portable manner. The program | 63 |
| shall be implemented and operated in accordance with sections | 64 |
| 113.51 to 113.77 of the Revised Code. | 65 |
| (B)There is hereby established a retirement savings trust to | 66 |
| be known as the Ohio secure choice retirement savings trust, which | 67 |
| shall be in the custody of the treasurer of state but shall not be | 68 |
| part of the state treasury. All contributions paid by employees | 69 |
| and employers into the trust shall be used exclusively for the | 70 |
| purposes of paying benefits to the participants of the program, | 71 |
| paying the costs of administering the program, and making | 72 |
| investments for the benefit of the program. All interest earnings | 73 |
| of the trust shall be credited to the trust. | 74 |
| Sec. 113.53. (A) There is hereby created the Ohio secure | 75 |
| choice retirement savings investment board. The board shall | 76 |
| oversee the establishment and operation of the Ohio secure choice | 77 |
| retirement savings program. The board shall consist of seven | 78 |
| members, as follows: | 79 |
| (1) The treasurer of state, who shall serve as chairperson; | 80 |
| (2) The director of budget and management, or the director's | 81 |
| designee; | 82 |
| (3) The auditor of state, or the auditor's designee; | 83 |
| (4) A member representing small business, appointed by the | 84 |
| minority leader of the senate; | 85 |
| (5) A member representing the public, appointed by the | 86 |
| speaker of the house of representatives; | 87 |
| (6) A member with retirement savings and investment | 88 |
| expertise, appointed by the president of the senate; | 89 |
| (7) A member representing employees, appointed by the | 90 |
| minority leader of the house of representatives. | 91 |
| (B) Initial appointments to the board shall be made not later | 92 |
| than ninety days after the effective date of this section. Of the | 93 |
| initial appointments made to the board, two shall be for a term | 94 |
| ending one year after the date of the appointment, and two shall | 95 |
| be for a term ending two years after the date of the appointment. | 96 |
| Thereafter, members shall be appointed to terms of four years, | 97 |
| with each term of office ending on the same day of the same month | 98 |
| as did the term that it succeeded. Vacancies on the board shall be | 99 |
| filled in the same manner as the initial appointment. | 100 |
| (C) Members of the board who are appointed shall serve at the | 101 |
| pleasure of the appointing authority. | 102 |
| (D) All members of the board shall serve without | 103 |
| compensation. Members of the board shall be reimbursed for | 104 |
| necessary travel expenses incurred in connection with their board | 105 |
| duties. | 106 |
| Sec. 113.54. The Ohio secure choice retirement savings | 107 |
| investment board, in the capacity of trustee, shall have the power | 108 |
| and authority to do all of the following: | 109 |
| (A) Adopt a seal and amend it from time to time; | 110 |
| (B) Employ staff; | 111 |
| (C) Enter into contracts necessary for the administration of | 112 |
| the Ohio secure choice retirement savings trust, including the | 113 |
| investment of funds held in the trust; | 114 |
| (D) Set minimum and maximum investment levels in accordance | 115 |
| with contribution limits set for IRAs by the Internal Revenue | 116 |
| Code; | 117 |
| (E) Accept any grants, gifts, appropriations, and other money | 118 |
| from the federal government, from the state or any political | 119 |
| subdivision of the state, and from any other person, firm, | 120 |
| partnership, or corporation for deposit in the trust to the credit | 121 |
| of the administrative fund or the program fund. | 122 |
| (F) Retain and contract with private financial institutions, | 123 |
| other financial and service providers, consultants, actuaries, | 124 |
| counsel, auditors, third-party administrators, and other | 125 |
| professionals as necessary; | 126 |
| (G) Appoint an administrator of the Ohio secure choice | 127 |
| retirement savings program, the costs of which shall be paid out | 128 |
| of funds held in the trust and shall not be attributed to the | 129 |
| administrative costs of the board in operating the trust, and | 130 |
| determine the duties of the program administrator and other staff | 131 |
| as necessary and set their compensation; | 132 |
| (H) Procure insurance against any loss in connection with the | 133 |
| property, assets, or activities of the trust, and secure private | 134 |
| underwriting and reinsurance to manage risk and insure the | 135 |
| retirement savings rate of return; | 136 |
| (I) Procure insurance indemnifying each member of the board | 137 |
| from personal loss or liability resulting from a member's action | 138 |
| or inaction as a member of the board; | 139 |
| (J) Collaborate and cooperate with private financial | 140 |
| institutions, other financial service providers, and business, | 141 |
| financial, trade, membership, and other organizations to the | 142 |
| extent necessary or desirable for the effective and efficient | 143 |
| design, implementation, and administration of the program and to | 144 |
| maximize outreach to eligible employers and eligible employees; | 145 |
| (K) Cause expenses incurred to initiate, implement, maintain, | 146 |
| and administer the program to be paid from contributions to, or | 147 |
| investment returns or assets of, the program or arrangements | 148 |
| established under the program, to the extent permitted under state | 149 |
| and federal law; | 150 |
| (L) Facilitate compliance by the program or payroll deposit | 151 |
| retirement savings arrangements established under the program with | 152 |
| all applicable requirements under the Internal Revenue Code, | 153 |
| including tax qualification requirements or any other applicable | 154 |
| law and accounting requirements, including providing or arranging | 155 |
| for assistance to program sponsors and individuals in complying | 156 |
| with applicable law and tax qualification requirements in a | 157 |
| cost-effective manner; | 158 |
| (M) Carry out the duties and obligations of the trust | 159 |
| pursuant to sections 113.51 to 113.77 of the Revised Code and | 160 |
| exercise any and all other powers as may be reasonably necessary | 161 |
| for the effectuation of the purposes, objectives, and provisions | 162 |
| of those sections pertaining to the trust. | 163 |
| Sec. 113.55. (A) The Ohio secure choice retirement savings | 164 |
| investment board shall segregate moneys received by the Ohio | 165 |
| secure choice retirement savings trust into two funds, which shall | 166 |
| be identified as the program fund and the administrative fund. | 167 |
| (B) Moneys in the program fund may be invested or reinvested | 168 |
| by the treasurer of state or may be invested in whole or in part | 169 |
| under contract with private money managers, as determined by the | 170 |
| board. | 171 |
| (C) With the approval of the board, transfers may be made | 172 |
| from the program fund to the administrative fund for the purpose | 173 |
| of paying operating costs associated with administering the trust | 174 |
| and as required by sections 113.51 to 113.77 of the Revised Code. | 175 |
| On an annual basis, expenditures from the administrative fund | 176 |
| shall not exceed more than one per cent of the total program fund. | 177 |
| All costs of administration of the trust shall be paid out of the | 178 |
| administrative fund. Operating costs associated with administering | 179 |
| the trust do not include the procurement of private underwriting | 180 |
| for the retirement savings' return. | 181 |
| Sec. 113.56. (A) The Ohio secure choice retirement savings | 182 |
| investment board may establish a segregated account within the | 183 |
| program fund to be known as the gain and loss reserve account. The | 184 |
| board shall have sole authority over the account, if established. | 185 |
| The account may be used to allocate interest at the stated | 186 |
| interest rate for program years in which the board determines that | 187 |
| the stated interest rate cannot be met from investment earnings. | 188 |
| (B) The board shall establish a goal for the balance of the | 189 |
| account and shall periodically review the sufficiency of the | 190 |
| account based on the recommendations of the board's actuary. | 191 |
| (C) The board may allocate excess earnings of the Ohio secure | 192 |
| choice retirement savings program with respect to assets | 193 |
| attributable to the program to the account. In addition, the board | 194 |
| may allocate any liability gains and losses to the account. Based | 195 |
| on an actuarial valuation following each program year, the board | 196 |
| shall determine annually the amount, if any, that is to be | 197 |
| allocated to the account for that program year. In determining | 198 |
| whether to allocate excess earnings to the account, the board | 199 |
| shall consider all of the following: | 200 |
| (1) Whether or not the program has excess earnings; | 201 |
| (2) The sufficiency of the account in light of the goal | 202 |
| established under division (B) of this section; | 203 |
| (3) The amount required for the program's administrative | 204 |
| costs; | 205 |
| (4) The amount required for making allocations to | 206 |
| participants' accounts at the stated interest rate. | 207 |
| (D) In determining whether to allocate liability gains and | 208 |
| losses to the account, the board shall consider the matters | 209 |
| described in divisions (C)(2), (3), and (4) of this section. | 210 |
| Sec. 113.57. (A) The Ohio secure choice retirement savings | 211 |
| investment board shall annually prepare and adopt a written | 212 |
| statement of investment policy that includes a risk management and | 213 |
| oversight program. The board shall adopt the investment policy and | 214 |
| any changes to the investment policy at a public hearing. | 215 |
| (B) The investment policy shall adhere to the following | 216 |
| principles: | 217 |
| (1) The primary objective of the investment policy is to | 218 |
| preserve the safety of principal and provide a stable and low-risk | 219 |
| rate of return. | 220 |
| (2) The investment policy shall mitigate risk by maintaining | 221 |
| a balanced investment portfolio that provides assurance that no | 222 |
| single investment or class of investments will have a | 223 |
| disproportionate impact on the total portfolio. | 224 |
| (C)(1) The board may invest the funds held in the trust only | 225 |
| in the following types of investments: | 226 |
| (a) Domestic and international equities; | 227 |
| (b) Medium-term and long-term debt obligations of domestic | 228 |
| corporations; | 229 |
| (c) United States government and government-sponsored entity | 230 |
| debt obligations; | 231 |
| (d) Real estate commingled funds that invest in publicly | 232 |
| traded real estate securities; | 233 |
| (e) Money market instruments, cash, and money market mutual | 234 |
| funds that are registered in the United States and denominated in | 235 |
| United States dollars; | 236 |
| (f) Investments in existing, rated mutual funds that are | 237 |
| registered in the United States and denominated in United States | 238 |
| dollars; | 239 |
| (g) Insurance agreements; | 240 |
| (h) Bank products insured by the federal deposit insurance | 241 |
| corporation. | 242 |
| (2) Equities shall not exceed fifty per cent of the overall | 243 |
| asset allocation of the investment portfolio. | 244 |
| (D) The investment policy shall also adhere to all of the | 245 |
| following restrictions: | 246 |
| (1) Borrowing for investment purposes, or leverage, is | 247 |
| prohibited. | 248 |
| (2) Instruments known as variable rate demand notes, | 249 |
| floaters, inverse floaters, leveraged floaters, and equity-linked | 250 |
| securities are not permitted. Investment in any instrument that is | 251 |
| commonly considered a derivative instrument, including, but not | 252 |
| limited to, options, futures, swaps, caps, floors, and collars, is | 253 |
| prohibited. | 254 |
| (3) Contracting to sell securities not yet acquired in order | 255 |
| to purchase other securities for purposes of speculating on | 256 |
| developments or trends in the market is prohibited. | 257 |
| Sec. 113.58. (A) The Ohio secure choice retirement savings | 258 |
| investment board shall design the risk management and oversight | 259 |
| program required under section 113.57 of the Revised Code to | 260 |
| ensure that an effective risk management system is in place to | 261 |
| monitor the risk levels of the Ohio secure choice retirement | 262 |
| savings program investment portfolio and ensure that the risks | 263 |
| taken are prudent and properly managed. The program shall be | 264 |
| managed to provide an integrated process for overall risk | 265 |
| management on both a consolidated and disaggregated basis, and to | 266 |
| monitor investment returns as well as risk to determine if the | 267 |
| risks taken are adequately compensated compared to applicable | 268 |
| performance benchmarks and standards. | 269 |
| (B)(1) The board shall contract with an investment management | 270 |
| entity or entities, the costs of which shall be paid out of funds | 271 |
| held in the Ohio secure choice retirement savings trust and shall | 272 |
| not be attributed to the administrative costs of the board in | 273 |
| operating the trust. Not later than thirty days after the close of | 274 |
| each month, the board shall place on file for public inspection | 275 |
| during business hours a report with respect to investments made | 276 |
| for the program and a report of deposits in financial | 277 |
| institutions. | 278 |
| (2) The investment manager chosen by the board shall report | 279 |
| the following information to the board within twenty days | 280 |
| following the end of each month: | 281 |
| (a) The type of investment, name of the issuer, date of | 282 |
| maturity, and the par and dollar amount invested in each security, | 283 |
| investment, and money within the program fund; | 284 |
| (b) The weighted average maturity of the investments within | 285 |
| the program fund; | 286 |
| (c) Any amounts in the program fund that are under the | 287 |
| management of private money managers; | 288 |
| (d) The market value as of the date of the report and the | 289 |
| source of this valuation for each security within the program | 290 |
| fund; | 291 |
| (e) A description of compliance with the statement of | 292 |
| investment policy. | 293 |
| Sec. 113.59. (A) The Ohio secure choice retirement savings | 294 |
| program shall include one or more payroll deposit retirement | 295 |
| savings arrangements as determined by the Ohio secure choice | 296 |
| retirement savings investment board. | 297 |
| (B)(1) Prior to the first day of July of the initial program | 298 |
| year, and prior to the beginning of each program year thereafter, | 299 |
| the board shall adopt a program amendment in coordination with the | 300 |
| investment management entity or entities under contract with the | 301 |
| program to set the stated interest rate for the following program | 302 |
| year. | 303 |
| (2) Interest shall be allocated to program accounts and shall | 304 |
| be computed at the stated interest rate on the balance of an | 305 |
| individual's account and shall be compounded daily. | 306 |
| (C) An individual's retirement savings benefit under the | 307 |
| program shall be an amount equal to the balance in the | 308 |
| individual's program account on the date the retirement savings | 309 |
| benefit becomes payable. | 310 |
| Sec. 113.60. In addition to the powers and authority granted | 311 |
| to the Ohio secure choice retirement savings investment board | 312 |
| pursuant to section 113.54 of the Revised Code, the board shall | 313 |
| have the power and authority to do the following: | 314 |
| (A) Cause the Ohio secure choice retirement savings program | 315 |
| and payroll deposit retirement savings arrangements to be | 316 |
| designed, established, and operated in a manner consistent with | 317 |
| all of the following: | 318 |
| (1) In accordance with best practices for retirement savings | 319 |
| vehicles; | 320 |
| (2) To maximize participation, saving, and sound investment | 321 |
| practices, and appropriate selection of default investments; | 322 |
| (3) With simplicity, ease of administration for participating | 323 |
| employers, and portability of benefits. | 324 |
| (B) Arrange for collective, common, and pooled investment of | 325 |
| assets of the program or arrangements, including investments in | 326 |
| conjunction with other funds with which those assets are permitted | 327 |
| to be collectively invested, with a view to saving costs through | 328 |
| efficiencies and economies of scale; | 329 |
| (C) Explore and establish investment options that offer | 330 |
| employees returns on contributions and the conversion of | 331 |
| individual retirement savings account balances to secure | 332 |
| retirement income without incurring debt or liabilities to the | 333 |
| state; | 334 |
| (D) Disseminate educational information concerning saving and | 335 |
| planning for retirement; | 336 |
| (E) Disseminate information concerning the tax credits | 337 |
| available to small business owners for establishing new retirement | 338 |
| plans and the federal retirement savings contribution credit | 339 |
| available to lower and moderate income households for qualified | 340 |
| savings contributions; | 341 |
| (F) Submit progress and status reports to participating | 342 |
| employers and eligible employees; | 343 |
| (G) If necessary, determine the eligibility of an employer, | 344 |
| employee, or other individual to participate in the program; | 345 |
| (H) Evaluate and establish the process by which an eligible | 346 |
| employee of an eligible employer is able to contribute a portion | 347 |
| of the employee's salary or wages to the program for automatic | 348 |
| deposit of those contributions and the participating employer | 349 |
| provides a payroll deposit retirement savings arrangement to | 350 |
| forward the employee contribution and related information to the | 351 |
| program or its agents. This may include, but is not limited to, | 352 |
| financial services companies and third-party administrators with | 353 |
| the capability to receive and process employee information and | 354 |
| contributions for payroll deposit retirement savings arrangements | 355 |
| or other arrangements authorized under sections 113.51 to 113.77 | 356 |
| of the Revised Code; | 357 |
| (I) Design and establish the process for the enrollment of | 358 |
| program participants; | 359 |
| (J) Allow participating employers to use the program to remit | 360 |
| employees' contributions to their individual retirement accounts | 361 |
| on their employees' behalf; | 362 |
| (K) Allow participating employers to make their own | 363 |
| contributions to their employees' individual retirement accounts, | 364 |
| provided that the contributions would be permitted under the | 365 |
| Internal Revenue Code and would not cause the program to be | 366 |
| treated as an employee benefit plan under the "Employee Retirement | 367 |
| Income Security Act," 88 Stat. 829, 29 U.S.C. 1001, as amended; | 368 |
| (L) Evaluate and establish the process by which an individual | 369 |
| or an employee of a nonparticipating employer may enroll in and | 370 |
| make contributions to the program. | 371 |
| Sec. 113.61. The Ohio secure choice retirement savings | 372 |
| investment board shall ensure that an insurance, annuity, or other | 373 |
| funding mechanism is in place at all times that protects the value | 374 |
| of participants' accounts. The funding mechanism shall protect, | 375 |
| indemnify, and hold the state harmless at all times against any | 376 |
| and all liability in connection with funding retirement benefits | 377 |
| under sections 113.51 to 113.77 of the Revised Code. The costs of | 378 |
| the funding mechanism shall be paid out of the funds held in the | 379 |
| Ohio secure choice retirement savings trust and shall not be | 380 |
| attributed to the administrative costs of the board in operating | 381 |
| the trust. | 382 |
| Sec. 113.62. (A) A member of the Ohio secure choice | 383 |
| retirement savings investment board, an administrator of the Ohio | 384 |
| secure choice retirement savings program, and an officer or | 385 |
| employee of the program shall not do any of the following: | 386 |
| (1) Directly or indirectly have any interest in any | 387 |
| investment made for the program or in the gains or profits | 388 |
| accruing from any investment made for the program; | 389 |
| (2) Borrow any funds or deposits of the Ohio secure choice | 390 |
| retirement savings trust, or use those funds or deposits in any | 391 |
| manner, for the individual's own purpose or as an agent or partner | 392 |
| of others; | 393 |
| (3) Become an endorser, surety, or obligor on any investment | 394 |
| made for the program. | 395 |
| (B) The members of the board, the program administrators, and | 396 |
| the officers and employees of the program shall discharge their | 397 |
| duties with respect to the trust solely in the interest of the | 398 |
| program participants, as follows: | 399 |
| (1) For the exclusive purposes of providing benefits to | 400 |
| program participants and defraying reasonable expenses of | 401 |
| administering the program; | 402 |
| (2) By investing with the care, skill, prudence, and | 403 |
| diligence under the circumstances then prevailing that a prudent | 404 |
| person acting in a like capacity and familiar with those matters | 405 |
| would use in the conduct of an enterprise of a like character and | 406 |
| with like aims. | 407 |
| Sec. 113.63. (A) Prior to opening the Ohio secure choice | 408 |
| retirement savings program for enrollment, the Ohio secure choice | 409 |
| retirement savings investment board shall design and disseminate | 410 |
| to employers an employee information packet. The packet shall | 411 |
| provide background information on the program, including, but not | 412 |
| be limited to, all of the following: | 413 |
| (1) The benefits and risks associated with making | 414 |
| contributions to the program; | 415 |
| (2) The mechanics of how to make contributions to the | 416 |
| program; | 417 |
| (3) How to opt out of the program; | 418 |
| (4) The process for withdrawal of retirement savings; | 419 |
| (5) How to obtain additional information on the program. | 420 |
| (B)(1) The employee information packet shall include a | 421 |
| disclosure form that clearly articulates the following: | 422 |
| (a) That employees seeking financial advice should contact | 423 |
| financial advisors, that employers are not in a position to | 424 |
| provide financial advice, and that employers are not liable for | 425 |
| decisions employees make with respect to the program; | 426 |
| (b) That the program is not an employer-sponsored retirement | 427 |
| plan; | 428 |
| (c) That the Ohio secure choice retirement savings trust is | 429 |
| privately insured and is not guaranteed by the state. | 430 |
| (2) The disclosure form shall include a signature line for | 431 |
| the employee to sign and date acknowledging that the employee has | 432 |
| read all of the disclosures and understands their content. | 433 |
| (C) The employee information packet shall also include an | 434 |
| opt-out form for an eligible employee to declare the employee's | 435 |
| decision to opt out of participation in the program. The opt-out | 436 |
| notation shall be simple and concise and drafted in a manner that | 437 |
| the board deems necessary to appropriately evidence the employee's | 438 |
| understanding that the employee is choosing not to automatically | 439 |
| deduct earnings to save for retirement. | 440 |
| (D)(1) Individuals who are employed as of the date the | 441 |
| program commences shall be given the employee information packet | 442 |
| as soon as possible after that date. Employees shall review the | 443 |
| packet and sign the disclosure form at that time. | 444 |
| (2) For employees hired on or after the commencement of the | 445 |
| program, the employee information packet shall be supplied at the | 446 |
| time of hiring. All new employees shall review the packet and sign | 447 |
| the disclosure form at that time. | 448 |
| Sec. 113.64. (A) If, prior to opening the Ohio secure choice | 449 |
| retirement savings program for enrollment, there is sufficient | 450 |
| interest by vendors to participate and provide the necessary | 451 |
| funding, the Ohio secure choice retirement savings investment | 452 |
| board shall establish both of the following: | 453 |
| (1) A retirement investments clearinghouse on the board's | 454 |
| internet web site; | 455 |
| (2) A vendor registration process through which information | 456 |
| about employer-sponsored retirement plans, and payroll deduction | 457 |
| IRAs offered by private sector providers, is made available on the | 458 |
| clearinghouse for consideration by eligible employers. | 459 |
| (B) Vendors that would like to participate in the board's | 460 |
| retirement investments clearinghouse and be listed on the board's | 461 |
| internet web site as a registered vendor shall provide the board | 462 |
| with all of the following: | 463 |
| (1) A statement of the vendor's experience in this and any | 464 |
| other state in providing employer-sponsored retirement plans and | 465 |
| payroll deduction IRAs; | 466 |
| (2) A description of the types of retirement investment | 467 |
| products offered and their features, the services available to | 468 |
| retirement plan participants, and the manner in which product | 469 |
| prospectuses or other relevant product information may be | 470 |
| accessed; | 471 |
| (3) A disclosure of all expenses paid directly or indirectly | 472 |
| by retirement plan participants, including, but not limited to, | 473 |
| penalties for early withdrawals, declining or fixed withdrawal | 474 |
| charges, surrender or deposit charges, management fees, and annual | 475 |
| fees, supported by documentation as required for prospectus | 476 |
| disclosure by the national association of securities dealers and | 477 |
| the securities and exchange commission. Vendors shall be required | 478 |
| to provide information regarding the impact of product fees upon a | 479 |
| hypothetical investment, as described in section 113.67 of the | 480 |
| Revised Code. | 481 |
| (4) A discussion of the ability, experience, and commitment | 482 |
| of the vendor to provide retirement counseling and education | 483 |
| services, including, but not limited to, access to group meetings | 484 |
| and individual counseling by various means, including telephone | 485 |
| and telecommunications devices for the deaf, internet, and | 486 |
| face-to-face consultations by registered representatives; | 487 |
| (5) A statement of the financial strength of the vendor by | 488 |
| identifying its ratings assigned by nationally recognized rating | 489 |
| services that evaluate the financial strength of similar | 490 |
| companies; | 491 |
| (6) The location of offices and counselors, individual | 492 |
| registered representatives, brokers, financial planners, agents, | 493 |
| or other methods of distribution, of the vendor that would serve | 494 |
| employers and their employees in this state; | 495 |
| (7) A description of the ability of the vendor to comply with | 496 |
| all applicable provisions of federal and state law governing | 497 |
| retirement plans, including minimum distribution requirements and | 498 |
| contribution limits; | 499 |
| (8) To the extent applicable, a demonstration of the ability | 500 |
| of the vendor to offer an appropriate array of accumulation | 501 |
| funding options, including, but not limited to, investment options | 502 |
| that offer guaranteed returns on contributions and the conversion | 503 |
| of retirement savings account balances to secure retirement | 504 |
| income, as well as a diversified mix of value, growth, growth and | 505 |
| income, hybrid, and index funds or accounts across large, medium, | 506 |
| and small capitalization asset classes, both domestic and | 507 |
| international; | 508 |
| (9) A discussion of the range of administrative and customer | 509 |
| services provided, including asset allocation, accounting and | 510 |
| administration of benefits for individual participants, | 511 |
| recordkeeping for individual participants, asset purchase, | 512 |
| control, and safekeeping, execution of a participant's | 513 |
| instructions as to asset and contribution allocation, calculation | 514 |
| of daily net asset values, direct access for participants to their | 515 |
| account information, periodic reporting that is not less than | 516 |
| quarterly to participants on their account balances and | 517 |
| transactions, and compliance with the standard of care consistent | 518 |
| with federal law and applicable to the provision of investment | 519 |
| services; | 520 |
| (10) Certification by the vendor that the information | 521 |
| provided to the board accurately reflects the provisions of the | 522 |
| retirement investment products it is registering. | 523 |
| (C) The board shall prescribe the format in which vendors are | 524 |
| to supply the information and data required under division (B) of | 525 |
| this section. | 526 |
| Sec. 113.65. Once annually, the Ohio secure choice | 527 |
| retirement savings investment board shall offer vendors an | 528 |
| opportunity to register to participate in the retirement | 529 |
| investments clearinghouse. Renewal of registration shall be | 530 |
| required at least once every five years thereafter for vendors | 531 |
| that wish to continue to participate. The board shall provide | 532 |
| public notice prior to the initial registration, annual | 533 |
| registration, and registration renewal periods. | 534 |
| Sec. 113.66. (A) The Ohio secure choice retirement savings | 535 |
| investment board may remove a vendor from the retirement | 536 |
| investments clearinghouse if the vendor submits materially | 537 |
| inaccurate information to the board, does not remit assessed fees | 538 |
| within sixty days, or fails to submit notice of material changes | 539 |
| to its registered investment products. Vendors found to have | 540 |
| submitted materially inaccurate information to the board shall be | 541 |
| allowed sixty days to correct the information. | 542 |
| (B) The board shall remove a vendor from the clearinghouse if | 543 |
| investments offered by the vendor are products of a regulated | 544 |
| investment company or insurance company that is not authorized to | 545 |
| do business in this state. | 546 |
| (C) The board shall establish an appeals process for vendors | 547 |
| that are denied registration or removed from the clearinghouse. | 548 |
| Sec. 113.67. (A) The retirement investments clearinghouse | 549 |
| shall include information on investment performance based upon the | 550 |
| investment's average annual total return as measured by a | 551 |
| nationally recognized rating service selected by the Ohio secure | 552 |
| choice retirement savings investment board for standard periods of | 553 |
| time of not less than one year. | 554 |
| (B) The board's internet web site shall include a table | 555 |
| showing, for each registered investment product, the total fee | 556 |
| cost in dollars incurred by an investor who initially invested | 557 |
| five thousand dollars and earned a five per cent rate of return | 558 |
| for one-, five-, ten-, fifteen-, and twenty-year time periods. | 559 |
| This table shall be accompanied by a disclaimer that the rate of | 560 |
| return is for purposes of illustrating the respective impacts of | 561 |
| different fee amounts on each investment, and is not to predict | 562 |
| future investment returns. | 563 |
| (C) A vendor shall not charge a fee associated with a product | 564 |
| registered on the retirement investments clearinghouse that is not | 565 |
| disclosed therein. | 566 |
| Sec. 113.68. The Ohio secure choice retirement savings | 567 |
| investment board shall notify eligible employers of the existence | 568 |
| of, and the internet web site address for, the retirement | 569 |
| investments clearinghouse. | 570 |
| Sec. 113.69. (A) The actual cost of establishing the | 571 |
| retirement investments clearinghouse and the vendor registration | 572 |
| system shall be borne equally by registered vendors, based on the | 573 |
| total number of registered vendors. At the close of the initial | 574 |
| registration period, each registered vendor shall pay a one-time | 575 |
| establishment fee equal to a pro rata share of the establishment | 576 |
| costs, as determined by the Ohio secure choice retirement savings | 577 |
| investment board. The one-time establishment fee charged to | 578 |
| vendors that register with the board after the close of the | 579 |
| initial registration period shall be distributed equally among | 580 |
| registered vendors that have paid the establishment fee and | 581 |
| credited toward subsequent maintenance and administrative fees | 582 |
| charged to each vendor. | 583 |
| (B) The actual cost of maintaining the retirement investments | 584 |
| clearinghouse and the vendor registration system, and the costs | 585 |
| associated with publicizing the availability of the clearinghouse | 586 |
| to eligible employers, shall be borne equally by registered | 587 |
| vendors, based on the total number of registered vendors. Each | 588 |
| registered vendor shall pay a renewal fee equal to a pro rata | 589 |
| share of the maintenance costs, as determined by the board. | 590 |
| (C) Each registered vendor shall pay an administrative fee | 591 |
| for each retirement investment product it offers to employers, | 592 |
| which fee shall represent the actual costs associated with | 593 |
| processing the information related to the investment option and | 594 |
| presenting it on the retirement investments clearinghouse, as | 595 |
| determined by the board. | 596 |
| (D) The board shall not use funds held in the Ohio secure | 597 |
| choice retirement savings trust to establish or maintain the | 598 |
| retirement investments clearinghouse or the vendor registration | 599 |
| system. | 600 |
| Sec. 113.70. (A) The Ohio secure choice retirement savings | 601 |
| investment board and the Ohio secure choice retirement savings | 602 |
| program, and its officers and employees, are not responsible for, | 603 |
| and shall not be held liable for, the adequacy of the information | 604 |
| provided by the participating vendors and contained in the | 605 |
| retirement investments clearinghouse. The clearinghouse maintained | 606 |
| by the board serves only to provide information supplied by the | 607 |
| participating vendors for the consideration of the selection of | 608 |
| retirement investment products. | 609 |
| (B) Participating vendors shall not utilize the program's | 610 |
| logo, or claim or infer endorsement or recommendation by the board | 611 |
| or the program with respect to products and services identified by | 612 |
| the vendors in the clearinghouse. At the discretion of the board, | 613 |
| a failure to comply with this division may lead to removal from | 614 |
| the registry. | 615 |
| (C) The board and the program shall not be held liable for | 616 |
| the actions of registered vendors. | 617 |
| Sec. 113.71. (A) Once the Ohio secure choice retirement | 618 |
| savings program is open for enrollment, any employer may choose to | 619 |
| have a payroll deposit retirement savings arrangement to allow | 620 |
| employee participation in the program. | 621 |
| (B)(1) Beginning three months after the program is open for | 622 |
| enrollment, eligible employers that have more than one hundred | 623 |
| eligible employees and that do not offer an employer-sponsored | 624 |
| retirement plan or automatic enrollment payroll deduction IRA | 625 |
| shall have a payroll deposit retirement savings arrangement to | 626 |
| allow employee participation in the program. | 627 |
| (2) Beginning six months after the program is open for | 628 |
| enrollment, eligible employers that have more than fifty eligible | 629 |
| employees and that do not offer an employer-sponsored retirement | 630 |
| plan or automatic enrollment payroll deduction IRA shall have a | 631 |
| payroll deposit retirement savings arrangement to allow employee | 632 |
| participation in the program. | 633 |
| (3) Beginning nine months after the program is open for | 634 |
| enrollment, all other eligible employers that do not offer an | 635 |
| employer-sponsored retirement plan or automatic enrollment payroll | 636 |
| deduction IRA shall have a payroll deposit retirement savings | 637 |
| arrangement to allow employee participation in the program. | 638 |
| (C)(1) Each eligible employee shall be enrolled in the | 639 |
| program unless the employee elects not to participate in the | 640 |
| program by noting that decision on the opt-out form. | 641 |
| (2) Following initial implementation of the program, | 642 |
| participating employers shall, at least once every two years, | 643 |
| designate an open enrollment period during which eligible | 644 |
| employees that previously opted out of the program may be enrolled | 645 |
| in the program unless the employee again elects to opt out. | 646 |
| (3) An employee who elected to opt out of the program and who | 647 |
| subsequently wants to participate may only enroll during the | 648 |
| employer's designated open enrollment period or, if permitted by | 649 |
| the employer, at an earlier time. | 650 |
| (4) An employee may terminate the employee's participation in | 651 |
| the program at any time in a manner prescribed by the Ohio secure | 652 |
| choice retirement savings investment board and, thereafter, by | 653 |
| making a notation on the opt-out form. | 654 |
| (D)(1) A participating employee shall contribute at least | 655 |
| three per cent of the employee's annual salary or wages to the | 656 |
| program. | 657 |
| (2) The board may adjust the minimum contribution amount set | 658 |
| forth in division (D)(1) of this section to no less than two per | 659 |
| cent and no more than four per cent and may vary that amount | 660 |
| within the two per cent to four per cent range for participating | 661 |
| employees according to the length of time the employee has | 662 |
| contributed to the program. | 663 |
| (E) Employers may, at any time, set up an employer-sponsored | 664 |
| retirement plan, such as a defined benefit plan or a 401(k), | 665 |
| simplified employee pension plan, or savings incentive match plan | 666 |
| for employees plan, or offer an automatic enrollment payroll | 667 |
| deduction IRA, instead of having a payroll deposit retirement | 668 |
| savings arrangement to allow employee participation in the | 669 |
| program. | 670 |
| Sec. 113.72. (A) Employers shall not be held liable for an | 671 |
| employee's decision to participate in, or opt out of, the Ohio | 672 |
| secure choice retirement savings program, or for the investment | 673 |
| decisions of employees whose assets are deposited in the program. | 674 |
| (B) An employer shall not: | 675 |
| (1) Be considered a fiduciary of the Ohio secure choice | 676 |
| retirement savings trust or the program; | 677 |
| (2) Bear responsibility for the administration, investment, | 678 |
| or investment performance of the program; | 679 |
| (3) Be held liable with regard to investment returns, program | 680 |
| design, and benefits paid to program participants. | 681 |
| (C) An employer's voluntary contribution under division (J) | 682 |
| of section 113.60 of the Revised Code shall not in any way | 683 |
| contradict the provisions of this section or change the employer's | 684 |
| relationship to the program or an employer's obligations to | 685 |
| employees. | 686 |
| Sec. 113.73. (A) Each eligible employer that, without good | 687 |
| cause, fails to allow its eligible employees to participate in the | 688 |
| Ohio secured choice retirement savings program shall be notified | 689 |
| by the treasurer of state of the employer's failure to comply with | 690 |
| sections 113.51 to 113.77 of the Revised Code. After an | 691 |
| administrative hearing, the treasurer of state shall impose a fine | 692 |
| of two hundred fifty dollars per eligible employee if | 693 |
| noncompliance by the employer extends ninety or more days after | 694 |
| receipt of the notice. If, after an administrative hearing, the | 695 |
| employer is found to be in noncompliance one hundred or more days | 696 |
| after receipt of the notice, the treasurer of state shall impose | 697 |
| an additional fine of five hundred dollars per eligible employee. | 698 |
| (B) All fines collected under this section shall be deposited | 699 |
| into the administration fund of the Ohio secure choice retirement | 700 |
| savings trust. | 701 |
| (C) The treasurer of state may charge the Ohio secure choice | 702 |
| retirement savings investment board a reasonable fee for costs the | 703 |
| treasurer of state's office incurs in implementing, administering, | 704 |
| and enforcing the program. | 705 |
| Sec. 113.74. The state shall not be liable for payment of | 706 |
| the retirement savings benefits earned by participants in the Ohio | 707 |
| secure choice retirement savings program. Any financial liability | 708 |
| for the payment of benefits in excess of funds available under the | 709 |
| program shall be borne by the entities with whom the Ohio secure | 710 |
| choice retirement savings investment board contracts to provide an | 711 |
| insurance, annuity, or other funding mechanism to protect the | 712 |
| value of participants' accounts pursuant to section 113.61 of the | 713 |
| Revised Code. The state, and any of the funds of the state, shall | 714 |
| not be obligated for payment of the retirement savings benefits. | 715 |
| Sec. 113.75. (A) Not later than the first day of August of | 716 |
| each year, the Ohio secure retirement savings investment board | 717 |
| shall submit an audited financial report, prepared in accordance | 718 |
| with generally accepted accounting principles, on the operations | 719 |
| of the Ohio secure choice retirement savings trust to the | 720 |
| governor, the director of budget and management, the auditor of | 721 |
| state, and the general assembly. The annual audit shall be | 722 |
| conducted by an independent certified public accountant and shall | 723 |
| include, but not be limited to, direct and indirect costs | 724 |
| attributable to the use of outside consultants, independent | 725 |
| contractors, and any other persons who are not state employees. | 726 |
| (B) The annual audit shall be supplemented by the following | 727 |
| information prepared by the board: | 728 |
| (1) Any relevant studies or evaluations prepared in the | 729 |
| preceding year; | 730 |
| (2) A summary of the benefits provided by the trust including | 731 |
| the number of participants in the trust; | 732 |
| (3) Any other information that is relevant in order to make a | 733 |
| full, fair, and effective disclosure of the operations of the | 734 |
| trust. | 735 |
| Sec. 113.76. The Ohio secure choice retirement savings | 736 |
| investment board shall adopt rules it deems necessary to implement | 737 |
| sections 113.51 to 113.77 of the Revised Code consistent with the | 738 |
| Internal Revenue Code and regulations issued thereunder to ensure | 739 |
| that the Ohio secure choice retirement savings program meets all | 740 |
| criteria for federal tax-deferral or tax-exempt benefits, or both. | 741 |
| Sec. 113.77. The Ohio secure choice retirement savings | 742 |
| program shall be suspended if the payroll deposit retirement | 743 |
| savings arrangements offered under the program fail to qualify for | 744 |
| the favorable federal income tax treatment ordinarily accorded to | 745 |
| IRAs under the Internal Revenue Code or if it is determined that | 746 |
| the program is an employee benefit plan under the "Employee | 747 |
| Retirement Income Security Act," 88 Stat. 829, 29 U.S.C. 1001, as | 748 |
| amended. | 749 |
| Sec. 113.78. Sections 113.51 to 113.77, except for section | 750 |
| 113.53, of the Revised Code shall not be implemented unless all of | 751 |
| the following occur: | 752 |
| (A) The Ohio secure choice retirement savings investment | 753 |
| board conducts a market analysis to determine whether the | 754 |
| necessary conditions for implementation of sections 113.51 to | 755 |
| 113.77 of the Revised Code can be met, including, but not limited | 756 |
| to, likely participation rates, participants' comfort with various | 757 |
| investment vehicles and degree of risk, contribution levels, and | 758 |
| the rate of account closures and rollovers. The board shall | 759 |
| conduct this analysis only if sufficient funds to initiate and | 760 |
| complete the required market analysis are made available through a | 761 |
| nonprofit or private entity or from federal funding. The Ohio | 762 |
| secure choice retirement savings program fund is hereby created in | 763 |
| the state treasury. The fund shall consist of all moneys made | 764 |
| available to conduct the market analysis. The board shall forward | 765 |
| and offer to present its findings to the chair of the committees | 766 |
| of the house of representatives and the senate that have | 767 |
| jurisdiction over commerce and labor matters. | 768 |
| (B) The board determines that, based on the market analysis, | 769 |
| sections 113.51 to 113.77 of the Revised Code will be | 770 |
| self-sustaining. | 771 |
| (C) Sufficient funds are made available through a nonprofit | 772 |
| or other private entity, federal funding, or appropriations to | 773 |
| allow the board to implement sections 113.51 to 113.77 of the | 774 |
| Revised Code until the Ohio secure choice retirement savings trust | 775 |
| has sufficient funds to be self-sustaining. | 776 |