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S. B. No. 199 As IntroducedAs Introduced
130th General Assembly | Regular Session | 2013-2014 |
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A BILL
To enact sections 113.51 to 113.78 of the Revised
Code to create, if certain conditions are met, the
Ohio Secure Choice Retirement Savings Program
under which certain private employers must offer
employees a payroll deposit retirement savings
arrangement, to establish the Ohio Secure Choice
Retirement Savings Trust from which retirement
benefits are to be paid to Program participants,
and to create the Ohio Secure Choice Retirement
Savings Investment Board, chaired by the Treasurer
of State, to oversee the operation of the Program.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 113.51, 113.52, 113.53, 113.54,
113.55, 113.56, 113.57, 113.58, 113.59, 113.60, 113.61, 113.62,
113.63, 113.64, 113.65, 113.66, 113.67, 113.68, 113.69, 113.70,
113.71, 113.72, 113.73, 113.74, 113.75, 113.76, 113.77, and 113.78
of the Revised Code be enacted to read as follows:
Sec. 113.51. As used in sections 113.51 to 113.78 of the
Revised Code:
(A)(1) "Eligible employee" means a person who is employed by
an eligible employer.
(2) "Eligible employee" does not include:
(a) Any employee covered under the "Railway Labor Act," 44
Stat. 577, 45 U.S.C. 151, as amended, or any employee engaged in
interstate commerce so as not to be subject to the legislative
powers of the state, except insofar as application of sections
113.51 to 113.77 of the Revised Code is authorized under the
United States Constitution or the laws of the United States;
(b) Any employee covered by a valid collective bargaining
agreement that expressly provides for a multiemployer Taft-Hartley
pension plan.
(B) "Eligible employer" means a person or entity engaged in a
business, industry, profession, trade, or other enterprise in this
state, whether for profit or not for profit, excluding any
governmental entity, that has twenty or more employees and that
satisfies the requirements to establish or participate in a
payroll deposit retirement savings arrangement.
(C) "IRA" means an individual retirement account or
individual retirement annuity under 26 U.S.C. 408(a) or 408(b).
(D) "Participating employer" means an eligible employer that
provides a payroll deposit retirement savings arrangement for
eligible employees under sections 113.51 to 113.77 of the Revised
Code.
(E) "Payroll deposit retirement savings arrangement" means an
arrangement by which an employer allows employees to remit payroll
deduction contributions to a retirement savings program.
(F) "Stated interest rate" means the rate of interest
allocated to participants' program accounts as determined by the
Ohio secure choice retirement savings investment board under
section 113.59 of the Revised Code.
(G) "Vendor" means a registered investment company or life
insurance company qualified to do business in this state that
provides retirement investment products. "Vendor" also includes a
company registered to do business in this state that provides
payroll services or recordkeeping services and offers retirement
plans or payroll deposit IRA arrangements using products of
regulated investment companies and insurance companies qualified
to do business in this state. "Vendor" does not include individual
registered representatives, brokers, financial planners, or
agents.
Sec. 113.52. (A) There is hereby established the Ohio secure
choice retirement savings program for the purpose of promoting
greater retirement savings for Ohio private employees in a
convenient, voluntary, low-cost, and portable manner. The program
shall be implemented and operated in accordance with sections
113.51 to 113.77 of the Revised Code.
(B) There is hereby established a retirement savings trust to
be known as the Ohio secure choice retirement savings trust, which
shall be in the custody of the treasurer of state but shall not be
part of the state treasury. All contributions paid by employees
and employers into the trust shall be used exclusively for the
purposes of paying benefits to the participants of the program,
paying the costs of administering the program, and making
investments for the benefit of the program. All interest earnings
of the trust shall be credited to the trust.
Sec. 113.53. (A) There is hereby created the Ohio secure
choice retirement savings investment board. The board shall
oversee the establishment and operation of the Ohio secure choice
retirement savings program. The board shall consist of seven
members, as follows:
(1) The treasurer of state, who shall serve as chairperson;
(2) The director of budget and management, or the director's
designee;
(3) The auditor of state, or the auditor's designee;
(4) A member representing small business, appointed by the
minority leader of the senate;
(5) A member representing the public, appointed by the
speaker of the house of representatives;
(6) A member with retirement savings and investment
expertise, appointed by the president of the senate;
(7) A member representing employees, appointed by the
minority leader of the house of representatives.
(B) Initial appointments to the board shall be made not later
than ninety days after the effective date of this section. Of the
initial appointments made to the board, two shall be for a term
ending one year after the date of the appointment, and two shall
be for a term ending two years after the date of the appointment.
Thereafter, members shall be appointed to terms of four years,
with each term of office ending on the same day of the same month
as did the term that it succeeded. Vacancies on the board shall be
filled in the same manner as the initial appointment.
(C) Members of the board who are appointed shall serve at the
pleasure of the appointing authority.
(D) All members of the board shall serve without
compensation. Members of the board shall be reimbursed for
necessary travel expenses incurred in connection with their board
duties.
Sec. 113.54. The Ohio secure choice retirement savings
investment board, in the capacity of trustee, shall have the power
and authority to do all of the following:
(A) Adopt a seal and amend it from time to time;
(C) Enter into contracts necessary for the administration of
the Ohio secure choice retirement savings trust, including the
investment of funds held in the trust;
(D) Set minimum and maximum investment levels in accordance
with contribution limits set for IRAs by the Internal Revenue
Code;
(E) Accept any grants, gifts, appropriations, and other money
from the federal government, from the state or any political
subdivision of the state, and from any other person, firm,
partnership, or corporation for deposit in the trust to the credit
of the administrative fund or the program fund.
(F) Retain and contract with private financial institutions,
other financial and service providers, consultants, actuaries,
counsel, auditors, third-party administrators, and other
professionals as necessary;
(G) Appoint an administrator of the Ohio secure choice
retirement savings program, the costs of which shall be paid out
of funds held in the trust and shall not be attributed to the
administrative costs of the board in operating the trust, and
determine the duties of the program administrator and other staff
as necessary and set their compensation;
(H) Procure insurance against any loss in connection with the
property, assets, or activities of the trust, and secure private
underwriting and reinsurance to manage risk and insure the
retirement savings rate of return;
(I) Procure insurance indemnifying each member of the board
from personal loss or liability resulting from a member's action
or inaction as a member of the board;
(J) Collaborate and cooperate with private financial
institutions, other financial service providers, and business,
financial, trade, membership, and other organizations to the
extent necessary or desirable for the effective and efficient
design, implementation, and administration of the program and to
maximize outreach to eligible employers and eligible employees;
(K) Cause expenses incurred to initiate, implement, maintain,
and administer the program to be paid from contributions to, or
investment returns or assets of, the program or arrangements
established under the program, to the extent permitted under state
and federal law;
(L) Facilitate compliance by the program or payroll deposit
retirement savings arrangements established under the program with
all applicable requirements under the Internal Revenue Code,
including tax qualification requirements or any other applicable
law and accounting requirements, including providing or arranging
for assistance to program sponsors and individuals in complying
with applicable law and tax qualification requirements in a
cost-effective manner;
(M) Carry out the duties and obligations of the trust
pursuant to sections 113.51 to 113.77 of the Revised Code and
exercise any and all other powers as may be reasonably necessary
for the effectuation of the purposes, objectives, and provisions
of those sections pertaining to the trust.
Sec. 113.55. (A) The Ohio secure choice retirement savings
investment board shall segregate moneys received by the Ohio
secure choice retirement savings trust into two funds, which shall
be identified as the program fund and the administrative fund.
(B) Moneys in the program fund may be invested or reinvested
by the treasurer of state or may be invested in whole or in part
under contract with private money managers, as determined by the
board.
(C) With the approval of the board, transfers may be made
from the program fund to the administrative fund for the purpose
of paying operating costs associated with administering the trust
and as required by sections 113.51 to 113.77 of the Revised Code.
On an annual basis, expenditures from the administrative fund
shall not exceed more than one per cent of the total program fund.
All costs of administration of the trust shall be paid out of the
administrative fund. Operating costs associated with administering
the trust do not include the procurement of private underwriting
for the retirement savings' return.
Sec. 113.56. (A) The Ohio secure choice retirement savings
investment board may establish a segregated account within the
program fund to be known as the gain and loss reserve account. The
board shall have sole authority over the account, if established.
The account may be used to allocate interest at the stated
interest rate for program years in which the board determines that
the stated interest rate cannot be met from investment earnings.
(B) The board shall establish a goal for the balance of the
account and shall periodically review the sufficiency of the
account based on the recommendations of the board's actuary.
(C) The board may allocate excess earnings of the Ohio secure
choice retirement savings program with respect to assets
attributable to the program to the account. In addition, the board
may allocate any liability gains and losses to the account. Based
on an actuarial valuation following each program year, the board
shall determine annually the amount, if any, that is to be
allocated to the account for that program year. In determining
whether to allocate excess earnings to the account, the board
shall consider all of the following:
(1) Whether or not the program has excess earnings;
(2) The sufficiency of the account in light of the goal
established under division (B) of this section;
(3) The amount required for the program's administrative
costs;
(4) The amount required for making allocations to
participants' accounts at the stated interest rate.
(D) In determining whether to allocate liability gains and
losses to the account, the board shall consider the matters
described in divisions (C)(2), (3), and (4) of this section.
Sec. 113.57. (A) The Ohio secure choice retirement savings
investment board shall annually prepare and adopt a written
statement of investment policy that includes a risk management and
oversight program. The board shall adopt the investment policy and
any changes to the investment policy at a public hearing.
(B) The investment policy shall adhere to the following
principles:
(1) The primary objective of the investment policy is to
preserve the safety of principal and provide a stable and low-risk
rate of return.
(2) The investment policy shall mitigate risk by maintaining
a balanced investment portfolio that provides assurance that no
single investment or class of investments will have a
disproportionate impact on the total portfolio.
(C)(1) The board may invest the funds held in the trust only
in the following types of investments:
(a) Domestic and international equities;
(b) Medium-term and long-term debt obligations of domestic
corporations;
(c) United States government and government-sponsored entity
debt obligations;
(d) Real estate commingled funds that invest in publicly
traded real estate securities;
(e) Money market instruments, cash, and money market mutual
funds that are registered in the United States and denominated in
United States dollars;
(f) Investments in existing, rated mutual funds that are
registered in the United States and denominated in United States
dollars;
(g) Insurance agreements;
(h) Bank products insured by the federal deposit insurance
corporation.
(2) Equities shall not exceed fifty per cent of the overall
asset allocation of the investment portfolio.
(D) The investment policy shall also adhere to all of the
following restrictions:
(1) Borrowing for investment purposes, or leverage, is
prohibited.
(2) Instruments known as variable rate demand notes,
floaters, inverse floaters, leveraged floaters, and equity-linked
securities are not permitted. Investment in any instrument that is
commonly considered a derivative instrument, including, but not
limited to, options, futures, swaps, caps, floors, and collars, is
prohibited.
(3) Contracting to sell securities not yet acquired in order
to purchase other securities for purposes of speculating on
developments or trends in the market is prohibited.
Sec. 113.58. (A) The Ohio secure choice retirement savings
investment board shall design the risk management and oversight
program required under section 113.57 of the Revised Code to
ensure that an effective risk management system is in place to
monitor the risk levels of the Ohio secure choice retirement
savings program investment portfolio and ensure that the risks
taken are prudent and properly managed. The program shall be
managed to provide an integrated process for overall risk
management on both a consolidated and disaggregated basis, and to
monitor investment returns as well as risk to determine if the
risks taken are adequately compensated compared to applicable
performance benchmarks and standards.
(B)(1) The board shall contract with an investment management
entity or entities, the costs of which shall be paid out of funds
held in the Ohio secure choice retirement savings trust and shall
not be attributed to the administrative costs of the board in
operating the trust. Not later than thirty days after the close of
each month, the board shall place on file for public inspection
during business hours a report with respect to investments made
for the program and a report of deposits in financial
institutions.
(2) The investment manager chosen by the board shall report
the following information to the board within twenty days
following the end of each month:
(a) The type of investment, name of the issuer, date of
maturity, and the par and dollar amount invested in each security,
investment, and money within the program fund;
(b) The weighted average maturity of the investments within
the program fund;
(c) Any amounts in the program fund that are under the
management of private money managers;
(d) The market value as of the date of the report and the
source of this valuation for each security within the program
fund;
(e) A description of compliance with the statement of
investment policy.
Sec. 113.59. (A) The Ohio secure choice retirement savings
program shall include one or more payroll deposit retirement
savings arrangements as determined by the Ohio secure choice
retirement savings investment board.
(B)(1) Prior to the first day of July of the initial program
year, and prior to the beginning of each program year thereafter,
the board shall adopt a program amendment in coordination with the
investment management entity or entities under contract with the
program to set the stated interest rate for the following program
year.
(2) Interest shall be allocated to program accounts and shall
be computed at the stated interest rate on the balance of an
individual's account and shall be compounded daily.
(C) An individual's retirement savings benefit 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.
Sec. 113.60. In addition to the powers and authority granted
to the Ohio secure choice retirement savings investment board
pursuant to section 113.54 of the Revised Code, the board shall
have the power and authority to do the following:
(A) Cause the Ohio secure choice retirement savings program
and payroll deposit retirement savings arrangements to be
designed, established, and operated in a manner consistent with
all of the following:
(1) In accordance with best practices for retirement savings
vehicles;
(2) To maximize participation, saving, and sound investment
practices, and appropriate selection of default investments;
(3) With simplicity, ease of administration for participating
employers, and portability of benefits.
(B) Arrange for collective, common, and pooled investment of
assets of the program or arrangements, including investments in
conjunction with other funds with which those assets are permitted
to be collectively invested, with a view to saving costs through
efficiencies and economies of scale;
(C) Explore and establish investment options that offer
employees returns on contributions and the conversion of
individual retirement savings account balances to secure
retirement income without incurring debt or liabilities to the
state;
(D) Disseminate educational information concerning saving and
planning for retirement;
(E) Disseminate information concerning the tax credits
available to small business owners for establishing new retirement
plans and the federal retirement savings contribution credit
available to lower and moderate income households for qualified
savings contributions;
(F) Submit progress and status reports to participating
employers and eligible employees;
(G) If necessary, determine the eligibility of an employer,
employee, or other individual to participate in the program;
(H) Evaluate and establish the process by which an eligible
employee of an eligible employer is able to contribute a portion
of the employee's salary or wages to the program for automatic
deposit of those contributions and the participating employer
provides a payroll deposit retirement savings arrangement to
forward the employee contribution and related information to the
program or its agents. This may include, but is not limited to,
financial services companies and third-party administrators with
the capability to receive and process employee information and
contributions for payroll deposit retirement savings arrangements
or other arrangements authorized under sections 113.51 to 113.77
of the Revised Code;
(I) Design and establish the process for the enrollment of
program participants;
(J) Allow participating employers to use the program to remit
employees' contributions to their individual retirement accounts
on their employees' behalf;
(K) Allow participating employers to make their own
contributions to their employees' individual retirement accounts,
provided that the contributions would be permitted under the
Internal Revenue Code and would not cause the program to be
treated as an employee benefit plan under the "Employee Retirement
Income Security Act," 88 Stat. 829, 29 U.S.C. 1001, as amended;
(L) Evaluate and establish the process by which an individual
or an employee of a nonparticipating employer may enroll in and
make contributions to the program.
Sec. 113.61. The Ohio secure choice retirement savings
investment board shall ensure that an insurance, annuity, or other
funding mechanism is in place at all times that protects the value
of participants' accounts. The funding mechanism shall protect,
indemnify, and hold the state harmless at all times against any
and all liability in connection with funding retirement benefits
under sections 113.51 to 113.77 of the Revised Code. The costs of
the funding mechanism shall be paid out of the funds held in the
Ohio secure choice retirement savings trust and shall not be
attributed to the administrative costs of the board in operating
the trust.
Sec. 113.62. (A) A member of the Ohio secure choice
retirement savings investment board, an administrator of the Ohio
secure choice retirement savings program, and an officer or
employee of the program shall not do any of the following:
(1) Directly or indirectly have any interest in any
investment made for the program or in the gains or profits
accruing from any investment made for the program;
(2) Borrow any funds or deposits of the Ohio secure choice
retirement savings trust, or use those funds or deposits in any
manner, for the individual's own purpose or as an agent or partner
of others;
(3) Become an endorser, surety, or obligor on any investment
made for the program.
(B) The members of the board, the program administrators, and
the officers and employees of the program shall discharge their
duties with respect to the trust solely in the interest of the
program participants, as follows:
(1) For the exclusive purposes of providing benefits to
program participants and defraying reasonable expenses of
administering the program;
(2) By investing with the care, skill, prudence, and
diligence under the circumstances then prevailing 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.
Sec. 113.63. (A) Prior to opening the Ohio secure choice
retirement savings program for enrollment, the Ohio secure choice
retirement savings investment board shall design and disseminate
to employers an employee information packet. The packet shall
provide background information on the program, including, but not
be limited to, all of the following:
(1) The benefits and risks associated with making
contributions to the program;
(2) The mechanics of how to make contributions to the
program;
(3) How to opt out of the program;
(4) The process for withdrawal of retirement savings;
(5) How to obtain additional information on the program.
(B)(1) The employee information packet shall include a
disclosure form that clearly articulates the following:
(a) That employees seeking financial advice should contact
financial advisors, that employers are not in a position to
provide financial advice, and that employers are not liable for
decisions employees make with respect to the program;
(b) That the program is not an employer-sponsored retirement
plan;
(c) That the Ohio secure choice retirement savings trust is
privately insured and is not guaranteed by the state.
(2) The disclosure form shall include a signature line for
the employee to sign and date acknowledging that the employee has
read all of the disclosures and understands their content.
(C) The employee information packet shall also include an
opt-out form for an eligible employee to declare the employee's
decision to opt out of participation in the program. The opt-out
notation shall be simple and concise and drafted in a manner that
the board deems necessary to appropriately evidence the employee's
understanding that the employee is choosing not to automatically
deduct earnings to save for retirement.
(D)(1) Individuals who are employed as of the date the
program commences shall be given the employee information packet
as soon as possible after that date. Employees shall review the
packet and sign the disclosure form at that time.
(2) For employees hired on or after the commencement of the
program, the employee information packet shall be supplied at the
time of hiring. All new employees shall review the packet and sign
the disclosure form at that time.
Sec. 113.64. (A) If, prior to opening the Ohio secure choice
retirement savings program for enrollment, there is sufficient
interest by vendors to participate and provide the necessary
funding, the Ohio secure choice retirement savings investment
board shall establish both of the following:
(1) A retirement investments clearinghouse on the board's
internet web site;
(2) A vendor registration process through which information
about employer-sponsored retirement plans, and payroll deduction
IRAs offered by private sector providers, is made available on the
clearinghouse for consideration by eligible employers.
(B) Vendors that would like to participate in the board's
retirement investments clearinghouse and be listed on the board's
internet web site as a registered vendor shall provide the board
with all of the following:
(1) A statement of the vendor's experience in this and any
other state in providing employer-sponsored retirement plans and
payroll deduction IRAs;
(2) A description of the types of retirement investment
products offered and their features, the services available to
retirement plan participants, and the manner in which product
prospectuses or other relevant product information may be
accessed;
(3) A disclosure of all expenses paid directly or indirectly
by retirement plan participants, including, but not limited to,
penalties for early withdrawals, declining or fixed withdrawal
charges, surrender or deposit charges, management fees, and annual
fees, supported by documentation as required for prospectus
disclosure by the national association of securities dealers and
the securities and exchange commission. Vendors shall be required
to provide information regarding the impact of product fees upon a
hypothetical investment, as described in section 113.67 of the
Revised Code.
(4) A discussion of the ability, experience, and commitment
of the vendor to provide retirement counseling and education
services, including, but not limited to, access to group meetings
and individual counseling by various means, including telephone
and telecommunications devices for the deaf, internet, and
face-to-face consultations by registered representatives;
(5) A statement of the financial strength of the vendor by
identifying its ratings assigned by nationally recognized rating
services that evaluate the financial strength of similar
companies;
(6) The location of offices and counselors, individual
registered representatives, brokers, financial planners, agents,
or other methods of distribution, of the vendor that would serve
employers and their employees in this state;
(7) A description of the ability of the vendor to comply with
all applicable provisions of federal and state law governing
retirement plans, including minimum distribution requirements and
contribution limits;
(8) To the extent applicable, a demonstration of the ability
of the vendor to offer an appropriate array of accumulation
funding options, including, but not limited to, investment options
that offer guaranteed returns on contributions and the conversion
of retirement savings account balances to secure retirement
income, as well as a diversified mix of value, growth, growth and
income, hybrid, and index funds or accounts across large, medium,
and small capitalization asset classes, both domestic and
international;
(9) A discussion of the range of administrative and customer
services provided, including asset allocation, accounting and
administration of benefits for individual participants,
recordkeeping for individual participants, asset purchase,
control, and safekeeping, execution of a participant's
instructions as to asset and contribution allocation, calculation
of daily net asset values, direct access for participants to their
account information, periodic reporting that is not less than
quarterly to participants on their account balances and
transactions, and compliance with the standard of care consistent
with federal law and applicable to the provision of investment
services;
(10) Certification by the vendor that the information
provided to the board accurately reflects the provisions of the
retirement investment products it is registering.
(C) The board shall prescribe the format in which vendors are
to supply the information and data required under division (B) of
this section.
Sec. 113.65. Once annually, the Ohio secure choice
retirement savings investment board shall offer vendors an
opportunity to register to participate in the retirement
investments clearinghouse. Renewal of registration shall be
required at least once every five years thereafter for vendors
that wish to continue to participate. The board shall provide
public notice prior to the initial registration, annual
registration, and registration renewal periods.
Sec. 113.66. (A) The Ohio secure choice retirement savings
investment board may remove a vendor from the retirement
investments clearinghouse if the vendor submits materially
inaccurate information to the board, does not remit assessed fees
within sixty days, or fails to submit notice of material changes
to its registered investment products. Vendors found to have
submitted materially inaccurate information to the board shall be
allowed sixty days to correct the information.
(B) The board shall remove a vendor from the clearinghouse if
investments offered by the vendor are products of a regulated
investment company or insurance company that is not authorized to
do business in this state.
(C) The board shall establish an appeals process for vendors
that are denied registration or removed from the clearinghouse.
Sec. 113.67. (A) The retirement investments clearinghouse
shall include information on investment performance based upon the
investment's average annual total return as measured by a
nationally recognized rating service selected by the Ohio secure
choice retirement savings investment board for standard periods of
time of not less than one year.
(B) The board's internet web site shall include a table
showing, for each registered investment product, the total fee
cost in dollars incurred by an investor who initially invested
five thousand dollars and earned a five per cent rate of return
for one-, five-, ten-, fifteen-, and twenty-year time periods.
This table shall be accompanied by a disclaimer that the rate of
return is for purposes of illustrating the respective impacts of
different fee amounts on each investment, and is not to predict
future investment returns.
(C) A vendor shall not charge a fee associated with a product
registered on the retirement investments clearinghouse that is not
disclosed therein.
Sec. 113.68. The Ohio secure choice retirement savings
investment board shall notify eligible employers of the existence
of, and the internet web site address for, the retirement
investments clearinghouse.
Sec. 113.69. (A) The actual cost of establishing the
retirement investments clearinghouse and the vendor registration
system shall be borne equally by registered vendors, based on the
total number of registered vendors. At the close of the initial
registration period, each registered vendor shall pay a one-time
establishment fee equal to a pro rata share of the establishment
costs, as determined by the Ohio secure choice retirement savings
investment board. The one-time establishment fee charged to
vendors that register with the board after the close of the
initial registration period shall be distributed equally among
registered vendors that have paid the establishment fee and
credited toward subsequent maintenance and administrative fees
charged to each vendor.
(B) The actual cost of maintaining the retirement investments
clearinghouse and the vendor registration system, and the costs
associated with publicizing the availability of the clearinghouse
to eligible employers, shall be borne equally by registered
vendors, based on the total number of registered vendors. Each
registered vendor shall pay a renewal fee equal to a pro rata
share of the maintenance costs, as determined by the board.
(C) Each registered vendor shall pay an administrative fee
for each retirement investment product it offers to employers,
which fee shall represent the actual costs associated with
processing the information related to the investment option and
presenting it on the retirement investments clearinghouse, as
determined by the board.
(D) The board shall not use funds held in the Ohio secure
choice retirement savings trust to establish or maintain the
retirement investments clearinghouse or the vendor registration
system.
Sec. 113.70. (A) The Ohio secure choice retirement savings
investment board and the Ohio secure choice retirement savings
program, and its officers and employees, are not responsible for,
and shall not be held liable for, the adequacy of the information
provided by the participating vendors and contained in the
retirement investments clearinghouse. The clearinghouse maintained
by the board serves only to provide information supplied by the
participating vendors for the consideration of the selection of
retirement investment products.
(B) Participating vendors shall not utilize the program's
logo, or claim or infer endorsement or recommendation by the board
or the program with respect to products and services identified by
the vendors in the clearinghouse. At the discretion of the board,
a failure to comply with this division may lead to removal from
the registry.
(C) The board and the program shall not be held liable for
the actions of registered vendors.
Sec. 113.71. (A) Once the Ohio secure choice retirement
savings program is open for enrollment, any employer may choose to
have a payroll deposit retirement savings arrangement to allow
employee participation in the program.
(B)(1) Beginning three months after the program is open for
enrollment, eligible employers that have more than one hundred
eligible employees and that do not offer an employer-sponsored
retirement plan or automatic enrollment payroll deduction IRA
shall have a payroll deposit retirement savings arrangement to
allow employee participation in the program.
(2) Beginning six months after the program is open for
enrollment, eligible employers that have more than fifty eligible
employees and that do not offer an employer-sponsored retirement
plan or automatic enrollment payroll deduction IRA shall have a
payroll deposit retirement savings arrangement to allow employee
participation in the program.
(3) Beginning nine months after the program is open for
enrollment, all other eligible employers that do not offer an
employer-sponsored retirement plan or automatic enrollment payroll
deduction IRA shall have a payroll deposit retirement savings
arrangement to allow employee participation in the program.
(C)(1) Each eligible employee shall be enrolled in the
program unless the employee elects not to participate in the
program by noting that decision on the opt-out form.
(2) Following initial implementation of the program,
participating employers shall, at least once every two years,
designate an open enrollment period during which eligible
employees that previously opted out of the program may be enrolled
in the program unless the employee again elects to opt out.
(3) An employee who elected to opt out of the program and who
subsequently wants to participate may only enroll during the
employer's designated open enrollment period or, if permitted by
the employer, at an earlier time.
(4) An employee may terminate the employee's participation in
the program at any time in a manner prescribed by the Ohio secure
choice retirement savings investment board and, thereafter, by
making a notation on the opt-out form.
(D)(1) A participating employee shall contribute at least
three per cent of the employee's annual salary or wages to the
program.
(2) The board may adjust the minimum contribution amount set
forth in division (D)(1) of this section to no less than two per
cent and no more than four per cent and may vary that amount
within the two per cent to four per cent range for participating
employees according to the length of time the employee has
contributed to the program.
(E) Employers may, at any time, set up an employer-sponsored
retirement plan, such as a defined benefit plan or a 401(k),
simplified employee pension plan, or savings incentive match plan
for employees plan, or offer an automatic enrollment payroll
deduction IRA, instead of having a payroll deposit retirement
savings arrangement to allow employee participation in the
program.
Sec. 113.72. (A) Employers shall not be held liable for an
employee's decision to participate in, or opt out of, the Ohio
secure choice retirement savings program, or for the investment
decisions of employees whose assets are deposited in the program.
(B) An employer shall not:
(1) Be considered a fiduciary of the Ohio secure choice
retirement savings trust or the program;
(2) Bear responsibility for the administration, investment,
or investment performance of the program;
(3) Be held liable with regard to investment returns, program
design, and benefits paid to program participants.
(C) An employer's voluntary contribution under division (J)
of section 113.60 of the Revised Code shall not in any way
contradict the provisions of this section or change the employer's
relationship to the program or an employer's obligations to
employees.
Sec. 113.73. (A) Each eligible employer that, without good
cause, fails to allow its eligible employees to participate in the
Ohio secured choice retirement savings program shall be notified
by the treasurer of state of the employer's failure to comply with
sections 113.51 to 113.77 of the Revised Code. After an
administrative hearing, the treasurer of state shall impose a fine
of two hundred fifty dollars per eligible employee if
noncompliance by the employer extends ninety or more days after
receipt of the notice. If, after an administrative hearing, the
employer is found to be in noncompliance one hundred or more days
after receipt of the notice, the treasurer of state shall impose
an additional fine of five hundred dollars per eligible employee.
(B) All fines collected under this section shall be deposited
into the administration fund of the Ohio secure choice retirement
savings trust.
(C) The treasurer of state may charge the Ohio secure choice
retirement savings investment board a reasonable fee for costs the
treasurer of state's office incurs in implementing, administering,
and enforcing the program.
Sec. 113.74. The state shall not be liable for payment of
the retirement savings benefits earned by participants in the Ohio
secure choice retirement savings program. Any financial liability
for the payment of benefits in excess of funds available under the
program shall be borne by the entities with whom the Ohio secure
choice retirement savings investment board contracts to provide an
insurance, annuity, or other funding mechanism to protect the
value of participants' accounts pursuant to section 113.61 of the
Revised Code. The state, and any of the funds of the state, shall
not be obligated for payment of the retirement savings benefits.
Sec. 113.75. (A) Not later than the first day of August of
each year, the Ohio secure retirement savings investment board
shall submit an audited financial report, prepared in accordance
with generally accepted accounting principles, on the operations
of the Ohio secure choice retirement savings trust to the
governor, the director of budget and management, the auditor of
state, and the general assembly. The annual audit shall be
conducted by an independent certified public accountant and shall
include, but not be limited to, direct and indirect costs
attributable to the use of outside consultants, independent
contractors, and any other persons who are not state employees.
(B) The annual audit shall be supplemented by the following
information prepared by the board:
(1) Any relevant studies or evaluations prepared in the
preceding year;
(2) A summary of the benefits provided by the trust including
the number of participants in the trust;
(3) Any other information that is relevant in order to make a
full, fair, and effective disclosure of the operations of the
trust.
Sec. 113.76. The Ohio secure choice retirement savings
investment board shall adopt rules it deems necessary to implement
sections 113.51 to 113.77 of the Revised Code consistent with the
Internal Revenue Code and regulations issued thereunder to ensure
that the Ohio secure choice retirement savings program meets all
criteria for federal tax-deferral or tax-exempt benefits, or both.
Sec. 113.77. The Ohio secure choice retirement savings
program shall be suspended if the payroll deposit retirement
savings arrangements offered under the program fail to qualify for
the favorable federal income tax treatment ordinarily accorded to
IRAs under the Internal Revenue Code or if it is determined that
the program is an employee benefit plan under the "Employee
Retirement Income Security Act," 88 Stat. 829, 29 U.S.C. 1001, as
amended.
Sec. 113.78. Sections 113.51 to 113.77, except for section
113.53, of the Revised Code shall not be implemented unless all of
the following occur:
(A) The Ohio secure choice retirement savings investment
board conducts a market analysis to determine whether the
necessary conditions for implementation of sections 113.51 to
113.77 of the Revised Code can be met, including, but not limited
to, likely participation rates, participants' comfort with various
investment vehicles and degree of risk, contribution levels, and
the rate of account closures and rollovers. The board shall
conduct this analysis only if sufficient funds to initiate and
complete the required market analysis are made available through a
nonprofit or private entity or from federal funding. The Ohio
secure choice retirement savings program fund is hereby created in
the state treasury. The fund shall consist of all moneys made
available to conduct the market analysis. The board shall forward
and offer to present its findings to the chair of the committees
of the house of representatives and the senate that have
jurisdiction over commerce and labor matters.
(B) The board determines that, based on the market analysis,
sections 113.51 to 113.77 of the Revised Code will be
self-sustaining.
(C) Sufficient funds are made available through a nonprofit
or other private entity, federal funding, or appropriations to
allow the board to implement sections 113.51 to 113.77 of the
Revised Code until the Ohio secure choice retirement savings trust
has sufficient funds to be self-sustaining.
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