HB 338: "An Act establishing the Alaska Work and Save Program for employees who do not have access to a qualified retirement savings plan at work; relating to the duties of the commissioner of labor and workforce development; and providing for an effective date."
00 HOUSE BILL NO. 338 01 "An Act establishing the Alaska Work and Save Program for employees who do not 02 have access to a qualified retirement savings plan at work; relating to the duties of the 03 commissioner of labor and workforce development; and providing for an effective 04 date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 43.23.130(a) is amended to read: 07 (a) Notwithstanding AS 43.23.200, the Department of Revenue shall prepare 08 the electronic Alaska permanent fund dividend application to allow an applicant who 09 files electronically to direct that money be subtracted from the dividend payment and 10 contributed to the applicant's Alaska Work and Save Program participant 11 account (AS 44.25.400 - 44.25.490), the crime victim compensation fund 12 (AS 18.67.162), the peace officer and firefighter survivors' fund, or one or more of the 13 educational organizations, community foundations, or charitable organizations that 14 appear on the contribution list contained in the application. A contribution to an
01 Alaska Work and Save Program participant account, the crime victim 02 compensation fund, the peace officer and firefighter survivors' fund or to an 03 organization may be $25, $50, $75, $100, or more, in increments of $50, up to the 04 total amount of the permanent fund dividend that the applicant is entitled to receive. If 05 the total amount of contributions elected by an applicant exceeds the amount of the 06 permanent fund dividend that the applicant is entitled to receive, contributions shall be 07 deducted from the dividend in the order of priority elected by the applicant on the 08 application until the entire amount of the dividend that the applicant is entitled to 09 receive is allocated for contribution. The electronic dividend application form must 10 include notice that seven percent of the money contributed will be used for 11 administrative costs incurred in implementing this section, and money from the 12 dividend fund will not be used for that purpose. 13 * Sec. 2. AS 43.23.130(b) is amended to read: 14 (b) The department shall list each educational organization, community 15 foundation, or charitable organization eligible under (c) and (d) of this section, each 16 university campus that applies under (l) of this section, the Alaska Work and Save 17 Program, the crime victim compensation fund, and the peace officer and firefighter 18 survivors' fund on the contribution list. The department shall maintain an electronic 19 database for the contribution list that is accessible to the public and that permits 20 searches by organization or fund name, geographic location, and type. The department 21 shall provide a statement of the contributions made by an individual that is suitable for 22 federal income tax purposes to each individual who elects to contribute under (a) of 23 this section. 24 * Sec. 3. AS 43.23.130(m) is amended to read: 25 (m) In addition to the application fee in (f) of this section, the department shall 26 withhold a coordination fee from each organization, foundation, or university campus 27 that receives contributions under this section in the immediately preceding dividend 28 year. The coordination fee for an organization, foundation, or university campus that 29 receives contributions under this section shall be seven percent of the amount of 30 contributions reported by the department under (j) of this section for the organization, 31 foundation, or university campus for the immediately preceding dividend year. The
01 coordination fee shall be separately accounted for under AS 37.05.142 and shall be 02 accounted for separately from the application fee collected under (f) of this section. 03 The annual estimated balance in the account maintained under AS 37.05.142 for 04 coordination fees collected under this subsection may be appropriated for costs of 05 administering this section. The department may not withhold a coordination fee for 06 contributions to an Alaska Work and Save Program participant account, the crime 07 victim compensation fund or the peace officer and firefighter survivors' fund. 08 * Sec. 4. AS 44.25 is amended by adding new sections to read: 09 Article 5. Alaska Work and Save Program. 10 Sec. 44.25.400. Alaska Work and Save Program. (a) The Alaska Work and 11 Save Program is established in the Department of Revenue. The commissioner of 12 revenue or the commissioner's designee shall administer the program. 13 (b) An employer that does not offer a qualified retirement plan shall facilitate 14 participation of the employer's employees in the program. Any person who earns 15 compensation in this state is eligible to voluntarily enroll in the program. 16 (c) An employee is automatically enrolled in the program at the default 17 contribution rate established by the administrator. A participating employee's 18 contribution rate increases at the default rate established by the administrator. An 19 employee may 20 (1) opt out of the program or a contribution rate increase; 21 (2) make contributions at a rate different than the default rate 22 established by the administrator; 23 (3) increase contributions at a rate different than the default rate 24 established by the administrator. 25 (d) The state, the program, and the administrator 26 (1) may not guarantee a specific rate of return or interest for a 27 contribution; 28 (2) are not liable for any loss incurred by a participant as a result of 29 participating in the program; 30 (3) have no proprietary interest in contributions to, or earnings on 31 amounts contributed to, participant accounts.
01 Sec. 44.25.410. Purpose of program. The administrator is the trustee of all 02 contributions and earnings on amounts contributed to participant accounts. The 03 administrator's primary mission is to 04 (1) develop a retirement program for employees in this state who are 05 not offered a qualified retirement plan by an employer; 06 (2) conduct a market and legal analysis of the program; and 07 (3) facilitate the investment of funds contributed to participant 08 accounts. 09 Sec. 44.25.420. Powers and duties of the administrator. (a) The 10 administrator shall 11 (1) develop and administer the program; 12 (2) adopt regulations to implement AS 44.25.400 - 44.25.490; 13 (3) establish a process for enrollment in the program, including 14 automatic employee enrollment and a process for an employee to opt out of the 15 program; 16 (4) direct the investment of funds contributed to participant accounts 17 and professionally manage participant accounts, consistent with 18 (A) investment restrictions established by the administrator; 19 and 20 (B) standards of prudence; 21 (5) provide a range of investment options and establish the rules by 22 which a participant may direct the participant's investments among those options; 23 (6) obtain an external performance review to evaluate the investment 24 policies of the program and include the results in the report provided under (7) of this 25 subsection; 26 (7) by the first day of each regular legislative session, report to the 27 governor and legislature on the financial condition of the program and any civil 28 penalties issued under the program; 29 (8) develop an annual operating budget; 30 (9) in accordance with Internal Revenue Code limits, set a minimum, 31 maximum, and default contribution rate and set a default rate for contribution
01 increases; 02 (10) allow a participant to adjust the rate of contributions to the 03 participant's account and the rate of increases to the contribution rate; 04 (11) establish a process to allow a participant to make contributions, in 05 addition to the participant's contributions through payroll deduction, to the 06 participant's account, including contributions from the participant's permanent fund 07 dividend; 08 (12) establish a process to allow a participant to withdraw funds from a 09 program account; 10 (13) deposit a contribution to the program directly in a participant 11 account; 12 (14) maintain separate records and accounting for each participant 13 account; 14 (15) provide program and account status reports to participants at least 15 once a year; 16 (16) allow participants to maintain a program account regardless of 17 employer; 18 (17) disclose to employees, employers, and program participants 19 (A) the benefits and risks of contributing to the program; 20 (B) instructions on contributing to the program and changing 21 contribution rates; 22 (C) the process to opt out of the program; 23 (D) the process to withdraw funds from a participant account; 24 (E) how to obtain additional program information; 25 (F) that the program is not an employer-sponsored retirement 26 plan; 27 (G) that financial advisors are best positioned to provide 28 financial advice and that employers are not liable for employee financial 29 decisions made under AS 44.25.400 - 44.25.490; 30 (H) that the state, the program, and the administrator do not 31 guarantee participant accounts or a rate of return;
01 (I) how an employee may file a complaint against an employer 02 who fails to facilitate employee participation in the program. 03 (b) The administrator may 04 (1) contract for services necessary to execute the administrator's 05 powers and duties; 06 (2) employ outside investment advisors to review investment policies; 07 (3) establish and collect fees to defray program administration costs; 08 (4) consider and purchase pooled private insurance for the program; 09 (5) develop and conduct outreach about the program and retirement 10 savings; 11 (6) request that the commissioner of labor and workforce development 12 investigate an employer as provided under AS 44.25.440; 13 (7) when prudent or necessary to do so for the benefit of the program, 14 enter into agreements, including contracts, memoranda of understanding, partnerships, 15 or other arrangements, with other governmental entities, including other states, or 16 agencies or instrumentalities of other states, that maintain or are establishing 17 retirement savings programs compatible with or similar to the program; 18 (8) change the default contribution rate and default rate for 19 contribution increases; 20 (9) use private sector partnerships to administer and invest 21 contributions to the program; 22 (10) access information held by, and enter into service agreements 23 with, other departments and agencies of the state. 24 Sec. 44.25.430. Confidentiality of information. (a) Individual account 25 information for participant accounts, including an account holder's name, address, 26 telephone number, personal identification information, contributions, earnings, and 27 account balance, is confidential and not subject to disclosure as a public record. 28 (b) Notwithstanding (a) of this section, individual account information may be 29 disclosed 30 (1) to the extent necessary to administer the program in a manner 31 consistent with the tax laws of the state and the Internal Revenue Code; or
01 (2) if the account holder expressly agrees to the disclosure, in writing. 02 Sec. 44.25.440. Complaints. (a) An employee may file a complaint with the 03 commissioner of labor and workforce development alleging that an employer subject 04 to AS 44.25.400 - 44.25.490 failed to facilitate employee participation in the program. 05 (b) The commissioner of labor and workforce development may, upon 06 receiving an employee complaint or upon request of the administrator, investigate an 07 employer. If the commissioner determines that the employer was required but failed to 08 facilitate employee participation in the program for six months, the commissioner may 09 impose a civil penalty on the employer. 10 (c) The commissioner of labor and workforce development may impose on an 11 employer a civil penalty of up to $100 for each employee of the employer who is 12 eligible to participate in the program but for whom the employer does not facilitate 13 participation in the program. The commissioner may not impose penalties under this 14 section on a single employer that exceed $5,000 in a calendar year. 15 (d) The commissioner of labor and workforce development shall notify the 16 administrator when an employer has failed to facilitate employee participation in the 17 program and when the commissioner imposes a civil penalty on an employer. 18 (e) The administrator may notify an employer that has failed to facilitate 19 employee participation in the program that the employer may be subject to a civil 20 penalty for failure to comply with program requirements. 21 Sec. 44.25.490. Definitions. In AS 44.25.400 - 44.25.490, 22 (1) "administrator" means the commissioner of revenue or the 23 commissioner's designee; 24 (2) "employee" has the meaning given in AS 23.30.395; 25 (3) "employer" means a person or business that has employed one or 26 more other persons in the state for not less than one year and does not provide a 27 qualified retirement plan to employees; 28 (4) "program" means the Alaska Work and Save Program established 29 in AS 44.25.400; 30 (5) "qualified retirement plan" includes a plan qualified under 26 31 U.S.C. 401(a) or (k), 403(a) or (b), 408(k) or (p), or 457(b) (Internal Revenue Code).