CSSB 21(L&C): "An Act establishing the Alaska Work and Save Program in the Department of Revenue; relating to the duties of the commissioner of labor and workforce development; and providing for an effective date."
00 CS FOR SENATE BILL NO. 21(L&C) 01 "An Act establishing the Alaska Work and Save Program in the Department of 02 Revenue; relating to the duties of the commissioner of labor and workforce 03 development; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 43.23.130(a) is amended to read: 06 (a) Notwithstanding AS 43.23.200, the Department of Revenue shall prepare 07 the electronic Alaska permanent fund dividend application to allow an applicant who 08 files electronically to direct that money be subtracted from the dividend payment and 09 contributed to the applicant's Alaska Work and Save Program participant 10 account (AS 44.25.400 - 44.25.490), the crime victim compensation fund 11 (AS 18.67.162), the peace officer and firefighter survivors' fund, or one or more of the 12 educational organizations, community foundations, or charitable organizations that 13 appear on the contribution list contained in the application. A contribution to an 14 Alaska Work and Save Program participant account, the crime victim
01 compensation fund, the peace officer and firefighter survivors' fund or to an 02 organization may be $25, $50, $75, $100, or more, in increments of $50, up to the 03 total amount of the permanent fund dividend that the applicant is entitled to receive. If 04 the total amount of contributions elected by an applicant exceeds the amount of the 05 permanent fund dividend that the applicant is entitled to receive, contributions shall be 06 deducted from the dividend in the order of priority elected by the applicant on the 07 application until the entire amount of the dividend that the applicant is entitled to 08 receive is allocated for contribution. The electronic dividend application form must 09 include notice that seven percent of the money contributed will be used for 10 administrative costs incurred in implementing this section, and money from the 11 dividend fund will not be used for that purpose. 12 * Sec. 2. AS 43.23.130(b) is amended to read: 13 (b) The department shall list each educational organization, community 14 foundation, or charitable organization eligible under (c) and (d) of this section, each 15 university campus that applies under (l) of this section, the Alaska Work and Save 16 Program, the crime victim compensation fund, and the peace officer and firefighter 17 survivors' fund on the contribution list. The department shall maintain an electronic 18 database for the contribution list that is accessible to the public and that permits 19 searches by organization or fund name, geographic location, and type. The department 20 shall provide a statement of the contributions made by an individual that is suitable for 21 federal income tax purposes to each individual who elects to contribute under (a) of 22 this section. 23 * Sec. 3. AS 43.23.130(m) is amended to read: 24 (m) In addition to the application fee in (f) of this section, the department shall 25 withhold a coordination fee from each organization, foundation, or university campus 26 that receives contributions under this section in the immediately preceding dividend 27 year. The coordination fee for an organization, foundation, or university campus that 28 receives contributions under this section shall be seven percent of the amount of 29 contributions reported by the department under (j) of this section for the organization, 30 foundation, or university campus for the immediately preceding dividend year. The 31 coordination fee shall be separately accounted for under AS 37.05.142 and shall be
01 accounted for separately from the application fee collected under (f) of this section. 02 The annual estimated balance in the account maintained under AS 37.05.142 for 03 coordination fees collected under this subsection may be appropriated for costs of 04 administering this section. The department may not withhold a coordination fee for 05 contributions to an Alaska Work and Save Program participant account, the crime 06 victim compensation fund or the peace officer and firefighter survivors' fund. 07 * Sec. 4. AS 44.25 is amended by adding new sections to read: 08 Article 5. Alaska Work and Save Program. 09 Sec. 44.25.400. Alaska Work and Save Program. (a) The Alaska Work and 10 Save Program is established in the Department of Revenue. The commissioner of 11 revenue or the commissioner's designee shall administer the program. 12 (b) An employer that does not offer a qualified retirement plan shall facilitate 13 participation of the employer's employees in the program. 14 (c) Under the program, 15 (1) an eligible employee is automatically enrolled in the program at the 16 default contribution rate established by the administrator; 17 (2) an eligible employee's contribution rate increases at the default rate 18 established by the administrator; 19 (3) an eligible employee may 20 (A) opt out of the program or a contribution rate increase; 21 (B) make contributions at a rate different than the default rate 22 established by the administrator; 23 (C) increase contributions at a rate different than the default 24 rate established by the administrator; 25 (4) any person who earns compensation in this state is eligible to 26 voluntarily enroll in the program. 27 (d) The state, the program, and the administrator 28 (1) may not guarantee a specific rate of return or interest for a 29 contribution; 30 (2) are not liable for any loss incurred by a participant as a result of 31 participating in the program;
01 (3) have no proprietary interest in contributions to, or earnings on 02 amounts contributed to, participant accounts. 03 (e) Nothing in AS 44.25.400 - 44.25.490 prohibits an employer from 04 establishing an alternative retirement plan for the employer's employees. 05 Sec. 44.25.410. Purpose of program. The administrator is the trustee of all 06 contributions and earnings on amounts contributed to participant accounts. The 07 administrator's primary mission is to 08 (1) develop a retirement program for employees in this state who are 09 not offered a qualified retirement plan by an employer; 10 (2) conduct a market and legal analysis of the program; and 11 (3) facilitate the investment of funds contributed to participant 12 accounts. 13 Sec. 44.25.420. Powers and duties of the administrator. (a) The 14 administrator shall 15 (1) develop and administer the program; 16 (2) adopt regulations to implement AS 44.25.400 - 44.25.490; 17 (3) establish a process for enrollment in the program, including 18 automatic employee enrollment and a process for an employee to opt out of the 19 program; 20 (4) direct the investment of funds contributed to participant accounts 21 and professionally manage participant accounts, consistent with 22 (A) investment restrictions established by the administrator; 23 and 24 (B) standards of prudence; 25 (5) provide a range of investment options and establish the rules by 26 which a participant may direct the participant's investments among those options; 27 (6) obtain an external performance review to evaluate the investment 28 policies of the program and include the results in the report provided under (7) of this 29 subsection; 30 (7) by the first day of each regular legislative session, report to the 31 governor and legislature on the financial condition of the program and any civil
01 penalties issued under the program; 02 (8) develop an annual operating budget; 03 (9) in accordance with Internal Revenue Code limits, set a minimum, 04 maximum, and default contribution rate and set a default rate for contribution 05 increases; 06 (10) allow a participant to adjust the rate of contributions to the 07 participant's account and the rate of increases to the contribution rate; 08 (11) establish a process to allow a participant to make contributions, in 09 addition to the participant's contributions through payroll deduction, to the 10 participant's account, including contributions from the participant's permanent fund 11 dividend; 12 (12) establish a process to allow a participant to withdraw funds from a 13 program account; 14 (13) deposit a contribution to the program directly in a participant 15 account; 16 (14) maintain separate records and accounting for each participant 17 account; 18 (15) provide program and account status reports to participants at least 19 once a year; 20 (16) allow participants to maintain a program account regardless of 21 employer; 22 (17) keep fees assessed to defray program administration costs low; 23 (18) disclose to employees, employers, and program participants 24 (A) the benefits and risks of contributing to the program; 25 (B) instructions on contributing to the program and changing 26 contribution rates; 27 (C) the process to opt out of the program; 28 (D) the process to withdraw funds from a participant account; 29 (E) how to obtain additional program information; 30 (F) that the program is not an employer-sponsored retirement 31 plan;
01 (G) that financial advisors are best positioned to provide 02 financial advice and that employers are not liable for employee financial 03 decisions under AS 44.25.400 - 44.25.490; 04 (H) that the state, the program, and the administrator do not 05 guarantee participant accounts or a rate of return; 06 (I) how an employee may file a complaint against an employer 07 who fails to facilitate employee participation in the program. 08 (b) The administrator may 09 (1) contract for services necessary to execute the administrator's 10 powers and duties; 11 (2) employ outside investment advisors to review investment policies; 12 (3) establish and collect fees to defray program administration costs; 13 (4) consider and purchase pooled private insurance for the program; 14 (5) develop and conduct outreach about the program and retirement 15 savings; 16 (6) request that the commissioner of labor and workforce development 17 investigate an employer under AS 44.25.440; 18 (7) when prudent or necessary to do so for the benefit of the program, 19 enter into agreements, including contracts, memoranda of understanding, partnerships, 20 or other arrangements, with other governmental entities, including other states, or 21 agencies or instrumentalities of other states, that maintain or are establishing 22 retirement savings programs compatible with or similar to the program; 23 (8) change the default contribution rate and default rate for 24 contribution increases; 25 (9) use private sector partnerships to administer and invest 26 contributions to the program; 27 (10) access information held by, and enter into service agreements 28 with, other departments and agencies of the state. 29 Sec. 44.25.430. Confidentiality of information. (a) Individual account 30 information for participant accounts, including an account holder's name, address, 31 telephone number, personal identification information, contributions, earnings, and
01 account balance, is confidential and not subject to disclosure as a public record. 02 (b) Notwithstanding (a) of this section, individual account information may be 03 disclosed 04 (1) to the extent necessary to administer the program in a manner 05 consistent with the tax laws of the state and the Internal Revenue Code; or 06 (2) if the account holder expressly agrees to the disclosure, in writing. 07 Sec. 44.25.440. Complaints. (a) An employee may file a complaint with the 08 commissioner of labor and workforce development alleging that an employer subject 09 to AS 44.25.400 - 44.25.490 failed to facilitate employee participation in the program. 10 (b) The commissioner of labor and workforce development may, upon 11 receiving an employee complaint or upon request of the administrator, investigate an 12 employer. If the commissioner determines that the employer was required but failed to 13 facilitate employee participation in the program for six months, the commissioner may 14 impose a civil penalty on the employer. 15 (c) The commissioner of labor and workforce development may impose on an 16 employer a civil penalty of up to $100 for each employee of the employer who is 17 eligible to participate in the program but for whom the employer does not facilitate 18 participation in the program. The commissioner may not impose penalties under this 19 section on a single employer that exceed $5,000 in a calendar year. 20 (d) The commissioner of labor and workforce development shall notify the 21 administrator when an employer has failed to facilitate employee participation in the 22 program and when the commissioner imposes a civil penalty on an employer. 23 (e) The administrator may notify an employer that has failed to facilitate 24 employee participation in the program that the employer may be subject to a civil 25 penalty for failure to comply with program requirements. 26 Sec. 44.25.490. Definitions. In AS 44.25.400 - 44.25.490, 27 (1) "administrator" means the commissioner of revenue or the 28 commissioner's designee; 29 (2) "employee" has the meaning given in AS 23.30.395; 30 (3) "employer" means a person or business that has employed one or 31 more other persons in the state for not less than one year and does not provide a
01 qualified retirement plan to employees; 02 (4) "program" means the Alaska Work and Save Program; 03 (5) "qualified retirement plan" includes a plan qualified under 26 04 U.S.C. 401(a) or (k), 403(a) or (b), 408(k) or (p), or 457(b) (Internal Revenue Code). 05 * Sec. 5. This Act takes effect January 1, 2026.