HCS CSSB 21(L&C): "An Act establishing the Alaska Work and Save Program in the Department of Revenue; relating to depositing permanent fund dividends into investment accounts; and providing for an effective date."
00 HOUSE CS FOR 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 depositing permanent fund dividends into investment accounts; 03 and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 43.23 is amended by adding a new section to read: 06 Sec. 43.23.058. Deposits from dividends. (a) An applicant for a permanent 07 fund dividend who is eligible under this chapter to receive a permanent fund dividend, 08 or the applicant's authorized representative, may direct that the dividend payment be 09 deposited in an investment account identified by the applicant. 10 (b) The department shall design the permanent fund dividend application form 11 to allow an applicant, or the applicant's authorized representative, to direct the 12 department to make a deposit under this section, and to provide the information that 13 the department determines is necessary to implement this section. The application 14 form must notify the applicant that the applicant assumes the risk of investments made
01 under this section. 02 (c) The department may not use money from the dividend fund for 03 administrative costs incurred in implementing this section. 04 * Sec. 2. AS 43.23.130(a) is amended to read: 05 (a) Notwithstanding AS 43.23.200, the Department of Revenue shall prepare 06 the electronic Alaska permanent fund dividend application to allow an applicant who 07 files electronically to direct that money be subtracted from the dividend payment and 08 contributed to the applicant's Alaska Work and Save Program participant 09 account (AS 44.25.400 - 44.25.490), the crime victim compensation fund 10 (AS 18.67.162), the peace officer and firefighter survivors' fund, or one or more of the 11 educational organizations, community foundations, or charitable organizations that 12 appear on the contribution list contained in the application. A contribution to an 13 Alaska Work and Save Program participant account, the crime victim 14 compensation fund, the peace officer and firefighter survivors' fund or to an 15 organization may be $25, $50, $75, $100, or more, in increments of $50, up to the 16 total amount of the permanent fund dividend that the applicant is entitled to receive. If 17 the total amount of contributions elected by an applicant exceeds the amount of the 18 permanent fund dividend that the applicant is entitled to receive, contributions shall be 19 deducted from the dividend in the order of priority elected by the applicant on the 20 application until the entire amount of the dividend that the applicant is entitled to 21 receive is allocated for contribution. The electronic dividend application form must 22 include notice that seven percent of the money contributed will be used for 23 administrative costs incurred in implementing this section, and money from the 24 dividend fund will not be used for that purpose. 25 * Sec. 3. AS 43.23.130(b) is amended to read: 26 (b) The department shall list each educational organization, community 27 foundation, or charitable organization eligible under (c) and (d) of this section, each 28 university campus that applies under (l) of this section, the Alaska Work and Save 29 Program, the crime victim compensation fund, and the peace officer and firefighter 30 survivors' fund on the contribution list. The department shall maintain an electronic 31 database for the contribution list that is accessible to the public and that permits
01 searches by organization or fund name, geographic location, and type. The department 02 shall provide a statement of the contributions made by an individual that is suitable for 03 federal income tax purposes to each individual who elects to contribute under (a) of 04 this section. 05 * Sec. 4. AS 43.23.130(m) is amended to read: 06 (m) In addition to the application fee in (f) of this section, the department shall 07 withhold a coordination fee from each organization, foundation, or university campus 08 that receives contributions under this section in the immediately preceding dividend 09 year. The coordination fee for an organization, foundation, or university campus that 10 receives contributions under this section shall be seven percent of the amount of 11 contributions reported by the department under (j) of this section for the organization, 12 foundation, or university campus for the immediately preceding dividend year. The 13 coordination fee shall be separately accounted for under AS 37.05.142 and shall be 14 accounted for separately from the application fee collected under (f) of this section. 15 The annual estimated balance in the account maintained under AS 37.05.142 for 16 coordination fees collected under this subsection may be appropriated for costs of 17 administering this section. The department may not withhold a coordination fee for 18 contributions to an Alaska Work and Save Program participant account, the crime 19 victim compensation fund or the peace officer and firefighter survivors' fund. 20 * Sec. 5. AS 44.25 is amended by adding new sections to read: 21 Article 5. Alaska Work and Save Program. 22 Sec. 44.25.400. Alaska Work and Save Program. (a) The Alaska Work and 23 Save Program is established in the Department of Revenue. The commissioner of 24 revenue or the commissioner's designee shall administer the program. 25 (b) An employer that does not offer a qualified retirement plan shall facilitate 26 participation of the employer's employees in the program. 27 (c) Under the program, 28 (1) an eligible employee is automatically enrolled in the program at the 29 default contribution rate established by the administrator; 30 (2) an eligible employee's contribution rate increases at the default rate 31 established by the administrator;
01 (3) an eligible employee may 02 (A) opt out of the program or a contribution rate increase; 03 (B) make contributions at a rate different than the default rate 04 established by the administrator; 05 (C) increase contributions at a rate different than the default 06 rate established by the administrator; 07 (4) any person who earns compensation in this state is eligible to 08 voluntarily enroll in the program. 09 (d) The state, the program, and the administrator 10 (1) may not guarantee a specific rate of return or interest for a 11 contribution; 12 (2) are not liable for any loss incurred by a participant as a result of 13 participating in the program; 14 (3) have no proprietary interest in contributions to, or earnings on 15 amounts contributed to, participant accounts. 16 (e) Nothing in AS 44.25.400 - 44.25.490 prohibits an employer from 17 establishing an alternative retirement plan for the employer's employees. 18 Sec. 44.25.410. Purpose of program. The administrator is the trustee of all 19 contributions and earnings on amounts contributed to participant accounts. The 20 administrator's primary mission is to 21 (1) develop a retirement program for employees in this state who are 22 not offered a qualified retirement plan by an employer; 23 (2) conduct a market and legal analysis of the program; and 24 (3) facilitate the investment of funds contributed to participant 25 accounts. 26 Sec. 44.25.420. Powers and duties of the administrator. (a) The 27 administrator shall 28 (1) develop and administer the program; 29 (2) adopt regulations to implement AS 44.25.400 - 44.25.490; 30 (3) establish a process for enrollment in the program, including 31 automatic employee enrollment and a process for an employee to opt out of the
01 program; 02 (4) direct the investment of funds contributed to participant accounts 03 and professionally manage participant accounts, consistent with 04 (A) investment restrictions established by the administrator; 05 and 06 (B) standards of prudence; 07 (5) provide a range of investment options and establish the rules by 08 which a participant may direct the participant's investments among those options; 09 (6) obtain an external performance review to evaluate the investment 10 policies of the program and include the results in the report provided under (7) of this 11 subsection; 12 (7) by the first day of each regular legislative session, report to the 13 governor and legislature on the financial condition of the program; 14 (8) develop an annual operating budget; 15 (9) in accordance with Internal Revenue Code limits, set a minimum, 16 maximum, and default contribution rate and set a default rate for contribution 17 increases; 18 (10) allow a participant to adjust the rate of contributions to the 19 participant's account and the rate of increases to the contribution rate; 20 (11) establish a process to allow a participant to make contributions, in 21 addition to the participant's contributions through payroll deduction, to the 22 participant's account, including contributions from the participant's permanent fund 23 dividend; 24 (12) establish a process to allow a participant to withdraw funds from a 25 program account; 26 (13) deposit a contribution to the program directly in a participant 27 account; 28 (14) maintain separate records and accounting for each participant 29 account; 30 (15) provide program and account status reports to participants at least 31 once a year;
01 (16) allow participants to maintain a program account regardless of 02 employer; 03 (17) keep fees assessed to defray program administration costs low; 04 (18) disclose to employees, employers, and program participants 05 (A) the benefits and risks of contributing to the program; 06 (B) instructions on contributing to the program and changing 07 contribution rates; 08 (C) the process to opt out of the program; 09 (D) the process to withdraw funds from a participant account; 10 (E) how to obtain additional program information; 11 (F) that the program is not an employer-sponsored retirement 12 plan; 13 (G) that financial advisors are best positioned to provide 14 financial advice and that employers are not liable for employee financial 15 decisions under AS 44.25.400 - 44.25.490; 16 (H) that the state, the program, and the administrator do not 17 guarantee participant accounts or a rate of return; 18 (I) how an employee may file a complaint against an employer 19 who fails to facilitate employee participation in the program; 20 (19) to the extent practicable, develop and administer the Alaska Work 21 and Save Program to allow employees in the state to benefit from applicable 22 incentives for retirement savings that may be created or allowed by federal law. 23 (b) The administrator may 24 (1) contract for services necessary to execute the administrator's 25 powers and duties; 26 (2) employ outside investment advisors to review investment policies; 27 (3) establish and collect fees to defray program administration costs; 28 (4) consider and purchase pooled private insurance for the program; 29 (5) develop and conduct outreach about the program and retirement 30 savings; 31 (6) when prudent or necessary to do so for the benefit of the program,
01 enter into agreements, including contracts, memoranda of understanding, partnerships, 02 or other arrangements, with other governmental entities, including other states, or 03 agencies or instrumentalities of other states, that maintain or are establishing 04 retirement savings programs compatible with or similar to the program; 05 (7) change the default contribution rate and default rate for 06 contribution increases; 07 (8) use private sector partnerships to administer and invest 08 contributions to the program; 09 (9) access information held by, and enter into service agreements with, 10 other departments and agencies of the state. 11 Sec. 44.25.430. Confidentiality of information. (a) Individual account 12 information for participant accounts, including an account holder's name, address, 13 telephone number, personal identification information, contributions, earnings, and 14 account balance, is confidential and not subject to disclosure as a public record. 15 (b) The identity of an employee who files a complaint under AS 44.25.440 is 16 confidential unless the employee waives confidentiality. 17 (c) Notwithstanding (a) of this section, individual account information may be 18 disclosed 19 (1) to the extent necessary to administer the program in a manner 20 consistent with the tax laws of the state and the Internal Revenue Code; or 21 (2) if the account holder expressly agrees to the disclosure, in writing. 22 Sec. 44.25.440. Employer compliance. (a) An employee may file a complaint 23 with the administrator alleging that an employer subject to AS 44.25.400 - 44.25.490 24 failed to facilitate employee participation in the program. 25 (b) The administrator may investigate, in response to a complaint or on the 26 administrator's own initiative, whether an employer is facilitating participation of the 27 employer's employees in the program as required under this section. If the 28 administrator determines that the employer failed to facilitate employee participation 29 in the program, the administrator may provide advice and training to the employer. 30 Sec. 44.25.490. Definitions. In AS 44.25.400 - 44.25.490, 31 (1) "administrator" means the commissioner of revenue or the
01 commissioner's designee; 02 (2) "employee" has the meaning given in AS 23.30.395; 03 (3) "employer" means a person or business that has employed more 04 than five other persons in the state for not less than three years and does not provide a 05 qualified retirement plan to employees; 06 (4) "program" means the Alaska Work and Save Program; 07 (5) "qualified retirement plan" includes a plan qualified under 26 08 U.S.C. 401(a) or (k), 403(a) or (b), 408(k) or (p), or 457(b) (Internal Revenue Code). 09 * Sec. 6. This Act takes effect January 1, 2027.