State legislatures continue to be active in considering ways to improve and enhance the retirement readiness of their citizens. The latest: North Carolina and Maine.
North Carolina
Legislation is before the North Carolina House of Representatives that would call on the Department of the State Treasurer to study the establishment of a voluntary “work and save” retirement program for private-sector workers whose employers don’t provide one.
The bill, H 515, is intended to increase the retirement savings options available to private-sector workers. It provides that participation in such a program would be entirely voluntary and benefits would be portable between employers.
The legislation directs the department to consider the recommendations AARP made regarding such a program when it conducts the study. The department would be required to report its findings and recommendations to the 2015 General Assembly when it reconvenes in 2016.
The bill was filed with the House on April 1 and on the next day was referred to the House Committee on Rules, Calendar and Operations. If enacted, the measure would go into effect immediately.
Another bill, H 264, would allow community colleges to participate in the state’s 403(b) supplemental retirement plan. In addition to creating opportunities for local boards of trustees to offer 403(b)s, the bill would allow such boards to offer participation on the North Carolina Public School Teachers’ and Professional Educators’ Investment Plan and allow them to elect to make contributions to employees’ accounts on behalf of employees.
The Department of the State Treasurer and Board of Trustees for the North Carolina Supplemental Retirement Plans would determine the way the funds would be invested and would have the sole responsibility for choosing a service provider for the North Carolina Public School Teachers’ and Professional Educators’ Investment Plan.
The bill was filed in the House on March 17 and on the next day referred to the House Committee on Pensions and Retirement. The committee reported the bill favorably on March 31 and it was referred to the Committee on Appropriations on the same day. If it is enacted, the measure will go into effect on Oct. 15, 2015.
Maine
The Maine bill, HP 715, would establish the Adjustable Pension Plan Program, a combined defined benefit and defined contribution retirement plan, to replace the State Employee and Teacher Retirement Program for state employees and teachers hired on or after July 1, 2017.
Under the bill, all state employees and teachers hired on or after July 1, 2017 would be covered by the Social Security and become members of the Adjustable Pension Plan Program as a condition of their employment. All state employees and teachers hired before that date would be required to become members of the State Employee and Teacher Retirement Program.
The bill also would direct the Maine Public Employees Retirement System to review the laws governing the existing retirement program and by Dec. 2, 2015 develop proposed legislation necessary to implement the Adjustable Pension Plan Program in accordance with the plan document developed by the Maine Public Employees Retirement System and submitted in March 2012 to the Joint Standing Committee on Appropriations and Financial Affairs.
The bill was referred to the House Committee on Appropriations and Fiscal Affairs on March 24 and the Senate Committee on Appropriations on the next day. The House committee held a public hearing on it on April 13. Representatives from the Maine Education Association, Maine School Management Association, MSEA/SEIU Local 1989 and Maine Rep. Tom Winsor (R-Norway) presented testimony; of them, only Winsor expressed support for the measure.
North Carolina
Legislation is before the North Carolina House of Representatives that would call on the Department of the State Treasurer to study the establishment of a voluntary “work and save” retirement program for private-sector workers whose employers don’t provide one.
The bill, H 515, is intended to increase the retirement savings options available to private-sector workers. It provides that participation in such a program would be entirely voluntary and benefits would be portable between employers.
The legislation directs the department to consider the recommendations AARP made regarding such a program when it conducts the study. The department would be required to report its findings and recommendations to the 2015 General Assembly when it reconvenes in 2016.
The bill was filed with the House on April 1 and on the next day was referred to the House Committee on Rules, Calendar and Operations. If enacted, the measure would go into effect immediately.
Another bill, H 264, would allow community colleges to participate in the state’s 403(b) supplemental retirement plan. In addition to creating opportunities for local boards of trustees to offer 403(b)s, the bill would allow such boards to offer participation on the North Carolina Public School Teachers’ and Professional Educators’ Investment Plan and allow them to elect to make contributions to employees’ accounts on behalf of employees.
The Department of the State Treasurer and Board of Trustees for the North Carolina Supplemental Retirement Plans would determine the way the funds would be invested and would have the sole responsibility for choosing a service provider for the North Carolina Public School Teachers’ and Professional Educators’ Investment Plan.
The bill was filed in the House on March 17 and on the next day referred to the House Committee on Pensions and Retirement. The committee reported the bill favorably on March 31 and it was referred to the Committee on Appropriations on the same day. If it is enacted, the measure will go into effect on Oct. 15, 2015.
Maine
The Maine bill, HP 715, would establish the Adjustable Pension Plan Program, a combined defined benefit and defined contribution retirement plan, to replace the State Employee and Teacher Retirement Program for state employees and teachers hired on or after July 1, 2017.
Under the bill, all state employees and teachers hired on or after July 1, 2017 would be covered by the Social Security and become members of the Adjustable Pension Plan Program as a condition of their employment. All state employees and teachers hired before that date would be required to become members of the State Employee and Teacher Retirement Program.
The bill also would direct the Maine Public Employees Retirement System to review the laws governing the existing retirement program and by Dec. 2, 2015 develop proposed legislation necessary to implement the Adjustable Pension Plan Program in accordance with the plan document developed by the Maine Public Employees Retirement System and submitted in March 2012 to the Joint Standing Committee on Appropriations and Financial Affairs.
The bill was referred to the House Committee on Appropriations and Fiscal Affairs on March 24 and the Senate Committee on Appropriations on the next day. The House committee held a public hearing on it on April 13. Representatives from the Maine Education Association, Maine School Management Association, MSEA/SEIU Local 1989 and Maine Rep. Tom Winsor (R-Norway) presented testimony; of them, only Winsor expressed support for the measure.
Ray Harmon is Government Affairs Counsel for the American Retirement Association.
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