A bill is before the Maine legislature that would amend the Maine Retirement Savings Program in a variety of ways.
Background. Gov. Janet Mills (D) signed the Act To Promote Individual Retirement Savings through a Public-Private Partnership (LD 1622) into law June 24, 2022. The legislation had been introduced by Sen. Eloise Vitelli (D-Sagadahoc).
That measure requires each covered employer to allow its covered employees to decide whether or not to contribute to a payroll deduction Roth IRA by automatically enrolling them but with the opportunity to opt out. Covered employees who opt out will be automatically reenrolled at regular intervals but will have the opportunity to opt out again. It also created the Maine Retirement Savings Board to administer the program.
Legislation before the Maine Senate and House of Representatives would amend the measure that creates the program. Sen. Vitelli also introduced this measure, SP 451. The bill would change provisions affecting employees, employers, and the Board.
Employees. The law as enacted provides that covered employees will automatically contribute 5% of their salary or wages initially, and may elect to contribute at a higher or lower rate. It also calls for an annual increase of contribution rates by no more than 1% of wages or salary up to a maximum of 8%. SP 451 calls for that maximum to be increased from 8% to 10%.
Employers. The bill would postpone the dates by which covered employers are required to participate in the program and similarly postpones the dates when the board may begin assessing penalties to covered employers who fail to participate. SP 451 also specifies that covered employers are deemed to have given reasonable notice of the need to participate in the program after the program has communicated the need to participate three times.
Maine Retirement Savings Board. SP 451 includes provisions that would allow the Board to:
- establish that it must meet no less than quarterly;
- enter into an intergovernmental agreement or memorandum of understanding with the state and any agency or instrumentality of the state in order to further the successful implementation and operation of the program; and
- change the name of the program.
The bill also provides that Board employees (1) could participate in the state health insurance plan and (2) participate in the defined contribution plans offered by the Maine Public Employees Retirement System without being required to participate in the defined benefit plan the system offers.
Status. SP 451 was introduced in the Senate on March 9 and is before the Committee on Health Coverage, Insurance and Financial Services. It was introduced one week later in the House and is now before that chamber’s Committee on Health Coverage, Insurance and Financial Service.
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