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Bills in CT, ME Would Adjust State Coverage for Private Sector Employees

Legislation

The ink is barely dry on the measures that created state-run retirement plans in Connecticut and Maine that provide coverage for private-sector employees whose employers do not, but already bills are advancing in the legislatures in those states to fine-tune those programs. 

Connecticut

The Nutmeg State’s House of Representatives has voted in favor of a bill that would make a variety of adjustments to the Connecticut Retirement Security Program, the state-run program that provides coverage for private-sector employees whose employers do not. 

Rep. Henry Genga (D-East Hartford) introduced HB-6552 in January. Sen. Julie Kushner (D-Fairfield) introduced the Senate version in that chamber. 

The legislation would make a variety of changes to the Connecticut Retirement Security Program.

Employees. The bill would reduce, from 120 days to 60 days, how long he or she must work for their employer in order to be a “covered employee” under the program. 

Employers. The bill would affect employers in a number of ways. It would: 

  • remove an obsolete Jan. 1, 2018 deadline by which employers were to begin annually providing their employees with certain informational materials on the program; 
  • protect employers covered by the program from liability for: (1) their employees’ decisions to participate or not in the program or the board’s or enrollees’ investment decisions, and (2) investment returns, program design, and benefits paid to participants; 
  • provide that employers are not: (1) fiduciaries of the program; (2) responsible for the program’s administration, investments, or investment performance; 
  • provide that an employer found to be noncompliant 90 calendar days after a final notice of noncompliance is served would be subject to a penalty based on the number of employees; and 
  • create a notice requirement and financial penalty for employers that are not in compliance, rather than allowing the labor commissioner or comptroller to sue them, as under current law. Those failures include:
    • not enrolling eligible employees in the program as required; and
    • not timely remitting employee contributions to the program as required.

Administration. The legislation would make a wide range of changes to how the program is administered. It would: 

  • change the board’s quorum requirement from eight of the board’s members to a majority, and allows the board to act by a majority vote of present members;
  • allow the comptroller to adopt regulations about program enforcement activities, such as financial penalties, to administer the program;
  • allow the comptroller to implement the program’s provisions on violations and possible civil actions; 
  • allow the comptroller to enter into memoranda of understanding (MOUs) with the Department of Labor and other state agencies about (1) gathering or disseminating information needed to operate the program, (2) sharing the costs of doing so, and (3) reimbursing costs for certain enforcement activities; 
  • allow the comptroller to enter into intergovernmental agreements to collaborate on data collection, shared program administration, and pooled investments; and
  • repeal a requirement for the comptroller to set up and maintain a website for qualified employers and vendors; and 
  • protect anyone who serves on the program’s advisory board from being subject to civil liabilities for the program’s debts, obligations, or liabilities, and require the comptroller to indemnify and hold harmless anyone acting under the law as an advisory board member.

Reimbursements. The bill would make a variety of changes to current law concerning reimbursements to the General Fund. It would: 

  • remove an Oct. 1, 2023, deadline for the program to reimburse the General Fund for any money spent from it to administer the program;
  • remove a requirement for the reimbursement to also cover General Fund costs of providing compensation for covered employees;
  • require that the plan must: (1) include a schedule for reimbursing any money spent from the General Fund to the program, and (2) incorporate any previously agreed upon terms between the comptroller and treasurer to repay the General Fund for a funding advance made under an existing law that allowed such an advance;
  • require that the reimbursement payments continue under the plan’s terms until all money spent from the General Fund for the program is repaid; and 
  • allow the program to pay any unpaid amounts earlier than the plan requires. 

Effective Date. The legislation would become effective upon enactment. 

Status. HB-6552 passed in the Connecticut House on May 17 in an 88-61 vote. It was put on the Senate calendar on May 19. 

Maine

The state House and Senate have both passed a measure that would make adjustments to the Maine Retirement Savings Program. 

Sen. Eloise Vitelli (D-Sagadahoc) introduced SP 451 on March 9. The bill would amend the Maine Retirement Savings Program by changing provisions affecting employees, employers, and the board that runs the program. 

Among the changes the bill would make is to add language to the Maine Retirement Savings Act (MRSA) that says that:

  • a covered employer shall offer the program to its covered employees no later than Dec. 31, 2024;  and 
  • a covered employer with fewer than five employees is not required to offer the program to its covered employees, but may do so. 

The bill also changes the amount of any penalty imposed on a covered employer for the failure to enroll a covered employee without reasonable cause, and the dates by which those are imposed.


Status. The Senate passed the bill on May 16; the House did so two days later. However, the Senate and House versions now must be reconciled.