Governor Malloy signed into law Public Act No. 16-29 on May 27, 2016.
HB 5591 was introduced by the Labor and Public Employees Committee on March 3, 2016. The bill would establish the Connecticut Retirement Security Exchange which would be administered by the Connecticut Retirement Security Authority and its fifteen (15) member Board. The Authority will be tasked with establishing and maintaining Roth IRAs. The program would be a mandatory (penalties for noncompliance) state-sponsored payroll deduction IRA for private sector workers at employers with five or more employees that do not currently offer a retirement plan. An automatic default three percent payroll deduction would be made into individual retirement accounts unless an employee chooses another amount or opts out of the program at any time. The program would be designed to provide for lifetime income, including investing at least 50 percent of a participant’s account balance at retirement age into a lifetime income investment. The Board will conduct a study of the interest of participants and potential participants of the Program in investing in a traditional IRA option. The Board will submit a report no later than January 1, 2019 to the joint standing committee of the General Assembly. The Program would only be established if the Authority can ensure that the system will be self-sustaining, qualifies for favorable federal tax treatment and is not considered an employment benefit plan under the Employee Retirement Income Security Act of 1974 (ERISA). Not later than January 1, 2018, each qualified employer shall provide each of its covered employees with information about the program provided by the Authority. Not later than 60 days after such material is provided, the employer shall enroll each of its covered employees in the program.
By law, the new Board should be appointed by January 1, 2017. As of this date, several appointments are still to be made to the 15-member Board, including those by the Governor. Last updated 12/21/2016.
2016 Legislative Session Dates: February 3, 2016 – May 4, 2016
Visit the official website for the Connecticut State Legislature.
Source: Georgetown University’s Center for Retirement Initiatives