This bill requires the Department of Financial Institutions to establish and manage a retirement plan marketplace to connect individuals who are residents of this state (eligible individuals) and employers that have fewer than 100 employees and that employ at least one individual who is a resident of this state (small employers) with retirement plans offered by private financial services firms, to improve access to retirement income options for eligible individuals, to encourage eligible individuals to plan for retirement and increase retirement savings, and to remove barriers to entry for small employers to offer retirement plan options to employees. Under the bill, DFI must contract with a vendor to create a website to host the marketplace.
The bill provides that a financial services firm that wants to offer retirement plans on the marketplace may apply to DFI, and DFI may approve the firm to participate if the firm offers high quality retirement plans that comply with the federal Employee Retirement Income Security Act of 1974, commonly called ERISA. For each firm approved to participate in the marketplace, DFI must specify the retirement plans the firm may offer on the marketplace. The bill requires DFI to ensure that the marketplace offers only ERISA compliant retirement plans with reasonable fees and offers a range of retirement plans and investment options, including retirement plans for investors with various levels of risk tolerance and of various ages and retirement plans that are environmentally friendly and socially responsible. The bill limits the administrative fees a firm may charge a participant enrolled in a retirement plan offered on the marketplace to no more than 100 basis points in total annual fees.
Under the bill, DFI must, in cooperation with the Department of Revenue, the Department of Workforce Development, and other state agencies, develop a marketing program to publicize and promote the marketplace to small employers and eligible individuals.
This is a preliminary draft. An analysis will be provided in a subsequent version of this draft.
For further information see the state fiscal estimate, which will be printed as an appendix to this bill.
SB1035,,44The people of the state of Wisconsin, represented in senate and assembly, do enact as follows: SB1035,15Section 1. 20.144 (1) (c) of the statutes is created to read: SB1035,,6620.144 (1) (c) Retirement plan marketplace; operations. A sum sufficient for establishing, managing, and marketing the retirement plan marketplace under s. 224.56. SB1035,27Section 2. 20.144 (1) (cd) of the statutes is created to read: SB1035,,8820.144 (1) (cd) Retirement plan marketplace; vendor development contract. A sum sufficient to pay the costs of a contract to develop the retirement plan marketplace website under s. 224.56 (2) (b). SB1035,39Section 3. 20.144 (1) (g) of the statutes is amended to read: SB1035,,101020.144 (1) (g) General program operations. The amounts in the schedule for the general program operations of the department of financial institutions. Except as provided in pars. (a), to (cd), (h), (i), (j), and (u) and sub. (3), all moneys received by the department, other than by the office of credit unions and the division of banking, and 88 percent of all moneys received by the office of credit unions and the department’s division of banking shall be credited to this appropriation, but any balance at the close of a fiscal year under this appropriation shall lapse to the general fund. Annually, $150,000 of the amounts received under this appropriation account shall be transferred to the appropriation account under s. 20.575 (1) (g). SB1035,411Section 4. 224.56 of the statutes is created to read: SB1035,,1212224.56 Retirement plan marketplace. (1) Definitions. In this section: SB1035,,1313(a) “Eligible employer” means an employer that has fewer than 100 employees and that has at least one employee who is a resident of this state. “Eligible employer” does not include the state, its political subdivisions, or any office, department, independent agency, authority, institution, association, society, or other body in state or local government created or authorized to be created by the constitution or any law, including the courts and the legislature. SB1035,,1414(b) “Eligible individual” means an individual who is a resident of this state. SB1035,,1515(c) “Enrollee” means an eligible individual who is enrolled in a retirement plan offered on the marketplace. SB1035,,1616(d) “Financial services firm” means a nongovernmental person that is licensed by or holding a certificate of authority and in good standing issued by the department or the office of the commissioner of insurance and that is an administrator, as defined in 29 USC 1002 (16). SB1035,,1717(e) “Marketplace” means the retirement plan marketplace established under sub. (2) (a). SB1035,,1818(f) “Participating employer” means an eligible employer that elects to participate in the marketplace by entering into an agreement with one or more financial services firms to offer the eligible employer’s employees who are residents of this state the opportunity to participate in a retirement plan available on the marketplace. SB1035,,1919(2) Establishment of marketplace. (a) The department shall establish and manage a retirement plan marketplace that meets the requirements under this section to do all of the following: SB1035,,20201. Connect eligible employers and eligible individuals with retirement plans offered by financial services firms. SB1035,,21212. Improve access to retirement income options for eligible individuals. SB1035,,22223. Encourage eligible individuals to plan for retirement and increase retirement savings. SB1035,,23234. Remove barriers to entry for eligible employers to offer retirement plan options to employees who are residents of this state by educating eligible employers on the retirement plans that are available and by promoting qualified, low cost, and low administrative burden retirement plan options. SB1035,,2424(b) The department shall enter into a contract with a vendor to create a website to host the marketplace. Sections 16.705 and 16.75 do not apply to a contract entered into under this section. SB1035,,2525(c) The department shall consult with the department of employee trust funds and the investment board in designing and managing the marketplace. SB1035,,2626(3) Participating financial services firms; authorized retirement plans. (a) A financial services firm may apply to the department to offer retirement plans to eligible employers and eligible individuals on the marketplace. The department may approve the financial services firm to participate in the marketplace if the financial services firm offers high quality retirement plans that are subject to and comply with the federal Employee Retirement Income Security Act of 1974, 29 USC 1001 to 1461. SB1035,,2727(b) If the department approves a financial services firm’s application under par. (a), the department shall specify the retirement plans the financial services firm is authorized to offer on the marketplace. The department may authorize only retirement plans that are subject to and comply with the federal Employee Retirement Income Security Act of 1974, 29 USC 1001 to 1461, and that the department determines charge reasonable fees to participating employers and enrollees. SB1035,,2828(c) In approving financial services firms to participate in the marketplace, the department shall ensure that the marketplace offers eligible employers and eligible individuals a range of retirement plans and investment options that meet the needs of investors with various levels of risk tolerance and of various ages, including retirements plans that allow participating employers to contribute to employee accounts and retirement plans that allow employee payroll deductions, and shall ensure that the marketplace offers retirement plans that are environmentally friendly and socially responsible. SB1035,,2929(d) A financial services firm that participates in the marketplace may not charge a participating employer or enrollee an administrative fee that is more than 100 basis points in total annual fees. If the financial services firm requests, the department may authorize the financial services firm to charge enrollees nominal fees for new or small balance accounts. The financial services firm shall provide participating employers and enrollees information about the applicable retirement plan’s historical investment performance. SB1035,,3030(4) Marketing. (a) The department shall develop a marketing program to publicize and promote the marketplace. The department shall cooperate with other state agencies, including the department of revenue and the department of workforce development, in marketing and providing outreach services to eligible employers and eligible individuals. SB1035,,3131(b) The department may engage the services of a 3rd-party vendor to provide marketing services. SB1035,,3232(5) Rules. The department may promulgate rules to implement and administer this section.
