SB1076: Bill Text

SB1076,,65 4. A low-cost fund focused on asset growth.

SB1076,,66 5. A low-cost fund focused on balancing risk and return.

SB1076,,67 (f) The investment policy for the plan includes all of the following concepts:

SB1076,,68 1. Best practices in the industry for retirement savings vehicles.

SB1076,,69 2. The promotion of portability of retirement savings accounts.

SB1076,,70 3. The minimization of fees and expenses.

SB1076,,71 4. The maximization of possible income replacement, balanced with appropriate levels of risk.

SB1076,,72 (g) The plan requires the investment administrator to offer to each enrolled eligible employee, before the employee makes his or her investment selections, a tool allowing the employee to identify the employee’s risk tolerance and projected retirement date as an aid to the employee in selecting suitable investments under the plan.

SB1076,,73 (h) The plan requires that the first $400 of an enrolled eligible employee’s contributions be deposited in a WisEARNS savings account and thereafter, unless the employee selects a different investment option, the employee’s contributions be to a WisEARNS retirement account and deposited in a fund described in par. (e) 2. The plan shall allow an employee to select a different investment option before the first $400 is deposited in a WisEARNS retirement account. An employee shall be allowed to withdraw the first $400 for emergency use from the employee’s WisEARNS savings account, and contributions subsequent to the withdrawal shall be deposited in the WisEARNS savings account until the amount in the employee’s WisEARNS savings account is restored to $400.

SB1076,,74 (i) Except as provided in par. (k), during an eligible employee’s first year of enrollment in the plan, the participating employer’s payroll deduction each pay period shall be at a rate of 5 percent of the employee’s gross wages, and this deducted amount shall be remitted to the investment administrator as the employee’s account contribution.

SB1076,,75 (j) Except as provided in par. (k), a participating employer shall increase the payroll deduction rate under par. (i) by 1 percent per year until the payroll deduction rate is the maximum allowed under the Internal Revenue Code.

SB1076,,76 (k) An enrolled eligible employee may elect a different payroll deduction rate than that provided for in pars. (i) and (j), except that the rate may not be less than 1 percent or more than the maximum allowed under the Internal Revenue Code.

SB1076,,77 (L) The plan sets forth a process for enrollment of eligible employees in the plan, which shall include all of the following processes:

SB1076,,78 1. Automatic enrollment of eligible employees in the plan.

SB1076,,79 2. Opting out of enrollment in the plan before any payroll deduction is made.

SB1076,,80 3. Opting out of enrollment in the plan at any time after a payroll deduction is made.

SB1076,,81 4. Changing the payroll deduction rate from that provided for in pars. (i) and (j)

SB1076,,82 (m) The plan provides a process for all of the following:

SB1076,,83 1. Employer withholding from employees’ wages contributions to WisEARNS accounts and remittance of those contributions to the investment administrator of the plan.

SB1076,,84 2. Eligible employees’ and self-employed individuals’ nonpayroll contributions to their WisEARNS retirement accounts.

SB1076,,85 3. Emergency withdrawals from WisEARNS savings accounts in accordance with procedures established by the board under sub. (7) (f).

SB1076,,86 (n) The plan requires contributions to WisEARNS accounts to be deposited directly with the investment administrator of the plan.

SB1076,,87 (o) The plan, to the greatest extent possible, uses existing employer and public infrastructure to facilitate contributions to WisEARNS accounts and outreach to employees and private employers.

SB1076,,88 (p) The plan prohibits employer contribution to an employee WisEARNS account.

SB1076,,89 (q) The plan requires the maintenance of separate records and accounting for each WisEARNS account and provides for reports on the status of accounts to be provided to plan participants at least once per quarter.

SB1076,,90 (r) The plan allows the owner of a WisEARNS retirement account to maintain that account regardless of his or her place of employment and to roll over money from that account to other retirement accounts as allowed under the Internal Revenue Code.

SB1076,,91 (s) The plan provides for the pooling of WisEARNS retirement accounts for investment purposes by the investment administrator of the plan.

SB1076,,92 (t) The plan is professionally managed in a way that keeps administrative costs low. The plan shall allow the investment administrator of the plan to charge and collect application, account, and administrative fees in an amount that does not exceed an amount that is sufficient to defray the costs of administering the plan.

SB1076,,93 (u) The plan provides that the state and any employer participating in the plan have no proprietary interest in an employee’s contributions to a WisEARNS account or in the earnings of such an account.

SB1076,,94 (v) The plan provides that the investment administrator of the plan is the trustee of all contributions to a WisEARNS account and earnings on those contributions.

SB1076,,95 (w) The plan does not impose any duties under the federal Employee Retirement Income Security Act of 1974, 29 USC 1001 to 1461, on an employer and does not expose any employer or the state, either as an employer or in the administration of the plan, to any potential liability under that act.

SB1076,,96 (x) The plan provides a process for making withdrawals from an employee’s WisEARNS retirement account.

SB1076,,97 (y) The plan sets forth the requirements that an employer that offers a qualified retirement plan described in par. (b) must meet in order to obtain an exemption from the requirement under par. (b) that the employer withhold and remit employee contributions to the plan through payroll deductions and a process for obtaining such an exemption.

SB1076,,98 (z) The plan sets forth the contents and frequency of disclosures that the board must make to employers, eligible employees and other individuals participating in the plan. Those disclosures shall include all of the following:

SB1076,,99 1. A discussion of the benefits and risks associated with making contributions to a retirement savings account.

SB1076,,100 2. Instructions on the process for making contributions to a WisEARNS account, opting out of participation in the plan, and making withdrawals from a WisEARNS account.

SB1076,,101 3. Instructions on how to obtain additional information about the plan.

SB1076,,102 4. A notice advising that employees should contact a financial or investment adviser for financial or investment advice, that participating employers may not provide financial or investment advice, and that participating employers are not liable for financial or investment decisions made by an employee.

SB1076,,103 5. A notice advising that the plan is not an employer-sponsored retirement savings plan.

SB1076,,104 6. A notice that a rate of interest or return on a WisEARNS retirement account, and the payment of principal, interest, or a return on such an account, are not guaranteed by the state and that the state may not be held liable for any loss incurred by any person as a result of participating in the plan.

SB1076,,105 (9) Construction. Nothing in this section guarantees any rate of interest or return on a WisEARNS retirement account or the payment of principal, interest, or a return on such an account. The state may not be held liable for any loss incurred by any person as a result of participating in the plan.

SB1076,,106 (10) Confidentiality. All personal and financial information pertaining to the owner or a beneficiary of a WisEARNS account is confidential and may not be disclosed except as follows:

SB1076,,107 (a) As necessary to administer the plan, the tax laws of this state, and the Internal Revenue Code.

SB1076,,108 (b) With the prior written consent of the subject of the information.

SB1076,,109 (11) Liability for private employers. No private employer is a fiduciary with respect to the plan. No private employer is liable for any of the following with respect to the plan or an eligible employee:

SB1076,,110 (a) An eligible employee’s decision to participate in the plan.

SB1076,,111 (b) Investment decisions made by the board or an eligible employee who participates in the plan.

SB1076,,112 (c) The administration or investment performance of the plan, including any interest rate or other rate of return on any contribution or account balance.

SB1076,,113 (d) The plan design.

SB1076,,114 (e) An eligible employee’s familiarity with and compliance with the applicable provisions of the Internal Revenue Code and U.S. department of treasury regulations related to individual retirement accounts.

SB1076,,115 (f) Any loss, failure to realize any gain, or other adverse consequences, including any adverse tax consequences or loss of favorable tax treatment, public assistance, or other benefits, incurred by any eligible employee as a result of participating in the plan.

SB1076,,116 (12) Liability of board and state. No cause of action of any nature may arise against and no civil liability may be imposed upon a member of the board for any act or omission in the performance of his or her powers and duties related to the plan, unless the individual asserting liability proves that the act or omission constitutes willful misconduct. No cause of action of any nature may arise against and no civil liability may be imposed upon the state or an employee of the state for any act or omission related to the powers and duties of the state or employee in the performance of any powers or duties related to the plan unless the individual asserting liability proves that the act or omission constitutes willful misconduct. No member of the board, the state, board or commission of the state, appointee, or employee of the state is liable for any of the following:

SB1076,,117 (a) An eligible employee’s familiarity with and compliance with the applicable provisions of the Internal Revenue Code and U.S. department of treasury regulations related to individual retirement accounts.

SB1076,,118 (b) The interest rate or other rate of return, on an account balance or investment performance.

SB1076,,119 (c) Any loss, failure to realize any gain, or other adverse consequences, including any adverse tax consequences or loss of favorable tax treatment, public assistance, or other benefits, incurred by any eligible employee as a result of participating in the plan.

SB1076,,120 (d) The debts, contracts, and obligations of the plan or the board.

SB1076,,121 (13) Reports. (a) By October 15 of each year, the board shall submit a report of its activities to the governor and the appropriate standing committees of the legislature under s. 13.172 (3). The report shall include information on the performance of the plan and any recommended changes to the plan.

SB1076,,122 (b) By January 1, 2028, the board shall submit a report of its activities to the governor and the appropriate standing committees of the legislature under s. 13.172 (3).

SB1076,,123 (14) Standard of responsibility. Members of the board and any 3rd-party administrators of the plan shall discharge their duties as fiduciaries with respect to the trust fund under s. 25.52 for the interest of eligible employees who participate in the plan as follows:

SB1076,,124 (a) To administer assets of the trust fund solely for the purpose of providing benefits to eligible employees who are enrolled in the plan at a reasonable cost and not for any other purpose.

SB1076,,125 (b) To manage the money and property of the trust fund with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a similar capacity, with the same resources, and familiar with like matters exercises in the conduct of an enterprise of a like character with like aims.

SB1076,,126 (15) Assistance. The office of the state treasurer shall provide the board with any assistance necessary to carry out this section, including staff, equipment, and office space.

SB1076,3 Section 3. 16.705 (9) of the statutes is amended to read:

SB1076,,128 16.705 (9) The department shall maintain a list of persons that are or have been a party to a contract with the state under this subchapter or s. 14.69 who have violated a provision of this subchapter or a contract under this subchapter or s. 14.69. The parties on the list are ineligible for state contracts and no state contract may be awarded to a party on the ineligible list. The department may remove any party from the ineligible list if the department determines that the party’s practices comply with this subchapter or s. 14.69 and provide adequate safeguards against future violations of this subchapter or s. 14.69 or contracts under this subchapter or s. 14.69.

SB1076,4 Section 4. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated:

SB1076,5 Section 5. 20.517 of the statutes is created to read:

SB1076,,131 20.517 WisEARNS. There is appropriated to the WisEARNS board for the following programs:

SB1076,,132 (1) WisEARNS plan. (a) Establishment and administration of plan. Biennially, the amounts in the schedule to establish and administer the plan under s. 14.69.

SB1076,,133 (q) Board operating expenses; WisEARNS plan administration trust fund. From the WisEARNS plan administration trust fund, all moneys deposited in that fund under s. 14.69 (7) (b) for the operating expenses of the board.

SB1076,,134 (r) Gifts and grants; WisEARNS plan administration trust fund. From the WisEARNS plan administration trust fund, all moneys received as contributions, gifts, grants, and bequests for that trust fund under s. 14.69 (6) (b) to carry out the purposes for which made and received.

SB1076,6 Section 6. 20.923 (4) (c) 7. of the statutes is created to read:

SB1076,,136 20.923 (4) (c) 7. State treasurer; WisEARNS board: executive director.

SB1076,7 Section 7. 25.52 of the statutes is created to read:

SB1076,,138 25.52 WisEARNS plan administration trust fund. There is established a separate nonlapsible trust fund designated as the WisEARNS plan administration trust fund, to consist of all moneys deposited in that fund under s. 14.69 (6) (b) and (7) (b).

SB1076,8 Section 8. 71.05 (6) (a) 15. of the statutes is amended to read:

SB1076,,140 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (4s), (4w), (5e), (5i), (5j), (5k), (5r), (5rm), (6n), and (10) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership’s, company’s, or tax-option corporation’s income under s. 71.21 (4) or 71.34 (1k) (g).

SB1076,9 Section 9. 71.07 (4s) of the statutes is created to read:

SB1076,,142 71.07 (4s) Retirement plan startup costs tax credit. (a) Definitions. In this subsection:

SB1076,,143 1. “Claimant” means an eligible employer, as defined in section 45E (c) of the Internal Revenue Code, that files a claim under this subsection.

SB1076,,144 2. “First credit year” has the meaning given in section 45E (d) (3) of the Internal Revenue Code.

SB1076,,145 3. “Qualified startup costs” has the meaning given in section 45E (d) (1) of the Internal Revenue Code.

SB1076,,146 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the taxes imposed under s. 71.02, up to the amount of the tax, an amount equal to 50 percent of the qualified startup costs paid or incurred by the claimant during the taxable year.

SB1076,,147 (c) Limitations. 1. The credit claimed under this subsection in a taxable year may not exceed the greater of the following:

SB1076,,148 a. $500.

SB1076,,149 b. The lesser of $250 for each employee of the claimant who is not a highly compensated employee, as defined in section 414 (q) of the Internal Revenue Code, or $5,000.

SB1076,,150 2. The credit under this subsection may be claimed only for 3 consecutive taxable years beginning with the first credit year.

SB1076,,151 3. The rules under section 45E (e) (1) and (3) of the Internal Revenue Code apply to the credit under this subsection.

SB1076,,152 4. No credit may be claimed under this subsection for an amount that is deducted under section 162 of the Internal Revenue Code.

SB1076,,153 5. A partnership, limited liability company, or tax-option corporation may not claim the credit under this subsection, but the partners, members, and shareholders may claim the credit based on the payments of the qualified startup costs by the partnership, limited liability company, or tax-option corporation. The partnership, limited liability company, or tax-option corporation shall calculate the amount of the credit that may be claimed by each partner, member, or shareholder and shall provide that information to each of them. The partners, members, and shareholders may claim the credit in proportion to their ownership interests.