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House File 189 - IntroducedA Bill ForAn Act 1establishing a retirement savings plan trust, and
2including implementation and effective date provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 12K.1 Purpose and definitions.
21. The general assembly finds that the general welfare and
3well-being of the state are directly related to the ability
4of the citizens of the state to save for their retirement
5years, and that a vital and valid public purpose is served by
6the creation and implementation of programs which encourage
7and make possible the attainment of financial security by
8the greatest number of citizens of the state. In order to
9make available to the citizens of the state an opportunity to
10fund future retirement savings needs, it is necessary that a
11public trust be established in which moneys may be invested for
12retirement.
132. As used in this chapter, unless the context otherwise
14requires:
15a. “Administrative fund” means the administrative fund
16established under section 12K.4.
17b. “Employer” means a person or entity engaged in a
18business, industry, profession, trade, or other enterprise in
19Iowa.
20c. “Internal Revenue Code” means the same as defined in
21section 422.3.
22d. “Iowa retirement savings plan trust” or “trust” means the
23trust created under section 12K.2.
24e. “Participant” means an individual that has entered into a
25participation agreement under this chapter to contribute to an
26Iowa retirement savings plan.
27f. “Participation agreement” means an agreement between a
28participant and the trust entered into under this chapter.
29g. “Program fund” means the program fund established under
30section 12K.4.
31 Sec. 2. NEW SECTION. 12K.2 Creation of the Iowa retirement
32savings plan trust.
33An Iowa retirement savings plan trust as allowed by the
34Internal Revenue Code is created for the purpose of helping
35Iowans save for retirement. The treasurer of state is the
-1-1trustee of the trust, and has all powers necessary to carry out
2and effectuate the purposes, objectives, and provisions of this
3chapter pertaining to the trust, including the power to do all
4of the following:
51. Make and enter into contracts necessary for the
6administration of the trust.
72. Enter into agreements with any financial institution,
8the state, or any federal or other state agency, or other
9entity as required to implement this chapter.
103. Carry out the duties and obligations of the trust
11pursuant to this chapter.
124. Accept any grants, gifts, legislative appropriations,
13and other moneys from the state, any unit of federal, state, or
14local government, or any other person, firm, partnership, or
15corporation which the treasurer of state shall deposit into the
16administrative fund or the program fund.
175. Carry out studies and projections so the treasurer of
18state may advise participants regarding present and estimated
19future retirement needs and levels of financial participation
20in the trust required in order to enable participants to
21achieve their retirement funding objectives.
226. Participate in any federal, state, or local governmental
23program for the benefit of the trust.
247. Procure insurance against any loss in connection with the
25property, assets, or activities of the trust.
268. Enter into agreements with participants and employers.
279. Make distributions and refunds to participants pursuant
28to participation agreements as prescribed by the Internal
29Revenue Code.
3010. Invest moneys from the program fund in any investments
31which are determined by the treasurer of state to be
32appropriate.
3311. Engage investment advisors, if necessary, to assist in
34the investment of trust assets.
3512. Contract for goods and services and engage personnel
-2-1as necessary, including consultants, actuaries, managers,
2legal counsel, and auditors, for the purpose of rendering
3professional, managerial, and technical assistance and advice
4to the treasurer of state regarding trust administration and
5operation.
613. Establish, impose, and collect administrative fees
7and charges in connection with transactions of the trust, and
8provide for reasonable service charges, including penalties for
9cancellations and late payments with respect to participation
10agreements.
1114. Administer the funds of the trust.
1215. Adopt rules pursuant to chapter 17A for the
13administration of the trust.
14 Sec. 3. NEW SECTION. 12K.3 Limitation of liability.
15The trust, the treasurer of state, and the state of Iowa may
16not guarantee any rate of return or any interest rate on any
17contribution to the trust. The trust, treasurer of state, and
18the state of Iowa are not liable for any loss incurred by any
19person as a result of participating in the trust.
20 Sec. 4. NEW SECTION. 12K.4 Program and administrative funds
21— investment and payments.
221. The treasurer of state shall segregate moneys received
23by the trust into two funds: the program fund and the
24administrative fund.
252. All moneys paid by participants in connection with
26participation agreements shall be deposited as received into
27separate accounts within the program fund.
283. Contributions to the trust made by participants may only
29be made in the form of cash.
30 Sec. 5. NEW SECTION. 12K.5 Cancellation of agreements.
31A participant may cancel a participation agreement at will.
32Upon cancellation of a participation agreement, a participant
33shall be entitled to the return of the participant’s account
34balance subject to penalties prescribed by the Internal Revenue
35Code.
-3-1 Sec. 6. NEW SECTION. 12K.6 Annual audited financial report.
21. The treasurer of state shall submit an annual audited
3financial report, prepared in accordance with generally
4accepted accounting principles, on the operations of the trust
5by January 1 to the governor and the general assembly.
62. The annual audit shall be made either by the auditor
7of state or by an independent certified public accountant
8designated by the auditor of state and shall include direct and
9indirect costs attributable to the use of outside consultants,
10independent contractors, and any other persons who are not
11state employees.
123. The annual audit shall be supplemented by all of the
13following information prepared by the treasurer of state:
14a. Any related studies or evaluations prepared in the
15preceding year.
16b. A summary of the benefits provided by the trust,
17including the number of participants in the trust.
18c. Any other information which is relevant in order to make
19a full, fair, and effective disclosure of the operations of the
20trust.
21 Sec. 7. NEW SECTION. 12K.7 Tax considerations.
22For federal tax purposes, the Iowa retirement savings plan
23trust shall conform to the requirements established by the
24Internal Revenue Code to be able to operate as a retirement
25plan. The plan may conform to the requirements under section
26401(a), section 408, or another section of the Internal Revenue
27Code which allows Iowans the best retirement option under the
28trust as determined by the treasurer of state.
29 Sec. 8. NEW SECTION. 12K.8 Property rights to assets in
30trust.
311. The assets of the trust shall at all times be preserved,
32invested, and expended solely and only for the purposes of the
33trust and shall be held in trust for the participants.
342. No property rights in the trust shall exist in favor of
35the state.
-4- 13. The assets of the trust shall not be transferred or used
2by the state for any purposes other than the purposes of the
3trust.
4 Sec. 9. NEW SECTION. 12K.9 Construction.
5This chapter shall be construed liberally in order to
6effectuate its purpose.
7 Sec. 10. IMPLEMENTATION PROVISION. The treasurer of state
8shall provide that when the requirements of chapter 12K are
9enacted, individuals may begin making contributions to the Iowa
10retirement savings plan trust, as created by section 12K.2, as
11enacted in this Act, no earlier than July 1, 2023.
12 Sec. 11. EFFECTIVE DATE. This Act takes effect on July 1,
132022.
14EXPLANATION
15The inclusion of this explanation does not constitute agreement with
16the explanation’s substance by the members of the general assembly.
17This bill creates the Iowa retirement savings plan trust
18under the office of treasurer of state for the purpose of
19helping Iowans save for retirement. The bill provides that
20the trust be operated so that, for federal tax purposes, it
21meets the requirements of a retirement plan as provided by the
22Internal Revenue Code.
23The state treasurer is the trustee of the trust and has
24numerous powers, as specified in the bill, for the purpose of
25carrying out the purpose of the trust. Powers granted the
26treasurer of state to effectuate the purpose of the trust
27include entering into agreements with trust participants and
28employers, investing moneys in the trust, and entering into any
29agreements or contracts necessary to carry out the purposes of
30the trust.
31The bill provides that the state, the treasurer of state,
32and the trust may not guarantee any rate of return on any
33contributions to the trust and are not liable for any loss
34incurred by any person as a result of participating in the
35trust. The bill requires the treasurer to submit an annual
-5-1audited financial report on the operations of the trust.
2The bill provides that when the requirements of the bill
3are enacted, the treasurer shall not allow individuals to make
4contributions to the trust earlier than July 1, 2023.
5The bill takes effect July 1, 2022.
-6-jda/rn
2including implementation and effective date provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 12K.1 Purpose and definitions.
21. The general assembly finds that the general welfare and
3well-being of the state are directly related to the ability
4of the citizens of the state to save for their retirement
5years, and that a vital and valid public purpose is served by
6the creation and implementation of programs which encourage
7and make possible the attainment of financial security by
8the greatest number of citizens of the state. In order to
9make available to the citizens of the state an opportunity to
10fund future retirement savings needs, it is necessary that a
11public trust be established in which moneys may be invested for
12retirement.
132. As used in this chapter, unless the context otherwise
14requires:
15a. “Administrative fund” means the administrative fund
16established under section 12K.4.
17b. “Employer” means a person or entity engaged in a
18business, industry, profession, trade, or other enterprise in
19Iowa.
20c. “Internal Revenue Code” means the same as defined in
21section 422.3.
22d. “Iowa retirement savings plan trust” or “trust” means the
23trust created under section 12K.2.
24e. “Participant” means an individual that has entered into a
25participation agreement under this chapter to contribute to an
26Iowa retirement savings plan.
27f. “Participation agreement” means an agreement between a
28participant and the trust entered into under this chapter.
29g. “Program fund” means the program fund established under
30section 12K.4.
31 Sec. 2. NEW SECTION. 12K.2 Creation of the Iowa retirement
32savings plan trust.
33An Iowa retirement savings plan trust as allowed by the
34Internal Revenue Code is created for the purpose of helping
35Iowans save for retirement. The treasurer of state is the
-1-1trustee of the trust, and has all powers necessary to carry out
2and effectuate the purposes, objectives, and provisions of this
3chapter pertaining to the trust, including the power to do all
4of the following:
51. Make and enter into contracts necessary for the
6administration of the trust.
72. Enter into agreements with any financial institution,
8the state, or any federal or other state agency, or other
9entity as required to implement this chapter.
103. Carry out the duties and obligations of the trust
11pursuant to this chapter.
124. Accept any grants, gifts, legislative appropriations,
13and other moneys from the state, any unit of federal, state, or
14local government, or any other person, firm, partnership, or
15corporation which the treasurer of state shall deposit into the
16administrative fund or the program fund.
175. Carry out studies and projections so the treasurer of
18state may advise participants regarding present and estimated
19future retirement needs and levels of financial participation
20in the trust required in order to enable participants to
21achieve their retirement funding objectives.
226. Participate in any federal, state, or local governmental
23program for the benefit of the trust.
247. Procure insurance against any loss in connection with the
25property, assets, or activities of the trust.
268. Enter into agreements with participants and employers.
279. Make distributions and refunds to participants pursuant
28to participation agreements as prescribed by the Internal
29Revenue Code.
3010. Invest moneys from the program fund in any investments
31which are determined by the treasurer of state to be
32appropriate.
3311. Engage investment advisors, if necessary, to assist in
34the investment of trust assets.
3512. Contract for goods and services and engage personnel
-2-1as necessary, including consultants, actuaries, managers,
2legal counsel, and auditors, for the purpose of rendering
3professional, managerial, and technical assistance and advice
4to the treasurer of state regarding trust administration and
5operation.
613. Establish, impose, and collect administrative fees
7and charges in connection with transactions of the trust, and
8provide for reasonable service charges, including penalties for
9cancellations and late payments with respect to participation
10agreements.
1114. Administer the funds of the trust.
1215. Adopt rules pursuant to chapter 17A for the
13administration of the trust.
14 Sec. 3. NEW SECTION. 12K.3 Limitation of liability.
15The trust, the treasurer of state, and the state of Iowa may
16not guarantee any rate of return or any interest rate on any
17contribution to the trust. The trust, treasurer of state, and
18the state of Iowa are not liable for any loss incurred by any
19person as a result of participating in the trust.
20 Sec. 4. NEW SECTION. 12K.4 Program and administrative funds
21— investment and payments.
221. The treasurer of state shall segregate moneys received
23by the trust into two funds: the program fund and the
24administrative fund.
252. All moneys paid by participants in connection with
26participation agreements shall be deposited as received into
27separate accounts within the program fund.
283. Contributions to the trust made by participants may only
29be made in the form of cash.
30 Sec. 5. NEW SECTION. 12K.5 Cancellation of agreements.
31A participant may cancel a participation agreement at will.
32Upon cancellation of a participation agreement, a participant
33shall be entitled to the return of the participant’s account
34balance subject to penalties prescribed by the Internal Revenue
35Code.
-3-1 Sec. 6. NEW SECTION. 12K.6 Annual audited financial report.
21. The treasurer of state shall submit an annual audited
3financial report, prepared in accordance with generally
4accepted accounting principles, on the operations of the trust
5by January 1 to the governor and the general assembly.
62. The annual audit shall be made either by the auditor
7of state or by an independent certified public accountant
8designated by the auditor of state and shall include direct and
9indirect costs attributable to the use of outside consultants,
10independent contractors, and any other persons who are not
11state employees.
123. The annual audit shall be supplemented by all of the
13following information prepared by the treasurer of state:
14a. Any related studies or evaluations prepared in the
15preceding year.
16b. A summary of the benefits provided by the trust,
17including the number of participants in the trust.
18c. Any other information which is relevant in order to make
19a full, fair, and effective disclosure of the operations of the
20trust.
21 Sec. 7. NEW SECTION. 12K.7 Tax considerations.
22For federal tax purposes, the Iowa retirement savings plan
23trust shall conform to the requirements established by the
24Internal Revenue Code to be able to operate as a retirement
25plan. The plan may conform to the requirements under section
26401(a), section 408, or another section of the Internal Revenue
27Code which allows Iowans the best retirement option under the
28trust as determined by the treasurer of state.
29 Sec. 8. NEW SECTION. 12K.8 Property rights to assets in
30trust.
311. The assets of the trust shall at all times be preserved,
32invested, and expended solely and only for the purposes of the
33trust and shall be held in trust for the participants.
342. No property rights in the trust shall exist in favor of
35the state.
-4- 13. The assets of the trust shall not be transferred or used
2by the state for any purposes other than the purposes of the
3trust.
4 Sec. 9. NEW SECTION. 12K.9 Construction.
5This chapter shall be construed liberally in order to
6effectuate its purpose.
7 Sec. 10. IMPLEMENTATION PROVISION. The treasurer of state
8shall provide that when the requirements of chapter 12K are
9enacted, individuals may begin making contributions to the Iowa
10retirement savings plan trust, as created by section 12K.2, as
11enacted in this Act, no earlier than July 1, 2023.
12 Sec. 11. EFFECTIVE DATE. This Act takes effect on July 1,
132022.
14EXPLANATION
15The inclusion of this explanation does not constitute agreement with
16the explanation’s substance by the members of the general assembly.
17This bill creates the Iowa retirement savings plan trust
18under the office of treasurer of state for the purpose of
19helping Iowans save for retirement. The bill provides that
20the trust be operated so that, for federal tax purposes, it
21meets the requirements of a retirement plan as provided by the
22Internal Revenue Code.
23The state treasurer is the trustee of the trust and has
24numerous powers, as specified in the bill, for the purpose of
25carrying out the purpose of the trust. Powers granted the
26treasurer of state to effectuate the purpose of the trust
27include entering into agreements with trust participants and
28employers, investing moneys in the trust, and entering into any
29agreements or contracts necessary to carry out the purposes of
30the trust.
31The bill provides that the state, the treasurer of state,
32and the trust may not guarantee any rate of return on any
33contributions to the trust and are not liable for any loss
34incurred by any person as a result of participating in the
35trust. The bill requires the treasurer to submit an annual
-5-1audited financial report on the operations of the trust.
2The bill provides that when the requirements of the bill
3are enacted, the treasurer shall not allow individuals to make
4contributions to the trust earlier than July 1, 2023.
5The bill takes effect July 1, 2022.
-6-jda/rn