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Senate File 2088 - IntroducedA Bill ForAn Act 1establishing a retirement savings plan trust, making
2appropriations, and including contingent implementation and
3effective date provisions.
4BE 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 who 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
2to governor and general assembly.
31. The treasurer of state shall submit an annual audited
4financial report, prepared in accordance with generally
5accepted accounting principles, on the operations of the trust
6by January 1 to the governor and the general assembly.
72. The annual audit shall be made either by the auditor
8of state or by an independent certified public accountant
9designated by the auditor of state and shall include direct and
10indirect costs attributable to the use of outside consultants,
11independent contractors, and any other persons who are not
12state employees.
133. The annual audit shall be supplemented by all of the
14following information prepared by the treasurer of state:
15a. Any related studies or evaluations prepared in the
16preceding year.
17b. A summary of the benefits provided by the trust including
18the number of participants in the trust.
19c. Any other information which is relevant in order to make
20a full, fair, and effective disclosure of the operations of the
21trust.
22 Sec. 7. NEW SECTION. 12K.7 Tax considerations.
23For federal tax purposes, the Iowa retirement savings plan
24trust shall conform to the requirements established by the
25Internal Revenue Code to be able to operate as a retirement
26plan. The plan may conform to the requirements under section
27401(a), section 408, or another section of the Internal Revenue
28Code which allows Iowans the best retirement option under the
29trust as determined by the treasurer of state.
30 Sec. 8. NEW SECTION. 12K.8 Property rights to assets in
31trust.
321. The assets of the trust shall at all times be preserved,
33invested, and expended solely and only for the purposes of the
34trust and shall be held in trust for the participants.
352. No property rights in the trust shall exist in favor of
-4-1the state.
23. The assets of the trust shall not be transferred or used
3by the state for any purposes other than the purposes of the
4trust.
5 Sec. 9. NEW SECTION. 12K.9 Construction.
6This chapter shall be liberally construed to effectuate its
7purpose.
8 Sec. 10. TREASURER OF STATE — IOWA RETIREMENT SAVINGS PLAN
9TRUST APPROPRIATION. There is appropriated from the general
10fund of the state to the treasurer of state for the fiscal year
11beginning July 1, 2018, and ending June 30, 2019, the following
12amount, or so much thereof as is necessary, to be used for the
13purposes designated:
14For establishing and managing an Iowa retirement savings
15plan trust, including salaries, support, maintenance, and
16miscellaneous purposes:
.................................................. $171,500,000
18Notwithstanding section 8.33, moneys appropriated in this
19section that remain unencumbered or unobligated at the close of
20the fiscal year shall not revert but shall remain available for
21expenditure for the purposes designated until the close of the
22fiscal year that begins July 1, 2019.
23 Sec. 11. CONTINGENT IMPLEMENTATION PROVISION. The
24treasurer of state shall provide that when chapter 12K takes
25effect, individuals may begin making contributions to the Iowa
26retirement savings plan trust, as created by section 12K.2, as
27enacted in this Act, no earlier than July 1, 2020.
28 Sec. 12. CONTINGENT EFFECTIVE DATE.
291. This Act takes effect, but in no event earlier than
30July 1, 2019, on the date that the treasurer of state notifies
31the Code editor that both of the following contingencies have
32occurred:
33a. An amount of no less than one million five hundred
34thousand dollars has been appropriated to the treasurer of
35state for the purpose of establishing and managing an Iowa
-5-1retirement savings plan trust.
2b. The treasurer of state has determined, at the sole
3discretion of the treasurer of state, that establishing an Iowa
4retirement savings plan trust is feasible and that applicable
5federal requirements make establishing a private retirement
6plan favorable for Iowans contributing to the trust.
72. The treasurer of state shall notify the Code editor in
8writing whether the contingencies in subsection 1 have occurred
9or will not occur.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
13This bill creates the Iowa retirement savings plan trust
14under the office of treasurer of state for the purpose of
15helping Iowans save for retirement. The bill provides that
16the trust be operated so that it meets the requirements of a
17retirement plan as provided by the Internal Revenue Code.
18The treasurer of state is the trustee of the trust and has
19numerous powers, as specified in the bill, for the purpose of
20carrying out the purpose of the trust. Powers granted the
21treasurer of state to effectuate the purpose of the trust
22include entering into agreements with trust participants and
23employers, investing moneys in the trust, and entering into any
24agreements or contracts necessary to carry out the purposes of
25the trust.
26The bill provides that the state, the treasurer of state,
27and the trust may not guarantee any rate of return on any
28contributions to the trust and are not liable for any loss
29incurred by any person as a result of participating in the
30trust. The bill requires the treasurer of state to submit
31to the governor and the general assembly an annual audited
32financial report on the operations of the trust.
33The bill provides an appropriation to the treasurer of state
34for FY 2018-2019 for the purposes of establishing and managing
35the Iowa retirement savings plan trust.
-6- 1The bill provides that when the bill takes effect, the
2treasurer of state shall not allow individuals to make
3contributions to the trust earlier than July 1, 2020.
4The bill provides that the bill takes effect no earlier
5than July 1, 2019, and only on the date the treasurer of state
6notifies the Code editor, in writing, that no less than $1.5
7million has been appropriated to the treasurer of state for the
8purpose of the bill and that establishing an Iowa retirement
9savings plan trust is feasible and that applicable federal
10requirements make establishing the trust favorable for Iowans
11contributing to the trust.
-7-ec/rj
2appropriations, and including contingent implementation and
3effective date provisions.
4BE 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 who 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
2to governor and general assembly.
31. The treasurer of state shall submit an annual audited
4financial report, prepared in accordance with generally
5accepted accounting principles, on the operations of the trust
6by January 1 to the governor and the general assembly.
72. The annual audit shall be made either by the auditor
8of state or by an independent certified public accountant
9designated by the auditor of state and shall include direct and
10indirect costs attributable to the use of outside consultants,
11independent contractors, and any other persons who are not
12state employees.
133. The annual audit shall be supplemented by all of the
14following information prepared by the treasurer of state:
15a. Any related studies or evaluations prepared in the
16preceding year.
17b. A summary of the benefits provided by the trust including
18the number of participants in the trust.
19c. Any other information which is relevant in order to make
20a full, fair, and effective disclosure of the operations of the
21trust.
22 Sec. 7. NEW SECTION. 12K.7 Tax considerations.
23For federal tax purposes, the Iowa retirement savings plan
24trust shall conform to the requirements established by the
25Internal Revenue Code to be able to operate as a retirement
26plan. The plan may conform to the requirements under section
27401(a), section 408, or another section of the Internal Revenue
28Code which allows Iowans the best retirement option under the
29trust as determined by the treasurer of state.
30 Sec. 8. NEW SECTION. 12K.8 Property rights to assets in
31trust.
321. The assets of the trust shall at all times be preserved,
33invested, and expended solely and only for the purposes of the
34trust and shall be held in trust for the participants.
352. No property rights in the trust shall exist in favor of
-4-1the state.
23. The assets of the trust shall not be transferred or used
3by the state for any purposes other than the purposes of the
4trust.
5 Sec. 9. NEW SECTION. 12K.9 Construction.
6This chapter shall be liberally construed to effectuate its
7purpose.
8 Sec. 10. TREASURER OF STATE — IOWA RETIREMENT SAVINGS PLAN
9TRUST APPROPRIATION. There is appropriated from the general
10fund of the state to the treasurer of state for the fiscal year
11beginning July 1, 2018, and ending June 30, 2019, the following
12amount, or so much thereof as is necessary, to be used for the
13purposes designated:
14For establishing and managing an Iowa retirement savings
15plan trust, including salaries, support, maintenance, and
16miscellaneous purposes:
.................................................. $171,500,000
18Notwithstanding section 8.33, moneys appropriated in this
19section that remain unencumbered or unobligated at the close of
20the fiscal year shall not revert but shall remain available for
21expenditure for the purposes designated until the close of the
22fiscal year that begins July 1, 2019.
23 Sec. 11. CONTINGENT IMPLEMENTATION PROVISION. The
24treasurer of state shall provide that when chapter 12K takes
25effect, individuals may begin making contributions to the Iowa
26retirement savings plan trust, as created by section 12K.2, as
27enacted in this Act, no earlier than July 1, 2020.
28 Sec. 12. CONTINGENT EFFECTIVE DATE.
291. This Act takes effect, but in no event earlier than
30July 1, 2019, on the date that the treasurer of state notifies
31the Code editor that both of the following contingencies have
32occurred:
33a. An amount of no less than one million five hundred
34thousand dollars has been appropriated to the treasurer of
35state for the purpose of establishing and managing an Iowa
-5-1retirement savings plan trust.
2b. The treasurer of state has determined, at the sole
3discretion of the treasurer of state, that establishing an Iowa
4retirement savings plan trust is feasible and that applicable
5federal requirements make establishing a private retirement
6plan favorable for Iowans contributing to the trust.
72. The treasurer of state shall notify the Code editor in
8writing whether the contingencies in subsection 1 have occurred
9or will not occur.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
13This bill creates the Iowa retirement savings plan trust
14under the office of treasurer of state for the purpose of
15helping Iowans save for retirement. The bill provides that
16the trust be operated so that it meets the requirements of a
17retirement plan as provided by the Internal Revenue Code.
18The treasurer of state is the trustee of the trust and has
19numerous powers, as specified in the bill, for the purpose of
20carrying out the purpose of the trust. Powers granted the
21treasurer of state to effectuate the purpose of the trust
22include entering into agreements with trust participants and
23employers, investing moneys in the trust, and entering into any
24agreements or contracts necessary to carry out the purposes of
25the trust.
26The bill provides that the state, the treasurer of state,
27and the trust may not guarantee any rate of return on any
28contributions to the trust and are not liable for any loss
29incurred by any person as a result of participating in the
30trust. The bill requires the treasurer of state to submit
31to the governor and the general assembly an annual audited
32financial report on the operations of the trust.
33The bill provides an appropriation to the treasurer of state
34for FY 2018-2019 for the purposes of establishing and managing
35the Iowa retirement savings plan trust.
-6- 1The bill provides that when the bill takes effect, the
2treasurer of state shall not allow individuals to make
3contributions to the trust earlier than July 1, 2020.
4The bill provides that the bill takes effect no earlier
5than July 1, 2019, and only on the date the treasurer of state
6notifies the Code editor, in writing, that no less than $1.5
7million has been appropriated to the treasurer of state for the
8purpose of the bill and that establishing an Iowa retirement
9savings plan trust is feasible and that applicable federal
10requirements make establishing the trust favorable for Iowans
11contributing to the trust.
-7-ec/rj