Bill Text: IN SB0380 | 2013 | Regular Session | Introduced
Bill Title: State-assisted retirement plan.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-01-10 - First reading: referred to Committee on Pensions and Labor [SB0380 Detail]
Download: Indiana-2013-SB0380-Introduced.html
Citations Affected: IC 4-38.
Synopsis: State-assisted retirement plan. Establishes a state-assisted
retirement plan (plan) for purposes of encouraging Indiana residents to
increase their rate of savings and to build assets for the use of a
participant or the participant's beneficiaries or survivors after the
participant's retirement. Provides that the treasurer of state is the
administrator of the plan. Requires that the plan be qualified under
Section 401(a) or another applicable section of the Internal Revenue
Code. Provides that an employer can participate in the plan only if the
employer does not offer its employees a pension or retirement system
of any kind. Provides that participation in the plan is voluntary for
eligible employers and employees, and permits self-employed
individuals to participate in the plan. Provides that the plan may not be
construed as a debt, a liability, or an obligation of the state, and that the
state does not guarantee amounts deposited into an account or
investment returns earned by an account.
Effective: July 1, 2013.
January 10, 2013, read first time and referred to Committee on Pensions and Labor.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or
A BILL FOR AN ACT to amend the Indiana Code concerning
pensions.
ARTICLE 38. STATE-ASSISTED RETIREMENT PLAN
Chapter 1. Definitions
Sec. 1. The definitions in this chapter apply throughout this article.
Sec. 2. "Account" refers to a plan account established for a participant under IC 4-38-2-6(b).
Sec. 3. "Compensation" means wages, salary, commissions, and any other form of remuneration, as defined by the plan, paid for personal services by an employer to a participant.
Sec. 4. "Internal Revenue Code" has the meaning set forth in IC 6-3-1-11.
Sec. 5. "Participant" means an individual who has elected to participate in the plan.
Sec. 6. "Participating employer" means a person or entity that
meets the eligibility requirements established by the plan to
participate in the plan as an employer.
Sec. 7. "Plan" refers to the state-assisted retirement plan
established under IC 4-38-2-1.
Sec. 8. "Treasurer" refers to the treasurer of state.
Chapter 2. Plan Establishment; General Provisions
Sec. 1. (a) A state-assisted retirement plan is established for
purposes of encouraging Indiana residents to increase their rate of
savings and to build assets for the use of a participant or the
participant's beneficiaries or survivors after the participant's
retirement.
(b) The treasurer shall adopt provisions to implement the plan
established under subsection (a), subject to obtaining the approval
of the Internal Revenue Service in a manner that satisfies the
treasurer that the plan is qualified under Section 401(a) or another
applicable section of the Internal Revenue Code.
(c) The treasurer shall administer the plan.
(d) The plan shall be maintained as a separate trust account.
(e) The treasurer may adopt a plan document that the treasurer
considers appropriate or necessary to administer the plan.
(f) The treasurer may request from the Internal Revenue
Service any rulings or determination letters that the treasurer
considers necessary or appropriate in order to implement or
administer the plan.
Sec. 2. The treasurer may contract with public or private
persons or entities for the provision of all or any portion of the
services the treasurer considers necessary for the management and
operation of the plan, including the investment of plan assets.
Sec. 3. The treasurer may establish an advisory board to assist
the treasurer in implementing and administering the plan.
Sec. 4. (a) The plan must establish eligibility requirements that
an employer must meet to become a participating employer.
(b) Only an employer that does not offer its employees a pension
or retirement system of any kind may be a participating employer.
(c) The action of an employer to become a participating
employer is voluntary.
Sec. 5. An individual who is:
(1) employed by a participating employer; or
(2) self-employed;
may elect to be a participant in the plan.
Sec. 6. (a) The plan consists of the following:
(1) Each participant's contributions to the plan under section
8 of this chapter.
(2) Contributions to the plan made by a participating
employer under section 7 of this chapter on behalf of each
participant who is employed by the participating employer.
(3) Rollovers to the plan by a participant to the extent
permitted by the Internal Revenue Code and applicable
regulations and guidance.
(4) All earnings on investments or deposits of the plan.
(b) The plan shall establish a separate account in the plan for
each individual who elects to be a participant in the plan under
section 5 of this chapter, consisting of the following:
(1) Contributions made to the participant's account under
section 7 of this chapter by the participating employer who
employs the participant.
(2) Contributions made by the participant under section 8 of
this chapter.
(3) Net earnings on contributions made under subdivisions (1)
or (2) to the participant's account, determined after
subtracting administrative fees established under section 9 of
this chapter.
(c) Each participant must be credited individually with the
amount of:
(1) the contributions made to the participant's account by the
participating employer who employs the participant;
(2) the participant's contributions; and
(3) the net investment earnings on the contributions described
in subdivisions (1) and (2).
Sec. 7. (a) A participating employer may contribute to the
account of a participant whom the employer employs, in the
manner and at intervals established by the plan, either:
(1) a specific dollar amount; or
(2) a percentage of the participant's compensation.
(b) A participating employer, besides making contributions
under subsection (a), may make additional contributions to the
account of a participant whom the employer employs, as specified
by the plan.
(c) A participant is vested in contributions made on the
participant's behalf by the participating employer who employs the
participant in accordance with the schedule specified by the plan.
Sec. 8. (a) A participant may contribute to the participant's
account, in the manner and at intervals established by the plan,
either:
(1) a specific dollar amount; or
(2) a percentage of the participant's compensation.
(b) A participant's contributions and net earnings on the participant's contributions belong to the participant at all times.
(c) A participant shall direct the investment of all amounts in the participant's account among the investment alternatives provided under the plan.
Sec. 9. (a) The treasurer shall pay all administrative costs of the plan from the earnings of the plan before crediting earnings to each participant's account.
(b) The treasurer shall determine the appropriate administrative fees to be charged to a participant's account.
(c) The treasurer may assess each participating employer an administrative fee to recover the costs incurred in establishing the plan.
Sec. 10. (a) A participant who terminates employment with a participating employer is entitled to withdraw an amount in the participant's account to the extent the participant is vested in the account and the withdrawal is required or permitted by the plan or the Internal Revenue Code.
(b) A participant who becomes employed by an employer offering a pension or retirement system in which the participant is eligible to participate may elect a direct rollover of the participant's account to the eligible pension or retirement system as provided by the plan and applicable federal law.
Sec. 11. (a) In accordance with the plan, each participant shall designate one (1) or more beneficiaries to receive the participant's account after the participant's death.
(b) If there is no properly designated beneficiary, or if no designated beneficiary survives the participant, the participant's account shall be paid:
(1) to the surviving spouse of the participant;
(2) if there is not a surviving spouse, to the surviving dependent or dependents of the participant in equal shares; or
(3) if there is not a surviving spouse or dependent, to the participant's estate.
(c) The beneficiary or beneficiaries designated under subsection (a) or a survivor as determined under subsection (b) may elect to have the participant's account paid under the options offered by the plan and as required or permitted by federal law.
Sec. 12. If the plan is terminated, the treasurer shall pay the account balances to participants, beneficiaries, and survivors as
provided by the plan and in accordance with federal law.
Sec. 13. A participant, beneficiary, survivor, or participating
employer that has a good faith belief that the plan is not being
administered as required by the plan or applicable federal law may
file a complaint as provided by the plan.
Chapter 3. Miscellaneous Provisions
Sec. 1. Accounts and earnings or interest on accounts are
exempt from taxation in Indiana to the extent that those accounts,
earnings, or interest are exempt from federal taxation under the
Internal Revenue Code.
Sec. 2. (a) The plan established by this article may not be
construed as a debt, a liability, or an obligation of the state.
(b) All documents used to communicate with a participant,
beneficiary, or survivor in connection with transactions involving
a participant's account must clearly state the following:
(1) That the account is not insured by the state.
(2) That the state does not guarantee:
(A) amounts deposited into an account; or
(B) investment returns earned by amounts in an account.
