Bill Text: MI SB1142 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Retirement; investments; automatic enrollment in certain retirement plans; allow public employers to provide and limit liability for certain default investment decisions. Amends title of 1965 PA 314 (MCL 38.1132 - 38.1140m) & adds sec. 39b.

Spectrum: Partisan Bill (Republican 9-0)

Status: (Introduced - Dead) 2012-05-24 - Referred To Committee On Appropriations [SB1142 Detail]

Download: Michigan-2011-SB1142-Introduced.html

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SENATE BILL No. 1142

 

 

May 24, 2012, Introduced by Senators PAVLOV, COLBECK, MEEKHOF, PROOS, HILDENBRAND, HUNE, EMMONS, KOWALL and BOOHER and referred to the Committee on Appropriations.

 

 

 

     A bill to amend 1965 PA 314, entitled

 

"Public employee retirement system investment act,"

 

(MCL 38.1132 to 38.1140m) by amending the title, as amended by 1988

 

PA 343, and by adding section 39b.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to authorize the investment of assets of public

 

employee retirement systems or plans and the assets of employees

 

contributed to retirement systems or plans created and established

 

by the state or any political subdivision; to provide for the

 

payment of certain costs and investment expenses; to authorize

 

investment in variable rate interest loans; to limit employer

 

liability for certain investment decisions; to define and limit the

 

investments which may be made by an investment fiduciary with the

 

assets of a public employee retirement system; and to prescribe the

 

powers and duties of investment fiduciaries and certain state

 

departments and officers.

 

     Sec. 39b. (1) A public employer may deduct from the wages of

 

an employee an amount for a contribution to an individual account

 

for each employee's benefit in a plan maintained under section 125,

 

401(k), 403(b), 408, 408A, or 457 of the internal revenue code of

 

1986, 26 USC 125, 401, 403, 408, 408A, and 457. The public employer

 

shall give written notice to a participating employee of the

 

contribution before the initial deduction is made. The public

 

employer shall include in the notice a description of the benefit

 

the contribution provides and the right of the participating

 

employee to cancel the contribution by instruction to the employer,

 

including the procedure for giving the instruction.

 

     (2) A public employer may provide for automatic enrollment of

 

an employee in a plan described in subsection (1). An employer who

 

provides automatic enrollment of an employee in a plan as provided

 

in this subsection or other plan official is not liable for the

 

actual decisions made by the public employer or other plan official

 

on behalf of a participating employee with regard to the default

 

investment of contributions made for that employee to the plan if

 

all of the following requirements are met:

 

     (a) The plan allows the participating employee at least

 

quarterly opportunities to select investments for the employee's

 

contributions between investment alternatives available under the

 

plan.

 

     (b) The participating employee is given notice of the

 

investment decisions that will be made in the absence of

 

participating employee direction.

 

     (c) The participating employee is given a description of all

 

the investment alternatives available for the participating

 

employee to change investments.

 

     (d) The participating employee is given notice at least

 

annually of the actual default investments made by the public

 

employer on behalf of the participating employee.

 

     (3) This section does not alter any existing responsibility of

 

a public employer or other plan official for the selection of

 

investment funds for participating employees.

 

     (4) As used in this section:

 

     (a) "Automatic enrollment" means a plan provision under which

 

the employee will have a specified contribution made to a plan

 

described in subsection (1) equal to a compensation reduction that

 

will be made for the employee unless the employee affirmatively

 

elects no compensation reduction contributions or a compensation

 

reduction contribution in another amount.

 

     (b) "Public employer" means this state or an agency of this

 

state, a city, county, village, township, school district, or

 

intermediate school district, or an institution of higher

 

education.