Analysis

Synopsis:

 Amended Synopsis March 01, 2021:

SFCa2/SB 129: Senate Finance Committee amendment 2 to Senate Bill 129 relates to private-sector retirement. Amends the New Mexico Work and Save Act. Provides flexibility for the New Mexico Work and Save Board to implement the provisions of the New Mexico Work and Save Act. Clarifies definitions, and clarifies certain provisions of the Work and Save Programs. Provides a scope of authority to the New Mexico Work and Save Board. Provides that the board, board members, and the state are not guarantors of the Work and Save Programs. Extends the timeline for implementation of the New Mexico Retirement Plan Marketplace and the New Mexico Work and Save IRA Program.

Amended Synopsis February 16, 2021:

STBTCa1/SB 129: The Senate Tax, Business and Transportation Committee amendment to Senate Bill 129 relates to private-sector retirement. Amends the New Mexico Work and Save Act. Provides flexibility for the New Mexico Work and Save Board to implement the provisions of the New Mexico Work and Save Act. Clarifies definitions. Clarifies certain provisions of the Work and Save Programs. Provides a scope of authority to the New Mexico Work and Save Board. Provides that the board, board members, and the state are not guarantors of the Work and Save Programs. Creates the Work and Save Fund. Extends the timeline for implementation of the New Mexico Retirement Plan Marketplace and the New Mexico Work and Save IRA Program. Makes an appropriation.

Original Synopsis January 19, 2021:

Senate Bill 129 (SB129) changes the New Mexico Work and Save Act. Provides flexibility for the New Mexico Work and Save Board to implement the provisions of the New Mexico Work and Save Act. Clarifies definitions. Clarifies certain provisions of the Work and Save Programs. Provides a scope of authority to the New Mexico Work and Save Board. Provides that the board, board members, and the state are not guarantors of the Work and Save Programs. Creates the Work and Save Fund. Provides conditions for the implementation of the New Mexico Work and Save Act and the New Mexico Work and Save IRA Program. Makes an appropriation. SB129 requires reporting.

Analysis:

 Senate Bill 129 (SB129) enacts and changes sections of the New Mexico Work and Save Act. SB129 creates the Work and Save Fund and provides guidelines. Requires the New Mexico Work and Save Board to prepare an annual report on the operation of the New Mexico Work and Save IRA program, and when implemented, the New Mexico Retirement Plan Marketplace.

New Law:
•	Enacts a new section of the New Mexico Work and Save Act, titled: Board and State Not Guarantors.
•	Prohibits the New Mexico Work and Save Board, each board member, and the state from guarantee any rate of return or interest rate on any contribution made by a New Mexico Work and Save IRA Program participant or New Mexico Retirement Plan Marketplace participant.

New Law:
•	Work and Save Fund-Created.
•	Administered by the New Mexico Work and Save Board. 
•	Money in the fund is appropriated to the board for the sole purposes of carrying out the provisions of the New Mexico Work and Save Act. 
•	Any balances in the fund at the end of a fiscal year will not revert to the General Fund or any other fund.

New Law:
•	Temporary Provision-New Mexico Work and Save Act-Implementation Dates-Conditions on Implementation.
•	The New Mexico Retirement Plan marketplace will be implemented when determined practicable by the New Mexico Work and Save Board and at a time that the board determines it has the necessary funding for the design, implementation, and maintenance of the marketplace.
•	The New Mexico Work and Save IRA Program will be implemented by the New Mexico Work and Save Board at a time that the board determines it has the necessary funding for the design, implementation, and maintenance of the program.

Changed Law:
•	Annual Report, Section 58-33-12 NMSA. 
•	Requires the New Mexico Work and Save Board to prepare an annual report on the operation of the New Mexico Work and Save IRA program, and when implemented, the New Mexico Retirement Plan Marketplace.
•	Will provide the report to the governor, the state treasurer, and appropriate legislative interim committees and will make the report available to all program participants, participating employers, and the general public.

Changed Law:
•	Protection for Covered Employers, Section 58-33-11 NMSA 1978. 
•	The New Mexico Work and Save IRA Program is not an employer-sponsored plan. 
A covered employer does not bear responsibility for: 
•	(1) the decision by a covered employee to participate or not to participate in the New Mexico Work and Save IRA Program; 
•	(2) the performance of a specific savings option selection made by a program participant and facilitated through the New Mexico Work and Save IRA Program; 
•	(3) investment decisions made by a program participant; 
•	(4) the administration, investment, investment returns or investment performance of an IRA savings option facilitated through the New Mexico Work and Save IRA Program, including interest rate or other rate of return on a contribution or individual retirement account balance; and 
•	(5) the design or administration of the New Mexico Work and Save IRA Program or the benefits paid to or the earnings or losses of program participants.

Changed Law:
•	New Mexico Work and Save IRA Program-Created-Implementation, Section 58-33-9 NMSA 1978. 

The New Mexico Work and Save IRA Program developed by the New Mexico Work and Save Board under the New Mexico Work and Save Act will: 
•	(1) facilitate the establishment of individual retirement accounts for program participants that are administered and managed by board-approved financial service providers; 
•	(2) provide that a covered employer may voluntarily choose to participate in the New Mexico Work and Save IRA Program; 
•	(10) ensure that each New Mexico Work and Save Board approved financial service provider submits a report on the status of each program participant's account to each program participant at least annually and provides annual reports to the board regarding the number of program participant accounts maintained by the financial service provider and the overall value of those accounts; 
•	(14) keep total fees and expenses below one percent of the funds invested by a program participant in the New Mexico Work and Save IRA Program.

Changed Law:
•	New Mexico Work and Save Act-Definitions, Section, 58-33-2 NMSA 1978.

New Definitions:
•	Default Investment Option means a Roth Individual Retirement Account with a target date fund investment and a default contribution rate established by the board.
•	Financial Service Provider means a financial or investment service provider that, if approved by the board as meeting the eligibility criteria, may administer and maintain one or more program participant investment accounts or one or more marketplace participant accounts for which the provider is a fiduciary.
•	IRA means an individual retirement account that conforms to the requirements of Section 408(a) of the Internal Revenue Code.
•	Marketplace Participant means a covered employer that establishes a plan through the New Mexico Retirement Plan Marketplace or a covered employee who establishes an investment account through the New Mexico Retirement Plan Marketplace.
•	New Mexico Work and Save Platform means the online digital service designed and implemented by the board to facilitate interaction among covered employers, covered employees, program participants, financial service providers, and other users via the internet.

Changed Definitions:
•	New Mexico Retirement Plan Marketplace means a board-approved web-based marketplace that facilitates access to retirement savings plans for private-sector and nonprofit employers and employees, including multiple-employer plans.
•	New Mexico Work and Save IRA Program means the retirement savings program, designed and implemented by the board, that facilitates payroll deductions of program participants in individual retirement accounts without any contributions from covered employers.

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