HB2251

SECTION 1. The legislature finds that there is an imminent retirement security crisis in the State, as many individuals do not have access to an employer-sponsored retirement plan. Individuals without a retirement plan are at significant risk of not having enough retirement income to meet basic expenses during retirement. A retirement savings plan can help employees achieve financial security, improve economic mobility, and reduce wealth disparity.

In 2017, Oregon was the first state to implement a retirement savings plan that covers private sector workers who do not otherwise have access to a savings plan provided by their employer. Other states have adopted similar programs, including California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and Vermont.

The legislature also finds that individuals need a lifelong savings system that provides them with the opportunity to build their assets and attain future financial stability. Providing private sector employees with access to employer-sponsored retirement plans is a reliable way to promote savings needed for a secure retirement, improve employees' financial security, and reduce wealth disparity in society.

The legislature further finds that approximately fifty per cent of the State's private sector employees work for an employer that does not offer a retirement plan or are not eligible for the plan offered. The lack of opportunity to participate in an employer-provided retirement plan spans all levels of education and earnings. An employee who is offered the opportunity to save through the employee's place of employment is significantly more likely to participate and make steady contributions to build retirement savings.

The purpose of this Act is to establish a retirement savings task force to secure a consultant to:

(1) Assess the feasibility of a Hawaii retirement savings program;

(2) Research the implications of the federal SECURE Act, enacted on December 20, 2019;

(3) Draft an implementation plan for a retirement savings program; and

(4) Submit to the legislature a report of findings and recommendations, including any proposed legislation, to implement the plan.

SECTION 2. (a) There is established a retirement savings task force to secure a consultant to:

(1) Assess the feasibility of a Hawaii retirement savings program;

(2) Research the implications of the federal SECURE Act, enacted on December 20, 2019;

(3) Draft an implementation plan for a retirement savings program; and

(4) Submit to the legislature a report of findings and recommendations, including any proposed legislation, to implement the plan.

(b) The task force shall be composed of the following members:

(1) The director of finance, or the director's designee;

(2) The director of labor and industrial relations, or the director's designee;

(3) One individual to represent employees, who shall be selected by the speaker of the house of representatives;

(4) One individual to represent small businesses, who shall be selected by the president of the senate;

(5) An attorney with professional experience in pension plans, who shall be selected jointly by the speaker of the house of representatives and the president of the senate;

(6) A third-party plan administrator, who shall be selected jointly by the speaker of the house of representatives and the president of the senate;

(7) A fiduciary investment adviser, who shall be selected jointly by the speaker of the house of representatives and the president of the senate;

(8) A fee-for-service investment adviser, who shall be selected jointly by the speaker of the house of representatives and the president of the senate; and

(9) A representative of retirees, who shall be selected jointly by the speaker of the house of representatives and the president of the senate.

(c) The task force may issue a request for proposals for a third party to conduct the activities identified in section 2(a) of this Act. The contracting of services pursuant to this Act shall be exempt from chapter 103D, Hawaii Revised Statutes.

(d) The task force shall submit to the legislature a report of its findings and recommendations, including any proposed legislation, no later than forty days prior to the convening of the regular session of 2021.

(e) The task force shall cease to exist on June 30, 2021.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $500,000 or so much thereof as may be necessary for fiscal year 2020-2021 to retain a consultant to conduct the activities identified in section 2(a) of this Act and pay for associated expenses, including $150,000 for one full-time equivalent (1.0 FTE) position to manage the retirement savings program.

The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2020.

INTRODUCED BY:

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HOUSE OF REPRESENTATIVES	H.B. NO.	2251
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII