Massachusetts Bill Sets Sights on a State-Run Open MEP
On Oct. 23, the Massachusetts legislature’s Joint Committee on State Administration and Regulatory Oversight considered a bill that would set up a state-run multiple employer plan (MEP) for private employers in the Bay State, one of 25 pieces of legislation the committee examined that day.
The bill, Senate Bill 1701
, requires the treasurer and receiver general of the state to sponsor a qualified defined contribution plan, which would then be available to private-sector employers to adopt for their own employees. Upon adoption, employees would then be automatically enrolled in the MEP unless they opt out.
In order to participate, employers would be required to “execute a participation agreement, agree to the terms of the plan, and operate the plan in compliance with” the Internal Revenue Code and ERISA. The state treasurer is also free to additionally prescribe its own forms and procedures, and even require that employers obtain their own approvals from the IRS.
The hearing was intended as a preliminary information-gathering step for the 25 bills on the agenda. Members of the public are free to stand and speak their support or opposition to any of the legislation on the table, but witnesses were not ormally invited. The committee will now decide which bills should be subjected to more in-depth hearing later with invited witnesses and organized testimony.
The current legislative session is pegged to adjourn on Nov. 15, but bills may be carried over to the 2018 term.
Massachusetts appears to be following on the heels of Vermont, which became the first state in the nation to pass legislation establishing its own MEP earlier this year.Ray Harmon, Esq. is government affairs counsel for the American Retirement Association.