§ 35-23-13 — § 35-23-13. Required favorable federal tax treatment.

§ 35-23-13. Required favorable federal tax treatment.

(a) The office of the general treasurer shall not implement the program if the IRA arrangements offered fail to qualify for the favorable federal income tax treatment ordinarily accorded to IRAs under the Internal Revenue Code, or if it is determined that the program is an employee benefit plan under the federal Employee Retirement Income Security Act.

(b) Prior to opening the program for enrollment, the office of the general treasurer shall report to the governor and the finance committees of the house and senate the specific date on which the program will start to enroll program participants and that the following prerequisites and requirements for the program have been met:

(1) The program is structured in a manner to keep the program from being classified as an employee benefit plan subject to the federal Employee Retirement Income Security Act;

(2) The payroll deduction IRA arrangements offered by the program qualify for the favorable federal income tax treatment ordinarily accorded to IRA arrangements under the Internal Revenue Code;

(3) The office of the general treasurer has defined in regulation the roles and responsibilities of employers in a manner to keep the program from being classified as an employee benefit plan subject to the federal Employee Retirement Income Security Act; and

(4) The office of the general treasurer has adopted a third-party administrator operational model that limits employer interaction and transactions with the employee to the extent feasible.

Legislative History

P.L. 2024, ch. 350, § 1, effective June 26, 2024; P.L. 2024, ch. 351, § 1, effective June 26, 2024.