AB 1138

This bill requires the Department of Financial Institutions to establish and

manage a retirement plan marketplace to connect individuals who are residents of

this state (eligible individuals) and employers that have fewer than 100 employees

and that employ at least one individual who is a resident of this state (small

employers) with retirement plans offered by private financial services firms, to

improve access to retirement income options for eligible individuals, to encourage

eligible individuals to plan for retirement and increase retirement savings, and to

remove barriers to entry for small employers to offer retirement plan options to

employees. Under the bill, DFI must contract with a vendor to create a website to

host the marketplace.

The bill provides that a financial services firm that wants to offer retirement

plans on the marketplace may apply to DFI, and DFI may approve the firm to

participate if the firm offers high quality retirement plans that comply with the

federal Employee Retirement Income Security Act of 1974, commonly called ERISA.

For each firm approved to participate in the marketplace, DFI must specify the

retirement plans the firm may offer on the marketplace. The bill requires DFI to

ensure that the marketplace offers only ERISA compliant retirement plans with

reasonable fees and offers a range of retirement plans and investment options,

including retirement plans for investors with various levels of risk tolerance and of

various ages and retirement plans that are environmentally friendly and socially

responsible. The bill limits the administrative fees a firm may charge a participant

enrolled in a retirement plan offered on the marketplace to no more than 100 basis

points in total annual fees.

Under the bill, DFI must, in cooperation with the Department of Revenue, the

Department of Workforce Development, and other state agencies, develop a

marketing program to publicize and promote the marketplace to small employers

and eligible individuals.