<section article="gle" article_name="Labor and Employment" number="12-101" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="1" subtitle_name="Definitions"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="b"> <text>“Board” means the Maryland Small Business Retirement Savings Board.</text> </level> <level label="c"> <level label="1"> <text>“Covered employee” means an individual who is employed by a covered employer.</text> </level> <level label="2"> <text>“Covered employee” does not include:</text> <level label="i"> <text>an employee covered under the federal Railway Labor Act (45 U.S.C. Sec. 151) or an employee engaged in interstate commerce so as not to be subject to the legislative powers of the State, except insofar as application of this title is authorized under the United States Constitution or laws of the United States;</text> </level> <level label="ii"> <text>an employee eligible to participate in a qualifying retirement plan;</text> </level> <level label="iii"> <text>an employee covered by a valid collective bargaining agreement that expressly provides for a multi–employer retirement plan described in 26 U.S.C. § 414(f); or</text> </level> <level label="iv"> <text>an employee who is under the age of 18 years before the beginning of the calendar year.</text> </level> </level> </level> <level label="d"> <level label="1"> <text>“Covered employer” means a person engaged in a business, an industry, a profession, a trade, or any other enterprise in the State, whether for profit or not for profit, that pays the covered employer’s employees through a payroll system or service.</text> </level> <level label="2"> <text>“Covered employer” does not include:</text> <level label="i"> <text>the federal government;</text> </level> <level label="ii"> <text>the State or any unit of the State;</text> </level> <level label="iii"> <text>a county or any unit of the county;</text> </level> <level label="iv"> <text>a municipal corporation or any unit of the municipal corporation;</text> </level> <level label="v"> <text>an employer that currently offers an employer–offered savings arrangement that was established separately from the requirements of this title;</text> </level> <level label="vi"> <text>an employer that, at any time during the preceding 2 calendar years, offered an employer–offered savings arrangement that was established separately from the requirements of this title; or</text> </level> <level label="vii"> <text>an employer that has not been in business at all times during the current calendar year and the preceding calendar year.</text> </level> </level> </level> <level label="e"> <text>“Employer–offered savings arrangement” includes any of the following:</text> <level label="1"> <text>an IRA;</text> </level> <level label="2"> <text>a defined benefit plan;</text> </level> <level label="3"> <text>a 401(k);</text> </level> <level label="4"> <text>a Simplified Employee Pension (SEP) plan;</text> </level> <level label="5"> <text>a Savings Incentive Match Plan for Employees (SIMPLE) plan; or</text> </level> <level label="6"> <text>another arrangement, if in compliance with federal law, that the Board specifies by regulation.</text> </level> </level> <level label="f"> <text>“IRA” means an individual retirement account or an individual retirement annuity under 26 U.S.C. § 408(a) or (b).</text> </level> <level label="g"> <text>“Maryland Small Business Retirement Savings Program” means a retirement savings program established by the Maryland Small Business Retirement Savings Board under this title.</text> </level> <level label="h"> <text>“Participating employee” means an employee that is participating in the Program through a payroll deposit retirement savings arrangement in accordance with regulations adopted by the Board.</text> </level> <level label="i"> <text>“Participating employer” means a covered employer that provides a payroll deposit retirement savings arrangement under this title for covered employees.</text> </level> <level label="j"> <text>“Payroll deposit retirement savings arrangement” means an arrangement by which a covered employer remits payroll deduction contributions of participating employees to the Program.</text> </level> <level label="k"> <text>“Program” means the Maryland Small Business Retirement Savings Program established under this title.</text> </level> <level label="l"> <text>“Trust” means the Maryland Small Business Retirement Savings Trust established under this title.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-201" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="2" subtitle_name="Establishment; Powers and Duties of Board"> <level label="a"> <level label="1"> <text>There is a Maryland Small Business Retirement Savings Board.</text> </level> <level label="2"> <text>The Board is a body politic and corporate and is an instrumentality of the State.</text> </level> <level label="3"> <level label="i"> <text>Except as provided in subparagraphs (ii) and (iii) of this subsection, the Board is not subject to any law, including § 6–106 of the State Government Article, that affects governmental units.</text> </level> <level label="ii"> <text>The Board is subject to:</text> <level label="1"> <text>the Open Meetings Act; and</text> </level> <level label="2"> <text>the Public Information Act.</text> </level> </level> <level label="iii"> <text>The Board and its employees are subject to the public ethics law.</text> </level> </level> </level> <level label="b"> <text>The Board consists of the following members:</text> <level label="1"> <text>the State Treasurer, or the State Treasurer’s designee;</text> </level> <level label="2"> <text>the Secretary of Labor, or the Secretary’s designee;</text> </level> <level label="3"> <text>the Comptroller, or the Comptroller’s designee; and</text> </level> <level label="4"> <text>nine members with expertise in retirement programs and benefits, investments, financial systems and controls, or small business, appointed as follows:</text> <level label="i"> <text>three members, appointed by the Governor;</text> </level> <level label="ii"> <text>three members, appointed by the President of the Senate; and</text> </level> <level label="iii"> <text>three members, appointed by the Speaker of the House of Delegates.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>The term of a member is 4 years.</text> </level> <level label="2"> <text>The terms of members are staggered as required by the terms provided for members of the Board on July 1, 2016.</text> </level> <level label="3"> <text>At the end of a term a member continues to serve until a successor is appointed and qualifies.</text> </level> <level label="4"> <text>A member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies.</text> </level> </level> <level label="d"> <text>The Board shall elect a chair from among the members of the Board.</text> </level> <level label="e"> <text>The appointing authority may remove a member whom the appointing authority appointed, for incompetence or misconduct.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-202" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="2" subtitle_name="Establishment; Powers and Duties of Board"> <level label="a"> <text>The Board shall meet at the times and places that the Board determines.</text> </level> <level label="b"> <level label="1"> <text>The Board may employ a staff and may hire consultants, administrators, and other professionals as necessary to help implement, maintain, and administer the Program and the Trust.</text> </level> <level label="2"> <text>All expenses, including employee costs, incurred to implement, maintain, and administer the Program and the Trust shall be paid from money collected by or for the Program or the Trust.</text> </level> <level label="3"> <text>Consistent with its fiduciary duties, the Board may enter into an agreement to borrow funds from the State or any other entity to provide funding for the operation of the Program until the Program can generate sufficient funding for operations through fees assessed on Program accounts.</text> </level> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-203" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="2" subtitle_name="Establishment; Powers and Duties of Board"> <level label="a"> <text>The Board, the Program administrator, and staff shall discharge the duties with respect to the Trust solely in the interest of the Program participants as follows:</text> <level label="1"> <text>for the exclusive purposes of providing benefits to Program participants and defraying reasonable expenses of administering the Program; and</text> </level> <level label="2"> <text>by selecting investment options or programs that will invest with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an enterprise of a like character and with like aims.</text> </level> </level> <level label="b"> <level label="1"> <text>The Board shall prepare, adopt, and annually review a written statement of investment policy that includes a risk management and oversight program.</text> </level> <level label="2"> <text>The investment policy shall consider investment options or programs that will seek to mitigate risk by maintaining a balanced investment portfolio that provides assurance that no single investment or class of investments will have a disproportionate impact on the total portfolio.</text> </level> <level label="3"> <text>The risk management and oversight program shall be designed to ensure that an effective risk management system is in place to monitor the risk levels of the Program investment portfolio and ensure that the risks taken are prudent and properly managed.</text> </level> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-204" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="2" subtitle_name="Establishment; Powers and Duties of Board"> <level label="a"> <text>In addition to the powers and duties set forth elsewhere in this title, the Board:</text> <level label="1"> <text>shall cause the Program or payroll deposit IRA arrangements established under the Program to be designed, established, and operated;</text> </level> <level label="2"> <text>shall appoint a Program administrator and determine the duties of the Program administrator;</text> </level> <level label="3"> <text>shall employ staff as necessary and set the compensation of the staff;</text> </level> <level label="4"> <text>shall make provisions for the payment of costs of administration and operation of the Trust;</text> </level> <level label="5"> <text>shall evaluate and establish the process for an employee to contribute automatically to the Program;</text> </level> <level label="6"> <text>shall evaluate and establish the process for a participating employer to provide a payroll deposit retirement savings arrangement for covered employees and to forward the employee contribution and related information to the Program or its agents, which may include financial services companies and third–party administrators with the capability to receive and process employee information and contributions for payroll deposit retirement savings arrangements or other arrangements authorized by this title;</text> </level> <level label="7"> <text>shall design and establish the process for the enrollment of Program participants;</text> </level> <level label="8"> <text>shall evaluate and establish a range of investment options, including a default investment selection for employees’ payroll deposit IRAs;</text> </level> <level label="9"> <text>may procure insurance against any loss in connection with the property, assets, or activities of the Trust, and secure private underwriting and reinsurance to manage risk;</text> </level> <level label="10"> <text>shall procure insurance indemnifying each member of the Board from personal loss or liability resulting from a member’s action or inaction as a member of the Board;</text> </level> <level label="11"> <text>shall set minimum and maximum employee contribution levels in accordance with contribution limits set for IRAs by the Internal Revenue Code;</text> </level> <level label="12"> <text>may arrange for collective, common, and pooled investment of assets of the Program or arrangements, including investments in conjunction with other funds with which those assets are authorized to be collectively invested, with a view to saving costs through efficiencies and economies of scale;</text> </level> <level label="13"> <text>shall determine the allocation of administrative fees to individual retirement accounts;</text> </level> <level label="14"> <text>shall explore and establish investment options that offer employees returns on contributions and the conversion of individual retirement savings account balances to secure retirement income without incurring debt or liabilities to the State;</text> </level> <level label="15"> <text>shall determine the eligibility of an employer, employee, or any other individual to participate in the Program; and</text> </level> <level label="16"> <text>may evaluate and establish the process by which a noncovered employer, an employee of a nonparticipating employer, or a self–employed individual may enroll in and make contributions to the Program.</text> </level> </level> <level label="b"> <text>The Board shall adopt regulations and take any other action necessary to implement this title consistent with the Internal Revenue Code and regulations issued in accordance with the Internal Revenue Code to ensure that the Program meets all criteria for federal tax deferral or tax–exempt benefits or both.</text> </level> <level label="c"> <text>The Board shall take any action necessary to ensure that the Program is not preempted by federal law.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-205" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="2" subtitle_name="Establishment; Powers and Duties of Board"> <level label="a"> <text>The Board shall establish procedures and disclosures to protect the interests of participants and employers.</text> </level> <level label="b"> <level label="1"> <text>Before opening the Program for enrollment, the Board shall design and disseminate to employers and employees information regarding the Program.</text> </level> <level label="2"> <text>The information provided shall include background information on the Program and appropriate disclosures for employees, including:</text> <level label="i"> <text>the benefits and risks associated with making contributions to the Program;</text> </level> <level label="ii"> <text>the mechanics of how to make contributions to the Program;</text> </level> <level label="iii"> <text>how to opt out of the Program;</text> </level> <level label="iv"> <text>the process for withdrawal of retirement savings;</text> </level> <level label="v"> <text>how to obtain additional information on the Program; and</text> </level> <level label="vi"> <text>information about alternative retirement savings options.</text> </level> </level> </level> <level label="c"> <text>The disclosure form shall clearly state the following:</text> <level label="1"> <text>employees seeking financial advice should contact financial advisors because employers are not in a position to provide financial advice;</text> </level> <level label="2"> <text>in accordance with § 12–501 of this title, employers are not liable for decisions made by employees;</text> </level> <level label="3"> <text>the Program is not an employer–offered savings arrangement; and</text> </level> <level label="4"> <text>in accordance with § 12–502 of this title, the Program fund may be privately insured and is not guaranteed by the State.</text> </level> </level> <level label="d"> <text>The Board shall establish procedures for:</text> <level label="1"> <text>a covered employee to opt out of participation in the Program;</text> </level> <level label="2"> <text>a participating employee to opt out of participation in the Program after the participating employee has commenced participation; and</text> </level> <level label="3"> <text>an employee who has opted out of participation to participate or resume participation in the Program.</text> </level> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-206" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="2" subtitle_name="Establishment; Powers and Duties of Board"> <level label="a"> <text>On or before August 1 each year, the Board shall submit an annual audited financial report, prepared in accordance with generally accepted accounting principles, on the operations of the Trust to the Governor and, subject to § 2–1257 of the State Government Article, the General Assembly.</text> </level> <level label="b"> <text>The annual audit shall be made by an independent certified public accountant and shall include direct and indirect costs attributable to the use of outside consultants, independent contractors, and any other persons who are not State employees.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-301" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="3" subtitle_name="Maryland Small Business Retirement Savings Trust"> <level label="a"> <text>There is a Maryland Small Business Retirement Savings Trust.</text> </level> <level label="b"> <level label="1"> <text>The Maryland Small Business Retirement Savings Trust shall be administered by the Board for the purpose of promoting greater retirement savings for Maryland private sector employees in a convenient, voluntary, low–cost, and portable manner.</text> </level> <level label="2"> <text>The Board shall enter into an agreement delegating the administration of the Trust to a third–party administrator.</text> </level> </level> <level label="c"> <text>Money in the Trust may be invested or reinvested as determined by the Board.</text> </level> <level label="d"> <text>Any contributions paid by employees into the Trust may be used only to:</text> <level label="1"> <text>pay benefits to the participants of the Program;</text> </level> <level label="2"> <text>pay the cost for administering the Program; and</text> </level> <level label="3"> <text>make investments for the benefit of the Program.</text> </level> </level> <level label="e"> <text>The Board shall establish, by regulation, dates when an employer shall deposit employee contributions.</text> </level> <level label="f"> <text>The State may not transfer any assets of the Trust to the General Fund or any other fund of the State, or otherwise encumber any assets of the Trust.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-401" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="4" subtitle_name="Maryland Small Business Retirement Savings Program"> <level label="a"> <text>There is a Maryland Small Business Retirement Savings Program.</text> </level> <level label="b"> <text>The Maryland Small Business Retirement Savings Program shall only include one or more payroll deposit IRA arrangements as determined by the Board.</text> </level> <level label="c"> <text>The Board shall:</text> <level label="1"> <text>implement a range of investment options and providers; and</text> </level> <level label="2"> <text>select a default investment option for Program participants.</text> </level> </level> <level label="d"> <text>When selecting investment options, the Board shall consider methods to minimize the risk of significant investment losses at the time of a participating employee’s retirement.</text> </level> <level label="e"> <text>The Board may provide an investment option that provides an assured lifetime income.</text> </level> <level label="f"> <level label="1"> <text>The Board shall consider investment options that minimize administrative expenses.</text> </level> <level label="2"> <text>Ongoing annual administrative expenses may not exceed 0.5% of assets under management in the Program.</text> </level> </level> <level label="g"> <text>The Board may not offer any investment options that conflict with federal law.</text> </level> <level label="h"> <text>The Board may not offer any investment options that could result in liability to the State or its taxpayers.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-402" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="4" subtitle_name="Maryland Small Business Retirement Savings Program"> <level label="a"> <level label="1"> <text>After the Board opens the Program for enrollment, covered employers shall establish a payroll deposit retirement savings arrangement to allow employee participation in the Program.</text> </level> <level label="2"> <text>A covered employer shall automatically enroll a covered employee in the Program, unless the employee elects to opt out in accordance with procedures established by the Board.</text> </level> </level> <level label="b"> <text>If a covered employer is not in compliance with subsection (a) of this section, the covered employer may not receive a waiver of the filing fee under § 1–203(b)(13) of the Corporations and Associations Article.</text> </level> <level label="c"> <text>Employers shall retain the option at all times to set up any type of employer–offered savings arrangement instead of having a payroll deposit retirement savings arrangement to allow employee participation in the Program.</text> </level> <level label="d"> <text>Compliance with this title and participation in the Program by itself does not create a fiduciary obligation of an employer with respect to the operation of the Program or funds contributed to the Program.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-403" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="4" subtitle_name="Maryland Small Business Retirement Savings Program"> <level label="a"> <text>A covered employee of a participating employer may elect to opt out of the Program.</text> </level> <level label="b"> <text>A covered employee of a participating employer who elects to opt out of the Program may re–enroll in the Program in accordance with procedures established by the Board.</text> </level> <level label="c"> <text>After the Board opens the Program for enrollment, an employee of a nonparticipating employer may elect to participate in the Program as authorized by the Board.</text> </level> <level label="d"> <text>A participating employee may terminate participation in the Program at any time in a manner prescribed by the Board.</text> </level> <level label="e"> <text>Unless otherwise specified by the employee, a participating employee shall contribute a fixed percentage or dollar amount of the employee’s salary or wages to the Program.</text> </level> <level label="f"> <text>By regulation, the Board shall set and may adjust the default contribution amount set in subsection (e) of this section.</text> </level> <level label="g"> <text>The assets in a participating employee’s Program account are the property of the participating employee.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-501" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="5" subtitle_name="Limitation of Liability"> <level label="a"> <text>An employer may not be held liable for:</text> <level label="1"> <text>an employee’s decision to participate in or opt out of the Program;</text> </level> <level label="2"> <text>the investment decisions of employees whose assets are deposited in the Program;</text> </level> <level label="3"> <text>the administration, investment, or investment performance of the Trust or the Program; or</text> </level> <level label="4"> <text>the Program design or the benefits paid to Program participants.</text> </level> </level> <level label="b"> <text>An employer is not a fiduciary, and may not be considered to be a fiduciary, of the Trust or the Program.</text> </level> </section> <section article="gle" article_name="Labor and Employment" number="12-502" title_number="12" title_name="Maryland Small Business Retirement Savings Program and Trust" subtitle_number="5" subtitle_name="Limitation of Liability"> <level label="a"> <text>The State may not be held liable for the payment of the retirement savings benefit earned by Program participants in accordance with this title.</text> </level> <level label="b"> <text>The debts, contracts, and obligations of the Board, Trust, or the Program are not the debts, contracts, and obligations of the State and neither the faith and credit nor the taxing power of the State is pledged directly or indirectly to the payment of the debts, contracts, and obligations.</text> </level> </section>