"Department." The Treasury Department of the Commonwealth.

"ERISA." 29 U.S.C.

§ 1001 et seq.

(The Employee Retirement Income Security Act of 1974).

"Internal Revenue Code." 26 U.S.C.

§ 1 et seq.

(The Internal Revenue Code of 1986).

"IRA." An individual retirement account or individual retirement annuity, including a traditional IRA or a Roth IRA, under one of the following sections of the Internal Revenue Code:

(1) 26 U.S.C.

§ 408(a) or (b) (relating to individual retirement accounts).

(2) 26 U.S.C.

§ 408A (relating to Roth IRAs).

"Participant." An individual who is contributing to an IRA under the program or has an IRA account balance under the program.

"Participating employer." Includes a covered employer or a 2024/90AJB/SB1056A05760 - 2 - noncovered employer that voluntarily participates in the program.

"Payroll service." A third party that provides payroll system activities to other persons, generally pursuant to a contractual or similar arrangement, for compensation.

"Payroll system." A system that uses software to automatically process payroll, including calculating total wage earnings, withholding and remitting of deductions, filing payroll taxes, and delivering payment of net wages to employees.

"Person." A corporation, partnership, limited liability company, business trust, other association, estate, trust, foundation or natural person, including natural persons doing business as sole proprietors.

"Program." The Keystone Saves Program established under section 311-A.

"Program fund." The Keystone Saves Program Fund established under section 312-A.

"Qualified payroll deposit retirement savings arrangement" or "qualified arrangement." An arrangement facilitated by a participating employer that allows employees to contribute to an IRA by processing employer payroll deductions and contributing the deductions to the program in accordance with section 352-A.

"Quarter." Any of the following periods:

(1) January 1 to March 31 of each year.

(2) April 1 to June 30 of each year.

(3) July 1 to September 30 of each year.

(4) October 1 to December 31 of each year.

"Roth IRA." A Roth individual retirement account or individual retirement annuity under section 408A of the Internal Revenue Code.

"Specified tax-favored retirement plan." A retirement plan that is tax-qualified under or intended to satisfy the requirements of section 401(a) or (k), 403(a) or (b) or 408(k) or (p) of the Internal Revenue Code.

"Total fees and expenses." All fees, costs and expenses of operating the program, including, but not limited to, any of the following:

(1) Initial planning and organizational costs.

(2) Administrative expenses.

(3) Investment expenses.

(4) Investment advice expenses.

(5) Accounting costs, actuarial costs, legal costs, marketing expenses, education expenses, trading costs, insurance annuitization costs and other costs reasonably related to the program.

"Traditional IRA." A traditional individual retirement account or traditional individual retirement annuity under section 408(a) or (b) of the Internal Revenue Code.

SUBARTICLE B ESTABLISHMENT Section 311-A.

Establishment of program.

2024/90AJB/SB1056A05760 - 3 - There is established a retirement savings program in the form of an automatic enrollment payroll deduction IRA, known as the Keystone Saves Program, within the department.

The program shall be administered by the department for the purposes of promoting greater retirement savings for covered employees in a convenient, low-cost and portable manner.

Section 312-A.

Keystone Saves Program Fund.

(a) Establishment.--The Keystone Saves Program Fund is established as a separate fund in the State Treasury.

The following shall apply:

(1) The program fund shall be used for the exclusive benefit of participants and the payment of program expenses.

(2) The construction of a participant's program account as self-settled shall not cause the program account to be treated as other than a trust.

(3) The program fund shall include the individual retirement accounts of participants, which shall be accounted for as individual accounts.

(4) Money in the program fund shall include money received from participants through participating employers.

(5) Investment earnings and interest that are attributable to money in the program fund shall be deposited in the program fund and credited appropriately to individual accounts.

(b) Amounts on deposit.--Except as provided under section 314-A(c), the following shall apply:

(1) The money deposited into the program fund, or any earnings thereof, does not constitute property of the Commonwealth.

(2) Money deposited into the program fund may not be commingled with Commonwealth funds.

(3) The Commonwealth shall have no claim to or against, or interest in, the money deposited into the program fund.

(c) Exemption from securities laws.--The program fund shall be construed to be an agency or instrumentality of the Commonwealth and shall be exempt from any statute regulating securities, including the act of December 5, 1972 (P.L.1280, No.284), known as the Pennsylvania Securities Act of 1972.

Section 313-A.

Keystone Saves Administrative Fund.

(a) Establishment.--The Keystone Saves Administrative Fund is established as a separate trust fund in the State Treasury.

Money in the administrative fund shall be segregated from the program fund and accounted for separately from the program fund.

(b) Use of money.--The department shall use money in the administrative fund to pay for all administrative and operating costs, fees and expenses incurred solely in performing the duties of the department under this article.

(c) Sources of money.--The administrative fund shall receive deposits from the individual account assessments under section 314-A(c) and funds designated for administrative purposes from the Federal Government, the Commonwealth or a local government 2024/90AJB/SB1056A05760 - 4 - entity or in the form of gifts, donations or grants made by any other person, firm, partnership or corporation for deposit into the administrative fund.

(d) Earnings and interest.--Investment earnings and interest that are attributable to money in the administrative fund shall be deposited into the administrative fund.

(e) Appropriation.--All money in the administrative fund is appropriated to the department on a continuing basis to carry out the provisions of this article.

Section 314-A.

Administration and funding.

(a) Duties of department.--Subject to the provisions of this article, the department shall implement and administer the program.

(b) Operating and administrative costs.-- (1) The department shall, through the Governor, annually submit to the General Assembly a budget covering the total fees and expenses for the program.

Upon approval by the General Assembly in an appropriation bill, total fees and expenses as incurred by the program and the department shall be paid from the fees, charges and investment earnings of the administrative fund or from other available money.

(2) Beginning five years after participants are enrolled in the program and upon approval by the General Assembly in an appropriation bill, total fees and expenses as incurred by the program shall be paid from the fees, charges, investment earnings and interest of the administrative fund or from other available money.

(c) Program costs.--All fees, costs and expenses of administering and operating the program and investing the assets of the program fund shall be incurred by the participants and paid from assessments against the balances of the individual program accounts as established by the State Treasurer and deposited in the administrative fund.

All fees, costs and expenses of administering and operating the program shall be paid by the Commonwealth through annual appropriations from the administrative fund.

The assessment for an individual program account shall not exceed an amount equivalent to 75 basis points per year calculated on the individual program account balance as of the date of each assessment, which shall be calculated pro rata.

The assessment limitation under this subsection shall not apply during the five-year period commencing with the enrollment of participants in the program and during the repayment period under subsection (d) of an appropriation provided during the five-year period.

(d) Repayment of appropriation.--The department shall over time repay to the General Fund money appropriated covering the total costs, fees and expenses for the program.

The repayment shall be made from the fees, charges, investment earnings and interest of the administrative fund or from any other available money.

SUBARTICLE C 2024/90AJB/SB1056A05760 - 5 - KEYSTONE SAVES PROGRAM ADVISORY BOARD Section 321-A.

Establishment of board.

The Keystone Saves Program Advisory Board is established within the department.

Section 322-A.

Composition of board.

(a) Members.--The board shall consist of the following members:

(1) The Governor, or a designee.

(2) The State Treasurer, or a designee.

(3) Four members, one each appointed by the President pro tempore of the Senate, the Speaker of the House of Representatives, the Minority Leader of the Senate and the Minority Leader of the House of Representatives.

The four appointed members must have knowledge, skill and expertise in financial planning and saving for retirement.

(b) Chairperson.--The State Treasurer, or a designee, shall serve as chairperson of the board.

Section 323-A.

Terms of board members.

(a) Term generally.--Each appointed board member shall serve a term of four years.

(b) Vacancy.--A vacancy on the board shall be filled for the unexpired term of an appointed member of the board in the same manner as the original appointment.

Section 324-A.

Meetings of board.

(a) Organizational meeting.--The State Treasurer, or the designee under section 322-A(a)(2), shall call the organizational meeting of the board.

(b) Subsequent meetings.--Meetings of the board shall be held at the call of the chairperson, but no less frequent than once every quarter.

(c) Employees.--The department shall have the power and its duty shall be to provide the board with experts, stenographers and assistants as necessary to carry out the work of the board.

In addition, the board may enlist voluntary assistance as available from citizens, research organizations and other agencies.

Section 325-A.

Duties of board.

(a) Mandatory duties.--The board shall:

(1) Consider, study and review the work of the program.

(2) Advise the department upon request.

(3) Make recommendations on the board's own initiative for the improvement of the program.

(b) Discretionary duties.--The board may make interim reports as the board deems advisable.

Section 326-A.

Limitations on board members.

A board member may not:

(1) Directly or indirectly have an interest in the making of an investment under the program or in gains or profits accruing from an investment under the program.

(2) Borrow program-related money or deposits or use program-related money or deposits in any manner, for the 2024/90AJB/SB1056A05760 - 6 - board member or as an agent or partner of another person.

(3) Become an endorser, surety or obligor on an investment made under the program.

SUBARTICLE D DEPARTMENT POWERS AND DUTIES Section 331-A.

Powers and duties of department.

The department shall have the following duties:

(1) Administer the program and the funds.

(2) Enter into individual retirement account contracts with individuals for the establishment of retirement savings accounts.

(3) Contract for goods and services and employing personnel, including contracts with private consultants, actuaries, investment advisors and managers, record keepers, legal counsel, auditors and such others as the department determines necessary for the rendering of professional, managerial and technical assistance and advice.

In awarding contracts for goods and services under this paragraph, the department may consider, where relevant, the following regarding an applicant:

(i) Staffing capabilities and capacity.

(ii) Experience and performance in supplying similar goods and services to governmental or private-sector programs.

(iii) Reputation for preserving the confidentiality and integrity of sensitive information.

(iv) Length of time in the current or comparable lines of business.

(v) Financial strength and record of creditworthiness.

(vi) Other factors as the department may deem material to evaluating the suitability of the applicant for any of the categories of contracts and personnel described in this paragraph.

(4) Solicit and accept gifts, grants, loans and other aid from any person, government entity, corporation or other entity and participate in any Federal, State or local government program that results in additional money being available for establishment and implementation of the program.

(5) Collect administrative fees and charges in connection with any transaction, including continued participation in the program.

(6) Contract for insurance, letters of credit and collateral agreements.

(7) Solicit answers from appropriate Federal agencies regarding the application of security laws or other Federal laws to the program.

(8) Promulgate rules and regulations and develop policies and procedures that the department deems necessary or advisable for the implementation of this article and the 2024/90AJB/SB1056A05760 - 7 - administration and operation of the program.

(9) Notwithstanding any other provision of this article, cause the program to be designed, established and operated in a manner that:

(i) accords with best practices for retirement saving vehicles;

(ii) is effective, efficient and low-cost;

(iii) encourages participation, saving, sound investment practices and appropriate selection of default investments;

(iv) maximizes simplicity and ease of administration for employers, minimizes financial costs for employers, and minimizes interactions between covered employees and covered employers;

(v) minimizes or eliminates costs for employers and employees;

(vi) promotes portability of benefits;

(vii) complies with all applicable sections of the Internal Revenue Code and regulations thereunder, including ensuring that the program satisfies all criteria for favorable Federal tax treatment and complies, to the extent necessary, with any other applicable Federal or State law;

(viii) ensures that accounts of participants meet the requirements for an IRA under the Internal Revenue Code;

and (ix) avoids preemption of the program by ERISA or other Federal law.

(10) Adopt, and periodically review, a written investment policy to ensure, among other considerations, that investment risks are prudent and properly managed and are appropriate in comparison to applicable performance benchmarks and standards.

(11) Develop and disseminate educational information to educate participating employers, covered employees, participants and others about the program, including all of the following information:

(i) The benefits of planning and saving for retirement.

(ii) Savings strategies that may be appropriate, including information describing the potential value of continuing income streams during retirement that might be derived from current account balances and products relating to generating such income.

(iii) The challenges of decumulating funds and managing spending during retirement.

(12) In addition to the materials described under paragraph (11), develop and deliver to each covered employee whose name is provided to it by the covered employer an information packet that provides details about the program and the choices available to the covered employee regarding 2024/90AJB/SB1056A05760 - 8 - participation in the program.

(13) Promulgate rules to allow employers who are not covered employers to voluntarily participate in the program, as modified for the noncovered employers as may be necessary and in a manner that does not cause any portion of the program to be considered a plan regulated by ERISA.

An employer that maintains or contributes to a specified tax- favored retirement plan for the employer's employees or has done so effective in form and operation at any time within the current or three preceding calendar years shall not be eligible to participate in the program.

(14) Promulgate rules to allow independent contractors, self-employed individuals and other workers who are not covered employees to voluntarily participate in the program, modified for the individuals as may be necessary.

(15) Make and enter into contracts, agreements or other arrangements to collaborate or cooperate with other State and local government agencies and governmental entities of other states that maintain retirement savings programs compatible with the program regarding the sharing of investment and administrative functions, including prudent collective, common or pooled investments with funds of other states' programs, in order to achieve economies of scale and other efficiencies designed to minimize costs for the program.

(16) Request from the Department of Labor and Industry and other State agencies information necessary for the department to implement this article, and share such data, pursuant to appropriate safeguards, with any of the entities or individuals retained under paragraph (3) as necessary for implementation of this article.

(17) Exercise any other powers reasonably necessary for the effectuation of the purposes, objectives and provisions of this article pertaining to the program.

SUBARTICLE E INVESTMENT AND FIDUCIARY RESPONSIBILITIES Section 341-A.

Fiduciary duties.

The department, and investment managers engaged by the department, shall be in a fiduciary relationship with participants and shall discharge their duties under this article solely in the interest of participants:

(1) for the exclusive purposes of providing benefits to participants and defraying reasonable expenses of administering the program;

and (2) by exercising that degree of judgment, skill and care under the circumstances then prevailing that persons of prudence, discretion and intelligence who are familiar with the matters exercise in the management of their own affairs, not in regard to speculation but in regard to the pursuit of reasonable income and preservation of capital.

Section 342-A.

Investment policies.

(a) Policies.--The department shall develop and adopt 2024/90AJB/SB1056A05760 - 9 - investment policies that define the investment objectives of the program consistent with the objectives of the program.

(b) Options.--The investment policies shall guide the department in identifying and making investment options available to participants that are intended to provide, in addition to other appropriate options, an economical income replacement balanced with an appropriate level of risk in an IRA-based environment consistent with the investment objectives of the program.

The investment options may encompass a range of risk and return opportunities and allow for a rate of return commensurate with an appropriate level of risk consistent with the investment objectives of the program.

(c) Recommendations.--The investment policies shall include recommendations regarding the desirability of limiting investment choices under the program to a reasonable number in the interest of simplicity and in consideration of the extensive investment choices available to participants if the participants roll over to an IRA existing outside of the program.

The recommendations shall conform to the program objectives of minimizing participant fees and administration and investment expenses and maximizing participation.

Section 343-A.

Additional investment options.

(a) Options.--As part of or in addition to investment options under section 342-A(b), the department shall, at a minimum, establish the following investment options for the program:

(1) Life-cycle fund with a target date based upon the age of the participant.

(2) Equity index fund.

(3) Bond index fund.

(4) Capital preservation fund.

(b) Distribution options.--The department may establish other investment options as the department deems necessary or desirable in accordance with the investment policies developed under section 342-A(a).

The department shall evaluate whether to offer one or more distribution options for the program to provide for a source of fixed retirement income that includes spousal protection for all or a portion of a participant's retirement.

(c) Default option.--The department shall select a default investment option for participants who do not elect an investment option.

From time to time, the department may change the default option for future participants.

Section 344-A.

Investment managers.

(a) Engagement.--The department shall have the sole and exclusive discretion to engage investment managers.

(b) Fees and charges.--An investment manager's fees and charges shall not exceed 60 basis points of program fund assets under management.

(c) Compliance.--An investment manager shall comply with applicable Federal and State laws and regulations, rules, 2024/90AJB/SB1056A05760 - 10 - policies and guidelines promulgated by the department regarding the program and the investment of money in a fund, including, but not limited to, investment policies.

(d) Oversight.--An investment manager shall provide reports to and appear before department personnel as the department deems necessary for the department to oversee the investment manager's performance and the performance of the fund.

(e) Performance reviews.--The department shall periodically conduct a performance review of each investment manager, including a review of fees and customer service.

A copy of each performance review shall be made available on the department's publicly accessible Internet website.

SUBARTICLE F PROGRAM IMPLEMENTATION Section 351-A.

Commencement of program activities.

No later than 24 months from the effective date of this section, the department shall begin implementation of the program and allow a participating employer to register with the department and certify that the participating employer has facilitated a qualified arrangement.

The department may delay the start of implementation, including the deadlines specified in section 356-A(b), for up to one year if the department determines that a delay would be in the best interests of the program.

Section 352-A.

Registration and certification of qualified payroll deposit retirement savings arrangements.

(a) General rule.--No later than the deadlines established under section 356-A(b), a participating employer shall facilitate a qualified arrangement and register with the department, certifying that the participating employer has facilitated a qualified payroll deposit retirement savings arrangement.

(b) Arrangement requirements.--A participating employer's qualified arrangement shall include the following components and features:

(1) Offer a covered employee the opportunity to participate in the program.

(2) In compliance with procedures established by the department, the department shall:

(i) Make available to a covered employee information regarding the program provided by the department.

(ii) Manage and facilitate all opt-in and opt-out paperwork with employees.

(iii) At least once each calendar year, provide an open enrollment period of not less than two weeks or a longer time period as may be prescribed by the department, during which a covered employee who previously opted out of the program or who terminated prior participation in the program may enroll or re- enroll in the program.

(3) In compliance with the procedures established by the 2024/90AJB/SB1056A05760 - 11 - department, the covered employer shall not be responsible for:

(i) Making available to a covered employee information regarding the program provided by the department.

(ii) Managing and facilitating opt-in and opt-out paperwork with employees.

(iii) Facilitating an open enrollment period provided under paragraph (2)(iii).

(4) In compliance with the procedures established by the department, the qualified arrangement shall:

(i) Provide the department with the name of the covered employee and other information as may be required by the department.

(ii) Automatically enroll a covered employee in the payroll deposit retirement savings arrangement, unless the covered employee opts out of the program.

(iii) Regularly take deductions from a participant's gross wages and remit the deductions to the participant's program account.

(5) Allow a participant to select the rate of deduction from the participant's gross wages for the program, subject to the annual contribution limit permitted by the Internal Revenue Code.

For a participant who does not identify a deduction rate, the department shall establish a default contribution equal to 4% of gross wages, or another default percentage as the department may prescribe for the program, subject to the annual contribution limit permitted by the Internal Revenue Code.

(6) Allow a participant to increase the deduction rate by any amount each year, to a maximum of 10% of gross wages or the annual contribution limit permitted by the Internal Revenue Code, whichever is greater.

(7) Allow a participant to completely opt out of deductions, increase or decrease the deduction rate, freeze automatic annual deduction rate increases or increase the deduction rate, subject to the annual contribution limit permitted by the Internal Revenue Code.

(8) Allow a participant to select one or more investment options from the investment options offered by the department through the program.

A participant may change the selected investment option or options at any time, subject to the program rules.

For a participant who does not select any investment option, the deductions from the participant's gross wages will be invested in a default option established by the department for the program.

(9) Allow a participant to terminate participation in the program at any time in accordance with Internal Revenue Code requirements.

(10) Allow a participant to roll over the program account balance into specified tax-favored retirement plans 2024/90AJB/SB1056A05760 - 12 - or traditional IRAs.

(11) Prohibit a participating employer from making contributions to the program.

(12) Prohibit a participating employer from taking any actions that constitute an explicit or direct endorsement or promotion of the arrangement or the program.

Section 353-A.

Participating employer plans.

Nothing in this article shall prohibit a participating employer from replacing a qualified arrangement with a specified tax-favored retirement plan.

Section 354-A.

Roth IRAs and traditional IRAs.

(a) Roth IRAs.--Subject to the requirements for a Roth IRA under the Internal Revenue Code, participant contributions, including contributions from a participant who does not select an investment option, shall be made to a Roth IRA.

(b) Alternative structures for emergency savings.--The department may offer an alternative investment option for a participant to select that facilitates access, in the event of emergency, to the participant's contributions comparable to that allowed by a Roth IRA.

(c) Traditional IRAs.--The department may make a traditional IRA available for a participant who selects the participant's investment options.

Section 355-A.

Implementation of qualified arrangements.

The department shall establish procedures regarding the facilitation of a qualified arrangement by a participating employer.

Section 356-A.

Registration and certification.

(a) Procedures.--The department shall establish procedures for a participating employer to register in the program and provide the registration information to the department.

A participating employer shall certify to the department implementation of a qualified arrangement at the time of registration.

(b) Registration deadlines.--Unless otherwise specified by the department, the registration deadlines for a covered employer to register as a participating employer shall be as follows, so long as nothing in this subsection shall prevent the department from implementing a limited pilot program earlier than any time periods described below to enable volunteer- covered employers to register with the department and certify having facilitated the implementation of qualified arrangements:

(1) A covered employer employing 100 or more employees shall register no later than 24 months after the effective date of this subsection.

(2) A covered employer employing at least 20 but no more than 99 employees shall register no later than 30 months after the effective date of this subsection.

(3) A covered employer employing at least 10 but no more than 19 employees shall register no later than 36 months after the effective date of this subsection.

2024/90AJB/SB1056A05760 - 13 - (4) A covered employer employing at least 5 but no more than 9 employees shall register no later than 48 months after the effective date of this subsection.

(5) Notwithstanding any of the preceding registration deadlines of this subsection, covered employers that pay their employees through a payroll system or payroll service shall register no later than 24 months after the effective date of this subsection.

A covered employer shall not be subject to a penalty for not participating in the program.

Section 357-A.

Payroll deductions.

(a) Payroll deduction deposits.--The department shall establish procedures for payroll deduction deposits, including time periods within which a participating employer must notify the department of the hiring of a new covered employee, must enroll the new covered employee in the program and must begin taking deductions from the participant's gross wages for the program.

(b) Retirement savings.--The department shall establish procedures for the remittance by a participating employer of payroll deductions through a qualified arrangement.

(c) Deductions held in trust.--All deductions collected by a person from a covered employee in accordance with or under color of this article that have not been properly returned by the person to the covered employee shall constitute a trust fund for the covered employee until contributed to the covered employee's program account.

The trust shall be enforceable by the covered employee or the Commonwealth against the person, the person's representatives and any person, other than the covered employee, who knowingly or unknowingly receives any part of the fund without consideration.

Section 358-A.

Withdrawals, rollovers and transfers.

The department shall establish procedures relating to a participant's ability to make withdrawals, arrange for rollovers of funds, make direct transfers from program IRAs and otherwise facilitate portability of program account balances.

Section 359-A.

Distribution of funds from program.

(a) Procedures.--The department shall establish procedures governing the distribution of funds from the program, including distributions as may be permitted or required by the program or any applicable provisions of Federal or State law, with the following objectives:

(1) Maximizing financial security in retirement.

(2) Assisting a participant with the challenges of the decumulation of savings.

(b) Consideration.--The department shall consider the benefits, feasibility and cost-effectiveness of the following when establishing the procedures under subsection (a):

(1) Designating a lifetime income investment product for the program to provide a participant and the participant's spouse with a source of retirement income for life, and, if determined by the department to be prudent, to provide 2024/90AJB/SB1056A05760 - 14 - benefits, where available, to other designated beneficiaries.

(2) Establishing distribution procedures for participants that encourage participants to elect, in combination with the designation of a lifetime income investment product, that at least 50% of a participant's program account balance on the date the participant attains the normal retirement age be invested in the lifetime income investment product.

Section 360-A.

Outreach and information.

The department shall develop, periodically update and distribute educational content to all of the following:

(1) A participating employer, as follows:

(i) General information about the requirements and procedures of the program.

(ii) Information describing the opportunity to and benefits of a participating employer sponsoring a specified tax-favored retirement plan that would exempt the participating employer from the requirements of the program.

(iii) Explanatory materials to be made available to a covered employee regarding the program and the choices available to the covered employee.

The explanatory materials shall include all required disclosures relating to participating in an IRA and instructions for how to enroll in the program.

(2) A covered employee, as follows:

(i) Information explaining the advantages of early savings activity that benefits from compound interest.

(ii) Descriptions of investment options offered by the program.

(iii) Strategies for increasing long-term financial security for an individual and a family unit.

(3) A participant, as follows:

(i) Information that will assist a participant in the prudent decumulation of savings during retirement.

(ii) Descriptions of asset distribution products that may provide predictable and fixed income for a period of time, including for all or a portion of the retirements of the participant and the participant's spouse.

Section 361-A.

Contributions, interest and investment earnings.

(a) Ownership.--A participant shall be the owner of the contributions, interest and investment earnings in the associated program account.

The Commonwealth or the participating employer may not have any proprietary interest in the contributions, interest or investment earnings.

(b) Prohibited uses.--The department shall ensure that no assets of the program are used for purposes other than the following:

(1) Paying benefits to a participant.

(2) Paying the cost of administering the program.

2024/90AJB/SB1056A05760 - 15 - (3) Making investments for the benefit of a participant and the program.

(c) Prohibited transfers.--The General Assembly may not transfer contributions in an IRA under the program, or the interest or investment earnings of any associated program accounts, to the General Fund or another Commonwealth fund or otherwise encumber or use the contributions, interest or investment earnings for a purpose other than the ones specified under this section.

(d) Procedures.--The department shall establish procedures to allocate interest, investment earnings and investment losses to the program account of a participant.

A participant's retirement savings benefit under the program shall be an amount equal to the balance in the participant's account on the date the retirement savings benefit becomes payable.

Section 362-A.

Duties and liability of Commonwealth.

(a) Excess amounts.--The Commonwealth shall have no duty or liability to a person for the payment of any amount in excess of the amount of a participant's retirement savings benefit and the amount shall be made available to the participant or beneficiary in accordance with the requirements of the program and the Internal Revenue Code.

(b) Losses or deficiencies.--A Commonwealth agency, commission or board or any officer, employee or member of a Commonwealth agency, commission or board shall not be liable for the loss or deficiency resulting from particular investments selected under this article, except for liability that arises out of a breach of fiduciary duty under section 341-A as determined by a competent court of law.

Section 363-A.

Protection from liability for employers.

(a) Liability.--A participating employer or another employer shall not be liable for any of the following:

(1) An employee's decision to participate in or opt out of the program.

(2) The investment decision of a participant or the department.

(3) The administration, investment, investment returns or investment performance of the program, including any interest rate or other rate of return on any contribution or account balance.

(4) The design of the program or benefits paid to a participant.

(5) An individual's awareness of or compliance with the conditions and other provisions of Federal and State tax laws that determine whether the individual is eligible to make tax-favored contributions to IRAs, including the amount of the contributions and the time frame and manner of the contributions.

(6) A loss, a failure to realize any gain or any other adverse consequences, including adverse tax consequences or a loss of favorable tax treatment, public assistance or other 2024/90AJB/SB1056A05760 - 16 - benefits incurred by an individual resulting from participating in the program.

(b) Fiduciaries.--A participating employer or another employer shall not be a fiduciary in relation to the program or any other arrangement under the program.

Section 364-A.

Risk management.

(a) Program.--The department shall annually prepare and adopt a written risk management and oversight program as a part of the investment policies of the department developed under section 342-A.

The risk management and oversight program shall be designed to:

(1) ensure that an effective risk management system is in place to monitor the risk levels of the program and program fund portfolio;

(2) ensure that the risks taken are prudent and properly managed;

(3) provide an integrated process for overall risk management;

and (4) assess investment returns and risks to determine if the risks taken are adequately compensated compared to applicable performance benchmarks and standards.

(b) Insurance.--In preparing the risk management and oversight program under subsection (a), the department shall evaluate whether to obtain insurance against any and all losses in connection with the property, assets or activities of the program.

Section 365-A.

Audit and reports.

(a) Reports to Governor and General Assembly.--The department shall annually submit the following reports to the Governor and the General Assembly:

(1) An audited financial report, prepared by the Auditor General in accordance with generally accepted accounting principles, of the program by July 1 of each calendar year for the prior calendar year.

(2) A report prepared by the department, which shall include, but not be limited to, the following:

(i) A summary of the benefits provided by the program, including the number of participants and participating employers in the program.

(ii) The percentage and amount of funds in the program's investment options and rates of return, net of fees.

(iii) Any other information that is relevant to make a full, fair and effective disclosure of the operations of the program and the program fund.

(b) Reports to participating employers.--In addition to other statements or reports required by Federal or State law, at least annually, the department shall provide a report to each participating employer that contains a list of the names of each participant employed by the participating employer and the amounts of deductions taken by the participating employer and 2024/90AJB/SB1056A05760 - 17 - contributed to the program on behalf of each participant during the reporting period.

(c) Reports to participants.--In addition to other statements or reports required by Federal or State law, the department shall provide the following to each participant:

(1) At least annually, a report of contributions and investment income allocated and withdrawals from and balances in the participant's account for the reporting period, including, but not limited to, the participant's rate of contribution and any change in the rate of contribution during the preceding calendar year or as required under section 352-A(b)(6).

(2) At least quarterly, all of the following:

(i) The account balance in a participant's program account, including the value of the participant's investment in each investment option selected by the participant.

(ii) The investment options available to a participant and the process by which a participant may select from the investment options for the participant's contributions to the program.

(iii) The amount of fees charged to a participant program account and a description of the services to which each charge relates.

(iv) An estimate of the amount of income the participant's program account could reasonably be expected to generate over the course of the participant's retirement, based upon reasonable assumptions.

(d) Additional information.--The department may include any other information in the reports under subsection (c) regarding the program as the department may determine appropriate and useful.

Section 366-A.

Confidentiality of information.

Notwithstanding any other provision of law, account information under the program relating to a participant, including, but not limited to, the participant's name, address, telephone number, email address, personal identification information, investments, contributions and earnings, shall be confidential and shall be maintained by the department and the department's agents as confidential, except in any of the following circumstances:

(1) It is necessary to administer the program in a manner consistent with this article or Federal or State tax laws.

(2) The participant who provides the information or is the subject of the information expressly agrees in writing to the disclosure of the information.

(3) The information is demanded pursuant to a subpoena, court order or other legal obligation.

Section 367-A.

Temporary regulations.

(a) Promulgation.--In order to facilitate the prompt 2024/90AJB/SB1056A05760 - 18 - implementation of this article, the department may promulgate temporary regulations that shall expire not later than two years after publication of the temporary regulations in the Pennsylvania Bulletin.

The promulgated temporary regulations shall not be subject to any of the following:

(1) Section 612 of the act of April 9, 1929 (P.L.177, No.175), known as The Administrative Code of 1929.

(2) Sections 201, 202, 203, 204 and 205 of the act of July 31, 1968 (P.L.769, No.240), referred to as the Commonwealth Documents Law.

(3) Sections 204(b) and 301(10) of the act of October 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act.

(4) The act of June 25, 1982 (P.L.633, No.181), known as the Regulatory Review Act.

(b) Expiration.--The authority of the department to promulgate temporary regulations under subsection (a) shall expire two years after the effective date of this section.

SUBARTICLE G (Reserved) SUBARTICLE H MISCELLANEOUS PROVISIONS Section 381-A.

Regulations.

The department shall promulgate regulations and adopt policies or guidelines as necessary to implement this article.

Section 382-A.

Provision of information.

The Department of Labor and Industry and other State agencies shall coordinate, cooperate and share data and information with the department to facilitate implementation of this article.

Section 383-A.

Notice of program implementation.

(a) Publication.--Upon the implementation of the program in accordance with this article, the department shall submit a notice to the Legislative Reference Bureau for publication in the next available issue of the Pennsylvania Bulletin.

(b) Internet posting.--The department shall post a notice of the date of implementation of the program on the department's publicly accessible Internet website.

The notice shall include a statement that in lieu of enrolling employees in the program employers may sponsor an alternative arrangement, including, but not limited to, a defined benefit plan, 401(k) plan, simplified employee pension (SEP) plan, savings incentive match plan for employees (SIMPLE) or automatic payroll deduction IRA offered through a private provider.

Amend Bill, page 2, line 15, by striking out "2" and inserting 3 2024/90AJB/SB1056A05760 - 19 -