bill letting counties auto-enroll new hires in retirement savings

The text as introduced · 687 words

90R5571 KFF-D

By: Garcia of Dallas
H.B. No. 991

A BILL TO BE ENTITLED

AN ACT

relating to automatic participation by certain county employees in

deferred compensation plans provided by certain counties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 609.007(c), Government Code, is amended

to read as follows:

(c) Except as provided by Section 609.1026, 609.202 , or

609.5025, to participate in a deferred compensation plan, an

employee must consent in the contract to automatic payroll

deductions in an amount equal to the deferred amount.

SECTION 2. Subchapter B, Chapter 609, Government Code, is

amended by adding Section 609.1026 to read as follows:

Sec. 609.1026. AUTOMATIC PARTICIPATION BY CERTAIN COUNTY

EMPLOYEES; DEFAULT INVESTMENT PRODUCT. (a) In this section,

"electing county" means a county that elects to require automatic

employee participation in a deferred compensation plan under this

section.

(b) The commissioners court of a county that offers a

deferred compensation plan to the county's employees under this

subchapter may by order elect to require automatic employee

participation in a deferred compensation plan under this section.

(c) An employee of an electing county automatically

participates in a deferred compensation plan provided by the county

unless the employee affirmatively elects not to participate in the

plan. The employee is not required to affirmatively contract for

and consent to participation in a plan under this section.

(d) An employee participating in a deferred compensation

plan under this section makes a contribution of one percent of the

compensation earned by the employee, or a higher percentage not to

exceed three percent prescribed by the commissioners court of the

electing county, to a default investment product selected by the

plan administrator based on the criteria established under Section

609.113 and the order adopted under Subsection (b), including

requirements prescribed in accordance with Subsection (g). The

contribution is made by automatic payroll deduction.

(e) At any time, an employee participating in a deferred

compensation plan under this section may, in accordance with the

order adopted by the commissioners court of the electing county, or

its designee, elect to end participation in the plan, to contribute

to a different investment product, to contribute a different amount

to the plan, or to designate all or a portion of the employee's

contribution as a Roth contribution subject to the availability of

a Roth contribution program.

(f) An electing county shall ensure that, at the time of

employment, each employee is informed of:

(1) the elections the employee may make under this

section; and

(2) the responsibilities of the employee under Section

609.010.

(g) In the order adopted under Subsection (b), the

commissioners court of an electing county, or its designee, shall

prescribe the requirements of this section. The order must ensure

that the operation of a deferred compensation plan under this

section conforms to the applicable requirements of any federal rule

that provides fiduciary relief for investments in qualified default

investment alternatives or otherwise governs default investment

alternatives under participant-directed individual account plans.

(h) The amount deducted under this section from an

employee's compensation is not deducted for payment of a debt and

the automatic payroll deduction is not garnishment or assignment of

wages.

(i) Using existing resources, the electing county shall

inform new employees of their automatic enrollment in a deferred

compensation plan and their right to opt out of enrollment. Using

existing resources, this information must be included as part of

the new employee orientation process. The county shall maintain a

record of a new employee's acknowledgment of receipt of information

regarding the ability to opt out of enrollment in a deferred

compensation plan.

SECTION 3. Section 609.1026, Government Code, as added by

this Act, applies only to an employee of a county subject to that

section who initially begins employment on or after January 1,

2028.

SECTION 4. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2027.