| |
| |
| |
|
|
AN ACT
|
|
|
relating to participation by certain state employees in a default |
|
|
investment product under a deferred compensation plan. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subchapter C, Chapter 609, Government Code, is |
|
|
amended by adding Section 609.5025 to read as follows: |
|
|
Sec. 609.5025. AUTOMATIC PARTICIPATION; DEFAULT INVESTMENT |
|
|
PRODUCT. (a) This section applies only to an employee of a state |
|
|
agency participating in a 401(k) plan. |
|
|
(b) An employee participates in a 401(k) plan unless the |
|
|
employee affirmatively elects not to participate in the plan. |
|
|
Notwithstanding Sections 609.007(b) and (c), an employee is not |
|
|
required to affirmatively contract for and consent to participation |
|
|
in a plan under this section. |
|
|
(c) An employee participating in a 401(k) plan under this |
|
|
section makes a contribution of one percent of the compensation |
|
|
earned by the employee to a default investment product selected by |
|
|
the board of trustees based on the criteria established under |
|
|
Section 609.505(d) and the rules adopted under Subsection (f). The |
|
|
contribution is made by automatic payroll deduction. |
|
|
(d) At any time, an employee participating in a 401(k) plan |
|
|
under this section may, in accordance with rules adopted by the |
|
|
board of trustees, elect to end participation in the 401(k) plan, to |
|
|
contribute to a different investment product, or to contribute a |
|
|
different amount to the plan. |
|
|
(e) The board of trustees 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. |
|
|
(f) The board of trustees shall adopt rules to implement the |
|
|
requirements of this section. The rules must ensure that the |
|
|
operation of the 401(k) 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. |
|
|
(g) 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. |
|
|
(h) Within existing resources, a state agency participating |
|
|
in a 401(k) plan shall inform new hires of their automatic |
|
|
enrollment in a 401(k) account and their right to opt-out of |
|
|
enrollment. Within existing resources, this information shall be |
|
|
included as part of the new employee orientation process. State |
|
|
agencies participating in a 401(k) plan shall maintain a record of a |
|
|
new hire's acknowledgement of receipt of information regarding the |
|
|
ability to opt-out of enrollment in a 401(k) plan. |
|
|
SECTION 2. Section 609.007(c), Government Code, is amended |
|
|
to read as follows: |
|
|
(c) Except as provided by Section 609.5025, to [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 3. Section 659.102(a), Government Code, is amended |
|
|
to read as follows: |
|
|
(a) An employee of a state agency may authorize in writing a |
|
|
deduction each pay period from the employee's salary or wage |
|
|
payment for coverage of the employee under an eligible supplemental |
|
|
optional benefits program. A deduction may be made each pay period |
|
|
from the employee's salary or wage payment without authorization in |
|
|
writing from the employee for participation in a 401(k) plan as |
|
|
provided by Section 609.5025. |
|
|
SECTION 4. Section 609.5025, Government Code, as added by |
|
|
this Act, applies only to an officer or employee of a state agency |
|
|
who initially takes office or begins employment on or after January |
|
|
1, 2008. |
|
|
SECTION 5. 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, 2007. |
| |
| |
| |
______________________________ |
______________________________ |
| |
President of the Senate |
Speaker of the House |
| |
| |
|
|
I certify that H.B. No. 957 was passed by the House on April |
|
|
25, 2007, by the following vote: Yeas 135, Nays 5, 2 present, not |
|
|
voting; and that the House concurred in Senate amendments to H.B. |
|
|
No. 957 on May 23, 2007, by the following vote: Yeas 145, Nays 2, 1 |
|
|
present, not voting. |
|
|
|
|
|
______________________________ |
|
|
Chief Clerk of the House |
| |
|
|
I certify that H.B. No. 957 was passed by the Senate, with |
|
|
amendments, on May 21, 2007, by the following vote: Yeas 31, Nays |
|
|
0. |
|
|
|
|
|
______________________________ |
|
|
Secretary of the Senate |
|
|
APPROVED: __________________ |
|
|
Date |
|
|
|
|
|
__________________ |
|
|
Governor |