ASSEMBLY, No. 208

STATE OF NEW JERSEY

218th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2018 SESSION

 


 

Sponsored by:

Assemblywoman  AMY H. HANDLIN

District 13 (Monmouth)

 

 

 

 

SYNOPSIS

     Requires person administering annuity retirement plans for teachers to annually disclose fee ratio, return, and fees to each participant.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel.

  


An Act requiring disclosures for persons providing annuity retirement plans to certain school board employees and supplementing chapter 66 of Title 18A of the New Jersey Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    a.  Any person who administers an annuity retirement plan offered by a school board on behalf of school board employees shall disclose to each participant in such retirement plan:

     (1) the fee ratio and return, net of fees, for each investment under the retirement plan; and

     (2) the fees paid to any person who, for compensation, engages in the business of providing investment advice to participants in the retirement plan either directly or through publications or writings.

     b.    The disclosures required under subsection a. of this section shall be made upon a participant’s initial enrollment in the retirement plan and at least annually thereafter.

     For the purposes of this section, “retirement plan” means any retirement plan created in accordance with the provisions of section 403(b) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, that is not made available through a State-administered retirement system under the Supplemental Annuity Collective Trust pursuant to P.L.1963, c.123 (C.52:18A-107 et seq.) or the Additional Contributions Tax-Sheltered Program pursuant to section 1 of P.L.1995, c.92 (C.52:18A-113.2).

 

     2.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill requires persons who administer certain supplemental annuity retirement plans for teachers, offered by a local school board, to disclose to each plan participant the (1) fee ratio and return, net of fees, for each investment under the plan and (2) fees paid to any person who, for compensation, provides investment advice to participants directly or through publications or writings. The plan administrator must make the disclosures upon a participant’s enrollment and annually thereafter. Under the bill, “retirement plan” means any retirement plan created under section 403(b) of the Internal Revenue Code that is not made available through a State-administered retirement system through the Supplemental Annuity Collective Trust (SACT) or the Additional Contributions Tax-Sheltered Program (ACTS).

     Under current law, school employees who are teachers may enter into an agreement with the school board to have a portion of their salary deducted for deposit into a supplemental annuity retirement account. Under section 403(b) of the Internal Revenue Code, teachers may elect to defer a portion of their current earnings and invest those earnings, tax-free, until withdrawn, usually at retirement. The 403(b) plans are similar to plans the code authorizes for private-sector employees (401(k) plans) and non-educational public employees (457 plans).