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S 3086Public Finance

Public Finance - Rhode Island Secure Choice Retirement Savings Program Act

Updates the state retirement savings program to allow individual enrollment and modifies investment oversight and employer exemption rules.

Signed into law69 Yea0 Nay6 Not voting
Population
Affected
35
Email Legislator
Introduced Mar 13, 2026Committee Senate Finance

Plain-English Summary

This legislation amends the Rhode Island Secure Choice Retirement Savings Program Act. It refines the definitions of eligible employees and employers, specifically creating a category for "optional employees" who can voluntarily enroll in the program even if their employer is not eligible. The bill modifies the duties of the State Investment Commission, requiring them to "consider" rather than "approve" investment offerings and policies every three years. It also clarifies exemptions for employers who offer payroll deduction IRAs and adds a severability clause to protect the act if specific provisions are challenged in court.

For younger readers

This bill helps people save money for when they get older and stop working, which is called retiring. It changes the rules so that more people can join the state's savings program on their own, even if their boss doesn't sign them up automatically. It also changes some instructions for the people who manage the money, telling them to check on the investments every three years to make sure they are still good choices. Finally, it adds a rule saying that if one part of the law is broken, the rest of the program can keep working.

Who & Where It Applies

Impacted groups
EmployeesEmployersSmall Business OwnersState Investment CommissionRetirees
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Expands access to the state-run retirement savings program to "optional employees," allowing gig workers, freelancers, and employees of very small businesses to access a secure path to financial stability.
  • Strengthens the social safety net by facilitating retirement savings for low-income workers who traditionally lack access to 401(k) plans, potentially reducing future reliance on state welfare programs.
  • Maintains the program's focus on responsible investing by requiring the State Investment Commission to regularly review investment options that prioritize good governance, environmental responsibility, and social impact.
  • Weakens the oversight authority of the State Investment Commission by changing their mandate from "approving" investment offerings to merely "considering" them, potentially reducing accountability.
  • Relies on market-based investment strategies managed by private third-party administrators rather than establishing a guaranteed, defined-benefit pension system for vulnerable workers.
  • Allows employers to be exempt if they offer a basic payroll deduction IRA, which may not offer the same quality of benefits, low fees, or oversight as the state-managed program.
For Conservatives
  • Reduces bureaucratic red tape by changing the requirement for the State Investment Commission to "approve" investments to "consider" them, streamlining administrative processes.
  • Clarifies exemptions for business owners, ensuring that those already offering payroll deduction IRAs are not burdened with mandatory participation in the state program.
  • Promotes individual responsibility by creating a mechanism for "optional employees" to voluntarily join the savings program without imposing new mandates on small businesses.
  • Continues the expansion of government into the financial sector, where the state competes directly with private investment firms and financial advisors.
  • Retains language prioritizing investments based on "social impact" and "environmental resources" (ESG), prioritizing political agendas over maximum financial returns for retirees.
  • Empowers the General Treasurer to set default contribution rates for individuals, creating a "nudge" state that interferes with how workers manage their own paychecks.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 22 additions · 12 deletions

It is enacted by the General Assembly as follows:

SECTION 1. Sections 35-23-2, 35-23-4 and 35-23-9 of the General Laws in Chapter 35- 23 entitled "Rhode Island Secure Choice Retirement Savings Program Act" are hereby amended to read as follows: 35-23-2. Definitions. As used in this chapter:

(1) “Eligible employee” means a person age eighteen (18) years or older who is employed by an eligible or optional employer and has been employed for a period of not less than one hundred twenty (120) days. “Eligible employee” does not include:

(i) Any employee covered under the federal Railway Labor Act (45 U.S.C. §§ 151—164 and 45 U.S.C §§ 181—188), or any employee engaged in interstate commerce not subject to the legislative powers of the state, except insofar as application of this chapter is authorized under the United States Constitution or laws of the United States; or

(ii) Any employee on whose behalf an employer makes contributions to a Taft-Hartley pension trust fund.

(2) “Eligible employer” means a person or entity engaged in a business, industry, profession, trade, or other enterprise in the state, whether for-profit or not-for-profit, excluding the federal government, the state, any municipal corporation, or any of the state’s units or instrumentalities, that has five (5) or more employees and that satisfies the requirements to establish or participate in a payroll deposit retirement savings arrangement. “Eligible employer” does not include an employer that provides a tax-qualified retirement savings program as described in § 35- 23-9.

(3) “IRA” means an individual retirement account or individual retirement annuity under 26 U.S.C § 408 or § 408A (the federal Internal Revenue Code).

(4) "Optional employee" means a person age eighteen (18) years or older that is not employed by an eligible employer but has elected to enroll in the program. (4)(5) “Optional employer” means a person or entity engaged in a business, industry, profession, trade, or other enterprise in the state, whether for-profit or not-for-profit, excluding the federal government, the state, any municipal corporation, or any of the state’s units or instrumentalities, that has under five (5) employees. (5)(6) “Participating employer” means an eligible or optional employer that provides a payroll deposit retirement savings arrangement provided for by this chapter for eligible employees. (6)(7) “Payroll deposit retirement savings arrangement” means an arrangement by which an employer allows employees to remit payroll deduction contributions to the RISavers retirement savings program. (7)(8) “RISavers retirement savings program” or “program” means a retirement savings program offered by the Rhode Island secure choice retirement savings program. (8)(9) “State investment commission” or “commission” means the state investment commission established pursuant to the provisions of § 35-10-1. 35-23-4. Investments.

(a) The office of the general treasurer may select an appropriate third-party administrator(s) for the program and shall adopt such plan, trust, and/or custodial documents, with such features and attributes as the office of the general treasurer determines necessary or advisable in its discretion to effectuate the provisions of this chapter in accordance with the following:

(1) The office of the general treasurer may select one or more firm(s) or company(ies) to provide retirement program investments, program administration, and communication services to employees who participate in the retirement savings program. The program shall provide for appropriate long-term retirement-oriented investments and shall include investment options as determined by the state investment commission. In determining the firm(s) or the company(ies) to provide these services, the office of the general treasurer shall consider the following:

(i) The financial stability of the company or firm;

(ii) The cost of the investments, program administration, and services to the members;

(iii) The experience of the company or firm in administering retirement savings plans;

(iv) The experience of the company or firm in providing education, counseling, and advice to participants of retirement savings plans; and

(v) Any criminal convictions, securities or antitrust law violations, material civil or regulatory fines or judgments against the company or firm which the company or firm shall be required to disclose to the office of the general treasurer and the commission as part of the selection process.

(2) The program shall provide education, counseling, and objective employee-specific plan advice to participants.

(3) The program shall include a limited number of investment options that shall include either:

(i) Investment portfolio options that are constructed to reflect different risk profiles such as conservative, moderate, and aggressive; and/or

(ii) Options constructed to reflect different risk profiles that automatically reallocate and rebalance contributions as an employee ages. There shall be investment options that prioritize the securities of companies that demonstrate good governance; efficient use of environmental resources; and thoughtful management of social impact. All investment offerings shall be approved considered by the state investment commission no less than once every three (3) years.

(b) The Rhode Island secure choice retirement savings program is an instrumentality of the state. Any security issued, managed, or invested by the state investment commission within the Rhode Island secure choice retirement savings program on behalf of an individual participating within the RISavers retirement savings program shall be state income tax deferred for investment earnings to include interest, dividends, and capital gains until such time as withdrawal pursuant to the terms of this chapter.

(c) The third-party administrator(s) shall adopt a written statement of investment policy that includes a risk management and oversight program. The state investment commission shall consider the statement of investment policy and any changes in the investment policy at a public meeting no less than once every three (3) years. 35-23-9. Employer participation.

(a) After the office of the general treasurer opens the RISavers retirement savings program for enrollment, eligible employers shall have a payroll deposit retirement savings arrangement to allow employee participation in the program under the terms and conditions prescribed by the office of the general treasurer.

(b) Within twelve (12) months after the office of the general treasurer opens the program for enrollment, eligible employers with more than one hundred (100) eligible employees and that do not offer a retirement savings program pursuant to subsection (g) of this section shall have a payroll deposit retirement savings arrangement to allow employee participation in the program.

(c) Within twenty-four (24) months after the office of the general treasurer opens the program for enrollment, eligible employers with more than fifty (50) eligible employees and that do not offer a retirement savings program pursuant to subsection (g) of this section shall have a payroll deposit retirement savings arrangement to allow employee participation in the program.

(d) Within thirty-six (36) months after the office of the general treasurer opens the program for enrollment, all other eligible employers that do not offer a retirement savings program pursuant to subsection (g) of this section shall have a payroll deposit retirement savings arrangement to allow employee participation in the program.

(e) The office of the general treasurer, in its discretion, may extend the time limits defined in subsections (b) through (d) of this section. (f)(1) Each eligible employee shall be enrolled in the program unless the employee elects not to participate in the program. An eligible employee may elect to opt out of the program at any time by making a notation on the opt-out form.

(2) Following initial implementation of the program pursuant to this section, at least once every year, the office of the general treasurer shall designate an open enrollment period during which eligible employees that previously opted-out of the program may enroll in the program.

(3) An employee who elects to opt out of the program who subsequently elects to participate through the employer’s payroll deposit retirement savings arrangement may enroll at any time. (g)(1) An employer that provides an employer-sponsored retirement plan, such as a defined benefit plan or a 401(k), 403(b), 457(b), simplified employee pension (SEP) plan, or savings incentive match plan for employees (SIMPLE) plan, or that offers an automatic enrollment a payroll deduction IRA, shall be exempt from the requirements of the RISavers retirement savings program, if the plan or IRA qualifies for favorable federal income tax treatment under the federal Internal Revenue Code.

(2) An employer shall retain the option at all times to set up and offer a tax-qualified retirement plan, instead of facilitating employee participation in the RISavers retirement savings program. (h)(1) Following initial implementation of the program pursuant to this section, and at least once every year, the general treasurer shall designate an open enrollment period during which optional employers employees may enroll in the program.

(2) An optional employer employee that enrolls in the program may elect to opt out of withdraw from the program upon thirty (30) days’ notice provided to employees their employer and to the office of the general treasurer.

(i) By regulation, the office of the general treasurer may set a default contribution rate, unless otherwise specified by the employee. Employees shall have the ability to change their contribution rate at any time with thirty (30) days’ notice provided to the office of the general treasurer.

SECTION 2. Chapter 35-23 of the General Laws entitled "Rhode Island Secure Choice Retirement Savings Program Act" is hereby amended by adding thereto the following section: 35-23-19. Severability. The provisions of this chapter are severable, and if any of its provisions shall be held unconstitutional or are found to be preempted by federal law or by any court of competent jurisdiction, the decision of the court shall not affect or impair any of the remaining provisions.

SECTION 3. This act shall take effect upon passage.