Massachusetts Governor Deval Patrick recently signed into law legislation that will provide new retirement plan options for small non-profit organizations. House Bill (HB) 3754, which is considered one of the first of its kind in the nation, creates a state-administered contributory retirement plan for non-profit organizations with fewer than 20 employees. The goal of the legislation is to allow small non-profits, which frequently lack the resources to fund retirement plans, to offer this critical benefit to career employees, the Governor said.
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Get Your Report Now!No state money will be used to fund the retirement plan, which will be overseen by the Treasurer’s Office. Currently, the Treasurer’s Office oversees a contributory plan with $5 billion in assets that includes approximately 300,000 members. Adding the plan for non-profit organizations is not expected to have a significant impact on operations.
To establish the plan, the Treasurer’s Office may create a trust to receive qualified contributions from non-profit employers and employees, and will establish a non-profit defined contribution committee that will include the Treasurer and four other members.
Reaction. A number of insurance industry groups opposed the bill. Adam Sachs, government relations chair for the National Association of Insurance and Financial Advisors of Massachusetts, said, “This bill puts the Commonwealth in direct competition with Massachusetts companies that are already providing retirement plans to employers of all sizes in Massachusetts … This is not filling a void, or correcting a market failure—it is simply an effort to take business away from Massachusetts taxpayers.”