WSR 17-15-124 PROPOSED RULES DEPARTMENT OF COMMERCE [Filed July 19, 2017, 9:11 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 17-11-012.
Title of Rule and Other Identifying Information: Washington small business retirement marketplace, chapter 365-65 WAC.
Description of Subject: The Washington small business retirement marketplace (marketplace) is a retirement savings program created to connect eligible employers and their employees with approved plans to increase retirement savings. RCW 43.330.750 requires the director of the department of commerce to adopt rules necessary to allow the marketplace to operate. The legislature recently passed SSB 5675, chapter 69, Laws of 2017, amending elements of the statutes. Commerce intends to update the rules in chapter 365-65 WAC in order to incorporate these amendments.
Hearing Location(s): Washington State Department of Commerce, 1011 Plum Street S.E., Room 407, Olympia, WA 98504, on Wednesday [Tuesday], August 22, 2017, at 1:30 p.m.
Date of Intended Adoption: August 23, 2017.
Submit Written Comments to: Carolyn C. McKinnon, 1011 Plum Street S.E., P.O. Box 42525, Olympia, WA 98504-2525, email Carolyn.mckinnon@commerce.wa.gov, fax (360) 586-8440, by August 21, at 5:00 p.m. PDT.
Assistance for Persons with Disabilities: Contact Nicole Piccolomini by August 18, 2017, TTY (statewide, toll-free) 711 or (360) 725-2801.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of this rule making is to incorporate amendments made with the passage of SSB 5675, chapter 69, Laws of 2017, amending elements of the statutes authorizing the small business retirement marketplace. Commerce intends to update the rules in chapter 365-65 WAC in order to incorporate these amendments. The anticipated effects of the rule will be the effective operation of the marketplace.
Reasons Supporting Proposal: The proposal is necessary to implement recently amended statute.
Statutory Authority for Adoption: RCW 43.330.750.
Statute Being Implemented: RCW 43.330.730-[43.330].750; SSB 5675, chapter 69, Laws of 2017.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Washington state department of commerce, governmental.
Name of Agency Personnel Responsible for Drafting, Implementation, and Enforcement: Carolyn McKinnon, 1011 Plum Street S.E., Olympia, WA 98504-2525, (360) 725-3121.
No small business economic impact statement has been prepared under chapter 19.85 RCW. Participation in the Washington small business retirement marketplace is entirely voluntary for small businesses (employers), employees, and private sector financial services firms (industry), and costs participants would incur to comply with these rules, if any, would be de minimis.
A cost-benefit analysis is not required under RCW 34.05.328. Subsection (5)(a)(i) of RCW 34.05.328 does not require commerce to provide a cost-benefit analysis. Not applicable.
July 18, 2017
Jaime Rossman
Rules Coordinator
AMENDATORY SECTION (Amending WSR 16-12-029, filed 5/23/16, effective 6/23/16)
WAC 365-65-060 Approval of verified plans.
(1) The department will approve a diverse array of verified plan options to be offered in the marketplace, including but not limited to:
(a) Life insurance plans or annuities that are designed for retirement purposes;
(b) Plans for eligible employer participation such as a ((A)) SIMPLE-IRA type of plan that provides for employer contributions to participant accounts; and
(c) A payroll deduction individual retirement account or individual retirement annuity, or a workplace based individual retirement account open to all workers to which the employer does not contribute.
(2) The department will approve the myRA retirement program to be offered in the marketplace.
(3) A verified plan that is proposed to be offered in the marketplace must be submitted to the department for review and approval, including all documentation, in a form prescribed by the department.
(4) A verified plan that is proposed to be offered in the marketplace must comply with applicable laws and rules, ((included)) including but not limited to federal tax laws.
AMENDATORY SECTION (Amending WSR 16-12-029, filed 5/23/16, effective 6/23/16)
WAC 365-65-080 Limits on fees.
(1) A verified financial services firm that offers approved plans in the marketplace may not charge participating employers an administrative fee, and may not charge enrollees more than one hundred basis points in total annual fees.
(2) As an exception to the aforementioned limit on fees, financial services firms may charge retirement plan enrollees a de minimis fee for new and/or low balance accounts in amounts, and for durations, negotiated and agreed upon by the department and the verified financial services firm, as follows:
(a) A financial services firm that intends to negotiate a de minimis fee for retirement plan enrollees with new and/or low balance accounts must contact the department with a request to enter into negotiations.
(b) A de minimis fee must be negotiated with the department and established as an agreement through a contractual instrument to be specified by the department. Once established, a de minimis fee must be evidenced in the plan agreement provided to enrollees.
(c) The director must limit plans to those with total fees the director considers reasonable based on all the facts and circumstances, including but not limited to:
(i) The primary mission to increase access to low-cost and low-barrier retirement savings plans for small businesses and their employees;
(ii) The goal of bringing new savers into retirement plans;
(iii) The market conditions faced by financial services firms to establish and service retirement savings plans for enrollees with new and/or low-balance accounts;
(iv) The goal of maintaining and improving fee transparency and simplicity; and/or
(v) Attempts on the part of the financial services firm to arrive at a low cost fee arrangement without charging a de minimis fee.
(d) Once a de minimis fee has been agreed upon by the department and the financial services firm, the financial services firm must supply a copy of the executed agreement to the department of financial institutions.
(e) Any changes to an agreed upon de minimis fee must be negotiated and agreed upon with the department prior to submission of an amended application for verification with the department of financial institutions.
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