SB226: SB226 Peach State Saves Programs; provide for creation

Many small and mid-size Georgia employers do not offer their workers any retirement savings plan. Senate Bill 226 would address that by creating the Peach State Saves program, a new chapter of Georgia law (O.C.G.A. Title 34) that sets up a state-administered individual retirement account (IRA) system. Covered employers, generally those with at least five employees and no existing tax-favored retirement plan, would have to automatically enroll eligible workers in a payroll-deduction Roth IRA, defaulting to a 5 percent contribution from wages, unless the worker opts out or chooses different terms. A board made up of the Employees' Retirement System trustees plus three governor-appointed members would design, run, and regulate the program, arrange investments, and issue rules on disclosures, fees, and audits. Employers that fail to enroll workers without reasonable cause face penalties of $250 to $500 per employee. The program must be substantially phased in by January 1, 2028.

• Creates the Peach State Saves program, a new state-run retirement savings system offering Roth (and optionally traditional) IRAs funded through employee payroll deductions.
• Requires covered employers (generally those with 5 or more employees and no existing tax-favored retirement plan) to automatically enroll eligible workers, who can opt out or change their contribution rate.
• Sets a default automatic contribution rate of 5 percent of wages, with board authority to raise it later by up to 1 percent a year to a maximum of 10 percent.
• Establishes a governing board combining the Employees' Retirement System trustees with three governor-appointed members with retirement, investment, or small business expertise.
• Creates penalties of $250 per employee for a first year of employer noncompliance and $500 per employee for later noncompliant years, enforced by the Department of Labor or the board.
• Makes participant account information confidential and exempt from Georgia's open records law (O.C.G.A. Title 50, Chapter 18, Article 4), with limited exceptions.

The bill affects private Georgia employers with five or more employees that do not already offer a qualifying retirement plan, their employees aged 18 and older, the Employees' Retirement System of Georgia and its trustees, the Department of Labor and Department of Revenue, and self-employed individuals who choose to contribute voluntarily.

Employees at businesses without a retirement plan would gain automatic access to a payroll-deduction IRA unless they opt out, potentially increasing retirement savings statewide. Employers without existing plans would face new administrative duties and possible fines if they don't comply, while facing no liability for investment outcomes.

• Code Section 34-11-1 defines key terms, including which employers ('covered employers') and employees ('covered employees') the program applies to and excludes, such as government employers and businesses with existing retirement plans.
• Code Section 34-11-3 creates the governing board, combining the Employees' Retirement System trustees with three governor-appointed members serving staggered terms.
• Code Section 34-11-8 sets participant contributions through payroll deduction, with account balances always 100 percent vested and nonforfeitable.
• Code Section 34-11-9 requires covered employers to auto-enroll employees in a Roth IRA with a default 5 percent contribution rate, subject to opt-out, and bars employer contributions.
• Code Section 34-11-12 requires an annual independent audit and a public financial report to the Governor, state treasurer, and legislative committees within six months of each fiscal year's end.
• Code Section 34-11-13 sets penalties of $250 per employee for first-year noncompliance and $500 per employee for later noncompliance, with exceptions for reasonable diligence or timely correction.
• Code Section 34-11-14 and 34-11-15 shield employers, the state, and the board from liability for investment performance, benefit payments, or tax consequences related to the program.
• Code Section 34-11-17 allows phased implementation for different employer or worker groups but requires substantial completion by January 1, 2028.

1. 2025-02-21Senate Read and Referred (Senate)
2. 2025-02-20Senate Hopper (Senate)

• Chuck Hufstetler (R, SD-052)Primary sponsor
• Ricky Williams (R, SD-025)
• Max Burns (R, SD-023)
• Carden Summers (R, SD-013)
• John Albers (R, SD-056)
• Randy Robertson (R, SD-029)
• Nan Orrock (D, SD-036)
• Brian Strickland (R, SD-042)
• Mike Hodges (R, SD-003)
• Chuck Payne (R, SD-054)
• Sam Watson (R, SD-011)
• Sonya Halpern (D, SD-039)
• Elena Parent (D, SD-044)

• retirement savings
• small business regulation
• payroll deduction IRA
• state employment policy
• financial literacy