Mass. bill would allow automatic enrollment in state deferred‑comp plans for new hires

Representative Ann‑Margaret Ferrante filed House Bill 2825 on Jan. 17, 2025, proposing changes to state deferred compensation law that would permit automatic enrollment and automatic escalation for certain new state and governmental‑body employees. The bill, titled “An Act expanding access to retirement savings,” would allow the state treasurer, and treasurers acting for individual governmental bodies, to implement an automatic enrollment feature in deferred compensation plans without prior employee authorization. The provision explicitly deems such automatic enrollment an exception to the Massachusetts Wage Act for payroll deductions. The measure specifies that automatic enrollment would apply to employees hired on or after June 1, 2024, unless a governmental body or an agency that offers 403(b) investment contracts elects otherwise. The bill directs that details of any automatic enrollment be placed in the deferred compensation plan document and include, among other items, a qualified default investment option, an annual automatic increase in deferral amounts unless an employee opts out, and a requirement that automatically enrolled workers be given no more than 90 days to discontinue participation, with a refund of their account if they do so within that period. The proposal also limits automatic deferral percentages to the Internal Revenue Service “safe harbor maximum deferral percentage” (the bill cites the IRS safe harbor but does not specify a numeric cap). House Bill 2825 would amend several sections of chapter 29 of the General Laws. It replaces the phrase “independent contractors” with “contracted employees” in section 64, inserts a new paragraph allowing automatic enrollment and spelling out the plan features in section 64, adds parallel language in section 64B for governmental bodies’ deferred compensation programs, and strikes the qualifying phrase “and employing not more than 20 persons,” from section 64E. Finally, the bill would permit the state treasurer or designee to seek private donations or grants to reduce the plan’s operating expenses, including direct and indirect fundraising. The text of the filing makes clear these are permissive authorities: governmental bodies would implement automatic enrollment only by their election, and agencies that maintain separate 403(b) contracts would be able to opt in or decline at their discretion. As filed, the measure is a legislative proposal and not law; it would require further legislative action and any implementing changes to deferred compensation plan documents and IRS‑compliant notices. The bill does not include appropriation language or specify an implementation timeline beyond the hire‑date cutoff it references.