Treasurer asks Appropriations Committee to back automatic enrollment for new state employees in supplemental 457(b) plan

State Treasurer Derek Davis told the House Appropriations Committee he is sponsoring House Bill 605 to automatically enroll new state employees hired on or after Jan. 1, 2026, into the state's 457(b) supplemental retirement plan and place them in a target fund tied to their anticipated retirement year. “Employees who do not want to participate will have 90 days, the maximum allowed per IRS rules, from the date of the first payroll deduction to elect to opt out,” Davis said at the committee hearing.

The bill’s sponsor and staff said the measure is intended to raise retirement savings among state employees by removing administrative barriers to enrollment. Davis noted that as of the third quarter of 2024, “only 40.5% of all eligible state employees were actively participating in their supplemental retirement savings by deferring contributions to the MRSP plan accounts,” and cited research showing most working…