A. The New Mexico work and save program developed by the board under the New Mexico Work and Save Act shall:
(1) provide that a covered employer may voluntarily choose to participate in New Mexico work and save;
(2) provide that a participating employer may automatically enroll its employees but shall allow its employees to opt out;
(3) allow covered employees to voluntarily contribute to a Roth individual retirement account through automatic payroll deductions, if allowed pursuant to federal law;
(4) provide that the default investment option for program participants shall be a Roth individual retirement account with a target date fund investment and a default contribution rate established by the board by rule; provided that the board may establish a principal protection fund for initial savings up to an amount established by the board; and provided that a program participant may choose to stop participating altogether, choose a different investment from among the options available or choose to contribute at a higher or lower contribution rate, subject to the Roth individual retirement account contribution dollar limits applicable under the Internal Revenue Code;
(5) offer default escalation of contribution rates that can be increased or decreased by program participants within the limits allowed by the Internal Revenue Code;
(6) provide for direct deposit of contributions into one or more investments approved by New Mexico work and save;
(7) be professionally managed;
(8) not allow employer contributions by covered employers;
(9) provide a report on the status of each program participant's account to each program participant at least annually;
(10) when practicable, use existing employer and public infrastructure to facilitate contributions, recordkeeping and outreach and use pooled or collective investment arrangements;
(11) provide that each program participant owns the contributions to and earnings on amounts contributed to the participant's account under New Mexico work and save and that the state, the board and covered employers have no proprietary interest, whether legal or equitable, in those contributions or earnings;
(12) not impose any duties on employers pursuant to the federal Employee Retirement Income Security Act of 1974; and
(13) keep total fees and expenses below one percent of the funds invested in New Mexico work and save.
B. The board shall ensure that New Mexico work and save is financially self-sustaining no later than five years after the date that it is fully implemented.
C. If a covered employer knowingly or intentionally fails to transmit a payroll deduction contribution to New Mexico work and save on the earliest date the amount withheld from the covered employee's compensation can reasonably be segregated from the covered employer's assets, but not later than the fifteenth day of the month following the month in which the covered employee's contribution amounts are withheld from the covered employee's paycheck, the failure to remit those contributions on a timely basis shall be subject to the same sanctions as employer misappropriation of employee wage withholdings.
History: Laws 2020, ch. 7, § 9.
ANNOTATIONSCross references. — For Internal Revenue Code, see 26 U.S.C. § 1 et seq.
For the federal Employee Retirement Income Security Act of 1974, see 29 U.S.C.S. § 1001 et seq.
Effective dates. — Laws 2020, ch. 7 contained no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, was effective May 20, 2020, 90 days after adjournment of the legislature.
Temporary provisions. — Laws 2020, ch. 7, § 13 provided:
A. The New Mexico retirement plan marketplace shall be implemented no later than July 1, 2021.
B. New Mexico work and save shall be implemented so that covered employees may begin contributing to New Mexico work and save no later than January 1, 2022.