LRB-5783/1
JK&MIM:cjs
2023 - 2024 LEGISLATURE
February 26, 2024 - Introduced by Senators Hesselbein, Agard, Carpenter, L.
Johnson
, Larson, Roys and Spreitzer, cosponsored by Representatives Bare,
Goyke, Baldeh, C. Anderson, Conley, Considine, Emerson, Jacobson, Joers,
Ohnstad, Palmeri, Ratcliff, Shankland, Sinicki, Snodgrass, Stubbs and
Subeck. Referred to Committee on Universities and Revenue.
SB1076,1,6 1An Act to amend 16.705 (9), 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34
2(1k) (g) and 71.45 (2) (a) 10.; and to create 14.57, 14.69, 20.517, 20.923 (4) (c)
37., 25.52, 71.07 (4s), 71.07 (4w), 71.10 (4) (ct) and (cu), 71.28 (4s), 71.28 (4w),
471.30 (3) (ct) and (cu), 71.47 (4s), 71.47 (4w), 71.49 (1) (ct) and (cu) and 230.08
5(2) (en) of the statutes; relating to: creating WisEARNS and making an
6appropriation.
Analysis by the Legislative Reference Bureau
WisEARNS retirement savings program
This bill creates a program called “WisEARNS” to provide a defined
contribution retirement savings plan for employees of private employers in this state
that do not offer an employer-sponsored retirement plan or that do not offer such a
plan to all employees. A defined contribution retirement savings plan is one that
pays retirement benefits based on an individual's account balance, rather than a
prescribed formula.
The bill creates a WisEARNS Board that is attached to the Office of the State
Treasurer. Under the bill, the board consists of the following nine members: the state
treasurer or his or her designee; the secretary of financial institutions or his or her
designee; two members appointed by the governor; two members appointed,
respectively, by the speaker of the assembly and president of the senate; one member

appointed by the state treasurer; one member appointed by the State of Wisconsin
Investment Board; and one member appointed by the other members. The bill
requires certain members to possess specified attributes or experience, and all
members serve four-year terms.
Under the bill, the state treasurer recommends a candidate for executive
director of the plan to the board, with the board approving the executive director. The
executive director serves outside the classified service and appoints staff outside the
classified service. The executive director serves at the pleasure of the board.
Under the bill, the board is required to establish the savings plan under which
employees may contribute to retirement savings accounts through payroll
deductions. Before establishing the plan, the board must conduct a legal analysis of
the applicability of the Internal Revenue Code and the Employee Retirement Income
Security Act of 1974 to the proposed plan, and must issue a request for information
from prospective vendors of a variety of defined-contribution retirement accounts
authorized under the Internal Revenue Code.
Under the bill, the default account type is a Roth IRA. The bill requires the
board to design the plan and contract with third-party investment administrators
to operate the plan. Among other requirements, the plan must do at least all of the
following: 1) require automatic participation by private employers in this state; 2)
require automatic enrollment for employees, but allow employees to opt out before
any payroll deduction is made; 3) prohibit employer contributions to employee
retirement accounts; and 4) allow an employee to roll over the amounts in an account
to a different IRS-qualified retirement account.
Also under the bill, unless the employee directs otherwise, during the
employee's first year of enrollment in the plan, the employer must make a payroll
deduction each pay period at a rate of 5 percent of the employee's gross wages, with
this rate increasing by 1 percent per year until the rate is the maximum rate allowed
under the Internal Revenue Code. Under the plan, the eligible employee must have
certain investment options within each account type, including a stable value or
capital preservation fund and a target date index fund or age-based fund. An eligible
employee's first $400 of contributions must be deposited in a savings account that is
not a retirement savings account, and thereafter, unless the employee selects a
different investment option, the employee's contributions must be deposited in a
target date index fund or age-based fund. An employee must be allowed to opt out
of this provision before the first $400 is deposited. The bill requires the board to
establish a policy for emergency withdrawals from a WisEARNS savings account
that is not a retirement savings account.
Under current law, DOA is authorized to purchase contractual services for most
bodies of state government. Under the bill, the board is exempted from some of the
requirements of contracting through DOA and instead must do all of the following
before awarding the contract: 1) conduct a cost-benefit analysis of contracting with
different vendors; 2) review and ensure the independence of the vendor and the
vendor's employees; and 3) require proof of background checks of the vendor and the
vendor's employees. The bill also requires the board to maintain a list of any vendor

or party to the contract that violates the contract or requirements of the law, and to
provide that list to DOA for inclusion on the ineligible list for state contracts.
Tax credits for retirement plan startup costs and automatic enrollment
The bill creates two income and franchise tax credits that may be claimed by
small businesses that have 100 or fewer employees who received at least $5,000 in
compensation during the preceding year. Both credits are based on similar federal
tax credits. The first credit may be claimed by small businesses for the costs of
setting up and administering a retirement plan and educating employees about the
plan. The credit is 50 percent of the costs, limited to the greater of $500 or the lesser
of $5,000 or $250 multiplied by the number of non-highly compensated employees
who are eligible to participate in the plan. The credit may be claimed for three
consecutive years and may be not be claimed for any costs that were deducted under
federal law. The second credit may be claimed by small businesses that provide for
automatic enrollment in their retirement plans. The credit is $500 and may be
claimed for three consecutive years, beginning with the year in which the small
business first provides for automatic enrollment.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB1076,1 1Section 1. 14.57 of the statutes is created to read:
SB1076,3,2 214.57 Same; attached boards.
SB1076,3,9 3(1) WisEARNS board. There is created a WisEARNS board that is attached
4to the state treasurer under s. 15.03. Of the members appointed under pars. (a) to
5(e), at least one must have experience in the field of investments, at least one must
6have experience as the owner of a business that employs between 5 and 50 people,
7and at least one must be an employee who is not eligible for or does not have access
8to an employer-sponsored retirement plan. The board shall consist of the following
9members appointed for 4-year terms:
SB1076,3,1010 (a) The state treasurer or his or her designee.
SB1076,3,1111 (b) The secretary of financial institutions or his or her designee.
SB1076,4,3
1(c) One member who has a favorable reputation for skill, knowledge, and
2experience in the field of retirement saving and investments, appointed by the
3governor.
SB1076,4,54 (d) One member who has a favorable reputation for skill, knowledge, and
5experience relating to small business, appointed by the governor.
SB1076,4,96 (e) One member who is a representative of an association representing
7employees or who has a favorable reputation for skill, knowledge, and experience in
8the interests of employees in retirement saving, appointed by the speaker of the
9assembly.
SB1076,4,1210 (f) One member who has a favorable reputation for skill, knowledge, and
11experience in the interests of employers in retirement saving, appointed by the
12president of the senate.
SB1076,4,1513 (g) One member who has a favorable reputation for skill, knowledge, and
14experience in retirement investment products or retirement plan designs, appointed
15by the state treasurer.
SB1076,4,1616 (h) One member appointed by the investment board.
SB1076,4,1817 (i) One member appointed, notwithstanding s. 15.07 (4), by a majority vote of
18all of the members identified in pars. (a) to (h).
SB1076,4,22 19(2) Membership prohibited. No individual appointed under sub. (1) (a) to (h)
20may be a dealer or broker in securities, or be employed by an entity that is primarily
21a dealer or broker in securities, and any member who accepts such employment shall
22vacate his or her membership.
SB1076,2 23Section 2. 14.69 of the statutes is created to read:
SB1076,4,24 2414.69 WisEARNS program. (1) Definitions. In this section:
SB1076,4,2525 (a) “Board" means the WisEARNS board.
SB1076,5,3
1(b) “Earnings” means all remuneration for employment or services provided to
2an individual in this state, including salary, fees, bonuses, and including the cash
3value of all remuneration paid in any medium other than cash.
SB1076,5,74 (c) “Eligible employee” means an employee who is 18 years of age or older who
5works in this state and whose private employer does not offer a retirement savings
6plan or who is not eligible to participate in a qualified retirement savings plan offered
7by his or her private employer.
SB1076,5,88 (d) “Investment administrator” means the vendor selected under sub. (3) (e).
SB1076,5,99 (e) “Plan" means the WisEARNS plan established under sub. (3).
SB1076,5,1410 (f) “Private employer” means any person engaging in any activity, enterprise
11or business in this state that has conducted such activity, enterprise, or business in
12this state for at least 2 years after the effective date of this paragraph .... [LRB inserts
13date], and did not offer a retirement plan qualified under the Internal Revenue Code
14during those 2 years.
SB1076,5,1615 (g) “WisEARNS retirement account" means a retirement savings account
16established under the plan.
SB1076,5,1817 (h) “WisEARNS savings account” means a savings account established under
18the plan that is not a retirement savings account.
SB1076,5,22 19(2) Duties of treasurer, executive director, and board. (a) The treasurer
20shall recommend an executive director of the plan to the board, which shall appoint
21an executive director outside the classified service, to serve at the pleasure of the
22board. The executive director may not be a member of the board.
SB1076,5,2423 (b) The executive director appointed under par. (a) shall appoint staff for the
24plan outside the classified service.
SB1076,6,5
1(3) Establishment of plan. The board shall establish, implement, and oversee
2a plan that meets the requirements specified in sub. (8) that shall enroll eligible
3employees beginning not more than 2 years after the effective date of this subsection
4.... [LRB inserts date]. Before establishing and implementing the plan, the board
5shall do all of the following:
SB1076,6,86 (a) Conduct a legal analysis regarding the applicability of the federal Employee
7Retirement Income Security Act of 1974, 29 USC 1001 to 1461, and the Internal
8Revenue Code to the proposed plan.
SB1076,6,129 (b) Enter into interagency agreements with the department of revenue, the
10department of financial institutions, and the department of workforce development
11to assist the board in providing outreach services to private employers and
12employees.
SB1076,6,1713 (c) Prepare and issue a request for information from prospective vendors of
14retirement savings accounts described in 26 USC 408 (a), individual retirement
15annuities described in 26 USC 408 (b), individual retirement bonds, and individual
16savings accounts to determine the feasibility of the proposed plan and the existence
17of plans in the private market that meet the requirements set forth in sub. (8).
SB1076,6,2018 (d) Investigate ways of allowing individuals who are not automatically enrolled
19in the plan to enroll in the plan and make contributions to retirement savings
20accounts.
SB1076,7,221 (e) Based on the results of the request for information under par. (c), prepare
22and issue a request for proposals from prospective vendors and select a vendor. The
23board shall determine the factors to be considered in selecting a vendor for the plan,
24which shall include the ability of the vendor to meet all of the requirements of the
25plan set forth in sub. (8) (a) to (z). Sections 16.705 and 16.75 do not apply to a contract

1entered into under this section. Before awarding a contract under this section, the
2board shall do all of the following:
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