North Carolina Work and Save
House Bill 79 would create the North Carolina Small Business Retirement Savings Program, also called “North Carolina Work and Save,” to expand access to retirement savings for private-sector workers who do not have an employer-sponsored plan. The bill establishes a state board within the Department of Commerce to design and oversee a payroll deduction IRA program, with voluntary participation for covered employers, covered employees, self-employed individuals, and independent contractors. The default account would be a Roth IRA with a target-date fund and an initial 5% contribution rate, while participants could opt out, choose different contribution rates, and in some cases select a traditional IRA or other investment options.
The program is structured to be administered through private-sector service providers and to operate in a way that avoids federal ERISA preemption. The board would have broad authority to adopt rules, contract for investment and administrative services, set fees, manage outreach and education, and coordinate with other states or public entities. The bill also requires annual reporting and independent audits, sets confidentiality protections for participant account information, and limits liability for employers and the State by making clear that neither is responsible for investment performance, tax compliance, or benefit guarantees.
The bill would amend Chapter 143B of the General Statutes by adding a new part governing the program and creating a dedicated administrative fund held in trust outside the General Fund. It also appropriates $400,000 for fiscal year 2025-2026 and $600,000 for fiscal year 2026-2027 to the Department of Commerce for startup and ongoing administration until the program becomes self-sustaining through fees. The program is scheduled to be ready for contributions by July 1, 2027, if the board determines implementation is not preempted by ERISA.
The overall sentiment reflected in the bill text is supportive of retirement security and small-business workers, with the findings emphasizing inadequate retirement savings and the goal of reducing future pressure on public assistance programs. Because there are no committee transcripts or recorded votes provided, there is no documented public debate in the supplied materials. The bill itself anticipates possible legal and operational concerns by directing the board to avoid ERISA preemption and by limiting state and employer liability, suggesting that compliance and legal structure are central design issues.
The main points of contention likely concern whether the program could be treated as an ERISA-covered plan, the administrative burden on employers, the use of state funds for startup costs, and the extent of state involvement in retirement savings administration. The bill tries to address these concerns by making participation voluntary for employers and employees, excluding employers that already offer certain retirement plans, and stating that employers are not fiduciaries and are not responsible for participants’ investment choices or tax consequences.
The bill would add a new statutory framework to Chapter 143B creating a state-administered payroll deduction IRA program for private-sector workers without access to an employer retirement plan. It would establish a new board in the Department of Commerce, create a dedicated administrative fund, authorize rulemaking and contracting authority, require annual reporting and audits, and appropriate state funds for startup and implementation. It also affects covered employers and employees by setting enrollment, contribution, disclosure, confidentiality, and liability rules, while expressly excluding employers with existing specified tax-favored retirement plans and limiting state and employer responsibility for program outcomes.
The bill’s stated purpose and structure reflect a generally favorable sentiment toward expanding retirement savings access, especially for moderate- and lower-income workers and small businesses. The findings frame the program as a consumer-protective, low-cost way to improve retirement security and reduce future public assistance costs. No committee testimony or votes were provided, so there is no recorded opposition or support in the supplied history beyond the bill’s own policy rationale.
The most likely areas of contention are legal and administrative rather than ideological: whether the payroll deduction IRA arrangement could trigger ERISA preemption, whether employers will view the program as an added compliance burden, and whether the state should appropriate funds for a new retirement savings infrastructure. The bill addresses these concerns by making participation voluntary, excluding employers that already sponsor qualifying retirement plans, limiting employer liability, and directing the board to implement the program only to the extent it is not preempted by federal law. Another possible concern is the extent of board discretion over fees, investments, and program design, though the bill requires fiduciary standards, low fees, and annual audits.