An Act to amend 16.705 (9), 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34 (1k) (g) and 71.45 (2) (a) 10.; to create 14.57, 14.69, 20.517, 20.923 (4) (c) 8., 25.52, 71.07 (4s), 71.07 (4w), 71.10 (4) (ct) and (cu), 71.28 (4s), 71.28 (4w), 71.30 (3) (ct) and (cu), 71.47 (4s), 71.47 (4w), 71.49 (1) (ct) and (cu) and 230.08 (2) (en) of the statutes; Relating to: creating WisEARNS, granting rule-making authority, and making an appropriation. (FE)
SB1137 creates WisEARNS, a state-administered retirement savings program for private-sector workers in Wisconsin whose employers do not offer a retirement plan, or do not offer one to all employees. The program is structured as an automatic-enrollment payroll deduction system, with eligible employees defaulted into a Roth IRA unless another permitted account type is selected. Employers would be required to withhold and remit employee contributions for covered workers, while employees could opt out before any deduction is made. The bill also allows self-employed individuals to participate and directs the board to use low-cost, professionally managed investment options, including a stable value fund and target-date or age-based funds.
The bill establishes a WisEARNS Board attached to the Office of the State Treasurer to design, implement, and oversee the program. The board would hire an executive director, contract with investment and administrative vendors, conduct a legal analysis of federal tax and ERISA issues, and coordinate outreach with other state agencies. The bill includes detailed rules on fees, disclosures, account portability, emergency withdrawals from a non-retirement savings account component, annual vendor performance reviews, confidentiality of participant information, and limits on state and employer liability. It also creates a separate WisEARNS plan administration trust fund and appropriates $200,000 GPR in each of fiscal years 2025-26 and 2026-27 for establishment and administration.
In addition to the retirement program, SB1137 creates two state income and franchise tax credits for small businesses with 100 or fewer employees. One credit covers 50 percent of qualified retirement plan startup and employee education costs, subject to a cap and available for three consecutive years. The second provides a $500 credit for employers that add automatic enrollment to a qualified retirement plan, also available for three consecutive years. The bill amends multiple tax provisions so these credits apply across individual, corporate, partnership, and pass-through tax structures.
The overall sentiment reflected in the bill materials is generally supportive of expanding retirement access, with bipartisan-style sponsorship and a policy design aimed at low-cost savings coverage for workers without employer plans. Because there were no committee transcripts or recorded votes provided, there is no documented floor or committee debate to indicate opposition or support beyond the bill’s structure and sponsorship. The bill’s emphasis on automatic enrollment, employer participation, and state oversight suggests a policy approach intended to increase retirement savings participation while limiting direct employer costs and liability.
The main points of potential contention are likely to be the mandatory employer withholding/remittance requirement for private employers without existing plans, the automatic-enrollment structure, and the extent of state involvement in a retirement savings program that is designed to avoid ERISA liability. Businesses may also focus on administrative burden, compliance costs, and whether the tax credits are sufficient to offset those burdens. Another possible issue is the legal and operational complexity of creating a state-run program that must fit within federal tax and retirement law requirements.
SB1137 would create a new chapter of state law governing WisEARNS, a state-facilitated retirement savings program for private employers without qualifying retirement plans, and would add related governance, trust fund, confidentiality, liability, and reporting provisions. It would also amend the state’s ineligible vendor list law to cover WisEARNS contractors and create a new appropriation for program startup and administration. Separately, the bill would add new income and franchise tax credits for retirement plan startup costs and automatic enrollment, affecting multiple tax code sections for individuals, corporations, partnerships, LLCs, and tax-option corporations.
The bill appears generally favorable toward expanding retirement savings access and helping small employers offer plans, with no recorded votes or committee testimony in the provided materials to show formal opposition. Its bipartisan sponsorship and the inclusion of tax credits for employers suggest an effort to balance worker coverage with business incentives. At the same time, the bill’s mandatory payroll-deduction framework and state-administered structure are the most likely sources of concern.
Likely points of contention include whether private employers should be required to participate in a state-facilitated automatic-enrollment retirement program, the administrative burden of payroll withholding and remittance, and the adequacy of the bill’s liability protections for employers and the state. Small businesses may question compliance costs and whether the startup-cost and auto-enrollment tax credits are enough to offset them. Legal and policy concerns may also arise over ERISA and Internal Revenue Code compliance, the use of a Roth IRA default, and the state’s role in selecting and overseeing vendors and investments.