SB 143

Abstract

The Plans Management Board (the “Board”) oversees and administers the State's Deferred Compensation Program authorized under chapter 60A of Title 29 of the Delaware Code. The Deferred Compensation Program encompasses the following 3 distinct supplemental retirement plans authorized under the Internal Revenue Code: the State's deferred compensation plan under 26 U.S.C. § 457(b); the State's tax-sheltered annuity plan for certain education employees under § 403(b); and the State’s employer match plan under 26 U.S.C. § 401(a). The Board also oversees and administers the State’s College Investment Plan under 26 U.S.C. § 529, authorized by Subchapter XII, Chapter 34 of Title 14 of the Delaware Code, and the State’s Achieving a Better Life Experience (“ABLE”) Program, authorized by Chapter 96A of Title 16 of the Delaware Code. None of these plans is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Section 1 of this Act proposes a separate fiduciary standard for the College Investment and ABLE plans. The existing standard of care under § 2722(d) of Title 29, which presently covers all 5 plans, closely tracks the standard of care for retirement plans subject to ERISA. The existing standard, while appropriate for the State’s supplemental retirement plans, may restrict the Board’s ability to use administrative fees collected from participants in the College Investment Plan and ABLE Program to fund marketing expenses and implement scholarship, match, or promotional programs, as is common in the industry. The proposed standard for the College Investment Plan and ABLE Program maintains a high “prudent person” standard but will give the Board needed flexibility to use administrative fees to attract participants in the highly competitive College Investment Plan and ABLE Program markets. Section 2 of this Act addresses subcommittee members who are not also members of the full Board. This section makes clear such individuals are entitled to reimbursement and indemnification to the same extent as Board members.