There is hereby established the Expanding Access for Retirement and Necessary Saving (“EARNS”) Program to serve as a vehicle through which covered employees may, on a voluntary basis, provide for additional retirement security through a state-facilitated retirement saving program in a convenient, cost effective, and portable manner. The Program is designed as a public-private partnership that will encourage, not replace or compete with, employer-sponsored retirement plans.

83 Del. Laws, c. 405, § 1; 

For purposes of this chapter:

(1) “Board” means the Delaware EARNS Program Board established under § 3803 of this title.

(2) “Covered employee” means an individual who is employed by a covered employer, and who has wages or other compensation allocable to the State. The Board may limit through regulation eligibility for specific categories of employees in order to avoid creating accounts that could increase administrative or management fees associated with available investment options. “Covered employee” does not include:

a. Any individual who is an employee of the federal government, the State or any other state, any county or municipal corporation, or any of the State’s or any other state’s agencies or instrumentalities.

b. Any employee covered under the federal Railway Labor Act [45 U.S.C. § 151 et seq.].

c. Any employee on whose behalf an employer makes contributions to a Taft-Hartley multiemployer pension plan [29 U.S.C. § 1002(37)].

d. Any employee who is ineligible for covered employee status under regulations promulgated by the Board.

e. Any employee under the age of 18.

(3) “Covered employer” means any person, partnership, limited liability company, corporation, or other entity engaged in a business, industry, profession, trade, or other enterprise in the State, including a nonprofit entity, that employs, and during the previous calendar year employed, at least 5 covered employees, and that has been in business in this State for at least 6 months in the immediately preceding calendar year. “Covered employer” does not include:

a. The federal government, the State, any other state, any county, any municipal corporation, or any of the State’s or another state’s agencies or instrumentalities.

b. Any employer that maintains a specified tax-favored retirement plan.

(4) “ERISA” means the federal Employee Retirement Income Security Act of 1974 [29 U.S.C. § 1001 et seq.], as amended.

(5) “Internal Revenue Code” means the federal Internal Revenue Code of 1986 [26 U.S.C. § 1 et seq.], as amended, or any successor law, in effect for the calendar year.

(6) “IRA” means a traditional or Roth individual retirement account or individual retirement annuity described in § 408(a), § 408(b), or § 408A of the Internal Revenue Code [26 U.S.C. § 408(a), § 408(b) or § 408A].

(7) “Participant” means any individual who is contributing to, or has a balance credited to, an IRA under the Program.

(8) “Participating employer” means a covered employer that makes the Program available to its employees through payroll deduction IRA arrangements under this chapter.

(9) “Payroll deduction IRA arrangement” means an arrangement by which a participating employer makes payroll deductions authorized by this chapter and remits the amounts deducted as contributions to IRAs on behalf of participants.

(10) “Plans Management Board” means the Board established by § 2722 of Title 29 to manage specified plans and programs created under the laws of this State.

(11) “Program” means the EARNS Program established by this chapter. Except as otherwise specified, references to the Program throughout this chapter also mean the trust, including trust assets, facilities, costs and expenses, receipts, expenditures, activities, operations, administration, and management.

(12) “Program expenses” means all fees, costs, and expenses of the State related to the Program, including administrative expenses, investment expenses, consulting fees, accounting costs, auditing costs, legal fees and costs, marketing expenses, education expenses, and other miscellaneous costs incurred in the implementation and continuation of the Program.

(13) “Roth IRA” means an IRA described in § 408A of the Internal Revenue Code [26 U.S.C. § 408A].

(14) “Specified tax-favored retirement plan” means a retirement plan that is an automatic enrollment payroll deduction IRA applicable to all covered employees and meeting all other qualifications that may be established by the Board, or a retirement plan qualified under, or described in, and in compliance with § 401(a), § 401(k), § 403(b), § 408(k), or § 408(p) of the Internal Revenue Code [26 U.S.C. § 401(a), § 401(k), § 403(b), § 408(k), or § 408(p)].

(15) “Traditional IRA” means an IRA described in § 408(a) or (b) of the Internal Revenue Code [26 U.S.C. § 408(a), (b)].

(16) “Trust” means the trust in which assets of the Program are to be held, including contributions and investment earnings.

(17) “Wages” means any commission, compensation, salary or other remuneration, as defined by § 219(f)(1) of the Internal Revenue Code [26 U.S.C. § 219(f)(1)] received by a participant from a participating employer.

83 Del. Laws, c. 405, § 1; 

83 Del. Laws, c. 405, § 1; 

The Program shall have such features as the Board in its discretion may adopt, subject to applicable federal law, and the following mandatory provisions:

(1) Each participant may have only 1 account with the Program, and all participating employers shall promptly remit the participant’s contributions under the Program to that account.

(2) Employers and nonparticipants may not contribute funds to program accounts.

(3) Employers shall not be fiduciaries with respect to, or be liable for, program design, program-related information, educational materials, or forms or disclosures approved by the Board, or the selection or performance of vendors selected by the Board. No employer, the State or any agency or instrumentality of the State, the Program, its administrator or personnel, shall be responsible for, or obligated to monitor a covered employee’s or participant’s decision to participate in or opt out of the Program, or for contribution decisions, investment decisions, or failure to comply with the statutory eligibility conditions or limits on IRA contributions. No employer shall guarantee any investment, rate of return, or interest on assets in any participant account or the administrative fund or be liable for any market losses, failure to realize gains, or any other adverse consequences, including the loss of favorable tax treatment or public assistance benefits, incurred by any person as a result of participating in the Program. Nothing in this subsection shall relieve an employer from liability for criminal, fraudulent, tortious or otherwise actionable conduct, including liability related to the failure to remit employee contributions.

(4) When and as required by the Board, covered employers shall:

a. Register with the Program and provide the program administrator relevant information about the employer’s employees.

b. Offer or assist the Program in offering all covered employees the choice to either participate in the Program by voluntarily contributing to an IRA under the Program or opt out of the Program.

c. Provide or assist the program administrator in providing program-related information, educational materials, and disclosures to covered employees and participants.

d. Timely remit participant contributions.

e. Perform any other duties or functions the Board may require to facilitate enrollment and administration of the Program.

(5) Covered employees who do not opt out shall be automatically enrolled in the Program at the default rate specified by the Board or at the rate or amount expressly specified by an employee in connection with the payroll deduction IRA arrangements. Participants shall have the right to modify their contribution rates or amounts, or terminate their participation in the Program at any time, subject to such rules as may be adopted by the Board.

(6) The initial automatic default contribution rate shall be established by the Board in its discretion.

a. The automatic default contribution rate may be changed by the Board from time to time. It shall not be less than 3% nor more than 6% of compensation.

b. The Board may determine in its discretion to increase the automatic default contribution rate for all participants based on their years of participation, provided that such increases shall be either 1% or 2% of compensation and shall not occur more frequently than annually.

c. The maximum default contribution rate established by the Board shall not exceed 15%.

d. The initial or subsequent default contribution rates shall apply to all participants who do not affirmatively select a different initial or subsequent contribution rate, or who do not affirmatively opt out of automatic contribution rate increases.

e. All contribution rates are subject to the dollar limits on contributions provided by law.

(7) Except as otherwise provided in this chapter, all IRAs established under the Program shall be Roth IRAs. The Board may authorize participants to utilize traditional IRAs in connection with the Program and allocate contributions between Roth and traditional IRAs, subject in all cases to the IRA contribution and income eligibility limits applicable under the Internal Revenue Code. If the Board authorizes participants to maintain both Roth and traditional IRAs, each shall be deemed to be a sub-account of the participant’s single account under the Program consistent with paragraph (1) of this section.

(8) Contributions shall be invested in the default investment option unless the participant affirmatively elects to invest some or all balances in 1 or more approved investment options offered by the Program. A participant shall have the opportunity to change investments for future contributions or existing balances or both, subject to rules adopted by the Board.

(9) A participant’s total annual contributions under the Program shall be subject to the limits established under federal law.

(10) A participant’s contributions and earnings thereon shall be held in the trust and combined for investment purposes only. Separate records and accounting shall be required for each account. Reports on the status of each participant’s account must be provided to each participant at least annually. Participants must have online access to their accounts.

(11) A participant’s account shall be portable with respect to any covered or participating employer. A former participant who is either unemployed, or who is employed by a noncovered employer, shall be permitted to contribute to accounts outside of the Program. A participant shall be entitled to maintain an account within the Program regardless of place of employment or to roll over or transfer balances into other IRAs or other retirement plans or accounts that accept such rollovers or transfers.

(12) A participant’s and former participant’s ability to withdraw or roll over or transfer account balances is subject to all fees, penalties, and taxes under applicable law.

(13) A participant’s and former participant’s ability to receive distributions of contributions and earnings is subject to applicable law.

(14) Information relating to accounts under the Program, including personally identifiable information, is confidential and shall be maintained as confidential except to the extent disclosure is necessary to administer the Program, authorized by the participant in writing, or permissible or required under other applicable law, regulation, or order.

83 Del. Laws, c. 405, § 1; 

(a) The Board shall have exclusive authority to ensure compliance with and enforce this chapter or any regulation promulgated under this chapter.

(b) The Board shall establish a process for the submission of employee complaints concerning a covered employer’s alleged failure to comply with this chapter. All complaints concerning a covered employer’s compliance with this chapter received by any other state agency shall be referred to the Board. The Board may, with or without a complaint, monitor the status of covered employers’ compliance with this chapter, including through review of available data and documents.

(c) If the Board determines that a covered employer is not in compliance with this chapter or regulations issued hereunder, the Board shall issue a notice to the employer outlining the nature and extent of the alleged noncompliance, providing instructions for compliance, and specifying the potential administrative penalties for noncompliance.

(d) If the employer does not come into compliance within 90 days of the date the notice was issued, the Board, in its discretion, may initiate enforcement proceedings under subchapter III, Chapter 101 of Title 29. The Board shall not initiate enforcement proceedings against a covered employer until 1 year after the date on which the employer is required to comply with this chapter for the first time.

(e) The Board may, in a final order, impose administrative penalties against a covered employer who fails to comply with this chapter or any regulation promulgated under this chapter, which penalties shall not exceed $250 per employee per year, up to a maximum total penalty of $5,000 per year.

83 Del. Laws, c. 405, § 1;