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Read. Follow. Verify.Iowa establishes state-run retirement savings trust with automatic payroll enrollment
Last action · February 5, 2025: Subcommittee: Rozenboom, Blake, and Schultz. S.J. 203 .Sponsors: Janet Petersen and 11 others
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What This Bill Would Do
Iowa creates a public retirement savings trust managed by the state treasurer, automatically enrolling employees whose wages are subject to state withholding at a default 5 percent contribution rate beginning no earlier than July 1, 2026. Participants may opt out at any time, adjust their contribution rates, and maintain their accounts regardless of employment changes. Employers with fewer than five employees or those already offering a qualified retirement plan are exempt from payroll deduction requirements.
Workers without access to workplace retirement plans will be automatically enrolled in a state-managed investment trust unless they actively opt out, impacting personal savings deductions and investment options.
Who It Would Affect
Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.
individuals employed for compensation in this state
Workers will be automatically enrolled in the retirement savings plan at a default 5 percent contribution rate unless they opt out.
employers
Employers may provide payroll deductions for employee contributions unless exempted by offering a qualified plan or having fewer than five employees.
local governments
Local governments are prohibited from establishing or offering retirement plans for persons other than public employees.
Key Facts
- The bill establishes the Iowa retirement savings plan trust under the administration of the treasurer of state.
- The state treasurer shall automatically enroll workers whose wages are subject to state withholding with a default contribution rate of 5 percent.
- Participants may opt out of the trust at any time, adjust contribution rates, maintain accounts regardless of employment changes, and roll over moneys into other accounts.
- Employers need not offer payroll deductions if they have fewer than five employees or already offer a qualified retirement plan such as a 401(k), 403(b), or 457(b).
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- Employer contributions are not required, and participating employers hold no proprietary interest in trust contributions or earnings.
- Account information for participants is classified as confidential except as necessary to administer the trust or with written consent.
- Local governments are prohibited from establishing or offering retirement plans for persons other than public employees.
- The state, the treasurer, and the trust do not guarantee any rate of return and are not liable for investment losses.
- Contributions must be made in cash on a pretax basis directly with the treasurer of state.
- The treasurer of state must submit an annual audited financial report to the governor and the general assembly by January 1.
- Individuals may begin making contributions to the trust no earlier than July 1, 2026.
Frequently Asked Questions
Will I be automatically enrolled in the retirement plan?
Are employers required to contribute to the trust?
Can my employer be forced to offer payroll deductions for this plan?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
Currently in committee. The next step in the legislative lifecycle is Floor Vote.
Procedural history
2 actions- Feb 5, 2025SenateSubcommittee: Rozenboom, Blake, and Schultz. S.J. 203 .
- Feb 3, 2025SenateIntroducedIntroduced, referred to State Government. S.J. 176 .
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
Show 7 more sponsors
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
State Preemption of Local Retirement Plans
The bill explicitly prohibits local governments from establishing or offering retirement plans for non-public employees, centralizing retirement savings policy at the state level.
Connected Entities
Sources
www.legis.iowa.gov
Analysis Score
0–100- Significance80How much this matters to a regular citizen
- Controversy60Intensity of disagreement among stakeholders
- Entertainment10Compellingness for a non-policy-wonk reader
- Buzz40Current news / social attention level
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