The Massachusetts state legislature passed a bill on Monday that would allow the state treasurer to set up a 401(k) plan for not-for-profit agencies. The bill gives the state treasurer the power to do research regarding the status of retirement programs available to not-for-profit employees and see if there is any appeal to creating a program for their benefit.

The treasurer and receiver general, on behalf of the commonwealth, may sponsor a qualified defined contribution plan within the meaning of section 414(i) of the Internal Revenue Code, according to the bill. To participate in the plan, not-for-profits must sign a participation agreement, agree to the terms of the plan and operate the plan in compliance with the tax code and the Employee Retirement Income Security Act.

The bill also sets up a not-for-profit defined contribution committee, made up of the state treasurer or a designee from the treasurer's office, who shall serve as chairperson, and four additional members appointed by the treasurer, two with practical experience in human services, educational or public and societal benefit sector of the non-profit community and two who are currently employed at not-for-profits.