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.
Recommended For You
Each member will be appointed for a three-year term.
The American Society of Pension Professionals and Actuaries and other organizations are encouraging the governor of Massachusetts not to sign the bill because they believe there should be a cap on the number of employees the small not-for-profits can have to participate in the plan and they believe that not-for-profits that already offer plans should not be able to participate in the state plan.
The bill automatically will become law in 10 days if no action is taken.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
