Massachusetts CORE Expansion Proposals Moving

Bills before the Massachusetts House and Senate that would expand the Massachusetts Defined Contribution CORE Plan are moving again. 

The legislation, introduced early in 2023, has been largely dormant since summer; however, committees in both chambers have given the measures a nod. 

About the CORE Plan

In 2012, Massachusetts established the CORE Plan, a 401(k) multiple employer plan (MEP) intended to help employees of nonprofits in Massachusetts save and invest for a financially secure retirement.

Massachusetts nonprofit organizations with no more than 20 employees may be eligible to adopt the CORE Plan; they can do so by executing a participation agreement. The Massachusetts Office of the State Treasurer is the CORE plan sponsor and handles most administrative responsibilities on behalf of participating employers and their employees.

Participants can choose between three ways to invest for retirement through the CORE Plan: 

1. target date funds;
2. advisory services that help participants manage their investments; and
3. CORE objective-based funds that allow participants to manage their own retirement assets by selecting a single fund, or a combination of funds, to meet their retirement savings goals.

The Bills 

Rep. Ann-Margaret Ferrente (D-Gloucester) introduced H. 3031 on Feb. 16. The House and Senate Committees on State Administration and Regulatory Oversight held a joint hearing on the bill on June 30; on Nov. 20 the House committee reported it favorably. 

Sen. Joan Lovely (D-Essex) introduced S. 2025 into the Senate on the same day Ferrente introduced her bill in the House. On Nov. 22 the Senate Committee on State Administration and Regulatory Oversight reported the bill favorably.

Both bills would expand the CORE Plan by removing the language that allows only employers with 20 or fewer employees to participate. 

But while both bills have been reported favorably by a committee in their respective chambers, they are not yet before either chamber. Both have been referred to the Ways and Means Committee of their chamber. 

ARA Weighs in 

The American Retirement Association (ARA) and its affiliates earlier this year sent a letter to the Massachusetts legislature opposing the bills. They took that stance due to the poor adoption and utilization rates seen with voluntary state MEPs. The ARA noted that the program has been operational for six years, yet just 5% of the eligible nonprofits have taken advantage of it; further, myRA—the voluntary federal program implemented by the Obama Administration—and the voluntary Washington State Small Business Retirement Plan Marketplace also generated low interest.

Not the First Time

This is not the first time that legislation has been introduced that would expand the CORE Plan. In January 2019 Sen. Patricia D. Jehlen (D-Second Middlesex) introduced a bill that would have expanded the plan to all employers in Massachusetts. The bill was not enacted.