A bill before the New Jersey legislature will require that there be multiple vendors for purposes of providing 403(b) plans to certain school districts.
The legislation provides that a board of education of a school district with an enrollment of at least 1,000 students that offers a 403(b) plan to school district employees would be required to select a minimum of three financial institutions or pension management organizations to provide services to the 403(b) plan. If fewer than three such financial institutions or pension management organizations are available, the board of education would then be required to select the number of available providers able to meet these requirements.
The bill further provides that a financial institution or pension management organization that provides services to a board of education would be required to:
1. enter into an agreement with the board of education that shall require the financial institution or pension management organization to provide, in an electronic format, all data necessary for the administration of the 403(b) plan as determined by the board of education; and
2. provide all data required by the board of education to facilitate disclosure of all fees, charges, expenses, commissions, compensation and payments to third parties related to investments offered under the 403(b) plan.
A1074, the version before the state Assembly, was introduced on Jan. 11. 2022 and was referred to the Assembly Education Committee. The Senate version, S. 2411, was introduced on May 9; it was referred to the Senate Education Committee. That committee voted in favor of the bill in a 5-0 vote on June 20 it reported it back to the state Senate, where it was read a second time.
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