Tex.
Gov't Code Section 609.5025
Automatic Participation; Default Investment Product
(a)
This section applies only to an employee of a state agency participating in a 401(k) plan.(b)
An employee participates in a 401(k) plan unless the employee affirmatively elects not to participate in the plan. Notwithstanding Sections 609.007 (Contract for Deferment of Compensation)(b) and (c), an employee is not required to affirmatively contract for and consent to participation in a plan under this section.(c)
An employee participating in a 401(k) plan under this section makes a contribution of one percent of the compensation earned by the employee to a default investment product selected by the board of trustees based on the criteria established under Section 609.505 (Qualified Vendor)(d) and the rules adopted under Subsection (f). The contribution is made by automatic payroll deduction.(d)
At any time, an employee participating in a 401(k) plan under this section may, in accordance with rules adopted by the board of trustees, elect to end participation in the 401(k) plan, to contribute to a different investment product, to contribute a different amount to the plan, or to designate all or a portion of the employee’s contribution as a Roth contribution subject to the availability of a Roth contribution program under Section 609.5021 (Roth Contribution Programs).(e)
The board of trustees shall ensure that, at the time of employment, each employee is informed of:(1)
the elections the employee may make under this section; and(2)
the responsibilities of the employee under Section 609.010 (Liability; Responsibility for Monitoring).(f)
The board of trustees shall adopt rules to implement the requirements of this section. The rules must ensure that the operation of the 401(k) plan under this section conforms to the applicable requirements of any federal rule that provides fiduciary relief for investments in qualified default investment alternatives or otherwise governs default investment alternatives under participant-directed individual account plans.(g)
The amount deducted under this section from an employee’s compensation is not deducted for payment of a debt and the automatic payroll deduction is not garnishment or assignment of wages.(h)
Within existing resources, a state agency participating in a 401(k) plan shall inform new hires of their automatic enrollment in a 401(k) account and their right to opt-out of enrollment. Within existing resources, this information shall be included as part of the new employee orientation process. State agencies participating in a 401(k) plan shall maintain a record of a new hire’s acknowledgement of receipt of information regarding the ability to opt-out of enrollment in a 401(k) plan.
Source:
Section 609.5025 — Automatic Participation; Default Investment Product, https://statutes.capitol.texas.gov/Docs/GV/htm/GV.609.htm#609.5025 (accessed Apr. 13, 2024).
