Shown verbatim: the complete text as captured from the official PDF posted by the Delaware General Assembly, fetched 2026-09-25. Page and line markers are part of the official record; nothing is edited or removed. This is the current version. The official bill page.
SPONSOR: Rep. Bush & Sen. Paradee
Reps. Carson, Griffith, Heffernan, Harris, Osienski; Sens.
Sokola, Wilson, Hoffner, Huxtable
HOUSE OF REPRESENTATIVES
153rd GENERAL ASSEMBLY
HOUSE BILL NO. 423
AN ACT TO AMEND TITLE 29 OF THE DELAWARE CODE RELATING TO DEFERRED COMPENSATION.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
1 Section 1. Amend Chapter 60, Title 29 of the Delaware Code by making deletions as shown by strike through and
2 insertions as shown by underline as follows and by redesignating accordingly:
3 § 6052. Definitions.
4 As used in this chapter:
5 (1) “Automatic enrollment” means a provision in the state plan under 26 U.S.C. § 457(b) under which an
6 employee is treated as having elected to have the employer make a specified contribution to the plan equal to a
7 percentage or fixed amount of compensation until the employee affirmatively elects to opt out of automatic enrollment.
8 (3) “Covered employee” includes any person who is a new employee and who is eligible for automatic
9 enrollment under the terms of the plan. Covered employee does not include any employee who is covered by a
10 collective bargaining agreement unless automatic enrollment into the 457(b) plan is expressly authorized by the
11 employee’s collective bargaining agreement.
12 (4) “Default contribution rate” means the percent of compensation that a covered employee contributes to the
13 employee’s 457(b) account from and after automatic enrollment and until such time as the employee affirmatively
14 elects to make a contribution in a different amount.
15 (5) “Default investment” means the investment in a qualified default investment alternative selected by the
16 Board that is purchased with a covered employee’s contributions from and after automatic enrollment and until such
17 time as the employee affirmatively elects a different investment option.
18 (9) “New employee” means any person who becomes an employee from and after [the effective date of this
19 Act]. New employee includes employees who have left and then returned to State employment, including post-
20 retirement.
21 Section 2. Amend § 6055, Title 29 of the Delaware Code by making deletions as shown by strike through and
22 insertions as shown by underline as follows:
23 § 6055. Payroll deductions.
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24 The Department of Finance and the State Treasurer are Office of Management and Budget is authorized to make
25 payroll deductions under this chapter pursuant to regulations rules or procedures adopted by the Board for any public
26 officer or employee of the State who has authorized such deductions in writing. writing, or who has been automatically
27 enrolled under this chapter. The Treasurer of the State shall account for all such payroll deductions and shall make
28 payment of such deductions in accordance with regulations adopted by the Board applicable law and regulations. Any
29 income deferred under such a plan shall continue to be included as regular compensation for the purpose of computing the
30 contributions to and benefits from the State Employees’ Pension Plan, any pension plan for members of the state judiciary
31 and any pension plan for members of the State Police. Unless subject to the provisions of § 6062 of this title, any sum so
32 deferred shall not be included in the computation of any federal or state income taxes withheld on behalf of any such
33 employee, but shall be included for computation of Social Security Administration contributions.
34 Section 3. Amend Chapter 60, Title 29 of the Delaware Code by making deletions as shown by strike through and
35 insertions as shown by underline as follows:
36 § 6063. Automatic enrollment, automatic escalation, and default investments.
37 (a) Notwithstanding anything to the contrary in § 5106 of this title, a covered employee who does not opt out shall
38 be automatically enrolled into the 457(b) plan at the default rate specified by the Board pursuant to subsection (b) of this
39 section.
40 (b) The initial default contribution rate shall be established by the Board. The initial default contribution rate may
41 be changed by the Board from time to time. The initial default contribution rate may not be less than 3% of compensation.
42 The Board may determine in its discretion to increase the automatic default contribution rate for all covered employees
43 based on their years of participation, provided that such increases may be either 1% or 2% of compensation and shall not
44 occur more frequently than annually. The maximum default contribution rate established by the Board may not exceed 15%
45 of compensation. The initial or subsequent default contribution rates shall apply to all covered employees who do not
46 affirmatively select a different initial or subsequent contribution rate. All contribution rates are subject to the dollar limits
47 on contributions provided by law. A covered employee shall have the right to change the contribution amount or cease
48 participating in the plan, subject to rules adopted by the Board.
49 (c) Contributions shall be invested in the default investment unless the covered employee affirmatively elects to
50 invest some or all balances in one or more approved investment options offered in the 457(b) plan. Contributions normally
51 shall start within 90 days of employment, subject to the new employee’s right to opt out. The Board shall select an age-
52 appropriate target date fund as the default investment. A covered employee shall have the opportunity to change
53 investments for future contributions or existing balances or both, subject to rules adopted by the Board. A covered
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54 employee who wishes to cease contributions and obtain a refund of amounts contributed to the plan pursuant to automatic
55 enrollment must opt out of the plan and request the return of the employee’s account balance within the deadline
56 established by the Board, which deadline may not exceed 120 days from the date of employment.
57 (d)(1) The Board must provide every covered employee with advance notice that includes all of the following:
58 a. A notification of the covered employee’s impending automatic enrollment into the 457(b) plan, the
59 default contribution rate, and the investments purchases that will be made in the absence of the employee's
60 affirmative election.
61 b. A description of the rules and procedures for opting out of automatic enrollment.
62 c. A description of the rules and procedures for changing the contribution amount.
63 d. A description of the rules and procedures for selecting a different investment option.
64 e. A description of all investment options available under the plan.
65 f. A description of the rules and procedures for requesting the return of the employee’s account balance
66 and the consequences of failing to make such request by the deadline established by the board.
67 (2) The Board or its designee shall provide notice required under this section to new employees as soon as
68 practicable after the start of employment.
69 (e) The Board shall determine whether contributions to default investment options are pre- or post-tax.
70 (f) Covered employees who opt out of automatic enrollment may at a later date affirmatively elect to participate in
71 the deferred compensation program.
72 (g) Any agency or other entity with covered employees must provide all employee data necessary for automatic
73 enrollment.
74 (h) The Board shall promulgate such rules, procedures, and regulations as are necessary to implement this section.
75 Section 4. This Act takes effect 10 days after the date of publication in the Register of Regulations of a notice from
76 the State Treasurer that the Office of Management and Budget has certified to the State Treasurer that necessary payroll
77 upgrades necessary to implement this Act have been completed.
SYNOPSIS
This Act establishes an automatic enrollment feature for newly hired state employees in the State’s 457(b) deferred
compensation retirement plan. The Board may, through a plan amendment, modify the definition of a covered employee.
Under the Act, a predetermined percentage of an employee’s salary will be automatically deducted from each paycheck and
contributed to the 457(b) plan upon hire.
This Act allows new employees to opt out at any time prior to the commencement of automatic withdrawals,
which normally commences 90 days after hire. If an employee does not opt out of automatic enrollment during this 90-day
period, the employee will be enrolled and contributions will commence. The employee will thereafter have an additional
30 days to opt out and request a refund of any contributions. Refund requests must be submitted no later than 120 days
after the date of hire. Employees under a collective bargaining agreement are not subjected to auto-enrollment but are able
to participate if should they elect to do so.
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This Act takes effect 10 days after the date of publication in the Register of Regulations of a notice from the State
Treasurer that the Office of Management and Budget has certified to the State Treasurer that necessary payroll upgrades
necessary to implement this Act have been completed.
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0841530047Every fact on this page links to its source, starting with the official bill record.