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Bill

Bill

H 40

An Act relative to the 401(k) CORE Plan

194th Legislature (2025-2026)

Massachusetts establishes automatic 401(k) retirement savings program for private workers lacking employer plans, with employer payroll deduction and limited employer liability.

Bill reported favorably by committee and referred to the committee on House Ways and Means
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Bill Summary · H 40

Legislative bill overview

H 40 proposes to establish a 401(k) CORE Plan in Massachusetts, a state-facilitated retirement savings program designed to help private sector workers without access to employer-sponsored retirement plans. The bill would create an automatic enrollment system where eligible employees contribute to individual retirement accounts, with employers serving as conduits for payroll deductions without bearing fiduciary responsibility.

Why is this important

Approximately 40% of Massachusetts private sector workers lack access to employer retirement plans, leaving many underprepared for retirement. A state-facilitated program could increase retirement savings participation, reduce reliance on public assistance programs, and address the "retirement security gap" affecting lower and middle-income workers.

Potential points of contention

  • Employer burden: While the bill limits employer liability, small businesses may view mandatory payroll deduction administration as an unfunded mandate that increases operational costs and complexity
  • Program costs and governance: Questions remain about who funds administrative operations, how investment options are selected, and whether state oversight creates new bureaucratic expenses
  • Market competition concerns: Financial services industry may argue that a state plan competes unfairly with private retirement products or displaces existing marketplace solutions
  • Opt-out participation: Automatic enrollment increases participation but raises concerns about whether workers fully understand their obligations and investment choices
  • Portability and vesting: Details on account portability between jobs and investment management during employment transitions need clarification

Compiled from official sources — confirm details with the bill’s official record.

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