Minnesota 2023-2024 Regular Session

Minnesota House Bill HF782 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		1.1 A bill for an act
2	2		1.2 relating to retirement; establishing the Minnesota Secure Choice retirement
3	3		1.3 program; providing for civil penalties; transferring money; appropriating money;
4	4		1.4 proposing coding for new law as Minnesota Statutes, chapter 187.
5	5		1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
6	6		1.6 Section 1. [187.01] MINNESOTA SECURE CHOICE RETIREMENT PROGRAM;
7	7		1.7CITATION.
8	8		1.8 This chapter shall be known as and may be cited as the "Minnesota Secure Choice
9	9		1.9Retirement Program Act."
10	10		1.10 Sec. 2. [187.03] DEFINITIONS.
11	11		1.11 Subdivision 1.Applicability.For purposes of this chapter, the terms defined in this
12	12		1.12section have the meanings given them.
13	13		1.13 Subd. 2.Board."Board" or "board of directors" means the board of directors of the
14	14		1.14Minnesota Secure Choice retirement program.
15	15		1.15 Subd. 3.Compensation."Compensation" means compensation within the meaning of
16		-	1.16Section 219(f)(1) of the Internal Revenue Code that is received by a covered employee
17		-	1.~~17from, or~~ with respect to service performed for, a covered employer.
	16	+	1.16section 219(f)(1) of the Internal Revenue Code that is received by a covered employee from,
	17	+	1.17or with respect to service performed for, a covered employer.
18	18		1.18 Subd. 4.Contribution rate."Contribution rate" means the percentage of compensation
19	19		1.19withheld from a covered employee's compensation and deposited in an account established
20	20		1.20for the covered employee under the program.
21	21		1Sec. 2.
22		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT
	22	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT
23	23		218
24	24		Printed
25	25		Page No.State of Minnesota
26	26		This Document can be made available
27	27		in alternative formats upon request
28	28		HOUSE OF REPRESENTATIVES
29	29		H. F. No. 782
30	30		NINETY-THIRD SESSION
31	31		Authored by Becker-Finn; Her; Wolgamott; Nelson, M.; Tabke and others01/25/2023
32	32		The bill was read for the first time and referred to the Committee on State and Local Government Finance and Policy
33	33		Adoption of Report: Amended and re-referred to the Committee on Judiciary Finance and Civil Law03/15/2023
34	34		By motion, recalled and re-referred to the Committee on Ways and Means03/22/2023
35	35		Adoption of Report: Placed on the General Register as Amended04/25/2023
36	36		Read for the Second Time
37	37		Calendar for the Day, Amended05/01/2023
38	38		Read Third Time as Amended
39		-	Passed by the House as Amended and transmitted to the Senate to include Floor Amendments
40		-	Passed by the Senate as Amended and returned to the House05/12/2023
41		-	The House concurred in the Senate Amendments
42		-	Read Third Time as Amended by the Senate
43		-	Repassed the bill as Amended by the Senate 2.1 Subd. 5.Covered employee.(a) "Covered employee" means a person who is employed
	39	+	Passed by the House as Amended and transmitted to the Senate to include Floor Amendments 2.1 Subd. 5.Covered employee.(a) "Covered employee" means a person who is employed
44	40		2.2by a covered employer and who satisfies any other criteria established by the board.
45	41		2.3 (b) Covered employee does not include:
46	42		2.4 (1) a person who, on December 31 of the preceding calendar year, was younger than 18
47	43		2.5years of age;
48	44		2.6 (2) a person covered under the federal Railway Labor Act, as amended, United States
49	45		2.7Code, title 45, sections 151 et seq.;
50	46		2.8 (3) a person on whose behalf an employer makes contributions to a Taft-Hartley
51	47		2.9multiemployer pension trust fund; or
52	48		2.10 (4) a person employed by the government of the United States, another country, the state
53	49		2.11of Minnesota, another state, or any subdivision thereof.
54	50		2.12 Subd. 6.Covered employer.(a) "Covered employer" means a person or entity:
55	51		2.13 (1) engaged in a business, industry, profession, trade, or other enterprise in Minnesota,
56	52		2.14whether for profit or not for profit;
57	53		2.15 (2) that employs five or more covered employees; and
58	54		2.16 (3) that does not sponsor or contribute to and did not in the immediately preceding 12
59	55		2.17months sponsor or contribute to a retirement savings plan for its employees.
60	56		2.18 (b) Covered employer does not include:
61	57		2.19 (1) an employer that has not engaged in a business, industry, profession, trade, or other
62	58		2.20enterprise in Minnesota, whether for profit or not for profit, at any time during the
63	59		2.21immediately preceding 12 months; and
64	60		2.22 (2) a state or federal government or any political subdivision thereof.
65	61		2.23 Subd. 7.Executive director."Executive director" means the chief executive and
66	62		2.24administrative head of the program.
67	63		2.25 Subd. 8.Internal Revenue Code."Internal Revenue Code" means the Internal Revenue
68	64		2.26Code of 1986, as amended, United States Code, title 26.
69	65		2.27 Subd. 9.Program."Program" means the Minnesota Secure Choice retirement program.
70	66		2.28 Subd. 10.Retirement savings plan."Retirement savings plan" means a plan or program
71	67		2.29offered by an employer that permits contributions to be set aside for retirement on a pretax
72	68		2.30or after-tax basis and permits all employees of the employer to participate except those
73	69		2.31employees who have not satisfied participation eligibility requirements that are no more
74	70		2Sec. 2.
75		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 3.1restrictive than the eligibility requirements permitted under section 410(b) of the Internal
	71	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 3.1restrictive than the eligibility requirements permitted under section 410(b) of the Internal
76	72		3.2Revenue Code. Retirement savings plan includes but is not limited to a plan described in
77	73		3.3section 401(a) of the Internal Revenue Code, an annuity plan or annuity contract described
78	74		3.4in section 403(a) or 403(b) of the Internal Revenue Code, a plan within the meaning of
79	75		3.5section 457(b) of the Internal Revenue Code, a simplified employee pension (SEP) plan, a
80	76		3.6savings incentive match plan for employees (SIMPLE) plan, an automatic enrollment payroll
81	77		3.7deduction individual retirement account, and a multiemployer pension plan described in
82	78		3.8section 414(f) of the Internal Revenue Code.
83	79		3.9 Subd. 11.Secure Choice administrative fund."Secure Choice administrative fund"
84	80		3.10or "administrative fund" means the fund established under section 187.06, subdivision 2.
85	81		3.11 Subd. 12.Secure Choice trust."Secure Choice trust" or "trust" means a trust established
86	82		3.12under section 187.06, subdivision 1, to hold contributions and investment earnings thereon
87	83		3.13under the program.
88	84		3.14 Subd. 13.Roth IRA."Roth IRA" means an individual retirement account established
89	85		3.15under section 408A of the Internal Revenue Code to hold and invest after-tax assets.
90	86		3.16 Subd. 14.Traditional IRA."Traditional IRA" means an individual retirement account
91	87		3.17established under section 408 of the Internal Revenue Code to hold and invest pretax assets.
92	88		3.18 Sec. 3. [187.05] SECURE CHOICE RETIREMENT PROGRAM.
93	89		3.19 Subdivision 1.Program established.(a) The board must operate an employee retirement
94	90		3.20savings program whereby employee payroll deduction contributions are transmitted on an
95	91		3.21after-tax or pretax basis by covered employers to individual retirement accounts established
96	92		3.22under the program.
97	93		3.23 (b) The board must establish procedures for opening a Roth IRA, a traditional IRA, or
98	94		3.24both a Roth IRA and a traditional IRA for each covered employee whose covered employer
99	95		3.25transmits employee payroll deduction contributions under the program.
100	96		3.26 (c) Contributions must be made on an after-tax (Roth) basis, unless the covered employee
101	97		3.27elects to contribute on a pretax basis.
102	98		3.28 Subd. 2.Compliance with Internal Revenue Code.The board must establish and
103	99		3.29administer each Roth IRA and traditional IRA opened under the program in compliance
104	100		3.30with section 408 or 408A of the Internal Revenue Code, as applicable, for the benefit of the
105	101		3.31covered employee for whom the account was opened.
106	102		3Sec. 3.
107		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 4.1 Subd. 3.Contributions held in trust.Each covered employer must transmit employee
	103	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 4.1 Subd. 3.Contributions held in trust.Each covered employer must transmit employee
108	104		4.2payroll deduction contributions to an account established for the benefit of the covered
109	105		4.3employee in a trust established to hold contributions under the program.
110	106		4.4 Subd. 4.Contribution rate.(a) The board must establish default, minimum, and
111	107		4.5maximum employee contribution rates and an escalation schedule to automatically increase
112	108		4.6each covered employee's contribution rate annually until the contribution rate is equal to
113	109		4.7the maximum contribution rate.
114	110		4.8 (b) A covered employee must have the right, annually or more frequently as determined
115	111		4.9by the board, to change the contribution rate, opt out or elect not to contribute, or cease
116	112		4.10contributions.
117	113		4.11 Subd. 5.Vesting.Covered employees are 100 percent vested in their accounts at all
118	114		4.12times.
119	115		4.13 Subd. 6.Withdrawals and distributions.The board must establish alternatives
120	116		4.14permitting covered employees to take a withdrawal of all or a portion of the covered
121	117		4.15employee's account while employed and one or more distributions following termination
122	118		4.16of employment. Distribution alternatives must include lifetime income options.
123	119		4.17 Subd. 7.Individuals not employed by a covered employer.The board may allow
124	120		4.18individuals to open and contribute to an account in the program, in which case the individual
125	121		4.19shall be considered a covered employee for purposes of sections 187.05 to 187.11.
126	122		4.20 Subd. 8.Employee leasing companies.(a) For purposes of this chapter, in the case of
127	123		4.21a taxpaying employer described in section 268.046 that contracts with an employee leasing
128	124		4.22company, professional employer organization, or other similar entity to obtain workers for
129	125		4.23the taxpaying employer from the entity for a fee, the workers covered by the contract must
130	126		4.24be treated as employed by the taxpaying employer and not by the entity, except that if the
131	127		4.25entity provides the workers with a retirement savings plan, the taxpaying employer is not
132	128		4.26a covered employer.
133	129		4.27 (b) A covered employer that is a taxpaying employer described in section 268.046 may
134	130		4.28contract with an employee leasing company, professional employer organization, or other
135	131		4.29similar entity to assist the taxpaying employer with the performance of some or all of the
136	132		4.30taxpaying employer's responsibilities under this chapter.
137	133		4Sec. 3.
138		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 5.1 Sec. 4. [187.06] ESTABLISHMENT OF SECURE CHOICE TRUST AND
	134	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 5.1 Sec. 4. [187.06] ESTABLISHMENT OF SECURE CHOICE TRUST AND
139	135		5.2ADMINISTRATIVE FUND; EMPLOYEE ACCOUNTS; INVESTMENTS.
140	136		5.3 Subdivision 1.Secure Choice trust established.The Secure Choice trust is established
141	137		5.4as an instrumentality of the state to hold employee payroll deduction contributions and
142	138		5.5earnings on the contributions. The board must appoint a financial institution to act as trustee
143	139		5.6or custodian. The trustee or custodian must manage and administer trust assets for the
144	140		5.7exclusive purposes of providing benefits and defraying reasonable expenses of administering
145	141		5.8the program.
146	142		5.9 Subd. 2.Secure Choice administrative fund established; money appropriated.(a)
147	143		5.10The Secure Choice administrative fund is established in the state treasury as a fund separate
148	144		5.11and apart from the Secure Choice trust.
149	145		5.12 (b) The board of directors may assess administrative fees on each covered employee's
150	146		5.13account to be applied toward the expenses of administering the program. Money in the
151	147		5.14administrative fund is appropriated to the board to pay administrative expenses of
152	148		5.15administering the program if fees from the trust are not sufficient to cover expenses. The
153	149		5.16board must determine which administrative expenses will be paid using money in the
154	150		5.17administrative fund and which administrative expenses will be paid using money in the trust
155	151		5.18in the exercise of its fiduciary duty.
156	152		5.19 (c) The board may receive and deposit into the administrative fund any gifts, grants,
157	153		5.20donations, loans, appropriations, or other moneys designated for the administrative fund
158	154		5.21from the state, any unit of federal or local government, any other entity, or any person.
159	155		5.22 (d) Any interest or investment earnings that are attributable to money in the administrative
160	156		5.23fund must be deposited into the administrative fund.
161	157		5.24 Subd. 3.Individual accounts established.The trustee or custodian, as applicable, must
162	158		5.25maintain an account for employee payroll deduction contributions with respect to each
163	159		5.26covered employee. Interest and earnings on the amount in the account are credited to the
164	160		5.27account and losses are deducted.
165	161		5.28 Subd. 4.Investments.The board must make available for investment a diversified array
166	162		5.29of investment funds selected by the State Board of Investment. Members of the board, the
167	163		5.30executive director and members of the State Board of Investment, and all other fiduciaries
168	164		5.31are relieved of fiduciary responsibility for investment losses resulting from a covered
169	165		5.32employee's investment directions. Each covered employee is entitled to direct the investment
170	166		5.33of the contributions credited to the covered employee's account in the trust and earnings on
171	167		5.34the contributions into the array of investment funds selected by the State Board of Investment.
172	168		5Sec. 4.
173		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 6.1 Subd. 5.Default investment fund.The board must designate a default investment fund
	169	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 6.1 Subd. 5.Default investment fund.The board must designate a default investment fund
174	170		6.2that is diversified to minimize the risk of large losses and consists of target date funds, a
175	171		6.3balanced fund, a capital preservation fund, or any combination of the foregoing funds.
176	172		6.4Accounts for which no investment direction has been given by the covered employee must
177	173		6.5be invested in the default investment fund. Members of the board, the executive director of
178	174		6.6the State Board of Investment, and all other fiduciaries are relieved of fiduciary duty with
179	175		6.7regard to investment of assets in the default investment fund.
180	176		6.8 Subd. 6.Inalienability of accounts.No account under the program is subject to
181	177		6.9assignment or alienation, either voluntarily or involuntarily, or to the claims of creditors,
182	178		6.10except as provided in section 518.58.
183	179		6.11 Subd. 7.Accounts not property of the state or covered employers.The assets of the
184	180		6.12Secure Choice trust shall be preserved, invested, and expended solely for the purposes of
185	181		6.13the trust and no property rights in the trust assets shall exist in favor of the state or any
186	182		6.14covered employer. The assets of the Secure Choice trust shall not be transferred or used by
187	183		6.15the state for any purpose other than the purposes of the trust, including reasonable
188	184		6.16administrative expenses of the program. Amounts deposited in the trust shall not constitute
189	185		6.17property of the state and shall not be commingled with state funds, and the state shall have
190	186		6.18no claim to or against, or interest in, the assets of the Secure Choice trust.
191	187		6.19 Sec. 5. [187.07] RESPONSIBILITIES OF COVERED EMPLOYERS.
192	188		6.20 Subdivision 1.Requirement to enroll employees.Each covered employer must enroll
193	189		6.21its covered employees in the program and withhold payroll deduction contributions from
194	190		6.22each covered employee's paycheck, unless the covered employee has elected not to contribute.
195	191		6.23 Subd. 2.Remitting contributions.A covered employer must timely remit contributions
196	192		6.24as required by the board.
197	193		6.25 Subd. 3.Distribution of information.Covered employers must provide information
198	194		6.26prepared by the board to all covered employees regarding the program. The information
199	195		6.27must be provided to each covered employee at least 30 days prior to the date of the first
200	196		6.28paycheck from which employee contributions could be deducted for transmittal to the
201	197		6.29program, if the covered employee does not elect to opt out of the program.
202	198		6.30 Subd. 4.No fiduciary responsibility.Except for the responsibilities described in
203	199		6.31subdivisions 1 to 3, a covered employer has no obligations to covered employees and is not
204	200		6.32a fiduciary for any purpose under the program or in connection with the Secure Choice
205	201		6Sec. 5.
206		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 7.1trust. Covered employers are not responsible for the administration, investment performance,
	202	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 7.1trust. Covered employers are not responsible for the administration, investment performance,
207	203		7.2plan design, or benefits paid to covered employees.
208	204		7.3 Subd. 5.Employer liability.A covered employer is not liable to a covered employee
209	205		7.4for damages alleged to have resulted from a covered employee's participation in or failure
210	206		7.5to participate in the program.
211	207		7.6 Subd. 6.Enforcement.(a) The board may impose statutory civil penalties against any
212	208		7.7covered employer that fails to comply with subdivisions 1, 2, and 3.
213	209		7.8 (b) At the request of the board, the attorney general shall enforce the penalties imposed
214	210		7.9by the board against a covered employer. Proceeds of such penalties, after deducting
215	211		7.10enforcement expenses, must be deposited in the Secure Choice administrative fund and are
216	212		7.11appropriated to the program.
217	213		7.12 (c) The board must provide covered employers with written warnings for the first year
218	214		7.13of noncompliance before assessing penalties.
219	215		7.14 Sec. 6. [187.08] SECURE CHOICE RETIREMENT PROGRAM BOARD OF
220	216		7.15DIRECTORS.
221	217		7.16 Subdivision 1.Membership.The policy-making function of the program is vested in a
222	218		7.17board of directors consisting of seven members as follows:
223	219		7.18 (1) the executive director of the Minnesota State Retirement System or the executive
224	220		7.19director's designee;
225	221		7.20 (2) the executive director of the State Board of Investment or the executive director's
226	222		7.21designee;
227	223		7.22 (3) three members chosen by the Legislative Commission on Pensions and Retirement,
228	224		7.23one from each of the following experience categories:
229	225		7.24 (i) executive or operations manager with substantial experience in record keeping 401(k)
230	226		7.25plans;
231	227		7.26 (ii) executive or operations manager with substantial experience in individual retirement
232	228		7.27accounts; and
233	229		7.28 (iii) executive or other professional with substantial experience in retirement plan
234	230		7.29investments;
235	231		7Sec. 6.
236		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 8.1 (4) a human resources or retirement benefits executive from a private company with
	232	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 8.1 (4) a human resources or retirement benefits executive from a private company with
237	233		8.2substantial experience in administering the company's 401(k) plan, appointed by the governor;
238	234		8.3and
239	235		8.4 (5) a small business owner or executive appointed by the governor.
240	236		8.5 Subd. 2.Appointment.Members appointed by the governor must be appointed as
241	237		8.6provided in section 15.0597.
242	238		8.7 Subd. 3.Membership terms.(a) Board members serve for two-year terms, except for
243	239		8.8the executive directors of the Minnesota State Retirement System and the State Board of
244	240		8.9Investment, who serve indefinitely.
245	241		8.10 (b) Board members' terms may be renewed, but no member may serve more than two
246	242		8.11consecutive terms.
247	243		8.12 Subd. 4.Resignation; removal; vacancies.(a) A board member may resign at any time
248	244		8.13by giving written notice to the board.
249	245		8.14 (b) A board member may be removed by the appointing authority and a majority vote
250	246		8.15of the board following notice and hearing before the board. For purposes of this subdivision,
251	247		8.16the chair may invite the appointing authority or a designee of the appointing authority to
252	248		8.17serve as a voting member of the board if necessary to constitute a quorum.
253	249		8.18 (c) If a vacancy occurs, the Legislative Commission on Pensions and Retirement or the
254	250		8.19governor, as applicable, shall appoint a new member within 90 days.
255	251		8.20 Subd. 5.Compensation.Public members are compensated and expenses reimbursed as
256	252		8.21provided under section 15.0575, subdivision 3.
257	253		8.22 Subd. 6.Chair.The board shall select a chair from among its members. The chair shall
258	254		8.23serve a two-year term. The board may select other officers as necessary to assist the board
259	255		8.24in performing the board's duties.
260	256		8.25 Subd. 7.Executive director; staff.The board must appoint an executive director,
261	257		8.26determine the duties of the director, and set the compensation of the executive director. The
262	258		8.27board may also hire staff as necessary to support the board in performing its duties.
263	259		8.28 Subd. 8.Duties.In addition to the duties set forth elsewhere in this chapter, the board
264	260		8.29has the following duties:
265	261		8.30 (1) to establish secure processes for enrolling covered employees in the program and
266	262		8.31for transmitting employee and employer contributions to accounts in the trust;
267	263		8Sec. 6.
268		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 9.1 (2) to prepare a budget and establish procedures for the payment of costs of administering
	264	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 9.1 (2) to prepare a budget and establish procedures for the payment of costs of administering
269	265		9.2and operating the program;
270	266		9.3 (3) to lease or otherwise procure equipment necessary to administer the program;
271	267		9.4 (4) to procure insurance in connection with the property of the program and the activities
272	268		9.5of the board, executive director, and other staff;
273	269		9.6 (5) to determine the following:
274	270		9.7 (i) any criteria for a covered employee other than employment with a covered employer
275	271		9.8under section 187.03, subdivision 5;
276	272		9.9 (ii) contribution rates and an escalation schedule under section 187.05, subdivision 4;
277	273		9.10 (iii) withdrawal and distribution options under section 187.05, subdivision 6; and
278	274		9.11 (iv) the default investment fund under section 187.06, subdivision 5;
279	275		9.12 (6) to keep annual administrative fees, costs, and expenses as low as possible:
280	276		9.13 (i) except that any administrative fee assessed against the accounts of covered employees
281	277		9.14may not exceed a reasonable amount relative to the fees charged by auto-IRA or defined
282	278		9.15contribution programs of similar size in the state of Minnesota or another state; and
283	279		9.16 (ii) the fee may be asset-based, flat fee, or a hybrid combination of asset-based and flat
284	280		9.17fee;
285	281		9.18 (7) to determine the eligibility of an employer, employee, or other individual to participate
286	282		9.19in the program and review and decide claims for benefits and make factual determinations;
287	283		9.20 (8) to prepare information regarding the program that is clear and concise for
288	284		9.21dissemination to all covered employees and includes the following:
289	285		9.22 (i) the benefits and risks associated with participating in the program;
290	286		9.23 (ii) procedures for enrolling in the program and opting out of the program, electing a
291	287		9.24different or zero percent employee contribution rate, making investment elections, applying
292	288		9.25for a distribution of employee accounts, and making a claim for benefits;
293	289		9.26 (iii) the federal and state income tax consequences of participating in the program, which
294	290		9.27may consist of or include the disclosure statement required to be distributed by retirement
295	291		9.28plan trustees or custodians under the Internal Revenue Code and the Treasury Regulations
296	292		9.29thereunder;
297	293		9.30 (iv) how to obtain additional information on the program; and
298	294		9Sec. 6.
299		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 10.1 (v) disclaimers of covered employer and state responsibility, including the following
	295	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 10.1 (v) disclaimers of covered employer and state responsibility, including the following
300	296		10.2statements:
301	297		10.3 (A) covered employees seeking financial, investment, or tax advice should contact their
302	298		10.4own advisors;
303	299		10.5 (B) neither a covered employer nor the state of Minnesota are liable for decisions covered
304	300		10.6employees make regarding their account in the program;
305	301		10.7 (C) neither a covered employer nor the state of Minnesota guarantees the accounts in
306	302		10.8the program or any particular investment rate of return; and
307	303		10.9 (D) neither a covered employer nor the state of Minnesota monitors or has an obligation
308	304		10.10to monitor any covered employee's eligibility under the Internal Revenue Code to make
309	305		10.11contributions to an account in the program, or whether the covered employee's contributions
310	306		10.12to an account in the program exceed the maximum permissible contribution under the
311	307		10.13Internal Revenue Code;
312	308		10.14 (9) to publish an annual financial report, prepared according to generally accepted
313	309		10.15accounting principles, on the operations of the program, which must include but not be
314	310		10.16limited to costs attributable to the use of outside consultants, independent contractors, and
315	311		10.17other persons who are not state employees and deliver the report to the chairs and ranking
316	312		10.18minority members of the legislative committees with jurisdiction over jobs and economic
317	313		10.19development and state government finance, the executive directors of the State Board of
318	314		10.20Investment and the Legislative Commission on Pensions and Retirement, and the Legislative
319	315		10.21Reference Library;
320	316		10.22 (10) to publish an annual report regarding plan outcomes, progress toward savings goals
321	317		10.23established by the board, statistics on the number of participants, participating employers,
322	318		10.24and covered employees who have opted out of participation, plan expenses, estimated impact
323	319		10.25of the program on social safety net programs, and penalties and violations, and disciplinary
324	320		10.26actions for enforcement, and deliver the report to the chairs and ranking minority members
325	321		10.27of the legislative committees with jurisdiction over jobs and economic development and
326	322		10.28state government finance, the executive directors of the State Board of Investment and the
327	323		10.29Legislative Commission on Pensions and Retirement, and the Legislative Reference Library;
328	324		10.30 (11) to file all reports required under the Internal Revenue Code or chapter 290;
329	325		10.31 (12) to, at the board's discretion, seek and accept gifts, grants, and donations to be used
330	326		10.32for the program, unless such gifts, grants, or donations would result in a conflict of interest
331	327		10Sec. 6.
332		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 11.1relating to the solicitation of service provider for program administration, and deposit such
	328	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 11.1relating to the solicitation of service provider for program administration, and deposit such
333	329		11.2gifts, grants, or donations in the Secure Choice administrative fund;
334	330		11.3 (13) to, at the board's discretion, seek and accept appropriations from the state or loans
335	331		11.4from the state or any agency of the state;
336	332		11.5 (14) to assess the feasibility of partnering with another state or a governmental subdivision
337	333		11.6of another state to administer the program through shared administrative resources and, if
338	334		11.7determined beneficial, enter into contracts, agreements, memoranda of understanding, or
339	335		11.8other arrangements with any other state or an agency or subdivision of any other state to
340	336		11.9administer, operate, or manage any part of the program, which may include combining
341	337		11.10resources, investments, or administrative functions;
342	338		11.11 (15) to hire, retain, and terminate third-party service providers as the board deems
343	339		11.12necessary or desirable for the program, including but not limited to the trustees, consultants,
344	340		11.13investment managers or advisors, custodians, insurance companies, recordkeepers,
345	341		11.14administrators, consultants, actuaries, legal counsel, auditors, and other professionals,
346	342		11.15provided that each service provider is authorized to do business in the state;
347	343		11.16 (16) to interpret the program's governing documents and this chapter and make all other
348	344		11.17decisions necessary to administer the program;
349	345		11.18 (17) to conduct comprehensive employer and worker education and outreach regarding
350	346		11.19the program that reflect the cultures and languages of the state's diverse workforce population,
351	347		11.20which may, in the board's discretion, include collaboration with state and local government
352	348		11.21agencies, community-based and nonprofit organizations, foundations, vendors, and other
353	349		11.22entities deemed appropriate to develop and secure ongoing resources; and
354	350		11.23 (18) to prepare notices for delivery to covered employees regarding the escalation
355	351		11.24schedule and to each covered employee before the covered employee is subject to an
356	352		11.25automatic contribution increase.
357	353		11.26 Subd. 9.Rules.The board of directors is authorized to adopt rules as necessary to
358	354		11.27implement this chapter.
359	355		11.28 Subd. 10.Conflict of interest; economic interest statement.No member of the board
360	356		11.29may participate in deliberations or vote on any matter before the board that will or is likely
361	357		11.30to result in direct, measurable economic gain to the member or the member's family. Members
362	358		11.31of the board shall file with the Campaign Finance and Public Disclosure Board an economic
363	359		11.32interest statement in a manner as prescribed by section 10A.09, subdivisions 5 and 6.
364	360		11Sec. 6.
365		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 12.1 Sec. 7. [187.09] FIDUCIARY DUTY; STANDARD OF CARE.
	361	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 12.1 Sec. 7. [187.09] FIDUCIARY DUTY; STANDARD OF CARE.
366	362		12.2 (a) The members of the board, the executive director of the program, the executive
367	363		12.3director and members of the State Board of Investment, and any person who controls the
368	364		12.4disposition or investment of the assets of the Secure Choice trust:
369	365		12.5 (1) owe a fiduciary duty to the covered employees who participate in the program and
370	366		12.6their beneficiaries;
371	367		12.7 (2) must administer the program solely for the exclusive benefit of such covered
372	368		12.8employees and their beneficiaries, and for the exclusive purpose of providing benefits and
373	369		12.9paying reasonable plan expenses;
374	370		12.10 (3) are subject to the standard of care established in section 356A.04, subdivision 2; and
375	371		12.11 (4) are indemnified and held harmless by the state of Minnesota for the reasonable costs,
376	372		12.12expenses, or liability incurred as a result of any actual or threatened litigation or
377	373		12.13administrative proceeding arising out of the performance of the person's duties.
378	374		12.14 (b) Except as otherwise established in this chapter, the fiduciaries under paragraph (a)
379	375		12.15owe no other duty to covered employees, express or implied, in common law or otherwise.
380	376		12.16Sec. 8. [187.10] NO STATE LIABILITY.
381	377		12.17 The state has no liability for the payment of, the amount of, or losses to any benefit to
382	378		12.18any participant in the program.
383	379		12.19Sec. 9. [187.11] OTHER STATE AGENCIES TO PROVIDE ASSISTANCE.
384	380		12.20 (a) The board may enter into intergovernmental agreements with the commissioner of
385	381		12.21revenue, the commissioner of labor and industry, and any other state agency that the board
386	382		12.22deems necessary or appropriate to provide outreach, technical assistance, or compliance
387	383		12.23services. An agency that enters into an intergovernmental agreement with the board pursuant
388	384		12.24to this section must collaborate and cooperate with the board to provide the outreach,
389	385		12.25technical assistance, or compliance services under any such agreement.
390	386		12.26 (b) The commissioner of administration must provide office space in the Capitol complex
391	387		12.27for the executive director and staff of the program.
392	388		12Sec. 9.
393		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 13.1 Sec. 10. MINNESOTA SECURE CHOICE RETIREMENT PROGRAM; START
	389	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 13.1 Sec. 10. MINNESOTA SECURE CHOICE RETIREMENT PROGRAM; START
394	390		13.2OF OPERATIONS.
395	391		13.3 Subdivision 1.Program start; phasing.(a) The board of directors of the Minnesota
396	392		13.4Secure Choice retirement program must begin operation of the secure choice retirement
397	393		13.5program under Minnesota Statutes, section 187.05, no earlier than January 1, 2025.
398	394		13.6 (b) The board of directors must open the program in phases, and the last phase must be
399	395		13.7opened no later than two years after the opening of the first phase.
400	396		13.8 Subd. 2.Board appointments; first meeting.Appointing authorities must make
401	397		13.9appointments to the board of directors under Minnesota Statutes, section 187.08, by January
402	398		13.1015, 2024. The Legislative Commission on Pensions and Retirement must designate one
403	399		13.11member of the board to convene the first meeting of the board of directors, which must
404	400		13.12occur by March 1, 2024. At the first meeting, the board shall elect a chair.
405	401		13.13Sec. 11. BOARD SUPPORT UNTIL APPOINTMENT OF EXECUTIVE DIRECTOR.
406	402		13.14 With the assistance of the Legislative Coordinating Commission, the executive director
407	403		13.15of the Legislative Commission on Pensions and Retirement must:
408	404		13.16 (1) provide notice to members of the board regarding the first meeting of the board and
409	405		13.17work with the member designated under section 10, subdivision 2, to determine the agenda
410	406		13.18and provide meeting support; and
411	407		13.19 (2) serve as the interim executive director to assist the board until the board completes
412	408		13.20the search, recruitment, and interview process and appoints the executive director under
413	409		13.21Minnesota Statutes, section 187.08, subdivision 8.
414	410		13.22Sec. 12. BOARD TO RECOMMEND PENALTIES TO THE LEGISLATIVE
415	411		13.23COMMISSION ON PENSIONS AND RETIREMENT.
416	412		13.24 No later than December 31, 2024, the board of directors of the Minnesota Secure Choice
417	413		13.25retirement program must recommend to the Legislative Commission on Pensions and
418	414		13.26Retirement penalties for failure by covered employers to comply with Minnesota Statutes,
419	415		13.27section 187.07, subdivisions 1, 2, and 3. The penalties for a failure to comply with Minnesota
420	416		13.28Statutes, section 187.07, subdivision 2, must be commensurate with penalties for failure to
421	417		13.29remit state payroll taxes and, for any other compliance failure, commensurate with penalties
422	418		13.30under similar programs in other states. The Legislative Commission on Pensions and
423	419		13.31Retirement must accept or modify the recommendation and recommend legislation for
424	420		13.32passage during the 2025 legislative session.
425	421		13Sec. 12.
426		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT 14.1 Sec. 13. ~~TRANSFER~~.
	422	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT 14.1 Sec. 13. TRANSFERS.
427	423		14.2 $5,000,000 in fiscal year 2024 is transferred from the general fund to the Secure Choice
428	424		14.3administrative fund established under Minnesota Statutes, section 187.06, to establish and
429	425		14.4administer the Secure Choice retirement program.
430	426		14.5 Sec. 14. EFFECTIVE DATE.
431	427		14.6 Sections 1 to 4 and 6 to 13 are effective the day following final enactment. Section 5 is
432	428		14.7effective the day after the Secure Choice retirement program board of directors opens the
433	429		14.8Secure Choice retirement savings program for enrollment of covered employees.
434	430		14Sec. 14.
435		-	REVISOR BD H0782-4HF782 ~~FOURTH~~ ENGROSSMENT
	431	+	REVISOR BD H0782-3HF782 THIRD ENGROSSMENT