| 30 | | - | Comm report: To pass as amended and re-refer to Labor1320a03/06/2023 |
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| 31 | | - | Author added Kupec138403/07/2023 |
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| 32 | | - | Comm report: To pass as amended and re-refer to Judiciary and Public Safety03/13/2023 2.1 Subd. 5.Covered employee.(a) "Covered employee" means a person who is employed |
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| 33 | | - | 2.2by a covered employer and who satisfies any other criteria established by the board. |
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| 34 | | - | 2.3 (b) Covered employee does not include: |
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| 35 | | - | 2.4 (1) a person who, on December 31 of the preceding calendar year, was younger than 18 |
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| 36 | | - | 2.5years of age; |
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| 37 | | - | 2.6 (2) a person covered under the federal Railway Labor Act, as amended, United States |
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| 38 | | - | 2.7Code, title 45, sections 151 et seq.; |
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| 39 | | - | 2.8 (3) a person on whose behalf an employer makes contributions to a Taft-Hartley |
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| 40 | | - | 2.9multiemployer pension trust fund; or |
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| 41 | | - | 2.10 (4) a person employed by the government of the United States, another country, the state |
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| 42 | | - | 2.11of Minnesota, another state, or any subdivision thereof. |
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| 43 | | - | 2.12 Subd. 6.Covered employer.(a) "Covered employer" means a person or entity: |
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| 44 | | - | 2.13 (1) engaged in a business, industry, profession, trade, or other enterprise in Minnesota, |
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| 45 | | - | 2.14whether for profit or not for profit; |
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| 46 | | - | 2.15 (2) that employs ten or more covered employees; and |
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| 47 | | - | 2.16 (3) that does not sponsor or contribute to and did not in the immediately preceding 12 |
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| 48 | | - | 2.17months sponsor or contribute to a retirement savings plan for its employees. |
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| 49 | | - | 2.18 (b) Covered employer does not include: |
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| 50 | | - | 2.19 (1) an employer that has not engaged in a business, industry, profession, trade, or other |
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| 51 | | - | 2.20enterprise in Minnesota, whether for profit or not for profit, at any time during the |
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| 52 | | - | 2.21immediately preceding 12 months; and |
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| 53 | | - | 2.22 (2) a state or federal government or any political subdivision thereof. |
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| 54 | | - | 2.23 (c) For purposes of this chapter in the case of a taxpaying employer described in section |
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| 55 | | - | 2.24268.046 that contracts with an employee leasing company, professional employer |
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| 56 | | - | 2.25organization, or similar person for such person to obtain the taxpaying employer's workforce |
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| 57 | | - | 2.26and provide workers to the taxpaying employer for a fee, the workers covered by such |
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| 58 | | - | 2.27contract shall be treated as employed by the taxpaying employer and not by such other |
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| 59 | | - | 2.28person. Nothing in this chapter shall prohibit a covered employer that is a taxpaying employer |
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| 60 | | - | 2.29described in section 268.046 from contracting with an employee leasing company, |
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| 61 | | - | 2.30professional employer organization, or similar person for such person to assist the taxpaying |
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| 62 | | - | 2.31employer with the performance of some or all of such taxpaying employer's responsibilities |
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| 63 | | - | 2.32as a covered employer under this chapter. |
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| 64 | | - | 2Sec. 2. |
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| 65 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 3.1 Subd. 7.Executive director."Executive director" means the chief executive and |
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| 66 | | - | 3.2administrative head of the program. |
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| 67 | | - | 3.3 Subd. 8.Internal Revenue Code."Internal Revenue Code" means the Internal Revenue |
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| 68 | | - | 3.4Code of 1986, as amended, United States Code, title 26. |
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| 69 | | - | 3.5 Subd. 9.Program."Program" means the Minnesota Secure Choice retirement program. |
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| 70 | | - | 3.6 Subd. 10.Retirement savings plan."Retirement savings plan" means a plan or program |
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| 71 | | - | 3.7offered by an employer that permits contributions to be set aside for retirement on a pretax |
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| 72 | | - | 3.8or after-tax basis and permits all employees of the employer to participate except those |
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| 73 | | - | 3.9employees who have not satisfied participation eligibility requirements that are no more |
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| 74 | | - | 3.10restrictive than the eligibility requirements permitted under section 410(b) of the Internal |
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| 75 | | - | 3.11Revenue Code. Retirement savings plan includes but is not limited to a plan described in |
|---|
| 76 | | - | 3.12section 401(a) of the Internal Revenue Code, an annuity plan or annuity contract described |
|---|
| 77 | | - | 3.13in section 403(a) or 403(b) of the Internal Revenue Code, a plan within the meaning of |
|---|
| 78 | | - | 3.14section 457(b) of the Internal Revenue Code, a simplified employee pension (SEP) plan, a |
|---|
| 79 | | - | 3.15savings incentive match plan for employees (SIMPLE) plan, an automatic enrollment payroll |
|---|
| 80 | | - | 3.16deduction individual retirement account, and a multiemployer pension plan described in |
|---|
| 81 | | - | 3.17section 414(f) of the Internal Revenue Code. |
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| 82 | | - | 3.18 Subd. 11.Secure Choice administrative fund."Secure Choice administrative fund" |
|---|
| 83 | | - | 3.19or "administrative fund" means the fund established under section 187.06, subdivision 2. |
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| 84 | | - | 3.20 Subd. 12.Secure Choice trust."Secure Choice trust" or "trust" means a trust established |
|---|
| 85 | | - | 3.21under section 187.06, subdivision 1, to hold contributions and investment earnings thereon |
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| 86 | | - | 3.22under the program. |
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| 87 | | - | 3.23 Subd. 13.Roth IRA."Roth IRA" means an individual retirement account established |
|---|
| 88 | | - | 3.24under section 408A of the Internal Revenue Code to hold and invest after-tax assets. |
|---|
| 89 | | - | 3.25 Subd. 14.Traditional IRA."Traditional IRA" means an individual retirement account |
|---|
| 90 | | - | 3.26established under section 408 of the Internal Revenue Code to hold and invest pretax assets. |
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| 91 | | - | 3.27 Sec. 3. [187.05] SECURE CHOICE RETIREMENT PROGRAM. |
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| 92 | | - | 3.28 Subdivision 1.Program established.(a) The board must operate an employee retirement |
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| 93 | | - | 3.29savings program whereby employee payroll deduction contributions are transmitted on an |
|---|
| 94 | | - | 3.30after-tax or pretax basis by covered employers to individual retirement accounts established |
|---|
| 95 | | - | 3.31under the program. |
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| 30 | + | Comm report: To pass as amended and re-refer to Labor03/06/2023 2.1 (4) increased retirement savings can save Minnesota taxpayers an estimated $258,000,000 |
|---|
| 31 | + | 2.2over a span of ten years in Medicaid savings alone; and |
|---|
| 32 | + | 2.3 (5) research has shown that offering workers a way to save through their job increases |
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| 33 | + | 2.4their ability to save dramatically and promotes individual responsibility and financial |
|---|
| 34 | + | 2.5freedom. |
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| 35 | + | 2.6 Sec. 3. [187.03] DEFINITIONS. |
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| 36 | + | 2.7 Subdivision 1.Applicability.For purposes of this chapter, the terms defined in this |
|---|
| 37 | + | 2.8section have the meanings given them. |
|---|
| 38 | + | 2.9 Subd. 2.Board."Board" means the board of directors of the program. |
|---|
| 39 | + | 2.10 Subd. 3.Compensation."Compensation" means compensation within the meaning of |
|---|
| 40 | + | 2.11Section 219(f)(1) of the Internal Revenue Code that is received by a covered employee from |
|---|
| 41 | + | 2.12a covered employer. |
|---|
| 42 | + | 2.13 Subd. 4.Contribution rate."Contribution rate" means the percentage of compensation |
|---|
| 43 | + | 2.14withheld from a covered employee's compensation and deposited in an account established |
|---|
| 44 | + | 2.15for the covered employee under the program. |
|---|
| 45 | + | 2.16 Subd. 5.Covered employee.(a) "Covered employee" means a person who is employed |
|---|
| 46 | + | 2.17by a covered employer and who satisfies any other criteria established by the board. |
|---|
| 47 | + | 2.18 (b) Covered employee does not include: |
|---|
| 48 | + | 2.19 (1) a person who, on December 31 of the preceding calendar year, was younger than 18 |
|---|
| 49 | + | 2.20years of age; |
|---|
| 50 | + | 2.21 (2) a person covered under the federal Railway Labor Act, as amended, United States |
|---|
| 51 | + | 2.22Code, title 45, sections 151 et seq.; |
|---|
| 52 | + | 2.23 (3) a person on whose behalf an employer makes contributions to a Taft-Hartley |
|---|
| 53 | + | 2.24multiemployer pension trust fund; or |
|---|
| 54 | + | 2.25 (4) a person employed by the government of the United States, another country, the state |
|---|
| 55 | + | 2.26of Minnesota, another state, or any subdivision thereof. |
|---|
| 56 | + | 2.27 Subd. 6.Covered employer.(a) "Covered employer" means a person or entity: |
|---|
| 57 | + | 2.28 (1) engaged in a business, industry, profession, trade, or other enterprise in Minnesota, |
|---|
| 58 | + | 2.29whether for profit or not for profit; |
|---|
| 59 | + | 2.30 (2) that employs one or more covered employees; and |
|---|
| 60 | + | 2Sec. 3. |
|---|
| 61 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 3.1 (3) that does not sponsor or contribute to and did not in the immediately preceding 12 |
|---|
| 62 | + | 3.2months sponsor or contribute to a retirement savings plan for its employees. |
|---|
| 63 | + | 3.3 (b) Covered employer does not include: |
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| 64 | + | 3.4 (1) an employer that has not engaged in a business, industry, profession, trade, or other |
|---|
| 65 | + | 3.5enterprise in Minnesota, whether for profit or not for profit, at any time during the |
|---|
| 66 | + | 3.6immediately preceding 12 months; and |
|---|
| 67 | + | 3.7 (2) a state or federal government or any political subdivision thereof. |
|---|
| 68 | + | 3.8 Subd. 7.Executive director."Executive director" means the chief executive and |
|---|
| 69 | + | 3.9administrative head of the program. |
|---|
| 70 | + | 3.10 Subd. 8.Internal Revenue Code."Internal Revenue Code" means the Internal Revenue |
|---|
| 71 | + | 3.11Code of 1986, as amended, United States Code, title 26. |
|---|
| 72 | + | 3.12 Subd. 9.Program."Program" means the Minnesota Secure Choice retirement program. |
|---|
| 73 | + | 3.13 Subd. 10.Retirement savings plan."Retirement savings plan" means a plan or program |
|---|
| 74 | + | 3.14offered by an employer that permits contributions to be set aside for retirement on a pre-tax |
|---|
| 75 | + | 3.15or after-tax basis and permits all employees of the employer to participate except those |
|---|
| 76 | + | 3.16employees who have not satisfied participation eligibility requirements that are no more |
|---|
| 77 | + | 3.17restrictive than the eligibility requirements permitted under section 410(b) of the Internal |
|---|
| 78 | + | 3.18Revenue Code. Retirement savings plan includes but is not limited to a plan described in |
|---|
| 79 | + | 3.19section 401(a) of the Internal Revenue Code, an annuity plan or annuity contract described |
|---|
| 80 | + | 3.20in section 403(a) or 403(b) of the Internal Revenue Code, a plan within the meaning of |
|---|
| 81 | + | 3.21section 457(b) of the Internal Revenue Code, a simplified employee pension (SEP) plan, a |
|---|
| 82 | + | 3.22savings incentive match plan for employees (SIMPLE) plan, an automatic enrollment payroll |
|---|
| 83 | + | 3.23deduction individual retirement account, and a multiemployer pension plan described in |
|---|
| 84 | + | 3.24section 414(f) of the Internal Revenue Code. |
|---|
| 85 | + | 3.25 Subd. 11.Secure Choice administrative fund."Secure Choice administrative fund" |
|---|
| 86 | + | 3.26or "administrative fund" means the fund established under section 187.06, subdivision 2. |
|---|
| 87 | + | 3.27 Subd. 12.Secure Choice trust or trust."Secure Choice trust" or "trust" means a trust |
|---|
| 88 | + | 3.28established under section 187.06, subdivision 1, to hold contributions and investment earnings |
|---|
| 89 | + | 3.29thereon under the program. |
|---|
| 90 | + | 3.30 Subd. 13.Roth IRA."Roth IRA" means an individual retirement account established |
|---|
| 91 | + | 3.31under section 408A of the Internal Revenue Code to hold and invest after-tax assets. |
|---|
| 97 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 4.1 (b) The board must establish procedures for opening a Roth IRA, a traditional IRA, or |
|---|
| 98 | | - | 4.2both a Roth IRA and a traditional IRA for each covered employee whose covered employer |
|---|
| 99 | | - | 4.3transmits employee payroll deduction contributions under the program. |
|---|
| 100 | | - | 4.4 (c) Contributions must be made on an after-tax (Roth) basis, unless the covered employee |
|---|
| 101 | | - | 4.5elects to contribute on a pretax basis. |
|---|
| 102 | | - | 4.6 Subd. 2.Compliance with Internal Revenue Code.The board must establish and |
|---|
| 103 | | - | 4.7administer each Roth IRA and traditional IRA opened under the program in compliance |
|---|
| 104 | | - | 4.8with section 408 or 408A of the Internal Revenue Code, as applicable, for the benefit of the |
|---|
| 105 | | - | 4.9covered employee for whom the account was opened. |
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| 106 | | - | 4.10 Subd. 3.Contributions held in trust.Each covered employer must transmit employee |
|---|
| 107 | | - | 4.11payroll deduction contributions to an account established for the benefit of the covered |
|---|
| 108 | | - | 4.12employee in a trust established to hold contributions under the program. |
|---|
| 109 | | - | 4.13 Subd. 4.Contribution rate.(a) The board must establish default, minimum, and |
|---|
| 110 | | - | 4.14maximum employee contribution rates and an escalation schedule to automatically increase |
|---|
| 111 | | - | 4.15each covered employee's contribution rate annually until the contribution rate is equal to |
|---|
| 112 | | - | 4.16the maximum contribution rate. |
|---|
| 113 | | - | 4.17 (b) A covered employee must have the right, annually or more frequently as determined |
|---|
| 114 | | - | 4.18by the board, to change the contribution rate, opt out or elect not to contribute, or cease |
|---|
| 115 | | - | 4.19contributions. |
|---|
| 116 | | - | 4.20 Subd. 5.Vesting.Covered employees are 100 percent vested in their accounts at all |
|---|
| 117 | | - | 4.21times. |
|---|
| 118 | | - | 4.22 Subd. 6.Withdrawals and distributions.The board must establish alternatives |
|---|
| 119 | | - | 4.23permitting covered employees to take a withdrawal of all or a portion of the covered |
|---|
| 120 | | - | 4.24employee's account while employed and one or more distributions following termination |
|---|
| 121 | | - | 4.25of employment. Distribution alternatives must include lifetime income options. |
|---|
| 122 | | - | 4.26 Subd. 7.Individuals not employed by a covered employer.The board may allow |
|---|
| 123 | | - | 4.27individuals to open and contribute to an account in the program, in which case the individual |
|---|
| 124 | | - | 4.28shall be considered a covered employee for purposes of sections 187.05 to 187.12. |
|---|
| 125 | | - | 4.29 Sec. 4. [187.06] ESTABLISHMENT OF SECURE CHOICE TRUST AND |
|---|
| 126 | | - | 4.30ADMINISTRATIVE FUND; EMPLOYEE ACCOUNTS; INVESTMENTS. |
|---|
| 127 | | - | 4.31 Subdivision 1.Secure Choice trust established.The Secure Choice trust is established |
|---|
| 128 | | - | 4.32as an instrumentality of the state to hold employee payroll deduction contributions and |
|---|
| 93 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 4.1 Subd. 14.Traditional IRA."Traditional IRA" means an individual retirement account |
|---|
| 94 | + | 4.2established under section 408 of the Internal Revenue Code to hold and invest pre-tax assets. |
|---|
| 95 | + | 4.3 Sec. 4. [187.05] SECURE CHOICE RETIREMENT PROGRAM. |
|---|
| 96 | + | 4.4 Subdivision 1.Program established.(a) No later than October 1, 2024, the board must |
|---|
| 97 | + | 4.5begin operation of an employee retirement savings program whereby employee payroll |
|---|
| 98 | + | 4.6deduction contributions are transmitted on an after-tax or pre-tax basis by covered employers |
|---|
| 99 | + | 4.7to individual retirement accounts established under the program. |
|---|
| 100 | + | 4.8 (b) The board must establish procedures for opening a Roth IRA, a traditional IRA, or |
|---|
| 101 | + | 4.9both a Roth IRA and a traditional IRA for each covered employee whose covered employer |
|---|
| 102 | + | 4.10transmits employee payroll deduction contributions under the program. |
|---|
| 103 | + | 4.11 (c) Contributions must be made on an after-tax (Roth) basis, unless the covered employee |
|---|
| 104 | + | 4.12elects to contribute on a pre-tax basis. |
|---|
| 105 | + | 4.13 (d) The board may open the program in phases, but the last phase must be opened no |
|---|
| 106 | + | 4.14later than two years after the opening of the first phase. |
|---|
| 107 | + | 4.15 Subd. 2.Compliance with Internal Revenue Code.Each Roth IRA and traditional |
|---|
| 108 | + | 4.16IRA opened under the program must be established and administered in compliance with |
|---|
| 109 | + | 4.17section 408A or 408 of the Internal Revenue Code, as applicable, for the benefit of the |
|---|
| 110 | + | 4.18covered employee for whom the account was opened. |
|---|
| 111 | + | 4.19 Subd. 3.Contributions held in trust.Employee payroll deduction contributions must |
|---|
| 112 | + | 4.20be transmitted by each covered employer to an account established for the benefit of the |
|---|
| 113 | + | 4.21covered employee in a trust established to hold contributions under the program. |
|---|
| 114 | + | 4.22 Subd. 4.Contribution rate.The board must establish default, minimum, and maximum |
|---|
| 115 | + | 4.23contribution rates and an auto-escalation schedule whereby each covered employee's |
|---|
| 116 | + | 4.24contribution rate automatically increases from year to year until it reaches a maximum |
|---|
| 117 | + | 4.25contribution rate, subject to the covered employee's election to change the contribution rate |
|---|
| 118 | + | 4.26or opt out or cease contributions. |
|---|
| 119 | + | 4.27 Subd. 5.Vesting.Covered employees must at all times be 100 percent vested in their |
|---|
| 120 | + | 4.28accounts. |
|---|
| 121 | + | 4.29 Subd. 6.Withdrawals and distributions.The board must establish alternatives |
|---|
| 122 | + | 4.30permitting covered employees to take a withdrawal of all or a portion of the covered |
|---|
| 123 | + | 4.31employee's account while employed and one or more distributions following termination |
|---|
| 124 | + | 4.32of employment. Distribution alternatives must include lifetime income options. |
|---|
| 130 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 5.1earnings on the contributions. The board must appoint a financial institution to act as trustee |
|---|
| 131 | | - | 5.2or custodian. The trustee or custodian must manage and administer trust assets for the |
|---|
| 132 | | - | 5.3exclusive purposes of providing benefits and defraying reasonable expenses of administering |
|---|
| 133 | | - | 5.4the program. |
|---|
| 134 | | - | 5.5 Subd. 2.Secure Choice administrative fund established; money appropriated.(a) |
|---|
| 135 | | - | 5.6The Secure Choice administrative fund is established in the state treasury as a fund separate |
|---|
| 136 | | - | 5.7and apart from the Secure Choice trust. |
|---|
| 137 | | - | 5.8 (b) The board of directors may assess administrative fees on each covered employee's |
|---|
| 138 | | - | 5.9account to be applied toward the expenses of administering the program. Money in the |
|---|
| 139 | | - | 5.10administrative fund is appropriated to the board to pay administrative expenses of |
|---|
| 140 | | - | 5.11administering the program if fees from the trust are not sufficient to cover expenses. The |
|---|
| 141 | | - | 5.12board must determine which administrative expenses will be paid using money in the |
|---|
| 142 | | - | 5.13administrative fund and which administrative expenses will be paid using money in the trust |
|---|
| 143 | | - | 5.14in the exercise of its fiduciary duty. |
|---|
| 144 | | - | 5.15 (c) The board may receive and deposit into the administrative fund any gifts, grants, |
|---|
| 145 | | - | 5.16donations, loans, appropriations, or other moneys designated for the administrative fund |
|---|
| 146 | | - | 5.17from the state, any unit of federal or local government, any other entity, or any person. |
|---|
| 147 | | - | 5.18 (d) Any interest or investment earnings that are attributable to money in the administrative |
|---|
| 148 | | - | 5.19fund must be deposited into the administrative fund. |
|---|
| 149 | | - | 5.20 Subd. 3.Individual accounts established.The trustee or custodian, as applicable, must |
|---|
| 150 | | - | 5.21maintain an account for employee payroll deduction contributions with respect to each |
|---|
| 151 | | - | 5.22covered employee. Interest and earnings on the amount in the account are credited to the |
|---|
| 152 | | - | 5.23account and losses are deducted. |
|---|
| 153 | | - | 5.24 Subd. 4.Investments.The board must make available for investment a diversified array |
|---|
| 154 | | - | 5.25of investment funds selected by the State Board of Investment. Members of the board, the |
|---|
| 155 | | - | 5.26executive director and members of the State Board of Investment, and all other fiduciaries |
|---|
| 156 | | - | 5.27are relieved of fiduciary responsibility for investment losses resulting from a covered |
|---|
| 157 | | - | 5.28employee's investment directions. Each covered employee is entitled to direct the investment |
|---|
| 158 | | - | 5.29of the contributions credited to the covered employee's account in the trust and earnings on |
|---|
| 159 | | - | 5.30the contributions into the array of investment funds selected by the State Board of Investment. |
|---|
| 160 | | - | 5.31 Subd. 5.Default investment fund.The board must designate a default investment fund |
|---|
| 161 | | - | 5.32that is diversified to minimize the risk of large losses and consists of target date funds, a |
|---|
| 162 | | - | 5.33balanced fund, a capital preservation fund, or any combination of the foregoing funds. |
|---|
| 163 | | - | 5.34Accounts for which no investment direction has been given by the covered employee must |
|---|
| 164 | | - | 5Sec. 4. |
|---|
| 165 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 6.1be invested in the default investment fund. Members of the board, the executive director of |
|---|
| 166 | | - | 6.2the State Board of Investment, and all other fiduciaries are relieved of fiduciary duty with |
|---|
| 167 | | - | 6.3regard to investment of assets in the default investment fund. |
|---|
| 168 | | - | 6.4 Subd. 6.Inalienability of accounts.No account under the program is subject to |
|---|
| 169 | | - | 6.5assignment or alienation, either voluntarily or involuntarily, or to the claims of creditors, |
|---|
| 170 | | - | 6.6except as provided in section 518.58. |
|---|
| 171 | | - | 6.7 Subd. 7.Accounts not property of the state or covered employers.The assets of the |
|---|
| 172 | | - | 6.8Secure Choice trust shall be preserved, invested, and expended solely for the purposes of |
|---|
| 173 | | - | 6.9the trust and no property rights in the trust assets shall exist in favor of the state or any |
|---|
| 174 | | - | 6.10covered employer. The assets of the Secure Choice trust shall not be transferred or used by |
|---|
| 175 | | - | 6.11the state for any purpose other than the purposes of the trust, including reasonable |
|---|
| 176 | | - | 6.12administrative expenses of the program. Amounts deposited in the trust shall not constitute |
|---|
| 177 | | - | 6.13property of the state and shall not be commingled with state funds, and the state shall have |
|---|
| 178 | | - | 6.14no claim to or against, or interest in, the assets of the Secure Choice trust. |
|---|
| 179 | | - | 6.15 Sec. 5. [187.07] RESPONSIBILITIES OF COVERED EMPLOYERS. |
|---|
| 180 | | - | 6.16 Subdivision 1.Requirement to enroll employees.Each covered employer must enroll |
|---|
| 181 | | - | 6.17its covered employees in the program and withhold payroll deduction contributions from |
|---|
| 182 | | - | 6.18each covered employee's paycheck, unless the covered employee has elected not to contribute. |
|---|
| 183 | | - | 6.19The board must establish penalties for covered employers for failing to enroll covered |
|---|
| 184 | | - | 6.20employees. |
|---|
| 185 | | - | 6.21 Subd. 2.Remitting contributions.A covered employer must timely remit contributions |
|---|
| 186 | | - | 6.22as required by the board. The board must establish penalties for covered employers for |
|---|
| 187 | | - | 6.23failing to timely remit contributions. |
|---|
| 188 | | - | 6.24 Subd. 3.Distribution of information.Covered employers must provide information |
|---|
| 189 | | - | 6.25prepared by the board to all covered employees regarding the program. The information |
|---|
| 190 | | - | 6.26must be provided to each covered employee at least 30 days prior to the date of the first |
|---|
| 191 | | - | 6.27paycheck from which employee contributions could be deducted for transmittal to the |
|---|
| 192 | | - | 6.28program, if the covered employee does not elect to opt out of the program. |
|---|
| 193 | | - | 6.29 Subd. 4.No fiduciary responsibility.Except for the responsibilities described in |
|---|
| 194 | | - | 6.30subdivisions 1 to 3, a covered employer has no obligations to covered employees and is not |
|---|
| 195 | | - | 6.31a fiduciary for any purpose under the program or in connection with the Secure Choice |
|---|
| 196 | | - | 6.32trust. Covered employers are not responsible for the administration, investment performance, |
|---|
| 197 | | - | 6.33plan design, or benefits paid to covered employees. |
|---|
| 198 | | - | 6Sec. 5. |
|---|
| 199 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 7.1 Subd. 5.Employer liability.A covered employer is not liable to a covered employee |
|---|
| 200 | | - | 7.2for damages alleged to have resulted from a covered employee's participation in or failure |
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| 201 | | - | 7.3to participate in the program. |
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| 202 | | - | 7.4 Subd. 6.Enforcement.(a) The board must establish monthly or quarterly penalties |
|---|
| 203 | | - | 7.5against any covered employer that fails to comply with subdivisions 1, 2, and 3. The penalties |
|---|
| 204 | | - | 7.6for a failure to comply with subdivision 2 shall be commensurate with penalties for failure |
|---|
| 205 | | - | 7.7to remit state payroll taxes and, for any compliance failure, commensurate with penalties |
|---|
| 206 | | - | 7.8imposed under similar programs in other states. |
|---|
| 207 | | - | 7.9 (b) At the request of the board, the attorney general shall enforce the penalties imposed |
|---|
| 208 | | - | 7.10by the board against a covered employer. Proceeds of such penalties, after deducting |
|---|
| 209 | | - | 7.11enforcement expenses, must be deposited in the Secure Choice administrative fund and are |
|---|
| 210 | | - | 7.12appropriated to the program. |
|---|
| 211 | | - | 7.13 (c) The board must provide covered employers with written warnings for the first year |
|---|
| 212 | | - | 7.14of noncompliance before assessing penalties. |
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| 213 | | - | 7.15 Sec. 6. [187.08] SECURE CHOICE RETIREMENT PROGRAM BOARD OF |
|---|
| 214 | | - | 7.16DIRECTORS. |
|---|
| 215 | | - | 7.17 Subdivision 1.Membership.The policy-making function of the program is vested in a |
|---|
| 216 | | - | 7.18board of directors consisting of seven members as follows: |
|---|
| 217 | | - | 7.19 (1) the executive director of the Minnesota State Retirement System or the executive |
|---|
| 218 | | - | 7.20director's designee; |
|---|
| 219 | | - | 7.21 (2) the executive director of the State Board of Investment or the executive director's |
|---|
| 220 | | - | 7.22designee; |
|---|
| 221 | | - | 7.23 (3) three members chosen by the Legislative Commission on Pensions and Retirement, |
|---|
| 222 | | - | 7.24one from each of the following experience categories: |
|---|
| 223 | | - | 7.25 (i) executive or operations manager with substantial experience in record keeping 401(k) |
|---|
| 224 | | - | 7.26plans; |
|---|
| 225 | | - | 7.27 (ii) executive or operations manager with substantial experience in individual retirement |
|---|
| 226 | | - | 7.28accounts; and |
|---|
| 227 | | - | 7.29 (iii) executive or other professional with substantial experience in retirement plan |
|---|
| 228 | | - | 7.30investments; |
|---|
| 229 | | - | 7Sec. 6. |
|---|
| 230 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 8.1 (4) a human resources or retirement benefits executive from a private company with |
|---|
| 126 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 5.1 Subd. 7.Individuals not employed by a covered employer.The board may allow |
|---|
| 127 | + | 5.2individuals to open and contribute to an account in the program outside of an employment |
|---|
| 128 | + | 5.3relationship with a covered employer, in which case the individual shall be considered a |
|---|
| 129 | + | 5.4covered employee for purposes of sections 187.05 to 187.12. |
|---|
| 130 | + | 5.5 Sec. 5. [187.06] ESTABLISHMENT OF SECURE CHOICE TRUST AND |
|---|
| 131 | + | 5.6ADMINISTRATIVE FUND; EMPLOYEE ACCOUNTS; INVESTMENTS. |
|---|
| 132 | + | 5.7 Subdivision 1.Secure Choice trust established.The Secure Choice trust is established |
|---|
| 133 | + | 5.8as an instrumentality of the state of Minnesota to hold employee payroll deduction |
|---|
| 134 | + | 5.9contributions and earnings thereon. The board must appoint a financial institution to act as |
|---|
| 135 | + | 5.10trustee or custodian. Trust assets must be managed and administered for the exclusive |
|---|
| 136 | + | 5.11purposes of providing benefits and defraying reasonable expenses of administering the |
|---|
| 137 | + | 5.12program. |
|---|
| 138 | + | 5.13 Subd. 2.Secure Choice administrative fund established.(a) The Secure Choice |
|---|
| 139 | + | 5.14administrative fund is established in the state treasury as a fund separate and apart from the |
|---|
| 140 | + | 5.15Secure Choice trust. |
|---|
| 141 | + | 5.16 (b) The board must use money in the administrative fund to pay for administrative |
|---|
| 142 | + | 5.17expenses of administering the program. The board must determine which administrative |
|---|
| 143 | + | 5.18expenses will be paid using money in the administrative fund and which will be paid using |
|---|
| 144 | + | 5.19money in the trust in the exercise of its fiduciary duty. |
|---|
| 145 | + | 5.20 (c) The administrative fund may receive any gifts, grants, donations, loans, appropriations, |
|---|
| 146 | + | 5.21or other moneys designated for the administrative fund from the state of Minnesota, any |
|---|
| 147 | + | 5.22unit of federal or local government, any other entity, or any person. |
|---|
| 148 | + | 5.23 (d) Any interest or investment earnings that are attributable to money in the administrative |
|---|
| 149 | + | 5.24fund must be deposited into the administrative fund. |
|---|
| 150 | + | 5.25 Subd. 3.Individual accounts established.The trustee or custodian, as applicable, must |
|---|
| 151 | + | 5.26maintain an account for employee payroll deduction contributions with respect to each |
|---|
| 152 | + | 5.27covered employee. Interest, earnings, and losses shall be allocated to accounts as prescribed |
|---|
| 153 | + | 5.28by the board. |
|---|
| 154 | + | 5.29 Subd. 4.Investments.Each covered employee is entitled to direct the investment of the |
|---|
| 155 | + | 5.30contributions credited to the covered employee's account in the trust and earnings thereon. |
|---|
| 156 | + | 5.31The board must make available for investment a diversified array of investment funds |
|---|
| 157 | + | 5.32selected by the State Board of Investment. Members of the board, the executive director of |
|---|
| 158 | + | 5Sec. 5. |
|---|
| 159 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 6.1the State Board of Investment, and all other fiduciaries are relieved of fiduciary responsibility |
|---|
| 160 | + | 6.2for investment losses resulting from a covered employee's investment directions. |
|---|
| 161 | + | 6.3 Subd. 5.Default investment fund.The board must designate a default investment fund |
|---|
| 162 | + | 6.4that is diversified to minimize the risk of large losses and consists of target date funds, a |
|---|
| 163 | + | 6.5balanced fund, a capital preservation fund, or any combination of the foregoing funds. |
|---|
| 164 | + | 6.6Accounts for which no investment direction has been given by the covered employee must |
|---|
| 165 | + | 6.7be invested in the default investment fund. Members of the board, the executive director of |
|---|
| 166 | + | 6.8the State Board of Investment, and all other fiduciaries are relieved of fiduciary duty with |
|---|
| 167 | + | 6.9regard to investment of assets in the default investment fund. |
|---|
| 168 | + | 6.10 Subd. 6.Inalienability of accounts.No account under the program is subject to |
|---|
| 169 | + | 6.11assignment or alienation, either voluntarily or involuntarily, or to the claims of creditors, |
|---|
| 170 | + | 6.12except as provided in section 518.58. |
|---|
| 171 | + | 6.13 Subd. 7.Accounts not property of the state of Minnesota or covered employers.The |
|---|
| 172 | + | 6.14assets of the Secure Choice trust shall at all times be preserved, invested, and expended |
|---|
| 173 | + | 6.15solely for the purposes of the trust and no property rights therein shall exist in favor of the |
|---|
| 174 | + | 6.16state of Minnesota or any covered employer. The assets of the Secure Choice trust shall not |
|---|
| 175 | + | 6.17be transferred or used by the state of Minnesota for any purpose other than the purposes of |
|---|
| 176 | + | 6.18the trust, including reasonable administrative expenses of the program. Amounts deposited |
|---|
| 177 | + | 6.19in the trust shall not constitute property of the state of Minnesota and shall not be commingled |
|---|
| 178 | + | 6.20with state funds, and the state of Minnesota shall have no claim to or against, or interest in, |
|---|
| 179 | + | 6.21the assets of the Secure Choice trust. |
|---|
| 180 | + | 6.22 Sec. 6. [187.07] RESPONSIBILITIES OF COVERED EMPLOYERS. |
|---|
| 181 | + | 6.23 Subdivision 1.Requirement to enroll employees.Each covered employer must enroll |
|---|
| 182 | + | 6.24its covered employees in the program and withhold payroll deduction contributions from |
|---|
| 183 | + | 6.25each covered employee's paycheck, unless the covered employee has elected not to contribute. |
|---|
| 184 | + | 6.26The board must establish penalties for covered employers for failing to enroll covered |
|---|
| 185 | + | 6.27employees. |
|---|
| 186 | + | 6.28 Subd. 2.Remitting contributions.A covered employer must timely remit contributions |
|---|
| 187 | + | 6.29as required by the board. The board must establish penalties for covered employers for |
|---|
| 188 | + | 6.30failing to timely remit contributions. |
|---|
| 189 | + | 6.31 Subd. 3.Distribution of information.Covered employers must provide information |
|---|
| 190 | + | 6.32prepared by the board to all covered employees regarding the program. The information |
|---|
| 191 | + | 6.33must be provided to each covered employee at least 30 days prior to the date of the first |
|---|
| 192 | + | 6Sec. 6. |
|---|
| 193 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 7.1paycheck from which employee contributions could be deducted for transmittal to the |
|---|
| 194 | + | 7.2program, if the covered employee does not elect to opt out of the program. |
|---|
| 195 | + | 7.3 Subd. 4.No fiduciary responsibility.Except for the responsibilities described in |
|---|
| 196 | + | 7.4subdivisions 1 to 3, a covered employer has no obligations to covered employees and is not |
|---|
| 197 | + | 7.5a fiduciary for any purpose under the program or in connection with the Secure Choice |
|---|
| 198 | + | 7.6trust. Covered employers do not bear responsibility for the administration, investment |
|---|
| 199 | + | 7.7performance, plan design, or benefits paid to covered employees. |
|---|
| 200 | + | 7.8 Subd. 5.Employer liability.A covered employer is not liable to a covered employee |
|---|
| 201 | + | 7.9for damages alleged to have resulted from a covered employee's participation in or failure |
|---|
| 202 | + | 7.10to participate in the program. |
|---|
| 203 | + | 7.11 Subd. 6.Enforcement.The Minnesota attorney general has the power to enforce the |
|---|
| 204 | + | 7.12provisions of this chapter. The attorney general may impose, after due process, monthly or |
|---|
| 205 | + | 7.13quarterly penalties as established by the board against any covered employer that fails to |
|---|
| 206 | + | 7.14comply with this section. Proceeds of such penalties, after deducting enforcement expenses, |
|---|
| 207 | + | 7.15must be deposited in the Secure Choice administrative fund and are appropriated to the |
|---|
| 208 | + | 7.16program. |
|---|
| 209 | + | 7.17 Sec. 7. [187.08] SECURE CHOICE RETIREMENT PROGRAM BOARD OF |
|---|
| 210 | + | 7.18DIRECTORS. |
|---|
| 211 | + | 7.19 Subdivision 1.Membership.The policy-making function of the program is vested in a |
|---|
| 212 | + | 7.20board of directors consisting of seven members as follows: |
|---|
| 213 | + | 7.21 (1) the executive director of the Minnesota State Retirement System or the executive |
|---|
| 214 | + | 7.22director's designee; |
|---|
| 215 | + | 7.23 (2) the executive director of the State Board of Investment or the executive director's |
|---|
| 216 | + | 7.24designee; |
|---|
| 217 | + | 7.25 (3) three members chosen by the Legislative Commission on Pensions and Retirement, |
|---|
| 218 | + | 7.26one from each of the following experience categories: |
|---|
| 219 | + | 7.27 (i) executive or operations manager with substantial experience in record keeping 401(k) |
|---|
| 220 | + | 7.28plans; |
|---|
| 221 | + | 7.29 (ii) executive or operations manager with substantial experience in individual retirement |
|---|
| 222 | + | 7.30accounts; and |
|---|
| 223 | + | 7.31 (iii) executive or other professional with substantial experience in retirement plan |
|---|
| 224 | + | 7.32investments; |
|---|
| 225 | + | 7Sec. 7. |
|---|
| 226 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 8.1 (4) a human resources or retirement benefits executive from a private company with |
|---|
| 259 | | - | 8.30 (1) to establish secure processes for enrolling covered employees in the program and |
|---|
| 260 | | - | 8.31for transmitting employee and employer contributions to accounts in the trust; |
|---|
| 261 | | - | 8Sec. 6. |
|---|
| 262 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 9.1 (2) to prepare a budget and establish procedures for the payment of costs of administering |
|---|
| 263 | | - | 9.2and operating the program; |
|---|
| 264 | | - | 9.3 (3) to lease or otherwise procure equipment necessary to administer the program; |
|---|
| 265 | | - | 9.4 (4) to procure insurance in connection with the property of the program and the activities |
|---|
| 266 | | - | 9.5of the board, executive director, and other staff; |
|---|
| 267 | | - | 9.6 (5) to determine the following: |
|---|
| 268 | | - | 9.7 (i) any criteria for "covered employee" other than employment with a covered employer |
|---|
| 269 | | - | 9.8under section 187.03, subdivision 5; |
|---|
| 270 | | - | 9.9 (ii) contribution rates and an escalation schedule under section 187.05, subdivision 4; |
|---|
| 271 | | - | 9.10 (iii) withdrawal and distribution options under section 187.05, subdivision 6; and |
|---|
| 272 | | - | 9.11 (iv) the default investment fund under section 187.06, subdivision 5; |
|---|
| 273 | | - | 9.12 (6) to keep annual administrative fees, costs, and expenses as low as possible: |
|---|
| 274 | | - | 9.13 (i) except that any administrative fee assessed against the accounts of covered employees |
|---|
| 275 | | - | 9.14may not exceed a reasonable amount relative to the fees charged by auto-IRA or defined |
|---|
| 276 | | - | 9.15contribution programs of similar size in the state of Minnesota or another state; and |
|---|
| 277 | | - | 9.16 (ii) the fee may be asset-based, flat fee, or a hybrid combination of asset-based and flat |
|---|
| 278 | | - | 9.17fee; |
|---|
| 279 | | - | 9.18 (7) to determine the eligibility of an employer, employee, or other individual to participate |
|---|
| 280 | | - | 9.19in the program and review and decide claims for benefits and make factual determinations; |
|---|
| 281 | | - | 9.20 (8) to prepare information regarding the program that is clear and concise for |
|---|
| 282 | | - | 9.21dissemination to all covered employees and includes the following: |
|---|
| 283 | | - | 9.22 (i) the benefits and risks associated with participating in the program; |
|---|
| 284 | | - | 9.23 (ii) procedures for enrolling in the program and opting out of the program, electing a |
|---|
| 285 | | - | 9.24different or zero percent employee contribution rate, making investment elections, applying |
|---|
| 286 | | - | 9.25for a distribution of employee accounts, and making a claim for benefits; |
|---|
| 287 | | - | 9.26 (iii) the federal and state income tax consequences of participating in the program, which |
|---|
| 288 | | - | 9.27may consist of or include the disclosure statement required to be distributed by retirement |
|---|
| 289 | | - | 9.28plan trustees or custodians under the Internal Revenue Code and the Treasury Regulations |
|---|
| 290 | | - | 9.29thereunder; |
|---|
| 291 | | - | 9.30 (iv) how to obtain additional information on the program; and |
|---|
| 292 | | - | 9Sec. 6. |
|---|
| 293 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 10.1 (v) disclaimers of covered employer and state responsibility, including the following |
|---|
| 294 | | - | 10.2statements: |
|---|
| 295 | | - | 10.3 (A) covered employees seeking financial, investment, or tax advice should contact their |
|---|
| 296 | | - | 10.4own advisors; |
|---|
| 297 | | - | 10.5 (B) neither covered employers nor the state of Minnesota are liable for decisions covered |
|---|
| 298 | | - | 10.6employees make regarding their account in the program; |
|---|
| 299 | | - | 10.7 (C) neither a covered employer nor the state of Minnesota guarantees the accounts in |
|---|
| 300 | | - | 10.8the program or any particular investment rate of return; and |
|---|
| 301 | | - | 10.9 (D) neither a covered employer nor the state of Minnesota monitors or has an obligation |
|---|
| 302 | | - | 10.10to monitor any covered employee's eligibility under the Internal Revenue Code to make |
|---|
| 303 | | - | 10.11contributions to an account in the program, or whether the covered employee's contributions |
|---|
| 304 | | - | 10.12to an account in the program exceed the maximum permissible contribution under the |
|---|
| 305 | | - | 10.13Internal Revenue Code; |
|---|
| 306 | | - | 10.14 (9) to publish an annual financial report, prepared according to generally accepted |
|---|
| 307 | | - | 10.15accounting principles, on the operations of the program, which must include but not be |
|---|
| 308 | | - | 10.16limited to costs attributable to the use of outside consultants, independent contractors, and |
|---|
| 309 | | - | 10.17other persons who are not state employees and deliver the report to the chairs and ranking |
|---|
| 310 | | - | 10.18minority members of the legislative committees with jurisdiction over jobs and economic |
|---|
| 311 | | - | 10.19development and state government finance, the executive directors of the State Board of |
|---|
| 312 | | - | 10.20Investment and the Legislative Commission on Pensions and Retirement, and the Legislative |
|---|
| 313 | | - | 10.21Reference Library; |
|---|
| 314 | | - | 10.22 (10) to publish an annual report regarding plan outcomes, progress toward savings goals |
|---|
| 315 | | - | 10.23established by the board, statistics on covered employees and participating employers, plan |
|---|
| 316 | | - | 10.24expenses, estimated impact of the program on social safety net programs, and penalties and |
|---|
| 317 | | - | 10.25violations and deliver the report to the chairs and ranking minority members of the legislative |
|---|
| 318 | | - | 10.26committees with jurisdiction over jobs and economic development and state government |
|---|
| 319 | | - | 10.27finance, the executive directors of the State Board of Investment and the Legislative |
|---|
| 320 | | - | 10.28Commission on Pensions and Retirement, and the Legislative Reference Library; |
|---|
| 321 | | - | 10.29 (11) to file all reports required under the Internal Revenue Code or chapter 290; |
|---|
| 322 | | - | 10.30 (12) to, at the board's discretion, seek and accept gifts, grants, and donations to be used |
|---|
| 323 | | - | 10.31for the program, unless such gifts, grants, or donations would result in a conflict of interest |
|---|
| 324 | | - | 10.32relating to the solicitation of service provider for program administration, and deposit such |
|---|
| 325 | | - | 10.33gifts, grants, or donations in the Secure Choice administrative fund; |
|---|
| 326 | | - | 10Sec. 6. |
|---|
| 327 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 11.1 (13) to, at the board's discretion, seek and accept appropriations from the state or loans |
|---|
| 328 | | - | 11.2from the state or any agency of the state; |
|---|
| 329 | | - | 11.3 (14) to assess the feasibility of partnering with another state or a governmental subdivision |
|---|
| 330 | | - | 11.4of another state to administer the program through shared administrative resources and, if |
|---|
| 331 | | - | 11.5determined beneficial, enter into contracts, agreements, memoranda of understanding, or |
|---|
| 332 | | - | 11.6other arrangements with any other state or an agency or subdivision of any other state to |
|---|
| 333 | | - | 11.7administer, operate, or manage any part of the program, which may include combining |
|---|
| 334 | | - | 11.8resources, investments, or administrative functions; |
|---|
| 335 | | - | 11.9 (15) to hire, retain, and terminate third-party service providers as the board deems |
|---|
| 336 | | - | 11.10necessary or desirable for the program, including but not limited to the trustees, consultants, |
|---|
| 337 | | - | 11.11investment managers or advisors, custodians, insurance companies, recordkeepers, |
|---|
| 338 | | - | 11.12administrators, consultants, actuaries, legal counsel, auditors, and other professionals, |
|---|
| 339 | | - | 11.13provided that each service provider is authorized to do business in the state; |
|---|
| 340 | | - | 11.14 (16) to interpret the program's governing documents and this chapter and make all other |
|---|
| 341 | | - | 11.15decisions necessary to administer the program; |
|---|
| 342 | | - | 11.16 (17) to conduct comprehensive employer and worker education and outreach regarding |
|---|
| 343 | | - | 11.17the program that reflect the cultures and languages of the state's diverse workforce population, |
|---|
| 344 | | - | 11.18which may, in the board's discretion, include collaboration with state and local government |
|---|
| 345 | | - | 11.19agencies, community-based and nonprofit organizations, foundations, vendors, and other |
|---|
| 346 | | - | 11.20entities deemed appropriate to develop and secure ongoing resources; and |
|---|
| 347 | | - | 11.21 (18) to prepare notices for delivery to covered employees regarding the escalation |
|---|
| 348 | | - | 11.22schedule and to each covered employee before the covered employee is subject to an |
|---|
| 349 | | - | 11.23automatic contribution increase. |
|---|
| 350 | | - | 11.24 Subd. 9.Rules.The board of directors is authorized to adopt rules as necessary to |
|---|
| 351 | | - | 11.25implement this chapter. |
|---|
| 352 | | - | 11.26 Subd. 10.Conflict of interest; economic interest statement.No member of the board |
|---|
| 353 | | - | 11.27may participate in deliberations or vote on any matter before the board that will or is likely |
|---|
| 354 | | - | 11.28to result in direct, measurable economic gain to the member or the member's family. Members |
|---|
| 355 | | - | 11.29of the board shall file with the Campaign Finance and Public Disclosure Board an economic |
|---|
| 356 | | - | 11.30interest statement in a manner as prescribed by section 10A.09, subdivisions 5 and 6. |
|---|
| 357 | | - | 11Sec. 6. |
|---|
| 358 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 12.1 Sec. 7. [187.09] FIDUCIARY DUTY; STANDARD OF CARE. |
|---|
| 255 | + | 8.30 (1) to appoint an executive director, determine the duties of the executive director, and |
|---|
| 256 | + | 8.31set the compensation of the executive director; |
|---|
| 257 | + | 8Sec. 7. |
|---|
| 258 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 9.1 (2) to establish secure processes for enrolling covered employees in the program and |
|---|
| 259 | + | 9.2for transmitting employee and employer contributions to accounts within the trust; |
|---|
| 260 | + | 9.3 (3) to prepare a budget and establish procedures for the payment of costs of administering |
|---|
| 261 | + | 9.4and operating the program; |
|---|
| 262 | + | 9.5 (4) to lease or otherwise procure office space and equipment necessary to operate the |
|---|
| 263 | + | 9.6program; |
|---|
| 264 | + | 9.7 (5) to procure insurance in connection with the property of the program and the activities |
|---|
| 265 | + | 9.8of the board, executive director, and other staff; |
|---|
| 266 | + | 9.9 (6) to determine the following: |
|---|
| 267 | + | 9.10 (i) any criteria for "covered employee" other than employment with a covered employer |
|---|
| 268 | + | 9.11under section 187.03, subdivision 5; |
|---|
| 269 | + | 9.12 (ii) contribution rates and an auto-escalation schedule under section 187.05, subdivision |
|---|
| 270 | + | 9.134; |
|---|
| 271 | + | 9.14 (iii) withdrawal and distribution options under section 187.05, subdivision 6; |
|---|
| 272 | + | 9.15 (iv) the default investment fund under section 187.06, subdivision 5; and |
|---|
| 273 | + | 9.16 (v) penalties for failure to timely transmit contributions and for failure to enroll covered |
|---|
| 274 | + | 9.17employees under section 187.07, subdivisions 1 and 2, respectively; |
|---|
| 275 | + | 9.18 (7) to keep annual administrative fees, costs, and expenses as low as possible: |
|---|
| 276 | + | 9.19 (i) except that any administrative fee assessed against the accounts of covered employees |
|---|
| 277 | + | 9.20may not exceed a reasonable amount relative to the fees charged by auto-IRA or defined |
|---|
| 278 | + | 9.21contribution programs of similar size in the state of Minnesota or another state; and |
|---|
| 279 | + | 9.22 (ii) the fee may be asset-based, flat fee, or a hybrid combination of asset-based and flat |
|---|
| 280 | + | 9.23fee; |
|---|
| 281 | + | 9.24 (8) to determine the eligibility of an employer, employee, or other individual to participate |
|---|
| 282 | + | 9.25in the program and review and decide claims for benefits and make factual determinations; |
|---|
| 283 | + | 9.26 (9) to prepare information regarding the program that is clear and concise for |
|---|
| 284 | + | 9.27dissemination to all covered employees and includes the following: |
|---|
| 285 | + | 9.28 (i) the benefits and risks associated with participating in the program; |
|---|
| 286 | + | 9.29 (ii) procedures for enrolling in the program and opting out of the program, electing a |
|---|
| 287 | + | 9.30different or zero percent employee contribution rate, making investment elections, applying |
|---|
| 288 | + | 9.31for a distribution of employee accounts, and making a claim for benefits; |
|---|
| 289 | + | 9Sec. 7. |
|---|
| 290 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 10.1 (iii) the federal and state income tax consequences of participating in the program, which |
|---|
| 291 | + | 10.2may consist of or include the disclosure statement required to be distributed by retirement |
|---|
| 292 | + | 10.3plan trustees or custodians under the Internal Revenue Code and the Treasury Regulations |
|---|
| 293 | + | 10.4thereunder; |
|---|
| 294 | + | 10.5 (iv) how to obtain additional information on the program; and |
|---|
| 295 | + | 10.6 (v) disclaimers of covered employer and state responsibility, including the following |
|---|
| 296 | + | 10.7statements: |
|---|
| 297 | + | 10.8 (A) covered employees seeking financial, investment, or tax advice should contact their |
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| 298 | + | 10.9own advisors; |
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| 299 | + | 10.10 (B) neither covered employers nor the state of Minnesota are liable for decisions covered |
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| 300 | + | 10.11employees make regarding their account in the program; |
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| 301 | + | 10.12 (C) neither a covered employer nor the state of Minnesota guarantees the accounts in |
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| 302 | + | 10.13the program or any particular investment rate of return; and |
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| 303 | + | 10.14 (D) neither a covered employer nor the state of Minnesota monitors or has an obligation |
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| 304 | + | 10.15to monitor any covered employee's eligibility under the Internal Revenue Code to make |
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| 305 | + | 10.16contributions to an account in the program, or whether the covered employee's contributions |
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| 306 | + | 10.17to an account in the program exceed the maximum permissible contribution under the |
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| 307 | + | 10.18Internal Revenue Code; |
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| 308 | + | 10.19 (10) to publish an annual financial report, prepared according to generally accepted |
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| 309 | + | 10.20accounting principles, on the operations of the program, which must include but not be |
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| 310 | + | 10.21limited to costs attributable to the use of outside consultants, independent contractors, and |
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| 311 | + | 10.22other persons who are not state employees and deliver the report to the chairs and ranking |
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| 312 | + | 10.23minority members of the legislative committees with jurisdiction over jobs and economic |
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| 313 | + | 10.24development and state government finance, the executive directors of the State Board of |
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| 314 | + | 10.25Investment and the Legislative Commission on Pensions and Retirement, and the Legislative |
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| 315 | + | 10.26Reference Library; |
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| 316 | + | 10.27 (11) to publish an annual report regarding plan outcomes, progress toward savings goals |
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| 317 | + | 10.28established by the board, statistics on covered employees and participating employers, plan |
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| 318 | + | 10.29expenses, estimated impact of the program on social safety net programs, and penalties and |
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| 319 | + | 10.30violations and deliver the report to the chairs and ranking minority members of the legislative |
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| 320 | + | 10.31committees with jurisdiction over jobs and economic development and state government |
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| 321 | + | 10.32finance, the executive directors of the State Board of Investment and the Legislative |
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| 322 | + | 10.33Commission on Pensions and Retirement, and the Legislative Reference Library; |
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| 323 | + | 10Sec. 7. |
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| 324 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 11.1 (12) to adopt rules to implement the program; |
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| 325 | + | 11.2 (13) to file all reports required under the Internal Revenue Code or chapter 290; |
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| 326 | + | 11.3 (14) to, at the board's discretion, seek and accept gifts, grants, and donations to be used |
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| 327 | + | 11.4for the program, unless such gifts, grants, or donations would result in a conflict of interest |
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| 328 | + | 11.5relating to the solicitation of service provider for program administration, and deposit such |
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| 329 | + | 11.6gifts, grants, or donations in the Secure Choice administrative fund; |
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| 330 | + | 11.7 (15) to, at the board's discretion, seek and accept appropriations from the state of |
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| 331 | + | 11.8Minnesota or loans from the state or any agency of the state; |
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| 332 | + | 11.9 (16) to assess the feasibility of partnering with another state or a governmental subdivision |
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| 333 | + | 11.10of another state to administer the program through shared administrative resources and, if |
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| 334 | + | 11.11determined beneficial, enter into contracts, agreements, memoranda of understanding, or |
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| 335 | + | 11.12other arrangements with any other state or an agency or subdivision of any other state to |
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| 336 | + | 11.13administer, operate, or manage any part of the program, which may include combining |
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| 337 | + | 11.14resources, investments, or administrative functions; |
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| 338 | + | 11.15 (17) to hire, retain, and terminate third-party service providers as the board deems |
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| 339 | + | 11.16necessary or desirable for the program, including but not limited to the trustees, consultants, |
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| 340 | + | 11.17investment managers or advisors, custodians, insurance companies, recordkeepers, |
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| 341 | + | 11.18administrators, consultants, actuaries, legal counsel, auditors, and other professionals, |
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| 342 | + | 11.19provided that each service provider is authorized to do business in the state of Minnesota; |
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| 343 | + | 11.20 (18) to interpret the program's governing documents and this chapter and make all other |
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| 344 | + | 11.21decisions necessary to administer the program; and |
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| 345 | + | 11.22 (19) to conduct comprehensive worker education and outreach regarding the program |
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| 346 | + | 11.23that reflect the cultures and languages of the state's diverse workforce population, which |
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| 347 | + | 11.24may, in the board's discretion, include collaboration with state and local government agencies, |
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| 348 | + | 11.25community-based and nonprofit organizations, foundations, vendors, and other entities |
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| 349 | + | 11.26deemed appropriate to develop and secure ongoing resources. |
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| 350 | + | 11.27 Subd. 9.Conflict of interest; economic interest statement.No member of the board |
|---|
| 351 | + | 11.28may participate in deliberations or vote on any matter before the board that will or is likely |
|---|
| 352 | + | 11.29to result in direct, measurable economic gain to the member or the member's family. Members |
|---|
| 353 | + | 11.30of the board shall file with the Campaign Finance and Public Disclosure Board an economic |
|---|
| 354 | + | 11.31interest statement in a manner as prescribed by section 10A.09, subdivisions 5 and 6. |
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| 355 | + | 11Sec. 7. |
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| 356 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 12.1 Sec. 8. [187.09] FIDUCIARY DUTY; STANDARD OF CARE. |
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| 383 | | - | 12.26 (b) The commissioner of administration must provide office space in the Capitol complex |
|---|
| 384 | | - | 12.27for the executive director and staff of the program. |
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| 385 | | - | 12Sec. 9. |
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| 386 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD 13.1 Sec. 10. MINNESOTA SECURE CHOICE RETIREMENT PROGRAM; START |
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| 387 | | - | 13.2OF OPERATIONS. |
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| 388 | | - | 13.3 Subdivision 1.Program start; phasing.(a) The board of directors of the Minnesota |
|---|
| 389 | | - | 13.4Secure Choice retirement program must begin operation of the secure choice retirement |
|---|
| 390 | | - | 13.5program under Minnesota Statutes, section 187.05, by January 1, 2025. |
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| 391 | | - | 13.6 (b) The board of directors must open the program in phases, and the last phase must be |
|---|
| 392 | | - | 13.7opened no later than two years after the opening of the first phase. |
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| 393 | | - | 13.8 Subd. 2.Board appointments; first meeting.Appointing authorities must make |
|---|
| 394 | | - | 13.9appointments to the board of directors under Minnesota Statutes, section 187.08, by January |
|---|
| 395 | | - | 13.1015, 2024. The Legislative Commission on Pensions and Retirement must designate one |
|---|
| 396 | | - | 13.11member of the board to convene the first meeting of the board of directors by March 1, |
|---|
| 397 | | - | 13.122024. At the first meeting, the board shall elect a chair. |
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| 398 | | - | 13.13Sec. 11. BOARD SUPPORT UNTIL APPOINTMENT OF EXECUTIVE DIRECTOR. |
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| 399 | | - | 13.14 With the assistance of the Legislative Coordinating Commission, the executive director |
|---|
| 400 | | - | 13.15of the Legislative Commission on Pensions and Retirement must: |
|---|
| 401 | | - | 13.16 (1) provide notice to members of the board regarding the first meeting of the board and |
|---|
| 402 | | - | 13.17work with the chair designated under Minnesota Statutes, section 187.08, subdivision 7, to |
|---|
| 403 | | - | 13.18determine the agenda and provide meeting support; and |
|---|
| 404 | | - | 13.19 (2) serve as the interim executive director to assist the board until the board completes |
|---|
| 405 | | - | 13.20the search, recruitment, and interview process and appoints the executive director under |
|---|
| 406 | | - | 13.21Minnesota Statutes, section 187.08, subdivision 8. |
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| 407 | | - | 13.22Sec. 12. TRANSFERS. |
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| 408 | | - | 13.23 $....... in fiscal year 2024 and $....... in fiscal year 2025 are transferred from the general |
|---|
| 409 | | - | 13.24fund to the Secure Choice administrative fund established under Minnesota Statutes, section |
|---|
| 410 | | - | 13.25187.06, to establish and administer the Secure Choice retirement program. The base for this |
|---|
| 411 | | - | 13.26transfer is $....... in fiscal year 2026, $....... in fiscal year 2027, and $0 in fiscal year 2028 |
|---|
| 412 | | - | 13.27and thereafter. |
|---|
| 413 | | - | 13.28Sec. 13. EFFECTIVE DATE. |
|---|
| 414 | | - | 13.29 Sections 1 to 4 and 6 to 12 are effective the day following final enactment. Section 5 is |
|---|
| 415 | | - | 13.30effective the day after the Secure Choice retirement program board of directors opens the |
|---|
| 416 | | - | 13.31Secure Choice retirement savings program for enrollment of covered employees. |
|---|
| 417 | | - | 13Sec. 13. |
|---|
| 418 | | - | S0413-2 2nd EngrossmentSF413 REVISOR BD |
|---|
| 381 | + | 12.26 (b) The commissioner of revenue, the commissioner of labor and industry, and any other |
|---|
| 382 | + | 12.27state agency must provide information and data on employees, employers, and corporations |
|---|
| 383 | + | 12.28doing business in the state of Minnesota, upon the request of the board or executive director. |
|---|
| 384 | + | 12.29The state agency providing the information or data may require that the board or executive |
|---|
| 385 | + | 12.30director comply with confidentiality requirements as a condition to providing such |
|---|
| 386 | + | 12.31information or data. |
|---|
| 387 | + | 12Sec. 10. |
|---|
| 388 | + | S0413-1 1st EngrossmentSF413 REVISOR BD 13.1 (c) The commissioner of administration must provide an office suite in the Capitol group |
|---|
| 389 | + | 13.2of buildings in which will reside the executive director and staff of the program. |
|---|
| 390 | + | 13.3 Sec. 11. [187.12] SEVERABILITY. |
|---|
| 391 | + | 13.4 If any provision of this chapter is found to be unconstitutional and void, the remaining |
|---|
| 392 | + | 13.5provisions of this chapter are valid. |
|---|
| 393 | + | 13.6 Sec. 12. BOARD SUPPORT UNTIL APPOINTMENT OF EXECUTIVE DIRECTOR. |
|---|
| 394 | + | 13.7 With the assistance of the Legislative Coordinating Commission, the executive director |
|---|
| 395 | + | 13.8of the Legislative Commission on Pensions and Retirement must: |
|---|
| 396 | + | 13.9 (1) provide notice to members of the board regarding the first meeting of the board and |
|---|
| 397 | + | 13.10work with the chair designated under Minnesota Statutes, section 187.08, subdivision 7, to |
|---|
| 398 | + | 13.11determine the agenda and provide meeting support; and |
|---|
| 399 | + | 13.12 (2) serve as the interim executive director to assist the board until the board completes |
|---|
| 400 | + | 13.13the search, recruitment, and interview process and appoints the executive director under |
|---|
| 401 | + | 13.14Minnesota Statutes, section 187.08, subdivision 8, clause (1). |
|---|
| 402 | + | 13.15Sec. 13. APPROPRIATION. |
|---|
| 403 | + | 13.16 $....... in fiscal year 2024 and $....... in fiscal year 2025 are appropriated from the general |
|---|
| 404 | + | 13.17fund to the Secure Choice administrative fund for the purpose of establishing and |
|---|
| 405 | + | 13.18administering the Secure Choice retirement program. |
|---|
| 406 | + | 13.19Sec. 14. EFFECTIVE DATE. |
|---|
| 407 | + | 13.20 Sections 1 to 5 and 7 to 13 are effective the day following final enactment. Section 6 is |
|---|
| 408 | + | 13.21effective the day after the Secure Choice retirement program board of directors opens the |
|---|
| 409 | + | 13.22Secure Choice retirement savings program for enrollment of covered employees. |
|---|
| 410 | + | 13Sec. 14. |
|---|
| 411 | + | S0413-1 1st EngrossmentSF413 REVISOR BD |
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