Minnesota Senate Bill SF413

Minnesota 2023-2024 Regular Session

• Introduced: 1/19/23
• Refer: 1/19/23
• Refer: 3/6/23
• Refer: 3/13/23
• Refer: 3/20/23

Caption

Minnesota Secure Choice Retirement Program Act

Impact

If passed, SF413 will have a significant impact on state laws governing retirement savings. It mandates that covered employers enroll their employees in the program and withhold the contributions unless employees opt out. This automatic enrollment feature is expected to significantly boost participation in retirement savings. Furthermore, the legislation outlines that the contributions can be made either on an after-tax (Roth IRA) or pretax basis, providing employees with flexibility in how they save.

Summary

SF413, known as the Minnesota Secure Choice Retirement Program Act, is designed to create a state-facilitated retirement savings program aimed at enhancing financial security for workers. This legislation establishes a board that will oversee the implementation of a program that allows employees to make payroll deductions into individual retirement accounts (IRAs). The program is particularly targeted at employees of small businesses that do not currently offer retirement plans, thereby promoting increased participation in retirement savings across the state.

Sentiment

The sentiment surrounding SF413 is generally positive among proponents who view it as a vital step toward addressing the savings crisis facing many Minnesotans. They argue that by facilitating this program, the state will help ensure that workers are better prepared for retirement. However, there are concerns expressed by some business groups who worry about the administrative burden this could place on small employers, who may struggle with compliance and managing payroll deductions.

Contention

Key points of contention include the mandate for employers to participate in the program and the potential fees that could be associated with administering the retirement accounts. Critics argue that the legislation could disproportionately affect small businesses that may already be operating on tight margins. Additionally, there are discussions around the fiduciary responsibilities outlined in the bill and the extent of liability that the state or employers would face concerning employee participation or contribution decisions.