SF 4904
Introduction - 94th Legislature (2025 - 2026)
Posted on 04/14/2026 09:25 a.m.
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A bill for an act
relating to retirement; requiring the commissioner of management and budget to
establish a program allowing state employees to contribute to a Launch Account
and have employer matching contributions to the Minnesota deferred compensation
plan be redirected for deposit in a Launch Account; proposing coding for new law
in Minnesota Statutes, chapter 43A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[43A.51] LAUNCH ACCOUNT CONTRIBUTION PROGRAM.
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new text begin Subdivision 1. new text end
new text begin Citation. new text end
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This section shall be known and may be cited as the "Launch
Account Contribution Program Act."
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new text begin Subd. 2. new text end
new text begin Definitions. new text end
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(a) For purposes of this section:
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(1) the following terms have the meanings given unless the language or context clearly
indicates that a different meaning is intended; and
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(2) a term defined in section 43A.02 has the same meaning given in that section unless
the term is defined in this subdivision.
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(b) "Deferred compensation plan" means the Minnesota deferred compensation plan
established in section 352.965.
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(c) "Employer matching contribution" means a contribution made by a state employee's
employer to the employee's deferred compensation plan account that matches the employee's
contribution to the employee's deferred compensation plan account as permitted by the
employer's personnel policy or collective bargaining agreement between the employer and
the exclusive representative of the state employee.
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(d) "Launch Account" means an account established under section 530A of the Internal
Revenue Code.
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(e) "Pilot program contribution" means a contribution made to a Launch Account under
section 6434 of the Internal Revenue Code.
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(f) "Program" means the Launch Account contribution program.
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new text begin Subd. 3. new text end
new text begin Statement of purpose. new text end
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(a) The purpose of the program is to provide a means
for a state employee to voluntarily contribute a portion of the employee's compensation or
direct the employer matching contribution to a Launch Account or Launch Accounts.
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(b) The state creates and establishes the "Launch Account contribution program" for
state employees to save for a child's financial future for the following reasons:
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(1) encouraging long-term savings for the benefit of dependent children strengthens
family financial security, supports the economic stability of the state, and complements
existing employee retirement and deferred compensation programs; and
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(2) permitting employees to allocate a portion of their compensation and employer
matching contribution toward a Launch Account promotes financial literacy and
intergenerational wealth without additional state expenditure.
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new text begin Subd. 4. new text end
new text begin Program establishment. new text end
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(a) No later than July 4, 2026, the commissioner must
establish and maintain the program whereby a state employee may:
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(1) voluntarily contribute a portion of the employee's compensation to a Launch Account;
and
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(2) direct any or all of the employer matching contribution that would have been
contributed to the state employee's deferred compensation plan account to a Launch Account.
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(b) The commissioner must adopt and amend a written plan document specifying the
rules, terms, and conditions of the program.
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(c) The program must be uniformly available to all state employees.
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(d) The program must comply with the requirements of sections 128 and 530A of the
Internal Revenue Code and the applicable Internal Revenue Service regulations.
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new text begin Subd. 5. new text end
new text begin Opening a Launch Account. new text end
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(a) Before contributions under the program can
be made, a Launch Account must be opened.
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(b) A Launch Account is opened by making an election on Internal Revenue Service
Form 4547 or through an online tool or application on the Launch Account website.
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(c) If an election to open an initial Launch Account is not being made at the same time
as the election to receive a pilot program contribution, the individual authorized to open the
initial Launch Account must be a legal guardian, parent, adult sibling, or grandparent of the
child, in that order of priority. If multiple individuals have the same highest level of priority
and no prior election has been made for the child, any individual with that level of priority
may make the election.
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(d) If an election to open the initial Launch Account is being made at the same time as
an election to receive a pilot program contribution, the individual authorized to open the
initial Launch Account is the individual who anticipates that the child will be the individual's
qualifying child, as defined in section 152 of the Internal Revenue Code, for the tax year
in which the election is made.
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new text begin Subd. 6. new text end
new text begin Contributions. new text end
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(a) The amount of an employer matching contribution that a
state employee elects to redirect to a Launch Account must be provided in an agreement
between the state employee and the employee's employer. The agreement must be in a
format specified by the commissioner.
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(b) The amount a state employee elects to contribute to a Launch Account as a payroll
deduction must be provided in an agreement between the state employee and the employee's
employer. The agreement must be in a format specified by the commissioner.
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(c) The amount an employee contributes under paragraph (b) is voluntary and not
considered employer contributions.
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(d) A state employee may reduce the amount the state employee is contributing to the
state employee's deferred compensation plan account to contribute to a Launch Account.
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(e) Contributions must be credited to the Launch Account or Launch Accounts designated
by the state employee.
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(f) The amount contributed by a state employee or the employee's employer must not
exceed the annual contribution limit as governed by section 530A(c)(2) of the Internal
Revenue Code.
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(g) The commissioner must allow for contributions to be made within the existing payroll
systems.
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new text begin Subd. 7. new text end
new text begin Treatment of employer contributions. new text end
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(a) Contributions paid to a Launch
Account pursuant to section 128 of the Internal Revenue Code are not includable in the
state employee's income.
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(b) The employer matching contribution that a state employee elects to direct to a Launch
Account is not considered compensation for purposes of retirement annuity calculations
under chapter 352.
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new text begin Subd. 8. new text end
new text begin Administration and reporting. new text end
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(a) The commissioner may adopt rules necessary
to coordinate program implementation with the Department of Revenue and the Internal
Revenue Service to ensure compliance with any contribution limits and reporting
requirements.
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(b) The commissioner must ensure that the program leverages existing payroll and
deferred compensation plan systems, as applicable, to minimize administrative costs.
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new text begin EFFECTIVE DATE. new text end
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This section is effective the day following final enactment.
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