Minnesota Legislature
HF 1774
as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:54am
Bill Text Versions
| Engrossments | ||
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| Introduction | Posted on 03/16/2009 |
Current Version - as introduced
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A bill for an act
relating to retirement; amending deferred compensation plan provisions; defining
terms; regulating the state unclassified employees retirement program; regulating
data; amending Minnesota Statutes 2008, sections 352.965, subdivisions 2,
6; 352D.015, subdivision 9; 352D.02, by adding a subdivision; 352D.04,
subdivision 1; 352D.05, subdivision 3; 352D.06, subdivisions 1, 3; 352D.065,
subdivision 3; 352D.09, subdivisions 3, 7.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2008, section 352.965, subdivision 2, is amended to read:
Subd. 2.
Right to participate in deferred compensation plan.
At the request of an
officer or employee of the state, an officer or employee of a political subdivision, or an
employee covered by a retirement fund in section 356.20, subdivision 2, the appointing
authority shall defer the payment of part of the compensation of the public officer or
employee through payroll deduction. The amount to be deferred must be as provided in a
written agreement between the officer or employee and the public employernew text begin unless the
employer elects to automatically enroll participants in the deferred compensation plan,
and gives the employee a period of time to opt out of the plannew text end . The agreement must be
in a form specified by the executive director of the Minnesota State Retirement System
and must be consistent with the requirements for an eligible plan under federal and state
tax laws, regulations, and rulings.
Sec. 2.
Minnesota Statutes 2008, section 352.965, subdivision 6, is amended to read:
Subd. 6.
Plan administrative expenses.
(a) The reasonable and necessary
administrative expenses of the deferred compensation plan may be charged to plan
participants in the form of an annual fee, an asset-based fee, a percentage of the
contributions to the plan, or a combination thereof, as set forth in the plan document. The
executive director of the system at the direction of the board of directors shall establish
procedures to carry out this section including allocation of administrative costs of the plan
to participants. Processes and procedures shall be set forth in the plan document. Fees
cannot be charged on contributions and investment returns attributable to contributions
made to the Minnesota supplemental investment funds before July 1, 1992.
(b) The plan document must conform to federal and state tax laws, regulations, and
rulings, and is not subject to the Administrative Procedure Act.
(c) The executive director may contract with a third party to perform administrative
and record keeping functions. The executive director may solicit bids and negotiate such
contracts.new text begin Participating employers must provide the necessary data to the third-party
administrator as determined by the executive director. Employers may also provide data
on eligible participants who have not yet elected to participate in order to facilitate
electronic enrollment. The third-party record keeper and the Minnesota State Retirement
System shall follow the data privacy provisions under chapter 13. The third-party record
keeper may not solicit participants for any product or services not related to the deferred
compensation plan.
new text end
(d) The board of directors may authorize a third-party investment consultant to
provide investment information and advice, provided that the offering of such information
and advice is consistent with the investment advice requirements applicable to private
plans under Title VI, subtitle A, of the Pension Protection Act of 2006, Public Law
109-280, section 601.
Sec. 3.
Minnesota Statutes 2008, section 352D.015, subdivision 9, is amended to read:
Subd. 9.
Value.
"Value" means deleted text begin cash value at the end of the month following receipt
of an application. If no application is required, "value" means the cash value at the end
of the month in which the event necessitating the transfer occursdeleted text end new text begin the value the account
calculated at the end of the most recent United States investment market daynew text end .
Sec. 4.
Minnesota Statutes 2008, section 352D.02, is amended by adding a subdivision
to read:
new text begin Subd. 7. new text end
new text begin Use of outside record keeper. new text end
new text begin
Employers shall provide the data to a
third-party record keeper selected by the Minnesota State Retirement System Board of
Directors as deemed necessary by the executive director to administer the unclassified
program. The Minnesota State Retirement System and the third-party record keeper are
required to follow the data privacy provisions under chapter 13. The Minnesota State
Retirement System and the third-party record keeper are not allowed to solicit any other
products not offered by the Minnesota State Retirement System.
new text end
Sec. 5.
Minnesota Statutes 2008, section 352D.04, subdivision 1, is amended to read:
Subdivision 1.
Investment options.
(a) A person exercising an option to participate
in the retirement program provided by this chapter may elect to purchase shares in one or
a combination of the income share account, the growth share account, the international
share account, the money market account, the bond market account, the fixed interest
account, or the common stock index account established in section 11A.17. The person
may elect to participate in one or more of the investment accounts in the fund by
specifying, deleted text begin on a form provideddeleted text end new text begin in a manner prescribednew text end by the executive director, the
percentage of the person's contributions provided in subdivision 2 to be used to purchase
shares in each of the accounts.
(b) A participant may deleted text begin indicate in writing on forms provideddeleted text end new text begin , in a manner prescribednew text end
by the Minnesota State Retirement System deleted text begin a choice of optionsdeleted text end new text begin , choose their investment
allocationnew text end for subsequent purchases of shares. Until a different written indication is made
by the participant, the executive director shall purchase shares in the supplemental fund
as selected by the participant. If no initial option is chosen, 100 percent income shares
must be purchased for a participant. A change in choice of investment option is effective
deleted text begin no later than the first pay date first occurring after 30 days following the receipt of the
request for a changedeleted text end new text begin at the end of the most recent United States investment market daynew text end .
deleted text begin
(c) Shares in the fixed interest account attributable to any guaranteed investment
contract as of July 1, 1994, may not be withdrawn from the fund or transferred to another
account until the guaranteed investment contract has expired, unless the participant
qualifies for withdrawal under section 352D.05 or for benefit payments under sections
352D.06 to 352D.075.
deleted text end
deleted text begin (d)deleted text end new text begin (c)new text end A participant or former participant may also change the investment options
selected for all or a portion of the participant's shares previously purchased in accounts,
subject to the deleted text begin provisions of paragraph (c) concerning the fixed interest account. Changes
in investment options for the participant's shares must be effected as soon as cash flow to
an account practically permits, but not later than six months after the requested changedeleted text end new text begin
trading restrictions imposed on the investment optionnew text end .
Sec. 6.
Minnesota Statutes 2008, section 352D.05, subdivision 3, is amended to read:
Subd. 3.
Full or partial withdrawal.
After termination of covered employment
or at any time thereafter, a participant is entitled, upon application, to withdraw the cash
value of the participant's total shares or leave such shares on deposit with the supplemental
retirement fund. The account is valued at the end of the deleted text begin month in whichdeleted text end new text begin most recent
United States investment market day following receipt of thenew text end application for withdrawal is
made. Shares not withdrawn remain on deposit with the supplemental retirement fund
until the former participant becomes at least 55 years old, and applies for an annuity under
section 352D.06, subdivision 1.
Sec. 7.
Minnesota Statutes 2008, section 352D.06, subdivision 1, is amended to read:
Subdivision 1.
Annuity; reserves.
When a participant attains at least age 55,
terminates from covered service, and applies for a retirement annuity, the cash value of
the participant's shares shall be transferred to the deleted text begin Minnesota postretirement investment
fund anddeleted text end new text begin supplemental fixed interest account and shall benew text end used to provide an annuity for
the retired employee based upon the participant's age when the benefit begins to accrue
according to the reserve basis used by the general state employees retirement plan in
determining pensions and reserves.
Sec. 8.
Minnesota Statutes 2008, section 352D.06, subdivision 3, is amended to read:
Subd. 3.
Accrual date.
An annuity under this section accrues the deleted text begin first day of the
first full month after an application is received or the day following termination of state
service, whichever is later. The account must be valued and redeemed on the later of the
end of the month of termination of covered employment, or the end of the month of receipt
of the annuity application for the purpose of computing the annuitydeleted text end new text begin day following receipt
of the application or the day following termination, whichever is later. The benefit will be
based on the value of the account the day following receipt of the application or the date of
termination, whichever is later, plus any contributions and interest received after that datenew text end .
Sec. 9.
Minnesota Statutes 2008, section 352D.065, subdivision 3, is amended to read:
Subd. 3.
Annuity payment.
The annuity payable under this section shall begin to
accrue the first day of the month following the date of disability and shall be based on
the participant's age when the annuity begins to accrue. The shares shall be valued as of
the deleted text begin end of the month following authorization of paymentsdeleted text end new text begin day following receipt of the
application or the day after termination, whichever is later, plus any contributions and
interest received after that datenew text end .
Sec. 10.
Minnesota Statutes 2008, section 352D.09, subdivision 3, is amended to read:
Subd. 3.
Prospectus.
The executive director shall annually deleted text begin distributedeleted text end new text begin make
availablenew text end the prospectus prepared by the supplemental fund, by July 1 or when received
from such fund, whichever is later, to each participant in covered employment.
Sec. 11.
Minnesota Statutes 2008, section 352D.09, subdivision 7, is amended to read:
Subd. 7.
Administrative fees.
The board of directors shall establish a budget
and charge participants a fee to pay the administrative expenses of the unclassified
program. Fees cannot be charged on contributions and investment returns attributable to
contributions made before July 1, 1992. deleted text begin Annual total fees charged for plan administration
cannot exceed 10/100 of one percent of the contributions and investment returns
attributable to contributions made on or after July 1, 1992.
deleted text end