HF 4656

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/20/2024 01:23pm

A bill for an act
relating to retirement; revising requirements for supplemental retirement plans;
allowing employer matching contributions on account of an employee's qualified
student loan payments under Secure 2.0; amending Minnesota Statutes 2022,
section 356.24, subdivision 3; Minnesota Statutes 2023 Supplement, section 356.24,
subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2023 Supplement, section 356.24, subdivision 1, is amended
to read:

Subdivision 1.

Restriction; exceptions.

It is unlawful for a school district or other
governmental subdivision or state agency to levy taxes for or to contribute public funds to
a supplemental pension or deferred compensation plan that is established, maintained, and
operated in addition to a primary pension program for the benefit of the governmental
subdivision employees other than:

(1) to a supplemental pension plan that was established, maintained, and operated before
May 6, 1971;

(2) to a plan that provides solely for group health, hospital, disability, or death benefits;

(3) to the individual retirement account plan established by chapter 354B;

(4) to a plan that provides solely for severance pay under section 465.72 to a retiring or
terminating employee;

(5) to a deferred compensation plan defined in subdivision 3;

(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges
and Universities and not covered by clause (5), to the supplemental retirement plan under
chapter 354C, if the supplemental plan coverage is provided for in a personnel policy or in
the collective bargaining agreement of the public employer with the exclusive representative
of the covered employees in an appropriate unit, in an amount matching employee
contributions on a dollar for dollar basis, but not to exceed an employer contribution of
$2,700 a year for each employee;

(7) to a supplemental plan or to a governmental trust to save for postretirement health
care expenses qualified for tax-preferred treatment under the Internal Revenue Code, if the
supplemental plan coverage is provided for in a personnel policy or in the collective
bargaining agreement of a public employer with the exclusive representative of the covered
employees in an appropriate unit;

(8) to the laborers national industrial pension fund or to a laborers local pension fund
for the employees of a governmental subdivision who are covered by a collective bargaining
agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of $10,000 per year per employee;

(9) to the plumbers and pipefitters national pension fund or to a plumbers and pipefitters
local pension fund for the employees of a governmental subdivision who are covered by a
collective bargaining agreement that provides for coverage by that fund and that sets forth
a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per
employee;

(10) to the international union of operating engineers pension fund for the employees
of a governmental subdivision who are covered by a collective bargaining agreement that
provides for coverage by that fund and that sets forth a fund contribution rate, but not to
exceed an employer contribution of $10,000 per year per employee;

(11) to the International Association of Machinists national pension fund for the
employees of a governmental subdivision who are covered by a collective bargaining
agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of $5,000 per year per employee;

(12) for employees of United Hospital District, Blue Earth, to the state of Minnesota
deferred compensation program, if the employee makes a contribution, in an amount that
does not exceed the total percentage of covered salary under section 353.27, subdivisions
3 and 3a;

(13) to the alternative retirement plans established by the Hennepin County Medical
Center under section 383B.914, subdivision 5; deleted text begin or
deleted text end

(14) to the International Brotherhood of Teamsters Central States pension plan for
fixed-route bus drivers employed by the St. Cloud Metropolitan Transit Commission who
are members of the International Brotherhood of Teamsters Local 638 by virtue of that
employment deleted text begin . deleted text end new text begin ; or
new text end

new text begin (15) to a supplemental plan organized and operated under the federal Internal Revenue
Code, as amended, that is wholly and solely funded by the employee's accumulated sick
leave, accumulated vacation leave, and accumulated severance pay.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2022, section 356.24, subdivision 3, is amended to read:

Subd. 3.

Deferred compensation plan.

(a) As used in this section:

(1) "deferred compensation plan" means a plan that satisfies the requirements of this
subdivision;

(2) "plan administrator" means the individual or entity defined as the plan administrator
in the plan document for the Minnesota deferred compensation plan under section 352.965
or a deferred compensation plan under section 457(b) of the Internal Revenue Code; and

(3) "vendor" means the provider of an annuity contract, custodial account, or retirement
income account under a tax-sheltered annuity plan under section 403(b) of the Internal
Revenue Code.

(b) The plan is:

(1) the Minnesota deferred compensation plan under section 352.965;

(2) a tax-sheltered annuity plan under section 403(b) of the Internal Revenue Code; or

(3) a deferred compensation plan under section 457(b) of the Internal Revenue Code.

(c) For each investment fund available to participants under the plan, other than in a
self-directed brokerage account, the plan administrator or vendor discloses at least annually
to participants a statement that sets forth (1) all fees, including administrative, maintenance,
and investment fees, that impact the rate of return on each investment fund available under
the plan, and (2) the rates of return for the prior one-, three-, five-, and ten-year periods or
for the life of the fund, if shorter, in an easily understandable document. The plan
administrator or vendor must file a copy of this statement with the executive director of the
Legislative Commission on Pensions and Retirement within 30 days of the end of each
fiscal year of the plan.

(d) Enrollment in the plan is provided for in:

(1) a personnel policy of the public employer;

(2) a collective bargaining agreement between the public employer and the exclusive
representative of public employees in an appropriate unit; or

(3) an individual employment contract new text begin (i) new text end between a city and a city manager new text begin or other
management employee, or (ii) between a school district and a superintendent or other
management employee new text end .

(e) The plan covers employees of a school district, state agency, or other governmental
subdivision. The plan may cover city managers covered by an alternative retirement
arrangement under section 353.028, subdivision 3, paragraph (a) or (b), but must not cover
employees of the Board of Trustees of Minnesota State Colleges and Universities who are
covered by the Higher Education Supplemental Retirement Plan under chapter 354C.

(f) deleted text begin Except as permitted under paragraph (g), public funds are contributed to the plan
only in an amount that matches deleted text end new text begin If the public employer makes matching contributions to the
plan, the matching contributions must match, on a dollar for dollar basis, new text end employee new text begin elective
deferral new text end contributions deleted text begin on a dollar for dollar basis deleted text end , deleted text begin but deleted text end not to exceed the lesser of (1) the
maximum authorized under the policy described in paragraph (d) that provides for enrollment
in the plan or program, or (2) one-half of the annual limit on elective deferrals under section
402(g) of the Internal Revenue Code. new text begin In lieu of or in addition to matching an employee's
elective deferral contributions, the public employer may make employer matching
contributions on behalf of an employee on account of qualified student loan payments, as
defined in the Secure 2.0 Act of 2022, Public Law 117-328 (December 29, 2022), Division
T, section 110, paragraph (b), and any regulations adopted thereunder. The employer
matching contributions on account of an employee's qualified student loan payments plus
any employer matching contributions that match an employee's elective deferral contributions
must not exceed, for the year, the lesser of (1) the maximum authorized under the policy
described in paragraph (d) that provides for enrollment in the plan or program, (2) one-half
of the annual limit on elective deferrals under section 402(g) of the Internal Revenue Code,
or (3) the employee's compensation for the year.
new text end

(g) Contributions to the plan may include contributions deducted from an employee's
sick leave, accumulated vacation leave, or accumulated severance pay, whether characterized
as employee contributions or nonelective employer contributions, up to applicable limits
under the Internal Revenue Code. Such contributions are not subject to the match requirement
and limit in paragraph (f).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end