SF 1545

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; revising selection 
  1.3             requirements for section 403(b) of the Internal 
  1.4             Revenue Code annuity service providers; making 
  1.5             technical changes; amending Minnesota Statutes 1996, 
  1.6             section 356.24, subdivision 1. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1996, section 356.24, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] (a) It is 
  1.11  unlawful for a school district or other governmental subdivision 
  1.12  or state agency to levy taxes for, or contribute public funds to 
  1.13  a supplemental pension or deferred compensation plan that is 
  1.14  established, maintained, and operated in addition to a primary 
  1.15  pension program for the benefit of the governmental subdivision 
  1.16  employees other than: 
  1.17     (1) to a supplemental pension plan that was established, 
  1.18  maintained, and operated before May 6, 1971; 
  1.19     (2) to a plan that provides solely for group health, 
  1.20  hospital, disability, or death benefits; 
  1.21     (3) to the individual retirement account plan established 
  1.22  by chapter 354B; 
  1.23     (4) to a plan that provides solely for severance pay under 
  1.24  section 465.72 to a retiring or terminating employee; 
  1.25     (5) for employees other than personnel employed by the 
  1.26  state university board or the community college board and board 
  2.1   of trustees of the Minnesota state colleges and universities 
  2.2   covered by the board of trustees of the Minnesota state colleges 
  2.3   and universities supplemental retirement plan under chapter 
  2.4   354C, if provided for in a personnel policy of the public 
  2.5   employer or in the collective bargaining agreement between the 
  2.6   public employer and the exclusive representative of public 
  2.7   employees in an appropriate unit, in an amount matching employee 
  2.8   contributions on a dollar for dollar basis, but not to exceed an 
  2.9   employer contribution of $2,000 a year per employee; 
  2.10     (i) to the state of Minnesota deferred compensation plan 
  2.11  under section 352.96; or 
  2.12     (ii) in payment of the applicable portion of the premium on 
  2.13  a tax-sheltered annuity contract qualified under section 403(b) 
  2.14  of the Internal Revenue Code, if purchased from a qualified 
  2.15  insurance company, and if the employing unit has complied with 
  2.16  any applicable pension plan provisions of the Internal Revenue 
  2.17  Code with respect to the tax-sheltered annuity program during 
  2.18  the preceding calendar year; or 
  2.19     (6) for personnel employed by the state university board or 
  2.20  the community college board board of trustees of the Minnesota 
  2.21  state colleges and universities and not covered by clause (5), 
  2.22  to the supplemental retirement plan under chapter 354C, if 
  2.23  provided for in a personnel policy or in the collective 
  2.24  bargaining agreement of the public employer with the exclusive 
  2.25  representative of the covered employees in an appropriate unit, 
  2.26  in an amount matching employee contributions on a dollar for 
  2.27  dollar basis, but not to exceed an employer contribution of 
  2.28  $2,000 a year for each employee.  
  2.29     (b) A qualified insurance company is a company that: 
  2.30     (1) meets the definition in section 60A.02, subdivision 4; 
  2.31     (2) is licensed to engage in life insurance or annuity 
  2.32  business in the state; 
  2.33     (3) is determined by the commissioner of commerce to have a 
  2.34  rating within the top two rating categories by a recognized 
  2.35  national rating agency or organization that regularly rates 
  2.36  insurance companies or to have a risk-based capital ratio of at 
  3.1   least 300 percent; and 
  3.2      (4) guarantees that the company will pay any penalty and 
  3.3   interest on any additional tax assessed by the Internal Revenue 
  3.4   Service or any state or local tax authority resulting from any 
  3.5   error by the company in computing maximum permissible 
  3.6   contributions to tax-sheltered annuity contracts; 
  3.7      (5) agrees to hold harmless and indemnify the employer and 
  3.8   its officers and employees from all claims and liabilities due 
  3.9   to failure of the purchased annuities to comply with all 
  3.10  requirements of section 403(b) of the Internal Revenue Code 
  3.11  regarding form, distributions, and loans, and for any act or 
  3.12  omission by the company, its employees, or agents, which 
  3.13  constitutes negligence or willful misconduct; and 
  3.14     (4) (6) is determined by the state board of investment to 
  3.15  be among the ten applicant insurance companies with competitive 
  3.16  options and investment returns on annuity products. 
  3.17     (c) The state board of investment determination under 
  3.18  paragraph (b) must be made on or before January 1, 1993, and 
  3.19  must be reviewed periodically.  The state board of investment 
  3.20  may retain actuarial services to assist it in this determination 
  3.21  and in its periodic review.  The state board of investment may 
  3.22  annually establish a budget for its costs in any determination 
  3.23  and periodic review processes.  The state board of investment 
  3.24  may charge a proportional share of all costs related to the 
  3.25  periodic review to those companies currently under contract and 
  3.26  may charge a proportional share of all costs related to 
  3.27  soliciting and evaluating bids in a determination process to 
  3.28  each company selected by the state board of investment.  All 
  3.29  contracts must be approved before execution by the state board 
  3.30  of investment.  The state board of investment shall establish 
  3.31  policies and procedures under section 11A.04, clause (2), to 
  3.32  carry out this paragraph. 
  3.33     (c) (d) A personnel policy for unrepresented employees or a 
  3.34  collective bargaining agreement may establish limits on the 
  3.35  number of vendors under paragraph (b), clause (5) (6), that it 
  3.36  will utilize and conditions under which the vendors may contact 
  4.1   employees both during working hours and after working hours.