Minnesota Legislature
SF 1713
as introduced - 88th Legislature (2013 - 2014) Posted on 02/26/2014 08:38am
Current Version - as introduced
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A bill for an act
relating to retirement; revising investment authority for various defined
contribution plans or programs; authorizing the State Board of Investment to
revise, remove, or create investment options for the Minnesota supplemental
investment fund; expanding permissible investments under the unclassified
state employees retirement program, the public employees defined contribution
plan, the deferred compensation program, and the health care savings plan;
amending Minnesota Statutes 2012, sections 11A.17, subdivisions 1, 9; 352.965,
subdivision 4, by adding subdivisions; 352.98, subdivision 2, by adding a
subdivision; 352D.04, by adding subdivisions; 353D.05, subdivision 1, by
adding a subdivision; proposing coding for new law in Minnesota Statutes,
chapter 356; repealing Minnesota Statutes 2012, sections 11A.17, subdivision 4;
352.965, subdivision 5; 352D.04, subdivision 1; 353D.05, subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2012, section 11A.17, subdivision 1, is amended to read:
Subdivision 1.
Purpose; accounts; continuation.
(a) The purpose of the
supplemental investment fund is to provide an investment vehicle for the assets of various
public retirement plans and funds.
(b) deleted text begin The fund consists of eight investment accounts: an income share account, a
growth share account, an international share account, a money market account, a fixed
interest account, a bond market account, a common stock index account, and a volunteer
firefighter account.deleted text end new text begin The state board shall determine and make available investment
accounts within the supplemental investment fund. These accounts shall include an
appropriate array of diversified investment options for participants of the public retirement
plans under subdivision 5.
new text end
(c) The new text begin assets of the new text end supplemental investment fund deleted text begin is a continuation of the
supplemental retirement fund in existence on January 1, 1980deleted text end new text begin must be invested by the
state board in investments permitted under section 11A.24new text end .
new text begin
(d) The state board shall make available a volunteer firefighter account for the
voluntary statewide lump-sum volunteer firefighter retirement plan under section 353G.02.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 2.
Minnesota Statutes 2012, section 11A.17, subdivision 9, is amended to read:
Subd. 9.
Valuation of investment shares.
new text begin (a) new text end The value of deleted text begin investmentdeleted text end shares deleted text begin in
the income share account, the growth share account, the international share account,
the bond market account, and the common stock indexdeleted text end new text begin for each investment new text end accountnew text begin ,
excluding a money market account, new text end must be determined by dividing the total market
value of the securities constituting the respective account by the total number of shares
then outstanding in the investment account.
new text begin (b)new text end The value of deleted text begin investmentdeleted text end shares in deleted text begin thedeleted text end new text begin a new text end money market account deleted text begin and the fixed
interest account isdeleted text end new text begin must be valued at new text end $1 a share. deleted text begin Terms as to withdrawal schedules will be
agreed upon by the public retirement fund and the state board.
deleted text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 3.
Minnesota Statutes 2012, section 352.965, subdivision 4, is amended to read:
Subd. 4.
Plan investments.
(a) new text begin Available new text end investments deleted text begin under the plan may include:
deleted text end new text begin are those investments chosen by the State Board of Investment under section 356.645 for
the plan.
new text end
deleted text begin
(1) shares in the Minnesota supplemental investment fund established in section
11A.17 that are selected to be offered under the plan by the State Board of Investment;
deleted text end
deleted text begin
(2) saving accounts in federally insured financial institutions;
deleted text end
deleted text begin
(3) life insurance contracts, fixed annuity, and variable annuity contracts from
companies that are subject to regulation by the commissioner of commerce;
deleted text end
deleted text begin
(4) investment options from open-end investment companies registered under the
federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1
to 80a-64;
deleted text end
deleted text begin
(5) investment options from a firm that is a registered investment advisor under the
Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to 80b-21;
deleted text end
deleted text begin
(6) investment options of a bank as defined in United States Code, title 15, section
80b-2, subsection (a), paragraph (2), or a bank holding company as defined in the Bank
Holding Company Act of 1956, United States Code, title 12, section 1841, subsection
(a), paragraph (1); or
deleted text end
deleted text begin
(7) a combination of clause (1), (2), (3), (4), (5), or (6), as provided by the plan as
specified by the participant.
deleted text end
new text begin
(b) The state, the State Board of Investment and its executive director and staff,
the Minnesota State Retirement System Board and its executive director and staff, and
participating public employers are not liable and are not responsible for any investment
losses due to choices made by participants or due to default options.
new text end
deleted text begin
(b) All amounts contributed to the deferred compensation plan and all earnings
on those amounts must be held for the exclusive benefit of the plan participants and
beneficiaries. These amounts must be held in trust, in custodial accounts, or in qualifying
annuity contracts as required by federal law in accordance with section 356A.06,
subdivision 1. This subdivision does not authorize an employer contribution, except as
authorized in section 356.24, subdivision 1, paragraph (a), clause (5). The state, political
subdivision, or other employing unit is not responsible for any loss that may result from
investment of the deferred compensation.
deleted text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 4.
Minnesota Statutes 2012, section 352.965, is amended by adding a subdivision
to read:
new text begin Subd. 4a. new text end
new text begin Exclusive benefit. new text end
new text begin
All amounts contributed to the deferred compensation
plan and all earnings on those amounts must be held for the exclusive benefit of the plan
participants and beneficiaries. These amounts must be held in trust, in custodial accounts,
or in qualifying annuity contracts as required by federal law in accordance with section
356A.06, subdivision 1.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 5.
Minnesota Statutes 2012, section 352.965, is amended by adding a subdivision
to read:
new text begin Subd. 4b. new text end
new text begin Employer contribution prohibition. new text end
new text begin
Except as authorized in section
356.24, subdivision 1, clause (5), employer contributions are prohibited.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 6.
Minnesota Statutes 2012, section 352.98, is amended by adding a subdivision
to read:
new text begin Subd. 1a. new text end
new text begin Member investment responsibility. new text end
new text begin
The state, the State Board of
Investment and its executive director and staff, the Minnesota State Retirement System
Board and its executive director and staff, and participating public employers are not liable
and are not responsible for any investment losses due to choices made by participants
or due to default options.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 7.
Minnesota Statutes 2012, section 352.98, subdivision 2, is amended to read:
Subd. 2.
Contracting authorized.
new text begin (a) new text end The executive director shall administer
the plan and contract with public and private entities to provide investment services,
record keeping, benefit payments, and other functions necessary for the administration of
the plan. deleted text begin If allowed by
deleted text end
new text begin (b) As specified in section 356.645,new text end the deleted text begin Minnesotadeleted text end State Board of Investmentdeleted text begin , the
Minnesota State Board of Investment supplemental investment funds may be offered as
deleted text end new text begin shall determine an appropriate selection of new text end investment options deleted text begin underdeleted text end new text begin that shall be offered
by new text end the health care savings plan deleted text begin or plansdeleted text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 8.
Minnesota Statutes 2012, section 352D.04, is amended by adding a subdivision
to read:
new text begin Subd. 1a. new text end
new text begin State Board of Investment selection of investment products. new text end
new text begin
As
specified in section 356.645, the State Board of Investment shall select investment
products to be available to participants in the retirement program provided by this chapter.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 9.
Minnesota Statutes 2012, section 352D.04, is amended by adding a subdivision
to read:
new text begin Subd. 1b. new text end
new text begin Participant selection of investments. new text end
new text begin
(a) A program participant may
elect to participate in one or more of the investment products made available under the
program by specifying the percentage of the participant's contributions under subdivision
2 to be used to purchase shares in the applicable products.
new text end
new text begin
(b) Before making an allocation election, or if the participant fails to specify an
allocation, the executive director shall, on behalf of that participant, purchase shares
in a default investment alternative. The investment alternative must be specified by
the Minnesota State Retirement System Board from the available investment options
authorized under subdivision 1a.
new text end
new text begin
(c) A participant may revise the investment allocation for subsequent purchase of
shares, and a participant or former participant may also change the investment options
selected for all or a portion of shares previously purchased.
new text end
new text begin
(d) Any investment allocation selection authorized under this subdivision, whether
relating to subsequent purchases of new shares or reallocating the existing portfolio,
must be conducted at times and under procedures prescribed by the executive director.
Any allocation or allocation revisions are effective at the end of the most recent United
States investment market day, unless subject to trading restrictions imposed on certain
investment options.
new text end
new text begin
(e) The state, the State Board of Investment and its executive director and staff,
the Minnesota State Retirement System Board and its executive director and staff, and
participating public employers are not liable and are not responsible for any investment
losses due to choices made by participants or due to default options.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 10.
Minnesota Statutes 2012, section 353D.05, subdivision 1, is amended to read:
Subdivision 1.
Investment.
new text begin As further specified under this section, new text end employing unit
contributions, after the deduction of an amount for administrative expenses, and individual
participant contributions must be deleted text begin remitted todeleted text end new text begin invested in the participant's account or
accounts in investment products authorized by the association that are made available
for this purpose by new text end the State Board of Investment deleted text begin for investment in the Minnesota
supplemental investment fund established bydeleted text end new text begin under new text end section deleted text begin 11A.17deleted text end new text begin 356.645new text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 11.
Minnesota Statutes 2012, section 353D.05, is amended by adding a
subdivision to read:
new text begin Subd. 1a. new text end
new text begin Participant selection of investments. new text end
new text begin
(a) A plan participant may elect
to allocate contributions, made by and on behalf of the participant, in one or more of the
investment products authorized by the association to be made available under the plan,
by specifying the percentage of the participant's contributions to be used to purchase
shares in the authorized products.
new text end
new text begin
(b) If contributions are received before the participant has made an allocation
election, or if the participant fails to specify an allocation, the executive director shall,
on behalf of that participant, purchase shares in a default investment alternative. The
investment option must be specified by the Public Employees Retirement Association board
of trustees from the designated available investment options authorized under this section.
new text end
new text begin
(c) A participant may revise the investment allocation for subsequent purchase of
shares, and a participant or former participant may also change the investment options
selected for all or a portion of shares previously purchased.
new text end
new text begin
(d) Any investment allocation selection authorized under this subdivision, whether
relating to subsequent purchases of new shares or reallocating the existing portfolio, must
be conducted at times and under procedures prescribed by the executive director.
new text end
new text begin
(e) The state, the State Board of Investment and its executive director and staff, the
Public Employees Retirement Association board of trustees and its executive director and
staff, and participating public employers are not liable and are not responsible for any
investment losses due to choices made by participants or due to default options.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 12.
new text begin
[356.645] INVESTMENT OF VARIOUS DEFINED CONTRIBUTION
PLAN ASSETS.
new text end
new text begin
The State Board of Investment shall determine the investments to be made available
to plan participants in plans defined in sections 352.965, 352.98, and chapters 352D
and 353D. Investments made available to plan participants must include at least one or
all of the following:
new text end
new text begin
(1) shares in the Minnesota supplemental investment fund established in section
11A.17;
new text end
new text begin
(2) saving accounts in federally insured financial institutions;
new text end
new text begin
(3) life insurance contracts, fixed annuity contracts, and variable annuity contracts
from companies that are subject to regulation by the commissioner of commerce;
new text end
new text begin
(4) investment options from open-end investment companies registered under the
federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1
to 80a-64;
new text end
new text begin
(5) investment options from a firm that is a registered investment adviser under
the Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to
80b-21; and
new text end
new text begin
(6) investment options of a bank as defined in United States Code, title 15, section
80b-2, subsection (a), paragraph (2), or a bank holding company as defined in the Bank
Holding Company Act of 1956, United States Code, title 12, section 1841, subsection
(a), paragraph (1).
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end
Sec. 13. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2012, sections 11A.17, subdivision 4; 352.965, subdivision 5;
352D.04, subdivision 1; and 353D.05, subdivision 2,
new text end
new text begin
are repealed.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2014.
new text end