SF 2359

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; various individual retirement account plans; revising
Minnesota State Colleges and Universities system tax-sheltered annuity
minimum vendor requirements; creating unclaimed account procedures for
the Minnesota State Colleges and Universities system individual retirement
account plan and supplemental plan; revising contribution rates for State Arts
Board and Minnesota Humanities Commission individual retirement account
plan members to equal those of Minnesota State Colleges and Universities
system individual retirement account plan; repealing obsolete higher education
mandatory retirement age provision; amending Minnesota Statutes 2004, sections
136F.45, subdivision 1a; 354B.20, by adding a subdivision; 354B.25, by adding
a subdivision; 354D.05; proposing coding for new law in Minnesota Statutes,
chapter 354C; repealing Minnesota Statutes 2004, section 43A.34, subdivision 1.

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

Section 1.

Minnesota Statutes 2004, section 136F.45, subdivision 1a, is amended to
read:

Subd. 1a.

Subsequent vendor contracts.

(a) The board may limit the number
of vendors under subdivision 1.

(b) In addition to any other tax-sheltered annuity program investment options, the
board may offer as an investment option the Minnesota supplemental investment fund
administered by the State Board of Investment under section 11A.17.

(c) For the tax-sheltered annuity program vendor contracts executed after July 1,
2000, The board shall actively solicit participation of and shall include as vendors lower
expense and "no-load" mutual funds or equivalent investment products as those terms are
defined by the federal Securities and Exchange Commission. To the extent possible, in
addition to a range of insurance annuity contract providers and other mutual fund provider
arrangements, the board must assure that no less than five insurance annuity providers
and no less than one nor more than three lower expense and "no-load" mutual funds or
equivalent investment products will be made available for direct-access by employee
participants. To the extent that offering a lower expense "no-load" product increases the
total necessary and reasonable expenses of the program and if the board is unable to
negotiate a rebate of fees from the mutual fund or equivalent investment product providers,
the board may charge the participants utilizing the lower expense "no-load" mutual fund
products a fee to cover those expenses. The participant fee may not exceed one percent
of the participant's annual contributions or $20 per participant per year, whichever is
greater. Any excess fee revenue generated under this subdivision must be reimbursed to
participant accounts in the manner provided in subdivision 3a.

Sec. 2.

Minnesota Statutes 2004, section 354B.20, is amended by adding a subdivision
to read:

Subd. 19.

Unclaimed plan account amounts.

"Unclaimed plan account amounts"
means the distributable accounts of any plan participant, surviving spouse, beneficiary, or
estate that the plan administrator is unable to locate in accordance with Internal Revenue
Service due diligence requirements.

Sec. 3.

Minnesota Statutes 2004, section 354B.25, is amended by adding a subdivision
to read:

Subd. 6.

Disposition of abandoned public pension amounts.

(a) Any unclaimed
plan account amounts are presumed to be abandoned, but are not subject to the provisions
of sections 345.31 to 345.60. If the account remains unclaimed after six months following
the date that the plan administrator first attempts to locate the former member, surviving
spouse, or other beneficiary, the unclaimed plan account amount cancels and must be
credited to the reserve account specified in paragraph (b).

(b) The board must establish a separate account to receive unclaimed plan account
amounts. A portion of this reserve account and any investment earnings attributable to
this reserve account are to be used to offset the reasonable and necessary expenses of
the individual retirement account plan, including costs incurred in efforts to locate lost
participants, surviving spouses, or other beneficiaries.

(c) If the unclaimed plan account amount exceeded $25 and the inactive member,
surviving spouse, or beneficiary, whichever is applicable, establishes a valid claim to the
forfeited account, the forfeited account is to be reestablished in an amount equal to the
amount originally forfeited. The board must ensure that the reserve account has sufficient
assets to cover any transfers needed to reestablish accounts. If reserve account assets are
insufficient to make a transfer, the board must cover any shortfall from other revenues.

Sec. 4.

[354C.155] UNCLAIMED PLAN ACCOUNT AMOUNTS.

Section 354B.25, subdivision 6, applies to the supplemental retirement plan.

Sec. 5.

Minnesota Statutes 2004, section 354D.05, is amended to read:

354D.05 CONTRIBUTIONS.

Subdivision 1.

Member contributions.

Eligible employees (a) Participants in the
individual retirement account plan who are specified in section 354D.02, subdivision 2,
clause (1) or (2), and who would otherwise be eligible to participate in the members of a
Minnesota State Retirement System, the Public Employees Retirement Association, or the
Teachers Retirement Association plan, but who participate in the individual retirement
account plan, shall make a member contribution in an amount equal to the member
contribution amount required by the plan for which the individual was originally eligible
for membership. The contribution as specified in section 354B.23, subdivision 1.

(b) For individual retirement account plan members specified in section 354D.02,
subdivision 2, clause (3), the member contribution is the employee contribution specified
in applicable law for the Minnesota State Retirement System, Public Employees
Retirement Association, or Teachers Retirement Association plan in which the individual
would otherwise be a member.

(c) Contributions under this subdivision must be made by payroll deduction each
pay period and must be in accordance with either section 403(b) or 414(h) of the Internal
Revenue Code.

Subd. 2.

Employer contributions.

(a) The employer of eligible employees an
employee described in subdivision 1 who are eligible to participate in either the Minnesota
State Retirement System or the Public Employees Retirement Association shall, paragraph
(a), must make an employer contribution to the employee's individual retirement account
plan in an amount equal to the employer contribution amount required by the plan for
which the individual was originally eligible for membership account as specified in section
354B.23, subdivisions 3 and 4.

(b) The employer of eligible employees an employee described in subdivision 1
who are eligible to participate in the Teachers Retirement Association shall, paragraph
(b), must make an employer contribution to the employee's individual retirement account
plan in an amount account equal to the employer contribution including, if applicable,
any employer additional contribution required by section 354.42, subdivision 3, and
shall make an employer contribution to the applicable plan law for the Minnesota State
Retirement System, Public Employees Retirement Association, or Teachers Retirement
Association in an amount equal to which the employer contribution required by section
354.42, subdivision 5 individual would otherwise be a member.

Sec. 6. REPEALER.

Minnesota Statutes 2004, section 43A.34, subdivision 1, is repealed.

Sec. 7. EFFECTIVE DATE.

Sections 1 to 6 are effective the day following final enactment. Any contribution
rate changes due to section 5 commence as of the start of the first full payroll period
beginning after the effective date.