SF 2839

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; various retirement plans; regulating the creation and
operation of liquidating trusts established by retirement plans; proposing coding
for new law in Minnesota Statutes, chapter 356.

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

Section 1.

new text begin [356.494] AUTHORIZATION FOR THE CREATION OF
LIQUIDATING TRUST.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin (a) A Minnesota public retirement plan governed
by section 356.20 that is scheduled to be consolidated into another Minnesota public
retirement plan under law or otherwise may establish a liquidating trust under this section.
new text end

new text begin (b) Any liquidating trust established by any Minnesota public retirement plan after
May 1, 2007, is governed by this section.
new text end

new text begin Subd. 2. new text end

new text begin Permitted purposes for a liquidating trust. new text end

new text begin A liquidating trust may be
established solely for one or more of the following purposes:
new text end

new text begin (1) to dispose of assets if the applicable retirement plan has an asset or a class of
assets which has an uncertain fair market value and which is not readily liquidated;
new text end

new text begin (2) to resolve liability issues if the applicable retirement plan has an actual liability
or a contingent liability that:
new text end

new text begin (i) is a reasonable and necessary expense of the plan or is an authorized benefit of
the plan; and
new text end

new text begin (ii) has been specified in proposed legislation or in other applicable documentation
as unpayable by the successor retirement plan following consolidation;
new text end

new text begin (3) to reduce the amount of accounts payable if the applicable retirement plan has
a large amount of accounts payable that is disputed administratively or is the subject
of pending litigation; or
new text end

new text begin (4) to resolve the accounts receivable portfolio if the applicable retirement plan has a
large amount of accounts receivable that is disputed administratively or is the subject of
pending litigation.
new text end

new text begin Subd. 3. new text end

new text begin Liquidating trustee. new text end

new text begin For any liquidating trust established under this
section, the trustee for the liquidating trust must be the commissioner of finance or the
designee of the commissioner of finance.
new text end

new text begin Subd. 4. new text end

new text begin Other restrictions. new text end

new text begin The liquidating trust document must conform with
the following restrictions and limitations:
new text end

new text begin (1) the assets to be transmitted to or deposited in the liquidating trust may not exceed
one percent of the total market value of the assets of the retirement plan;
new text end

new text begin (2) the duration of the liquidating trust may not exceed one year;
new text end

new text begin (3) expenditures permitted from the liquidating trust must conform with the
authorized disbursement requirements of the retirement plan;
new text end

new text begin (4) the liquidating trust assets must be invested in the Minnesota supplemental
investment fund;
new text end

new text begin (5) the successor retirement plan must be the primary beneficiary of the liquidating
trust; and
new text end

new text begin (6) the board of trustees and the administrative officials or employees of the
consolidating retirement plan establishing the liquidating trust may not be a beneficiary of
the liquidating trust to any greater extent than any other retirement plan member.
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