354B.25 Individual retirement account plan administration.
Subdivision 1. General governance. The individual retirement account plan is the administrative responsibility of the board of trustees of the Minnesota state colleges and universities. The board of trustees of the Minnesota state colleges and universities may administer the plan directly or may contract out for administrative services with a qualified third-party plan administrative entity.
Subd. 1a. Advisory committee. (a) A committee is created to advise the state board of investment and the board of trustees of the Minnesota state colleges and universities concerning administration of the individual retirement account plan and the supplemental retirement plan established in chapter 354C. The committee shall adopt recommendations by majority vote of those members voting on each issue. The exclusive representatives of the state university instructional unit and the state college instructional unit shall each appoint two members to the committee. The exclusive representatives of the general professional unit, the supervisory employees unit and the state university administrative unit shall each appoint one member to the committee. The chancellor of the Minnesota state colleges and universities shall appoint three members, at least one of whom shall be a personnel administrator. No member of the committee shall be retired. Members serve at the pleasure of the applicable appointing authority, but no member shall serve for more than a total of five years. Members shall be reimbursed from the administrative expense account of the individual retirement account plan for expenses as provided in section 15.059, subdivision 3.
(b) The committee shall:
(1) advise the board of trustees of the Minnesota state colleges and universities on the structure and operation of the individual retirement account plan and the supplemental retirement plan;
(2) along with any other consultants selected by the board, advise the state board of investment on selection of financial institutions and on the type of investment products to be offered by these institutions for the plans;
(3) advise the board of trustees of the Minnesota state colleges and universities on administration of the plans, including selection of a third-party plan administrator, if any, for the individual retirement account plan.
(c) The board of trustees of the Minnesota state colleges and universities shall provide the advisory committee with meeting space and other administrative support.
(d) Expenses of the advisory committee are considered administrative expenses of the plans under subdivision 5 and section 354C.12, subdivision 4, and must be allocated between the two plans in proportion to the market value of the total assets of the plans as of the most recent prior audited annual financial report.
Subd. 2. Investment options. The plan administrator shall arrange for the purchase of investment products.
The investment products must be purchased with contributions under section 354B.23 or with money or assets otherwise provided by law by authority of the board.
The Minnesota supplemental investment fund established under section 11A.17 and administered by the state board of investment is one of the investment products for the individual retirement account plan. Direct access must also be provided to lower expense and no-load mutual funds, as those terms are defined by the federal Securities and Exchange Commission, including stock funds, bond funds, and balanced funds. Other investment products or combination of investment products which may be included are:
(1) savings accounts at federally insured financial institutions;
(2) life insurance contracts, fixed and variable annuity contracts from companies that are subject to regulation by the commerce commissioner;
(3) investment options from open-ended investment companies registered under the federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1 to 80a-64;
(4) investment options from a firm that is a registered investment advisor under the federal Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to 80b-21; and
(5) 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).
Subd. 3. Selection of financial institutions. (a) The investment options provided under subdivision 2 must be selected by the state board of investment.
In making its selection, at a minimum, the state board of investment shall consider the following:
(1) the experience and ability of the financial institution to provide benefits and products that are suited to meet the needs of plan participants;
(2) the relationship of those benefits and products provided by the financial institution to their cost;
(3) the financial strength and stability of the financial institution; and
(4) the fees and expenses associated with the investment products in comparison to other products of similar risk and rates of return.
(b) After selecting a financial institution, the state board of investment must periodically review each financial institution and the offered products. The periodic review must occur at least every three years. In making its review, the state board of investment may retain appropriate consulting services to assist it in its periodic review, establish a budget for the cost of the periodic review process, and charge a proportional share of these costs to the reviewed financial institution.
(c) Contracts with financial institutions under this section must be executed by the board and must be approved by the state board of investment before execution.
(d) The state board of investment shall also establish policies and procedures under section 11A.04, clause (2), to carry out the provisions of this subdivision.
Subd. 4. Benefit ownership. The retirement benefits provided by the annuity contracts and custodial accounts of the individual retirement account plan are held for the benefit of plan participants and must be paid according to this chapter and the plan document.
Subd. 5. Individual retirement account plan administrative expenses. (a) The reasonable and necessary administrative expenses of the individual retirement account plan may be charged to plan participants by the plan sponsor in the form of an annual fee, an asset-based fee, a percentage of the contributions to the plan, or a combination thereof.
(b) Any administrative expense charge that is not actually needed for the administrative expenses of the individual retirement account plan must be refunded to member accounts.
(c) The board of trustees shall report annually, before October 1, to the advisory committee created in subdivision 1a on administrative expenses of the plan. The report must include a detailed accounting of charges for administrative expenses collected from plan participants and expenditure of the administrative expense charges. The administrative expense charges collected from plan participants must be kept in a separate account from any other funds under control of the board of trustees and may be used only for the necessary and reasonable administrative expenses of the plan.
Official Publication of the State of Minnesota
Revisor of Statutes