352.96 DEFERRED COMPENSATION.
Subdivision 1. Entitlement to defer compensation.
At the request of an officer or employee
of the state, an officer or employee of a political subdivision, or an employee covered by
a retirement fund in section
356.20, subdivision 2
, the appointing authority shall by payroll
deduction defer the payment of part of the compensation of the officer or employee. The amount
to be deferred must be as provided in a written agreement between the officer or employee and
the employing unit. The agreement must be in a form specified by the executive director of the
Minnesota State Retirement System in such a manner as will qualify the deferred amount for
benefits under federal and state tax laws, rules, and rulings.
Subd. 1a. Failure to implement plan.
Implementation of the deferred compensation plan by
the employing unit must be completed within 30 days of the request as provided in subdivision
1. If the employing unit fails to implement the deferred compensation plan, the employing
unit may not defer compensation under any existing or new deferred compensation plan from
the date of the request until the date on which the deferred compensation plan provided for in
this section is implemented. The executive director of the Minnesota State Retirement System
may order any employing unit that fails to implement the deferred compensation plan provided
for in this section upon a valid request to undertake that implementation and may enforce that
order in appropriate legal proceedings.
Subd. 2. Purchase of shares.
The amount of compensation so deferred may be used to
(1) shares in the Minnesota Supplemental Investment Fund established in section
that are selected to be offered under the plan by the State Board of Investment;
(2) saving accounts in federally insured financial institutions;
(3) life insurance contracts, fixed annuity and variable annuity contracts from companies that
are subject to regulation by the commissioner of commerce;
(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;
(5) investment options from a firm that is a registered investment advisor under the
Investment Advisers Act of 1940, United States Code, title 15, section 80b-1 to 80b-21;
(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
(7) a combination of clause (1), (2), (3), (4), (5), or (6), as provided by the plan as specified
by the participant.
All amounts contributed to the deferred compensation plan and all earnings on those amounts
will be held for the exclusive benefit of the plan participants and beneficiaries. These amounts will
be held in trust, in custodial accounts, or in qualifying annuity contracts as required by federal
law and 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.
Subd. 3. Executive director to administer section.
This section must be administered
by the executive director of the system with the advice and consent of the board of directors
under subdivision 4. Fiduciary activities of the deferred compensation plan must be undertaken
in a manner consistent with chapter 356A. If the State Board of Investment so elects, it may
solicit bids for options under subdivision 2, clauses (2), (3), (4), (5), and (6). The State Board
of Investment may retain consulting services to assist it in soliciting and evaluating bids and in
the periodic review of companies offering options under subdivision 2, clauses (3), (4), (5), and
(6). The periodic review must occur at least every two years. The State Board of Investment
may annually establish a budget for its costs in the soliciting, evaluating, and periodic review
processes. The State Board of Investment may charge a proportional share of all costs related
to the periodic review to each company currently under contract and may charge a proportional
share of all costs related to soliciting and evaluating bids to each company selected by the state
board. All contracts must be approved before execution by the State Board of Investment.
Contracts must provide that all options in subdivision 2 must: be presented in an unbiased
manner and in a manner that conforms to rules adopted by the executive director, be reported on
a periodic basis to all employees participating in the deferred compensation program, and not
be the subject of unreasonable solicitation of state employees to participate in the program. The
contract may not call for any person to jeopardize the tax-deferred status of money invested by
state employees under this section. All costs or fees in relation to the options provided under
subdivision 2, clauses (3), (4), (5), and (6), must be paid by the companies ultimately selected
by the State Board of Investment.
Subd. 4. Executive director to establish rules.
The executive director of the system with
the advice and consent of the board of directors shall establish rules and procedures to carry out
this section including allocation of administrative costs of the plan to participants. Fees cannot
be charged on contributions and investment returns attributable to contributions made to the
Minnesota supplemental investment funds before July 1, 1992. Annual total fees charged for plan
administration for the Minnesota supplemental investment funds cannot exceed 40/100 of one
percent of the contributions and investment returns attributable to contributions made on or after
July 1, 1992. The rules established by the executive director must conform to federal and state tax
laws, regulations, and rulings, and are not subject to the Administrative Procedure Act. Except
for the marketing rules, rules relating to the options provided under subdivision 2, clauses (2)
and (3), must be approved by the State Board of Investment.
Subd. 5. Other laws not applicable.
No provision of this chapter or other law specifically
referring to this chapter applies to this section unless this section is specifically mentioned.
Subd. 6. Exemption from process.
No amount of deferred compensation is assignable or
subject to execution, levy, attachment, garnishment, or other legal process, except as provided in
History: 1975 c 273 s 1; 1977 c 300 s 1-3; 1980 c 607 art 14 s 45 subd 1; s 46; 1981 c 208 s
10; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1985 c 248 s 70; 1986 c 356 s 8; 1987 c 157 s
3; 1987 c 229 art 6 s 1; art 11 s 1; 1987 c 284 art 4 s 2,3; 1988 c 605 s 8; 1989 c 319 art 8 s
12; 1990 c 570 art 10 s 6; 1993 c 192 s 87; 1993 c 300 s 11; 1993 c 307 art 2 s 9,10; 1994 c
528 art 1 s 9; 1997 c 203 art 6 s 92; 1997 c 241 art 3 s 1-3; 1997 c 251 s 1; 1998 c 390 art 2 s
6; 1Sp2003 c 12 art 2 s 2; 2005 c 164 s 29; 1Sp2005 c 7 s 28