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CHAPTER 354C. HIGHER EDUCATION SUPPLEMENTAL RETIREMENT PLAN

Table of Sections
SectionHeadnote
354C.01Renumbered 354D.01
354C.02Renumbered 354D.02
354C.03Renumbered 354D.03
354C.04Renumbered 354D.04
354C.05Renumbered 354D.05
354C.06Renumbered 354D.06
354C.07Renumbered 354D.07
354C.10ESTABLISHMENT.
354C.11COVERAGE.
354C.12SALARY DEDUCTIONS AND MATCHING EMPLOYER CONTRIBUTIONS.
354C.13ADMINISTRATION.
354C.14INVESTMENT OF DEDUCTIONS AND CONTRIBUTIONS.
354C.15REDEMPTION OF SUPPLEMENTAL INVESTMENT FUND SHARES.
354C.16PAYMENT OF BENEFITS.
354C.165PROHIBITION ON LOANS OR PRETERMINATION DISTRIBUTIONS.
354C.17TAX SHELTER PROVISIONS.
354C.18RULES.
354C.01 [Renumbered 354D.01]
354C.02 [Renumbered 354D.02]
354C.03 [Renumbered 354D.03]
354C.04 [Renumbered 354D.04]
354C.05 [Renumbered 354D.05]
354C.06 [Renumbered 354D.06]
354C.07 [Renumbered 354D.07]
354C.10 ESTABLISHMENT.
A supplemental retirement plan is established for certain employees of the Board of Trustees
of the Minnesota State Colleges and Universities. The supplemental retirement plan is the
continuation of the plan established by Laws 1967, chapter 808, sections 1 to 6, as amended.
History: 1995 c 141 art 4 s 16; 1995 c 212 art 4 s 64
354C.11 COVERAGE.
    Subdivision 1. Authorization. Individuals employed by the Board of Trustees of the
Minnesota State Colleges and Universities are authorized to participate in the supplemental
retirement plan, effective on the next following July 1, after meeting eligibility requirements
specified in subdivision 2.
    Subd. 2. Eligibility. (a) An individual must participate in the supplemental retirement plan if
the individual is employed by the Board of Trustees in the unclassified service of the state and has
completed at least two years with a full-time contract of applicable unclassified employment with
the board or an applicable predecessor board in any of the positions specified in paragraph (b).
(b) Eligible positions or employment classifications are:
(1) an unclassified administrative position as defined in section 354B.20, subdivision 6;
(2) an employment classification included in one of the following collective bargaining
units under section 179A.10, subdivision 2:
(i) the state university instructional unit;
(ii) the state college instructional unit; and
(iii) the state university administrative unit; or
(3) an unclassified employee of the board:
(i) included in the general professional unit or the supervisory employees unit under section
179A.10, subdivision 2; or
(ii) an employee who is excluded from one of those units due to the employee's confidential
status under section 179A.10, subdivision 1, clause (8).
    Subd. 3. Continuing eligibility authorization. Once a person qualifies for participation
in the supplemental retirement plan, all subsequent service by the person as an unclassified
employee of the Board of Trustees in a position or employment classification listed in subdivision
2, paragraph (b), is covered by the supplemental retirement plan.
History: 1995 c 141 art 4 s 17; 1995 c 212 art 4 s 64; 1997 c 241 art 8 s 6; 1999 c 222 art
9 s 7; 2001 c 133 s 5; 2004 c 267 art 1 s 8
354C.12 SALARY DEDUCTIONS AND MATCHING EMPLOYER CONTRIBUTIONS.
    Subdivision 1. Basic contributions and deductions. (a) The employer of personnel covered
by the supplemental retirement plan as provided in section 354C.11 shall deduct a sum equal to
five percent of the annual salary of the person between $6,000 and $15,000. The employer may
accomplish this deduction by making equal deductions each payroll period, based on anticipated
annual salary. The employer may adjust these deductions as necessary to deduct the correct
amount annually. Deductions cease upon termination of employment covered by the supplemental
retirement plan.
(b) The basic contribution deduction must be made in the same manner as other retirement
deductions are made from the salary of the person under section 352.04, subdivision 4; 352D.04,
subdivision 2
; 354.42, subdivision 2; or 354A.12, whichever applies.
(c) The employer shall also make a contribution to the supplemental retirement plan on
behalf of covered personnel equal to the salary deduction made under paragraph (a).
    Subd. 1a. Excess contributions. When contributions to the plan exceed limits imposed by
federal law or regulation, the excess employee contributions must be returned to the employee
and the excess employer contributions must be reallocated in accordance with section 415 of the
federal Internal Revenue Code, as amended, and the applicable federal regulations and revenue
rulings.
    Subd. 2. Omitted deductions. If the employer of personnel covered by the supplemental
retirement plan as provided in section 354C.11 fails to deduct the member basic contribution from
the covered employee's salary and a period of less than 60 days from the date on which the
deduction should have been made has elapsed, the employer must obtain the omitted member
deduction by an additional payroll deduction during the pay period next following the discovery
of the omission. If the employer fails to deduct the member basic contribution from the covered
employee's salary and that omission continues for at least 60 days from the date on which the
member basic contribution deduction should have been made, the employer must pay the amount
representing the omitted member basic contribution, and the full required omitted employer basic
contribution, plus compound interest at an annual rate of 8.5 percent. The contributions must be
made within one year of the date on which the omission was discovered.
    Subd. 3. Additional deductions and contributions. If an agreement is made under section
356.24 for an additional employee deduction and an additional matching employer contribution,
an amount equal to the additional employee contribution must be deducted from the employee's
salary above $15,000. The employer must match the additional employee contribution deduction.
    Subd. 4. Administrative expenses. (a) The Board of Trustees of the Minnesota State
Colleges and Universities is authorized to pay the necessary and reasonable administrative
expenses of the supplemental retirement plan and may bill participants to recover these expenses.
The administrative fees or charges may be charged to participants as an annual fee, an asset-based
fee, a percentage of contributions to the plan, or a contribution thereof.
    (b) Any recovered or assessed amounts that are not needed for the necessary and reasonable
administrative expenses of the plan must be refunded to member accounts.
    (c) The Board of Trustees shall report annually, before October 1, to the legislature 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.
History: 1995 c 141 art 4 s 18; 1995 c 212 art 4 s 64; 1997 c 241 art 3 s 9,10; 1998 c 390
art 2 s 13,14; 1999 c 222 art 19 s 13; 2000 c 461 art 12 s 13; 2007 c 133 art 3 s 2
354C.13 ADMINISTRATION.
The Board of Trustees of the Minnesota State Colleges and Universities shall administer
the supplemental retirement plan.
History: 1995 c 141 art 4 s 19; 1995 c 212 art 4 s 64
354C.14 INVESTMENT OF DEDUCTIONS AND CONTRIBUTIONS.
(a) The Board of Trustees of the Minnesota State Colleges and Universities shall invest the
deductions and contributions under section 354C.12, after deduction of administrative expenses
under section 354C.12, subdivision 4, in annuity contracts or custodial accounts from financial
institutions selected by the State Board of Investment under section 354B.25, subdivision 3.
(b) The retirement contributions and death benefits provided by annuity contracts or custodial
accounts purchased by the Board of Trustees of the Minnesota State Colleges and Universities are
owned by the supplemental retirement plan and must be paid in accordance with those annuity
contracts or custodial account agreements.
History: 1995 c 141 art 4 s 20; 1995 c 212 art 4 s 64
354C.15 REDEMPTION OF SUPPLEMENTAL INVESTMENT FUND SHARES.
(a) The Board of Trustees of the Minnesota State Colleges and Universities shall redeem all
shares in the accounts of the Minnesota supplemental investment fund held on behalf of personnel
covered by the supplemental retirement plan upon the election by the person of an investment
option other than the supplemental investment fund, except as provided in paragraph (b).
(b) The redemption of shares in the fixed interest account attributable to a guaranteed
investment contract as of July 1, 1994, may not occur until the expiration date of the applicable
guaranteed investment contract.
(c) The Board of Trustees of the Minnesota State Colleges and Universities shall transfer
the cash realized from a redemption of Minnesota supplemental investment fund shares to the
financial institution or institutions selected by the State Board of Investment under section
354B.25, subdivision 3.
History: 1995 c 141 art 4 s 21; 1995 c 212 art 4 s 64
354C.16 PAYMENT OF BENEFITS.
(a) The withdrawal of member contributions, employer contributions, and accrued
investment income, or a retirement benefit based on those amounts is payable immediately upon
the death or termination of employment of the employee.
(b) An application by the employee or made on behalf of the employee by an appropriate
third party must be filed before any payment of benefits may occur.
History: 1995 c 141 art 4 s 22
354C.165 PROHIBITION ON LOANS OR PRETERMINATION DISTRIBUTIONS.
(a) Except as provided in paragraph (c), no participant may obtain a loan or any distribution
from the plan before the participant terminates the employment that gave rise to plan coverage.
(b) No amounts to the credit of the plan are assignable either in law or in equity, or are
subject to execution, levy, attachment, garnishment, or other legal process, except as provided in
section 518.58, 518.581, or 518A.53.
(c) MS 2002 [Expired]
History: 1995 c 141 art 4 s 23; 1997 c 203 art 6 s 92; 2000 c 461 art 12 s 14,20; 2002 c 392
art 7 s 2; 2003 c 127 art 3 s 22; 1Sp2003 c 12 art 6 s 4; 2005 c 164 s 29; 1Sp2005 c 7 s 28
354C.17 TAX SHELTER PROVISIONS.
    Subdivision 1. Agreements; salary adjustments. For the purpose of permitting participation
in a tax shelter for employment income under the applicable pension provisions of the Internal
Revenue Code, the Board of Trustees of the Minnesota State Colleges and Universities may enter
into agreements with its employees to reduce or to adjust downward the salaries for persons
covered by the supplemental retirement plan under section 354C.11, and to pay as the employer an
amount equivalent to the salary reduction or the salary downward adjustment in the same manner
as deductions would have been paid by the employee under section 354C.12, subdivision 1.
    Subd. 2. Rules. The Board of Trustees of the Minnesota State Colleges and Universities may
adopt rules and procedures consistent with this chapter to permit, if possible, participation in a tax
shelter under the applicable provisions of the Internal Revenue Code.
History: 1995 c 141 art 4 s 24; 1995 c 212 art 4 s 64
354C.18 RULES.
(a) The Board of Trustees of the Minnesota State Colleges and Universities may adopt rules
to administer this chapter.
(b) The Board of Trustees of the Minnesota State Colleges and Universities may deposit
member contributions in a nontreasury account established under chapter 136, an account or
accounts established under section 11A.17, or other appropriate accounts operated by the
State Board of Investment for investment under procedures established by the State Board
of Investment.
History: 1995 c 141 art 4 s 25; 1995 c 212 art 4 s 64

Official Publication of the State of Minnesota
Revisor of Statutes