1997 Minnesota Statutes

     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 exclusive representatives of the state university 
 instructional unit, the community college instructional unit, 
 and the technical 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.    Annuity contracts and custodial accounts.  
 (a) The plan administrator shall arrange for the purchase of 
 fixed annuity contracts, variable annuity contracts, a 
 combination of fixed and variable annuity contracts, or 
 custodial accounts from financial institutions which have been 
 selected by the state board of investment under subdivision 3, 
 as the investment vehicle for the retirement coverage of plan 
 participants and to provide retirement benefits to plan 
 participants.  Custodial accounts from financial institutions 
 shall include open-end investment companies registered under the 
 federal Investment Company Act of 1940, as amended. 

    (b) The annuity contracts or accounts must be purchased 
 with contributions under section 354B.23 or with money or assets 
 otherwise provided by law by authority of the board and deemed 
 acceptable by the applicable financial institution. 

    (c) In addition to contracts and accounts from financial 
 institutions, the Minnesota supplemental investment fund 
 established under section 11A.17 and administered by the state 
 board of investment is one of the investment options for the 
 individual retirement account plan. 

    Subd. 3.    Selection of financial institutions.  (a) 
 The financial institutions provided for under subdivision 2 must 
 be selected by the state board of investment.  Financial 
 institutions include open-end investment companies registered 
 under the federal Investment Company Act of 1940, as amended. 

    (b) The state board of investment may select up to five 
 financial institutions to provide annuity contracts, custodial 
 accounts, or a combination, as investment options for the 
 individual retirement account plan in addition to the Minnesota 
 supplemental investment fund.  In making its selection, at a 
 minimum, the state board of investment shall consider at least 
 the following: 

    (1) the experience and ability of the financial institution 
 to provide retirement and death benefits that are suited to meet 
 the needs of plan participants; 

    (2) the relationship of those retirement and death benefits 
 provided by the financial institution to their cost; and 

    (3) the financial strength and stability of the financial 
 institution. 

    (c) After selecting a financial institution, the state 
 board of investment must periodically review each financial 
 institution selected under paragraph (b).  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. 

    (d) 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. 

    (e) 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 must be paid by plan participants in the following manner: 

    (1) from plan participants with amounts invested in the 
 Minnesota supplemental investment fund, the plan administrator 
 may charge an administrative expense assessment as provided in 
 section 11A.17, subdivisions 10a and 14; and 

    (2) from plan participants with amounts through annuity 
 contracts and custodial accounts purchased under subdivision 2, 
 paragraph (a), the plan administrator may charge an 
 administrative expense assessment of a designated amount, not to 
 exceed two percent of member and employer contributions, as 
 those contributions are made. 

    (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. 

    HIST: 1995 c 141 art 4 s 13; 1995 c 212 art 4 s 64; 1997 c 241 
 art 3 s 7,8