Bill Text: MN HF2163 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Retirement; investment authority revised for various defined contribution plans or programs; State Board of Investment authorized to revise, remove, or create investment options for the Minnesota supplemental investment fund; and permissible investments expanded under the unclassified state employees retirement program, the public employees defined contribution plan, the deferred compensation program, and the health care savings plan.
Sponsorship: Slight Partisan Bill (Republican 2-1)
Status: (Introduced - Dead) 2014-02-25 - Introduction and first reading, referred to Government Operations [HF2163 Detail]
Download: Minnesota-2013-HF2163-Introduced.html
1.2relating to retirement; revising investment authority for various defined
1.3contribution plans or programs; authorizing the State Board of Investment to
1.4revise, remove, or create investment options for the Minnesota supplemental
1.5investment fund; expanding permissible investments under the unclassified
1.6state employees retirement program, the public employees defined contribution
1.7plan, the deferred compensation program, and the health care savings plan;
1.8amending Minnesota Statutes 2012, sections 11A.17, subdivisions 1, 9; 352.965,
1.9subdivision 4, by adding subdivisions; 352.98, subdivision 2, by adding a
1.10subdivision; 352D.04, by adding subdivisions; 353D.05, subdivision 1, by
1.11adding a subdivision; proposing coding for new law in Minnesota Statutes,
1.12chapter 356; repealing Minnesota Statutes 2012, sections 11A.17, subdivision 4;
1.13352.965, subdivision 5; 352D.04, subdivision 1; 353D.05, subdivision 2.
1.14BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. Minnesota Statutes 2012, section 11A.17, subdivision 1, is amended to read:
1.16 Subdivision 1. Purpose; accounts; continuation. (a) The purpose of the
1.17supplemental investment fund is to provide an investment vehicle for the assets of various
1.18public retirement plans and funds.
1.19(b)The fund consists of eight investment accounts: an income share account, a
1.20growth share account, an international share account, a money market account, a fixed
1.21interest account, a bond market account, a common stock index account, and a volunteer
1.22firefighter account. The state board shall determine and make available investment
1.23accounts within the supplemental investment fund. These accounts shall include an
1.24appropriate array of diversified investment options for participants of the public retirement
1.25plans under subdivision 5.
1.26(c) The assets of the supplemental investment fundis a continuation of the
1.27supplemental retirement fund in existence on January 1, 1980 must be invested by the
1.28state board in investments permitted under section 11A.24.
2.1(d) The state board shall make available a volunteer firefighter account for the
2.2voluntary statewide lump-sum volunteer firefighter retirement plan under section 353G.02.
2.3EFFECTIVE DATE.This section is effective July 1, 2014.
2.4 Sec. 2. Minnesota Statutes 2012, section 11A.17, subdivision 9, is amended to read:
2.5 Subd. 9. Valuation of investment shares. (a) The value ofinvestment shares in
2.6the income share account, the growth share account, the international share account,
2.7the bond market account, and the common stock index for each investment account,
2.8excluding a money market account, must be determined by dividing the total market
2.9value of the securities constituting the respective account by the total number of shares
2.10then outstanding in the investment account.
2.11(b) The value ofinvestment shares in the a money market account and the fixed
2.12interest account is must be valued at $1 a share. Terms as to withdrawal schedules will be
2.13agreed upon by the public retirement fund and the state board.
2.14EFFECTIVE DATE.This section is effective July 1, 2014.
2.15 Sec. 3. Minnesota Statutes 2012, section 352.965, subdivision 4, is amended to read:
2.16 Subd. 4. Plan investments. (a) Available investmentsunder the plan may include:
2.17 are those investments chosen by the State Board of Investment under section 356.645 for
2.18the plan.
2.19(1) shares in the Minnesota supplemental investment fund established in section
2.2011A.17 that are selected to be offered under the plan by the State Board of Investment;
2.21(2) saving accounts in federally insured financial institutions;
2.22(3) life insurance contracts, fixed annuity, and variable annuity contracts from
2.23companies that are subject to regulation by the commissioner of commerce;
2.24(4) investment options from open-end investment companies registered under the
2.25federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1
2.26to 80a-64;
2.27(5) investment options from a firm that is a registered investment advisor under the
2.28Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to 80b-21;
2.29(6) investment options of a bank as defined in United States Code, title 15, section
2.3080b-2, subsection (a), paragraph (2), or a bank holding company as defined in the Bank
2.31Holding Company Act of 1956, United States Code, title 12, section 1841, subsection
2.32(a), paragraph (1); or
3.1(7) a combination of clause (1), (2), (3), (4), (5), or (6), as provided by the plan as
3.2specified by the participant.
3.3(b) The state, the State Board of Investment and its executive director and staff,
3.4the Minnesota State Retirement System Board and its executive director and staff, and
3.5participating public employers are not liable and are not responsible for any investment
3.6losses due to choices made by participants or due to default options.
3.7(b) All amounts contributed to the deferred compensation plan and all earnings
3.8on those amounts must be held for the exclusive benefit of the plan participants and
3.9beneficiaries. These amounts must be held in trust, in custodial accounts, or in qualifying
3.10annuity contracts as required by federal law in accordance with section
356A.06,
3.11subdivision 1. This subdivision does not authorize an employer contribution, except as
3.12authorized in section
356.24, subdivision 1, paragraph (a), clause (5). The state, political
3.13subdivision, or other employing unit is not responsible for any loss that may result from
3.14investment of the deferred compensation.
3.15EFFECTIVE DATE.This section is effective July 1, 2014.
3.16 Sec. 4. Minnesota Statutes 2012, section 352.965, is amended by adding a subdivision
3.17to read:
3.18 Subd. 4a. Exclusive benefit. All amounts contributed to the deferred compensation
3.19plan and all earnings on those amounts must be held for the exclusive benefit of the plan
3.20participants and beneficiaries. These amounts must be held in trust, in custodial accounts,
3.21or in qualifying annuity contracts as required by federal law in accordance with section
3.22356A.06 , subdivision 1.
3.23EFFECTIVE DATE.This section is effective July 1, 2014.
3.24 Sec. 5. Minnesota Statutes 2012, section 352.965, is amended by adding a subdivision
3.25to read:
3.26 Subd. 4b. Employer contribution prohibition. Except as authorized in section
3.27356.24, subdivision 1 , clause (5), employer contributions are prohibited.
3.28EFFECTIVE DATE.This section is effective July 1, 2014.
3.29 Sec. 6. Minnesota Statutes 2012, section 352.98, is amended by adding a subdivision
3.30to read:
3.31 Subd. 1a. Member investment responsibility. The state, the State Board of
3.32Investment and its executive director and staff, the Minnesota State Retirement System
4.1Board and its executive director and staff, and participating public employers are not liable
4.2and are not responsible for any investment losses due to choices made by participants
4.3or due to default options.
4.4EFFECTIVE DATE.This section is effective July 1, 2014.
4.5 Sec. 7. Minnesota Statutes 2012, section 352.98, subdivision 2, is amended to read:
4.6 Subd. 2. Contracting authorized. (a) The executive director shall administer
4.7the plan and contract with public and private entities to provide investment services,
4.8record keeping, benefit payments, and other functions necessary for the administration of
4.9the plan.If allowed by
4.10 (b) As specified in section 356.645, theMinnesota State Board of Investment, the
4.11Minnesota State Board of Investment supplemental investment funds may be offered as
4.12 shall determine an appropriate selection of investment optionsunder that shall be offered
4.13by the health care savings planor plans.
4.14EFFECTIVE DATE.This section is effective July 1, 2014.
4.15 Sec. 8. Minnesota Statutes 2012, section 352D.04, is amended by adding a subdivision
4.16to read:
4.17 Subd. 1a. State Board of Investment selection of investment products. As
4.18specified in section 356.645, the State Board of Investment shall select investment
4.19products to be available to participants in the retirement program provided by this chapter.
4.20EFFECTIVE DATE.This section is effective July 1, 2014.
4.21 Sec. 9. Minnesota Statutes 2012, section 352D.04, is amended by adding a subdivision
4.22to read:
4.23 Subd. 1b. Participant selection of investments. (a) A program participant may
4.24elect to participate in one or more of the investment products made available under the
4.25program by specifying the percentage of the participant's contributions under subdivision
4.262 to be used to purchase shares in the applicable products.
4.27(b) Before making an allocation election, or if the participant fails to specify an
4.28allocation, the executive director shall, on behalf of that participant, purchase shares
4.29in a default investment alternative. The investment alternative must be specified by
4.30the Minnesota State Retirement System Board from the available investment options
4.31authorized under subdivision 1a.
5.1(c) A participant may revise the investment allocation for subsequent purchase of
5.2shares, and a participant or former participant may also change the investment options
5.3selected for all or a portion of shares previously purchased.
5.4(d) Any investment allocation selection authorized under this subdivision, whether
5.5relating to subsequent purchases of new shares or reallocating the existing portfolio,
5.6must be conducted at times and under procedures prescribed by the executive director.
5.7Any allocation or allocation revisions are effective at the end of the most recent United
5.8States investment market day, unless subject to trading restrictions imposed on certain
5.9investment options.
5.10(e) The state, the State Board of Investment and its executive director and staff,
5.11the Minnesota State Retirement System Board and its executive director and staff, and
5.12participating public employers are not liable and are not responsible for any investment
5.13losses due to choices made by participants or due to default options.
5.14EFFECTIVE DATE.This section is effective July 1, 2014.
5.15 Sec. 10. Minnesota Statutes 2012, section 353D.05, subdivision 1, is amended to read:
5.16 Subdivision 1. Investment. As further specified under this section, employing unit
5.17contributions, after the deduction of an amount for administrative expenses, and individual
5.18participant contributions must beremitted to invested in the participant's account or
5.19accounts in investment products authorized by the association that are made available
5.20for this purpose by the State Board of Investmentfor investment in the Minnesota
5.21supplemental investment fund established by under section 11A.17 356.645.
5.22EFFECTIVE DATE.This section is effective July 1, 2014.
5.23 Sec. 11. Minnesota Statutes 2012, section 353D.05, is amended by adding a
5.24subdivision to read:
5.25 Subd. 1a. Participant selection of investments. (a) A plan participant may elect
5.26to allocate contributions, made by and on behalf of the participant, in one or more of the
5.27investment products authorized by the association to be made available under the plan,
5.28by specifying the percentage of the participant's contributions to be used to purchase
5.29shares in the authorized products.
5.30(b) If contributions are received before the participant has made an allocation
5.31election, or if the participant fails to specify an allocation, the executive director shall,
5.32on behalf of that participant, purchase shares in a default investment alternative. The
6.1investment option must be specified by the Public Employees Retirement Association board
6.2of trustees from the designated available investment options authorized under this section.
6.3(c) A participant may revise the investment allocation for subsequent purchase of
6.4shares, and a participant or former participant may also change the investment options
6.5selected for all or a portion of shares previously purchased.
6.6(d) Any investment allocation selection authorized under this subdivision, whether
6.7relating to subsequent purchases of new shares or reallocating the existing portfolio, must
6.8be conducted at times and under procedures prescribed by the executive director.
6.9(e) The state, the State Board of Investment and its executive director and staff, the
6.10Public Employees Retirement Association board of trustees and its executive director and
6.11staff, and participating public employers are not liable and are not responsible for any
6.12investment losses due to choices made by participants or due to default options.
6.13EFFECTIVE DATE.This section is effective July 1, 2014.
6.14 Sec. 12. [356.645] INVESTMENT OF VARIOUS DEFINED CONTRIBUTION
6.15PLAN ASSETS.
6.16The State Board of Investment shall determine the investments to be made available
6.17to plan participants in plans defined in sections 352.965, 352.98, and chapters 352D
6.18and 353D. Investments made available to plan participants must include at least one or
6.19all of the following:
6.20(1) shares in the Minnesota supplemental investment fund established in section
6.2111A.17;
6.22(2) saving accounts in federally insured financial institutions;
6.23(3) life insurance contracts, fixed annuity contracts, and variable annuity contracts
6.24from companies that are subject to regulation by the commissioner of commerce;
6.25(4) investment options from open-end investment companies registered under the
6.26federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1
6.27to 80a-64;
6.28(5) investment options from a firm that is a registered investment adviser under
6.29the Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to
6.3080b-21; and
6.31(6) investment options of a bank as defined in United States Code, title 15, section
6.3280b-2, subsection (a), paragraph (2), or a bank holding company as defined in the Bank
6.33Holding Company Act of 1956, United States Code, title 12, section 1841, subsection
6.34(a), paragraph (1).
7.1EFFECTIVE DATE.This section is effective July 1, 2014.
7.2 Sec. 13. REPEALER.
7.3Minnesota Statutes 2012, sections 11A.17, subdivision 4; 352.965, subdivision 5;
7.4352D.04, subdivision 1; and 353D.05, subdivision 2, are repealed.
7.5EFFECTIVE DATE.This section is effective July 1, 2014.
1.3contribution plans or programs; authorizing the State Board of Investment to
1.4revise, remove, or create investment options for the Minnesota supplemental
1.5investment fund; expanding permissible investments under the unclassified
1.6state employees retirement program, the public employees defined contribution
1.7plan, the deferred compensation program, and the health care savings plan;
1.8amending Minnesota Statutes 2012, sections 11A.17, subdivisions 1, 9; 352.965,
1.9subdivision 4, by adding subdivisions; 352.98, subdivision 2, by adding a
1.10subdivision; 352D.04, by adding subdivisions; 353D.05, subdivision 1, by
1.11adding a subdivision; proposing coding for new law in Minnesota Statutes,
1.12chapter 356; repealing Minnesota Statutes 2012, sections 11A.17, subdivision 4;
1.13352.965, subdivision 5; 352D.04, subdivision 1; 353D.05, subdivision 2.
1.14BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. Minnesota Statutes 2012, section 11A.17, subdivision 1, is amended to read:
1.16 Subdivision 1. Purpose; accounts; continuation. (a) The purpose of the
1.17supplemental investment fund is to provide an investment vehicle for the assets of various
1.18public retirement plans and funds.
1.19(b)
1.20
1.21
1.22
1.23accounts within the supplemental investment fund. These accounts shall include an
1.24appropriate array of diversified investment options for participants of the public retirement
1.25plans under subdivision 5.
1.26(c) The assets of the supplemental investment fund
1.27
1.28state board in investments permitted under section 11A.24.
2.1(d) The state board shall make available a volunteer firefighter account for the
2.2voluntary statewide lump-sum volunteer firefighter retirement plan under section 353G.02.
2.3EFFECTIVE DATE.This section is effective July 1, 2014.
2.4 Sec. 2. Minnesota Statutes 2012, section 11A.17, subdivision 9, is amended to read:
2.5 Subd. 9. Valuation of investment shares. (a) The value of
2.6
2.7
2.8excluding a money market account, must be determined by dividing the total market
2.9value of the securities constituting the respective account by the total number of shares
2.10then outstanding in the investment account.
2.11(b) The value of
2.12
2.13
2.14EFFECTIVE DATE.This section is effective July 1, 2014.
2.15 Sec. 3. Minnesota Statutes 2012, section 352.965, subdivision 4, is amended to read:
2.16 Subd. 4. Plan investments. (a) Available investments
2.17 are those investments chosen by the State Board of Investment under section 356.645 for
2.18the plan.
2.19
2.20
2.21
2.22
2.23
2.24
2.25
2.26
2.27
2.28
2.29
2.30
2.31
2.32
3.1
3.2
3.3(b) The state, the State Board of Investment and its executive director and staff,
3.4the Minnesota State Retirement System Board and its executive director and staff, and
3.5participating public employers are not liable and are not responsible for any investment
3.6losses due to choices made by participants or due to default options.
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.14
3.15EFFECTIVE DATE.This section is effective July 1, 2014.
3.16 Sec. 4. Minnesota Statutes 2012, section 352.965, is amended by adding a subdivision
3.17to read:
3.18 Subd. 4a. Exclusive benefit. All amounts contributed to the deferred compensation
3.19plan and all earnings on those amounts must be held for the exclusive benefit of the plan
3.20participants and beneficiaries. These amounts must be held in trust, in custodial accounts,
3.21or in qualifying annuity contracts as required by federal law in accordance with section
3.22
3.23EFFECTIVE DATE.This section is effective July 1, 2014.
3.24 Sec. 5. Minnesota Statutes 2012, section 352.965, is amended by adding a subdivision
3.25to read:
3.26 Subd. 4b. Employer contribution prohibition. Except as authorized in section
3.27
3.28EFFECTIVE DATE.This section is effective July 1, 2014.
3.29 Sec. 6. Minnesota Statutes 2012, section 352.98, is amended by adding a subdivision
3.30to read:
3.31 Subd. 1a. Member investment responsibility. The state, the State Board of
3.32Investment and its executive director and staff, the Minnesota State Retirement System
4.1Board and its executive director and staff, and participating public employers are not liable
4.2and are not responsible for any investment losses due to choices made by participants
4.3or due to default options.
4.4EFFECTIVE DATE.This section is effective July 1, 2014.
4.5 Sec. 7. Minnesota Statutes 2012, section 352.98, subdivision 2, is amended to read:
4.6 Subd. 2. Contracting authorized. (a) The executive director shall administer
4.7the plan and contract with public and private entities to provide investment services,
4.8record keeping, benefit payments, and other functions necessary for the administration of
4.9the plan.
4.10 (b) As specified in section 356.645, the
4.11
4.12 shall determine an appropriate selection of investment options
4.13by the health care savings plan
4.14EFFECTIVE DATE.This section is effective July 1, 2014.
4.15 Sec. 8. Minnesota Statutes 2012, section 352D.04, is amended by adding a subdivision
4.16to read:
4.17 Subd. 1a. State Board of Investment selection of investment products. As
4.18specified in section 356.645, the State Board of Investment shall select investment
4.19products to be available to participants in the retirement program provided by this chapter.
4.20EFFECTIVE DATE.This section is effective July 1, 2014.
4.21 Sec. 9. Minnesota Statutes 2012, section 352D.04, is amended by adding a subdivision
4.22to read:
4.23 Subd. 1b. Participant selection of investments. (a) A program participant may
4.24elect to participate in one or more of the investment products made available under the
4.25program by specifying the percentage of the participant's contributions under subdivision
4.262 to be used to purchase shares in the applicable products.
4.27(b) Before making an allocation election, or if the participant fails to specify an
4.28allocation, the executive director shall, on behalf of that participant, purchase shares
4.29in a default investment alternative. The investment alternative must be specified by
4.30the Minnesota State Retirement System Board from the available investment options
4.31authorized under subdivision 1a.
5.1(c) A participant may revise the investment allocation for subsequent purchase of
5.2shares, and a participant or former participant may also change the investment options
5.3selected for all or a portion of shares previously purchased.
5.4(d) Any investment allocation selection authorized under this subdivision, whether
5.5relating to subsequent purchases of new shares or reallocating the existing portfolio,
5.6must be conducted at times and under procedures prescribed by the executive director.
5.7Any allocation or allocation revisions are effective at the end of the most recent United
5.8States investment market day, unless subject to trading restrictions imposed on certain
5.9investment options.
5.10(e) The state, the State Board of Investment and its executive director and staff,
5.11the Minnesota State Retirement System Board and its executive director and staff, and
5.12participating public employers are not liable and are not responsible for any investment
5.13losses due to choices made by participants or due to default options.
5.14EFFECTIVE DATE.This section is effective July 1, 2014.
5.15 Sec. 10. Minnesota Statutes 2012, section 353D.05, subdivision 1, is amended to read:
5.16 Subdivision 1. Investment. As further specified under this section, employing unit
5.17contributions, after the deduction of an amount for administrative expenses, and individual
5.18participant contributions must be
5.19accounts in investment products authorized by the association that are made available
5.20for this purpose by the State Board of Investment
5.21
5.22EFFECTIVE DATE.This section is effective July 1, 2014.
5.23 Sec. 11. Minnesota Statutes 2012, section 353D.05, is amended by adding a
5.24subdivision to read:
5.25 Subd. 1a. Participant selection of investments. (a) A plan participant may elect
5.26to allocate contributions, made by and on behalf of the participant, in one or more of the
5.27investment products authorized by the association to be made available under the plan,
5.28by specifying the percentage of the participant's contributions to be used to purchase
5.29shares in the authorized products.
5.30(b) If contributions are received before the participant has made an allocation
5.31election, or if the participant fails to specify an allocation, the executive director shall,
5.32on behalf of that participant, purchase shares in a default investment alternative. The
6.1investment option must be specified by the Public Employees Retirement Association board
6.2of trustees from the designated available investment options authorized under this section.
6.3(c) A participant may revise the investment allocation for subsequent purchase of
6.4shares, and a participant or former participant may also change the investment options
6.5selected for all or a portion of shares previously purchased.
6.6(d) Any investment allocation selection authorized under this subdivision, whether
6.7relating to subsequent purchases of new shares or reallocating the existing portfolio, must
6.8be conducted at times and under procedures prescribed by the executive director.
6.9(e) The state, the State Board of Investment and its executive director and staff, the
6.10Public Employees Retirement Association board of trustees and its executive director and
6.11staff, and participating public employers are not liable and are not responsible for any
6.12investment losses due to choices made by participants or due to default options.
6.13EFFECTIVE DATE.This section is effective July 1, 2014.
6.14 Sec. 12. [356.645] INVESTMENT OF VARIOUS DEFINED CONTRIBUTION
6.15PLAN ASSETS.
6.16The State Board of Investment shall determine the investments to be made available
6.17to plan participants in plans defined in sections 352.965, 352.98, and chapters 352D
6.18and 353D. Investments made available to plan participants must include at least one or
6.19all of the following:
6.20(1) shares in the Minnesota supplemental investment fund established in section
6.2111A.17;
6.22(2) saving accounts in federally insured financial institutions;
6.23(3) life insurance contracts, fixed annuity contracts, and variable annuity contracts
6.24from companies that are subject to regulation by the commissioner of commerce;
6.25(4) investment options from open-end investment companies registered under the
6.26federal Investment Company Act of 1940, United States Code, title 15, sections 80a-1
6.27to 80a-64;
6.28(5) investment options from a firm that is a registered investment adviser under
6.29the Investment Advisers Act of 1940, United States Code, title 15, sections 80b-1 to
6.3080b-21; and
6.31(6) investment options of a bank as defined in United States Code, title 15, section
6.3280b-2, subsection (a), paragraph (2), or a bank holding company as defined in the Bank
6.33Holding Company Act of 1956, United States Code, title 12, section 1841, subsection
6.34(a), paragraph (1).
7.1EFFECTIVE DATE.This section is effective July 1, 2014.
7.2 Sec. 13. REPEALER.
7.3Minnesota Statutes 2012, sections 11A.17, subdivision 4; 352.965, subdivision 5;
7.4352D.04, subdivision 1; and 353D.05, subdivision 2, are repealed.
7.5EFFECTIVE DATE.This section is effective July 1, 2014.
