Bill Text: MN HF2419 | 2013-2014 | 88th Legislature | Engrossed
Bill Title: State-administered retirement savings plan report to the legislature required by the commissioner of management and budget, and money appropriated.
Spectrum: Strong Partisan Bill (Democrat 13-1)
Status: (Introduced - Dead) 2014-03-27 - Committee report, to adopt as amended and re-refer to Ways and Means [HF2419 Detail]
Download: Minnesota-2013-HF2419-Engrossed.html
1.2relating to retirement; requiring the commissioner of management and budget
1.3to report to the legislature on a state-administered retirement savings plan;
1.4appropriating money.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. REPORT; RETIREMENT SAVINGS PLAN.
1.7(a) The commissioner of management and budget must report to the legislature
1.8by January 15, 2015, on the potential for a state-administered retirement savings plan
1.9to serve employees without access to either an automatic enrollment payroll deduction
1.10IRA maintained or offered by their employer, or a multiemployer retirement plan or
1.11qualifying retirement plan or arrangement described in sections 414(f) and 219(g)(5),
1.12respectively, of the Internal Revenue Code of 1986, as amended through April 14, 2011.
1.13The potential state-administered plan would provide for individuals to make contributions
1.14to their own accounts to be pooled and invested by the State Board of Investment, with the
1.15benefit consisting of the balance in each individual's account, and with the state having no
1.16liability for investment earnings and losses, while discouraging employers from dropping
1.17existing retirement plan options.
1.18(b) The report must include:
1.19(1) estimates of the number of Minnesota workers who could be served by the
1.20potential state-administered plan and the participation rate that would make the plan
1.21self-sustaining;
1.22(2) the effect of federal tax laws and the federal Employee Retirement Income
1.23Security Act on a potential state-administered plan and on participating employers and
1.24employees, including coverage and potential gaps in consumer protections;
2.1(3) the potential use and availability of investment strategies, private insurance,
2.2underwriting, or reinsurance against loss to limit or eliminate potential state liability
2.3and manage risk to the principal;
2.4(4) options for the process by which individuals would enroll in and contribute to
2.5the plan;
2.6 (5) projected costs of administration, record keeping, and investment management,
2.7including staffing, legal, compliance, licensing, procurement, communications with
2.8employers and employees, oversight, marketing, technology and infrastructure, and the fee
2.9needed to cover these costs as a percentage of the average daily net assets of the potential
2.10state-administered plan, relative to asset size, with estimates of investment-related fees
2.11determined in consultation with the State Board of Investment; and
2.12(6) a comparison of a potential state-administered plan to private sector and federal
2.13government retirement savings options with regard to participation rates, contribution
2.14rates, risk-adjusted return expectations, fees, and any other factors determined by
2.15the commissioner, which may include suitability in meeting the investment needs of
2.16participants.
2.17(c) Subject to available appropriation, the report may include:
2.18(1) estimates of the average amount of savings and other financial resources residents
2.19of Minnesota have upon retirement and those that are recommended for a financially
2.20secure retirement in Minnesota;
2.21(2) estimates of the relative progress toward achieving the savings recommended for
2.22a financially secure retirement by gender, race, and ethnicity;
2.23(3) barriers to savings and reasons individuals and employers may not be
2.24participating in existing private sector retirement plans;
2.25(4) the estimated impact on publicly funded social safety net programs attributable
2.26to insufficient retirement savings, and the aggregate effect of potential state-administered
2.27plan options on publicly funded social safety net programs and the state economy;
2.28(5) the effect of federal tax laws and the federal Employee Retirement Income
2.29Security Act on a potential state-administered plan that allows for voluntary employer
2.30contributions, either commingled with or segregated from employee contributions;
2.31(6) options for a potential state-administered plan to use group annuities to ensure a
2.32stable stream of retirement income throughout beneficiaries' retirement years;
2.33(7) alternative ways and costs for the state to encourage similar outcomes to a
2.34state-administered plan; and
2.35(8) other topics that the commissioner determines are relevant to legislative
2.36consideration of possible establishment of a state-administered plan.
3.1(d) The commissioner may meet any of the topics in paragraph (c) by reporting the
3.2results of a request for public comment.
3.3 Sec. 2. APPROPRIATION.
3.4$300,000 is appropriated for the fiscal year ending June 30, 2014, from the general
3.5fund to the commissioner of management and budget for the purposes of section 1. This
3.6appropriation is available until spent.
3.7 Sec. 3. EFFECTIVE DATE.
3.8Sections 1 and 2 are effective the day following final enactment.
1.3to report to the legislature on a state-administered retirement savings plan;
1.4appropriating money.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. REPORT; RETIREMENT SAVINGS PLAN.
1.7(a) The commissioner of management and budget must report to the legislature
1.8by January 15, 2015, on the potential for a state-administered retirement savings plan
1.9to serve employees without access to either an automatic enrollment payroll deduction
1.10IRA maintained or offered by their employer, or a multiemployer retirement plan or
1.11qualifying retirement plan or arrangement described in sections 414(f) and 219(g)(5),
1.12respectively, of the Internal Revenue Code of 1986, as amended through April 14, 2011.
1.13The potential state-administered plan would provide for individuals to make contributions
1.14to their own accounts to be pooled and invested by the State Board of Investment, with the
1.15benefit consisting of the balance in each individual's account, and with the state having no
1.16liability for investment earnings and losses, while discouraging employers from dropping
1.17existing retirement plan options.
1.18(b) The report must include:
1.19(1) estimates of the number of Minnesota workers who could be served by the
1.20potential state-administered plan and the participation rate that would make the plan
1.21self-sustaining;
1.22(2) the effect of federal tax laws and the federal Employee Retirement Income
1.23Security Act on a potential state-administered plan and on participating employers and
1.24employees, including coverage and potential gaps in consumer protections;
2.1(3) the potential use and availability of investment strategies, private insurance,
2.2underwriting, or reinsurance against loss to limit or eliminate potential state liability
2.3and manage risk to the principal;
2.4(4) options for the process by which individuals would enroll in and contribute to
2.5the plan;
2.6 (5) projected costs of administration, record keeping, and investment management,
2.7including staffing, legal, compliance, licensing, procurement, communications with
2.8employers and employees, oversight, marketing, technology and infrastructure, and the fee
2.9needed to cover these costs as a percentage of the average daily net assets of the potential
2.10state-administered plan, relative to asset size, with estimates of investment-related fees
2.11determined in consultation with the State Board of Investment; and
2.12(6) a comparison of a potential state-administered plan to private sector and federal
2.13government retirement savings options with regard to participation rates, contribution
2.14rates, risk-adjusted return expectations, fees, and any other factors determined by
2.15the commissioner, which may include suitability in meeting the investment needs of
2.16participants.
2.17(c) Subject to available appropriation, the report may include:
2.18(1) estimates of the average amount of savings and other financial resources residents
2.19of Minnesota have upon retirement and those that are recommended for a financially
2.20secure retirement in Minnesota;
2.21(2) estimates of the relative progress toward achieving the savings recommended for
2.22a financially secure retirement by gender, race, and ethnicity;
2.23(3) barriers to savings and reasons individuals and employers may not be
2.24participating in existing private sector retirement plans;
2.25(4) the estimated impact on publicly funded social safety net programs attributable
2.26to insufficient retirement savings, and the aggregate effect of potential state-administered
2.27plan options on publicly funded social safety net programs and the state economy;
2.28(5) the effect of federal tax laws and the federal Employee Retirement Income
2.29Security Act on a potential state-administered plan that allows for voluntary employer
2.30contributions, either commingled with or segregated from employee contributions;
2.31(6) options for a potential state-administered plan to use group annuities to ensure a
2.32stable stream of retirement income throughout beneficiaries' retirement years;
2.33(7) alternative ways and costs for the state to encourage similar outcomes to a
2.34state-administered plan; and
2.35(8) other topics that the commissioner determines are relevant to legislative
2.36consideration of possible establishment of a state-administered plan.
3.1(d) The commissioner may meet any of the topics in paragraph (c) by reporting the
3.2results of a request for public comment.
3.3 Sec. 2. APPROPRIATION.
3.4$300,000 is appropriated for the fiscal year ending June 30, 2014, from the general
3.5fund to the commissioner of management and budget for the purposes of section 1. This
3.6appropriation is available until spent.
3.7 Sec. 3. EFFECTIVE DATE.
3.8Sections 1 and 2 are effective the day following final enactment.
