A bill for an act
relating to retirement; establishing the Minnesota Secure Choice retirement
program; proposing coding for new law as Minnesota Statutes, chapter 187.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
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This chapter shall be known as and may be cited as the "Minnesota Secure Choice
Retirement Program Act."
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The state of Minnesota creates and establishes a public-private partnership model known
as the "Minnesota Secure Choice retirement program" for privately employed workers to
save for retirement for the following reasons:
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(1) for millions of Americans, including hundreds of thousands of Minnesotans, a secure
retirement is not attainable, with the median retirement account balance being $3,000 for
all working-age households and $12,000 for near-retirement-age households;
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(2) Americans who do not have access to a retirement savings plan through their
workplace are more likely to rely on Social Security as their only source of retirement
income;
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(3) in Minnesota, the average monthly Social Security benefit is $1,600, with nearly 14
percent of seniors relying on Social Security for 90 percent of their income;
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(4) increased retirement savings can save Minnesota taxpayers an estimated $258,000,000
over a span of ten years in Medicaid savings alone; and
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(5) research has shown that offering workers a way to save through their job increases
their ability to save dramatically and promotes individual responsibility and financial
freedom.
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For purposes of this chapter, the terms defined in this
section have the meanings given them.
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"Board" means the Secure Choice retirement program board of directors.
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"Compensation" means compensation within the meaning of
Section 219(f)(1) of the Internal Revenue Code that is received by a covered employee from
a covered employer.
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"Contribution rate" means the percentage of compensation
withheld from a covered employee's compensation and deposited in an account established
for the covered employee under the program.
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(a) "Covered employee" means a person who is employed
by a covered employer and who, for the immediately preceding calendar year, was credited
with 500 or more hours of service for the covered employer and whose primary work location
is in Minnesota. Once a person has been credited with 500 or more hours of service in a
calendar year, the person continues to be a covered employee for as long as the person is
employed by a covered employer, even if the person is credited with fewer than 500 hours
of service in the current or subsequent calendar year.
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(b) Covered employee does not include:
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(1) a person who, on December 31 of the preceding calendar year, was younger than 18
years of age;
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(2) a person covered under the federal Railway Labor Act, as amended, United States
Code, title 45, sections 151 et seq.;
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(3) a person on whose behalf an employer makes contributions to a Taft-Hartley
multiemployer pension trust fund; and
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(4) a person employed by the government of the United States, another country, the state
of Minnesota, another state, or any subdivision thereof.
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(a) "Covered employer" means a person or entity:
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(1) engaged in a business, industry, profession, trade, or other enterprise in Minnesota,
whether for profit or not for profit;
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(2) that employs one or more covered employees or is a sole proprietor; and
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(3) that does not sponsor or contribute to and did not in the immediately preceding
calendar year sponsor or contribute to a retirement savings plan for its employees or, in the
case of a sole proprietorship, for the sole proprietor.
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(b) Covered employer does not include:
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(1) an employer that has not engaged in a business, industry, profession, trade, or other
enterprise in Minnesota, whether for profit or not for profit, at any time during the
immediately preceding calendar year; and
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(2) a state or federal government or any political subdivision thereof.
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"Executive director" means the chief executive and
administrative head of the program.
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"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, United States Code, title 26.
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"Program" means the Minnesota Secure Choice retirement program.
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"Retirement savings plan" means a plan or program
offered by an employer that permits contributions to be set aside for retirement on a pre-tax
or after-tax basis and permits all employees of the employer to participate except those
employees who have not satisfied participation eligibility requirements that are no more
restrictive than the eligibility requirements permitted under section 410(b) of the Internal
Revenue Code. Retirement savings plan includes but is not limited to a plan described in
section 401(a) of the Internal Revenue Code, an annuity plan or annuity contract described
in section 403(a) or (b) of the Internal Revenue Code, a plan within the meaning of section
457(b) of the Internal Revenue Code, a simplified employee pension (SEP) plan, a savings
incentive match plan for employees (SIMPLE) plan, a payroll deduction individual retirement
account, and a multiemployer pension plan described in section 414(f) of the Internal
Revenue Code.
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"Secure Choice administrative fund"
or "administrative fund" means the fund established under section 187.06, subdivision 2.
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"Secure Choice trust" means a trust established under
section 187.06, subdivision 1, to hold contributions and investment earnings thereon under
the program.
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