Subdivision 1.Program established.
(a)The board must operate an employee retirement savings program whereby employee payroll deduction contributions are transmitted on an after-tax or pretax basis by covered employers to individual retirement accounts established under the program.
(b)The board must establish procedures for opening a Roth IRA, a traditional IRA, or both a Roth IRA and a traditional IRA for each covered employee whose covered employer transmits employee payroll deduction contributions under the program.
(c)Contributions must be made on an after-tax (Roth) basis, unless the covered employee elects to contribute on a pretax basis.
Subd. 1a.Certification by employers that are not covered employers.
(a)Any entity or person may file a certification with the executive direc
Free access — add to your briefcase to read the full text and ask questions with AI
Subdivision 1.Program established.
(a) The board must operate an employee retirement savings program whereby employee payroll deduction contributions are transmitted on an after-tax or pretax basis by covered employers to individual retirement accounts established under the program.
(b) The board must establish procedures for opening a Roth IRA, a traditional IRA, or both a Roth IRA and a traditional IRA for each covered employee whose covered employer transmits employee payroll deduction contributions under the program.
(c) Contributions must be made on an after-tax (Roth) basis, unless the covered employee elects to contribute on a pretax basis.
Subd. 1a.Certification by employers that are not covered employers.
(a) Any entity or person may file a certification with the executive director on a form prescribed by the executive director and provide documentation in support of the certification, as requested by the executive director, stating that the entity or person is not a covered employer. The certification must state that the entity or person is not a covered employer for one or more of the following reasons:
(1) the entity or person has not been engaged for at least 12 months in a business, industry, profession, trade, or other enterprise in Minnesota, whether for profit or not for profit;
(2) the entity or person does not employ five or more employees;
(3) the entity or person sponsors or contributes to or, in the immediately preceding 12 months, sponsored or contributed to a retirement savings plan for its employees; or
(4) the entity is a political subdivision of the state or federal government.
(b) Within 30 days of receiving the certification, the executive director must accept the certification or issue a determination that the entity or person is a covered employer and subject to the requirements of section187.07.
(c) The entity or person may appeal the executive director's determination by filing an appeal with the board of directors no later than 30 days after receipt of the determination.
Subd. 2.Compliance with Internal Revenue Code.
The board must establish and administer each Roth IRA and traditional IRA opened under the program in compliance with section 408 or 408A of the Internal Revenue Code, as applicable, for the benefit of the covered employee for whom the account was opened.
Subd. 3.Contributions held in trust.
Each covered employer must transmit employee payroll deduction contributions to an account established for the benefit of the covered employee in a trust established to hold contributions under the program.
Subd. 4.Contribution rate.
(a) The board may change the required employee contribution rates and the escalation schedule under section187.07, subdivision 1. The board must provide all covered employers with notice of a change in employee contribution rates or the escalation schedule at least six months in advance of the effective date of the change.
(b) A covered employee must have the right, annually or more frequently as determined by the board, to change the contribution rate, opt out or elect not to contribute, or cease contributions.
Subd. 5.Vesting.
Covered employees are 100 percent vested in their accounts at all times.
Subd. 6.Withdrawals and distributions.
The board must establish alternatives permitting covered employees to take a withdrawal of all or a portion of the covered employee's account while employed and one or more distributions following termination of employment. By July 1, 2028, the board must include lifetime income options as distribution alternatives.
Subd. 7.Individuals not employed by a covered employer.
(a) In addition to home and community-based services employees under paragraph (b), the board may allow individuals not employed by a covered employer to open and contribute to an account in the program, in which case the individual must be considered a covered employee for purposes of sections187.05to187.11.
(b) The board must allow any home and community-based services employee to open and contribute to an account in the program within six months of the opening of the program and must consider a home and community-based services employee a covered employee for purposes of sections187.05to187.11.
Subd. 8.Employee leasing companies.
(a) For purposes of this chapter, in the case of a taxpaying employer described in section268.046that contracts with an employee leasing company, professional employer organization, or other similar entity to obtain workers for the taxpaying employer from the entity for a fee, the workers covered by the contract must be treated as employed by the taxpaying employer and not by the entity, except that if the entity provides the workers with a retirement savings plan, the taxpaying employer is not a covered employer.
(b) A covered employer that is a taxpaying employer described in section268.046may contract with an employee leasing company, professional employer organization, or other similar entity to assist the taxpaying employer with the performance of some or all of the taxpaying employer's responsibilities under this chapter.