HF2942

Purpose of the Bill

The bill aims to modify and improve the Minnesota Secure Choice Retirement Program. It focuses on requiring the disclosure of certain information by the commissioner of employment and economic development to facilitate the administration of the program. The bill also makes various administrative and technical adjustments to existing provisions of this retirement program.

Main Provisions

• Employer Information Disclosure: The bill mandates the commissioner to provide data regarding businesses within the state to the executive director of the Minnesota Secure Choice retirement program to ensure compliance and inform employers about the program.

• Eligibility and Enrollment: Adjustments are made to clarifications on which employees and employers are covered under the program. It describes who qualifies as a covered employee and clarifies that certain individuals, like federal employees or those in a temporary job lasting less than 120 days, are excluded from mandatory participation unless they choose otherwise.

• Employer Certification: Employers who are not covered by the program can certify their status by demonstrating they don't meet the criteria such as having fewer than five employees or currently offering a retirement savings plan.

• Employee Contributions: Establishes default contribution rates of covered employees, beginning at 5% of pay, increasing annually to 8%, unless alternative rates are set by the board or chosen by the employee. It includes provisions for employees to modify their contribution rate or opt out.

• Withdrawal Options: The bill specifies that withdrawal and distribution options from the retirement account should include lifetime income plans, which should be available by July 2028.

• Compliance and Enforcement: The bill includes penalties for employers who fail to comply with the requirements of enrolling employees in the program and remitting contributions in a timely manner. Warnings will be issued for first-time violations before penalties are enforced after two years of noncompliance.

• Administrative Support and Coordination: Allows the board to enter agreements with other state agencies for additional support and services needed for the program, ensuring privacy of data shared under these agreements.

Significant Changes

• The bill introduces a clear procedure for employers to declare they are not subject to the program's requirements.
• There is a stronger enforcement mechanism for compliance, with penalties for companies failing to meet their obligations.
• It sets clear timelines and frameworks for the implementation of contribution and withdrawal options, including escalations and lifetime income distributions.

Relevant Terms

• Minnesota Secure Choice Retirement Program
• Covered Employers and Employees
• Contribution Rate Escalation
• Compliance and Penalties
• Lifetime Income Options
• Employer Certification