HF4921
Minnesota Secure Choice retirement program provisions modified.
Legislative Session 94 (2025-2026)
Related bill: SF4797
AI Generated Summary
Purpose
- Establish and expand a state retirement savings program (the Minnesota Secure Choice program) to help private-sector workers save for retirement. The bill adds new definitions, enrollment rules, contribution schedules, reporting requirements, governance provisions, and protections around data and enforcement.
Key Definitions and Terms
- Covered employee: a worker who is eligible to participate in the program, with specific exclusions (e.g., certain young workers, some federal employees, temporary/seasonal workers lasting 180 days or less, and others described in the bill).
- Covered employer: an employer that must enroll its eligible employees in the program.
- Enrollment window: the period when a covered employer must provide information to employees and enroll those who don’t opt out.
- Waiting period: a 30-day period before a newly eligible employee must begin participating.
- Contributions: employee payroll deductions into IRAs (Roth and/or traditional) or direct payments if not employed by a covered employer.
- Default contribution rate and escalation schedule: the initial automatic contribution rate for new participants and how it increases over time unless the employee elects otherwise.
- Roth IRA and Traditional IRA: the program can open these accounts for employees and set up relevant payroll deduction contributions.
- Annual report: a yearly summary of financial performance, program expenses, outcomes, and other metrics.
Main Provisions and What the Bill Seeks to Accomplish
- Program establishment and accounts
- The board must operate a retirement savings program with contributions via payroll deduction or direct payment to IRAs (Roth and/or traditional).
- Employees can contribute after-tax (Roth) unless they choose pretax contributions; the board sets procedures to open Roth and traditional IRAs for participants.
- Enrollment, waiting period, and contributions
- Employers must enroll eligible employees during the enrollment window and begin payroll deductions no later than 30 days after the employee’s first day of work, unless the employee elects not to contribute.
- A default escalation schedule sets increasing contribution rates over time (5% in year 1, 6% in year 2, 7% in year 3, 8% in year 4 and thereafter). Employees may adjust contributions or opt out annually; the board can change rates with advance notice (at least six months).
- A 30-day waiting period applies before enrollment or contributions start for new hires; there are rules around when rates apply after a waiting period.
- Employer certification and coverage determination
- Non-covered employers can certify through the program portal that they are not covered, with review, appeal, and potential enrollment if misclassification occurs.
- Default and opt-out
- If no employee elects otherwise, contributions default to the set escalation schedule; employees have annual opportunities to change rates or opt out.
- Account management and fees
- Each participating employee has an individual account; investment earnings accrue and fees/ losses are handled within the account.
- The board must keep administrative costs reasonable and publish related financial information in annual reports.
- Notices, information, and consumer protections
- The board must provide clear notices to employees about benefits, risks, enrollment, distributions, tax consequences, and disclaimers about liability and investment decisions.
- Annual notices remind employees about IRA contribution limits and the need to adjust contributions to stay within those limits.
- Penalties for noncompliance
- The bill creates penalties for covered employers that fail to enroll or to provide required information, with escalating amounts by anniversary years (e.g., $100 per employee by year 2, up to $4,000; higher amounts in later years).
- If a covered employer fails to comply with multiple requirements, penalties can be doubled.
- Governance and administration
- The program’s policymaking board is defined and expanded to seven members, including the executive directors of relevant state retirement and investment agencies, plus experienced professionals and representatives from private/public sectors.
- The board has duties such as establishing enrollment processes, budgeting, acquiring services, selecting contribution criteria and distribution options, choosing a default investment fund, and maintaining low administrative costs.
- The board can enter intergovernmental agreements with other state agencies to provide outreach and compliance support, while protecting data privacy.
- Data privacy
- Employee and account data are confidential; data may only be disclosed under specific legal or consent circumstances.
- Reporting and transparency
- The board must publish annual financial and outcomes reports and deliver them to legislative chairs and relevant bodies, including details on costs, participation, and program impact on social safety nets.
- Miscellaneous
- The bill repeals a prior provision (187.07 subdivision 3) and adds several new sections to Minnesota Statutes (2024/2025 supplements).
- Provisions authorize the program to seek gifts, grants, and donations (with conflict-of-interest safeguards) and to contract with third-party service providers as needed.
Significant Changes to Existing Law
- Introduces a comprehensive, mandatory enrollment framework for private employers to participate in a secure retirement program with a defined escalation of employee contribution rates.
- Establishes a formal default contribution rate schedule (5% to 8% over four years) and annual opt-out/change rights for employees.
- Expands governance to a seven-member board with specified expertise and terms, including ongoing authority to hire third-party service providers.
- Creates detailed reporting requirements, including annual financial and plan-outcome reports.
- Adds penalties for noncompliance by employers, with escalating penalties by anniversary dates.
- Clarifies and broadens data privacy protections for employee and account data.
- Enables intergovernmental cooperation with other state agencies for outreach, compliance, and administration.
- Repeals a prior subdivision (187.07 subdivision 3), replacing it with updated provisions and procedures.
Administration and Oversight
- The program is overseen by a seven-member board that sets policies, rates, and distribution options.
- The board must ensure enrollment processes, communications, and disclosures are clear and accessible.
- The program coordinates with other state agencies for outreach, compliance, and data privacy, while protecting private data.
Implementation Timeline (Highlights)
- Enrollment windows, waiting periods, and default contribution rates are defined with phased implementation and ongoing adjustments subject to board-approved schedules and notices.
- Six months’ advance notice is required for changes to employee contribution rates.
- Required notices and annual reports must be produced and distributed according to the defined timelines.
Relevant Terms - Minnesota Secure Choice - board of directors (program) - covered employer - covered employee - enrollment window - waiting period - enrollment and payroll deduction - contributions ( Roth IRA, Traditional IRA, after-tax/pre-tax) - default contribution rate - escalation schedule - opt out - annual report - penalties and enforcement - intergovernmental agreements - confidentiality / private data - trust / accounts (individual accounts) - administrative fees - notices (enrollment notices, annual IRA limit notices) - fiduciary duties - compliance and outreach - investment fund (default investment fund) - gifts, grants, donations to program - repealed subdivision (187.07, subd. 3)
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Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| April 09, 2026 | House | Action | Introduction and first reading, referred to | State Government Finance and Policy |
Citations
[
{
"analysis": {
"added": [
"Annual report meaning including financial performance, program expenses, outcomes, progress toward savings goals, participation statistics, and enforcement penalties."
],
"removed": [],
"summary": "Adds Subdivision 1a to Minnesota Statutes 2024 section 187.03 defining 'Annual report' for the Secure Choice retirement program.",
"modified": []
},
"citation": "187.03",
"subdivision": "Subd.1a"
},
{
"analysis": {
"added": [
"Explicitly includes criteria and exclusions for who counts as a covered employee, including certain age, multiemployer/railway, government, and temporary/seasonal workers."
],
"removed": [],
"summary": "Amends Minnesota Statutes 2025 Supplement section 187.03 subdivision 5 by refining 'Covered employee' and related exemptions.",
"modified": [
"Revises the definition of 'Covered employee' and related exemptions."
]
},
"citation": "187.03",
"subdivision": "Subd.5"
},
{
"analysis": {
"added": [
"Defines Enrollment window and its relation to phase-in schedules and enrollment obligations."
],
"removed": [],
"summary": "Amends Minnesota Statutes 2025 Supplement section 187.03 subdivision 6a to define the 'Enrollment window'.",
"modified": []
},
"citation": "187.03",
"subdivision": "Subd.6a"
},
{
"analysis": {
"added": [
"Waiting period means a 30-day period beginning on the first day of the applicable enrollment period."
],
"removed": [],
"summary": "Adds Subdivision 15 to 187.03 establishing a Waiting period.",
"modified": []
},
"citation": "187.03",
"subdivision": "Subd.15"
},
{
"analysis": {
"added": [
"Creates the program framework including Roth IRA and traditional IRA options and the mechanism for contributions."
],
"removed": [],
"summary": "Program established; board must operate an employee retirement savings program with payroll deduction and IRA contributions.",
"modified": []
},
"citation": "187.05",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [
"Adds a certification process for entities not considered covered employers to confirm non-coverage."
],
"removed": [],
"summary": "Certification by employers that are not covered employers.",
"modified": []
},
"citation": "187.05",
"subdivision": "Subd.1a"
},
{
"analysis": {
"added": [
"Allows changes to employee contribution rates and the escalation schedule with notice."
],
"removed": [],
"summary": "Contribution rate; board may change rates and escalation schedule.",
"modified": []
},
"citation": "187.05",
"subdivision": "Subd.4"
},
{
"analysis": {
"added": [
"Affirms annual or more frequent rights to begin contributing, change rate, opt out, or cease contributions."
],
"removed": [],
"summary": "Covered employee right to begin contributing or change contribution rate annually.",
"modified": []
},
"citation": "187.05",
"subdivision": "Subd.9"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Individual accounts established; trustee maintains accounts for each covered employee; interest credited; losses/fees deducted.",
"modified": []
},
"citation": "187.06",
"subdivision": "Subd.3"
},
{
"analysis": {
"added": [
"Enrollment within the enrollment window and withholding within 30 days after first day of employment, subject to rate guarantees."
],
"removed": [],
"summary": "Requirement to enroll employees and begin payroll deduction; withholding from first paycheck after waiting period.",
"modified": []
},
"citation": "187.07",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [
"Default schedule: 5% first year, 6% second year, 7% third year, 8% fourth year and thereafter."
],
"removed": [],
"summary": "Default contribution rate and escalation schedule.",
"modified": []
},
"citation": "187.07",
"subdivision": "Subd.1a"
},
{
"analysis": {
"added": [
"Outlines board makeup including executive directors and appointees."
],
"removed": [],
"summary": "Membership and board composition for the program.",
"modified": []
},
"citation": "187.08",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [
"Describes appointment processes and term considerations."
],
"removed": [],
"summary": "Appointment process and terms for board members.",
"modified": []
},
"citation": "187.08",
"subdivision": "Subd.2"
},
{
"analysis": {
"added": [
"Defines term lengths for executive/professional members and related renewal provisions."
],
"removed": [],
"summary": "Membership terms for certain categories; renewal rules.",
"modified": []
},
"citation": "187.08",
"subdivision": "Subd.3"
},
{
"analysis": {
"added": [
"Requires election of a chair and establishes quorum rules; sets term lengths."
],
"removed": [],
"summary": "Chair and quorum provisions for the board.",
"modified": []
},
"citation": "187.08",
"subdivision": "Subd.6"
},
{
"analysis": {
"added": [
"Lists board duties including enrollment processes, budgeting, procurement, and dissemination of information."
],
"removed": [],
"summary": "Duties of the board; enrollment processes, budgeting, procurement, and information dissemination.",
"modified": []
},
"citation": "187.08",
"subdivision": "Subd.8"
},
{
"analysis": {
"added": [
"Authorizes intergovernmental agreements with other state agencies for outreach, technical assistance, and compliance services."
],
"removed": [],
"summary": "Other state agencies to provide assistance; intergovernmental agreements.",
"modified": []
},
"citation": "187.11",
"subdivision": ""
},
{
"analysis": {
"added": [
"Penalties for failure to enroll or provide required information, with escalating amounts by anniversary."
],
"removed": [],
"summary": "Failure to enroll or distribute information; penalties and scheduling.",
"modified": []
},
"citation": "187.12",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [
"Notice must be disseminated within seven days of enrollment; includes detailed contents about program and tax consequences."
],
"removed": [],
"summary": "Required notices upon enrollment; contents include benefits, tax consequences, and disclaimers.",
"modified": []
},
"citation": "187.13",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [
"Annual notices about IRA contribution limits (408 and 408A) and employee responsibility to adjust contributions."
],
"removed": [],
"summary": "Annual notices to covered employees regarding IRA contribution limits and related responsibilities.",
"modified": []
},
"citation": "187.13",
"subdivision": "Subd.2"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Federal Railway Labor Act reference within Subd.5 of 187.03.",
"modified": []
},
"citation": "45 U.S.C. § 151 et seq.",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References to traditional IRA contribution limits for annual notices and related provisions.",
"modified": []
},
"citation": "26 U.S.C. § 408",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References to Roth IRA contribution limits for annual notices and related provisions.",
"modified": []
},
"citation": "26 U.S.C. § 408A",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Minnesota Statutes Chapter 290 cited in Sec. 19 as the framework for reporting.",
"modified": []
},
"citation": "290",
"subdivision": ""
}
]Progress through the legislative process
In Committee