1.1                          A bill for an act 
  1.2             relating to retirement; raising maximum annual 
  1.3             employer contribution limits for plans under section 
  1.4             403(b) and 457(b) of the federal Internal Revenue 
  1.5             Code; amending Minnesota Statutes 1998, section 
  1.6             356.24, by adding a subdivision; Minnesota Statutes 
  1.7             1999 Supplement, section 356.24, subdivision 1. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.10  356.24, subdivision 1, is amended to read: 
  1.11     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
  1.12  for a school district or other governmental subdivision or state 
  1.13  agency to levy taxes for, or contribute public funds to a 
  1.14  supplemental pension or deferred compensation plan that is 
  1.15  established, maintained, and operated in addition to a primary 
  1.16  pension program for the benefit of the governmental subdivision 
  1.17  employees other than: 
  1.18     (1) to a supplemental pension plan that was established, 
  1.19  maintained, and operated before May 6, 1971; 
  1.20     (2) to a plan that provides solely for group health, 
  1.21  hospital, disability, or death benefits; 
  1.22     (3) to the individual retirement account plan established 
  1.23  by chapter 354B; 
  1.24     (4) to a plan that provides solely for severance pay under 
  1.25  section 465.72 to a retiring or terminating employee; 
  1.26     (5) for employees other than personnel employed by the 
  2.1   state university board or the community college board and 
  2.2   covered by the board of trustees of the Minnesota state colleges 
  2.3   and universities supplemental retirement plan under chapter 
  2.4   354C, if provided for in a personnel policy of the public 
  2.5   employer or in the collective bargaining agreement between the 
  2.6   public employer and the exclusive representative of public 
  2.7   employees in an appropriate unit, in an amount matching employee 
  2.8   contributions on a dollar for dollar basis, but not to exceed an 
  2.9   the applicable maximum employer contribution of $2,000 a year 
  2.10  per employee specified in subdivision 1c; 
  2.11     (i) to the state of Minnesota deferred compensation plan 
  2.12  under section 352.96; or 
  2.13     (ii) in payment of the applicable portion of the premium on 
  2.14  a tax-sheltered annuity contract qualified under section 403(b) 
  2.15  of the Internal Revenue Code, if purchased from a qualified 
  2.16  insurance company, or to a qualified investment entity, as 
  2.17  defined in subdivision 1a, and, in either case, if the employing 
  2.18  unit has complied with any applicable pension plan provisions of 
  2.19  the Internal Revenue Code with respect to the tax-sheltered 
  2.20  annuity program during the preceding calendar year; or 
  2.21     (6) for personnel employed by the state university board or 
  2.22  the community college board and not covered by clause (5), to 
  2.23  the supplemental retirement plan under chapter 354C, if provided 
  2.24  for in a personnel policy or in the collective bargaining 
  2.25  agreement of the public employer with the exclusive 
  2.26  representative of the covered employees in an appropriate unit, 
  2.27  in an amount matching employee contributions on a dollar for 
  2.28  dollar basis, but not to exceed an employer contribution of 
  2.29  $2,000 a year for each employee.  
  2.30     Sec. 2.  Minnesota Statutes 1998, section 356.24, is 
  2.31  amended by adding a subdivision to read: 
  2.32     Subd. 1c.  [EMPLOYER MATCHING CONTRIBUTION MAXIMUM.] (a) 
  2.33  Except as provided in paragraph (b), the maximum annual employer 
  2.34  matching contribution to the state of Minnesota deferred 
  2.35  compensation plan or a tax-sheltered investment under 
  2.36  subdivision 1, clause (5), is $2,000 and requires an employee 
  3.1   match on a dollar-for-dollar basis. 
  3.2      (b) For severance pay offset programs established in 
  3.3   conjunction with severance pay plans in school districts and 
  3.4   other educational employing units where a portion of the 
  3.5   available severance payment amount is paid as an employer 
  3.6   contribution to a supplemental retirement plan investment under 
  3.7   section 403(b) or section 457(b) of the federal Internal Revenue 
  3.8   Code, whichever applies, in anticipation of retirement, the 
  3.9   maximum annual employer contribution to that investment under 
  3.10  subdivision 1, clause (5), is the difference between the amount 
  3.11  of the employer matching contribution generally applicable under 
  3.12  the supplemental retirement plan subject to the maximum in 
  3.13  paragraph (a) and the applicable contribution limit for that 
  3.14  year under federal law and does not require an employee 
  3.15  contribution beyond the generally applicable amount. 
  3.16     (c) The limits under paragraph (b) may be included in 
  3.17  collective bargaining agreements made prior to June 30, 2004, 
  3.18  and once implemented by collective bargaining, continue in 
  3.19  effect so long as accrued severance payment amounts are treated 
  3.20  as constructive receipt amounts by the federal Internal Revenue 
  3.21  Service. 
  3.22     Sec. 3.  [EFFECTIVE DATE.] 
  3.23     Sections 1 and 2 are effective on the day following final 
  3.24  enactment.