1.1                          A bill for an act 
  1.2             relating to retirement; Minnesota state retirement 
  1.3             system unclassified plan; public employees retirement 
  1.4             association defined contribution plan; Minnesota state 
  1.5             colleges and universities individual retirement 
  1.6             account plan and supplemental retirement plan; state 
  1.7             arts board, humanities commission, Minnesota 
  1.8             historical society plan; revising excess contribution 
  1.9             language in certain plans; clarifying fiduciary 
  1.10            status, responsibilities, and liabilities; authorizing 
  1.11            distributions prior to termination from supplemental 
  1.12            retirement plan under a phased retirement program; 
  1.13            extending vendor contracts; amending Minnesota 
  1.14            Statutes 1998, sections 354B.23, subdivision 5a; 
  1.15            354C.12, subdivision 1a; 354C.165; 356A.01, 
  1.16            subdivision 8; 356A.02; and 356A.06, by adding a 
  1.17            subdivision. 
  1.18  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.19     Section 1.  Minnesota Statutes 1998, section 354B.23, 
  1.20  subdivision 5a, is amended to read: 
  1.21     Subd. 5a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
  1.22  to the plan exceed limits imposed by federal law or 
  1.23  regulation and it is necessary to return contributions to comply 
  1.24  with the federal limits, the excess employee contributions must 
  1.25  be returned to the employee and to the excess employer in the 
  1.26  same proportions as the contributions were made contributions 
  1.27  must be reallocated in accordance with section 415 of the 
  1.28  Internal Revenue Code, as amended, and applicable regulations 
  1.29  and revenue rulings. 
  1.30     (b) When an employer contribution required under section 
  1.31  354B.24 due to a sabbatical leave is made after completion of 
  2.1   the leave or an employer contribution is made due to omitted 
  2.2   deductions under subdivision 5, and these employer contributions 
  2.3   cause or would cause total contributions to the plan to exceed 
  2.4   limits imposed by federal law or regulation, the employer must 
  2.5   make that portion of the contribution that would exceed the 
  2.6   federal limit during the next calendar year. 
  2.7      Sec. 2.  Minnesota Statutes 1998, section 354C.12, 
  2.8   subdivision 1a, is amended to read: 
  2.9      Subd. 1a.  [EXCESS CONTRIBUTIONS.] (a) When contributions 
  2.10  to the plan exceed limits imposed by federal law or 
  2.11  regulation and it is necessary to return contributions to comply 
  2.12  with the federal limits, one-half of the excess contributions 
  2.13  must be returned to, the excess employee contributions must be 
  2.14  returned to the employee and one-half to the excess employer 
  2.15  contributions must be reallocated in accordance with section 415 
  2.16  of the Internal Revenue Code, as amended, and applicable 
  2.17  regulations and revenue rulings. 
  2.18     (b) When an employer contribution is made due to omitted 
  2.19  deductions under subdivision 2, and these employer contributions 
  2.20  cause or would cause total contributions to the plan to exceed 
  2.21  limits imposed by federal law or regulation, the employer must 
  2.22  make that portion of the contribution that would exceed the 
  2.23  federal limit during the next calendar year. 
  2.24     Sec. 3.  Minnesota Statutes 1998, section 354C.165, is 
  2.25  amended to read: 
  2.26     354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 
  2.27  DISTRIBUTIONS.] 
  2.28     (a) No participant may obtain a loan from the plan or 
  2.29  obtain any distribution from the plan at a time before the 
  2.30  participant terminates the employment that gave rise to plan 
  2.31  coverage, except as indicated in paragraph (b). 
  2.32     (b) Prior to termination from covered employment, a 
  2.33  participant may obtain distributions from the supplemental 
  2.34  retirement plan at or after age 55 under a phased retirement 
  2.35  program if negotiated and provided under a collective bargaining 
  2.36  agreement.  Any distribution must be consistent with applicable 
  3.1   provisions of the Internal Revenue Code, as amended, and 
  3.2   applicable regulations and revenue rulings. 
  3.3      (c) No amounts to the credit of the plan are assignable 
  3.4   either in law or in equity, are subject to state estate tax, or 
  3.5   are subject to execution, levy, attachment, garnishment, or 
  3.6   other legal process, except as provided in section 518.58, 
  3.7   518.581, or 518.6111.  
  3.8      Sec. 4.  Minnesota Statutes 1998, section 356A.01, 
  3.9   subdivision 8, is amended to read: 
  3.10     Subd. 8.  [COVERED PENSION PLAN.] "Covered pension plan" 
  3.11  means a pension plan or fund listed in section 356.20, 
  3.12  subdivision 2, or 356.30, subdivision 3, or plans established 
  3.13  under chapter 353D, 354B, 354C, or 354D. 
  3.14     Sec. 5.  Minnesota Statutes 1998, section 356A.02, is 
  3.15  amended to read: 
  3.16     356A.02 [FIDUCIARY STATUS AND ACTIVITIES.] 
  3.17     Subdivision 1.  [FIDUCIARY STATUS.] For purposes of this 
  3.18  chapter, the following persons are fiduciaries: 
  3.19     (1) any member of the governing board of a covered pension 
  3.20  plan; 
  3.21     (2) the chief administrative officer of a covered pension 
  3.22  plan or of the state board of investment; 
  3.23     (3) any member of the state board of investment; and 
  3.24     (4) any member of the investment advisory council or any 
  3.25  similar council or committee established to provide investment 
  3.26  advice to a covered pension plan; 
  3.27     (5) any member of the advisory committee established under 
  3.28  section 354B.25; and 
  3.29     (6) any investment manager or investment management 
  3.30  company, custodian, financial institution, open-end investment 
  3.31  company registered under the federal Investment Company Act of 
  3.32  1940, as amended, or other financial product or financial 
  3.33  services provider, relating to the investment products and 
  3.34  services offered to covered pension plan members. 
  3.35     Subd. 2.  [FIDUCIARY ACTIVITY.] The activities of a 
  3.36  fiduciary identified in subdivision 1 that must be carried out 
  4.1   in accordance with the requirements of section 356A.04 include, 
  4.2   but are not limited to: 
  4.3      (1) the investment and reinvestment of plan assets; 
  4.4      (2) the determination of benefits; 
  4.5      (3) the determination of eligibility for membership or 
  4.6   benefits; 
  4.7      (4) the determination of the amount or duration of 
  4.8   benefits; 
  4.9      (5) the determination of funding requirements or the 
  4.10  amounts of contributions; 
  4.11     (6) the maintenance of membership or financial records; and 
  4.12     (7) the expenditure of plan assets; and 
  4.13     (8) the selection of financial institutions and investment 
  4.14  products. 
  4.15     Sec. 6.  Minnesota Statutes 1998, section 356A.06, is 
  4.16  amended by adding a subdivision to read: 
  4.17     Subd. 10.  [DEFINED CONTRIBUTION PLANS; APPLICATION.] (a) 
  4.18  To the extent that a plan specified in chapters 352D, 353D, 
  4.19  354B, 354C, and 354D permits a participant or beneficiary to 
  4.20  select among investment products for his or her account and the 
  4.21  participant or beneficiary exercises that control, no fiduciary 
  4.22  is liable for any loss which may result from the participant's 
  4.23  or beneficiary's exercise of that control. 
  4.24     (b) Subdivisions 1, 2, 6, 8, and 8a do not apply to plans 
  4.25  specified in chapters 354B and 354C. 
  4.26     Sec. 7.  [VENDOR CONTRACT EXTENSION OPTION.] 
  4.27     Notwithstanding Minnesota Statutes, section 136F.45, 
  4.28  subdivision 1a, paragraph (c), the board of trustees of the 
  4.29  Minnesota state colleges and universities may, with the 
  4.30  agreement of the parties involved, extend the vendor contracts 
  4.31  in effect immediately prior to July 1, 2000, with any revisions 
  4.32  mutually agreeable to the parties, for up to an additional two 
  4.33  years. 
  4.34     Sec. 8.  [EFFECTIVE DATE.] 
  4.35     Sections 1 to 7 are effective the day following final 
  4.36  enactment.