Minnesota became the latest state to officially launch a state-sponsored retirement plan for private-sector employees lacking coverage.
Governor Tim Walz signed HF0782, the Minnesota Secure Choice retirement program, into law on Friday, making it one of 12 states offering an auto-IRA for previously uncovered private sector workers.
“We are pleased Minnesota is joining the growing list of states taking a meaningful step toward closing the retirement savings opportunity gap,” American Retirement Association CEO Brian Graff said.
The state Senate approved the bill on May 11, and the House did so 10 days earlier. The Senate approved the measure in a 34-33 vote. Sen. Sandra L. Pappas (DFL-St. Paul) introduced the Senate version of the bill on Jan. 19, 2023. The House passed HF 782 in a 71-60 vote on May 1.
The legislation would require employers that employ five or more workers to participate in Secure Choice if they do not already offer a plan. It also would grant employees several options. They could:
· Decide whether their contributions will be pre-tax or after-tax;
· Opt out of participation;
· Change their contribution rate;
· Direct the investment of their accounts into an array of investment funds offered through the State Board of Investment; and
· After separation from service, leave their account with the state for distribution at a later date or elect a distribution in the form of a lump sum or other options to be determined by the board, including lifetime income options.
Rep. Jamie Becker-Finn, DFL-Roseville, the bill’s author in the House, previously praised “nerdy group” American Retirement Association (ARA) for its help and support.
“It’s a very nerdy group to brag about getting support from, but the American Retirement Association is a big deal,” Becker-Finn, a small business owner, said. “The ARA recognizes that despite our best efforts in the private sector, there are far too many Americans without access to a retirement plan at work. So that is what we are trying to fix in this bill and would appreciate everyone’s support.”
John Iekel contributed to this report.