Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Retirement Security topic
No spam. Unsubscribe anytime.
Senate committee advances Minnesota Secure Choice penalties, seeks employer data from DEED
Summary
The Senate Judiciary Committee advanced two Secure Choice bills that set penalties for employer noncompliance and authorize state access to employer data to identify firms already offering retirement plans.
Senator Pappas introduced two bills on Minnesota's state-facilitated retirement program, the Minnesota Secure Choice, explaining the measures would set enforcement penalties and allow the program to obtain employer identifiers from the Department of Employment and Economic Development (DEED).
The committee heard detailed explanation from Dave Bergstrom, interim executive director of the Minnesota Secure Choice Program, who described the penalty schedule and the program's operations. Bergstrom said penalties are intended to encourage enrollment and that other states' programs use similar penalties. He described a graduated penalty scheme that starts only after about two years of outreach and includes a $100-per-employee penalty (capped at $4,000) after certified notice if an employer fails to enroll; penalties rise if noncompliance continues. For withheld payroll deductions, Bergstrom said remitted funds that arrive within 10 days of contact would require employers to remit missed contributions plus 7% annual interest; willful failure to remit could be treated as a misdemeanor, enforced by the attorney general, and repeat violations could bring higher per-employee charges.
Bergstrom and Senator Pappas also described a companion bill to allow DEED to provide employer data including federal employer identification numbers. The Secure Choice board plans to use those identifiers to compare employers against federal filings (Form 5500) to exclude employers that already offer retirement plans; the board estimates that will shrink the 48,000 employers it must contact to around 20,000.
Committee members asked about opt-outs and employer obligations. Senator Anderson confirmed that employees may opt out and that if an employer has five or more employees it must withhold for any employee who remains enrolled even if others opt out. Senator Limmer asked whether employers may contribute; Pappas said Secure Choice accounts are IRA-style: employer matching is not allowed under the program's design.
The committee adopted a drafted 1A amendment and an oral amendment changing mandatory deadlines to "may" in two lines of the bill. On Senator Pappas' motion, Senate File 2984 as amended was recommended to pass and sent to the Committee on State and Local Government. Senate File 2985 (the DEED-data bill), after adoption of a committee-level technical amendment, was also recommended to pass and sent to State and Local Government.
The bills envision the Minnesota Secure Choice program being managed by the State Board of Investment and applying only to employers with five or more employees; employers that already offer plans would be excluded. Bergstrom emphasized that the board delayed penalties' immediate effect, staged notices and a 30-day waiver window after certified notice as part of stakeholder discussions with business groups.
Votes at a glance: Senate File 29-84 (penalty bill): 1A amendment adopted; oral amendment adopted; motion to recommend passage and send to State and Local Government — motion carried. Senate File 29-85 (DEED data): 1A amendment adopted; motion to recommend passage and send to State and Local Government — motion carried.
Why it matters: Proponents said the program will expand retirement saving access for hundreds of thousands of Minnesotans who lack employer plans and could reduce future public benefit costs; opponents at other forums have raised concerns about employer burden and data security. The bills will move to State and Local Government where technical language and data-security provisions may be further refined.
