The Minnesota Public Employees Retirement System’s new 401(k) plan has opened a new era for companies looking to boost their stock prices in the face of tough economic conditions.
The new plan will allow employees to take advantage of the market’s ups and downs in order to boost stock prices, and it is expected to help raise dividends and boost profits, according to the Minnesota Department of Labor.
The state’s public employees’ retirement system is the first to adopt the 401(ks) since the federal Employee Retirement Income Security Act of 1974, which also created the first state retirement plan.
The law requires all public sector employers to provide employees with 401(K) plans, which were established in the early 1990s.
The new state plan provides an opportunity for companies to use the new 401ks as a means of boosting their stock price and investing more in their workers, the department said in a release.
Under the plan, employees who opt into the plan will be able to contribute up to $18,500 to their 401(p) plan.
They will also be able deduct up to 20 percent of their compensation as a contribution toward a 401(c).
The Minnesota Public Employee Retirement System will pay out at least $16 billion in 401(b) and other employer-sponsored plans over the next decade, according the department.
The plan will also provide a tax break for companies that invest in their employees.
The state plans to begin accepting applications for employees in the coming weeks.
The Minnesota Pension Fund Investment Board said in its statement that the state’s new plan is “a powerful tool for businesses to grow and prosper” and that the investment board “will continue to monitor the implementation of this new plan.”
The fund also expects to see the state plan increase in value over the long-term, as employees who have been enrolled in the plan continue to receive benefits.
The fund said the state plans also will provide “a significant boost to the state pension fund, which is a vital component of our state’s economy.”
In addition to the new state retirement plans, the fund plans to invest in other public sector retirement plans including the Minnesota Pension Foundation and the Minnesota Public Aid Fund.