|Financial Audit Division Report 05-24||Released April 20, 2005|
We conducted this special review in response to concerns raised by a Minnesota State Retirement System (MSRS) employee about administration of the Minnesota State Deferred Compensation Plan. We considered these concerns when establishing the audit scope. We focused this special review primarily on controls over financial activity of the plan’s administrative account. Our review was not a full audit of the deferred compensation plan.
January 1, 2002, through December 31, 2004
The Minnesota State Retirement System administers the Minnesota State Deferred Compensation Plan. The deferred compensation plan is available to all public employees in the state. Employees who choose to participate in the plan invest a portion of their wages to accumulate on a tax-deferred basis, until withdrawn. At June 30, 2004, the plan had approximately 80,000 participants with assets exceeding $2 billion.
We did not find evidence of financial wrongdoing by MSRS employees. In addition, we did not find evidence that MSRS employees were actively involved in the administration of other tax-sheltered annuity plans. However, we identified several weaknesses in MSRS’s administration of the state’s deferred compensation plan, including weaknesses in controls over the administrative account, contract administration, and system access.