Engrossments
Introduction		Posted on 02/02/2023
1st Engrossment		Posted on 02/16/2023

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM
ADMINISTRATIVE CHANGES

Section 1.

Minnesota Statutes 2022, section 352B.08, subdivision 1, is amended to read:

Subdivision 1.

Eligibility; when to apply; accrual.

(a) Every member who is credited
with three or more years of allowable service if first employed before July 1, 2013, or with
at least ten years of allowable service if first employed after June 30, 2013, is entitled to
separate from state service and upon becoming 50 years old, is entitled to receive a life
annuity, upon separation from state service.

(b) Members must apply for an annuity in a form and manner prescribed by the executive
director.

(c) No application may be made more than deleted text begin 90deleted text end new text begin 60new text end days before the date the member is
eligible to retire by reason of both age and service requirements.

(d) An annuity begins to accrue no earlier than 180 days before the date the application
is filed with the executive director.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2022, section 356.551, subdivision 2, is amended to read:

Subd. 2.

Determination.

(a) Unless the minimum purchase amount set forth in paragraph
(c) applies, the prior service credit purchase amount is an amount equal to the actuarial
present value, on the date of payment, as calculated by the chief administrative officer of
the pension plan and reviewed by the actuary retained under section 356.214, of the amount
of the additional retirement annuity obtained by the acquisition of the additional service
credit in this section.

(b) Calculation of this amount must be made using the investment return assumption
applicable to the public pension plan specified in section 356.215, subdivision 8, and the
mortality table adopted for the public pension plan.

(1) Unless clause (2) applies, the calculation must assume continuous future service in
the public pension plan until, and retirement at, the age at which the minimum requirements
of the fund for normal retirement or retirement with an annuity unreduced for retirement at
an early age, including section 356.30, are met with the additional service credit purchased.
The calculation must also assume a full-time equivalent salary, or actual salary, whichever
is greater, and a future salary history that includes annual salary increases at the applicable
salary increase rate for the plan specified in section 356.215, subdivision 8.

(2) This clause applies when the calculation is being done for purposes of section 352.272;
352B.087; 353.0141, subdivision 3; 354.544; deleted text begin ordeleted text end 354A.0961new text begin ; or 490.1211, subdivision 2new text end .
The calculation must include continuous future service in the public pension plan until, and
retirement at, any age at or after which the minimum requirements of the fund for early
retirement or retirement with an annuity unreduced for retirement at an early age, including
section 356.30, are met with the additional service credit purchased. The calculation must
be determined using the retirement age that provides the most valuable benefit to the member.
The calculation must also assume a full-time equivalent salary, or actual salary, whichever
is greater, and a future salary history that includes annual salary increases at the applicable
salary increase rate for the plan specified in section 356.215, subdivision 8.

(c) The prior service credit purchase amount may not be less than the amount determined
by applying, for each year or fraction of a year being purchased, the sum of the employee
contribution rate, the employer contribution rate, and the additional employer contribution
rate, if any, applicable during that period, to the person's annual salary during that period,
or fractional portion of a year's salary, if applicable, plus interest at the applicable annual
rate or rates specified in section 356.59, subdivision 2, 3, 4, or 5, whichever applies,
compounded annually, from the end of the year in which contributions would otherwise
have been made to the date on which the payment is received.

(d) Unless otherwise provided by statutes governing a specific plan, payment must be
made in one lump sum within one year of the prior service credit authorization or prior to
the member's effective date of retirement, whichever is earlier. Payment of the amount
calculated under this section must be made by the applicable eligible person.

(e) However, the current employer or the prior employer may, at its discretion, pay all
or any portion of the payment amount that exceeds an amount equal to the employee
contribution rates in effect during the period or periods of prior service applied to the actual
salary rates in effect during the period or periods of prior service, plus interest at the
applicable annual rate or rates specified in section 356.59, subdivision 2, 3, 4, or 5, whichever
applies, compounded annually, from the date on which the contributions would otherwise
have been made to the date on which the payment is made. If the employer agrees to
payments under this subdivision, the purchaser must make the employee payments required
under this subdivision within 90 days of the prior service credit authorization. If that
employee payment is made, the employer payment under this subdivision must be remitted
to the chief administrative officer of the public pension plan within 60 days of receipt by
the chief administrative officer of the employee payments specified under this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2022, section 490.1211, is amended to read:

490.1211 UNIFORMED SERVICE.

new text begin Subdivision 1. new text end

new text begin Federal uniformed service protections. new text end

(a) A judge who is absent from
employment by reason of service in the uniformed services, as defined in United States
Code, title 38, section 4303(13), and who returns to state employment as a judge upon
discharge from service in the uniformed service within the time frame required in United
States Code, title 38, section 4312(e), may obtain service credit for the period of the
uniformed service, provided that the judge did not separate from uniformed service with a
dishonorable or bad conduct discharge or under other than honorable conditions.

(b) The judge may obtain credit by paying into the fund equivalent member contribution
based on the contribution rate or rates in effect at the time that the uniformed service was
performed multiplied by the full and fractional years being purchased and applied to the
annual salary rate. The annual salary rate is the average annual salary during the purchase
period that the judge would have received if the judge had continued to provide employment
services to the state rather than to provide uniformed service, or if the determination of that
rate is not reasonably certain, the annual salary rate is the judge's average salary rate during
the 12-month period of judicial employment rendered immediately preceding the deleted text begin purchasedeleted text end
periodnew text begin of the uniformed servicenew text end .

(c) The equivalent employer contribution and, if applicable, the equivalent employer
additional contribution, must be paid by the employing unit, using the employer and employer
additional contribution rate or rates in effect at the time that the uniformed service was
performed, applied to the same annual salary rate or rates used to compute the equivalent
member contribution.

(d) If the member equivalent contributions provided for in this section are not paid in
full, the judge's allowable service credit must be prorated by multiplying the full and
fractional number of years of uniformed service eligible for purchase by the ratio obtained
by dividing the total member contributions received by the total member contributions
otherwise required under this section.

(e) To receive allowable service credit under this section, the contributions specified in
this section deleted text begin and section 490.121deleted text end must be transmitted to the fund during the period which
begins with the date on which the individual returns to judicial employment and which has
a duration of three times the length of the uniformed service period, but not to exceed five
years. If the determined payment period is calculated to be less than deleted text begin one yeardeleted text end new text begin three yearsnew text end ,
the contributions required under this section to receive service credit deleted text begin maydeleted text end new text begin must new text end be new text begin transmitted
to the fund new text end within deleted text begin one yeardeleted text end new text begin three yearsnew text end from the discharge date.

(f) The amount of allowable service credit obtainable under this section and section
490.121 may not exceed five years, unless a longer purchase period is required under United
States Code, title 38, section 4312.

(g) The state court administrator shall pay interest on all equivalent member and employer
contribution amounts payable under this section. Interest must be at the applicable annual
rate or rates specified in section 356.59, subdivision 2, compounded annually, from the end
of each fiscal year of the leave or break in service to the end of the month in which payment
is received.

new text begin Subd. 2. new text end

new text begin State-authorized purchase of service credit for periods of military service. new text end

new text begin (a)
Unless prohibited under paragraph (b), a judge is eligible to purchase service credit, not to
exceed five cumulative years of service credit, for one or more periods of service in the
uniformed services, as defined in United States Code, title 38, section 4303(13), if:
new text end

new text begin (1) the judge has at least three years of service credit with the judges retirement plan
under this chapter;
new text end

new text begin (2) the duration of the judge's current period of employment is at least six months; and
new text end

new text begin (3) the judge did not obtain service credit for a period of military service under
subdivision 1.
new text end

new text begin (b) A service credit purchase is prohibited if:
new text end

new text begin (1) the judge separated from uniformed service with a dishonorable or bad conduct
discharge or under other than honorable conditions;
new text end

new text begin (2) the judge has purchased or otherwise received service credit from any Minnesota
public employee pension plan for the same period of service in the uniformed services; or
new text end

new text begin (3) the judge's service in the uniformed services occurred before the judge was first
appointed or elected as a judge.
new text end

new text begin (c) When purchasing a period of service, if the period of service in the uniformed services
is one year or less, the judge must purchase the full period of service. If the period of service
in the uniformed services is longer than one year, the judge may purchase the full period,
not to exceed five cumulative years, or may purchase a portion of the period of service. If
the judge purchases a portion of the period of service in the uniformed services, the portion
must: (1) not be less than one year; and (2) be in increments of six months of service.
new text end

new text begin Subd. 3. new text end

new text begin Application and documentation. new text end

new text begin To purchase service credit under subdivision
2, a judge must apply to the executive director of the Minnesota State Retirement System
to make the purchase. The application must include all necessary documentation of the
judge's qualifications to make the purchase, signed written permission to allow the executive
director to request and receive necessary verification of applicable facts and eligibility
requirements, and any other relevant information that the executive director may require.
new text end

new text begin Subd. 4. new text end

new text begin Purchase payment amount; service credit grant. new text end

new text begin (a) The purchase payment
amount for a purchase under subdivision 2 is the amount determined under section 356.551
for the period or periods of service requested, except that, for purposes of calculating the
purchase payment amount to purchase service credit for service in the uniformed services
between periods of employment as a judge, section 356.551, subdivision 2, paragraph (c),
does not apply.
new text end

new text begin (b) Service credit must be granted by the judges retirement plan to the purchasing judge
upon the executive director's receipt of the purchase payment amount. The service credit
purchased under this section may not be used for the purpose of determining a disability
benefit under section 490.124, subdivision 4.
new text end

new text begin (c) Payment must be made before the effective date of the judge's retirement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 490.124, subdivision 10, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 2

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
ADMINISTRATIVE CHANGES

Section 1.

Minnesota Statutes 2022, section 353.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees; mandatory membership.

(a) Public employees whose
deleted text begin annualdeleted text end salary from one governmental subdivision deleted text begin is stipulated in advance to exceed $5,100
if the person is not a school year employee or $3,800 if the person is a school year employeedeleted text end
new text begin exceeds $425 in any month new text end and who are not specifically excluded under subdivision 2b or
deleted text begin whodeleted text end have not been provided an option to participate under subdivision 2d, whether
individually or by action of the governmental subdivision, must participate as members of
the association with retirement coverage by the general employees retirement plan under
this chapter, the public employees police and fire deleted text begin retirementdeleted text end plan under this chapter, or the
local government correctional employees retirement plan under chapter 353E, whichever
applies. Membership commences as a condition of deleted text begin theirdeleted text end employment on the first day of
deleted text begin theirdeleted text end employment or on the first day that the eligibility criteria are met, whichever is later.
Public employees include but are not limited to:

(1) persons whose salary meets the threshold in this paragraph from employment in one
or more positions within one governmental subdivision;

(2) elected county sheriffs;

(3) persons who are appointed, employed, or contracted to perform governmental
functions that by law or local ordinance are required of a public officer, including, but not
limited to:

(i) town and city clerk or treasurer;

(ii) county auditor, treasurer, or recorder;

(iii) city manager as defined in section 353.028 who does not exercise the option provided
under subdivision 2d; or

(iv) emergency management director, as provided under section 12.25;

(4) physicians under section 353D.01, subdivision 2, who do not elect public employees
defined contribution plan coverage under section 353D.02, subdivision 2;

(5) full-time employees of the Dakota County Agricultural Society;

(6) employees of the Red Wing Port Authority who were first employed by the Red
Wing Port Authority before May 1, 2011, and who are not excluded employees under
subdivision 2b;

(7) employees of the Seaway Port Authority of Duluth who are not excluded employees
under subdivision 2b;

(8) employees of the Stevens County Housing and Redevelopment Authority who were
first employed by the Stevens County Housing and Redevelopment Authority before May
1, 2014, and who are not excluded employees under subdivision 2b;

(9) employees of the Minnesota River Area Agency on Aging who were first employed
by a Regional Development Commission before January 1, 2016, and who are not excluded
employees under subdivision 2b; and

(10) employees of the Public Employees Retirement Association.

(b) A public employee or elected official who was a member of the association on June
30, 2002, based on employment that qualified for membership coverage by the public
employees retirement plan or the public employees police and fire plan under this chapter,
or the local government correctional employees retirement plan under chapter 353E as of
June 30, 2002, retains that membership for the duration of the person's employment in that
position or incumbency in elected office. Except as provided in subdivision 28, the person
shall participate as a member until the employee or elected official terminates public
employment under subdivision 11a or terminates membership under subdivision 11b.

(c) If deleted text begin in any subsequent yeardeleted text end the deleted text begin annualdeleted text end salary of an included public employee is less
than deleted text begin the minimum salary threshold specified in this subdivisiondeleted text end new text begin $425 in any subsequent
monthnew text end , the member retains membership eligibility.

(d) For the purpose of participation in the general employees retirement plan, public
employees include employees who were members of the former Minneapolis Employees
Retirement Fund on June 29, 2010.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 2.

Minnesota Statutes 2022, section 353.01, subdivision 2b, is amended to read:

Subd. 2b.

Excluded employees.

(a) The following public employees are not eligible to
participate as members of the association with retirement coverage by the general employees
retirement plan, the local government correctional employees retirement plan under chapter
353E, or the public employees police and fire deleted text begin retirementdeleted text end plan:

(1) persons whose deleted text begin annualdeleted text end salary from one governmental subdivision never exceeds deleted text begin an
amount, stipulated in writing in advance, of $5,100 if the person is not a school district
employee or $3,800 if the person is a school year employee. If annual compensation from
one governmental subdivision to an employee exceeds the stipulated amount in a calendar
year or a school year, whichever applies, after being stipulated in advance not to exceed the
applicable amount, the stipulation is no longer valid and contributions must be made on
behalf of the employee under section 353.27, subdivision 12, from the first month in which
the employee received salary exceedingdeleted text end $425 in a month;

(2) public officers who are elected to a governing body, city mayors, or persons who
are appointed to fill a vacancy in an elected office of a governing body, whose term of office
commences on or after July 1, 2002, for the service to be rendered in that elected position;

(3) election judges and persons employed solely to administer elections;

(4) patient and inmate personnel who perform services for a governmental subdivision;

(5) except as otherwise specified in subdivision 12a, employees who are employed solely
in a temporary position as defined under subdivision 12a, and employees who resign from
a nontemporary position and accept a temporary position within 30 days of that resignation
in the same governmental subdivision;

(6) employees who are employed by reason of work emergency caused by fire, flood,
storm, or similar disaster, but if the person becomes a probationary or provisional employee
within the same pay period, other than on a temporary basis, the person is a "public
employee" retroactively to the beginning of the pay period;

(7) employees who by virtue of their employment in one governmental subdivision are
required by law to be a member of and to contribute to any of the plans or funds administered
by the Minnesota State Retirement System, the Teachers Retirement Association, or the St.
Paul Teachers Retirement Fund Association, but this exclusion must not be construed to
prevent a person from being a member of and contributing to the Public Employees
Retirement Association and also belonging to and contributing to another public pension
plan or fund for other service occurring during the same period of time, and a person who
meets the definition of "public employee" in subdivision 2 by virtue of other service occurring
during the same period of time becomes a member of the association unless contributions
are made to another public retirement plan on the salary based on the other service or to the
Teachers Retirement Association by a teacher as defined in section 354.05, subdivision 2;

(8) persons who are members of a religious order and are excluded from coverage under
the federal Old Age, Survivors, Disability, and Health Insurance Program for the performance
of service as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if
no irrevocable election of coverage has been made under section 3121(r) of the Internal
Revenue Code of 1954, as amended;

(9) persons who are:

(i) employed by a governmental subdivision who have not reached the age of 23 and
who are enrolled on a full-time basis to attend or are attending classes on a full-time basis
at an accredited school, college, or university in an undergraduate, graduate, or
professional-technical program, or at a public or charter high school;

(ii) employed as resident physicians, medical interns, pharmacist residents, or pharmacist
interns and are serving in a degree or residency program in a public hospital or in a public
clinic; or

(iii) students who are serving for a period not to exceed five years in an internship or a
residency program that is sponsored by a governmental subdivision, including an accredited
educational institution;

(10) persons who hold a part-time adult supplementary technical college license who
render part-time teaching service in a technical college;

(11) for the first three years of employment, foreign citizens who are employed by a
governmental subdivision, except that the following foreign citizens must be considered
included employees under subdivision 2a:

(i) H-1B, H-1B1, and E-3 status holders;

(ii) employees of Hennepin County or Hennepin Healthcare System, Inc.;

(iii) employees legally authorized to work in the United States for three years or more;
and

(iv) employees otherwise required to participate under federal law;

(12) public hospital employees who elected not to participate as members of the
association before 1972 and who did not elect to participate from July 1, 1988, to October
1, 1988;

(13) except as provided in section 353.86, volunteer ambulance service personnel, as
defined in subdivision 35, but persons who serve as volunteer ambulance service personnel
may still qualify as public employees under subdivision 2 and may be members of the Public
Employees Retirement Association and participants in the general employees retirement
plan or the public employees police and fire plan, whichever applies, on the basis of
compensation received from public employment service other than service as volunteer
ambulance service personnel;

(14) except as provided in section 353.87, volunteer firefighters, as defined in subdivision
36, engaging in activities undertaken as part of volunteer firefighter duties, but a person
who is a volunteer firefighter may still qualify as a public employee under subdivision 2
and may be a member of the Public Employees Retirement Association and a participant
in the general employees retirement plan or the public employees police and fire plan,
whichever applies, on the basis of compensation received from public employment activities
other than those as a volunteer firefighter;

(15) employees in the building and construction trades, as follows:

(i) pipefitters and associated trades personnel employed by Independent School District
No. 625, St. Paul, with coverage under a collective bargaining agreement by the pipefitters
local 455 pension plan who were either first employed after May 1, 1997, or, if first employed
before May 2, 1997, elected to be excluded under Laws 1997, chapter 241, article 2, section
12;

(ii) electrical workers, plumbers, carpenters, and associated trades personnel employed
by Independent School District No. 625, St. Paul, or the city of St. Paul, with coverage
under a collective bargaining agreement by the electrical workers local 110 pension plan,
the plumbers local 34 pension plan, or the carpenters local 322 pension plan who were either
first employed after May 1, 2000, or, if first employed before May 2, 2000, elected to be
excluded under Laws 2000, chapter 461, article 7, section 5;

(iii) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, painters,
allied tradesworkers, and plasterers employed by the city of St. Paul or Independent School
District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
bricklayers and allied craftworkers local 1 pension plan, the cement masons local 633
pension plan, the glaziers and glassworkers local 1324 pension plan, the painters and allied
trades local 61 pension plan, or the plasterers local 265 pension plan who were either first
employed after May 1, 2001, or if first employed before May 2, 2001, elected to be excluded
under Laws 2001, First Special Session chapter 10, article 10, section 6;

(iv) plumbers employed by the Metropolitan Airports Commission, with coverage under
a collective bargaining agreement by the plumbers local 34 pension plan, who were either
first employed after May 1, 2001, or if first employed before May 2, 2001, elected to be
excluded under Laws 2001, First Special Session chapter 10, article 10, section 6;

(v) electrical workers or pipefitters employed by the Minneapolis Park and Recreation
Board, with coverage under a collective bargaining agreement by the electrical workers
local 292 pension plan or the pipefitters local 539 pension plan, who were first employed
before May 2, 2015, and elected to be excluded under Laws 2015, chapter 68, article 11,
section 5;

(vi) laborers and associated trades personnel employed by the city of St. Paul or
Independent School District No. 625, St. Paul, who are designated as temporary employees
with coverage under a collective bargaining agreement by a multiemployer plan as defined
in section 356.27, subdivision 1, who were either first employed on or after June 1, 2018,
or if first employed before June 1, 2018, elected to be excluded under Laws 2018, chapter
211, article 16, section 13; and

(vii) employees who are trades employees as defined in section 356.27, subdivision 1,
first hired on or after July 1, 2020, by the city of St. Paul or Independent School District
No. 625, St. Paul, except for any trades employee for whom contributions are made under
section 356.24, subdivision 1, clause (8), (9), or (10), by either employer to a multiemployer
plan as defined in section 356.27, subdivision 1;

(16) employees who are hired after June 30, 2002, solely to fill seasonal positions under
subdivision 12b which are limited in duration by the employer to a period of six months or
less in each year of employment with the governmental subdivision;

(17) persons who are provided supported employment or work-study positions by a
governmental subdivision and who participate in an employment or industries program
maintained for the benefit of these persons where the governmental subdivision limits the
position's duration to up to five years, including persons participating in a federal or state
subsidized on-the-job training, work experience, senior citizen, youth, or unemployment
relief program where the training or work experience is not provided as a part of, or for,
future permanent public employment;

(18) independent contractors and the employees of independent contractors;

(19) reemployed annuitants of the association during the course of that reemployment;

(20) persons appointed to serve on a board or commission of a governmental subdivision
or an instrumentality thereof;

(21) persons employed as full-time fixed-route bus drivers by the St. Cloud Metropolitan
Transit Commission who are members of the International Brotherhood of Teamsters Local
638 and who are, by virtue of that employment, members of the International Brotherhood
of Teamsters Central States pension plan; and

(22) persons employed by the Duluth Transit Authority or any subdivision thereof who
are members of the Teamsters General Local Union 346 and who are, by virtue of that
employment, members of the Central States Southeast and Southwest Areas Pension Fund.

(b) Any person performing the duties of a public officer in a position defined in
subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
employee of an independent contractor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 3.

Minnesota Statutes 2022, section 353.01, subdivision 15, is amended to read:

Subd. 15.

Dependent child.

For the purpose of survivor benefit eligibility deleted text begin under sections
353.31, subdivision 1, and 353.657, subdivision 3deleted text end , "dependent child" meansnew text begin :
new text end

new text begin (1)new text end a biological or adopted child of a deceased member who is unmarrieddeleted text begin ,deleted text end and deleted text begin underdeleted text end
new text begin has not reached new text end the age of deleted text begin 18, or age 18 todeleted text end 23deleted text begin , so long as the child submits evidence of
full-time enrollment in an accredited educational institution. "Dependent child" also includesdeleted text end new text begin ;
new text end

new text begin (2)new text end a child of the member conceived during the member's lifetime and born after the
member's deathdeleted text begin . It also meansdeleted text end new text begin , unless a parent-child relationship does not exist under section
524.2-120, subdivision 10; and
new text end

new text begin (3)new text end a deleted text begin dependentdeleted text end child who new text begin has not reached the age of 23 and new text end is the subject of adoption
proceedings filed by a memberdeleted text begin ,deleted text end and whonew text begin ,new text end within two years after death of the member, by
judgment and decree duly entered, is adjudged to be the adopted child of the deceased
memberdeleted text begin ; subject, however, to the qualifying conditions of age and dependency under this
subdivisiondeleted text end . The deleted text begin dependency of thedeleted text end child deleted text begin dates fromdeleted text end new text begin is a dependent child effective on the
date of new text end the decree of adoption. deleted text begin "Dependent child" also includes a child age 18 to 23 who
had submitted evidence of full-time enrollment in an accredited educational institution but
was determined to be medically unable to continue school on a full-time basis. The board
of trustees shall adopt written procedures to make determinations regarding eligibility based
on a student being medically unable to continue school, and may not continue a benefit for
medical reasons for a period greater than one year.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 4.

Minnesota Statutes 2022, section 353.0162, is amended to read:

353.0162 SALARY CREDIT PURCHASE FOR PERIODS OF REDUCED
SALARY.

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in this
subdivision have the meanings given them, unless the context clearly indicates another
meaning is intended.
new text end

new text begin (b) "Differential salary credit" is the difference between the salary received by the
member during a period of reduced salary as described in subdivision 2 and the salary of
the member, excluding overtime, on which contributions to the applicable plan would have
been made during the period based on the member's normal employment period, measured
in hours or otherwise, as applicable, and rate of pay.
new text end

new text begin (c) "Reporting period" means a school year, for school year employees, or a calendar
year, for all other employees, during which a member has a period of reduced salary.
new text end

new text begin Subd. 2. new text end

new text begin Salary credit purchase permitted. new text end

deleted text begin (a)deleted text end A member may purchase differential
salary credit deleted text begin as described in paragraph (c)deleted text end for a period of reduced salary deleted text begin as described in
paragraph (b)deleted text end .

deleted text begin (b)deleted text end The period of reduced salary must be a period occurring entirely within one school
year, for school year employees, or one calendar year, for all other employees, during which
the member receives no salary or a reduced salary from the employer while the member is:

(1) receiving workers' compensation payments related to the member's service to the
public employer;

(2) on an authorized leave of absence;

(3) on an authorized leave of absence as a result of a budgetary or salary savings program
offered or mandated by a governmental subdivision, if certified to the executive director
by the governmental subdivision; or

(4) on a periodic, repetitive leave that is offered to all employees of a governmental
subdivision where the leave program is certified by the employer to the association as one
that does not exceed 208 hours during the school year or calendar year, as applicable.

deleted text begin (c) Differential salary credit is the difference between the salary received by the member
during a period of reduced salary specified in paragraph (b) and the salary of the member,
excluding overtime, on which contributions to the applicable plan would have been made
during the period based on the member's normal employment period, measured in hours or
otherwise, as applicable, and rate of pay.
deleted text end

new text begin Subd. 3. new text end

new text begin Payment amount. new text end

deleted text begin (d)deleted text end new text begin (a) new text end To receive differential salary credit, the member
shall pay the plan, by delivering payment to the executive director, an amount equal to:

(1) the applicable employee contribution rate under section 353.27, subdivision 2; 353.65,
subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the differential salary
amount;

(2) plus an employer equivalent payment equal to the applicable employer contribution
rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, subdivision 2, as
applicable, multiplied by the differential salary amount;

(3) plus, if applicable, an equivalent employer additional amount equal to the additional
employer contribution rate in section 353.27, subdivision 3a, multiplied by the differential
salary amount.

deleted text begin (e)deleted text end new text begin (b) new text end The employer, by appropriate action of its governing body and documented in
its official records, may pay on behalf of the member the amounts determined under
paragraph deleted text begin (d)deleted text end new text begin (a)new text end , clauses (2) and (3), as applicable, plus interest under paragraph deleted text begin (f)deleted text end new text begin (c)new text end .
However, if the period of reduced salary is a periodic, repetitive leave under deleted text begin paragraph (b)deleted text end new text begin
subdivision 2new text end , clause (4), then the employer must pay on behalf of the member the amount
determined under paragraph deleted text begin (d)deleted text end new text begin (a)new text end , clauses (2) and (3), as applicable, plus interest under
paragraph deleted text begin (f)deleted text end new text begin (c)new text end .

deleted text begin (f)deleted text end new text begin (c)new text end Payment under this section must include interest on the contribution amount or
amounts, whichever applies, at the applicable rate or rates specified in section 356.59,
subdivision 3, compounded annually, prorated for the number of months, if less than 12
months, from the end of the school year or calendar year, as applicable, until full payment
is received by the executive director.

new text begin Subd. 4. new text end

new text begin Timing of required payment. new text end

Payment under this section must be completed
deleted text begin by the earliest of: (1) six months after termination of public service by the employee under
section 353.01, subdivision 11a; (2)deleted text end new text begin no later than new text end one year after the deleted text begin terminationdeleted text end new text begin end new text end of deleted text begin thedeleted text end
new text begin each reporting new text end period deleted text begin of reduced salary specified in paragraph (b); or(3) six months after
the commencement of a disability benefitdeleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 5.

Minnesota Statutes 2022, section 353.031, subdivision 10, is amended to read:

Subd. 10.

Restoring forfeited service and salary credit.

deleted text begin (a)deleted text end To restore forfeited service
and salary credit, a repayment of a refund must be made within six months after the effective
date of disability benefits or within six months after the date of the filing of the disability
application, whichever is laterdeleted text begin .
deleted text end

deleted text begin (b)deleted text end new text begin ,new text end except deleted text begin fordeleted text end new text begin that new text end the salary credit purchase new text begin for periods of reduced salary must be made
as new text end authorized under section 353.0162deleted text begin , paragraph (b), clause (1), no purchase of prior service
or payment made in lieu of salary deductions otherwise authorized under section 353.01 or
353.0162 may be made after the occurrence of the disability for which an application is
filed under this sectiondeleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 6.

Minnesota Statutes 2022, section 353.32, subdivision 1c, is amended to read:

Subd. 1c.

Dependent child survivor coverage.

If deleted text begin there isdeleted text end new text begin a deceased member has new text end no
surviving spouse eligible for benefits under subdivision 1a, deleted text begin adeleted text end new text begin the member's new text end dependent child
deleted text begin or childrendeleted text end as defined in section 353.01, subdivision deleted text begin 15adeleted text end new text begin 15new text end , is eligible for monthly payments.
Payments to a dependent child must be paid from the date of the member's death to the date
the dependent child attains age deleted text begin 20 if the child is under age 15. If the child is 15 years or
older on the date of death, payment must be made for five yearsdeleted text end new text begin 23new text end . The payment to a
dependent child is an amount actuarially equivalent to the value of a 100 percent optional
annuity under subdivision 1a using the age of the member and new text begin the new text end age of the dependent
child at the date of new text begin the member's new text end death in lieu of the age of the surviving spouse. If there is
more than one dependent child, each dependent child deleted text begin shalldeleted text end new text begin must new text end receive a proportionate
share of the actuarial value of the deleted text begin employee's accountdeleted text end new text begin 100 percent optional annuitynew text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 7.

Minnesota Statutes 2022, section 353E.001, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Fund. new text end

new text begin "Fund" means the public employees local government correctional
service retirement fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 8.

Minnesota Statutes 2022, section 353E.001, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Member. new text end

new text begin "Member" means an individual identified as a member under section
353E.02, for whom retirement coverage is provided by the plan.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 9.

Minnesota Statutes 2022, section 353E.001, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Plan. new text end

new text begin "Plan" means the public employees local government correctional service
retirement plan.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 10.

Minnesota Statutes 2022, section 353E.07, subdivision 3, is amended to read:

Subd. 3.

Election; accrual.

A surviving spouse election under subdivisions 1 and 2 may
be made at any time after the date of death of deleted text begin the local government correctional service
employeedeleted text end new text begin a membernew text end . The surviving spouse benefit begins to accrue as of the first of the
next month following the date on which the application for the benefit was filed.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 11.

Minnesota Statutes 2022, section 353E.07, subdivision 4, is amended to read:

Subd. 4.

Surviving spouse coverage; term certain.

In lieu of the 100 percent optional
annuity under subdivision 1, the surviving spouse of a deceased deleted text begin local government correctional
service employeedeleted text end new text begin member new text end may elect to receive survivor coverage in a term certain of ten,
15, or 20 years. The monthly term certain annuity must be actuarially equivalent to the 100
percent optional annuity under subdivision 1 and must be based on tables approved by the
actuary retained under section 356.214. The optional annuity ceases upon the expiration of
the term certain period. If a survivor elects a term certain annuity and dies before the
expiration of the specified term certain period, the commuted value of the remaining annuity
payments must be paid in a lump sum to the survivor's estate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 12.

Minnesota Statutes 2022, section 353E.07, subdivision 5, is amended to read:

Subd. 5.

Dependent child survivor coverage.

If deleted text begin there isdeleted text end new text begin a deceased member has new text end no
surviving spouse eligible for benefits under subdivisions 1, 2, and 4, deleted text begin adeleted text end new text begin the member's
new text end dependent child as defined in section 353.01, subdivision deleted text begin 15adeleted text end new text begin 15new text end , is eligible for a deleted text begin dependent
childdeleted text end survivor benefit. Benefits to a dependent child must be paid from the date of the
employee's death to the date the dependent child attains age deleted text begin 20 if the child is under age 15
on the date of death. If the child is 15 years or older on the date of death, the benefit is
payable for five yearsdeleted text end new text begin 23new text end . The payment to a dependent child is an amount actuarially
equivalent to the value of a 100 percent joint and survivor optional annuity using the age
of the deleted text begin employeedeleted text end new text begin member new text end and new text begin the new text end age of the dependent child at the date of new text begin the member's
new text end death in lieu of the age of the surviving spouse. If there is more than one dependent child,
each dependent child deleted text begin shalldeleted text end new text begin must new text end receive a proportionate share of the actuarial value of the
deleted text begin employee's accountdeleted text end new text begin 100 percent joint and survivor optional annuitynew text end , with the amount of the
benefit payable to each child to be determined based on the portion of the total eligibility
period that each child is eligible. The process for calculating the deleted text begin dependent childdeleted text end survivor
benefit must be approved by the actuary retained under section 356.214.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 13. new text begin REVISOR INSTRUCTION.
new text end

new text begin In Minnesota Statutes, sections 353E.01 to 353E.08, the revisor of statutes shall change
the terms "public employees local government correctional service retirement fund" to
"fund" and "an employee covered under section 353E.02" to "member" and "local government
correctional employee" to "member" and "public employees local government correctional
service retirement plan" to "plan" wherever the terms appear in statutes. The revisor shall
make any necessary grammatical changes or changes to sentence structure necessary to
preserve the meaning of the text as a result of the changes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 14. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 353.01, subdivision 15a, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

HF 1199

Bill Text Versions

ARTICLE 1

MINNESOTA STATE RETIREMENT SYSTEM ADMINISTRATIVE CHANGES

Section 1.

Subdivision 1.

Eligibility; when to apply; accrual.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 2.

Determination.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

490.1211 UNIFORMED SERVICE.

new text begin Subdivision 1. new text end

new text begin Federal uniformed service protections. new text end

new text begin Subd. 2. new text end

new text begin State-authorized purchase of service credit for periods of military service. new text end

new text begin Subd. 3. new text end

new text begin Application and documentation. new text end

new text begin Subd. 4. new text end

new text begin Purchase payment amount; service credit grant. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 4. new text begin REPEALER.new text end

new text begin EFFECTIVE DATE. new text end

ARTICLE 2

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION ADMINISTRATIVE CHANGES

Section 1.

Subd. 2a.

Included employees; mandatory membership.

new text begin EFFECTIVE DATE. new text end

Sec. 2.

Subd. 2b.

Excluded employees.

new text begin EFFECTIVE DATE. new text end

Sec. 3.

Subd. 15.

Dependent child.

new text begin EFFECTIVE DATE. new text end

Sec. 4.

353.0162 SALARY CREDIT PURCHASE FOR PERIODS OF REDUCED SALARY.

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin Subd. 2. new text end

new text begin Salary credit purchase permitted. new text end

new text begin Subd. 3. new text end

new text begin Payment amount. new text end

new text begin Subd. 4. new text end

new text begin Timing of required payment. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 5.

Subd. 10.

Restoring forfeited service and salary credit.

new text begin EFFECTIVE DATE. new text end

Sec. 6.

Subd. 1c.

Dependent child survivor coverage.

new text begin EFFECTIVE DATE. new text end

Sec. 7.

new text begin Subd. 1a. new text end

new text begin Fund. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 8.

new text begin Subd. 2a. new text end

new text begin Member. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 9.

new text begin Subd. 3a. new text end

new text begin Plan. new text end

new text begin EFFECTIVE DATE. new text end

Sec. 10.

Subd. 3.

Election; accrual.

new text begin EFFECTIVE DATE. new text end

Sec. 11.

Subd. 4.

Surviving spouse coverage; term certain.

new text begin EFFECTIVE DATE. new text end

Sec. 12.

Subd. 5.

MINNESOTA STATE RETIREMENT SYSTEM
ADMINISTRATIVE CHANGES

Sec. 4. new text begin REPEALER.
new text end

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
ADMINISTRATIVE CHANGES

353.0162 SALARY CREDIT PURCHASE FOR PERIODS OF REDUCED
SALARY.

Sec. 13. new text begin REVISOR INSTRUCTION.
new text end

Sec. 14. new text begin REPEALER.
new text end

TEACHERS RETIREMENT ASSOCIATION
ADMINISTRATIVE CHANGES