SF 2371

as introduced - 93rd Legislature (2023 - 2024) Posted on 06/14/2023 11:18am

A bill for an act
relating to retirement; Public Employees Retirement Association; increasing
postretirement adjustments for members receiving a basic member annuity from
the general public employees retirement fund and providing funding; amending
Minnesota Statutes 2022, sections 353.27, by adding a subdivision; 356.415,
subdivision 1b.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 353.27, is amended by adding a subdivision
to read:

Subd. 3d.

Direct state aid for postretirement adjustments for basic member
benefits.

(a) On or before October 1, 2023, and by October 1 of each year after 2023, the
state must pay $6,000,000 to the general employees retirement fund of the Public Employees
Retirement Association. The commissioner of management and budget must pay the aid
specified in this subdivision. The amount required is annually appropriated from the general
fund to the commissioner of management and budget.

(b) The aid under paragraph (a) continues until the earlier of:

(1) the first day of the fiscal year following the fiscal year in which the actuarial value
of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as
reported by the actuary retained under section 356.214 in the annual actuarial valuation
prepared under section 356.215; or

(2) July 1, 2048.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Minnesota Statutes 2022, section 356.415, subdivision 1b, is amended to read:

Subd. 1b.

Annual postretirement adjustments; PERA; general employees retirement
plan.

(a) Annuities, disability benefits, and survivor benefits being paid from the general
employees retirement plan fund of the Public Employees Retirement Association shall be
increased effective each January 1 by the percentage of increase determined under this
subdivision. The increase to the annuity or benefit shall be determined by multiplying the
monthly amount of the annuity or benefit by the percentage of increase specified in paragraph
(b) or (c), as applicable, after taking into account any reduction to the percentage of increase
required under paragraph (c) (d).

(b) For a coordinated member annuity, disability benefit, or survivor benefit, the
percentage of increase shall be one percent unless the federal Social Security Administration
has announced a cost-of-living adjustment pursuant to United States Code, title 42, section
415(i), in the last quarter of the preceding calendar year that is greater than two percent. If
the cost-of-living adjustment announced by the federal Social Security Administration is
greater than two percent, the percentage of increase shall be 50 percent of the cost-of-living
adjustment announced by the federal Social Security Administration, but in no event may
the percentage of increase exceed 1.5 percent.

(c) For a basic member annuity, disability benefit, or survivor benefit, the percentage
of increase must be 1.5 percent unless the federal Social Security Administration has
announced a cost-of-living adjustment pursuant to United States Code, title 42, section
415(i), in the last quarter of the preceding calendar year that is greater than 1.5 percent. If
the cost-of-living adjustment announced by the federal Social Security Administration is
greater than 1.5 percent, the percentage of increase must equal the cost-of-living adjustment
announced by the federal Social Security Administration, but in no event may the percentage
of increase exceed 3.5 percent.

(c) (d)(1) If the recipient of an annuity, disability benefit, or survivor's benefit has been
receiving the annuity or benefit for at least 12 full months as of the June 30 of the calendar
year immediately before the effective date of the increase, there is no reduction in the
percentage of increase.

(2) If the recipient of an annuity, disability benefit, or survivor's benefit has been receiving
the annuity or benefit for at least one month, but less than 12 full months, as of the June 30
of the calendar year immediately preceding the effective date of the increase, the percentage
of increase is multiplied by a fraction, the numerator of which is the number of months the
annuity or benefit was received as of June 30 of the preceding calendar year and the
denominator of which is 12.

(d) (e) Effective for members who retire on or after January 1, 2024, annuities shall not
be increased under paragraphs (a) to (c) (d) until January 1 of the year following the year
in which the member reaches normal retirement age. January 1 of the year following the
year in which the member reaches normal retirement age shall be considered the effective
date of the increase under paragraph (c) (d). If a member has been receiving an annuity for
fewer than seven months as of the January 1 of the year following the year in which the
member reaches normal retirement age, no increase shall be paid until January 1 of the next
year.

(e) (f) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the recipient with the executive director of
the Public Employees Retirement Association requesting that the increase not be made.

(f) (g) Paragraph (d) (e) does not apply to members who retire under section 353.30,
subdivision 1a.

EFFECTIVE DATE.

This section is effective January 1, 2024