SF 60

Conference Committee Report - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to local government; authorizing the city of Duluth to establish accounts
to pay for postemployment benefits owed to retired employees and to generate
revenue dedicated to meet certain city obligations; proposing coding for new
law in Minnesota Statutes, chapter 353.

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

Section 1.

new text begin [353.95] ACCOUNTS FOR DULUTH POSTEMPLOYMENT
BENEFITS AND OTHER OBLIGATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The Public Employees Retirement Association
must establish two funds for the city of Duluth. One fund must be irrevocable and is to
be used only to fund or pay for the postemployment benefits owed to retired employees
in accordance with language contained in labor agreements between the city and its
employee bargaining units, or between participating subgroups in the city's health plan
and their retirees. The other fund must be revocable and is to be used to accumulate the
money received by the city for proceeds from Fond du Luth Casino or other sources; use is
restricted to debt service payments for the city's street improvement program, or any other
use approved in accordance with Section 54(E) of the Home Rule Charter of the city of
Duluth. All money in the two funds is appropriated to the Public Employees Retirement
Association for purposes of this section.
new text end

new text begin Subd. 2. new text end

new text begin Definition. new text end

new text begin For purposes of this section "postemployment benefit" means
a benefit giving rise to a liability under Statement 45 of the Governmental Accounting
Standards Board, and therefore does not include benefits to be paid by a Minnesota public
pension plan listed in section 356.20, subdivision 2, or 356.30, subdivision 3, and benefits
provided on a defined contribution, individual account basis.
new text end

new text begin Subd. 3. new text end

new text begin Account maintenance and investment. new text end

new text begin (a) The city may establish
an account in one or both of the funds created in this section. The Public Employees
Retirement Association shall maintain a separate account within each fund for the city.
The Public Employees Retirement Association may charge the city fees for reasonable
administrative costs, and the amount of those fees is appropriated to the association from
the accounts. The Public Employees Retirement Association may establish other terms
and conditions for participation in the funds.
new text end

new text begin (b) The Public Employees Retirement Association must certify all money in the
funds to the State Board of Investment for investment in the combined investment funds
established in section 11A.14. Investment earnings must be credited to the account of the
city.
new text end

new text begin Subd. 4. new text end

new text begin Limit on deposits. new text end

new text begin After the initial deposit into each account, the city may
make additional deposits on a quarterly basis.
new text end

new text begin Subd. 5. new text end

new text begin Withdrawal of funds and termination of account. new text end

new text begin (a) For the revocable
account, the city may withdraw funds to make payments on debt service obligations, or for
other purposes as approved by the Duluth City Council in accordance with Section 54(E)
of the Home Rule Charter of the city of Duluth. Withdrawals may be made on a quarterly
basis. The account may be terminated by the city at any time. Once terminated, the city
may not reestablish the revocable account.
new text end

new text begin (b) For the irrevocable account, the city may withdraw money as needed to pay only
for postemployment benefits owed on behalf of retired employees of the city. Withdrawals
may be made on a monthly basis and are to be deposited into the city fund which pays
such postemployment benefits. The account may be terminated only to the extent the city's
postemployment benefit actuarial liability is satisfied or otherwise defeased.
new text end

new text begin (c) In requesting withdrawal of money from an account created under this section,
the city must do so at a time and in a manner required by the executive director of the
Public Employees Retirement Association. The executive director must ensure that
withdrawals comply with the requirements of this section.
new text end

new text begin Subd. 6. new text end

new text begin Status of irrevocable fund. new text end

new text begin (a) All money in the irrevocable fund created
in this section is held in trust for the exclusive benefit of retired employees of the city or
subgroups participating in the city's health plan, and are not subject to claims by creditors
of the state, the city, the city's subgroups, or the current and former employees of the
city or its subgroups.
new text end

new text begin (b) The irrevocable fund created in this section shall be deemed an arrangement
equivalent to a trust for all legal purposes.
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