HF 868

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to local government; authorizing political subdivisions to establish trusts
to pay for postemployment benefits; proposing coding for new law in Minnesota
Statutes, chapter 471.

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

Section 1.

new text begin [471.612] TRUST FUNDS FOR POSTEMPLOYMENT BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment; administration and investment. new text end

new text begin (a) A
political subdivision may establish an irrevocable trust fund to hold money to pay for
postemployment benefits owed to its officers and employees after termination of service.
A political subdivision establishing a trust fund under this section must establish a board
of trustees for the trust.
new text end

new text begin (b) A political subdivision may:
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new text begin (1) certify assets in a trust fund under this section to the State Board of Investment
for investment in the combined investment funds established in section 11A.14; or
new text end

new text begin (2) select another investment manager, who may invest the assets in any instrument
authorized as an investment for purposes of section 11A.14.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For purposes of this section:
new text end

new text begin (1) "political subdivision" means any entity authorized by section 471.61 to provide
benefits to its retired officers and employees; and
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new text begin (2) "postemployment benefit" means a benefit giving rise to a liability under
Statement 45 of the Government Accounting Standards Board, thereby excluding 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 Withdrawal of funds. new text end

new text begin A political subdivision may withdraw money from
a trust fund established under this section only to pay postemployment benefits owed for
former officers and employees of the political subdivision, or to the extent the political
subdivision's actuarial liability for these benefits is satisfied or otherwise defeased.
new text end

new text begin Subd. 4. new text end

new text begin Status of irrevocable trust fund. new text end

new text begin All money held in a trust fund created
under this section is held in trust for the exclusive benefit of current or former officers and
employees promised a postemployment benefit by the political subdivision. Money in the
trust fund is not subject to claims by creditors of the participating political subdivision, or
the current and former officers and employees of the political subdivision. An irrevocable
trust created in this section is an arrangement equivalent to a trust for all legal purposes.
new text end

Sec. 2. new text begin EFFECTIVE DATE.
new text end

new text begin Section 1 is effective the day following final enactment.
new text end