as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to retirement; Minneapolis employees 1.3 retirement fund; authorizing billing for certain 1.4 negative account balances; clarifying 1.5 death-while-active survivor refund amounts; clarifying 1.6 death-while-active survivor refund eligibility; 1.7 correcting fund reference for escalation of disability 1.8 and long-service survivor annuity escalation; 1.9 providing annuity escalation on short-service 1.10 death-while-active survivor benefits; amending 1.11 Minnesota Statutes 1998, sections 422A.06, 1.12 subdivisions 3 and 6; 422A.101, subdivision 4; 1.13 422A.18, subdivision 2; 422A.22, subdivisions 4 and 5; 1.14 and 422A.23; repealing Minnesota Statutes 1998, 1.15 section 422A.16, subdivision 3a. 1.16 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.17 Section 1. Minnesota Statutes 1998, section 422A.06, 1.18 subdivision 3, is amended to read: 1.19 Subd. 3. [DEPOSIT ACCUMULATION FUND.] The deposit 1.20 accumulation fund consists of the assets held in the fund, 1.21increased byincluding amounts contributed by or for employees, 1.22 amounts contributed by the city, amounts contributed by 1.23 municipal activities supported in whole or in part by revenues 1.24 other than taxes and amounts contributed by any public 1.25 corporation, amounts paid by the state, and by income from 1.26 investments. There must be paid from the fund the amounts 1.27 required to be transferred to the retirement benefit fund, or 1.28 the disability benefit fund, refunds of contributions,death1.29benefits payable on death before retirement that are not payable1.30from the survivors' benefit fundincluding the 2.1 death-while-active refund specified in section 422A.22, 2.2 subdivision 4, postretirement increases in retirement allowances 2.3 granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 2.4 and expenses of the administration of the retirement fund which 2.5 were not charged by the retirement board against the income of 2.6 the retirement benefit fund from investments as the cost of 2.7 handling the investments of the retirement benefit fund. 2.8 Sec. 2. Minnesota Statutes 1998, section 422A.06, 2.9 subdivision 6, is amended to read: 2.10 Subd. 6. [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 2.11 fundshall consistconsists of the amount held for survivor 2.12 benefits, increased by contributions for survivor benefits made 2.13 by and for employees, including contributions made by the 2.14 employer, by any municipal activity supported in whole or in 2.15 part by revenue other than taxes or by any public corporation. 2.16 A proportionate share of income from investmentsshallmust be 2.17 allocated to this fund.There shall be paid from such fund the2.18 Survivor benefits specified in section 422A.23except that the2.19refund of net accumulated deductions from the salary of a2.20contributing member shall upon death in service be paid from the2.21deposit accumulation fundmust be paid from this fund. 2.22 Sec. 3. Minnesota Statutes 1998, section 422A.101, 2.23 subdivision 4, is amended to read: 2.24 Subd. 4. [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 2.25 INSTANCES.] (a) If a participating employing unit, other than 2.26 the state, has a negative asset balance in the deposit 2.27 accumulation fund, the executive director shall bill the 2.28 employing unit for the amount of the deficiency. Any amount 2.29 billed will include six percent interest, compounded annually, 2.30 for any year or portion of a year from the billing date until 2.31 the date of payment. 2.32 (b) If assets in the deposit accumulation fund are 2.33 insufficient to make a transfer to the retirement benefit fund, 2.34 the city of Minneapolis shall pay the amount of that 2.35 insufficiency to the retirement benefit fund within three days 2.36 of certification of the insufficiency by the executive director 3.1 of the fund. The city of Minneapolis may bill any other 3.2 participating employing unit other than the state for its 3.3 proportion of the amount paid. Any amount billed by the city 3.4 under this paragraph will include interest as specified in 3.5 paragraph (a). 3.6 Sec. 4. Minnesota Statutes 1998, section 422A.18, 3.7 subdivision 2, is amended to read: 3.8 Subd. 2. [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 3.9 disability allowance under this section shall be the amount of 3.10 service allowance to which the employee would be entitled under 3.11 section 422A.15, notwithstanding the age requirements expressed 3.12 therein; or the lesser of the following amounts: 50 percent of 3.13 the final average compensation, or an amount equal to two 3.14 percent of final average compensation for each year of allowable 3.15 service for the first ten years, and thereafter 2.5 percent of 3.16 final average compensation per year of allowable service, 3.17 including in the latter assumed service between the date the 3.18 disability occurred and the 60th birthday of the employee. 3.19If the amount of annuity(b) Annuities payablefrom the3.20Minnesota postretirement investment fund to any class of3.21annuitants is adjusted pursuant to section 11A.18, the amount of3.22benefits payable from the disability benefit fund for that class3.23of annuitantsunder this section shallalsobe adjusted at the 3.24 same time and rate as retirement annuities in the retirement 3.25 benefit fund. 3.26 Sec. 5. Minnesota Statutes 1998, section 422A.22, 3.27 subdivision 4, is amended to read: 3.28 Subd. 4. [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 3.29 ofa contributingan active memberwhile still in the service of3.30the city, and before reaching the compulsory age of3.31retirementprior to termination of service, there shall be paid 3.32 tosuch personthe beneficiary orpersons asbeneficiaries 3.33 designated by the membershall have nominated by written3.34designationon a form specified by the executive director and 3.35 filed with the retirement board,in such form as the retirement3.36board shall require,the net accumulatedamount ofemployee 4.1 deductions from salary, pay, or compensation, including interest 4.2, to the member's credit on date ofcompounded annually to the 4.3 date of the member's death. The amount must not include any 4.4 contributions made by the employee or on the employee's behalf, 4.5 or any interest or investment earnings on those contributions, 4.6 which were allocated to the survivor benefit fund under section 4.7 422A.06, subdivision 6. 4.8 (b) If the employee fails to make a designation, or if 4.9 theperson or personsbeneficiary or beneficiaries designated by 4.10suchthe employee predeceasessuchthe employee, thenet4.11accumulated amount of deductions from salary, pay, or4.12compensation including interest, to the credit of such employee4.13on date of death shallbenefit specified in paragraph (a) must 4.14 be paid tosuchthe deceased employee's estate. 4.15 (c) A benefit payable under this subdivision is in addition 4.16 to any applicable survivor benefit under section 422A.23. 4.17 Sec. 6. Minnesota Statutes 1998, section 422A.22, 4.18 subdivision 5, is amended to read: 4.19 Subd. 5. [REPAYMENT OF REFUND.] Uponreinstatement4.20 reemployment of a former covered employeeto the service,in 4.21 employment covered by the Minneapolis employees retirement fund, 4.22 service credit forsuchpast serviceor for any part thereof4.23shallwhich was forfeited by taking a refund must begranted4.24 reinstated only upon repayment of the amount of the separation 4.25 refund, with interest, from the time ofseparationpayment of 4.26 the refund until the date repaid. 4.27 Sec. 7. Minnesota Statutes 1998, section 422A.23, is 4.28 amended to read: 4.29 422A.23 [SURVIVOR BENEFITS.] 4.30 Subdivision 1. [PAYMENT OF CITY INSTALLMENT ACCUMULATED 4.31 AMOUNT.] (a) Ifa contributingan active or deferred member dies 4.32after having been in the servicewith ten or more years of 4.33 service credit,and before actual retirement, as determined by4.34the retirement board, the present worth of the city's annual4.35installments of $60 then to the credit of the contributing4.36member, shall be paid to a beneficiary designated by such5.1contributing member in such form as the retirement board shall5.2require, who shall be the surviving spouse, or surviving child,5.3or children of such member or, if there be no surviving spouse5.4or surviving child or children, then to a person actually5.5dependent on and receiving principal support from such member,5.6or surviving mother or father, or grandchildren, or surviving5.7brother or sister, or surviving children of the deceased brother5.8or sister of such memberexcept as noted in paragraph (d), the 5.9 individual specified in paragraph (b) is eligible to receive the 5.10 benefit specified in paragraph (c). 5.11 (b) An individual eligible for the benefit specified in 5.12 paragraph (c) is a beneficiary designated by the member on a 5.13 form specified by the executive director. If thebeneficiary5.14designated by the member is not one of the class of persons5.15named in the preceding sentence, such benefit from the5.16accumulation of city deposits shall be paid in the following5.17order: (1) to the surviving spouse, the whole thereof; (2) if5.18there be no surviving spouse, to the surviving children, share5.19and share alike; (3) if there be no surviving spouse or child or5.20children, to the dependent or dependents as those terms are5.21herein defined, of the member, share and share alike; (4) if5.22there be no surviving spouse, child or children, or dependents,5.23to the surviving mother and father, share and share alike; (5)5.24if there be no surviving mother and father, to the5.25grandchildren, in equal shares; if there be no grandchildren, to5.26the surviving brothers and sisters of the member, in equal5.27shares; (6) if there be no surviving brothers and sisters, to5.28the surviving children of the deceased brothers and sisters of5.29the member, in equal shares; or (7) if there is none of the5.30foregoing persons who survives the member, the accumulation of5.31the city deposits shall be applied to the funeral expenses of5.32themember failed to designate a beneficiary, or if the 5.33 beneficiary or beneficiaries designated by the employee 5.34 predecease the employee, the benefit in paragraph (c) is payable 5.35 to the deceased employee's estate. 5.36 (c) The benefit is a lump-sum payment of the present value 6.1 of the city's or other contributing employer's annual 6.2 installments of $60 to the credit of the member. 6.3 (d) No benefit is payable under this subdivision if a 6.4 monthly survivor benefit is paid under another subdivision of 6.5 this section. 6.6 Subd. 2. [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 6.7 active member dies prior to termination of service with at least 6.8 18 months but less than 20 years of service credit, the 6.9 surviving spouse or surviving child or children is eligible to 6.10 receive the survivor benefit specified in paragraph (b) or (c), 6.11 as applicable. Payment of a benefit for any surviving child 6.12 under the age of 18 years shall be made to the surviving parent, 6.13 or if there be none, to the legal guardian of the surviving 6.14 child.For purposes of this subdivision, a surviving child is6.15an unmarried child of the deceased member under the age of 18,6.16or under the age of 22 if a full-time student at an accredited6.17school, college, or university.6.18 (b) If the surviving spouse or surviving child benefit 6.19 commenced before July 1, 1983, the surviving spouse benefit is 6.20 increased from $500 per month to $750 per month and the 6.21 surviving child benefit is $225 per month, beginning with the 6.22 first monthly payment payable after May 28, 1998. The sum of 6.23 surviving spouse and surviving child benefits payable under this 6.24 paragraph shall not exceed $900 per month. The increased cost 6.25 resulting from the benefit increases under this paragraph must 6.26 be allocated to each employing unit listed in section 422A.101, 6.27 subdivisions 1a, 2, and 2a, on the basis of the additional 6.28 accrued liability resulting from increased benefits paid to the 6.29 survivors of employees from that unit. 6.30 (c) If the surviving spouse or surviving child benefit 6.31 commences after June 30, 1983, the surviving spouse benefit is 6.32 30 percent of the member's average salary in effect over the 6.33 last six months of allowable service preceding the month in 6.34 which death occurs. The surviving child benefit is ten percent 6.35 of the member's average salary in effect over the last six 6.36 months of allowable service preceding the month in which death 7.1 occurs. The sum of surviving spouse and surviving child 7.2 benefits payable under this paragraph shall not exceed 50 7.3 percent of the member's average salary in effect over the last 7.4 six months of allowable service. 7.5 (d) Any surviving child benefit or surviving spouse benefit 7.6 computed under paragraph (c) and in effect for the month 7.7 immediately prior to May 28, 1998, is increased by 15 percent as 7.8 of the first payment on or after May 28, 1998. 7.9 (e) Surviving child benefits under this subdivision 7.10 terminate when the child no longer meets the definition of 7.11 surviving child. 7.12 Subd. 5. [ADMINISTRATION.] Benefitshereinprovidedshall7.13 in this section following the death of an active employee or 7.14 deferred member, as applicable, commencewithon the first day 7.15 of the month following the month in which the active employee or 7.16 deferred member dies and shall end with the last day of the 7.17 month preceding the month in which eligibility 7.18 ceases.Eligibility for the benefits herein provided shall be7.19determined by the retirement board and its determination shall7.20be final. Each beneficiary or parent or guardian of a dependent7.21child or legal representative shall furnish suchInformationas7.22the board may deemdeemed necessary by the executive director to 7.23 determine eligibility for the benefits provided by this section,7.24andmust be submitted. Failure to furnish any required 7.25 information shall be sufficient grounds forthedenial or 7.26 discontinuance of benefits. A determination made by the 7.27 executive director may be appealed to the retirement board, 7.28 whose determination is final. If the surviving spouse of the 7.29 deceased active employee or deferred member becomes entitled to 7.30 a retirement allowance by reason of membership in this fund, the 7.31 surviving spouseshallis authorized to receive the retirement 7.32 allowance in addition totheall applicable survivingspouse's7.33benefitspouse benefits to which the surviving spouse is 7.34 entitled as specified in this section and section 422A.22, 7.35 subdivision 4, if applicable. The cost of allmonthly7.36survivor'sbenefits provided in this sectionshall beis an 8.1 obligation of the members and of the city, any of its boards, 8.2 departments, commissions or public corporations or other 8.3 applicable employing units. 8.4 Subd. 6. [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 8.5 retirement board shall create a reserve account for survivor's 8.6 benefits from which shall be paid on an actuarial basis all 8.7 survivor benefits due and payable. At the end of each fiscal 8.8 year, as part of the annual actuarial valuation of the fund 8.9 prepared by the commission-retained actuary, a determination of 8.10 the normal cost of the benefits payable from the survivor's 8.11 benefit account shall be made and the board shall reduce or 8.12 increase the employee contribution rateof one-fourth of one8.13percentif and when it is determined based on the annual 8.14 actuarial valuation that the member contribution rate is in 8.15 excess of or is less than the amount necessary to pay for 50 8.16 percent of the calculated normal cost of the survivor benefits 8.17 provided in this section. 8.18 Subd. 7. [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 8.19 COVERAGE.] (a) If thecontributingactive or deferred member 8.20 diesafter having been in the service of the city 20 or more8.21years, and before the effective date of retirement, as8.22determined by the retirement board, the board shall paywith 20 8.23 or more years of service credit, a beneficiary as defined in 8.24 paragraph (b) is eligible to receive the benefit specified in 8.25 paragraph (c). 8.26 (b) The beneficiary eligible for a benefit under paragraph 8.27 (c) is the surviving spouse of the deceased employee. If there 8.28 is no surviving spouse, the beneficiary may be a dependent 8.29 surviving child of the member or dependent parent designated by 8.30 the employee on a form prescribed by the executive director. 8.31 (c) The benefit payable to the beneficiary designated in 8.32 paragraph (b) is a monthly allowance for lifeto the designated8.33beneficiary of the employee. The monthly allowanceherein8.34provided for shall beis the actuarial equivalent of a single 8.35 life service allowance specified in section 422A.15, subdivision 8.36 1, which would have been payable to the employee on the date of 9.1 death, notwithstanding the age requirement stated in section 9.2 422A.15, subdivision 1. For purposes of this section, the 9.3 amount of any excess contributions or voluntary additions by the 9.4 member shall not be included in the calculations in determining 9.5 the monthly allowance. 9.6The survivor allowance under this subdivision shall be9.7computed and determined under a procedure specified by the9.8commission-retained actuary utilizing the appropriate mortality9.9table established by the board of trustees based on the9.10experience of the fund as recommended by the commission-retained9.11actuary and using the applicable postretirement interest rate9.12assumption specified in section 356.215, subdivision 4d.9.13 (d) For benefits payable under this subdivision following 9.14 the death of a deferred member, the benefit must be calculated 9.15 as of the date of termination from service and increased by five 9.16 percent per year until January 1, 1981, and by three percent per 9.17 year thereafter compounded annually. 9.18 Subd. 8. [SURVIVING CHILD; DEPENDENT DEFINITION.]The9.19beneficiary designated by the employee shall be the surviving9.20spouse of such employee. If there is no surviving spouse, the9.21designated beneficiary may be a dependent surviving child or9.22dependent parent of such employee as dependency is defined in9.23sections 422A.01 to 422A.25. If the beneficiary designated by9.24the employee is not of the class of persons provided for in this9.25subdivision, or if the designated beneficiary predeceases the9.26employee, a refund shall be made as provided for in section9.27422A.22, in lieu of a life income. If the employee does not9.28elect to designate a beneficiary to receive a life income as9.29herein provided, the designated beneficiary, if of the class of9.30persons set forth in this subdivision, may elect within 60 days9.31after the date of death of the employee to receive a life income9.32computed and determined as though the employee had retired on9.33the date of death under the option 2 plan of retirement, as9.34provided for in sections 422A.01 to 422A.25, and had designated9.35such person as beneficiary.For purposes of subdivision 2, a 9.36 surviving child is an unmarried child of the deceased member 10.1 under the age of 18, or under the age of 22 if a full-time 10.2 student at an accredited school, college, or university. For 10.3 purposes of subdivision 7, a dependent surviving child or 10.4 dependent parent must meet the definition of dependent, as 10.5 defined in section 422A.01, subdivision 12, at the time of the 10.6 active or deferred member's death. 10.7 Subd. 9. [LUMP-SUM DEATH BENEFIT.]If any employee who has10.8contributed to the survivor's benefit account as herein provided10.9dies before the effective date of retirement on a service or10.10disability pension and is not survived by a beneficiary eligible10.11to receive a monthly allowance as herein providedIf no monthly 10.12 survivor benefit is payable under subdivision 2 or 7, there 10.13 shall be paid from thesurvivor'ssurvivor benefit account to a 10.14 beneficiary designated by the employee on a form prescribed by 10.15 the executive director a lump-sum death benefit of $750 if death 10.16 occurs prior to the end of the employee's tenth year of 10.17 service credit or of $1500 if the employee hadprior to death10.18completedten or morecalendaryears of service credit.Upon10.19reinstatement of a former employee to the service, credit for10.20such past service or for any part thereof shall be granted only10.21upon repayment of the amount of the separation refund, with10.22interest, from the time of separationAny benefit under this 10.23 subdivision may be paid in addition to a benefit payable under 10.24 subdivision 1. 10.25 Subd. 10. [BENEFIT INCREASES.]If the amount of annuity10.26payable from the Minnesota postretirement investment fund to any10.27class of annuitants is adjusted pursuant to section 11A.18, the10.28amount of benefits payable from the survivor's benefit fund10.29pursuant to subdivisions 7 or 8 for that class of annuitants10.30shall also be adjusted at the same time and rate.Annuities 10.31 payable under this section shall be adjusted at the same time 10.32 and rate as retirement annuities in the retirement benefit fund. 10.33 Subd. 11. [EFFECT OF SPOUSE REMARRIAGE.] A monthly 10.34 survivor benefitismust notsuspended,be discontinued or 10.35 terminated, or otherwise stoppeddue to a surviving spouse's 10.36 remarriage. 11.1 Subd. 12. [DETERMINATION OF ANNUITY.] The survivor 11.2 annuities payable under this section shall be computed and 11.3 determined under a procedure specified by the actuary retained 11.4 by the legislative commission on pensions and retirement 11.5 utilizing the appropriate mortality table based on the 11.6 experience of the fund as recommended by that actuary and 11.7 approved by the legislative commission on pensions and 11.8 retirement and using the applicable postretirement interest rate 11.9 assumption specified in section 356.215, subdivision 4d. 11.10 Sec. 8. [REPEALER.] 11.11 Minnesota Statutes 1998, section 422A.16, subdivision 3a, 11.12 is repealed. 11.13 Sec. 9. [EFFECTIVE DATE.] 11.14 Sections 1 to 8 are effective upon approval by the 11.15 Minneapolis city council and compliance with Minnesota Statutes, 11.16 section 645.021.