Minnesota Legislature
HF 2411
as introduced - 87th Legislature (2011 - 2012) Posted on 02/20/2012 01:15pm
Current Version - as introduced
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A bill for an act
relating to retirement; Teachers Retirement Association; revising deferred
annuity augmentation rates for certain deferred annuitants; amending Minnesota
Statutes 2010, section 354.55, subdivision 11.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2010, section 354.55, subdivision 11, is amended to read:
Subd. 11.
Deferred annuity; augmentation.
(a) Any person covered under section
354.44, subdivision 6, who ceases to render teaching service, may leave the person's
accumulated deductions in the fund for the purpose of receiving a deferred annuity
at retirement.
(b) The amount of the deferred retirement annuity is determined by section 354.44,
subdivision 6, and augmented as provided in this subdivision. The required reserves for
the annuity which had accrued when the member ceased to render teaching service must
be augmented, as further specified in this subdivision, by the applicable interest deleted text begin ratedeleted text end new text begin rates
new text end compounded annually from the first day of the month following the month during which
the member ceased to render teaching service to the effective date of retirement.
(c) No augmentation is deleted text begin notdeleted text end creditable if the deferral period is less than three months
or if deferral commenced before July 1, 1971.
(d) For persons who became deleted text begin covered employeesdeleted text end new text begin members new text end before July 1, 2006, new text begin and
who terminated service before May 15, 2010, new text end with a deferral period commencing after
June 30, 1971, the annuity must be augmented as follows:
(1) five percent interest compounded annually until January 1, 1981;
(2) three percent interest compounded annually from January 1, 1981, until January
1 of the year following the year in which the deferred annuitant attains age 55;new text begin and
new text end
(3) five percent interest compounded annually from the date established in clause (2)
to the effective date of retirementnew text begin .
new text end
new text begin
(e) For persons who became members before July 1, 2006, and who terminate
service after May 14, 2010, the annuity must be augmented as follows:
new text end
new text begin
(1) three percent interest compounded annually to January 1 of the year following
the year in which the deferred annuitant attains age 55;
new text end
new text begin (2) five percent interest compounded annually from the date established in clause (1)
to the effective date of retirementnew text end or until June 30, 2012, whichever is earlier; and
deleted text begin (4)deleted text end new text begin (3) new text end two percent interest compounded annually after June 30, 2012new text begin , to the
effective date of retirementnew text end .
new text begin
(f) For persons who became members after June 30, 2006, and who terminated
service before May 15, 2010, the interest rate used to augment the deferred annuity is 2.5
percent interest compounded annually to the effective date of retirement.
new text end
deleted text begin (e)deleted text end new text begin (g) new text end For persons who become covered employees after June 30, 2006, new text begin and who
terminate service after May 14, 2010, new text end the interest rate used to augment the deferred
annuity is 2.5 percent interest compounded annually until June 30, 2012, or until the
effective date of retirement, whichever is earlier, and two percent interest compounded
annually after June 30, 2012new text begin , to the effective date of retirementnew text end .
deleted text begin (f)deleted text end new text begin (h) new text end If a person has more than one period of uninterrupted service, a separate
average salary determined under section 354.44, subdivision 6, must be used for each
period and the required reserves related to each period must be augmented as specified in
this subdivision. The sum of the augmented required reserves is the present value of the
annuity. For the purposes of this subdivision, "period of uninterrupted service" means a
period of covered teaching service during which the member has not been separated from
active service for more than one fiscal year.
deleted text begin (g)deleted text end new text begin (i) new text end If a person repays a refund, the service restored by the repayment must
be considered as continuous with the next period of service for which the person has
allowable service credit in the Teachers Retirement Association.
deleted text begin (h)deleted text end new text begin (j) new text end If a person does not render teaching service in any one fiscal year or more
consecutive fiscal years and then resumes teaching service, the formula percentages used
from the date of the resumption of teaching service must be those applicable to new
members.
deleted text begin (i)deleted text end new text begin (k) new text end The mortality table and interest rate actuarial assumption used to compute
the annuity must be the applicable mortality table established by the board under section
354.07, subdivision 1, and the interest rate actuarial assumption under section 356.215 in
effect when the member retires.
deleted text begin (j)deleted text end new text begin (l) new text end In no case may the annuity payable under this subdivision be less than the
amount of annuity payable under section 354.44, subdivision 6.
deleted text begin (k)deleted text end new text begin (m) new text end The requirements and provisions for retirement before normal retirement
age contained in section 354.44, subdivision 6, also apply to an employee fulfilling the
requirements with a combination of service as provided in section 354.60.
deleted text begin (l)deleted text end new text begin (n) new text end The augmentation provided by this subdivision applies to the benefit provided
in section 354.46, subdivision 2.
deleted text begin (m)deleted text end new text begin (o) new text end The augmentation provided by this subdivision does not apply to any period
in which a person is on an approved leave of absence from an employer unit covered
by the provisions of this chapter.
deleted text begin (n)deleted text end new text begin (p) new text end The retirement annuity or disability benefit of, or the survivor benefit payable
on behalf of, a former teacher who terminated service before July 1, 1997, which is not
first payable until after June 30, 1997, must be increased on an actuarial equivalent basis
to reflect the change in the postretirement interest rate actuarial assumption under section
356.215, subdivision 8, from five percent to six percent under a calculation procedure and
tables adopted by the board as recommended by an approved actuary and approved by the
actuary retained under section 356.214.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end