HF 2862

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/03/2022 06:39pm

A bill for an act
relating to retirement; Minnesota State Retirement System; Public Employees
Retirement Association; Teachers Retirement Association; St. Paul Teachers
Retirement Association; extending eligibility for a Rule of 90 unreduced early
retirement benefit by one month to members hired after June 30, 1989, and before
August 1, 1989; amending Minnesota Statutes 2020, sections 352.116, subdivision
1, by adding a subdivision; 353.29, subdivision 3; 353.30, by adding a subdivision;
353.651, subdivision 1; 353E.04, subdivision 1; 354.44, subdivision 6; 354A.31,
subdivision 6, by adding a subdivision; repealing Minnesota Statutes 2020, section
353.30, subdivision 1a.

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

Section 1.

Minnesota Statutes 2020, section 352.116, subdivision 1, is amended to read:

Subdivision 1.

Reduced annuity before normal retirement age.

(a) This subdivision
applies only to a person who first became a covered employee or a member of a pension
fund listed in section 356.30, subdivision 3, before July 1, 1989, and whose annuity is higher
when calculated under section 352.115, subdivision 3, paragraph (a), in conjunction with
this subdivision than when calculated under section 352.115, subdivision 3, paragraph (b),
in conjunction with subdivision 1a.

(b) Any employee who is eligible for a retirement annuity under section 352.115,
subdivision 1, and who retires before normal retirement age with credit for at least three
but less than 30 years of allowable service shall be paid the normal retirement annuity
provided in section 352.115, subdivisions 2 and 3, paragraph (a), reduced by one-quarter
of one percent for each month that the employee is under normal retirement age at the time
of retirement. An employee who is eligible for a retirement annuity under section 352.115,
subdivision 1, and who retires prior to age 62 with credit for at least 30 years of allowable
service shall be paid the normal retirement annuity provided in section 352.115, subdivisions
2 and 3, paragraph (a), reduced by one-quarter of one percent for each month that the
employee is under age 62 at the time of retirement.

deleted text begin (c) Any person whose attained age plus credited allowable service totals 90 years is
entitled, upon application, to a retirement annuity in an amount equal to the normal annuity
provided in section 352.115, subdivisions 2 and 3, paragraph (a), without any reduction by
reason of early retirement.
deleted text end

Sec. 2.

Minnesota Statutes 2020, section 352.116, is amended by adding a subdivision to
read:

new text begin Subd. 1b. new text end

new text begin Rule of 90. new text end

new text begin (a) This subdivision applies to any person who first became a
covered employee or a member of a pension fund listed in section 356.30, subdivision 3,
before August 1, 1989, and whose attained age plus credited allowable service totals at least
90.
new text end

new text begin (b) A person described in paragraph (a) is entitled, upon application, to a retirement
annuity that is the greater of:
new text end

new text begin (1) an amount equal to the normal annuity provided in section 352.115, subdivisions 2
and 3, paragraph (a), without any reduction by reason of early retirement and without regard
to the requirement under section 352.115, subdivision 3, paragraph (a), that the person
became a covered employee or a member of a pension fund listed in section 356.30,
subdivision 3, before July 1, 1989; or
new text end

new text begin (2) an amount equal to the annuity to which the person is otherwise entitled under:
new text end

new text begin (i) section 352.115, subdivision 3, paragraph (a), in conjunction with subdivision 1; or
new text end

new text begin (ii) section 352.115, subdivision 3, paragraph (b), in conjunction with subdivision 1a.
new text end

Sec. 3.

Minnesota Statutes 2020, section 353.29, subdivision 3, is amended to read:

Subd. 3.

Retirement annuity formula.

(a) This paragraph, in conjunction with section
353.30, subdivisions deleted text begin 1a, deleted text end 1b deleted text begin , deleted text end and 1c, applies to any member who first became a public
employee or a member of a pension fund listed in section 356.30, subdivision 3, before July
1, 1989, unless paragraph (b), in conjunction with section 353.30, subdivision 5, produces
a higher annuity amount, in which case paragraph (b) applies. The average salary as defined
in section 353.01, subdivision 17a, multiplied by 2.2 percent for each year of allowable
service for the first ten years and thereafter by 2.7 percent per year of allowable service and
completed months less than a full year for a basic member, and 1.2 percent for each year
of allowable service for the first ten years and thereafter by 1.7 percent per year of allowable
service and completed months less than a full year for a coordinated member determines
the amount of the normal retirement annuity.

(b) This paragraph applies to a member who has become at least 55 years old and first
became a public employee after June 30, 1989, and to any other member whose annuity
amount, when calculated under this paragraph and in conjunction with section 353.30,
subdivision 5, is higher than it is when calculated under paragraph (a), in conjunction with
section 353.30, subdivisions deleted text begin 1a, deleted text end 1b deleted text begin , deleted text end and 1c. The average salary, as defined in section 353.01,
subdivision 17a, multiplied by 2.7 percent for each year of allowable service and completed
months less than a full year for a basic member and 1.7 percent per year of allowable service
and completed months less than a full year for a coordinated member, determines the amount
of the normal retirement annuity.

Sec. 4.

Minnesota Statutes 2020, section 353.30, is amended by adding a subdivision to
read:

new text begin Subd. 6. new text end

new text begin Rule of 90. new text end

new text begin (a) This subdivision applies to any member who first became a
public employee or a member of a pension fund listed in section 356.30, subdivision 3,
before August 1, 1989, and whose attained age plus credited allowable service totals at least
90.
new text end

new text begin (b) Upon termination of public service under section 353.01, subdivision 11a, a person
described in paragraph (a) is entitled, upon application, to a retirement annuity that is the
greater of:
new text end

new text begin (1) an amount equal to the normal annuity provided in section 353.29, subdivision 3,
paragraph (a), without any reduction by reason of early retirement and without regard to
the requirement under section 353.29, subdivision 3, paragraph (a), that the person became
a covered employee or a member of a pension fund listed in section 356.30, subdivision 3,
before July 1, 1989; or
new text end

new text begin (2) an amount equal to the annuity to which the person is otherwise entitled under:
new text end

new text begin (i) section 353.29, subdivision 3, paragraph (a), in conjunction with subdivision 1b or
1c; or
new text end

new text begin (ii) section 353.29, subdivision 3, paragraph (b), in conjunction with subdivision 5.
new text end

Sec. 5.

Minnesota Statutes 2020, section 353.651, subdivision 1, is amended to read:

Subdivision 1.

Age and allowable service requirements.

new text begin (a) new text end Upon separation from
public service, any police officer or firefighter member, other than a firefighter covered by
section 353.6511, or a police officer covered by section 353.6512, new text begin (1) new text end who has attained the
age deleted text begin of at least 55 years deleted text end new text begin requirements under paragraph (b) or the age and service requirements
under paragraph (c), new text end and new text begin (2) new text end who is partially or 100 percent vested under section 353.01,
subdivision 47, is entitled upon application to a retirement annuity, known as the normal
retirement annuity.

new text begin (b) A police or firefighter member has attained the age requirement under this paragraph
if the member has attained the age of at least 55 years.
new text end

new text begin (c) A police or firefighter member has attained the age and service requirements under
this paragraph if:
new text end

new text begin (1) the member first became a public employee or member of a pension fund listed in
section 356.30, subdivision 3, before July 1, 1989; and
new text end

new text begin (2) the member's attained age plus credited allowable service totals at least 90.
new text end

Sec. 6.

Minnesota Statutes 2020, section 353E.04, subdivision 1, is amended to read:

Subdivision 1.

Eligibility requirements.

new text begin (a) new text end After termination of public employment,
an employee covered under section 353E.02 new text begin (1) new text end who has attained the age deleted text begin of at least 55 years deleted text end
new text begin requirements under paragraph (b) or the age and service requirements under paragraph (c),
new text end and new text begin (2) new text end who is vested under section 353.01, subdivision 47, in the local government
correctional service plan is entitled, upon application, to a normal retirement annuity. Instead
of a normal retirement annuity, a retiring employee may elect to receive the optional annuity
provided in section 353.30, subdivision 3.

new text begin (b) An employee has attained the age requirements under this paragraph if the employee
has attained the age of at least 55 years.
new text end

new text begin (c) An employee has attained the age and service requirements under this paragraph if:
new text end

new text begin (1) the employee first became a public employee or member of a pension fund listed in
section 356.30, subdivision 3, before July 1, 1989; and
new text end

new text begin (2) the employee's attained age plus credited allowable service totals at least 90.
new text end

Sec. 7.

Minnesota Statutes 2020, section 354.44, subdivision 6, is amended to read:

Subd. 6.

Computation of formula program retirement annuity.

(a) The formula
retirement annuity must be computed in accordance with the applicable provisions of the
formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
section 354.05, subdivision 13a, for the period of the member's formula service credit.

(b) This paragraph, in conjunction with paragraph (c), applies to a person who first
became a member of the association or a member of a pension fund listed in section 356.30,
subdivision 3, before July 1, 1989, unless paragraph (d), in conjunction with paragraph (e),
produces a higher annuity amount, in which case paragraph (d) applies. The average salary
as defined in section 354.05, subdivision 13a, multiplied by the following percentages per
year of formula service credit shall determine the amount of the annuity to which the member
qualifying therefor is entitled for service rendered before July 1, 2006:

	Period		Coordinated Member		Basic Member
	Each year of service during first ten		1.2 percent per year		2.2 percent per year
	Each year of service thereafter		1.7 percent per year		2.7 percent per year

For service rendered on or after July 1, 2006, by a member other than a member who
was a member of the former Duluth Teachers Retirement Fund Association between January
1, 2006, and June 30, 2015, and for service rendered on or after July 1, 2013, by a member
who was a member of the former Duluth Teachers Retirement Fund Association between
January 1, 2013, and June 30, 2015, the average salary as defined in section 354.05,
subdivision 13a, multiplied by the following percentages per year of service credit, determines
the amount the annuity to which the member qualifying therefor is entitled:

	Period		Coordinated Member		Basic Member
	Each year of service during first ten		1.4 percent per year		2.2 percent per year
	Each year of service after ten years of service		1.9 percent per year		2.7 percent per year

(c)(1) This paragraph applies only to a person who first became a member of the
association or a member of a pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, and whose annuity is higher when calculated under paragraph (b), in conjunction
with this paragraph than when calculated under paragraph (d), in conjunction with paragraph
(e).

(2) Where any member retires prior to normal retirement age under a formula annuity,
the member shall be paid a retirement annuity in an amount equal to the normal annuity
provided in paragraph (b) reduced by one-quarter of one percent for each month that the
member is under normal retirement age at the time of retirement except that for any member
who has 30 or more years of allowable service credit, the reduction shall be applied only
for each month that the member is under age 62.

deleted text begin (3) Any member whose attained age plus credited allowable service totals 90 years is
entitled, upon application, to a retirement annuity in an amount equal to the normal annuity
provided in paragraph (b), without any reduction by reason of early retirement.
deleted text end

(d) This paragraph applies to a member who has become at least 55 years old and first
became a member of the association after June 30, 1989, and to any other member who has
become at least 55 years old and whose annuity amount when calculated under this paragraph
and in conjunction with paragraph (e), is higher than it is when calculated under paragraph
(b), in conjunction with paragraph (c).

(1) For a basic member, the average salary, as defined in section 354.05, subdivision
13a, multiplied by 2.7 percent for each year of service for a basic member determines the
amount of the retirement annuity to which the basic member is entitled. The annuity of a
basic member who was a member of the former Minneapolis Teachers Retirement Fund
Association as of June 30, 2006, must be determined according to the annuity formula under
the articles of incorporation of the former Minneapolis Teachers Retirement Fund Association
in effect as of that date.

(2) For a coordinated member, the average salary, as defined in section 354.05,
subdivision 13a, multiplied by 1.7 percent for each year of service rendered before July 1,
2006, and by 1.9 percent for each year of service rendered on or after July 1, 2006, for a
member other than a member who was a member of the former Duluth Teachers Retirement
Fund Association between January 1, 2006, and June 30, 2015, and by 1.9 percent for each
year of service rendered on or after July 1, 2013, for a member of the former Duluth Teachers
Retirement Fund Association between January 1, 2013, and June 30, 2015, determines the
amount of the retirement annuity to which the coordinated member is entitled.

(e) This paragraph applies to a person who has become at least 55 years old and first
becomes a member of the association after June 30, 1989, and to any other member who
has become at least 55 years old and whose annuity is higher when calculated under
paragraph (d) in conjunction with this paragraph than when calculated under paragraph (b)
in conjunction with paragraph (c). An employee who retires under the formula annuity
before the normal retirement age is entitled to receive the normal annuity provided in
paragraph (d), reduced as described in clause (1) or (2), as applicable.

(1) For a member who is at least age 62 and has at least 30 years of service, the annuity
shall be reduced by an early reduction factor of six percent for each year that the member's
age of retirement precedes the normal retirement age. The resulting reduced annuity shall
be further adjusted to take into account the increase in the monthly amount that would have
occurred had the member retired early and deferred receipt of the annuity until normal
retirement age and the annuity was augmented during the deferral period at 2.5 percent, if
the member commenced employment after June 30, 2006, or at three percent, if the member
commenced employment before July 1, 2006, compounded annually.

(2) For a member who has not attained age 62 or has fewer than 30 years of service, the
annuity shall be reduced for each year that the member's age of retirement precedes normal
retirement age by the following early reduction factors:

(i) for the period during which the member is age 55 through age 58, the factor is four
percent; and

(ii) for the period during which the member is at least age 59 but not yet normal retirement
age, the factor is seven percent.

The resulting annuity shall be further adjusted to take into account the increase in the
monthly amount that would have occurred had the member retired early and deferred receipt
of the annuity until normal retirement age and the annuity was augmented during the deferral
period at the applicable annual rate, compounded annually. The applicable annual rate is
the rate in effect for the month that includes the member's effective date of retirement and
shall be considered as fixed for the member for the period until the member reaches normal
retirement age. The applicable annual rate for June 2019 is 2.5 percent, if the member
commenced employment after June 30, 2006, or three percent, if the member commenced
employment before July 1, 2006, compounded annually, and decreases each month beginning
July 2019 in equal monthly increments over the five-year period that begins July 1, 2019,
and ends June 30, 2024, to zero percent effective for July 2024 and thereafter.

After June 30, 2024, the reduced annuity commencing before normal retirement age
under this clause shall not take into account any augmentation.

new text begin (f)(1) This paragraph applies to a person who first became a member of the association
or a member of a pension fund listed in section 356.30, subdivision 3, before August 1,
1989, and whose attained age plus credited allowable service totals at least 90.
new text end

new text begin (2) A person described in clause (1) is entitled, upon application, to a retirement annuity
that is the greater of:
new text end

new text begin (i) an amount equal to the normal annuity provided in paragraph (b), without any
reduction by reason of early retirement and without regard to the requirement under paragraph
(b) that the person became a covered employee or a member of a pension fund listed in
section 356.30, subdivision 3, before July 1, 1989; or
new text end

new text begin (ii) an amount equal to the annuity to which the person is otherwise entitled under
paragraph (b) in conjunction with paragraph (c) or under paragraph (d) in conjunction with
paragraph (e).
new text end

deleted text begin (f) deleted text end new text begin (g) new text end No retirement annuity is payable to a former employee with a salary that exceeds
95 percent of the governor's salary unless and until the salary figures used in computing the
highest five successive years average salary under paragraph (a) have been audited by the
Teachers Retirement Association and determined by the executive director to comply with
the requirements and limitations of section 354.05, subdivisions 35 and 35a.

Sec. 8.

Minnesota Statutes 2020, section 354A.31, subdivision 6, is amended to read:

Subd. 6.

Reduced retirement annuity.

(a) This subdivision applies only to a person
who first became a coordinated member or a member of a pension fund listed in section
356.30, subdivision 3, before July 1, 1989, and whose annuity is higher when calculated
using the retirement annuity formula percentage in subdivision 4, paragraph (c), in
conjunction with this subdivision than when calculated under subdivision 4, paragraph (d),
in conjunction with subdivision 7.

(b) Upon retirement at an age before normal retirement age or prior to age 62 with at
least 30 years of service credit, a vested coordinated member shall be entitled to a retirement
annuity in an amount equal to the normal retirement annuity calculated using the retirement
annuity formula percentage in subdivision 4, paragraph (c), reduced by one-quarter of one
percent for each month that the coordinated member is under normal retirement age if the
coordinated member has less than 30 years of service credit or is under the age of 62 if the
coordinated member has at least 30 years of service credit.

deleted text begin (c) Any coordinated member whose attained age plus credited allowable service totals
90 years is entitled, upon application, to a retirement annuity in an amount equal to the
normal retirement annuity calculated using the retirement annuity formula percentage in
subdivision 4, paragraph (c), without any reduction by reason of early retirement.
deleted text end

Sec. 9.

Minnesota Statutes 2020, section 354A.31, is amended by adding a subdivision to
read:

new text begin Subd. 7a. new text end

new text begin Rule of 90. new text end

new text begin (a) This subdivision applies to a person (1) who first became a
coordinated member or a member of a pension fund listed in section 356.30, subdivision
3, before August 1, 1989, and (2) whose age plus credited allowable service totals at least
90.
new text end

new text begin (b) A person described in paragraph (a) is entitled, upon application, to a retirement
annuity that is the greater of:
new text end

new text begin (1) an amount equal to the normal retirement annuity calculated using the retirement
annuity formula percentage in subdivision 4, paragraph (c), without any reduction by reason
of early retirement and without regard to the requirement under subdivision 4, paragraph
(c), that the person became a covered employee or a member of a pension fund listed in
section 356.30, subdivision 3, before July 1, 1989; or
new text end

new text begin (2) an amount equal to the annuity to which the person is otherwise entitled under
subdivision 4, paragraph (c), in conjunction with subdivision 6 or under subdivision 4,
paragraph (d), in conjunction with subdivision 7.
new text end

Sec. 10. new text begin REVISOR INSTRUCTION.
new text end

new text begin In Minnesota Statutes, sections 353.32, subdivision 1a; 353.34, subdivision 3; 353F.05;
and 356.415, subdivision 1b, the revisor of statutes shall replace references to Minnesota
Statutes, section 353.30, subdivision 1a, with references to Minnesota Statutes, section
353.30, subdivision 6.
new text end

Sec. 11. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2020, section 353.30, subdivision 1a, new text end new text begin is repealed.
new text end

Sec. 12. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 11 are effective July 1, 2022.
new text end

APPENDIX

Repealed Minnesota Statutes: 21-04241

353.30 ANNUITIES UPON RETIREMENT.

Subd. 1a.

Pre-July 1, 1989, members: rule of 90.

Upon termination of public service under section 353.01, subdivision 11a, a person who first became a public employee or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989, and whose attained age plus credited allowable service totals 90 years is entitled upon application to a retirement annuity in an amount equal to the applicable normal annuity provided in section 353.29, subdivision 3, paragraph (a); section 353.651, subdivision 3; or section 353E.04, subdivision 3. Such annuity is not subject to a reduction for early retirement.