Minnesota Legislature
HF 3294
as introduced - 93rd Legislature (2023 - 2024) Posted on 02/26/2024 03:54pm
Current Version - as introduced
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A bill for an act
relating to retirement; Teachers Retirement Association; higher education individual
retirement account plan; lowering the normal retirement age to age 64; increasing
employee and employer contributions; extending the end of the amortization period
to 2053; increasing the pension adjustment revenue for school districts;
appropriating money; amending Minnesota Statutes 2022, sections 126C.10,
subdivision 37; 354.05, subdivision 38; 354.42, subdivisions 2, 3; 354B.23,
subdivision 1; 356.215, subdivision 11.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2022, section 126C.10, subdivision 37, is amended to read:
Subd. 37.
Pension adjustment revenue.
(a) A school district's pension adjustment
revenue equals the sum of:
(1) the greater of zero or the product of:
(i) the difference between the district's adjustment under Minnesota Statutes 2012, section
127A.50, subdivision 1, for fiscal year 2014 per adjusted pupil unit and the state average
adjustment under Minnesota Statutes 2012, section 127A.50, subdivision 1, for fiscal year
2014 per adjusted pupil unit; and
(ii) the district's adjusted pupil units for the fiscal year; and
(2) the product of the salaries paid to district employees who were members of the
Teachers Retirement Association and the St. Paul Teachers' Retirement Fund Association
for the prior fiscal year and the district's pension adjustment rate for the fiscal year. The
pension adjustment rate for Independent School District No. 625, St. Paul, equals deleted text begin 0.84
percent for fiscal year 2019, 1.67 percent for fiscal year 2020, 1.88 percent for fiscal year
2021, 2.09 percent for fiscal year 2022,deleted text end 2.3 percent for fiscal year 2023, and 2.5 percent for
fiscal year 2024 and later. The pension adjustment rate for all other districts equals deleted text begin 0.21
percent for fiscal year 2019, 0.42 percent for fiscal year 2020, 0.63 percent for fiscal year
2021, 0.84 percent for fiscal year 2022,deleted text end 1.05 percent for fiscal year 2023, and deleted text begin 1.25deleted text end new text begin 2.25
new text end percent for fiscal year 2024 and later.
(b) For fiscal year 2025 and later, the state total pension adjustment revenue under
paragraph (a), clause (2), must not exceed the amount calculated under paragraph (a), clause
(2), for fiscal year 2024. The commissioner must prorate the pension adjustment revenue
under paragraph (a), clause (2), so as not to exceed the maximum.
(c) Notwithstanding section 123A.26, subdivision 1, a cooperative unit, as defined in
section 123A.24, subdivision 2, qualifies for pension adjustment revenue under paragraph
(a), clause (2), as if it was a district, and the aid generated by the cooperative unit shall be
paid to the cooperative unit.
Sec. 2.
Minnesota Statutes 2022, section 354.05, subdivision 38, is amended to read:
Subd. 38.
Normal retirement age.
"Normal retirement age" means age 65 for 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. For a person who first becomes a member of
the association after June 30, 1989, normal retirement age means deleted text begin the higher of age 65 or
"retirement age," as defined in United States Code, title 42, section 416(l), as amended, but
not to exceeddeleted text end age deleted text begin 66deleted text end new text begin 64new 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
Sec. 3.
Minnesota Statutes 2022, section 354.42, subdivision 2, is amended to read:
Subd. 2.
Employee contribution.
(a) The employee contribution to the fund is the
following percentage of the member's salary:
| Period |
Basic Program |
Coordinated Program |
|
| from July 1, 2014, through June 30, 2023 |
11 percent |
7.5 percent |
|
| after June 30, 2023 |
deleted text begin 11.25deleted text end new text begin 11.75 new text end percent |
deleted text begin 7.75deleted text end new text begin 8.25 new text end percent |
(b) When an employee contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid for each employer unit with the first payroll cycle
reported.
(c) This contribution must be made by deduction from salary. Where any portion of a
member's salary is paid from other than public funds, the member's employee contribution
must be based on the entire salary received.
Sec. 4.
Minnesota Statutes 2022, section 354.42, subdivision 3, is amended to read:
Subd. 3.
Employer.
(a) The regular employer contribution to the fund by Special School
District No. 1, Minneapolis, is an amount equal to the applicable following percentage of
salary of each coordinated member and the applicable percentage of salary of each basic
member specified in paragraph (c).
The additional employer contribution to the fund by Special School District No. 1,
Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a
coordinated member or who is a basic member.
(b) The regular employer contribution to the fund by Independent School District No.
709, Duluth, is an amount equal to the applicable percentage of salary of each old law or
new law coordinated member specified for the coordinated program in paragraph (c).
(c) The employer contribution to the fund for every other employer is an amount equal
to the applicable following percentage of the salary of each coordinated member and the
applicable following percentage of the salary of each basic member:
| Period |
Coordinated Member |
Basic Member |
|||
|
deleted text begin
from July 1, 2014, through June 30, 2018 deleted text end |
deleted text begin
7.5 percent deleted text end |
deleted text begin
11.5 percent deleted text end |
|||
|
deleted text begin
from July 1, 2018, through June 30, 2019 deleted text end |
deleted text begin
7.71 percent deleted text end |
deleted text begin
11.71 percent deleted text end |
|||
|
deleted text begin
from July 1, 2019, through June 30, 2020 deleted text end |
deleted text begin
7.92 percent deleted text end |
deleted text begin
11.92 percent deleted text end |
|||
|
deleted text begin
from July 1, 2020, through June 30, 2021 deleted text end |
deleted text begin
8.13 percent deleted text end |
deleted text begin
12.13 percent deleted text end |
|||
|
deleted text begin
from July 1, 2021, through June 30, 2022 deleted text end |
deleted text begin
8.34 percent deleted text end |
deleted text begin
12.34 percent deleted text end |
|||
| from July 1, 2022, through June 30, 2023 |
8.55 percent |
12.55 percent |
|||
| after June 30, 2023 |
deleted text begin 8.75deleted text end new text begin 9.75 new text end percent |
deleted text begin 12.75deleted text end new text begin 13.75 new text end percent |
|||
(d) When an employer contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid for each employer unit with the first payroll cycle
reported.
Sec. 5.
Minnesota Statutes 2022, section 354B.23, subdivision 1, is amended to read:
Subdivision 1.
Member contribution rate.
(a) Except for a participant described under
paragraph (b), the member contribution rate for participants in the individual retirement
account plan is equal to the coordinated employee contribution rate in section 354.42,
subdivision 2.
(b) The member contribution rate is the rate described in paragraph (c) for a participant
in the individual retirement account plan who:
(1) achieved tenure or its equivalent at a Minnesota state college or university before
July 1, 2018; or
(2) is an employee in an eligible unclassified administrative position, is not a faculty
member, and first contributed to the individual retirement account plan before July 1, 2018.
(c) The member contribution rate for a participant described in paragraph (b) is the
following percentage of salary:
|
deleted text begin
from July 1, 2019, to June 30, 2020 deleted text end |
deleted text begin
5.15 deleted text end |
|
|
deleted text begin
from July 1, 2020, to June 30, 2021 deleted text end |
deleted text begin
5.80 deleted text end |
|
|
deleted text begin
from July 1, 2021, to June 30, 2022 deleted text end |
deleted text begin
6.45 deleted text end |
|
| from July 1, 2022, to June 30, 2023 |
7.10 |
|
| from July 1, 2023, to June 30, 2024 |
deleted text begin
7.75
deleted text end
new text begin
8.25 new text end |
After June 30, 2024, the member contribution rate is the rate specified in paragraph (a).
Sec. 6.
Minnesota Statutes 2022, section 356.215, subdivision 11, is amended to read:
Subd. 11.
Amortization contributions.
(a) In addition to the exhibit indicating the level
normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial
reporting purposes indicating the additional annual contribution sufficient to amortize the
unfunded actuarial accrued liability and must contain an exhibit indicating the additional
contribution sufficient to amortize the unfunded actuarial accrued liability. For the retirement
plans listed in subdivision 8, paragraph (a), but excluding the legislators retirement plan,
the Bloomington Fire Department Relief Association, and the local monthly benefit volunteer
firefighter relief associations, the additional contribution must be calculated on a level
percentage of covered payroll basis by the established date for full funding in effect when
the valuation is prepared, assuming annual payroll growth at the applicable percentage rate
set forth in the appendix described in subdivision 8, paragraph (c). For the legislators
retirement plan, the additional annual contribution must be calculated on a level annual
dollar amount basis.
(b) For any retirement plan other than a retirement plan governed by paragraph (d), (e),
(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for
calculating the actuarial accrued liability of the fund, a change in the benefit plan governing
annuities and benefits payable from the fund, a change in the actuarial cost method used in
calculating the actuarial accrued liability of all or a portion of the fund, or a combination
of the three, which change or changes by itself or by themselves without inclusion of any
other items of increase or decrease produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding is the first actuarial valuation date
occurring after June 1, 2020.
(c) For any retirement plan, if there has been a change in any or all of the actuarial
assumptions used for calculating the actuarial accrued liability of the fund, a change in the
benefit plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the fund,
or a combination of the three, and the change or changes, by itself or by themselves and
without inclusion of any other items of increase or decrease, produce a net increase in the
unfunded actuarial accrued liability in the fund, the established date for full funding must
be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the fund must be determined in accordance
with the plan provisions governing annuities and retirement benefits and the actuarial
assumptions in effect before an applicable change;
(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the investment return assumption specified in subdivision 8 in effect before the change;
(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance
with any new plan provisions governing annuities and benefits payable from the fund and
any new actuarial assumptions and the remaining plan provisions governing annuities and
benefits payable from the fund and actuarial assumptions in effect before the change;
(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the applicable
change is effective must be calculated using the applicable investment return assumption
specified in subdivision 8 in effect after any applicable change;
(v) the level annual dollar or level percentage amortization contribution under item (iv)
must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);
(vi) the period in which the unfunded actuarial accrued liability amount determined in
item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the investment return
assumption specified in subdivision 8 in effect after any applicable change, rounded to the
nearest integral number of years, but not to exceed 30 years from the end of the plan year
in which the determination of the established date for full funding using the procedure set
forth in this clause is made and not to be less than the period of years beginning in the plan
year in which the determination of the established date for full funding using the procedure
set forth in this clause is made and ending by the date for full funding in effect before the
change; and
(vii) the period determined under item (vi) must be added to the date as of which the
actuarial valuation was prepared and the date obtained is the new established date for full
funding.
(d) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2048.
(e) For the Teachers Retirement Association, the established date for full funding is June
30, deleted text begin 2048deleted text end new text begin 2053new text end .
(f) For the correctional state employees retirement plan and the State Patrol retirement
plan of the Minnesota State Retirement System, the established date for full funding is June
30, 2048.
(g) For the judges retirement plan, the established date for full funding is June 30, 2048.
(h) For the local government correctional service retirement plan and the public employees
police and fire retirement plan, the established date for full funding is June 30, 2048.
(i) For the St. Paul Teachers Retirement Fund Association, the established date for full
funding is June 30, 2048.
(j) For the general state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, 2048.
(k) For the retirement plans for which the annual actuarial valuation indicates an excess
of valuation assets over the actuarial accrued liability, the valuation assets in excess of the
actuarial accrued liability must be recognized as a reduction in the current contribution
requirements by an amount equal to the amortization of the excess expressed as a level
percentage of pay over a 30-year period beginning anew with each annual actuarial valuation
of the plan.
Sec. 7. new text begin EDUCATION APPROPRIATION.
new text end
new text begin Subdivision 1. new text end
new text begin Department of Education. new text end
new text begin
The sums indicated are appropriated from
the general fund to the Department of Education for the fiscal years designated. These sums
are in addition to appropriations made for the same purpose in any other law.
new text end
new text begin Subd. 2. new text end
new text begin General education aid. new text end
new text begin
For general education aid under Minnesota Statutes,
section 126C.13, subdivision 4:
new text end
|
new text begin
$ new text end |
new text begin
....... new text end |
new text begin
..... new text end |
new text begin
2024 new text end |
|
|
new text begin
$ new text end |
new text begin
....... new text end |
new text begin
..... new text end |
new text begin
2025 new text end |
new text begin
The 2024 appropriation includes $0 for 2023 and $....... for 2024.
new text end
new text begin
The 2025 appropriation includes $....... for 2024 and $....... for 2025.
new text end