HF 3401

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 firefighters' 
  1.3             relief association; providing for an annual 
  1.4             postretirement benefit. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [DEFINITIONS.] 
  1.7      Subdivision 1.  [TERMS.] Unless the context clearly 
  1.8   indicates otherwise, each of the terms defined in this section 
  1.9   has the meaning given. 
  1.10     Subd. 2.  [ACTIVE MEMBER PERCENTAGE.] The "active member 
  1.11  percentage" is the percentage of the number of units accrued by 
  1.12  active members of the association to the total number of units 
  1.13  to which eligible retired, surviving spouse, and disabled 
  1.14  members are entitled and active members of the association have 
  1.15  accrued. 
  1.16     Subd. 3.  [RESIDUAL INVESTMENT AMOUNT.] "Residual 
  1.17  investment amount" means the amount in excess of 110 percent of 
  1.18  the actuarial value of assets of the fund relative to its 
  1.19  actuarial accrued liabilities according to the most recent 
  1.20  annual actuarial valuation prepared in accordance with Minnesota 
  1.21  Statutes, sections 356.215 and 356.216. 
  1.22     Subd. 4.  [RESIDUAL INVESTMENT PAYMENT.] "Residual 
  1.23  investment payment" means the payment of a lump sum 
  1.24  postretirement benefit under section 3 to an eligible member on 
  1.25  June 1 following the determination date in any year. 
  2.1      Subd. 5.  [RESIDUAL INVESTMENT POOL.] "Residual investment 
  2.2   pool" means a separate account of the association which may 
  2.3   derive its funds only from the residual investment amounts 
  2.4   determined in section 2.  The residual investment pool may only 
  2.5   be used to make residual investment payments and reimburse the 
  2.6   fund in accordance with section 3. 
  2.7      Sec. 2.  [DETERMINATION OF RESIDUAL INVESTMENT AMOUNT.] 
  2.8      The board of the association shall determine by May 1 of 
  2.9   each year whether or not the fund has a residual investment 
  2.10  amount for that year.  The amount of the residual investment 
  2.11  amount, if any, must be stated as a dollar amount and reported 
  2.12  to the chief administrative officer of the association, the 
  2.13  mayor and governing body of the city, the state auditor, the 
  2.14  commissioner of finance, and the executive director of the 
  2.15  legislative commission on pensions and retirement.  The residual 
  2.16  investment amount shall be multiplied by the active member 
  2.17  percentage for that year and the amount so determined shall be 
  2.18  returned to the special fund.  The remaining residual investment 
  2.19  amount must be placed in the residual investment pool and 
  2.20  applied for the purpose specified in section 3.  The residual 
  2.21  investment amount must not be considered as income to or assets 
  2.22  of the fund for actuarial valuations of the fund for that year 
  2.23  under Minnesota Statutes, sections 69.77, 356.215, and 356.216, 
  2.24  and the provisions of this section, except to offset the annual 
  2.25  postretirement payment. 
  2.26     Sec. 3.  [AMOUNT OF ANNUAL RESIDUAL INVESTMENT PAYMENT.] 
  2.27     Subdivision 1.  [PAYMENT CALCULATIONS.] (a) Subject to 
  2.28  subdivision 2, the amount determined under section 2 must be 
  2.29  applied in accordance with this subdivision.  Payment of the 
  2.30  residual investment payment must be in a lump sum amount on June 
  2.31  1 following the determination date in any year.  Payment to each 
  2.32  eligible member must be calculated as specified in paragraphs 
  2.33  (b) and (c). 
  2.34     (b) Twenty percent of the residual investment pool must be 
  2.35  stated as a dollar amount and made available for the residual 
  2.36  investment payment under paragraph (c). 
  3.1      (c) Payment to each eligible member must be calculated by 
  3.2   dividing the total number of pension units to which eligible 
  3.3   members are entitled into 20 percent of the residual investment 
  3.4   pool made available for distribution to members, and then 
  3.5   multiplying that result by the number of units to which each 
  3.6   eligible member is entitled to determine each eligible member's 
  3.7   annual residual investment payment.  A person who received a 
  3.8   pension or benefit for the entire 12 months before the 
  3.9   determination date is eligible for a full residual investment 
  3.10  payment.  A person who received a pension or benefit for less 
  3.11  than 12 months before the determination date is eligible for a 
  3.12  prorated residual investment payment. 
  3.13     Subd. 2.  [NO RESIDUAL INVESTMENT AMOUNT.] In the event no 
  3.14  residual investment amount exists according to the most recent 
  3.15  annual actuarial valuation prepared in accordance with Minnesota 
  3.16  Statutes, sections 356.215 and 356.216, the board shall 
  3.17  determine the dollar amount necessary for the actuarial assets 
  3.18  of the fund to maintain 110 percent of its accrued actuarial 
  3.19  liabilities.  The board shall then disburse from the residual 
  3.20  investment pool to the fund the amount so determined.  Any 
  3.21  amount remaining in the residual investment pool shall be 
  3.22  distributed in accordance with subdivision 1, paragraphs (b) and 
  3.23  (c). 
  3.24     Subd. 3.  [DISBURSEMENTS.] The lump sum amount determined 
  3.25  under subdivision 1 may be disbursed by the board to eligible 
  3.26  members in 12 equal monthly installments or any other manner 
  3.27  which the board shall determine.  
  3.28     Sec. 4.  [CITY OF MINNEAPOLIS; NORMAL COST CONTRIBUTIONS.] 
  3.29     Notwithstanding any law to the contrary, the city of 
  3.30  Minneapolis is not responsible for active members' normal cost 
  3.31  contributions to the association nor for reimbursing the fund 
  3.32  for members' normal cost contributions that were deposited in 
  3.33  the association's health insurance escrow account. 
  3.34     Sec. 5.  [SUSPENSION OF NORMAL COST CONTRIBUTIONS.] 
  3.35     Notwithstanding the provisions of Minnesota Statutes, 
  3.36  section 69.77, or any other law to the contrary, when the 
  4.1   valuation of the actuarial assets of the fund exceed its 
  4.2   actuarial liabilities by 110 percent, the city of Minneapolis is 
  4.3   not required to make a contribution to the fund for the normal 
  4.4   cost of active members. 
  4.5      Sec. 6.  [CHANGE IN AMORTIZATION PERIOD.] 
  4.6      Notwithstanding the provisions of Minnesota Statutes, 
  4.7   sections 69.77, subdivision 2b; 356.215; and 356.216, or any 
  4.8   other law to the contrary, the date for amortizing any unfunded 
  4.9   actuarial accrued liability of the fund shall be 15 years from 
  4.10  the date of the most recent actuarial valuation, unless the life 
  4.11  expectancy of any remaining members of the association is less 
  4.12  than 15 years, in which case the amortization period will be no 
  4.13  more than the life expectancy of the remaining members.  
  4.14     Sec. 7.  [NO GUARANTEE OF ANNUAL RESIDUAL INVESTMENT 
  4.15  PAYMENT.] 
  4.16     No provision of or residual investment payment made under 
  4.17  section 3 may be interpreted or relied upon by any member of the 
  4.18  association to guarantee or entitle a member to a residual 
  4.19  investment payment when no such amounts are currently in the 
  4.20  residual investment pool. 
  4.21     Sec. 8.  [EFFECTIVE DATE.] 
  4.22     Sections 1 to 3 and 5 to 7 are effective upon approval by 
  4.23  the city council of Minneapolis in compliance with Minnesota 
  4.24  Statutes, section 645.021, subdivision 3.  Section 4 is 
  4.25  effective upon approval by the city council of Minneapolis in 
  4.26  compliance with Minnesota Statutes, section 645.021, subdivision 
  4.27  3, and applies retroactively to contributions beginning after 
  4.28  July 1, 1990.