HF 3675

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/21/2024 04:01pm

A bill for an act
relating to retirement; Minnesota State Retirement System; general state employees
retirement plan; providing an unreduced early retirement annuity to select
Department of Corrections employees if the employee is at least 62 years old or
has at least 30 years of service; amending Minnesota Statutes 2022, section 352.116,
subdivision 1a, by adding a subdivision.

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

Sec. 1.

Minnesota Statutes 2022, section 352.116, subdivision 1a, is amended to read:

Subd. 1a.

Actuarial reduction for early retirement.

(a) This subdivision applies to a
person who has become at least 55 years old and first became a covered employee after
June 30, 1989, and to any other covered employee who has become at least 55 years old
and whose annuity is higher when calculated under section 352.115, subdivision 3, paragraph
(b), in conjunction with this subdivision than when calculated under section 352.115,
subdivision 3, paragraph (a), in conjunction with subdivision 1. new text begin Except as provided under
subdivision 1b, new text end a covered employee who retires before the normal retirement age shall be
paid the normal retirement annuity provided in section 352.115, subdivisions 2 and 3,
paragraph (b), reduced as described in paragraph (b) or (c), as applicable.

(b) For covered employees who retire on or after July 1, 2019, the reduced annuity is
the actuarial equivalent of the annuity that would be payable to the employee if the employee
deferred receipt of the annuity until normal retirement age and the annuity amount were
augmented at the applicable annual rate, compounded annually, from the day the annuity
begins to accrue until the normal retirement age. The applicable annual rate is the rate in
effect on the employee's effective date of retirement and shall be considered as fixed for
the employee for the period until the employee reaches normal retirement age. The applicable
annual rates are the following:

(1) until June 30, 2019, three percent if the employee became an employee before July
1, 2006, and 2.5 percent if the employee became an employee after June 30, 2006;

(2) beginning July 1, 2019, through June 30, 2024, a rate that changes each month, on
the first day of the month, starting with the rate in clause (1), as applicable to the employee,
and reducing the rate to zero in equal monthly increments over the five-year period; and

(3) after June 30, 2024, zero percent.

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

(c) For covered employees who retire before July 1, 2019, the reduced annuity is the
actuarial equivalent of the annuity that would be payable to the employee if the employee
deferred receipt of the annuity until normal retirement age and the annuity amount were
augmented at an annual rate of three percent, compounded annually, from the day the annuity
begins to accrue until normal retirement age if the employee became an employee before
July 1, 2006, and at an annual rate of 2.5 percent, compounded annually, from the day the
annuity begins to accrue until normal retirement age if the employee became an employee
after June 30, 2006.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end

Sec. 2.

Minnesota Statutes 2022, section 352.116, is amended by adding a subdivision to
read:

new text begin Subd. 1b. new text end

new text begin Unreduced annuity for select Department of Corrections employees. new text end

new text begin An
employee is entitled to receive the retirement annuity provided in section 352.115, subdivision
3, without any reduction for reason of early retirement if the employee first became a covered
employee after June 30, 1989, and, on the date the employee terminates employment, the
employee:
new text end

new text begin (1) is employed by the Department of Corrections as a corrections agent responsible for
probation or parole services; and
new text end

new text begin (2) is at least 62 years old or has at least 30 years of service.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end