Minnesota Legislature
HF 3808
as introduced - 93rd Legislature (2023 - 2024) Posted on 02/26/2024 04:16pm
Bill Text Versions
| Engrossments | ||
|---|---|---|
| Introduction | Posted on 02/14/2024 |
Current Version - as introduced
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A bill for an act
relating to retirement; providing for an unreduced retirement annuity upon reaching
age 62 with 30 years of service; increasing the employee contribution rate for the
Teachers Retirement Association; amending Minnesota Statutes 2022, section
354.44, subdivision 6; Minnesota Statutes 2023 Supplement, section 354.42,
subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2023 Supplement, 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 |
new text begin
Years of allowable service new text end |
Basic Program |
Coordinated Program |
|
| from July 1, 2014, through June 30, 2023 |
new text begin
all new text end |
11 percent |
7.5 percent |
|
| from July 1, 2023, through June 30, deleted text begin 2025deleted text end new text begin 2024 new text end |
new text begin
all new text end |
11.25 percent |
7.75 percent |
|
| after June 30, deleted text begin 2025deleted text end new text begin 2024 new text end |
new text begin
fewer than 10 new text end |
11.5 percent |
8.0 percent |
|
|
new text begin
after June 30, 2024 new text end |
new text begin
10 or more and fewer than 20 new text end |
new text begin
12 percent new text end |
new text begin
8.5 percent new text end |
|
|
new text begin
after June 30, 2024 new text end |
new text begin
20 or more and fewer than 30 new text end |
new text begin
12.25 percent new text end |
new text begin
8.75 percent new text end |
|
|
new text begin
after June 30, 2024 new text end |
new text begin
30 or more new text end |
new text begin
12.5 percent new text end |
new text begin
9.0 percent new text end |
(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.
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 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.
(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.
(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), deleted text begin reduceddeleted text end 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
deleted text begin 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 annuallydeleted text end new text begin is the normal annuity
provided in paragraph (d), without any reduction by reason of early retirementnew text end .
(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.
(f) 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.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2024.
new text end