Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1999, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 222-S.F.No. 319
An act relating to retirement; various pension plans;
providing special benefit coverage for privatized
employees of the Luverne public hospital, the Waconia
Ridgeview medical center, and the Glencoe area health
center; creating a local government correctional
service retirement plan; modifying actuarial cost
provision; providing a special property tax levy for
certain county retirement contributions; providing an
ad hoc postretirement adjustment to Eveleth police and
fire trust fund benefit recipients; establishing an
additional postretirement adjustment for the Fairmont
police relief association; extending survivor benefit
provisions to include certain Fairmont police relief
association survivors; providing a special ad hoc
postretirement adjustment to certain retired St. Cloud
police officers; merging the pre-March 1, 1999, local
police and paid fire consolidation accounts into the
public employees police and fire plan; extending the
minimum volunteer firefighter fire state aid amount to
post-1993 relief association members; modifying
governance provisions for the Minneapolis fire
department relief association and the Minneapolis
police relief association; providing a targeted early
retirement incentive program for certain employees of
the metropolitan council; permitting the purchase of
service credit by various public employees; mandating
certain school district service credit purchase
payments; making miscellaneous changes in the
legislators retirement plan, the Minnesota state
colleges and university system individual retirement
account plan, the Minnesota state retirement system,
and the teachers retirement association; including
supplemental needs trusts as recipients of optional
annuity forms; eliminating the service credit maximum
for monthly benefit volunteer fire relief
associations; mandating school district repayment of
certain omitted deduction interest charges; expanding
the membership of the state correctional employees
retirement plan to include certain Minnesota extended
treatment options program employees; downsizing the
early retirement reduction rates for various public
safety plans; grandparenting public employee police
and fire plan coverage for certain Rice county
correctional employees; requiring Rice county to repay
certain police state aid amounts; providing employer
penalties for pension plan membership certification
failures or errors; providing special retirement
coverage for certain state fire marshal employees;
authorizing the purchase of credit for certain periods
of prior military service, out-of-state public
teaching service, maternity leaves, maternity
breaks-in-employment, parochial or private school
teaching service, Peace Corps service or VISTA
service; clarifying various Minneapolis employees
retirement plan survivor benefit provisions;
increasing the number of vendors for certain
tax-sheltered annuities for educational employees;
modifying various benefit provisions for certain
Minnesota state colleges and universities employees;
reducing the membership of the legislative commission
on pensions and retirement; requiring a study;
authorizing the purchase or construction of an
administration building for the Minnesota state
retirement system, the public employees retirement
association, and the teachers retirement association;
authorizing the issuance of certain revenue bonds;
amending Minnesota Statutes 1998, sections 3.751,
subdivision 1; 3.85, subdivisions 3, 11, and 12;
3A.02, subdivision 1b; 43A.27, subdivision 3; 69.021,
subdivisions 7 and 10; 69.031, subdivision 5; 122A.46,
subdivision 2; 136F.48; 273.1385, subdivision 2;
275.70, subdivision 5; 352.03, subdivision 1; 352.90;
352.91, by adding a subdivision; 352.92, subdivisions
1 and 2; 352.93, subdivision 2a; 352B.08, subdivision
2a; 353.01, subdivisions 2b, 10, and 16; 353.03,
subdivision 4; 353.27, subdivisions 2 and 3; 353.64,
subdivision 1; 353.65, subdivisions 2 and 3; 353.651,
subdivision 4; 353A.083, by adding a subdivision;
353A.09, subdivisions 4, 5, and by adding a
subdivision; 353D.01, subdivision 2; 353D.02, by
adding a subdivision; 353D.03, subdivision 3; 354.05,
subdivision 40; 354.06, subdivision 1; 354.10,
subdivision 4; 354.445; 354.66, subdivisions 1b, 1c,
3, and 5; 354B.24, subdivision 3; 354B.25,
subdivisions 2, 3, and 5; 354C.11; 354C.12,
subdivision 4; 356.19, by adding subdivisions; 356.20,
subdivision 2; 356.215, subdivision 4g; 356.24,
subdivision 1; 356.30, subdivision 3; 356.302,
subdivision 7; and 356.303, subdivision 4; 356.55,
subdivisions 1 and 6; 356.61; 422A.06, subdivisions 3
and 6; 422A.101, subdivision 4; 422A.18, subdivision
2; 422A.22, subdivisions 4 and 5; and 422A.23;
423A.02, subdivisions 1b, 2, and by adding
subdivisions; and 423B.07; Laws 1977, chapter 61,
section 6, as amended; proposing coding for new law in
Minnesota Statutes, chapters 352; 353; 354; 354A;
354B; 356; and 422A; proposing coding for new law as
Minnesota Statutes, chapters 353E; and 353F; repealing
Minnesota Statutes 1998, sections 353.33, subdivision
3a; 353.65, subdivision 3a; 422A.16, subdivision 3a;
and 424A.02, subdivision 5; Laws 1998, chapter 390,
article 1, section 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
FUTURE PERA PENSION BENEFITS FOR
PRIVATIZED PUBLIC HOSPITAL AND OTHER PUBLIC
EMPLOYEES
Section 1. [353F.01] [PURPOSE AND INTENT.]
The purpose of this chapter is to ensure, to the extent
possible, that persons employed at public medical facilities and
other public employing units who are privatized and consequently
are excluded from retirement coverage by the public employees
retirement association will be entitled to receive future
retirement benefits under the general employees retirement plan
of the public employees retirement association commensurate with
the prior contributions made by them or made on their behalf
upon the privatization of the medical facility or other public
employing unit.
Sec. 2. [353F.02] [DEFINITIONS.]
Subdivision 1. [GENERALLY.] As used in this chapter,
unless the context clearly indicates otherwise, each of the
terms in the following subdivisions has the meaning indicated.
Subd. 2. [ALLOWABLE SERVICE.] "Allowable service" has the
meaning provided in section 353.01, subdivision 16 of the
edition of Minnesota Statutes published in the year before the
year in which the privatization occurred.
Subd. 3. [EFFECTIVE DATE.] "Effective date" means the date
that the operation of the medical facility or other public
employing unit is assumed by another employer or the date that
the medical facility or other public employing unit is purchased
by another employer and active membership in the public
employees retirement association consequently terminates.
Subd. 4. [MEDICAL FACILITY.] "Medical facility" means:
(1) the Glencoe area health center;
(2) the Luverne public hospital; and
(3) the Waconia-Ridgeview medical center.
Subd. 5. [OTHER PUBLIC EMPLOYING UNIT.] "Other public
employing unit" means Metro II, a joint powers organization
formed under section 471.59.
Subd. 6. [TERMINATED MEDICAL FACILITY OR OTHER PUBLIC
EMPLOYING UNIT EMPLOYEE.] "Terminated medical facility or other
public employing unit employee" means a person who:
(1) was employed on the day before the effective date by
the medical facility or other public employing unit; or
(2) terminated employment with the medical facility or
other public employing unit on the day before the effective
date; and
(3) was a participant in the general employees retirement
plan of the public employees retirement association at the time
of termination of employment with the medical facility or other
public employing unit.
Subd. 7. [YEARS OF ALLOWABLE SERVICE.] "Years of allowable
service" means the total number of years of allowable service
under section 353.01, subdivision 18, of the edition of
Minnesota Statutes published in the year before the year in
which the privatization occurred.
Sec. 3. [353F.03] [VESTING RULE FOR CERTAIN EMPLOYEES.]
Notwithstanding any provision of chapter 353 to the
contrary, a terminated medical facility or other public
employing unit employee is eligible to receive a retirement
annuity under section 353.29 of the edition of Minnesota
Statutes published in the year before the year in which the
privatization occurred, without regard to the requirement for
three years of allowable service.
Sec. 4. [353F.04] [AUGMENTATION INTEREST RATE FOR
TERMINATED MEDICAL FACILITY EMPLOYEES.]
The deferred annuity of a terminated medical facility or
other public employing unit employee is subject to augmentation
in accordance with section 353.71, subdivision 2, of the edition
of Minnesota Statutes published in the year in which the
privatization occurred, except that the rate of interest for
this purpose is 5.5 percent compounded annually until January 1
following the year in which such person attains age 55. From
that date to the effective date of retirement, the rate is 7.5
percent. These increased augmentation rates are no longer
applicable for any time after the terminated medical facility or
other public employing unit employee becomes covered again by a
retirement fund enumerated in section 356.30, subdivision 3.
These increased deferred annuity augmentation rates do not apply
to a terminated transferred medical facility or other public
employing unit employee who begins receipt of a retirement
annuity while employed by the employer which assumed operations
of the medical facility or other public employing unit or
purchased the medical facility or other public employing unit.
Sec. 5. [353F.05] [AUTHORIZATION FOR ADDITIONAL ALLOWABLE
SERVICE FOR CERTAIN EARLY RETIREMENT PURPOSES.]
For the purpose of determining eligibility for early
retirement benefits provided under section 353.30, subdivision
1a, of the edition of Minnesota Statutes published in the year
before the year in which the privatization occurred, and
notwithstanding any provision of chapter 353, to the contrary,
the years of allowable service for a terminated medical facility
or other public employing unit employee who transfers employment
on the effective date and does not apply for a refund of
contributions under section 353.34, subdivision 1, of the
edition of Minnesota Statutes published in the year before the
year in which the privatization occurred, or any similar
provision, includes service with the successor employer to the
medical facility or other public employing unit following the
effective date. The successor employer shall provide any
reports that the executive director of the public employees
retirement association may reasonably request to permit
calculation of benefits.
To be eligible for early retirement benefits under this
section, the individual must separate from service with the
successor employer to the medical facility. The terminated
eligible individual, or an individual authorized to act on
behalf of that individual, may apply for an annuity following
application procedures under section 353.29, subdivision 4.
Sec. 6. [353F.06] [APPLICATION OF REEMPLOYED ANNUITANT
EARNINGS LIMITATIONS.]
The reemployed annuitant earnings limitations of section
353.37 apply to any service by a terminated medical facility or
other public employing unit employee as an employee of the
successor employer to the medical facility.
Sec. 7. [353F.07] [EFFECT ON REFUND.]
Notwithstanding any provision of chapter 353 to the
contrary, terminated medical facility or other public employing
unit employees may receive a refund of employee accumulated
contributions plus interest at the rate of six percent per year
compounded annually in accordance with section 353.34,
subdivision 2, of the edition of Minnesota Statutes published in
the year in which the privatization occurred, at any time after
the transfer of employment to the successor employer to the
medical facility or other public employing unit. If a
terminated medical facility employee has received a refund from
a pension plan enumerated in section 356.30, subdivision 3, the
person may not repay that refund unless the person again becomes
a member of one of those enumerated plans and complies with
section 356.30, subdivision 2.
Sec. 8. [353F.08] [COUNSELING SERVICES.]
The medical facility or other public employing unit and the
executive director of the public employees retirement
association shall provide terminated medical facility or other
public employing unit employees with counseling on their
benefits available under the general employees retirement plan
of the public employees retirement association during the 90
days following privatization.
Sec. 9. [REPEALER.]
Laws 1998, chapter 390, article 1, section 1, is repealed.
Sec. 10. [EFFECTIVE DATE.]
(a) Sections 1 to 9 with respect to privatized medical
facilities are effective on the day following final enactment.
(b) Sections 1 to 9 with respect to Metro II are effective
on the first day of the month next following certification by
the executive director of the public employees retirement
association that the actuarial accrued liability of the special
benefit coverage proposed for extension to the privatized Metro
II employees under this article does not exceed the actuarial
gain otherwise to be accrued by the public employees retirement
association, as calculated by the consulting actuary retained by
the legislative commission on pensions and retirement. The cost
of the actuarial calculations must be borne by Metro II.
ARTICLE 2
ESTABLISHMENT OF LOCAL CORRECTIONAL
EMPLOYEES RETIREMENT PLAN
Section 1. Minnesota Statutes 1998, section 3.85,
subdivision 11, is amended to read:
Subd. 11. [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The
commission shall contract with an established actuarial
consulting firm to conduct annual actuarial valuations for the
retirement plans named in paragraph (b). The contract must
include provisions for performing cost analyses of proposals for
changes in benefit and funding policies.
(b) The contract for actuarial valuation must include the
following retirement plans:
(1) the teachers retirement plan, teachers retirement
association;
(2) the general state employees retirement plan, Minnesota
state retirement system;
(3) the correctional employees retirement plan, Minnesota
state retirement system;
(4) the state patrol retirement plan, Minnesota state
retirement system;
(5) the judges retirement plan, Minnesota state retirement
system;
(6) the Minneapolis employees retirement plan, Minneapolis
employees retirement fund;
(7) the public employees retirement plan, public employees
retirement association;
(8) the public employees police and fire plan, public
employees retirement association;
(9) the Duluth teachers retirement plan, Duluth teachers
retirement fund association;
(10) the Minneapolis teachers retirement plan, Minneapolis
teachers retirement fund association;
(11) the St. Paul teachers retirement plan, St. Paul
teachers retirement fund association;
(12) the legislators retirement plan, Minnesota state
retirement system; and
(13) the elective state officers retirement plan, Minnesota
state retirement system; and
(14) local government correctional service retirement plan,
public employees retirement association.
(c) The contract must specify completion of annual
actuarial valuation calculations on a fiscal year basis with
their contents as specified in section 356.215, and the
standards for actuarial work adopted by the commission.
The contract must specify completion of annual experience
data collection and processing and a quadrennial published
experience study for the plans listed in paragraph (b), clauses
(1), (2), and (7), as provided for in the standards for
actuarial work adopted by the commission. The experience data
collection, processing, and analysis must evaluate the following:
(1) individual salary progression;
(2) rate of return on investments based on current asset
value;
(3) payroll growth;
(4) mortality;
(5) retirement age;
(6) withdrawal; and
(7) disablement.
(d) The actuary retained by the commission shall annually
prepare a report to the legislature, including the commentary on
the actuarial valuation calculations for the plans named in
paragraph (b) and summarizing the results of the actuarial
valuation calculations. The commission-retained actuary shall
include with the report the actuary's recommendations concerning
the appropriateness of the support rates to achieve proper
funding of the retirement funds by the required funding dates.
The commission-retained actuary shall, as part of the
quadrennial published experience study, include recommendations
to the legislature on the appropriateness of the actuarial
valuation assumptions required for evaluation in the study.
(e) If the actuarial gain and loss analysis in the
actuarial valuation calculations indicates a persistent pattern
of sizable gains or losses, as directed by the commission, the
actuary retained by the commission shall prepare a special
experience study for a plan listed in paragraph (b), clause (3),
(4), (5), (6), (8), (9), (10), (11), (12), or (13), or (14), in
the manner provided for in the standards for actuarial work
adopted by the commission.
(f) The term of the contract between the commission and the
actuary retained by the commission is four years. The contract
is subject to competitive bidding procedures as specified by the
commission.
Sec. 2. Minnesota Statutes 1998, section 3.85, subdivision
12, is amended to read:
Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The
commission shall assess each retirement plan specified in
subdivision 11, paragraph (b), its appropriate portion of the
compensation paid to the actuary retained by the commission for
the actuarial valuation calculations, quadrennial projection
valuations, and quadrennial experience studies. The total
assessment is 100 percent of the amount of contract compensation
for the actuarial consulting firm retained by the commission for
actuarial valuation calculations, including the public employees
police and fire plan consolidation accounts of the public
employees retirement association, annual experience data
collection and processing, quadrennial projection valuations,
and quadrennial experience studies.
The portion of the total assessment payable by each
retirement system or pension plan must be determined as follows:
(1) Each pension plan specified in subdivision 11,
paragraph (b), clauses (1) to (13) (14), must pay the following
indexed amount based on its total active, deferred, inactive,
and benefit recipient membership:
up to 2,000 members, inclusive $2.55 per member
2,001 through 10,000 members $1.13 per member
over 10,000 members $0.11 per member
The amount specified is applicable for the assessment of
the July 1, 1991, to June 30, 1992, fiscal year actuarial
compensation amounts. For the July 1, 1992, to June 30, 1993,
fiscal year and subsequent fiscal year actuarial compensation
amounts, the amount specified must be increased at the same
percentage increase rate as the implicit price deflator for
state and local government purchases of goods and services for
the 12-month period ending with the first quarter of the
calendar year following the completion date for the actuarial
valuation calculations, as published by the federal Department
of Commerce, and rounded upward to the nearest full cent.
(2) The total per-member portion of the allocation must be
determined, and that total per-member amount must be subtracted
from the total amount for allocation. Of the remainder dollar
amount, the following per-retirement system and per-pension plan
charges must be determined and the charges must be paid by the
system or plan:
(i) 37.87 percent is the total additional per-retirement
system charge, of which one-seventh must be paid by each
retirement system specified in subdivision 11, paragraph (b),
clauses (1), (2), (6), (7), (9), (10), and (11).
(ii) 62.13 percent is the total additional per-pension plan
charge, of which one-thirteenth one-fourteenth must be paid by
each pension plan specified in subdivision 11, paragraph (b),
clauses (1) to (13) (14).
(b) The assessment must be made following the completion of
the actuarial valuation calculations and the experience
analysis. The amount of the assessment is appropriated from the
retirement fund applicable to the retirement plan. Receipts
from assessments must be deposited in the state treasury and
credited to the general fund.
Sec. 3. Minnesota Statutes 1998, section 273.1385,
subdivision 2, is amended to read:
Subd. 2. [LIMIT ON AID AND POTENTIAL FUTURE PERMANENT AID
REDUCTIONS.] (a) The aid amount received by any jurisdiction in
fiscal year 2000 or any year thereafter may not exceed the
amount it received in fiscal year 1999. The commissioner may,
from time to time, request the most recent fiscal year payroll
information by jurisdiction to be certified by the executive
director of the public employees retirement association. For
any jurisdiction where newly certified public employees
retirement association general plan payroll is significantly
lower than the fiscal 1997 amount, as determined by the
commissioner, the commissioner shall recalculate the aid amount
based on the most recent fiscal year payroll information,
certify the recalculated aid amount for the next distribution
year, and permanently reduce the aid amount to that jurisdiction.
(b) Aid to a jurisdiction must not be reduced under this
section due to a transfer of an employee from the general plan
of the public employees retirement association to the local
government correctional service plan administered by the public
employees retirement association. The executive director of the
public employees retirement association must provide the
commissioner of revenue with any information requested by the
commissioner to administer this paragraph.
Sec. 4. Minnesota Statutes 1998, section 275.70,
subdivision 5, is amended to read:
Subd. 5. [SPECIAL LEVIES.] "Special levies" means those
portions of ad valorem taxes levied by a local governmental unit
for the following purposes or in the following manner:
(1) to pay the costs of the principal and interest on
bonded indebtedness or to reimburse for the amount of liquor
store revenues used to pay the principal and interest due on
municipal liquor store bonds in the year preceding the year for
which the levy limit is calculated;
(2) to pay the costs of principal and interest on
certificates of indebtedness issued for any corporate purpose
except for the following:
(i) tax anticipation or aid anticipation certificates of
indebtedness;
(ii) certificates of indebtedness issued under sections
298.28 and 298.282;
(iii) certificates of indebtedness used to fund current
expenses or to pay the costs of extraordinary expenditures that
result from a public emergency; or
(iv) certificates of indebtedness used to fund an
insufficiency in tax receipts or an insufficiency in other
revenue sources;
(3) to provide for the bonded indebtedness portion of
payments made to another political subdivision of the state of
Minnesota;
(4) to fund payments made to the Minnesota state armory
building commission under section 193.145, subdivision 2, to
retire the principal and interest on armory construction bonds;
(5) for unreimbursed expenses related to flooding that
occurred during the first half of calendar year 1997, as allowed
by the commissioner of revenue under section 275.74, paragraph
(b);
(6) for local units of government located in an area
designated by the Federal Emergency Management Agency pursuant
to a major disaster declaration issued for Minnesota by
President Clinton after April 1, 1997, and before June 11, 1997,
for the amount of tax dollars lost due to abatements authorized
under section 273.123, subdivision 7, and Laws 1997, chapter
231, article 2, section 64, to the extent that they are related
to the major disaster and to the extent that neither the state
or federal government reimburses the local government for the
amount lost;
(7) property taxes approved by voters which are levied
against the referendum market value as provided under section
275.61;
(8) to fund matching requirements needed to qualify for
federal or state grants or programs to the extent that either
(i) the matching requirement exceeds the matching requirement in
calendar year 1997, or (ii) it is a new matching requirement
that didn't exist prior to 1998;
(9) to pay the expenses reasonably and necessarily incurred
in preparing for or repairing the effects of natural disaster
including the occurrence or threat of widespread or severe
damage, injury, or loss of life or property resulting from
natural causes, in accordance with standards formulated by the
emergency services division of the state department of public
safety, as allowed by the commissioner of revenue under section
275.74, paragraph (b);
(10) for the amount of tax revenue lost due to abatements
authorized under section 273.123, subdivision 7, for damage
related to the tornadoes of March 29, 1998, to the extent that
neither the state or federal government provides reimbursement
for the amount lost;
(11) pay amounts required to correct an error in the levy
certified to the county auditor by a city or county in a levy
year, but only to the extent that when added to the preceding
year's levy it is not in excess of an applicable statutory,
special law or charter limitation, or the limitation imposed on
the governmental subdivision by sections 275.70 to 275.74 in the
preceding levy year; and
(12) to pay an abatement under section 469.1815; and
(13) to pay the employer contribution to the local
government correctional service retirement plan under section
353E.03, subdivision 2, to the extent that the employer
contribution exceeds 5.49 percent of total salary.
Sec. 5. Minnesota Statutes 1998, section 353.27,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTION.] (a) Except as provided
in paragraph (b), The employee contribution shall be is an
amount (1) for a "basic member" equal to 8.75 percent of total
salary; and (2) for a "coordinated member" equal to 4.75 percent
of total salary.
(b) For local government correctional service employees, as
defined in section 353.33, subdivision 3a, the employee
contribution is an amount equal to 4.96 percent of total salary.
(c) These contributions must be made by deduction from
salary in the manner provided in subdivision 4. Where any
portion of a member's salary is paid from other than public
funds, such member's employee contribution must be based on the
total salary received from all sources.
Sec. 6. Minnesota Statutes 1998, section 353.27,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTION.] (a) Except as provided
in paragraph (b), The employer contribution shall be is an
amount equal to the employee contribution under subdivision 2.
(b) On behalf of local government correctional service
employees, as defined in section 353.33, subdivision 3a, the
employer contribution is an amount equal to 5.06 percent of
total salary.
(c) This contribution shall must be made from funds
available to the employing subdivision by the means and in the
manner provided in section 353.28.
Sec. 7. [353E.01] [LOCAL GOVERNMENT CORRECTIONAL SERVICE
RETIREMENT PLAN.]
Subdivision 1. [PLAN ADMINISTRATION; FUND.] (a) The public
employees local government correctional service retirement plan
is established as a separate plan to be administered by the
board of trustees and the executive director of the public
employees retirement association.
(b) The board of trustees and the executive director shall
undertake their activities in a manner consistent with chapter
356A.
(c) The association shall maintain a special fund to be
known as the public employees local government correctional
service retirement fund.
Subd. 2. [REVENUE SOURCES.] Member contributions under
section 353E.03, subdivision 1, and employer contributions under
section 353E.03, subdivision 2, and other amounts authorized by
law, including any investment return on invested fund assets,
must be deposited in the fund.
Subd. 3. [INVESTMENT.] (a) The public employees local
government correctional service retirement fund participates in
the Minnesota postretirement investment fund.
(b) The amounts provided in section 353.271 must be
deposited in that fund.
(c) The balance of any assets of the fund must be deposited
in the Minnesota combined investment fund as provided in section
11A.14, if applicable, or otherwise invested under section
11A.23.
Subd. 4. [COLLECTION OF CONTRIBUTIONS.] The collection of
member and employer contributions is governed by section 353.27,
subdivisions 4, 7, 7b, 10, 11, and 12.
Subd. 5. [FUND DISBURSEMENT RESTRICTED.] (a) The public
employees local government correctional service retirement fund
and its share of participation in the Minnesota postretirement
investment fund may be disbursed only for the purposes provided
for in this chapter.
(b) The proportional share of the necessary and reasonable
administrative expenses of the association and any benefits
provided in this chapter, other than benefits payable from the
Minnesota postretirement investment fund, must be paid from the
public employees local government correctional service
retirement fund. Retirement annuities, disability benefits,
survivorship benefits, and any refunds of accumulated deductions
may be paid only from the correctional service retirement fund
after those needs have been certified by the executive director
and any applicable amounts withdrawn from the share of
participation in the Minnesota postretirement fund under section
11A.18.
(c) The amounts necessary to make the payments from the
public employees local government correctional service
retirement fund and its participation in the Minnesota
postretirement investment fund are annually appropriated from
those funds for those purposes.
Sec. 8. [353E.02] [CORRECTIONAL SERVICE EMPLOYEES.]
A local government correctional service employee is a
person who:
(1) is employed in a county-administered jail or
correctional facility or in a regional correctional facility
administered by multiple counties;
(2) spends at least 95 percent of the employee's working
time in direct contact with persons confined in the jail or
facility, as certified in writing, in advance, by the employer
to the executive director of the association; and
(3) is a "public employee" as defined in section 353.01,
but is not a member of the public employees police and fire fund.
Sec. 9. [353E.03] [CORRECTIONAL SERVICE PLAN
CONTRIBUTIONS.]
Subdivision 1. [MEMBER CONTRIBUTIONS.] A local government
correctional service employee shall make an employee
contribution in an amount equal to 5.83 percent of salary.
Subd. 2. [EMPLOYER CONTRIBUTIONS.] The employer shall
contribute for a local government correctional service employee
an amount equal to 8.75 percent of salary.
Sec. 10. [353E.04] [CORRECTIONAL SERVICE PLAN RETIREMENT
ANNUITY.]
Subdivision 1. [ELIGIBILITY REQUIREMENTS.] After
termination of public employment, an employee covered under
section 353E.02 who has attained the age of at least 55 years
and has credit for not less than three years of coverage 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.
Subd. 2. [AVERAGE SALARY BASE.] In calculating the annuity
under subdivision 3, "average salary" means an amount equivalent
to the average of the highest salary earned as a local
government correctional employee upon which employee
contributions were paid for any five successive years of
allowable service. Average salary must be based on all
allowable service if this service is less than five years.
Subd. 3. [ANNUITY AMOUNT.] The average salary as defined
in subdivision 2, multiplied by the percent specified in section
356.19, subdivision 5a, for each year of allowable service,
determines the amount of the normal retirement annuity. If a
person has earned allowable service in the public employees
retirement association or the public employees police and fire
fund prior to participation under this chapter, the retirement
annuity representing such service must be computed in accordance
with the formula specified in sections 353.29 and 353.30 or
353.651, whichever applies.
Subd. 4. [EARLY RETIREMENT.] An employee covered under
section 353E.02 who has attained the age of at least 50 years
and has credit for not less than three years of coverage in the
local government correctional service plan is entitled, upon
application, to a reduced retirement annuity equal to the
annuity calculated under subdivision 3, reduced so that the
reduced annuity is the actuarial equivalent of the annuity that
would be payable if the employee deferred receipt of the annuity
from the day the annuity begins to accrue until age 55.
Subd. 5. [ACCRUAL AND DURATION.] The retirement annuity
under this section begins to accrue as provided in section
353.29, subdivision 7. The retirement annuity is payable for
the life of the recipient, or in accordance with the terms of
any optional annuity form selected by the retiring member.
Subd. 6. [MULTIPLE SERVICE LIMITATION.] A former employee
who has both public employees retirement plan and public
employees local government correctional retirement plan credited
service must, if qualified, receive a retirement annuity from
each retirement plan that takes into account both periods of
service and both covered salary amounts, but no period of
service may be used more than once in calculating the annuity.
Sec. 11. [353E.05] [AUGMENTATION IN CERTAIN CASES.]
Unless prior service has been transferred or unless a
combined service annuity under section 356.30 has been elected,
an employee who becomes a local government correctional employee
after being a member of the public employees retirement
association or the public employees police and fire fund is
covered under section 353.71, subdivision 2, with respect to
that prior service. An employee who becomes a member of the
public employees retirement association or the public employees
police and fire plan after being a local government correctional
employee is also covered under section 353.71, subdivision 2,
with respect to that prior service, unless calculated under
section 356.30.
Sec. 12. [353E.06] [DISABILITY BENEFITS.]
Subdivision 1. [DUTY DISABILITY QUALIFICATION
REQUIREMENTS.] A local government correctional employee who
becomes disabled and physically or mentally unfit to perform the
duties of the position as a direct result of an injury,
sickness, or other disability that is medically determinable,
that was incurred in or arose out of any act of duty, and that
renders the employee physically or mentally unable to perform
the employee's duties, is entitled to a disability benefit. The
disability benefit must be based on covered service under this
chapter only and is an amount equal to 47.5 percent of the
average salary defined in section 353E.04, subdivision 2, plus
an additional percent equal to that specified in section 356.19,
subdivision 5a, for each year of covered service under this
chapter in excess of 25 years.
Subd. 2. [NONDUTY DISABILITY QUALIFICATION
REQUIREMENTS.] A local government correctional employee who has
at least one year of covered service under this chapter and
becomes disabled and physically or mentally unfit to perform the
duties of the position because of sickness or injury that is
medically determinable and that occurs while not engaged in
covered employment, is entitled to a disability benefit based on
covered service under this chapter. The disability benefit must
be computed in the same manner as an annuity under section
353E.04, subdivision 3, and as though the employee had at least
ten years of covered correctional service.
Subd. 3. [OPTIONAL ANNUITY.] A disabled local government
correctional employee may elect the normal disability benefit or
an optional annuity as provided in section 353.30, subdivision
3. The election of an optional annuity must be made before the
commencement of payment of the disability benefit and is
effective on the date on which the disability benefit begins to
accrue as provided in section 353.33, subdivision 2. Upon
becoming effective, the optional annuity begins to accrue on the
same date as provided for the disability benefit.
Subd. 4. [DISABILITY BENEFIT APPLICATION.] A claim or
demand for a disability benefit must be initiated by written
application in the manner and form prescribed by the executive
director, filed in the office of the association, showing
compliance with the statutory conditions qualifying the
applicant for a disability benefit. A member or former member
who became disabled during a period of membership may file an
application for disability benefits within three years following
termination of local government correctional service, but not
after that time has elapsed. The disability benefit begins to
accrue the day following the commencement of disability, 90 days
preceding the filing of the application, or, if annual or sick
leave is paid for more than the 90-day period, from the date
salary ceased, whichever is latest. No payment may accrue
beyond the end of the month in which entitlement has
terminated. If the disabilitant dies before negotiating the
check for the month in which death occurs, payment must be made
to the optional annuitant or beneficiary.
Subd. 5. [DISABILITY BENEFIT TERMINATION.] The disability
benefit paid to a disabled local government correctional
employee terminates at the end of the month in which the
employee reaches age 65. If the disabled local government
correctional employee is still disabled when the employee
reaches age 65, the employee is deemed to be a retired employee
and, if the employee had elected an optional annuity under
subdivision 3, must receive an annuity in accordance with the
terms of the optional annuity previously elected. If the
employee had not elected an optional annuity under subdivision
3, the employee may elect either to receive a normal retirement
annuity computed in the manner provided in section 353E.04,
subdivision 3, or to receive an optional annuity as provided in
section 353.30, subdivision 3, based on the same length of
service as used in the calculation of the disability benefit.
Election of an optional annuity must be made within 90 days
before attaining the age of 65 years, or reaching the five-year
anniversary of the effective date of the disability benefit,
whichever is later.
Subd. 6. [RESUMPTION OF EMPLOYMENT.] If a disabled
employee resumes a gainful occupation from which earnings are
less than salary received at the date of disability or the
salary currently paid for similar positions, or should the
employee be entitled to receive workers' compensation benefits,
the disability benefit must be continued in an amount that, when
added to such earnings and workers' compensation benefits, does
not exceed the salary received at the date of disability or the
salary currently payable for the same employment position or an
employment position substantially similar to the one the person
held as of the date of the disability, whichever is greater.
Subd. 7. [COMBINED SERVICE DISABILITY BENEFIT.] If the
employee is entitled to receive a disability benefit as provided
in subdivision 1 or 2 and has credit for less covered
correctional service than the length of service upon which the
correctional disability benefit is based, and also has credit
for public employees retirement plan service, the employee is
entitled to a disability benefit or deferred retirement annuity
based on the regular plan service only for the service that,
when combined with the correctional service, exceeds the number
of years on which the correctional disability benefit is based.
The disabled employee who also has credit for regular plan
service must in all respects qualify under section 353.33 to be
entitled to receive a disability benefit based on the public
employees retirement plan service, except that the service may
be combined to satisfy length of service requirements. Any
deferred annuity to which the employee may be entitled based on
public employees retirement plan service must be augmented as
provided in section 353.71 while the employee is receiving a
disability benefit under this section.
Subd. 8. [CONTINUING BENEFIT ELIGIBILITY.] Continuing
eligibility for a disability benefit is subject to section
353.33, subdivision 6.
Sec. 13. [353E.07] [SURVIVOR BENEFITS.]
Subdivision 1. [MEMBER AT LEAST AGE 50.] If a member or
former member of the local government correctional service
retirement plan who has attained the age of at least 50 years
and has credit for not less than three years of allowable
service dies before the annuity or disability benefit has become
payable, notwithstanding any designation of beneficiary to the
contrary, the surviving spouse may elect to receive, in lieu of
a refund with interest provided in section 353.32, subdivision
1, a surviving spouse annuity equal to the 100 percent joint and
survivor annuity for which the member could have qualified had
the member terminated service on the date of death.
Subd. 2. [MEMBER NOT YET AGE 50.] If the member was under
age 50, dies, and had credit for not less than three years of
allowable service on the date of death but did not yet qualify
for retirement, the surviving spouse may elect to receive a 100
percent joint and survivor annuity based on the age of the
employee and the surviving spouse at the time of death. The
annuity is payable using the early retirement reduction under
section 353E.04, subdivision 4, to age 50 and one-half the early
retirement reduction from age 50 to the age payment begins.
Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply
to a deferred annuity or surviving spouse benefit payable under
this subdivision.
Subd. 3. [ELECTION; ACCRUAL.] A surviving spouse election
under subdivisions 1 and 2 may be made at any time after the
date of death of the local government correctional service
employee. The surviving spouse benefit begins to accrue as of
the first of the next month following the date on which the
application for the benefit was filed.
Subd. 4. [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In
lieu of the 100 percent optional annuity under subdivision 1,
the surviving spouse of a deceased local government correctional
service employee may elect to receive survivor coverage in a
term certain of ten, 15, or 20 years. The monthly term certain
annuity must be actuarially equivalent to the 100 percent
optional annuity under subdivision 1 and must be based on tables
approved by the actuary retained by the legislative commission
on pensions and retirement. The optional annuity ceases upon
the expiration of the term certain period. If a survivor elects
a term certain annuity and dies before the expiration of the
specified term certain period, the commuted value of the
remaining annuity payments must be paid in a lump sum to the
survivor's estate.
Subd. 5. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is
no surviving spouse eligible for benefits under subdivisions 1,
2, and 4, a dependent child as defined in section 353.01,
subdivision 15a, is eligible for a dependent child survivor
benefit. Benefits to a dependent child must be paid from the
date of the employee's death to the date the dependent child
attains age 20 if the child is under age 15 on the date of
death. If the child is 15 years or older on the date of death,
the benefit is payable for five years. The payment to a
dependent child is an amount actuarially equivalent to the value
of a 100 percent joint and survivor optional annuity using the
age of the employee and age of the dependent child at the date
of death in lieu of the age of the surviving spouse. If there
is more than one dependent child, each dependent child shall
receive a proportionate share of the actuarial value of the
employee's account, with the amount of the benefit payable to
each child to be determined based on the portion of the total
eligibility period that each child is eligible. The process for
calculating the dependent child survivor benefit must be
approved by the actuary retained by the legislative commission
on pensions and retirement.
Subd. 6. [PAYMENT TO DESIGNATED BENEFICIARY.] An amount
equal to any excess of the accumulated contributions that were
credited to the account of the deceased employee over and above
the total of the annuities paid and payable to the surviving
spouse or dependent children must be paid to the deceased
member's last designated beneficiary or, if none, to the legal
representative of the estate of the deceased member.
Subd. 7. [ELECTION THAT SECTION DOES NOT APPLY.] A member
may specify in writing that this section does not apply and that
payment must be made only to the designated beneficiary, as
otherwise provided by this chapter.
Sec. 14. [353E.08] [SCOPE AND APPLICATION.]
The general provisions of chapter 353 apply to the local
government correctional service retirement plan except where
otherwise specifically provided in sections 353E.01 to 353E.07.
Sec. 15. Minnesota Statutes 1998, section 356.19, is
amended by adding a subdivision to read:
Subd. 5a. [LOCAL GOVERNMENT CORRECTIONAL SERVICE
PLAN.] The applicable benefit accrual rate is 1.9 percent.
Sec. 16. Minnesota Statutes 1998, section 356.20,
subdivision 2, is amended to read:
Subd. 2. [COVERED PUBLIC PENSION FUNDS.] This section
applies to the following public pension plans:
(1) State employees retirement fund.
(2) Public employees retirement fund.
(3) Teachers retirement association.
(4) State patrol retirement fund.
(5) Minneapolis teachers retirement fund association.
(6) St. Paul teachers retirement fund association.
(7) Duluth teachers retirement fund association.
(8) Minneapolis employees retirement fund.
(9) University of Minnesota faculty retirement plan.
(10) University of Minnesota faculty supplemental
retirement plan.
(11) Judges retirement fund.
(12) Any police or firefighter's relief association
enumerated in section 69.77, subdivision 1a, or 69.771,
subdivision 1.
(13) Public employees police and fire fund.
(14) Minnesota state retirement system correctional
officers retirement fund.
(15) Public employees local government correctional service
retirement plan.
Sec. 17. Minnesota Statutes 1998, section 356.30,
subdivision 3, is amended to read:
Subd. 3. [COVERED FUNDS.] This section applies to the
following retirement funds:
(1) state employees retirement fund, established pursuant
to chapter 352;
(2) correctional employees retirement program, established
pursuant to chapter 352;
(3) unclassified employees retirement plan, established
pursuant to chapter 352D;
(4) state patrol retirement fund, established pursuant to
chapter 352B;
(5) legislators retirement plan, established pursuant to
chapter 3A;
(6) elective state officers' retirement plan, established
pursuant to chapter 352C;
(7) public employees retirement association, established
pursuant to chapter 353;
(8) public employees police and fire fund, established
pursuant to chapter 353;
(9) public employees local government correctional service
retirement plan, established pursuant to chapter 353E;
(10) teachers retirement association, established pursuant
to chapter 354;
(10) (11) Minneapolis employees retirement fund,
established pursuant to chapter 422A;
(11) (12) Minneapolis teachers retirement fund association,
established pursuant to chapter 354A;
(12) (13) St. Paul teachers retirement fund association,
established pursuant to chapter 354A;
(13) (14) Duluth teachers retirement fund association,
established pursuant to chapter 354A; and
(14) (15) judges' retirement fund, established by sections
490.121 to 490.132.
Sec. 18. Minnesota Statutes 1998, section 356.302,
subdivision 7, is amended to read:
Subd. 7. [COVERED RETIREMENT PLANS.] This section applies
to the following retirement plans:
(1) state employees retirement fund, established by chapter
352;
(2) unclassified employees retirement plan, established by
chapter 352D;
(3) public employees retirement association, established by
chapter 353;
(4) teachers retirement association, established by chapter
354;
(5) Duluth teachers retirement fund association,
established by chapter 354A;
(6) Minneapolis teachers retirement fund association,
established by chapter 354A;
(7) St. Paul teachers retirement fund association,
established by chapter 354A;
(8) Minneapolis employees retirement fund, established by
chapter 422A;
(9) correctional employees retirement plan, established by
chapter 352;
(10) state patrol retirement fund, established by chapter
352B;
(11) public employees police and fire fund, established by
chapter 353; and
(12) public employees local government correctional service
retirement plan, established by chapter 353E; and
(13) judges' retirement fund, established by sections
490.121 to 490.132.
Sec. 19. Minnesota Statutes 1998, section 356.303,
subdivision 4, is amended to read:
Subd. 4. [COVERED RETIREMENT PLANS.] This section applies
to the following retirement plans:
(1) legislators retirement plan, established by chapter 3A;
(2) state employees retirement fund, established by chapter
352;
(3) correctional employees retirement plan, established by
chapter 352;
(4) state patrol retirement fund, established by chapter
352B;
(5) elective state officers retirement plan, established by
chapter 352C;
(6) unclassified employees retirement plan, established by
chapter 352D;
(7) public employees retirement association, established by
chapter 353;
(8) public employees police and fire fund, established by
chapter 353;
(9) public employees local government correctional service
retirement plan, established by chapter 353E;
(10) teachers retirement association, established by
chapter 354;
(10) (11) Duluth teachers retirement fund association,
established by chapter 354A;
(11) (12) Minneapolis teachers retirement fund association,
established by chapter 354A;
(12) (13) St. Paul teachers retirement fund association,
established by chapter 354A;
(13) (14) Minneapolis employees retirement fund,
established by chapter 422A; and
(14) (15) judges' retirement fund, established by sections
490.121 to 490.132.
Sec. 20. [REPEALER.]
Minnesota Statutes 1998, section 353.33, subdivision 3a, is
repealed.
Sec. 21. [EFFECTIVE DATE.]
Sections 1 to 8 and 10 to 20 are effective on July 1, 1999.
Section 9 is effective on the first day of the first payroll
period beginning after June 30, 1999.
ARTICLE 3
LOCAL POLICE AND PAID FIRE RELIEF
ASSOCIATION BENEFIT MODIFICATIONS
Section 1. Laws 1977, chapter 61, section 6, as amended by
Laws 1981, chapter 68, section 39, and Laws 1998, chapter 390,
article 7, section 3, is amended to read:
Sec. 6. [EVELETH RETIRED POLICE AND FIRE TRUST FUND;
FINANCIAL REQUIREMENTS OF THE TRUST FUND.]
(a) The city of Eveleth shall provide by annual levy an
amount sufficient to pay an amount which when added to the
investment income of the trust fund is sufficient to pay the
benefits provided under the trust fund for the succeeding year
as certified by the board of trustees of the trust fund.
(b) If the city of Eveleth fails to contribute the amount
required in paragraph (a) in a given year, no postretirement
adjustment granted under Laws 1995, chapter 262, article 10,
section 1, or Laws 1997, chapter 241, article 2, section 19 is
payable in the following year.
Sec. 2. [EVELETH RETIRED POLICE AND FIRE TRUST FUND; AD
HOC POSTRETIREMENT ADJUSTMENT.]
In addition to the current pensions and other retirement
benefits payable, the pensions and retirement benefits payable
to retired police officers and firefighters and their surviving
spouses by the Eveleth police and fire trust fund are increased
by $100 a month. Increases are retroactive to January 1, 1999.
Sec. 3. [FAIRMONT POLICE RELIEF ASSOCIATION; ADDITIONAL
ANNUAL POSTRETIREMENT ADJUSTMENT.]
(a) If the requirement of paragraph (f) is met, every
recipient of a pension or benefit from the Fairmont police
relief association on June 30, annually, is entitled to receive
a postretirement adjustment as provided in this section in
addition to any pension or benefit increase payable by virtue of
an increase in the salary of active patrol officers in the city
of Fairmont on the following July 1.
(b) If the value of current assets of the relief
association is equal to at least 102 percent of the actuarial
accrued liability of the Fairmont police relief association as
of December 31 in the prior calendar year as calculated under
Minnesota Statutes, sections 356.215 and 356.216, one percent of
the value of current assets of the relief association is
available for the payment of the postretirement adjustment under
this section.
(c) The amount of the postretirement adjustment must be
calculated by the chief administrative officer of the relief
association. The postretirement adjustment amount is payable
monthly. The total amount of all service pensions, disability
pensions, and survivor benefits, without inclusion of any
postretirement adjustment paid previously under this section
must be calculated and the percentage amount of each recipient's
annual pension or benefit of the total amount, expressed as four
digits beyond the decimal point, must be determined. The
monthly postretirement adjustment payable to each pension or
benefit recipient is 1/12 of the dollar amount determined by
applying each recipient's determined percentage of the total
amount of pensions and benefits to the total dollar amount
available for payment as a postretirement adjustment.
(d) The postretirement adjustment amount paid in any year
under this section does not compound and must not be added to
the pension base for the calculation of a subsequent
postretirement adjustment. If a pension or benefit recipient
dies before the 12 monthly postretirement adjustments under this
section have been paid, the remaining monthly postretirement
adjustment payments cancel to the special fund of the relief
association. Nothing in this section authorizes the payment of
the postretirement adjustment to an estate or to a person who
did not qualify for a postretirement adjustment in the person's
own right.
(e) The chief administrative officer of the relief
association will report the total amount of benefits paid under
this section to the executive director of the legislative
commission on pensions and retirement, the city clerk, and the
state auditor.
(f) Payment of the postretirement adjustment amount
provided under this section may be made in a given year only if
the average time-weighted total rate of return for the total
portfolio for the most recent five-year period exceeds by at
least two percent the actual average percent increase in the
current monthly salary of a first class patrol officer in the
most recent prior five fiscal years.
Sec. 4. [FAIRMONT POLICE RELIEF ASSOCIATION; RETROACTIVITY
OF SURVIVING SPOUSE BENEFIT INCREASE.]
(a) The surviving spouse benefit amount under Laws 1963,
chapter 423, is payable to all surviving spouses receiving
benefits as of the date of the approval of this act.
(b) Any surviving spouse benefit increase under this
section is first payable on the first day of the month next
following the effective date of this section.
Sec. 5. [FAIRMONT POLICE RELIEF ASSOCIATION; BYLAWS
AMENDMENTS REQUIRED.]
Sections 3 and 4 must be implemented by the appropriate
amendments to the bylaws of the Fairmont police relief
association.
Sec. 6. [ST. CLOUD POLICE CONSOLIDATION ACCOUNT; SPECIAL
ONE-TIME POSTRETIREMENT ADJUSTMENT.]
(a) Notwithstanding any provision of general or special law
to the contrary, all service pensioners, disability pensioners,
and survivor benefit recipients of the St. Cloud police
consolidation account who had begun the receipt of pensions or
benefits before December 31, 1997, the effective date of the St.
Cloud police consolidation process under Minnesota Statutes,
chapter 353A, that began in April 1997, are entitled to receive
the pension or benefit increase granted under Laws 1997, chapter
233, article 1, section 72.
(b) The special one-time postretirement adjustment under
paragraph (a) is effective retroactive to January 1, 1998. The
first payment of pensions and benefits next following the
effective date of this section must include any back payments of
the retroactive postretirement adjustment.
(c) Nothing in this section authorizes the payment of a
special postretirement adjustment to an estate.
Sec. 7. [EFFECTIVE DATE.]
(a) Sections 1 and 2 are effective on approval by the
Eveleth city council and compliance with Minnesota Statutes,
section 645.021.
(b) Sections 3, 4, and 5 are effective on the day following
approval by the Fairmont city council and compliance with
Minnesota Statutes, section 645.021.
(c) Section 6 is effective on the day following approval by
the St. Cloud city council and compliance with Minnesota
Statutes, section 645.021.
ARTICLE 4
MERGER INTO PERA-P&F OF
LOCAL POLICE AND FIRE
CONSOLIDATION ACCOUNTS
Section 1. Minnesota Statutes 1998, section 3.85,
subdivision 12, is amended to read:
Subd. 12. [ALLOCATION OF ACTUARIAL COST.] (a) The
commission shall assess each retirement plan specified in
subdivision 11, paragraph (b), the compensation paid to the
actuary retained by the commission for the actuarial valuation
calculations, quadrennial projection valuations, and quadrennial
experience studies. The assessment is 100 percent of the amount
of contract compensation for the actuarial consulting firm
retained by the commission for actuarial valuation calculations,
including the public employees police and fire plan
consolidation accounts of the public employees retirement
association established before March 2, 1999, for which the
municipality declined merger under section 353.665, subdivision
1, or established after March 1, 1999, annual experience data
collection and processing, and quadrennial experience
studies and quadrennial projection valuations.
The portion of the total assessment payable by each
retirement system or pension plan must be determined as follows:
(1) Each pension plan specified in subdivision 11,
paragraph (b), clauses (1) to (13), must pay the following
indexed amount based on its total active, deferred, inactive,
and benefit recipient membership:
up to 2,000 members, inclusive $2.55 per member
2,001 through 10,000 members $1.13 per member
over 10,000 members $0.11 per member
The amount specified is applicable for the assessment of
the July 1, 1991, to June 30, 1992, fiscal year actuarial
compensation amounts. For the July 1, 1992, to June 30, 1993,
fiscal year and subsequent fiscal year actuarial compensation
amounts, the amount specified must be increased at the same
percentage increase rate as the implicit price deflator for
state and local government purchases of goods and services for
the 12-month period ending with the first quarter of the
calendar year following the completion date for the actuarial
valuation calculations, as published by the federal Department
of Commerce, and rounded upward to the nearest full cent.
(2) The total per-member portion of the allocation must be
determined, and that total per-member amount must be subtracted
from the total amount for allocation. Of the remainder dollar
amount, the following per-retirement system and per-pension plan
charges must be determined and the charges must be paid by the
system or plan:
(i) 37.87 percent is the total additional per-retirement
system charge, of which one-seventh must be paid by each
retirement system specified in subdivision 11, paragraph (b),
clauses (1), (2), (6), (7), (9), (10), and (11).
(ii) 62.13 percent is the total additional per-pension plan
charge, of which one-thirteenth must be paid by each pension
plan specified in subdivision 11, paragraph (b), clauses (1) to
(13).
(b) The assessment must be made following the completion of
the actuarial valuation calculations and the experience
analysis. The amount of the assessment is appropriated from the
retirement fund applicable to the retirement plan. Receipts
from assessments must be deposited in the state treasury and
credited to the general fund.
Sec. 2. Minnesota Statutes 1998, section 69.021,
subdivision 10, is amended to read:
Subd. 10. [REDUCTION IN POLICE STATE AID APPORTIONMENT.]
(a) The commissioner of revenue shall reduce the apportionment
of police state aid under subdivisions 5, paragraph (b), 6, and
7a, for eligible employer units by any excess police state aid.
(b) "Excess police state aid" is:
(1) for counties and for municipalities in which police
retirement coverage is provided wholly by the public employees
police and fire fund and all police officers are members of the
plan governed by sections 353.63 to 353.657, the amount in
excess of the employer's total prior calendar year obligation as
defined in paragraph (c), as certified by the executive director
of the public employees retirement association;
(2) for municipalities in which police retirement coverage
is provided in part by the public employees police and fire fund
governed by sections 353.63 to 353.657 and in part by a local
police consolidation account governed by chapter 353A, and
established before March 2, 1999, for which the municipality
declined merger under section 353.665, subdivision 1, or
established after March 1, 1999, the amount in excess of the
employer's total prior calendar year obligation as defined in
paragraph (c), plus the amount of the employer's total prior
calendar year obligation under section 353A.09, subdivision 5,
paragraphs (a) and (b), as certified by the executive director
of the public employees retirement association;
(3) for municipalities in which police retirement coverage
is provided by the public employees police and fire plan
governed by sections 353.63 to 353.657, in which police
retirement coverage was provided by a police consolidation
account under chapter 353A before July 1, 1999, and for which
the municipality has an additional municipal contribution under
section 353.665, subdivision 8, paragraph (b), the amount in
excess of the employer's total prior calendar year obligation as
defined in paragraph (c), plus the amount of any additional
municipal contribution under section 353.665, subdivision 8,
paragraph (b), until the year 2010, as certified by the
executive director of the public employees retirement
association;
(4) for municipalities in which police retirement coverage
is provided in part by the public employees police and fire fund
governed by sections 353.63 to 353.657 and in part by a local
police relief association governed by sections 69.77 and
423A.01, the amount in excess of the employer's total prior
calendar year obligation as defined in paragraph (c), as
certified by the executive director of the public employees
retirement association, plus the amount of the financial
requirements of the relief association certified to the
applicable municipality during the prior calendar year under
section 69.77, subdivisions 2b and 2c, reduced by the amount of
member contributions deducted from the covered salary of the
relief association during the prior calendar year under section
69.77, subdivision 2a, as certified by the chief administrative
officer of the applicable municipality;
(4) (5) for the metropolitan airports commission, if there
are police officers hired before July 1, 1978, with retirement
coverage by the Minneapolis employees retirement fund remaining,
the amount in excess of the commission's total prior calendar
year obligation as defined in paragraph (c), as certified by the
executive director of the public employees retirement
association, plus the amount determined by expressing the
commission's total prior calendar year contribution to the
Minneapolis employees retirement fund under section 422A.101,
subdivisions 2 and 2a, as a percentage of the commission's total
prior calendar year covered payroll for commission employees
covered by the Minneapolis employees retirement fund and
applying that percentage to the commission's total prior
calendar year covered payroll for commission police officers
covered by the Minneapolis employees retirement fund, as
certified by the chief administrative officer of the
metropolitan airports commission; and
(5) (6) for the department of natural resources and for the
department of public safety, the amount in excess of the
employer's total prior calendar year obligation under section
352B.02, subdivision 1c, for plan members who are peace officers
under section 69.011, subdivision 1, clause (g), as certified by
the executive director of the Minnesota state retirement system.
(c) The employer's total prior calendar year obligation
with respect to the public employees police and fire plan is the
total prior calendar year obligation under section 353.65,
subdivision 3, for police officers as defined in section 353.64,
subdivision 2, and the actual total prior calendar year
obligation under section 353.65, subdivision 3, for
firefighters, as defined in section 353.64, subdivision 3, but
not to exceed for those firefighters the applicable following
amounts:
Municipality Maximum Amount
Albert Lea $54,157.01
Anoka 10,399.31
Apple Valley 5,442.44
Austin 49,864.73
Bemidji 27,671.38
Brooklyn Center 6,605.92
Brooklyn Park 24,002.26
Burnsville 15,956.00
Cloquet 4,260.49
Coon Rapids 39,920.00
Cottage Grove 8,588.48
Crystal 5,855.00
East Grand Forks 51,009.88
Edina 32,251.00
Elk River 5,216.55
Ely 13,584.16
Eveleth 16,288.27
Fergus Falls 6,742.00
Fridley 33,420.64
Golden Valley 11,744.61
Hastings 16,561.00
Hopkins 4,324.23
International Falls 14,400.69
Lakeville 782.35
Lino Lakes 5,324.00
Little Falls 7,889.41
Maple Grove 6,707.54
Maplewood 8,476.69
Minnetonka 10,403.00
Montevideo 1,307.66
Moorhead 68,069.26
New Hope 6,739.72
North St. Paul 4,241.14
Northfield 770.63
Owatonna 37,292.67
Plymouth 6,754.71
Red Wing 3,504.01
Richfield 53,757.96
Rosemount 1,712.55
Roseville 9,854.51
St. Anthony 33,055.00
St. Louis Park 53,643.11
Thief River Falls 28,365.04
Virginia 31,164.46
Waseca 11,135.17
West St. Paul 15,707.20
White Bear Lake 6,521.04
Woodbury 3,613.00
any other municipality 0.00
(d) The total amount of excess police state aid must be
deposited in the excess police state-aid account in the general
fund, administered and distributed as provided in subdivision 11.
Sec. 3. Minnesota Statutes 1998, section 69.031,
subdivision 5, is amended to read:
Subd. 5. [DEPOSIT OF STATE AID.] (a) The municipal
treasurer shall, within 30 days after receipt, transmit the fire
state aid to the treasurer of the duly incorporated
firefighters' relief association if there is one organized and
the association has filed a financial report with the
municipality. If the relief association has not filed a
financial report with the municipality, the municipal treasurer
shall delay transmission of the fire state aid to the relief
association until the complete financial report is filed. If
there is no relief association organized, or if the association
has dissolved, or has been removed as trustees of state aid,
then the treasurer of the municipality shall deposit the money
in the municipal treasury as provided for in section 424A.08 and
the money may be disbursed only for the purposes and in the
manner set forth in that section.
(b) The municipal treasurer, upon receipt of the police
state aid, shall disburse the police state aid in the following
manner:
(1) For a municipality in which a local police relief
association exists and all peace officers are members of the
association, the total state aid must be transmitted to the
treasurer of the relief association within 30 days of the date
of receipt, and the treasurer of the relief association shall
immediately deposit the total state aid in the special fund of
the relief association;
(2) For a municipality in which police retirement coverage
is provided by the public employees police and fire fund and all
peace officers are members of the fund, including municipalities
covered by section 353.665, the total state aid must be applied
toward the municipality's employer contribution to the public
employees police and fire fund under section sections 353.65,
subdivision 3, and 353.665, subdivision 8, paragraph (b), if
applicable; or
(3) For a municipality other than a city of the first class
with a population of more than 300,000 in which both a police
relief association exists and police retirement coverage is
provided in part by the public employees police and fire fund,
the municipality may elect at its option to transmit the total
state aid to the treasurer of the relief association as provided
in clause (1), to use the total state aid to apply toward the
municipality's employer contribution to the public employees
police and fire fund subject to all the provisions set forth in
clause (2), or to allot the total state aid proportionately to
be transmitted to the police relief association as provided in
this subdivision and to apply toward the municipality's employer
contribution to the public employees police and fire fund
subject to the provisions of clause (2) on the basis of the
respective number of active full-time peace officers, as defined
in section 69.011, subdivision 1, clause (g).
For a city of the first class with a population of more
than 300,000, in addition, the city may elect to allot the
appropriate portion of the total police state aid to apply
toward the employer contribution of the city to the public
employees police and fire fund based on the covered salary of
police officers covered by the fund each payroll period and to
transmit the balance to the police relief association; or
(4) For a municipality in which police retirement coverage
is provided in part by the public employees police and fire fund
and in part by a local police consolidation account governed by
chapter 353A and established before March 2, 1999, for which the
municipality declined merger under section 353.665, subdivision
1, or established after March 1, 1999, the total police state
aid must be applied towards the municipality's total employer
contribution to the public employees police and fire fund and to
the local police consolidation account under sections 353.65,
subdivision 3, and 353A.09, subdivision 5.
(c) The county treasurer, upon receipt of the police state
aid for the county, shall apply the total state aid toward the
county's employer contribution to the public employees police
and fire fund under section 353.65, subdivision 3.
(d) The designated metropolitan airports commission
official, upon receipt of the police state aid for the
metropolitan airports commission, shall apply the total police
state aid first toward the commission's employer contribution
for police officers to the Minneapolis employees retirement fund
under section 422A.101, subdivision 2a, and, if there is any
amount of police state aid remaining, shall apply that remainder
toward the commission's employer contribution for police
officers to the public employees police and fire plan under
section 353.65, subdivision 3.
(e) The police state aid apportioned to the departments of
public safety and natural resources under section 69.021,
subdivision 7a, is appropriated to the commissioner of finance
for transfer to the funds and accounts from which the salaries
of peace officers certified under section 69.011, subdivision
2a, are paid. The commissioner of revenue shall certify to the
commissioners of public safety, natural resources, and finance
the amounts to be transferred from the appropriation for police
state aid. The commissioners of public safety and natural
resources shall certify to the commissioner of finance the
amounts to be credited to each of the funds and accounts from
which the peace officers employed by their respective
departments are paid. Each commissioner must allocate the
police state aid first for employer contributions for employees
funded from the general fund and then for employer contributions
for employees funded from other funds. For peace officers whose
salaries are paid from the general fund, the amounts transferred
from the appropriation for police state aid must be canceled to
the general fund.
Sec. 4. Minnesota Statutes 1998, section 353.01,
subdivision 2b, is amended to read:
Subd. 2b. [EXCLUDED EMPLOYEES.] The following public
employees shall not participate as members of the association
with retirement coverage by the public employees retirement plan
or the public employees police and fire retirement plan:
(1) elected public officers, or persons appointed to fill a
vacancy in an elective office, who do not elect to participate
in the association by filing an application for membership;
(2) election officers;
(3) patient and inmate personnel who perform services in
charitable, penal, or correctional institutions of a
governmental subdivision;
(4) employees who are hired for a temporary position under
subdivision 12a, and employees who resign from a nontemporary
position and accept a temporary position within 30 days in the
same governmental subdivision, but not those employees who are
hired for an unlimited period but are serving a probationary
period. If the period of employment extends beyond six
consecutive months and the employee earns more than $425 from
one governmental subdivision in any one calendar month, the
department head shall report the employee for membership and
require employee deductions be made on behalf of the employee
under section 353.27, subdivision 4.
Membership eligibility of an employee who resigns or is
dismissed from a temporary position and within 30 days accepts
another temporary position in the same governmental subdivision
is determined on the total length of employment rather than on
each separate position. Membership eligibility of an employee
who holds concurrent temporary and nontemporary positions in one
governmental subdivision is determined by the length of
employment and salary of each separate position;
(5) employees whose actual salary from one governmental
subdivision does not exceed $425 per month, or whose annual
salary from one governmental subdivision does not exceed a
stipulation prepared in advance, in writing, that the salary
must not exceed $5,100 per calendar year or per school year for
school employees for employment expected to be of a full year's
duration or more than the prorated portion of $5,100 per
employment period for employment expected to be of less than a
full year's duration;
(6) employees who are employed by reason of work emergency
caused by fire, flood, storm, or similar disaster;
(7) employees who by virtue of their employment in one
governmental subdivision are required by law to be a member of
and to contribute to any of the plans or funds administered by
the Minnesota state retirement system, the teachers retirement
association, the Duluth teachers retirement fund association,
the Minneapolis teachers retirement association, the St. Paul
teachers retirement fund association, the Minneapolis employees
retirement fund, or any police or firefighters relief
association governed by section 69.77 that has not consolidated
with the public employees retirement association, or any local
police or firefighters relief association that has consolidated
with the public employees retirement association consolidation
account but whose members who have not elected the type of
benefit coverage provided by the public employees police and
fire fund under sections 353A.01 to 353A.10, or any persons
covered by section 353.665, subdivision 4, 5, or 6, who have not
elected public employees police and fire plan benefit coverage.
This clause must not be construed to prevent a person from being
a member of and contributing to the public employees retirement
association and also belonging to and contributing to another
public pension fund for other service occurring during the same
period of time. A person who meets the definition of "public
employee" in subdivision 2 by virtue of other service occurring
during the same period of time becomes a member of the
association unless contributions are made to another public
retirement fund on the salary based on the other service or to
the teachers retirement association by a teacher as defined in
section 354.05, subdivision 2;
(8) persons who are excluded from coverage under the
federal Old Age, Survivors, Disability, and Health Insurance
Program for the performance of service as specified in United
States Code, title 42, section 410(a)(8)(A), as amended through
January 1, 1987, if no irrevocable election of coverage has been
made under section 3121(r) of the Internal Revenue Code of 1954,
as amended;
(9) full-time students who are enrolled and are regularly
attending classes at an accredited school, college, or
university and who are part-time employees as defined by a
governmental subdivision;
(10) resident physicians, medical interns, and pharmacist
residents and pharmacist interns who are serving in a degree or
residency program in public hospitals;
(11) students who are serving in an internship or residency
program sponsored by an accredited educational institution;
(12) persons who hold a part-time adult supplementary
technical college license who render part-time teaching service
in a technical college;
(13) foreign citizens working for a governmental
subdivision with a work permit of less than three years, or an
H-1b visa valid for less than three years of employment. Upon
notice to the association that the work permit or visa extends
beyond the three-year period, the foreign citizens are eligible
for membership from the date of the extension;
(14) public hospital employees who elected not to
participate as members of the association before 1972 and who
did not elect to participate from July 1, 1988, to October 1,
1988;
(15) except as provided in section 353.86, volunteer
ambulance service personnel, as defined in subdivision 35, but
persons who serve as volunteer ambulance service personnel may
still qualify as public employees under subdivision 2 and may be
members of the public employees retirement association and
participants in the public employees retirement fund or the
public employees police and fire fund on the basis of
compensation received from public employment service other than
service as volunteer ambulance service personnel;
(16) except as provided in section 353.87, volunteer
firefighters, as defined in subdivision 36, engaging in
activities undertaken as part of volunteer firefighter duties;
provided that a person who is a volunteer firefighter may still
qualify as a public employee under subdivision 2 and may be a
member of the public employees retirement association and a
participant in the public employees retirement fund or the
public employees police and fire fund on the basis of
compensation received from public employment activities other
than those as a volunteer firefighter; and
(17) pipefitters and associated trades personnel employed
by independent school district No. 625, St. Paul, with coverage
by the pipefitters local 455 pension plan under a collective
bargaining agreement who were either first employed after May 1,
1997, or, if first employed before May 2, 1997, elected to be
excluded under Laws 1997, chapter 241, article 2, section 12.
Sec. 5. Minnesota Statutes 1998, section 353.01,
subdivision 10, is amended to read:
Subd. 10. [SALARY.] (a) "Salary" means:
(1) periodic compensation of a public employee, before
deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs, and also
means "wages" and includes net income from fees; and
(2) for a public employee who has prior service covered by
a local police or firefighters' relief association that has
consolidated with the public employees retirement association or
to which section 353.665 applies and who has elected
coverage either under the public employees police and fire fund
benefit plan under section 353A.08 following the
consolidation or under section 353.665, subdivision 4, "salary"
means the rate of salary upon which member contributions to the
special fund of the relief association were made prior to the
effective date of the consolidation as specified by law and by
bylaw provisions governing the relief association on the date of
the initiation of the consolidation procedure and the actual
periodic compensation of the public employee after the effective
date of consolidation.
(b) Salary does not mean:
(1) fees paid to district court reporters, unused annual or
sick leave payments, in lump-sum or periodic payments, severance
payments, reimbursement of expenses, lump-sum settlements not
attached to a specific earnings period, or workers' compensation
payments;
(2) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage and certain amounts determined by the
executive director to be ineligible;
(3) the amount equal to that which the employing
governmental subdivision would otherwise pay toward single or
family insurance coverage for a covered employee when, through a
contract or agreement with some but not all employees, the
employer:
(i) discontinues, or for new hires does not provide,
payment toward the cost of the employee's selected insurance
coverages under a group plan offered by the employer;
(ii) makes the employee solely responsible for all
contributions toward the cost of the employee's selected
insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees'
selected insurance coverages under a group plan offered by the
employer; and
(iii) provides increased salary rates for employees who do
not have any employer-paid group insurance coverages; and
(4) except as provided in section 353.86 or 353.87,
compensation of any kind paid to volunteer ambulance service
personnel or volunteer firefighters, as defined in subdivisions
35 and 36.
Sec. 6. Minnesota Statutes 1998, section 353.01,
subdivision 16, is amended to read:
Subd. 16. [ALLOWABLE SERVICE.] (a) "Allowable service"
means service during years of actual membership in the course of
which employee contributions were made, periods covered by
payments in lieu of salary deductions under section 353.35, and
service in years during which the public employee was not a
member but for which the member later elected, while a member,
to obtain credit by making payments to the fund as permitted by
any law then in effect.
(b) "Allowable service" also means a period of authorized
leave of absence with pay from which deductions for employee
contributions are made, deposited, and credited to the fund.
(c) "Allowable service" also means a period of authorized
leave of absence without pay that does not exceed one year, and
during or for which a member obtained credit by payments to the
fund made in place of salary deductions, provided that the
payments are made in an amount or amounts based on the member's
average salary on which deductions were paid for the last six
months of public service, or for that portion of the last six
months while the member was in public service, to apply to the
period in either case immediately preceding commencement of the
leave of absence. If the employee elects to pay employee
contributions for the period of any leave of absence without
pay, or for any portion of the leave, the employee shall also,
as a condition to the exercise of the election, pay to the fund
an amount equivalent to both the required employer and
additional employer contributions for the employee. The payment
must be made within one year from the expiration of the leave of
absence or within 20 days after termination of public service
under subdivision 11a. The employer by appropriate action of
its governing body, made a part of its official records, before
the date of the first payment of the employee contribution, may
certify to the association in writing its commitment to pay the
employer and additional employer contributions from the proceeds
of a tax levy made under section 353.28. Payments under this
paragraph must include interest at an annual rate of 8.5 percent
compounded annually from the date of the termination of the
leave of absence to the date payment is made. An employee shall
return to public service and receive a minimum of three months
of allowable service to be eligible to pay employee and employer
contributions for a subsequent authorized leave of absence
without pay.
(d) "Allowable service" also means a periodic, repetitive
leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per
annual normal work cycle as certified to the association by the
employer. A participating member obtains service credit by
making employee contributions in an amount or amounts based on
the member's average salary that would have been paid if the
leave had not been taken. The employer shall pay the employer
and additional employer contributions on behalf of the
participating member. The employee and the employer are
responsible to pay interest on their respective shares at the
rate of 8.5 percent a year, compounded annually, from the end of
the normal cycle until full payment is made. An employer shall
also make the employer and additional employer contributions,
plus 8.5 percent interest, compounded annually, on behalf of an
employee who makes employee contributions but terminates public
service. The employee contributions must be made within one
year after the end of the annual normal working cycle or within
20 days after termination of public service, whichever is
sooner. The association shall prescribe the manner and forms to
be used by a governmental subdivision in administering a
periodic, repetitive leave.
(e) "Allowable service" also means a period during which a
member is on an authorized sick leave of absence, without pay,
limited to one year. An employee who has received one year of
allowable service shall return to public service and receive a
minimum of three months of allowable service to receive
allowable service for a subsequent authorized sick leave of
absence.
(f) "Allowable service" also means an authorized temporary
layoff under subdivision 12, limited to three months allowable
service per authorized temporary layoff in one calendar year.
An employee who has received the maximum service allowed for an
authorized temporary layoff shall return to public service and
receive a minimum of three months of allowable service to
receive allowable service for a subsequent authorized temporary
layoff.
(g) Notwithstanding any law to the contrary, "allowable
service" also means a parental leave. The association shall
grant a maximum of two months service credit for a parental
leave, within six months after the birth or adoption, upon
documentation from the member's governmental subdivision or
presentation of a birth certificate or other evidence of birth
or adoption to the association.
(h) "Allowable service" also means a period during which a
member is on an authorized leave of absence to enter military
service, provided that the member returns to public service upon
discharge from military service under section 192.262 and pays
into the fund employee contributions based upon the employee's
salary at the date of return from military service. Payment
must be made within five years of the date of discharge from the
military service. The amount of these contributions must be in
accord with the contribution rates and salary limitations, if
any, in effect during the leave, plus interest at an annual rate
of 8.5 percent compounded annually from the date of return to
public service to the date payment is made. The matching
employer contribution and additional employer contribution under
section 353.27, subdivisions 3 and 3a, must be paid by the
governmental subdivision employing the member upon return to
public service if the member makes the employee contributions.
The governmental subdivision involved may appropriate money for
those payments. A member may not receive credit for a voluntary
extension of military service at the instance of the member
beyond the initial period of enlistment, induction, or call to
active duty.
(i) For calculating benefits under sections 353.30, 353.31,
353.32, and 353.33 for state officers and employees displaced by
the Community Corrections Act, chapter 401, and transferred into
county service under section 401.04, "allowable service" means
combined years of allowable service as defined in paragraphs (a)
to (i) and section 352.01, subdivision 11.
(j) For a public employee who has prior service covered by
a local police or firefighters relief association that has
consolidated with the public employees retirement association or
to which section 353.665 applies, and who has elected the type
of benefit coverage provided by the public employees police and
fire fund either under section 353A.08 following the
consolidation or under section 353.665, subdivision 4,
"applicable service" is a period of service credited by the
local police or firefighters relief association as of the
effective date of the consolidation based on law and on bylaw
provisions governing the relief association on the date of the
initiation of the consolidation procedure.
Sec. 7. Minnesota Statutes 1998, section 353.64,
subdivision 1, is amended to read:
Subdivision 1. [POLICE AND FIRE FUND MEMBERSHIP.] (a) A
person who prior to July 1, 1961, was a member of the police and
fire fund, by virtue of being a police officer or firefighter,
shall, as long as the person remains in either position,
continue membership in the fund.
(b) A person who was employed by a governmental subdivision
as a police officer and was a member of the police and fire fund
on July 1, 1978, by virtue of being a police officer as defined
by this section on that date, and if employed by the same
governmental subdivision in a position in the same department in
which the person was employed on that date, shall continue
membership in the fund whether or not that person has the power
of arrest by warrant after that date.
(c) A person who was employed by a governmental subdivision
as a police officer or a firefighter, whichever applies, was an
active member of the local police or salaried firefighters
relief association located in that governmental subdivision by
virtue of that employment as of the effective date of the
consolidation as authorized by sections 353A.01 to 353A.10, and
has elected coverage by the public employees police and fire
fund benefit plan, shall become a member of the police and fire
fund after that date if employed by the same governmental
subdivision in a position in the same department in which the
person was employed on that date.
(d) Any other employee serving on a full-time basis as a
police officer or firefighter on or after July 1, 1961, shall
become a member of the public employees police and fire fund.
(e) An employee serving on less than a full-time basis as a
police officer shall become a member of the public employees
police and fire fund only after a resolution stating that the
employee should be covered by the police and fire fund is
adopted by the governing body of the governmental subdivision
employing the person declaring that the position which the
person holds is that of a police officer.
(f) An employee serving on less than a full-time basis as a
firefighter shall become a member of the public employees police
and fire fund only after a resolution stating that the employee
should be covered by the police and fire fund is adopted by the
governing body of the governmental subdivision employing the
person declaring that the position which the person holds is
that of a firefighter.
(g) A police officer or firefighter employed by a
governmental subdivision who by virtue of that employment is
required by law to be a member of and to contribute to any
police or firefighter relief association governed by section
69.77 which has not consolidated with the public employees
police and fire fund and, any police officer or firefighter of a
relief association that has consolidated with the association
for which the employee has not elected coverage by the public
employees police and fire fund benefit plan as provided in
sections 353A.01 to 353A.10, or any police officer or
firefighter to whom section 353.665 applies who has not elected
coverage by the public employees police and fire fund benefit
plan as provided in section 353.665, subdivision 4, shall not
become a member of the public employees police and fire fund.
Sec. 8. Minnesota Statutes 1998, section 353.65,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTION RATE.] The employee
contribution is an amount equal to 7.6 6.2 percent of the total
salary of the member. This contribution must be made by
deduction from salary in the manner provided in subdivision 4.
Where any portion of a member's salary is paid from other than
public funds, the member's employee contribution is based on the
total salary received from all sources.
Sec. 9. Minnesota Statutes 1998, section 353.65,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTION RATE.] The employer
contribution shall be an amount equal to 11.4 9.3 percent of the
total salary of every member. This contribution shall be made
from funds available to the employing subdivision by the means
and in the manner provided in section 353.28.
Sec. 10. [353.665] [MERGER OF CERTAIN CONSOLIDATION
ACCOUNTS INTO PERA-P&F.]
Subdivision 1. [MERGER AUTHORIZED.] (a) Notwithstanding
any provision of law to the contrary, unless the applicable
municipality elects otherwise under paragraph (b), every local
police and fire consolidation account under chapter 353A in
existence on March 1, 1999, becomes a part of the public
employees police and fire plan and fund governed by sections
353.63 to 353.659 on July 1, 1999.
(b) If a municipality desires to retain its consolidation
account or consolidation accounts, whichever applies, the
governing body of the municipality must adopt a resolution to
that effect and must file a copy of the resolution with the
secretary of state, the state auditor, the legislative auditor,
the finance commissioner, the revenue commissioner, the
executive director of the public employees retirement
association, and the executive director of the legislative
commission on pensions and retirement. The retention election
must apply to both consolidation accounts if the municipality is
associated with more than one consolidation account. The
retention resolution must be adopted and filed with all
recipients before June 15, 1999.
Subd. 2. [TRANSFER OF LIABILITIES.] Unless the
municipality has elected to retain the consolidation account
under subdivision 1, paragraph (b), all current and future
liabilities of a former local police or fire consolidation
account are the liabilities of the public employees police and
fire fund as of July 1, 1999, and the accrued benefits of the
members are the obligation of the public employees police and
fire fund.
Subd. 3. [TRANSFER OF ASSETS.] Unless the municipality has
elected to retain the consolidation account under subdivision 1,
paragraph (b), the assets of the former local police or fire
consolidation account must be transferred and upon transfer, the
actuarial value of the assets of a former local police or fire
consolidation account less an amount equal to the residual
assets as determined under subdivision 7, paragraph (f), are the
assets of the public employees police and fire fund as of July
1, 1999. The participation of a consolidation account in the
Minnesota postretirement investment fund becomes part of the
participation of the public employees police and fire fund in
the Minnesota postretirement investment fund. The remaining
assets, excluding the amounts for distribution under subdivision
7, paragraph (f), become an asset of the public employees police
and fire fund. The public employees police and fire fund also
must be credited as an asset with the amount of receivable
assets under subdivision 7, paragraph (e).
Subd. 4. [BENEFIT COVERAGE FOR ACTIVE MEMBERS.] (a) A
person who is a police officer or a firefighter who, as such, is
an active member of a merging local police or fire consolidation
account on June 30, 1999, and who has not previously elected
benefit coverage under the relevant provisions of the public
employees police and fire fund benefit plan under section
353A.08, subdivision 3, may elect benefit coverage under the
relevant provisions of the public employees police and fire fund
benefit plan. This election must be made in writing on a form
prescribed by the executive director before September 1, 1999,
and is irrevocable.
(b) If an eligible person makes no affirmative election of
benefit coverage before September 1, 1999, the person retains
the benefit coverage provided by the relief association benefit
plan as reflected in the applicable provisions of chapter 353B
and may elect benefit coverage under the relevant provisions of
the public employees police and fire fund benefit plan when the
person terminates active employment for purposes of receiving a
service pension, disability benefit, or within 90 days of the
date the member terminates active employment and defers receipt
of a service pension, whichever applies.
(c) Notwithstanding any provision of section 353A.083 and
any municipal action under authority of that statute to the
contrary, the provisions of the public employees police and fire
fund benefit plan applicable to active members of the merging
local police or fire consolidation accounts who elect the public
employees police and fire fund benefit plan under section
353A.08, subdivision 3, or paragraph (a), are the applicable
provisions of sections 353.63 to 353.659.
Subd. 5. [BENEFIT COVERAGE FOR RETIREES AND BENEFIT
RECIPIENTS.] (a) A person who received a service pension, a
disability pension or benefit, or a survivor benefit from a
merging local police or fire consolidation account for the month
of June 1999, and who has not previously elected participation
in the Minnesota postretirement investment fund for any future
postretirement adjustments rather than the postretirement
adjustment mechanism or mechanisms of the relief association
benefit plan under section 353A.08, subdivision 1, may elect
participation in the Minnesota postretirement investment fund
for any future postretirement adjustments or retention of the
postretirement adjustment mechanism or mechanisms of the relief
association benefit plan as reflected in the applicable
provisions of chapter 353B. This election must be in writing on
a form prescribed by the executive director and must be made
before September 1, 1999.
(b) If an eligible person is a minor, the election must be
made by the person's parent or legal guardian. If the eligible
person makes no affirmative election under this subdivision, the
person retains the postretirement adjustment mechanism or
mechanisms of the relief association benefit plan as reflected
in the applicable provisions of chapter 353B.
(c) The survivor benefit payable on behalf of any service
pension or disability benefit recipient who elects participation
in the Minnesota postretirement investment fund must be
calculated under the relief association benefit plan in effect
on the effective date of consolidation under chapter 353A as
reflected in the applicable provisions of chapter 353B.
Subd. 6. [BENEFIT COVERAGE FOR DEFERRED MEMBERS.] A person
who terminated before July 1, 1999, active employment as a
police officer or a firefighter that gave rise to membership in
a local relief association that has consolidated with the public
employees police and fire plan under chapter 353A and is merging
under this section and who had sufficient service credit to
entitle the person to an eventual service pension retains the
benefit plan as reflected in the applicable provisions of
chapter 353B, except that the deferred member may elect before
September 1, 1999, to participate, upon retirement, in the
Minnesota postretirement investment fund. Any election to
participate in the Minnesota postretirement investment fund is
applicable to any survivor benefit attributable to a deferred
member covered by this subdivision.
Subd. 7. [CALCULATION OF FINAL FUNDED STATUS.] (a) As of
June 30, 1999, the actuary retained by the legislative
commission on pensions and retirement shall determine the final
funded status of local police and fire consolidation accounts
under chapter 353A that the applicable municipality has not
elected to retain under subdivision 1, paragraph (b), as
provided in this subdivision.
(b) The final funded status calculation must be made using
the benefit plan provisions applicable to the consolidation
account and the actuarial assumptions used for the June 30,
1998, actuarial valuation of the account.
(c) The actuary must calculate the total actuarial accrued
liability of the consolidation account, which is the sum of the
actuarial accrued liability for all consolidation account
members who are not included in the participation of the account
in the Minnesota postretirement investment fund calculated using
the entry age normal actuarial cost method. If local
legislation enacted during the 1999 regular session or any
special session occurring before October 1, 1999, provides a
benefit increase for one consolidation account member or more,
whether the applicable municipality has given final approval to
the local legislation yet or not, the total actuarial accrued
liability calculation must include that benefit increase. The
actuary also must calculate any account unfunded accrued
liability or any account funding surplus. An account unfunded
accrued liability is the actuarial accrued liability reduced by
the amount of the current value of assets, if the resulting
number is positive. An account funding surplus is the actuarial
accrued liability reduced by the amount of the current value of
assets, if the resulting number is negative. If a municipality
is associated with two consolidation accounts and one has an
account funding surplus and one has an account unfunded accrued
liability in the preliminary calculation under this paragraph,
the actuary must make a second calculation for the account with
a preliminary account unfunded accrued liability, after
crediting to that account an amount up to 75 percent of the
one-half of the market value of the assets of the account with
an account funding surplus that are in excess of 100 percent of
the account actuarial accrued liability and that are less than
that percentage of the total actuarial accrued liability that
equals the public employees police and fire fund funded ratio as
of June 30, 1999, but not to exceed the account's unfunded
actuarial accrued liability.
(d) The actuary also must calculate the amortizable base
for every consolidation account. The amortizable base is the
present value of future benefits for all account members who are
not included in the participation of the account in the
Minnesota postretirement investment fund reduced by the present
value of 19 percent of future covered salary and further reduced
by the current value of account assets other than its
participation in the Minnesota postretirement investment fund,
after adjustment for fiscal year 1999 net mortality gains and
losses and for the net actuarial affect of the election of
postretirement adjustment coverage under subdivision 5.
(e) If the amortizable base under paragraph (d) is a
positive number, the receivable assets are an amount equal to
the amortizable base number.
(f) If the amortizable base under paragraph (d) is a
negative number, the actuary must calculate the residual asset
amount. The residual asset amount is:
(1) one-half of the amount by which the current assets of
the account exceed 100 percent of the total actuarial accrued
liability up to that percentage of the total actuarial accrued
liability that equals the public employees police and fire fund
funded ratio on June 30, 1999; and
(2) the amount by which the current assets of the account
exceed that percentage of the total actuarial accrued liability
that equals the public employees police and fire fund funded
ratio on June 30, 1999. Following the calculation of the
residual asset amount for each applicable municipality and the
verification of the amount by the legislative auditor, the
executive director of the public employees retirement
association shall pay the applicable residual asset amount with
interest equal to the average yield on the invested treasurer's
cash fund from July 1, 1999, to the first of the month in which
the payment is issued to each qualifying municipality. The
residual asset amount must be used by the municipality to defray
fire department expenditure items if the residual asset amount
was derived from a fire consolidation account or to defray
police department expenditure items if the residual asset amount
was derived from a police consolidation account. Before the
residual asset amount payment is made by the public employees
retirement association, the governing body of the applicable
municipality, following a public hearing on the issue, must
formulate and adopt a plan for the expenditure of the residual
amount and must file that plan in the form of a municipal
resolution with the state auditor. The residual asset amount
must be deposited in a special fund or account in the municipal
treasury established for that purpose. The special fund or
account must be invested and any investment return attributable
to the residual asset amount must be credited to that special
fund or account and its disbursement similarly restricted. The
special fund or account must be audited periodically by the
state auditor.
Subd. 8. [MEMBER AND EMPLOYER CONTRIBUTIONS.] (a)
Effective on the first day of the first full pay period
following June 30, 1999, the employee contribution rate for
merging former consolidation account active members is the rate
specified in section 353.65, subdivision 2, and the regular
municipal contribution rate on behalf of former consolidation
account active members is the rate specified in section 353.65,
subdivision 3.
(b) The municipality associated with a merging former local
consolidation account that had a positive value amortizable base
calculation under subdivision 7, paragraph (d), after the
preliminary calculation or the second calculation, whichever
applies, must make an additional municipal contribution to the
public employees police and fire plan for the period from
January 1, 2000, to December 31, 2009. The amount of the
additional municipal contribution is the amount calculated by
the actuary retained by the legislative commission on pensions
and retirement and certified by the executive director of the
public employees retirement association by which the amortizable
base amount would be amortized on a level dollar annual
end-of-the-year contribution basis, using an 8.5 percent
interest rate assumption. The additional municipal contribution
is payable during the month of January, is without any interest,
or if made after January 31, but before the next following
December 31, is payable with interest for the period since
January 1 at a rate which is equal to the preretirement interest
rate assumption specified in section 356.215, subdivision 4d,
applicable to the public employees police and fire fund
expressed as a monthly rate and compounded on a monthly basis or
if made after December 31 of the year in which the additional
municipal contribution is due is payable with interest at a rate
which is four percent greater than the highest interest rate
assumption specified in section 356.215, subdivision 4d,
expressed as a monthly rate and compounded monthly from January
1 of the year in which the additional municipal contribution is
due until the date on which payment is made.
Subd. 9. [BENEFIT PLAN COVERAGE.] Unless modified by an
election authorized under subdivision 4, 5, or 6, the benefit
plan election by any person or on behalf of any person under
section 353A.08 remains binding. Merging former consolidation
account members who elected the entirety of the public employees
police and fire benefit plan are entitled to an applicable
annuity or benefit under the provisions of sections 353.63 to
353.68 in effect on the day that the merging former
consolidation account member terminated active service as a
police officer or firefighter, whichever applies.
Subd. 10. [CONSOLIDATION ACCOUNT TERMINATION.] Unless the
municipality has elected to retain the consolidation account
under subdivision 1, paragraph (b), upon the payment of all
residual asset amounts under subdivision 7 and the transfer of
all liabilities and remaining assets under subdivisions 2 and 3,
the local consolidation accounts under chapter 353A in existence
on March 1, 1999, are terminated, and all benefits accrued up to
the date of termination are the obligation of the public
employees police and fire fund.
Sec. 11. Minnesota Statutes 1998, section 353A.09,
subdivision 4, is amended to read:
Subd. 4. [MEMBER CONTRIBUTIONS.] Following the effective
date of consolidation, the applicable member contribution rate
and applicable salary rate to which the member contribution rate
applies for persons who were formerly members of the relief
association shall be determined as follows:
(1) if the person has elected coverage by the public
employees police and fire fund benefit plan under section
353A.08, the applicable member contribution rate shall be that
rate specified in Minnesota Statutes 1998, section 353.65,
subdivision 2, and the applicable salary rate to which the
member contribution rate applies shall be the actual salary of
the person, as defined in section 353.01, subdivision 10; and
(2) if the person has not elected coverage by the public
employees police and fire fund benefit plan under section
353A.08, the applicable member contribution rate shall be the
rate specified in section 69.77, subdivision 2a, or the rate
specified in the applicable general law, special law, or bylaw
provision governing the relief association as of the date of the
initiation of consolidation, whichever is greater, and the
applicable salary rate to which the member contribution rate
applies shall be the salary rate specified in the applicable
general law, special law, or bylaw provision governing the
relief association as of the date of the initiation of
consolidation or the actual salary of the person, including
overtime pay and any regularly occurring special payments but
excluding lump sum annual leave payments, worker's compensation
payments, and severance payments, whichever salary rate is
greater.
The member contribution rate and applicable salary rate to
which the member contribution rate applies shall be effective as
of the first day of the first pay period occurring after the
effective date of consolidation.
The chief administrative officer of the municipal police
department or municipal fire department, whichever applies,
shall cause the member contributions required under this
subdivision to be deducted in the manner and subject to the
terms provided in section 353.27, subdivision 4.
Sec. 12. Minnesota Statutes 1998, section 353A.09,
subdivision 5, is amended to read:
Subd. 5. [REGULAR AND ADDITIONAL MUNICIPAL CONTRIBUTIONS.]
(a) Following the effective date of consolidation, the
applicable regular municipal contribution rate and applicable
salary rate to which the regular municipal contribution rate
applies on behalf of persons who were formerly members of the
relief association shall be as follows:
(1) on behalf of persons who have elected coverage by the
public employees police and fire fund benefit plan under section
353A.08, the applicable regular municipal contribution rate
shall be that specified in Minnesota Statutes 1998, section
353.65, subdivision 3, and the applicable salary rate to which
the regular municipal contribution rate applies shall be that
specified in subdivision 4, clause (1); and
(2) on behalf of persons who have not elected coverage by
the public employees police and fire fund benefit plan under
section 353A.08, the applicable regular municipal contribution
rate shall be 12 percent and the applicable salary rate to which
the regular municipal contribution rate applies shall be that
specified in subdivision 4, clause (2).
(b) Following the effective date of consolidation, the
applicable additional municipal contribution amount shall be the
sum of the following:
(1) the annual level dollar contribution as calculated by
the actuary retained by the commission as of the effective date
of consolidation which is required to amortize by December 31,
2010, that portion of the present value of future benefits
computed on the basis of the benefit plan producing the largest
present value of future benefits for each individual which
remains after subtracting the present value of future member
contributions as provided in subdivision 4, the present value of
future regular municipal contributions as provided in clause
(a), and the market value of the assets of the relief
association transferred to the fund; and
(2) the amount of the annual contribution as calculated by
the actuary retained by the commission as of the most recent
actuarial valuation date which is required to amortize on a
level annual dollar basis the amount of any net actuarial
experience loss incurred during the year which ended as of the
day immediately before the most recent actuarial valuation date
by December 31 of the year occurring 15 years later.
(c) Regular municipal contributions shall be made in the
manner provided in section 353.28. Additional municipal
contributions shall be paid during the calendar year following
the annual certification of the amount of the annual additional
municipal contribution by the executive director of the public
employees retirement association and, if made during the month
of January, shall be payable without any interest, or if made
after January 31, but before the next following December 31,
shall be payable with interest for the period since January 1 at
a rate which is equal to the preretirement interest rate
assumption specified in section 356.215, subdivision 4d,
applicable to the fund expressed as a monthly rate and
compounded on a monthly basis or if made after December 31 of
the year in which the additional municipal contribution is due
shall be payable with interest at a rate which is four percent
greater than the highest interest rate assumption specified in
section 356.215, subdivision 4d, expressed as a monthly rate and
compounded monthly from January 1 of the year in which the
additional municipal contribution is due until the date on which
payment is made.
Sec. 13. Minnesota Statutes 1998, section 353A.09, is
amended by adding a subdivision to read:
Subd. 5a. [AUTHORITY TO MODIFY CONTRIBUTION RATES.] (a)
Notwithstanding subdivisions 4 and 5, a municipality associated
with a consolidation account, with municipal governing body
approval, may implement the contribution rates specified in
section 353.65, subdivisions 2 and 3, rather than the rates
specified in subdivisions 4 and 5.
(b) If the contribution rates specified in section 353.65,
subdivisions 2 and 3, are subsequently modified, the applicable
municipal governing body must approve that subsequent
modification.
(c) The municipal governing body approval must be in the
form of a municipal resolution. The municipal resolution must
specify the effective date for the contribution rate
modification. The municipal resolution must be filed with the
executive director of the public employees retirement
association, the state auditor, the secretary of state, and the
executive director of the legislative commission on pensions and
retirement.
Sec. 14. Minnesota Statutes 1998, section 356.215,
subdivision 4g, is amended to read:
Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] (a) In addition to
the exhibit indicating the level normal cost, the actuarial
valuation must contain an exhibit indicating the additional
annual contribution sufficient to amortize the unfunded
actuarial accrued liability. For funds governed by chapters 3A,
352, 352B, 352C, 353, 354, 354A, and 490, 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. For funds governed by chapter
3A, sections 352.90 through 352.951, chapters 352B, 352C,
sections 353.63 through 353.68, and chapters 353C, 354A, and
490, the level percent additional contribution must be
calculated assuming annual payroll growth of 6.5 percent. For
funds governed by sections 352.01 through 352.86 and chapter
354, the level percent additional contribution must be
calculated assuming an annual payroll growth of five percent.
For the fund governed by sections 353.01 through 353.46, the
level percent additional contribution must be calculated
assuming an annual payroll growth of six percent. For all other
funds, the additional annual contribution must be calculated on
a level annual dollar amount basis.
(b) For any fund other than the Minneapolis employees
retirement fund, after the first actuarial valuation date
occurring after June 1, 1989, 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 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 for
the first actuarial valuation made after June 1, 1989, and each
successive actuarial valuation is the first actuarial valuation
date occurring after June 1, 2020.
(c) For any fund or plan other than the Minneapolis
employees retirement fund, after the first actuarial valuation
date occurring after June 1, 1989, 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
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 interest
assumption specified in subdivision 4d 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 interest assumption specified in subdivision 4d 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 interest assumption specified in subdivision 4d 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 Minneapolis employees retirement fund, the
established date for full funding is June 30, 2020.
(e) For the following 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 in the
following manner:
(1) the public employees retirement association police and
fire plan, the valuation assets in excess of the actuarial
accrued liability serve to reduce 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; and
(2) the correctional employees retirement plan of the
Minnesota state retirement system, and the state patrol
retirement plan, an excess of valuation assets over actuarial
accrued liability must be amortized in the same manner over the
same period as an unfunded actuarial accrued liability but must
serve to reduce the required contribution instead of increasing
it.
Sec. 15. Minnesota Statutes 1998, section 423A.02,
subdivision 1b, is amended to read:
Subd. 1b. [ADDITIONAL AMORTIZATION STATE AID.] (a)
Annually, on October 1, the commissioner of revenue shall
allocate the additional amortization state aid transferred under
section 69.021, subdivision 11, to:
(1) all police or salaried firefighter relief associations
governed by and in full compliance with the requirements of
section 69.77, that had an unfunded actuarial accrued liability
in the actuarial valuation prepared under sections 356.215 and
356.216 as of the preceding December 31; and
(2) all local police or salaried firefighter consolidation
accounts governed by chapter 353A that are certified by the
executive director of the public employees retirement
association as having for the current fiscal year an additional
municipal contribution amount under section 353A.09, subdivision
5, paragraph (b), and that have implemented section 353A.083,
subdivision 1, if the effective date of the consolidation
preceded May 24, 1993, and that have implemented section
353A.083, subdivision 2, if the effective date of the
consolidation preceded June 1, 1995.; and
(3) the public employees police and fire fund on behalf of
municipalities that received amortization aid in 1999 and are
required to make an additional municipal contribution under
section 353.665, subdivision 8, for the duration of the required
additional contribution.
(b) The commissioner shall allocate the state aid on the
basis of the proportional share of the relief association or
consolidation account of the total unfunded actuarial accrued
liability of all recipient relief associations and consolidation
accounts as of December 31, 1993, for relief associations, and
as of June 30, 1994, for consolidation accounts.
(c) Beginning October 1, 2000, and annually thereafter, the
commissioner shall allocate the state aid on the basis of 64.5
percent to the public employees police and fire fund or local
consolidation account, whichever applies, on behalf of
municipalities to which section 353.665, subdivision 8,
paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply
for distribution in accordance with paragraph (b) and subject to
the limitation in subdivision 4, 34.2 percent to the city of
Minneapolis to fund any unfunded actuarial accrued liability in
the actuarial valuation prepared under sections 356.215 and
356.216 as of the preceding December 31 for the Minneapolis
police relief association or the Minneapolis fire department
relief association, and 1.3 percent to the city of Virginia to
fund any unfunded actuarial accrued liability in the actuarial
valuation prepared under sections 356.215 and 356.216 as of the
preceding December 31 for the Virginia fire department relief
association. In the event that there is no unfunded actuarial
accrued liability in both the Minneapolis police relief
association and the Minneapolis fire department relief
association, the commissioner shall allocate that 34.2 percent
of the aid as follows: 49 percent to the Minneapolis teachers
retirement fund association, provided that, annually, beginning
on July 1, 2005, if a teacher's association five-year average
time-weighted rate of investment return does not equal or exceed
the performance of a composite portfolio assumed passively
managed (indexed) invested ten percent in cash equivalents, 60
percent bonds and similar debt securities, and 30 percent in
domestic stock calculated using the formula under section
11A.04, clause (11), the aid under this section ceases until the
five-year annual rate of return equals or exceeds the
performance of a composite portfolio, 21 percent to the St. Paul
teachers retirement fund association, provided that, annually,
beginning on July 1, 2005, if a teacher's association five-year
average time-weighted rate of investment return does not equal
or exceed the performance of a composite portfolio assumed
passively managed (indexed) invested ten percent in cash
equivalents, 60 percent bonds and similar debt securities, and
30 percent in domestic stock calculated using the formula under
section 11A.04, clause (11), the aid under this section ceases
until the five-year annual rate of return equals or exceeds the
performance of a composite portfolio, and 30 percent as
additional funding to support minimum fire state aid for
volunteer firefighter relief associations, with the allocation
made at the same time and under the same procedures in
subdivision 3. In the event there is no actuarial accrued
unfunded liability in the Virginia fire department relief
association, the commissioner shall allocate that 1.3 percent of
the aid as follows: 49 percent to the Minneapolis teachers
retirement fund association, provided that, annually, beginning
on July 1, 2005, if a teacher's association five-year average
time-weighted rate of investment return does not equal or exceed
the performance of a composite portfolio assumed passively
managed (indexed) invested ten percent in cash equivalents, 60
percent bonds and similar debt securities, and 30 percent in
domestic stock calculated using the formula under section
11A.04, clause (11), the aid under this section ceases until the
five-year annual rate of return equals or exceeds the
performance of a composite portfolio, 21 percent to the St. Paul
teachers retirement fund association, provided that, annually,
beginning on July 1, 2005, if a teacher's association five-year
average time-weighted rate of investment return does not equal
or exceed the performance of a composite portfolio assumed
passively managed (indexed) invested ten percent in cash
equivalents, 60 percent bonds and similar debt securities, and
30 percent in domestic stock calculated using the formula under
section 11A.04, clause (11), the aid under this section ceases
until the five-year annual rate of return equals or exceeds the
performance of a composite portfolio, and 30 percent as
additional funding to support minimum fire state aid for
volunteer firefighter relief associations, with the allocation
made at the same time and under the same procedures in
subdivision 3.
(d) Additional amortization state aid payable to the public
employees retirement association on behalf of a municipality
must be credited by the executive director of the public
employees retirement association against any additional
municipal contribution to which the applicable municipality is
obligated to make under section 353A.09, subdivision 5, or under
section 353.665, subdivision 8.
(e) The amounts required under this subdivision are
annually appropriated to the commissioner of revenue.
Sec. 16. Minnesota Statutes 1998, section 423A.02,
subdivision 2, is amended to read:
Subd. 2. [CONTINUED ELIGIBILITY.] A municipality that has
qualified for amortization state aid under subdivision 1 on
December 31, 1984, and has an additional municipal contribution
payable under section 353A.09, subdivision 5, paragraph (b), as
of the most recent December 31, continues upon application to be
entitled to receive amortization state aid under subdivision 1
and supplementary amortization state aid under subdivision 1a,
after the local police or salaried firefighters' relief
association has been consolidated into the public employees
police and fire fund. If a municipality loses entitlement for
amortization state aid and supplementary amortization state aid
in any year because of not having an additional municipal
contribution under section 353A.09, subdivision 5, paragraph
(b), the municipality is not entitled to the aid amounts in any
subsequent year. If the actuarial assumptions specified in
section 356.215 are changed in 1997, and the change results in a
municipality having an additional municipal contribution, and
the municipality had previously lost entitlement for
amortization aid and supplementary amortization due to not
having an additional municipal contribution, then the
municipality is again entitled to receive amortization aid and
supplementary amortization aid in the same amount as it
previously received. A municipality that received amortization
aid in 1999 and is required to make an additional municipal
contribution under section 353.665, subdivision 8, continues to
qualify for the amortization state aid and the supplemental
amortization aid until December 31, 2009.
Sec. 17. Minnesota Statutes 1998, section 423A.02, is
amended by adding a subdivision to read:
Subd. 4. [LIMIT ON CERTAIN TOTAL AID AMOUNTS.] (a) The
total of amortization aid, supplemental amortization aid, and
additional amortization aid under this section payable to the
executive director of the public employees retirement
association on behalf of a municipality to which section
353.665, subdivision 8, paragraph (b), applies, may not exceed
the amount of the additional municipal contribution payable by
an individual municipality under section 353.665, subdivision 8,
paragraph (b).
(b) Any aid amount in excess of the limit under this
subdivision for an individual municipality must be redistributed
to the other municipalities to which section 353.665,
subdivision 8, paragraph (b), applies. The excess aid must be
distributed in proportion to each municipality's additional
municipal contribution under section 353.665, subdivision 8,
paragraph (b).
(c) When the total aid for each municipality under this
section equals the limit under paragraph (a), any aid in excess
of the limit must be redistributed under subdivisions 1, 1a, and
1b.
Sec. 18. Minnesota Statutes 1998, section 423A.02, is
amended by adding a subdivision to read:
Subd. 5. [TERMINATION OF STATE AID PROGRAMS.] The
amortization state aid, supplemental amortization state aid, and
additional amortization state aid programs terminate when the
assets of the Minneapolis teachers retirement fund association
equal the actuarial accrued liability of that plan and when the
assets of the St. Paul teachers retirement fund association
equal the actuarial accrued liability of that plan.
Sec. 19. [1999 PERA-P&F ACTUARIAL VALUATION.]
(a) As of July 1, 1999, no actuarial valuations are
required of the local police and fire consolidation accounts
which were in existence before March 1, 1999, and have not been
retained under Minnesota Statutes, section 353.655, subdivision
1, paragraph (b).
(b) The actuary retained by the legislative commission on
pensions and retirement shall prepare all calculations required
under Minnesota Statutes, section 353.665, and shall present
them to the commission in a separate report.
(c) The calculated actuarial accrued liability of the
public employees police and fire plan for July 1, 1999, must
contain all liabilities associated with the former local police
and fire consolidation accounts affected by Minnesota Statutes,
section 353.665.
(d) The asset value of the public employees police and fire
plan for July 1, 1999, is the sum of the following:
(1) the current assets of the public employees police and
fire plan as of June 30, 1999, without reference to any local
consolidation accounts in existence on March 1, 1999;
(2) the amount of assets transferred from the Minnesota
postretirement investment fund with respect to local
consolidation accounts under Minnesota Statutes, section
353.655, subdivision 3;
(3) that portion of the market value of assets of the local
consolidation accounts affected by Minnesota Statutes, section
353.665, and not retained under Minnesota Statutes, section
353.665, subdivision 1, paragraph (b), after subtracting the
amount in clause (2) determined by multiplying the total by the
ratio that the current asset value of public employee police and
fire fund assets other than the participation in the Minnesota
postretirement investment fund as of June 30, 1999, without
reference to any local consolidation accounts in existence on
March 1, 1999, bears to the market value of the same assets; and
(4) a receivable amount equal to the present value of the
future additional municipal contributions required under
Minnesota Statutes, section 353.655, subdivision 8, paragraph
(b).
Sec. 20. [REPEALER.]
Minnesota Statutes 1998, section 353.65, subdivision 3a, is
repealed.
Sec. 21. [EFFECTIVE DATE.]
Sections 1 to 7, 10, 11, 12, 13, and 15 to 20 are effective
on the day following final enactment. Sections 8 and 9 are
effective on the first day of the first full pay period that
begins after June 30, 1999. Section 14 is effective on July 1,
2000.
ARTICLE 5
MINIMUM VOLUNTEER FIREFIGHTER
STATE AID AMOUNT CHANGES
Section 1. Minnesota Statutes 1998, section 69.021,
subdivision 7, is amended to read:
Subd. 7. [APPORTIONMENT OF FIRE STATE AID TO
MUNICIPALITIES AND RELIEF ASSOCIATIONS.] (a) The commissioner
shall apportion the fire state aid relative to the premiums
reported on the Minnesota Firetown Premium Reports filed under
this chapter to each municipality and/or firefighters' relief
association.
(b) The commissioner shall calculate an initial fire state
aid allocation amount for each municipality or fire department
under paragraph (c) and a minimum fire state aid allocation
amount for each municipality or fire department under paragraph
(d). The municipality or fire department must receive the
larger fire state aid amount.
(c) The initial fire state aid allocation amount is the
amount available for apportionment as fire state aid under
subdivision 5, without inclusion of any additional funding
amount to support a minimum fire state aid amount under section
423A.02, subdivision 3, allocated one-half in proportion to the
population as shown in the last official statewide federal
census for each fire town and one-half in proportion to the
market value of each fire town, including (1) the market value
of tax exempt property and (2) the market value of natural
resources lands receiving in lieu payments under sections
477A.11 to 477A.14, but excluding the market value of minerals.
In the case of incorporated or municipal fire departments
furnishing fire protection to other cities, towns, or townships
as evidenced by valid fire service contracts filed with the
commissioner, the distribution must be adjusted proportionately
to take into consideration the crossover fire protection
service. Necessary adjustments shall be made to subsequent
apportionments. In the case of municipalities or independent
fire departments qualifying for the aid, the commissioner shall
calculate the state aid for the municipality or relief
association on the basis of the population and the market value
of the area furnished fire protection service by the fire
department as evidenced by duly executed and valid fire service
agreements filed with the commissioner. If one or more fire
departments are furnishing contracted fire service to a city,
town, or township, only the population and market value of the
area served by each fire department may be considered in
calculating the state aid and the fire departments furnishing
service shall enter into an agreement apportioning among
themselves the percent of the population and the market value of
each service area. The agreement must be in writing and must be
filed with the commissioner.
(d) The minimum fire state aid allocation amount is the
amount in addition to the initial fire state allocation amount
that is derived from any additional funding amount to support a
minimum fire state aid amount under section 423A.02, subdivision
3, and allocated to municipalities with volunteer firefighter
relief associations based on the number of active volunteer
firefighters who are members of the relief association as
reported in the annual financial reporting for the calendar year
1993 to the office of the state auditor, but not to exceed 30
active volunteer firefighters, so that all municipalities or
fire departments with volunteer firefighter relief associations
receive in total at least a minimum fire state aid amount per
1993 active volunteer firefighter to a maximum of 30
firefighters. If a relief association did not exist in calendar
year 1993, the number of active volunteer firefighters who are
members of the relief association as reported in the annual
financial reporting for calendar year 1998 to the office of the
state auditor, but not to exceed 30 active volunteer
firefighters, shall be used in this determination.
(e) The fire state aid must be paid to the treasurer of the
municipality where the fire department is located and the
treasurer of the municipality shall, within 30 days of receipt
of the fire state aid, transmit the aid to the relief
association if the relief association has filed a financial
report with the treasurer of the municipality and has met all
other statutory provisions pertaining to the aid apportionment.
(f) The commissioner may make rules to permit the
administration of the provisions of this section. Any
adjustments needed to correct prior misallocations must be made
to subsequent apportionments.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day following final enactment
and applies to the first fire state aid and minimum fire state
aid allocation occurring after that date.
ARTICLE 6
MINNEAPOLIS POLICE AND FIRE DEPARTMENT
RELIEF ASSOCIATIONS GOVERNANCE
CHANGES
Section 1. Minnesota Statutes 1998, section 423B.07, is
amended to read:
423B.07 [AUTHORIZED FUND DISBURSEMENTS.]
The police pension fund may be used only for the payment of:
(1) service, disability, or dependency pensions;
(2) notwithstanding a contrary provision of section 69.80,
the salary of the secretary of the association in an amount not
to exceed 30 percent of the base salary of a first grade patrol
officer, the salary of the president of the association in an
amount not to exceed ten percent of the base salary of a first
grade patrol officer, and the salaries of the other elected
members of the board of trustees in an amount not to exceed
three units;
(3) expenses of officers and employees of the association
in connection with the protection of the fund;
(4) expenses of operating and maintaining the association,
including the administrative expenses related to the
administration of the insurance plan authorized in section
423B.08; and
(5) other expenses authorized by section 69.80, or other
applicable law.
Sec. 2. [CONTINUATION OF BOARD.]
Notwithstanding Minnesota Statutes, section 423A.01,
subdivision 2, or any other law to the contrary, the board of
trustees of the Minneapolis firefighters relief association
shall continue to govern the association until there are fewer
than 100 benefit recipients of the relief association pension
fund. The special fund thereafter must become a trust fund in
accordance with Minnesota Statutes, section 423A.01, subdivision
2.
Sec. 3. [EFFECTIVE DATE.]
(a) Section 1 is effective on December 31, 1999.
(b) Section 2 is effective on the day following approval by
the Minneapolis city council and compliance with Minnesota
Statutes, section 645.021, subdivision 3.
ARTICLE 7
METROPOLITAN COUNCIL TARGETED
EARLY RETIREMENT INCENTIVE
Section 1. [RETIREMENT INCENTIVE.]
The metropolitan council may offer its eligible employees,
as specified in sections 2 and 3, the retirement incentive
provided in section 4.
Sec. 2. [INCLUSION.]
If the metropolitan council chooses to offer the retirement
incentive under section 4, it must designate the positions or
group of positions within the council divisions specified in
section 3, clause (1), that will qualify for participation in
its retirement incentive program and may exclude otherwise
eligible employees. After initially designating the qualified
positions or group of positions, the council may at any time
modify its designation in order to further limit the qualified
positions or group of positions.
Sec. 3. [ELIGIBILITY.]
An employee of the metropolitan council is eligible to
participate in the retirement incentive program if the employee:
(1) was employed in the environmental services, community
development, or regional administration divisions of the council
on January 1, 1999;
(2) on or after the effective date of this article notifies
the council's regional administrator in writing of the
employee's intention to retire, the plan or plans from which the
individual will retire, and the employee's date of separation
from employment with the council;
(3) is, on the date the council receives the employee's
written notice of intention to retire, within the positions or
group of positions then currently designated by the council
under section 2;
(4) on the date of retirement has at least 25 years of
combined allowable service in any covered fund or funds listed
in Minnesota Statutes, section 356.30, subdivision 3;
(5) on the date of retirement is at least 55 years of age;
(6) upon retirement is immediately eligible for a
retirement annuity from a defined benefit plan listed in
Minnesota Statutes, section 356.30, subdivision 3; and
(7) has a retirement annuity accrual date in the applicable
plan or plans on or after July 1, 1999, and before July 1, 2000.
Sec. 4. [RETIREMENT INCENTIVE.]
Subdivision 1. [FORMULA INCREASE.] For an eligible
employee who elects to participate in the retirement incentive
program, the benefit accrual rate multiplier percentage or
percentages used to calculate the retirement annuity from each
defined benefit plan listed in Minnesota Statutes, section
356.30, subdivision 3, from which the employee is eligible to
receive a retirement annuity must be increased by .25 percentage
point for each year of allowable service, and pro rata for
completed months less than a full year, in the applicable plan
or plans. If the eligible employee has more than 30 years of
combined service in covered plans, the .25 percentage point
increase applies only to the first 30 years of allowable service
in such covered funds.
Subd. 2. [CERTIFICATION OF ELIGIBILITY.] Before applying
the formula increase in subdivision 1, the applicable retirement
plan or plans must receive a certification from the council's
regional administrator that the employee meets the eligibility
criteria in clauses (1), (2), and (3) of section 3.
Subd. 3. [PAYMENT OF ENHANCED RETIREMENT COST.] (a) If the
metropolitan council chooses to offer a retirement incentive
under this section, it must make an additional employer
contribution or contributions as specified in paragraph (b) to
the applicable retirement plan or plans from which the eligible
individual retired under the incentive program.
(b) The additional employer contribution for the applicable
employee to each applicable plan is an amount equal to the
difference in the actuarial present value of the annuity payable
by the plan for the employee, with and without the retirement
incentive under subdivision 1. The actuarial present value
calculations must be made by the chief administrative officer of
the applicable retirement plan.
(c) An additional employer contribution under paragraph (b)
must be paid within 60 days from the effective date of the
applicable annuity for the eligible employee who elects to
participate in the retirement incentive.
Sec. 5. [LIMIT ON REHIRING AND FUTURE SERVICES.]
The metropolitan council may not rehire or contract for
services from a former employee who retires with an early
retirement incentive under this article.
Sec. 6. [APPLICATION OF OTHER LAWS.]
Unilateral implementation of retirement incentives under
this article by the metropolitan council is not an unfair labor
practice for purposes of Minnesota Statutes, chapter 179A.
Sec. 7. [EFFECTIVE DATE.]
Sections 1 to 6 are effective on the day following final
enactment.
ARTICLE 8
VARIOUS SMALL GROUP PENSION CHANGES
Section 1. Minnesota Statutes 1998, section 354.66,
subdivision 5, is amended to read:
Subd. 5. [OTHER MEMBERSHIP PRECLUDED.] A teacher entitled
to full accrual of allowable service credit and employee
contributions for part time teaching service pursuant to this
section shall not be entitled during the same period of time to
be a member of, accrue allowable service credit in or make
employee contributions to any other Minnesota public employee
pension plan, except the plan established in chapter 3A, the
plan established in chapter 352D if the teacher also is a
legislator, or a volunteer firefighters' relief association
governed by sections 69.771 to 69.776.
Sec. 2. [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; PURCHASE
OF SERVICE CREDIT BY RUSH CITY SCHOOL DISTRICT EMPLOYEE.]
(a) Notwithstanding Minnesota Statutes, section 353.01,
subdivision 16, or any other law to the contrary, an eligible
person described in paragraph (b) may purchase service credit in
the public employees retirement association for the period
described in paragraph (c).
(b) An eligible person is a person who:
(1) was born on October 28, 1948;
(2) was first employed by the Rush City school district in
September 1968;
(3) has received service credit from the public employees
retirement association for a period of leave for military
service from April 1969 through March 1970; and
(4) has not received service credit from the public
employees retirement association for a period of leave for
military service from April 1970 through March 1971.
(c) The period for service credit purchase is the
uncredited portion of the period from April 1970 through March
1971.
(d) An eligible person may purchase service credit under
this section by making the payment determined under Minnesota
Statutes, section 356.55, for the period in paragraph (c).
(e) The person who desires to purchase service credit under
this section must apply with the executive director to make the
purchase. The application must include all necessary
documentation of the person's qualifications to make the
purchase, signed written permission to allow the executive
director to request and receive necessary verification of
applicable facts and eligibility requirements, and any other
relevant information that the executive director may require.
(f) Service credit for the purchase period must be granted
by the public employees retirement association to the purchaser
on receipt of the purchase payment amount.
Sec. 3. [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF
SERVICE CREDIT BY SCHOOL DISTRICT NO. 786 TEACHER FOR UNCREDITED
LEAVE.]
(a) An eligible teacher as defined in paragraph (b) is
entitled to purchase allowable and formula service credit from
the teachers retirement association for an uncredited leave
during the 1996-1997 school year under terms specified in
paragraph (c).
(b) An eligible teacher is a person who:
(1) was born on November 14, 1944;
(2) became a member of the teachers retirement association
on September 29, 1972;
(3) is employed by independent school district No. 786
(Bertha-Hewitt); and
(4) failed to obtain one year of service credit due to the
classification of a 1996-1997 school year leave as an "other"
leave rather than an extended leave.
(c) Notwithstanding Minnesota Statutes, section 356.55,
subdivision 5, the eligible person may pay, before January 1,
2000, or the date of retirement, whichever is earlier, an amount
equal to the employee contribution rate or rates in effect
during the leave period specified in paragraph (b) applied to
the actual salary rate or rates in effect during that period,
plus any applicable employer contributions the employee agreed
to pay under an agreement with independent school district No.
786 (Bertha-Hewitt), plus annual compound interest at the rate
of 8.5 percent from June 30, 1997, to the date on which the
payment is actually made. Independent school district No. 786
(Bertha-Hewitt) must pay the remaining balance of the prior
service credit purchase payment amount calculated under
Minnesota Statutes, section 356.55, within 30 days of the
payment by the eligible person. The executive director of the
teachers retirement association must notify the superintendent
of independent school district No. 786 (Bertha-Hewitt) of its
payment amount and payment due date if the eligible person makes
the required payment.
(d) If independent school district No. 786 (Bertha-Hewitt)
fails to pay its portion of the required prior service credit
purchase payment amount, the executive director may notify the
commissioner of finance of that fact and the commissioner of
finance may order that the required employer payment be deducted
from the next subsequent payment or payments of state education
aid to the school district and be transmitted to the teachers
retirement association.
(e) An eligible teacher must provide any relevant
documentation required by the executive director to determine
eligibility for the prior service credit under this section.
(f) Service credit for the purchase period must be granted
by the teachers retirement association to the account of the
eligible teacher upon receipt of the purchase payment amount
specified in paragraph (c).
Sec. 4. [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF
UNREQUESTED LEAVE PERIOD BY VIRGINIA TEACHER.]
(a) A qualified teacher described in paragraph (b) is
entitled to purchase one year of allowable and formula service
credit from the teachers retirement association for a one-year
portion of the period of unrequested leave from teaching service
specified in paragraph (b), clause (5), upon the payment of the
purchase price specified in paragraph (c).
(b) A qualified teacher is a person who:
(1) was born in 1943;
(2) is a current member of the teachers retirement
association;
(3) initially was employed as a teacher in 1966 by the
Alexandria school district;
(4) was subsequently employed as an industrial arts teacher
at the Virginia high school by the Virginia school district; and
(5) was placed on unrequested leave by the Virginia school
district for the 1983-1984 and 1984-1985 school years.
(c) The purchase payment amount must be determined as
provided in Minnesota Statutes, section 356.55.
(d) Payment of the prior service credit purchase amount
must be made by January 1, 2000.
Sec. 5. [PURCHASE OF SERVICE CREDIT; PRIOR SAINT PAUL
BUREAU OF HEALTH EMPLOYEE.]
(a) An eligible person, as described in paragraph (b), is
entitled to purchase coordinated service credit in the public
employees retirement association general plan for the period of
employment described in paragraph (b), clause (2), by making
payment as specified in paragraph (c).
(b) An eligible person is a person who:
(1) was born on May 22, 1932;
(2) was employed by the St. Paul Bureau of Health from
March 17, 1958, to September 21, 1962, was covered by the St.
Paul bureau of health relief association as a result of that
employment, and who forfeited all service credit in that relief
association upon leaving that employment; and
(3) later became a coordinated member of the general plan
of the public employees retirement association and currently is
a coordinated member of that plan.
(c) An eligible person described in paragraph (b) may
purchase service credit from the public employees retirement
association by paying the amount specified in Minnesota
Statutes, section 356.55, prior to termination of public
employees retirement association covered employment or prior to
July 1, 2000, whichever is earlier. If the city of St. Paul
agrees to make a payment under Minnesota Statutes, section
356.55, subdivision 5, an eligible person must make the employee
payments prior to termination of public employees retirement
association covered employment or prior to July 1, 2000,
whichever is earlier. If the employee payment is made in a
timely fashion, the city payment must be remitted 60 days
thereafter.
(d) An eligible person must provide any relevant
documentation required by the executive director to determine
eligibility for the prior service credit under this section.
(e) Service credit for the purchase period must be granted
by the public employees retirement association to the account of
the eligible person upon receipt of the purchase payment amount
specified in paragraph (c).
Sec. 6. [INDEPENDENT SCHOOL DISTRICT NO. 276, MINNETONKA,
TEACHER; PRIOR SERVICE CREDIT PURCHASE.]
(a) Notwithstanding Minnesota Statutes, section 354.095, an
eligible person described in paragraph (b) is entitled to
purchase allowable and formula service credit in the teachers
retirement association for the period described in paragraph (c)
by paying the amount specified in Minnesota Statutes, section
356.55, subdivision 2.
(b) An eligible person is a person who:
(1) was on medical leave for a period that includes the
1994-1995 and the 1995-1996 school years;
(2) was employed by independent school district No. 276,
Minnetonka, during the period that the medical leave was taken;
and
(3) due to the failure of independent school district No.
276, Minnetonka, to file certain papers with the teachers
retirement association was not able to obtain service credit for
the 1994-1995 and 1995-1996 school year portions of the medical
leave.
(c) The period for service credit purchase is the 1994-1995
and 1995-1996 school years.
(d) Notwithstanding Minnesota Statutes, section 356.55,
subdivision 5, the eligible person must pay, on or before
September 1, 1999, an amount equal to the employee, employer,
and employer additional contribution rates in effect during the
prior service period applied to the actual salary rates in
effect during the prior service period, plus annual compound
interest at the rate of 8.5 percent from the date on which the
contributions would have been made if made contemporaneous with
the service period to the date on which the payment is actually
made. Independent school district No. 276, Minnetonka, must pay
one-half of the remaining balance of the prior service credit
purchase payment amount calculated under Minnesota Statutes,
section 356.55, within 30 days of the payment by the eligible
person. Recognizing that the teachers retirement association
failed to provide adequate information on the opportunity of the
eligible person to make timely payments for the 1995-1996 school
year following receipt of the medical leave of absence forms on
August 16, 1996, the teachers retirement association is
responsible for one-half of the remaining balance of the prior
service credit purchase payment amount calculated under
Minnesota Statutes, section 356.55. The executive director of
the teachers retirement association must notify the
superintendent of independent school district No. 276,
Minnetonka, of its payment amount and payment due date if the
eligible person makes the required payment.
(e) If independent school district No. 276, Minnetonka,
fails to pay its portion of the required prior service credit
purchase payment amount, the executive director may notify the
commissioner of finance of that fact and the commissioner of
finance may order that the required school district payment be
deducted from the next subsequent payment or payments of state
education aid to the school district and be transmitted to the
teachers retirement association.
Sec. 7. [HOPKINS SCHOOL DISTRICT; REPAYMENT OF INTEREST
CHARGE ON CERTAIN MEMBER CONTRIBUTION SHORTAGE PAYMENTS.]
(a) Independent school district No. 270, Hopkins, shall pay
the amount of $1,004.08, plus compound interest on the amount at
the annual rate of six percent from June 1, 1997, to the date of
payment, to an eligible person described in paragraph (b) to
compensate the person for a past overcharge in a member
contribution shortage payment. The shortage was caused by the
failure of the school district to make the required member
contribution deductions during the 1968-1969 school year and the
overpayment was caused by the failure of the teachers retirement
association to notify the eligible person in a timely fashion of
the shortage.
(b) An eligible person is a person who:
(1) was employed by independent school district No. 270,
Hopkins, during the 1968-1969 school year and suffered an under
deduction by the school district of $114.66;
(2) took a member contribution refund in the early 1970's
and repaid the refund in November 1974; and
(3) had an appeal denied by the teachers retirement
association board of trustees at a May 8, 1998, hearing,
reflected in a May 21, 1998, findings and final order.
(c) The payment must be made within 30 days of the
effective date of this section. If independent school district
No. 270, Hopkins, fails to make a timely payment of its
obligation, the teachers retirement association must make the
payment and may notify the commissioner of finance of the school
district's failure to pay. In that event, the commissioner of
finance may order that the required school district payment be
deducted from the next subsequent payment of state education aid
to the school district and transmitted to the teachers
retirement association.
Sec. 8. [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF
SERVICE CREDIT FOR CERTAIN SABBATICAL LEAVES.]
(a) Notwithstanding any provision of Minnesota Statutes,
chapter 354, to the contrary, an eligible teacher as defined in
paragraph (b) is entitled to purchase allowable and formula
service credit from the teachers retirement association for the
uncredited portion of a sabbatical leave during the 1976-1977
school year under paragraph (c).
(b) An eligible teacher is a person who was born on
September 10, 1942, became a member of the teachers retirement
association on October 31, 1968, is employed by independent
school district No. 16, Spring Lake Park, and will qualify for
an early normal retirement annuity under the "rule of 90" on
September 16, 2000.
(c) Notwithstanding Minnesota Statutes, section 356.55,
subdivision 5, the eligible person may pay, before January 1,
2000, or the date of retirement, whichever is earlier, an amount
equal to the employee contribution rate or rates in effect
during the prior service period applied to the actual salary
rates in effect during the prior service period, plus annual
compound interest at the rate of 8.5 percent from the date on
which the contributions would have been made if made
contemporaneous with the service period to the date on which the
payment is actually made. Independent school district No. 16,
Spring Lake Park, must pay the balance of the prior service
credit purchase payment amount calculated under Minnesota
Statutes, section 356.55, within 30 days of the payment by the
eligible person. The executive director of the teachers
retirement association must notify the superintendent of
independent school district No. 16, Spring Lake Park, of its
payment amount and payment due date if the eligible person makes
the required payment.
(d) If independent school district No. 16, Spring Lake
Park, fails to pay its portion of the required prior service
credit purchase payment amount, the executive director may
notify the commissioner of finance of that fact and the
commissioner of finance may order that the required employer
payment be deducted from the next subsequent payment or payments
of state education aid to the school district and be transmitted
to the teachers retirement association.
(e) An eligible teacher must provide any relevant
documentation required by the executive director to determine
eligibility for the prior service credit under this section.
(f) Service credit for the purchase period must be granted
by the teachers retirement association to the account of the
eligible teacher upon receipt of the purchase payment amount
specified in paragraph (c).
Sec. 9. [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; STATE
BOARD OF PUBLIC DEFENSE EMPLOYEE PRIOR SERVICE CREDIT PURCHASE.]
(a) An eligible person described in paragraph (b) is
entitled to purchase service credit from the public employees
retirement association for the period of omitted deductions
December 19, 1992, through December 27, 1994.
(b) An eligible person for purposes of paragraph (a) is a
person who:
(1) was born on August 17, 1950;
(2) was employed through Winona county until 1992;
(3) is currently employed by the state board of public
defense in the third judicial district public defender's office;
and
(4) had omitted member contributions for public employment
during the period December 19, 1992, through December 27, 1994.
(c) The prior service credit purchase payment amount is
governed by Minnesota Statutes, section 356.55. Authority to
purchase the service credit expires on July 1, 2000.
(d) Notwithstanding Minnesota Statutes, section 356.55,
subdivision 5, the eligible person must pay, on or before
September 1, 1999, an amount equal to the employee contribution
rate in effect during the prior service period applied to the
actual salary rates in effect during the prior service period,
plus annual compound interest at the rate of 8.5 percent from
the date on which the contributions would have been made if made
contemporaneous with the service period to the date on which the
payment is actually made. The state board of public defense
must pay the balance of the prior service credit purchase
payment amount calculated under Minnesota Statutes, section
356.55, within 30 days of the payment by the eligible person.
(e) A person purchasing service credit under this section
must provide sufficient documentation of eligibility to the
executive director of the public employees retirement
association.
Sec. 10. [TRA; PURCHASE OF SERVICE CREDIT FOR FINAL
PORTION OF EXTENDED LEAVE OF ABSENCE BY ANOKA-HENNEPIN TEACHER.]
(a) An eligible person, as described in paragraph (b), is
entitled to purchase allowable and formula service credit in the
teachers retirement association for the period specified in
paragraph (c) by making the payment specified in Minnesota
Statutes, section 356.55.
(b) An eligible person is a person who:
(1) was born February 1, 1943;
(2) was initially employed as a teacher by the Richfield
school district in 1966;
(3) is currently employed as an elementary school principal
by independent school district No. 11 (Anoka-Hennepin); and
(4) was on an extended leave of absence from June 29, 1984,
to June 28, 1989, but failed to obtain service credit for the
final two years of the leave.
(c) The prior service credit purchase period is July 1,
1987, through June 28, 1989.
Sec. 11. [EFFECTIVE DATE.]
Section 1 is effective on January 2, 2001. Sections 2 to
10 are effective on the day following final enactment.
ARTICLE 9
MISCELLANEOUS PENSION CHANGES
Section 1. Minnesota Statutes 1998, section 3A.02,
subdivision 1b, is amended to read:
Subd. 1b. [REDUCED RETIREMENT ALLOWANCE.] (a) Upon
separation from service after the beginning of the 1981
legislative session, a former member of the legislature who has
attained the age of at least 60 years set by the board of
directors of the Minnesota state retirement system and who is
otherwise qualified in accordance with subdivision 1 is entitled
upon making written application on forms supplied by the
director to a retirement allowance in an amount equal to the
retirement allowance specified in subdivision 1 reduced so that
the reduced annuity is the actuarial equivalent of the annuity
that would be payable if the former member of the legislature
deferred receipt of the annuity and the annuity amount were
augmented at an annual rate of three percent compounded annually
from the date the annuity begins to accrue until age 62.
(b) The age set by the board of directors under paragraph
(a) cannot be less than the early retirement age under section
352.116, subdivision 1a.
(c) If there is an actuarial cost to the plan of resetting
the early retirement age under paragraph (a), the retired
legislator is required to pay an additional amount to cover the
full actuarial value. The additional amount must be paid in a
lump sum within 30 days of the certification of the amount by
the executive director.
(d) The executive director of the Minnesota state
retirement system shall report to the legislative commission on
pensions and retirement on the utilization of this provision on
or before September 1, 2000.
Sec. 2. Minnesota Statutes 1998, section 122A.46,
subdivision 2, is amended to read:
Subd. 2. [LEAVE OF ABSENCE.] The board of any district may
grant an extended leave of absence without salary to any full-
or part-time elementary or secondary teacher who has been
employed by the district for at least five years and has at
least ten years of allowable service, as defined in section
354.05, subdivision 13, or the bylaws of the appropriate
retirement association or ten years of full-time teaching
service in Minnesota public elementary and secondary schools.
The maximum duration of an extended leave of absence pursuant to
under this section must be determined by mutual agreement of the
board and the teacher at the time the leave is granted and shall
be at least three but no more than five years. An extended
leave of absence pursuant to under this section shall be taken
by mutual consent of the board and the teacher. If the school
board denies a teacher's request, it must provide reasonable
justification for the denial.
Sec. 3. Minnesota Statutes 1998, section 352.03,
subdivision 1, is amended to read:
Subdivision 1. [MEMBERSHIP OF BOARD; ELECTION; TERM.] The
policy-making function of the system is vested in a board of 11
members, who must be known as the board of directors. This
board shall consist of three members appointed by the governor,
one of whom must be a constitutional officer or appointed state
official and two of whom must be public members knowledgeable in
pension matters, four state employees elected by state employees
covered by the system excluding employees in categories
specifically authorized to designate or elect a member by this
subdivision, one employee of the transit operating division of
the metropolitan council's transit commission operations or its
successor agency designated by the executive committee of the
labor organization that is the exclusive bargaining agent
representing employees of the transit division, one member of
the state patrol retirement fund elected by members of that fund
at a time and in a manner fixed by the board, one employee
covered by the correctional employees plan elected by employees
covered by that plan, and one retired employee elected by
disabled and retired employees of all plans administered by the
system at a time and in a manner to be fixed by the board. Two
state employee members, whose terms of office begin on the first
Monday in May after their election, must be elected biennially.
Elected members and the appointed member of the metropolitan
council's office of transit operations hold office for a term of
four years, except the retired member whose term is two years,
and until their successors are elected or appointed, and have
qualified. An employee of the system is not eligible for
membership on the board of directors. A state employee on leave
of absence is not eligible for election or reelection to
membership on the board of directors. The term of any board
member who is on leave for more than six months automatically
ends on expiration of this period the term of office.
Sec. 4. Minnesota Statutes 1998, section 354.05,
subdivision 40, is amended to read:
Subd. 40. [TIMELY RECEIPT.] An application, payment,
return, claim, or other document that is not personally
delivered to the association on or before the applicable due
date is considered to be a timely receipt if officially
postmarked received on or before the due date or if delivered or
filed under section 645.151.
Sec. 5. Minnesota Statutes 1998, section 354.06,
subdivision 1, is amended to read:
Subdivision 1. The management of the association is vested
in a board of eight trustees known as the board of trustees of
the teachers retirement association. It is composed of the
following persons: the commissioner of children, families, and
learning, the commissioner of finance, a representative of the
Minnesota school boards association, four members of the
association elected by the members of the association, and one
retiree elected by the retirees of the association. The five
elected members of the board of trustees must be chosen by mail
ballot in a manner fixed by the board of trustees of the
association. In every odd-numbered year there shall be elected
two members of the association to the board of trustees for
terms of four years commencing on the first of July next
succeeding their election. In every other odd-numbered year one
retiree of the association must be elected to the board of
trustees for a term of two four years commencing on the first of
July next succeeding the election. The filing of candidacy for
a retiree election must include a petition of endorsement signed
by at least ten retirees of the association. Each election must
be completed by June first of each succeeding odd-numbered
year. In the case of elective members, any vacancy must be
filled by appointment by the remainder of the board, and the
appointee shall serve until the members or retirees of the
association at the next regular election have elected a trustee
to serve for the unexpired term caused by the vacancy. No
member or retiree may be appointed by the board, or elected by
the members of the association as a trustee, if the person is
not a member or retiree of the association in good standing at
the time of the appointment or election.
Sec. 6. Minnesota Statutes 1998, section 354.10,
subdivision 4, is amended to read:
Subd. 4. [CHANGES IN DESIGNATED BENEFICIARIES.] Any
beneficiary designated by a retiree or member under section
354.05, subdivision 22, may be changed or revoked by the retiree
or member on a form provided by the executive director. A
change or revocation made under this subdivision is valid only
if the properly completed form is received by the association
postmarked on or before the date of death of the retiree or the
member. If a designated beneficiary dies before the retiree or
member designating the beneficiary, and a new beneficiary is not
designated, the retiree's or member's estate is the beneficiary.
Sec. 7. Minnesota Statutes 1998, section 354C.11, is
amended to read:
354C.11 [COVERAGE.]
Subdivision 1. [AUTHORIZATION.] Personnel Individuals
employed by the board of trustees of the Minnesota state
colleges and universities who are in the unclassified service of
the state, and who have completed at least two years of
employment by the board or a predecessor board with a full-time
contract are participants authorized to participate in the
supplemental retirement plan, effective on the next following
July 1, if the person is employed in an eligible after meeting
eligibility requirements specified in subdivision 2.
Subd. 2. [ELIGIBILITY.] (a) An individual must participate
in the supplemental retirement plan if the individual is
employed by the board of trustees in the unclassified service of
the state and has completed at least two years with a full time
contract of applicable unclassified employment with the board or
an applicable predecessor board in any of the positions
specified in paragraph (b).
(b) Eligible positions or employment classifications are:
(1) an unclassified administrative position as defined in
section 354B.20, subdivision 6, or is employed in;
(2) an employment classification included in one of the
following collective bargaining units under section 179A.10,
subdivision 2:
(1) (i) the state university instructional unit;
(2) (ii) the community college instructional unit;
(3) (iii) the technical college instructional unit; and
(4) (iv) the state university administrative unit; or
(3) an unclassified employee of the board included in the
general professional unit or supervisory employees unit under
section 179A.10, subdivision 2.
Subd. 3. [CONTINUING ELIGIBILITY AUTHORIZATION.] Once a
person qualifies for participation in the
supplemental retirement plan, all subsequent service by the
person as an unclassified employee of the state university
board, the state board for community colleges, the higher
education board, or the technical colleges board of trustees in
a position or employment classification listed in subdivision 2,
paragraph (b), is covered by the supplemental retirement plan.
Sec. 8. [EFFECTIVE DATE.]
Sections 1 and 3 to 7 are effective on the day following
final enactment. Section 2 is effective on July 1, 1999.
ARTICLE 10
INCLUSION OF SUPPLEMENTAL NEEDS TRUSTS
AS OPTIONAL ANNUITY FORM RECIPIENTS
Section 1. [356.372] [SUPPLEMENTAL NEEDS TRUST AS OPTIONAL
ANNUITY FORM RECIPIENT.]
Subdivision 1. [INCLUSION AS RECIPIENT.] Notwithstanding
any provision to the contrary of the laws, articles of
incorporation, or bylaws governing a covered retirement plan
specified in subdivision 3, a retiring member may designate a
qualified supplemental needs trust under subdivision 2 as the
remainder recipient on an optional retirement annuity form for a
period not to exceed the lifetime of the beneficiary of the
supplemental needs trust.
Subd. 2. [QUALIFIED SUPPLEMENTAL NEEDS TRUST.] A qualified
supplemental needs trust is a trust that:
(1) was established on or after July 1, 1992;
(2) was established solely for the benefit of one person
who has a disability under federal Social Security
Administration supplemental security income or retirement,
survivors, and disability insurance disability determination
standards and who was determined as such before the creation of
the trust;
(3) is funded, in whole or in part, by the primary
recipient of the optional annuity form and, unless the trust is
a Zebley trust, is not funded by the beneficiary, the
beneficiary's spouse, or a person who is required to pay a sum
to or for the trust beneficiary under the terms of litigation or
a litigation settlement;
(4) is established to cover reasonable living expenses and
other basic needs of the disabilitant, in whole or in part, in
instances when public assistance does not provide sufficiently
for these needs;
(5) is not permitted to make disbursement to replace or
reduce public assistance otherwise available;
(6) is irrevocable;
(7) terminates upon the death of the disabled person for
whose benefit it was established; and
(8) is determined by the executive director to be a trust
that contains excluded assets for purposes of the qualification
for public entitlement benefits under the applicable federal and
state laws and regulations.
Subd. 3. [COVERED RETIREMENT PLAN.] The provisions of this
section apply to the following retirement plans:
(1) general state employees retirement plan of the
Minnesota state retirement system, established under chapter
352;
(2) correctional employees retirement plan of the Minnesota
state retirement system, established under chapter 352;
(3) state patrol retirement plan, established under chapter
352B;
(4) legislators retirement plan, established under chapter
3A;
(5) judges retirement plan, established under chapter 490;
(6) public employees retirement plan, established under
chapter 353;
(7) public employees police and fire plan, established
under chapter 353;
(8) teachers retirement plan, established under chapter
354;
(9) Duluth teachers retirement fund association,
established under chapter 354A;
(10) St. Paul teachers retirement fund association,
established under chapter 354A;
(11) Minneapolis teachers retirement fund association,
established under chapter 354A;
(12) Minneapolis employees retirement plan, established
under chapter 422A;
(13) Minneapolis firefighters relief association,
established under chapter 69;
(14) Minneapolis police relief association, established
under chapter 423B; and
(15) public employees local government correctional service
retirement plan, established under chapter 353E.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day following final enactment.
ARTICLE 11
VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES
Section 1. [REPEALER.]
Minnesota Statutes 1998, section 424A.02, subdivision 5, is
repealed.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective July 1, 1999.
ARTICLE 12
ANNUITY LIMITS
Section 1. Minnesota Statutes 1998, section 356.61, is
amended to read:
356.61 [LIMITATION ON PUBLIC EMPLOYEE RETIREMENT
ANNUITIES.]
Notwithstanding any provision of law, bylaws, articles of
incorporation, retirement and disability allowance plan
agreements or retirement plan contracts to the contrary, no
person who has pension or retirement coverage by a public
pension plan is entitled to receive a monthly retirement annuity
or disability benefit which, at the time of commencement of the
retirement annuity or disability benefit, exceeds 1/12 of the
amount of the annual benefit permitted by the terms of section
415 of the Internal Revenue Code with respect to a participant
in a plan qualified under section 401(a) of the Internal Revenue
Code, as amended through December 31, 1982.
The benefit limitation is to be determined on the date the
benefit is initially payable or on the date the employee
terminated employment, if earlier. The benefit limitation on
any date is the benefit limitation for the limitation year in
which the date occurs. The limitations apply only to the annual
benefit which is derived from employer contributions. Mandatory
and voluntary employee contributions, if any, are treated as a
separate defined contribution plan maintained by the employer
which is subject to the limitations placed on annual additions
to defined contribution plans.
The maximum annual benefit for any limitation year is the
lesser of (1) or (2) below:
(1) A dollar limitation of $90,000, adjusted as of January
1 of each calendar year to the dollar limitation as determined
for that year by the commissioner of Internal Revenue. The
amount determined for any year will apply to limitation years
ending with or within that calendar year.
(2) A compensation limitation of 100 percent of the average
of compensation paid or made available to the participant by the
employer during those three consecutive calendar years of
employment, or actual number of consecutive calendar years of
employment if employed less than three consecutive years, which
give the highest average. Compensation means any compensation
which is includable in the employee's gross income, plus any
elective deferral as defined in section 402(g)(3) of the federal
Internal Revenue Code of 1986, as amended through May 15, 1999,
and any amount which was contributed or deferred by the employer
at the election of the employee and which is not includable in
the gross income of the employee by reason of section 125 or 457
of the federal Internal Revenue Code.
A benefit is deemed not to exceed the maximum benefit
limitation if:
(1) the retirement benefits payable under the plan and
under any other defined benefit plans of the employer do not
exceed the $10,000 limit set in section 415(b)(4) of the
Internal Revenue Code for the plan year, or for any prior plan
year, and
(2) the employer has not at any time maintained a defined
contribution plan in which the employee participated.
A public pension plan is any Minnesota public pension plan
or fund which provides pension or retirement coverage for public
employees other than volunteer firefighters, including any plan
or fund enumerated in sections 356.20, subdivision 2, or 356.30,
subdivision 3, any local police or firefighter's relief
association to which section 69.77 applies, or any retirement or
pension plan or fund, including a supplemental retirement plan
or fund, established, maintained or supported by any
governmental subdivision or public body whose revenues are
derived from taxation, fees, assessments or from other public
sources.
The figure for the monthly retirement annuity or disability
benefit to be used for the calculation of this limitation must
not include any reduction or adjustment required for retirement
prior to the normal retirement age or required for the election
of an optional annuity.
If the figure for the monthly retirement annuity or
disability benefit exceeds the limit contained in this section,
the annuity or benefit payable must be reduced appropriately.
The managing board of each public pension plan from which a
retirement annuity or disability benefit is payable shall, at
the time that the retirement annuity or disability benefit
commences, contact all other public pension plans to determine
whether or not the recipient of the retirement annuity or
disability benefit is also receiving or is entitled to receive a
retirement annuity or disability benefit from any other public
pension plan. If a person is entitled to receive or is
receiving a retirement annuity or disability benefit from more
than one public pension plan, all retirement annuities or
disability benefits from all public pension plans must be
totaled in determining whether or not the limitation applies. A
reduction in the amount of the retirement annuity or disability
benefit required under this section is made by the public
pension plan which provided retirement coverage for the most
recent period of service.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
ARTICLE 13
CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES
Section 1. Minnesota Statutes 1998, section 352.90, is
amended to read:
352.90 [POLICY.]
It is the policy of the legislature to provide special
retirement benefits and contributions for certain correctional
employees who may be required to retire at an early age because
they lose the mental or physical capacity required to maintain
the safety, security, discipline, and custody of inmates at
state correctional facilities or of patients at the Minnesota
security hospital or at the Minnesota sexual psychopathic
personality treatment center or of patients in the Minnesota
extended treatment options on-campus program at the Cambridge
regional human services center.
Sec. 2. Minnesota Statutes 1998, section 352.91, is
amended by adding a subdivision to read:
Subd. 3e. [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM;
CAMBRIDGE.] "Covered correctional service" means service by a
state employee in one of the following employment positions with
the Minnesota extended treatment options on-campus program at
the Cambridge regional human services center if at least 75
percent of the employee's working time is spent in direct
contact with patients who are in the Minnesota extended
treatment options program and if service in such a position is
certified to the executive director by the commissioner of human
services, unless the person elects to retain current retirement
coverage under section 6:
(1) behavior analyst I;
(2) human services support specialist;
(3) mental retardation residential program lead;
(4) psychologist 2;
(5) recreation program assistant;
(6) recreation therapist senior;
(7) registered nurse senior;
(8) skills development specialist; and
(9) social worker senior.
Sec. 3. Minnesota Statutes 1998, section 352.92,
subdivision 1, is amended to read:
Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] Employee
contributions of covered correctional employees must be in an
amount equal to 5.50 5.69 percent of salary.
Sec. 4. Minnesota Statutes 1998, section 352.92,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYER CONTRIBUTIONS.] The employer shall
contribute for covered correctional employees an amount equal to
7.70 7.98 percent of salary.
Sec. 5. Minnesota Statutes 1998, section 352.93,
subdivision 2a, is amended to read:
Subd. 2a. [EARLY RETIREMENT.] Any covered correctional
employee, or former employee if service ended after June 30,
1989, who becomes at least 50 years old and who has at least
three years of allowable service is entitled upon application to
a reduced retirement annuity equal to the annuity calculated
under subdivision 2, reduced so that the reduced annuity is the
actuarial equivalent of the annuity that would be payable if the
employee deferred receipt of the annuity from the day the
annuity begins to accrue to age 55 by two-tenths of one percent
for each month that the correctional employee is under age 55 at
the time of retirement.
Sec. 6. [TEMPORARY PROVISION; ELECTION TO RETAIN
RETIREMENT COVERAGE.]
(a) An employee in a position specified as qualifying under
section 2 may elect to retain coverage under the general
employees retirement plan of the Minnesota state retirement
system or may elect to transfer coverage and contribute to the
correctional employees retirement plan. An employee electing to
participate in the correctional employees retirement plan shall
begin making contributions to the correctional plan beginning
the first full pay period after July 1, 1999, or the first full
pay period following filing of their election to transfer
coverage to the correctional employees retirement plan,
whichever is later. The election to retain coverage or to
transfer coverage must be made in writing by the person on a
form prescribed by the executive director of the Minnesota state
retirement system and must be filed with the executive director
no later than December 31, 1999.
(b) An employee failing to make an election by December 15,
1999, must be notified by certified mail by the executive
director of the Minnesota state retirement system of the
deadline to make a choice. A person who does not submit an
election form must continue coverage in the general employees
retirement plan and forfeits all rights to transfer retirement
coverage to the correctional employees retirement plan.
(c) The election to retain coverage in the general
employees retirement plan or the election to transfer retirement
coverage to the correctional employees retirement plan is
irrevocable once it is filed with the executive director.
Sec. 7. [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN
PERSONS.]
Subdivision 1. [ELECTION OF PRIOR STATE SERVICE COVERAGE.]
(a) An employee who has future retirement coverage transferred
to the correctional employees retirement plan under section 6,
and who does not elect to retain general state employees
retirement plan coverage, is entitled to elect to obtain prior
service credit for eligible state service performed on or after
July 1, 1997, and before the first day of the first full pay
period beginning after December 31, 1999. All prior service
credit must be purchased.
(b) Eligible state service is any period of service on or
after the date which the employee started employment with the
Minnesota extended treatment options program in a position
specified in Minnesota Statutes, section 352.91, subdivision 3e,
in which at least 75 percent of the employee's working time is
determined to have been spent in direct contact with Minnesota
extended treatment options program patients or July 1, 1997,
whichever is later, and the date the employee joined the
correctional employees plan.
(c) The department of human services shall certify eligible
state service to the executive director of the Minnesota
retirement system.
Subd. 2. [PAYMENT FOR PRIOR SERVICE.] (a) An employee
electing to obtain prior service credit under subdivision 1 must
pay an additional employee contribution for that prior service.
The additional member contribution is the contribution
differential percentage applied to the actual salary paid to the
employee during the period of the prior eligible state service,
plus interest at the rate of six percent per annum, compounded
annually. The contribution differential percentage is the
difference between 5.5 percent of salary and the applicable
employee contribution rate of the general state employees
retirement plan during the prior eligible state service.
(b) The additional member contribution must be paid only in
a lump sum. Payment must accompany the election to obtain prior
service credit. No election or payment may be made by the
person or accepted by the executive director after June 30, 2001.
Subd. 3. [TRANSFER OF ASSETS.] Assets must be transferred
from the general state employees retirement plan to the
correctional employees retirement plan in an amount equal to the
present value of benefits earned under the general employees
retirement plan for each employee transferring to the
correctional employees retirement plan, as determined by the
actuary retained by the legislative commission on pensions and
retirement in accordance with Minnesota Statutes, section
356.215, multiplied by the accrued liability funding ratio of
active members as derived from the most recent actuarial
valuation prepared by the commission-retained actuary. The
transfer of assets must be made within 45 days after the
employee elects to transfer coverage to the correctional
employees retirement plan.
Subd. 4. [EFFECT OF THE ASSET TRANSFER.] Upon the transfer
of assets in subdivision 3, service credit in the general state
employees plan of the Minnesota state retirement system is
forfeited and may not be reinstated. The service credit and
transferred assets must be credited to the correctional
employees retirement plan.
Subd. 5. [COUNSELING.] (a) The commissioners of human
services and employee relations, and the executive director of
the Minnesota state retirement system have the joint
responsibility of providing affected employees with appropriate
and timely retirement and related benefit counseling.
(b) Counseling must include the anticipated impact of the
retirement coverage change on the person's future retirement
benefit amounts, future retirement eligibility, future
applicability of mandatory retirement laws, and future
postemployment insurance coverage.
(c) The commissioner of human services must consult with
the appropriate collective bargaining agents of the affected
employees regarding the content, form, and timing of the
counseling required by this section.
Sec. 8. [TRANSITIONAL PROVISION; RETENTION OF CERTAIN
RIGHTS.]
(a) Nothing in sections 1, 2, and 6 to 9 may be considered
to restrict the entitlement of a person under state law to repay
a previously taken refund of employee or member contributions to
a Minnesota public pension plan if all qualifying requirements
are met.
(b) The period of correctional employees retirement plan
contributions, plus interest, must be restored upon the
repayment of the appropriate refund amount if the service was
correctional employees retirement plan covered service on the
date when the service was rendered or on the date when the
refund was taken.
Sec. 9. [EARLY RETIREMENT INCENTIVE.]
This section applies to an employee who has future
retirement coverage transferred to the correctional employee
retirement plan under section 6 and who is at least 55 years old
on the effective date of section 6. That employee may
participate in a health insurance early retirement incentive
available under the terms of a collective bargaining agreement,
notwithstanding any provision of the collective bargaining
agreement that limits participation to persons who select the
option during the payroll period in which they become 55 years
old. A person selecting the health insurance early retirement
incentive under this section must retire by the later of
December 31, 2000, or within the pay period following the time
at which the person has at least three years of covered
correctional service, including any purchased service credit.
An employee meeting this criteria who wishes to extend the
person's employment must do so under Minnesota Statutes, section
43A.34, subdivision 3.
Sec. 10. [EFFECTIVE DATE.]
Sections 1, 2, 3, 4, and 6 to 9 are effective on the first
day of the first full pay period beginning after July 1, 1999.
Section 5 is effective July 1, 1999.
ARTICLE 14
PUBLIC SAFETY EMPLOYEE PENSION
PLAN CHANGES
Section 1. Minnesota Statutes 1998, section 352B.08,
subdivision 2a, is amended to read:
Subd. 2a. [EARLY RETIREMENT.] Any member who has become at
least 50 years old and who has at least three years of allowable
service is entitled upon application to a reduced retirement
annuity equal to the annuity calculated under subdivision 2,
reduced by two-tenths one-tenth of one percent for each month
that the member is under age 55 at the time of retirement.
Sec. 2. Minnesota Statutes 1998, section 353.64,
subdivision 1, is amended to read:
Subdivision 1. [POLICE AND FIRE FUND MEMBERSHIP.] (a) A
person who prior to July 1, 1961, was a member of the police and
fire fund, by virtue of being a police officer or firefighter,
shall, as long as the person remains in either position,
continue membership in the fund.
(b) A person who was employed by a governmental subdivision
as a police officer and was a member of the police and fire fund
on July 1, 1978, by virtue of being a police officer as defined
by this section on that date, and if employed by the same
governmental subdivision in a position in the same department in
which the person was employed on that date, shall continue
membership in continues to be a member of the fund, whether or
not that person has the power of arrest by warrant and is
licensed by the peace officers standards and training board
after that date. A person who was employed as a correctional
officer by Rice county before July 1, 1998, for the duration of
employment in the correctional position held on July 1, 1998,
continues to be a member of the public employees police and fire
plan, whether or not the person has the power of arrest by
warrant and is licensed by the peace officers standards and
training board after that date.
(c) A person who was employed by a governmental subdivision
as a police officer or a firefighter, whichever applies, was an
active member of the local police or salaried firefighters
relief association located in that governmental subdivision by
virtue of that employment as of the effective date of the
consolidation as authorized by sections 353A.01 to 353A.10, and
has elected coverage by the public employees police and fire
fund benefit plan, shall become a member of the police and fire
fund after that date if employed by the same governmental
subdivision in a position in the same department in which the
person was employed on that date.
(d) Any other employee serving on a full-time basis as a
police officer as defined in subdivision 2 or as a firefighter
as defined in subdivision 3 on or after July 1, 1961, shall
become a member of the public employees police and fire fund.
(e) An employee serving on less than a full-time basis as a
police officer shall become a member of the public employees
police and fire fund only after a resolution stating that the
employee should be covered by the police and fire fund is
adopted by the governing body of the governmental subdivision
employing the person declaring that the position which the
person holds is that of a police officer.
(f) An employee serving on less than a full-time basis as a
firefighter shall become a member of the public employees police
and fire fund only after a resolution stating that the employee
should be covered by the police and fire fund is adopted by the
governing body of the governmental subdivision employing the
person declaring that the position which the person holds is
that of a firefighter.
(g) A police officer or firefighter employed by a
governmental subdivision who by virtue of that employment is
required by law to be a member of and to contribute to any
police or firefighter relief association governed by section
69.77 which has not consolidated with the public employees
police and fire fund and any police officer or firefighter of a
relief association that has consolidated with the association
for which the employee has not elected coverage by the public
employees police and fire fund benefit plan as provided in
sections 353A.01 to 353A.10 shall not become a member of the
public employees police and fire fund.
Sec. 3. Minnesota Statutes 1998, section 353.651,
subdivision 4, is amended to read:
Subd. 4. [EARLY RETIREMENT.] Any police officer or
firefighter member who has become at least 50 years old and who
has at least three years of allowable service is entitled upon
application to a retirement annuity equal to the normal annuity
calculated under subdivision 3, reduced by two-tenths one-tenth
of one percent for each month that the member is under age 55 at
the time of retirement.
Sec. 4. [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN
CERTAIN INSTANCES.]
(a) If a public employee continues in retirement plan
coverage by the public employees police and fire retirement plan
by virtue of this article and subsequently is covered by the
federal old age, survivors, and disability insurance program for
service as a Rice county correctional officer, the retirement
annuity of the person under section 353.651 or the disability
benefit of the person under section 353.656 must be reduced
dollar for dollar for the social security benefit that the
person is entitled to receive by virtue of Rice county
correctional service rendered after the effective date of
section 1.
(b) To be effective, the retirement annuity or disability
benefit application form for a Rice county correctional employee
must include signed written permission by the person for the
public employees retirement association to obtain the necessary
information from the federal old age, survivors, and disability
insurance program to implement the offset provision in paragraph
(a).
Sec. 5. [353.88] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS
AND CERTIFICATION FAILURES.]
(a) If the board of trustees of the public employees
retirement association, upon the recommendation of the executive
director, determines that a governmental subdivision has
certified a public employee for membership in the public
employees police and fire retirement plan when the public
employee was not eligible for that retirement plan coverage, the
public employee must be covered by the correct retirement plan
for subsequent service, the public employee retains the coverage
for the period of the misclassification, and the governmental
subdivision shall pay in a lump sum the difference in the
actuarial present value of the retirement annuities to which the
public employee would have been entitled if the public employee
was properly classified. The governmental subdivision payment
is payable within 30 days of the board's determination. If
unpaid, it must be collected under section 353.28. The lump sum
payment must be deposited in the public employees retirement
fund.
(b) If the executive director of the public employees
retirement association determines that a governmental
subdivision has failed to certify a person for retirement plan
membership and coverage under this chapter, in addition to the
procedures under section 353.27, subdivision 4, 9, 10, 11, 12,
12a, or 12b, the director shall charge a fine of $25 for each
membership certification failure.
Sec. 6. Minnesota Statutes 1998, section 353A.083, is
amended by adding a subdivision to read:
Subd. 4. [PRE-1999 CONSOLIDATIONS.] For any consolidation
account in effect on July 1, 1999, the public employees police
and fire fund benefit plan applicable to consolidation account
members who have elected or will elect that benefit plan
coverage under section 353A.08 is the most recent change adopted
by the applicable municipality under subdivision 1, 2, or 3,
unless the applicable municipality approves the extension of the
post-June 30, 1999, public employees police and fire fund
benefit plan to the consolidation account.
Sec. 7. [COLLECTION OF POLICE STATE OVERPAYMENTS.]
(a) As police state aid that was received by Rice county on
account of correctional officers who were improperly included in
retirement coverage by the public employees police and fire
plan, the total of the following amounts must be deducted in 20
equal annual installments from any police state aid payable to
Rice county under Minnesota Statutes, chapter 69:
amount year
$11,543 1994
19,096 1995
39,111 1996
19,170 1997
13,764 1998.
(b) Rice county correctional officers who are members of
the public employees police and fire plan may not be included in
the police officer certification under Minnesota Statutes,
section 69.011, subdivision 2, paragraph (b), and the employer
contributions to the public employees police and fire fund on
behalf of those correctional employees may not be included in
the employer police retirement coverage prior calendar year
obligation for the determination of excess police state aid
under Minnesota Statutes, section 69.021, subdivision 10, unless
the correctional officer is a peace officer as defined in
Minnesota Statutes, section 69.011, subdivision 1, paragraph (g).
Sec. 8. [EFFECTIVE DATE.]
(a) Sections 1, 3, and 7 are effective on July 1, 1999.
Sections 2, 4, and 6 are effective on the day following final
enactment. Section 5 is effective on August 1, 2000.
(b) If all consolidation accounts in effect on March 1,
1999, are merged with the public employees police and fire fund
after July 1, 1999, section 6 is repealed as of June 30, 1999.
ARTICLE 15
SPECIAL RETIREMENT COVERAGE
FOR CERTAIN STATE FIRE
MARSHAL EMPLOYEES
Section 1. [352.87] [STATE FIRE MARSHAL DIVISION
EMPLOYEES.]
Subdivision 1. [ELIGIBILITY.] A member of the general plan
who is employed by the department of public safety, state fire
marshal division, as a deputy state fire marshal, fire/arson
investigator, who elects special benefit coverage under
subdivision 8, is entitled to retirement benefits or disability
benefits, as applicable, as stated in this section for eligible
service under this section rendered after July 1, 1999, for
which allowable service credit is received. The covered member
must be at least age 55 to qualify for the retirement annuity
specified in subdivision 3.
Subd. 2. [RETIREMENT ANNUITY ELIGIBILITY.] A person
specified in subdivision 1 who meets all eligibility
requirements specified in this chapter applicable to general
plan members is eligible for retirement benefits as specified in
subdivision 3.
Subd. 3. [RETIREMENT ANNUITY FORMULA.] A person specified
in subdivision 1 will have a retirement annuity applicable for
allowable service credit under this section calculated by
multiplying the employee's average salary, as defined in section
352.115, subdivision 2, by the percent specified in section
356.19, subdivision 2a, for each year or portions of a year of
allowable service credit. No reduction for retirement prior to
normal retirement age, as specified in section 352.01,
subdivision 25, applies to service to which this section applies.
Subd. 4. [NON-JOB-RELATED DISABILITY BENEFITS.] An
eligible member described in subdivision 1, who is less than 55
years of age and who becomes disabled and physically or mentally
unfit to perform the duties of the position because of sickness
or injury while not engaged in covered employment, is entitled
to a disability benefit amount equivalent to an annuity computed
under subdivision 3 assuming the member has 15 years of service
qualifying under this section and waiving the minimum age
requirement. If the eligible member becomes disabled under this
subdivision with more than 15 years of service covered under
this section, the eligible member is entitled to a disability
benefit amount equivalent to an annuity computed under
subdivision 3 based on all years of service credited under this
section and waiving the minimum age requirement.
Subd. 5. [JOB-RELATED DISABILITY BENEFITS.] An eligible
member defined in subdivision 1, who is less than 55 years of
age and who becomes disabled and physically or mentally unfit to
perform the duties of the position because of sickness or injury
while engaged in covered employment, is entitled to a disability
benefit amount equivalent to an annuity computed under
subdivision 3 assuming the member has 20 years of service
qualifying under this section and waiving the minimum age
requirement. An eligible member who becomes disabled under this
subdivision with more than 20 years of service credited under
this section is entitled to a disability benefit amount
equivalent to an annuity computed under subdivision 3 based on
all years of service credited under this section and waiving the
age requirement.
Subd. 6. [DISABILITY BENEFIT COORDINATION.] If the
eligible employee is entitled to receive a disability benefit as
provided in subdivision 4 or 5 and has allowable service credit
under this section for less service than the length of service
upon which the disability benefit in subdivision 4 or 5 is
based, and also has allowable service in the general plan not
includable in this section, the employee is entitled to a
disability benefit or deferred retirement annuity based on the
general plan service not includable in this section only for the
service that, when combined with the service includable in this
section, exceeds the number of years on which the disability
benefit provided in subdivision 4 or 5 is based. The benefit
recipient under subdivision 4 or 5 who also has credit for
regular plan service must in all respects qualify under section
352.113 to be entitled to receive a disability benefit based on
the general plan service not includable in this section, except
that the service may be combined to satisfy length of service
requirements. Any deferred annuity to which the employee may be
entitled based on general plan service not includable in this
section must be augmented as provided in section 352.72,
subdivision 2, while the employee is receiving a disability
benefit under this section.
Subd. 7. [ADDITIONAL CONTRIBUTIONS.] The special
retirement annuity and disability coverage under this section
must be financed by an employee contribution of 2.78 percent of
covered salary and an employer contribution of 4.20 percent of
covered salary. These contributions are in addition to the
contributions required by section 352.04, subdivisions 2 and 3,
and must be made in the manner provided for in section 352.04,
subdivisions 4, 5, and 6.
Subd. 8. [ELECTION OF COVERAGE.] To be covered by this
section, an employee of the department of public safety
described in subdivision 1 who is employed in a position
described in that subdivision on or after July 1, 1999, must
file a notice with the executive director of the Minnesota state
retirement system on a form prescribed by the executive director
stating whether or not the employee elects to be covered by this
section. Notice must be filed by September 1, 1999, or within
90 days of employment, whichever is later. Elections are
irrevocable during any period of covered employment. A failure
to file a timely notice shall be deemed a waiver of coverage by
this section.
Sec. 2. Minnesota Statutes 1998, section 356.19, is
amended by adding a subdivision to read:
Subd. 2a. [COORDINATED MEMBERS.] The applicable benefit
accrual rate is 2.0 percent.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective the day following final
enactment.
ARTICLE 16
TEACHER RETIREMENT PLANS
PRIOR SERVICE CREDIT PURCHASE
AUTHORIZATION
Section 1. [354.533] [PRIOR OR UNCREDITED MILITARY SERVICE
CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement association and who performed
service in the United States armed forces before becoming a
teacher as defined in section 354.05, subdivision 2, or who
failed to obtain service credit for a military leave of absence
under the provisions of section 354.53, is entitled to purchase
allowable and formula service credit for the initial period of
enlistment, induction, or call to active duty without any
voluntary extension by making payment under section 356.55
provided the teacher is not entitled to receive a current or
deferred retirement annuity from a United States armed forces
pension plan and has not purchased service credit from any other
defined benefit public employee pension plan for the same period
of service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula
service credit for the purchase period must be granted by the
teachers retirement association to the purchasing teacher upon
receipt of the purchase payment amount. Payment must be made
before the teacher's effective date of retirement.
Sec. 2. [354.534] [PRIOR OUT-OF-STATE TEACHING SERVICE
CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement association is entitled to purchase
up to ten years of allowable and formula service credit for
out-of-state teaching service by making payment under section
356.55, provided the out-of-state teaching service was performed
for an educational institution established and operated by
another state, governmental subdivision of another state, or the
federal government and the teacher is not entitled to receive a
current or deferred age and service retirement annuity or
disability benefit and has not purchased service credit from
another defined benefit public employee pension plan for that
out-of-state teaching service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula
service credit for the purchase period must be granted by the
teachers retirement association to the purchasing teacher on
receipt of the purchase payment amount.
Sec. 3. [354.535] [MATERNITY LEAVE OF ABSENCE AND BREAK IN
SERVICE PURCHASES.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement association and who was granted a
maternity leave of absence by a school district or other
employing unit covered by the teachers retirement association
for which the teacher did not previously receive allowable and
formula service credit, or who had a maternity break in teaching
service for which the teacher did not receive or purchase
service credit from another defined benefit public employee
pension plan is entitled to purchase the actual period of the
leave or of the break in teaching service, up to five years, of
allowable and formula service credit for applicable maternity
leaves of absence or applicable maternity break in teaching
service periods by making payment under section 356.55.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula
service credit for the purchase period must be granted by the
teachers retirement association to the purchasing teacher on
receipt of the purchase payment amount.
Sec. 4. [354.536] [PRIVATE OR PAROCHIAL TEACHING SERVICE
CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement association is entitled to purchase
up to ten years of allowable and formula service credit for
private or parochial school teaching service by making payment
under section 356.55, provided that the teacher is not entitled
to receive a current or deferred age and service retirement
annuity or disability benefit from the applicable
employer-sponsored pension plan and has not purchased service
credit from the applicable defined benefit employer-sponsored
pension plan for that service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula
service credit for the purchase period must be granted by the
teachers retirement association to the purchasing teacher on
receipt of the purchase payment amount.
Sec. 5. [354.537] [PEACE CORPS OR VISTA SERVICE CREDIT
PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement association is entitled to purchase
up to ten years of allowable and formula service credit for
service rendered in the federal peace corps program or in the
federal volunteers in service to America program by making
payment under section 356.55, provided that the teacher has not
purchased service credit from any defined benefit pension plan
for that service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula
service credit for the purchase period must be granted by the
teachers retirement association to the purchasing teacher on
receipt of the purchase payment amount.
Sec. 6. [354.538] [CHARTER SCHOOL TEACHING SERVICE CREDIT
PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement association is entitled to purchase
up to ten years of allowable and formula service credit for
charter school teaching service by making payment under section
356.55, provided that the teacher is not entitled to receive a
current or deferred age and service retirement annuity or
disability benefit from the applicable employer-sponsored
pension plan and has not purchased service credit from the
applicable defined benefit employer-sponsored pension plan for
that service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable and formula
service credit for the purchase period must be granted by the
teachers retirement association to the purchasing teacher on
receipt of the purchase payment amount.
Sec. 7. [354A.097] [PRIOR OR UNCREDITED MILITARY SERVICE
CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association and who performed
service in the United States armed forces before becoming a
teacher as defined in section 354A.011, subdivision 27, or who
failed to obtain service credit for a military leave of absence
period under section 354A.093, is entitled to purchase allowable
service credit for the initial period of enlistment, induction,
or call to active duty without any voluntary extension by making
payment under section 356.55 provided the teacher is not
entitled to receive a current or deferred retirement annuity
from a United States armed forces pension plan and has not
purchased service credit from another defined benefit public
employee pension plan for the same period of service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director or secretary of the respective
teachers retirement fund association to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director or secretary to
request and receive necessary verification of applicable facts
and eligibility requirements, and any other relevant information
that the executive director or secretary may require. Payment
must be made before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit
for the purchase period must be granted by the applicable
teachers retirement fund association to the purchasing teacher
on receipt of the purchase payment amount.
Sec. 8. [354A.098] [PRIOR OUT-OF-STATE TEACHING SERVICE
CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with one of the retirement fund associations under this chapter
and who rendered out-of-state teaching service for an
educational institution established and operated by another
state, governmental subdivision of another state, or the federal
government, is entitled to purchase up to ten years of allowable
service credit for that out-of-state service by making payment
under section 356.55, provided the teacher is not entitled to
receive a current or deferred age and service retirement annuity
or disability benefit and has not purchased service credit from
another defined benefit public employee pension plan for that
out-of-state teaching service. Payment must be made before the
teacher's effective date of retirement.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director or secretary of the respective
teachers retirement fund association to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director or secretary to
request and receive necessary verification of applicable facts
and eligibility requirements, and any other relevant information
that the executive director or secretary may require.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit
for the purchase period must be granted by the applicable
teachers retirement fund association to the purchasing teacher
on receipt of the purchase payment amount.
Sec. 9. [354A.099] [MATERNITY BREAK IN SERVICE OR LEAVE
SERVICE CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association and who was
granted a maternity leave of absence by a school district or
other employing unit covered by the teachers retirement
association for which the teacher did not previously receive
allowable service credit or who had a maternity break in
teaching service for which the teacher did not receive or
purchase service credit from another defined benefit public
employee pension plan is entitled to purchase the actual period
of the leave or of the break in teaching service, up to five
years, of allowable service credit for applicable maternity
leaves of absence or applicable maternity break in teaching
service periods by making payment under section 356.55.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director or secretary of the respective
retirement fund association to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director or secretary to
request and receive any necessary verification of applicable
facts and eligibility requirements, and any other relevant
information that the executive director or secretary may require.
Payment must be made before the teacher's effective date of
retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit
for the purchase period must be granted by the applicable
teachers retirement fund association to the purchasing teacher
on receipt of the purchase payment amount.
Sec. 10. [354A.101] [PRIVATE OR PAROCHIAL TEACHING SERVICE
CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association is entitled to
purchase up to ten years of allowable service credit for private
or parochial school teaching service by making payment under
section 356.55, provided that the teacher is not entitled to
receive a current or deferred age and service retirement annuity
or disability benefit from the applicable employer-sponsored
pension plan and has not purchased service credit from the
applicable defined benefit employer-sponsored pension plan for
that service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit
for the purchase period must be granted by the teachers
retirement fund association to the purchasing teacher on receipt
of the purchase payment amount.
Sec. 11. [354A.102] [PEACE CORPS OR VISTA SERVICE CREDIT
PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association is entitled to
purchase up to ten years of allowable service credit for service
rendered in the federal Peace Corps program or in the federal
Volunteers in Service to America program by making payment under
section 356.55, provided that the teacher has not purchased
service credit from any defined benefit pension plan for that
service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit
for the purchase period must be granted by the teachers
retirement fund association to the purchasing teacher on receipt
of the purchase payment amount.
Sec. 12. [354A.103] [CHARTER SCHOOL TEACHING SERVICE
CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association is entitled to
purchase up to ten years of allowable service credit for charter
school teaching service by making payment under section 356.55,
provided that the teacher is not entitled to receive a current
or deferred age and service retirement annuity or disability
benefit from the applicable employer-sponsored pension plan and
has not purchased service credit from the applicable defined
benefit employer-sponsored pension plan for that service.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit
for the purchase period must be granted by the teachers
retirement fund association to the purchasing teacher on receipt
of the purchase payment amount.
Sec. 13. [354A.104] [PREVIOUSLY UNCREDITED PART-TIME
TEACHING SERVICE CREDIT PURCHASE.]
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association and who performed
part-time teaching service in the applicable school district and
was not eligible previously for service credit for that service
is entitled to purchase the previously uncredited service by
making payment under section 356.55.
Subd. 2. [APPLICATION AND DOCUMENTATION.] A teacher who
desires to purchase service credit under subdivision 1 must
apply with the executive director to make the purchase. The
application must include all necessary documentation of the
teacher's qualifications to make the purchase, signed written
permission to allow the executive director to request and
receive necessary verification of applicable facts and
eligibility requirements, and any other relevant information
that the executive director may require. Payment must be made
before the teacher's effective date of retirement.
Subd. 3. [SERVICE CREDIT GRANT.] Allowable service credit
for the purchase period must be granted by the teachers
retirement fund association to the purchasing teacher on receipt
of the purchase payment amount.
Sec. 14. Minnesota Statutes 1998, section 356.55,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION.] Unless the prior service
credit purchase authorization special law or general statute
provision explicitly specifies a different purchase payment
amount determination procedure, this section governs the
determination of the prior service credit purchase payment
amount of any prior service credit purchase. The purchase
payment amount determination procedure must recognize any
service credit accrued to the purchaser in a pension plan listed
in section 356.30, subdivision 3. Any service credit in a
Minnesota defined benefit public employee pension plan available
to be reinstated by the purchaser through the repayment of a
refund of member or employee contributions previously received
must be repaid in full before any purchase of prior service
credit payment is made under this section.
Sec. 15. Minnesota Statutes 1998, section 356.55,
subdivision 6, is amended to read:
Subd. 6. [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a)
As part of the regular data reporting to the consulting actuary
retained by the legislative commission on pensions and
retirement annually, the chief administrative officer of each
public pension plan that has accepted a prior service credit
purchase payment under this section shall report for any
purchase, the purchaser, the purchaser's employer, the age of
the purchaser, the period of the purchase, the purchaser's
prepurchase accrued service credit, the purchaser's postpurchase
accrued service credit, the purchaser's prior service credit
payment, the prior service credit payment made by the
purchaser's employer, and the amount of the additional benefit
or annuity purchased.
(b) As part of a supplemental report to the regular annual
actuarial valuation for the applicable public pension plan
prepared by the consulting actuary retained by the legislative
commission on pensions and retirement, there must be an exhibit
comparing a comparison for each purchase showing the total prior
service credit payment received from all sources and the
increased public pension plan actuarial accrued liability
resulting from each purchase.
Sec. 16. [REPEALER.]
Sections 1 to 13 are repealed on May 16, 2002.
Sec. 17. [INSTRUCTION TO REVISOR.]
The revisor of statutes shall replace the current headnote
for Minnesota Statutes, section 354.53, with the headnote
"CREDIT FOR MILITARY SERVICE LEAVE OF ABSENCE."
Sec. 18. [EFFECTIVE DATE.]
(a) This article is effective on May 16, 1999.
(b) A teacher who retires on or before May 16, 1999, is not
eligible to purchase service credit under the provisions of this
article. A teacher who has rendered teaching service after May
16, 1999, and who has filed an application for retirement that
is effective on or before July 1, 1999, may purchase service
credit under this article on or before September 1, 1999,
notwithstanding that the person is not a teacher rendering
active teaching service on the date of the payment. Payment
must be received on or before September 1, 1999. If this
payment is received on or after the effective date of
retirement, the increased benefit resulting from the purchase is
effective on the first day of the month following the month
during which payment is received.
ARTICLE 17
MINNEAPOLIS EMPLOYEES RETIREMENT
PLAN CHANGES
Section 1. Minnesota Statutes 1998, section 422A.06,
subdivision 3, is amended to read:
Subd. 3. [DEPOSIT ACCUMULATION FUND.] The deposit
accumulation fund consists of the assets held in the fund,
increased by including amounts contributed by or for employees,
amounts contributed by the city, amounts contributed by
municipal activities supported in whole or in part by revenues
other than taxes and amounts contributed by any public
corporation, amounts paid by the state, and by income from
investments. There must be paid from the fund the amounts
required to be transferred to the retirement benefit fund, or
the disability benefit fund, refunds of contributions, death
benefits payable on death before retirement that are not payable
from the survivors' benefit fund including the
death-while-active refund specified in section 422A.22,
subdivision 4, postretirement increases in retirement allowances
granted under Laws 1965, chapter 688, or Laws 1969, chapter 859,
and expenses of the administration of the retirement fund which
were not charged by the retirement board against the income of
the retirement benefit fund from investments as the cost of
handling the investments of the retirement benefit fund.
Sec. 2. Minnesota Statutes 1998, section 422A.06,
subdivision 6, is amended to read:
Subd. 6. [SURVIVOR'S BENEFIT FUND.] The survivor's benefit
fund shall consist consists of the amount held for survivor
benefits, increased by contributions for survivor benefits made
by and for employees, including contributions made by the
employer, by any municipal activity supported in whole or in
part by revenue other than taxes or by any public corporation.
A proportionate share of income from investments shall must be
allocated to this fund. There shall be paid from such fund the
Survivor benefits specified in section 422A.23 except that the
refund of net accumulated deductions from the salary of a
contributing member shall upon death in service be paid from the
deposit accumulation fund must be paid from this fund.
Sec. 3. Minnesota Statutes 1998, section 422A.101,
subdivision 4, is amended to read:
Subd. 4. [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN
INSTANCES.] (a) If a participating employing unit, other than
the state, has a negative asset balance in the deposit
accumulation fund, the executive director shall bill the
employing unit for the amount of the deficiency. Any amount
billed must include six percent interest, compounded annually,
for any year or portion of a year from the billing date until
the date of payment.
(b) If assets in the deposit accumulation fund are
insufficient to make a transfer to the retirement benefit fund,
the city of Minneapolis shall pay the amount of that
insufficiency to the retirement benefit fund within three days
of certification of the insufficiency by the executive director
of the fund. The city of Minneapolis may bill any other
participating employing unit other than the state for its
proportion of the amount paid. Any amount billed by the city
under this paragraph must include interest as specified in
paragraph (a).
Sec. 4. Minnesota Statutes 1998, section 422A.18,
subdivision 2, is amended to read:
Subd. 2. [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of
disability allowance under this section shall be the amount of
service allowance to which the employee would be entitled under
section 422A.15, notwithstanding the age requirements expressed
therein; or the lesser of the following amounts: 50 percent of
the final average compensation, or an amount equal to two
percent of final average compensation for each year of allowable
service for the first ten years, and thereafter 2.5 percent of
final average compensation per year of allowable service,
including in the latter assumed service between the date the
disability occurred and the 60th birthday of the employee.
If the amount of annuity (b) Annuities payable from the
Minnesota postretirement investment fund to any class of
annuitants is adjusted pursuant to section 11A.18, the amount of
benefits payable from the disability benefit fund for that class
of annuitants under this section shall also be adjusted at the
same time and rate as retirement annuities in the retirement
benefit fund.
Sec. 5. Minnesota Statutes 1998, section 422A.22,
subdivision 4, is amended to read:
Subd. 4. [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death
of a contributing an active member while still in the service of
the city, and before reaching the compulsory age of
retirement prior to termination of service, there shall be paid
to such person the beneficiary or persons as beneficiaries
designated by the member shall have nominated by written
designation on a form specified by the executive director and
filed with the retirement board, in such form as the retirement
board shall require, the net accumulated amount of employee
deductions from salary, pay, or compensation, including interest
, to the member's credit on date of compounded annually to the
date of the member's death. The amount must not include any
contributions made by the employee or on the employee's behalf,
or any interest or investment earnings on those contributions,
which were allocated to the survivor benefit fund under section
422A.06, subdivision 6.
(b) If the employee fails to make a designation, or if
the person or persons beneficiary or beneficiaries designated by
such the employee predeceases such the employee, the net
accumulated amount of deductions from salary, pay, or
compensation including interest, to the credit of such employee
on date of death shall benefit specified in paragraph (a) must
be paid to such the deceased employee's estate.
(c) A benefit payable under this subdivision is in addition
to any applicable survivor benefit under section 422A.23.
Sec. 6. Minnesota Statutes 1998, section 422A.22,
subdivision 5, is amended to read:
Subd. 5. [REPAYMENT OF REFUND.] Upon reinstatement
reemployment of a former covered employee to the service, in
employment covered by the Minneapolis employees retirement fund,
service credit for such past service or for any part thereof
shall which was forfeited by taking a refund must be granted
reinstated only upon repayment of the amount of the separation
refund, with interest, from the time of separation payment of
the refund until the date repaid.
Sec. 7. Minnesota Statutes 1998, section 422A.23, is
amended to read:
422A.23 [SURVIVOR BENEFITS.]
Subdivision 1. [PAYMENT OF CITY INSTALLMENT ACCUMULATED
AMOUNT.] (a) If a contributing an active or deferred member dies
after having been in the service with ten or more years of
service credit, and before actual retirement, as determined by
the retirement board, the present worth of the city's annual
installments of $60 then to the credit of the contributing
member, shall be paid to a beneficiary designated by such
contributing member in such form as the retirement board shall
require, who shall be the surviving spouse, or surviving child,
or children of such member or, if there be no surviving spouse
or surviving child or children, then to a person actually
dependent on and receiving principal support from such member,
or surviving mother or father, or grandchildren, or surviving
brother or sister, or surviving children of the deceased brother
or sister of such member except as noted in paragraph (d), the
individual specified in paragraph (b) is eligible to receive the
benefit specified in paragraph (c).
(b) An individual eligible for the benefit specified in
paragraph (c) is a beneficiary designated by the member on a
form specified by the executive director. If the beneficiary
designated by the member is not one of the class of persons
named in the preceding sentence, such benefit from the
accumulation of city deposits shall be paid in the following
order: (1) to the surviving spouse, the whole thereof; (2) if
there be no surviving spouse, to the surviving children, share
and share alike; (3) if there be no surviving spouse or child or
children, to the dependent or dependents as those terms are
herein defined, of the member, share and share alike; (4) if
there be no surviving spouse, child or children, or dependents,
to the surviving mother and father, share and share alike; (5)
if there be no surviving mother and father, to the
grandchildren, in equal shares; if there be no grandchildren, to
the surviving brothers and sisters of the member, in equal
shares; (6) if there be no surviving brothers and sisters, to
the surviving children of the deceased brothers and sisters of
the member, in equal shares; or (7) if there is none of the
foregoing persons who survives the member, the accumulation of
the city deposits shall be applied to the funeral expenses of
the member failed to designate a beneficiary, or if the
beneficiary or beneficiaries designated by the employee
predecease the employee, the benefit in paragraph (c) is payable
to the deceased employee's estate.
(c) The benefit is a lump-sum payment of the present value
of the city's or other contributing employer's annual
installments of $60 to the credit of the member.
(d) No benefit is payable under this subdivision if a
monthly survivor benefit is paid on behalf of the deceased
employee under another subdivision of this section.
Subd. 2. [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an
active member dies prior to termination of service with at least
18 months but less than 20 years of service credit, the
surviving spouse or surviving child or children is eligible to
receive the survivor benefit specified in paragraph (b) or (c),
as applicable. Payment of a benefit for any surviving child
under the age of 18 years shall be made to the surviving parent,
or if there be none, to the legal guardian of the surviving
child. For purposes of this subdivision, a surviving child is
an unmarried child of the deceased member under the age of 18,
or under the age of 22 if a full-time student at an accredited
school, college, or university.
(b) If the surviving spouse or surviving child benefit
commenced before July 1, 1983, the surviving spouse benefit is
increased from $500 per month to $750 per month and the
surviving child benefit is $225 per month, beginning with the
first monthly payment payable after May 28, 1998. The sum of
surviving spouse and surviving child benefits payable under this
paragraph shall not exceed $900 per month. The increased cost
resulting from the benefit increases under this paragraph must
be allocated to each employing unit listed in section 422A.101,
subdivisions 1a, 2, and 2a, on the basis of the additional
accrued liability resulting from increased benefits paid to the
survivors of employees from that unit.
(c) If the surviving spouse or surviving child benefit
commences after June 30, 1983, the surviving spouse benefit is
30 percent of the member's average salary in effect over the
last six months of allowable service preceding the month in
which death occurs. The surviving child benefit is ten percent
of the member's average salary in effect over the last six
months of allowable service preceding the month in which death
occurs. The sum of surviving spouse and surviving child
benefits payable under this paragraph shall not exceed 50
percent of the member's average salary in effect over the last
six months of allowable service.
(d) Any surviving child benefit or surviving spouse benefit
computed under paragraph (c) and in effect for the month
immediately prior to May 28, 1998, is increased by 15 percent as
of the first payment on or after May 28, 1998.
(e) Surviving child benefits under this subdivision
terminate when the child no longer meets the definition of
surviving child.
Subd. 5. [ADMINISTRATION.] Benefits herein provided shall
in this section following the death of an active employee or
deferred member, as applicable, commence with on the first day
of the month following the month in which the active employee or
deferred member dies and shall end with the last day of the
month preceding the month in which eligibility
ceases. Eligibility for the benefits herein provided shall be
determined by the retirement board and its determination shall
be final. Each beneficiary or parent or guardian of a dependent
child or legal representative shall furnish such Information as
the board may deem deemed necessary by the executive director to
determine eligibility for the benefits provided by this section,
and must be submitted. Failure to furnish any required
information shall be sufficient grounds for the denial or
discontinuance of benefits. A determination made by the
executive director may be appealed to the retirement board,
whose determination is final. If the surviving spouse of the
deceased active employee or deferred member becomes entitled to
a retirement allowance by reason of membership in this fund, the
surviving spouse shall is authorized to receive the retirement
allowance in addition to the all applicable surviving spouse's
benefit spouse benefits to which the surviving spouse is
entitled as specified in this section and section 422A.22,
subdivision 4, if applicable. The cost of all monthly
survivor's benefits provided in this section shall be is an
obligation of the members and of the city, any of its boards,
departments, commissions or public corporations or other
applicable employing units.
Subd. 6. [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The
retirement board shall create a reserve account for survivor's
benefits from which shall be paid on an actuarial basis all
survivor benefits due and payable. At the end of each fiscal
year, as part of the annual actuarial valuation of the fund
prepared by the commission-retained actuary, a determination of
the normal cost of the benefits payable from the survivor's
benefit account shall be made and the board shall reduce or
increase the employee contribution rate of one-fourth of one
percent if and when it is determined based on the annual
actuarial valuation that the member contribution rate is in
excess of or is less than the amount necessary to pay for 50
percent of the calculated normal cost of the survivor benefits
provided in this section.
Subd. 7. [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR
COVERAGE.] (a) If the contributing active or deferred member
dies after having been in the service of the city 20 or more
years, and before the effective date of retirement, as
determined by the retirement board, the board shall pay with 20
or more years of service credit, a beneficiary as defined in
paragraph (b) is eligible to receive the benefit specified in
paragraph (c).
(b) The beneficiary eligible for a benefit under paragraph
(c) is the surviving spouse of the deceased employee. If there
is no surviving spouse, the beneficiary may be a dependent
surviving child of the member or dependent parent designated by
the employee on a form prescribed by the executive director.
(c) The benefit payable to the beneficiary designated in
paragraph (b) is a monthly allowance for life to the designated
beneficiary of the employee. The monthly allowance herein
provided for shall be is the actuarial equivalent of a single
life service allowance specified in section 422A.15, subdivision
1, which would have been payable to the employee on the date of
death, notwithstanding the age requirement stated in section
422A.15, subdivision 1. For purposes of this section, the
amount of any excess contributions or voluntary additions by the
member shall not be included in the calculations in determining
the monthly allowance.
The survivor allowance under this subdivision shall be
computed and determined under a procedure specified by the
commission-retained actuary utilizing the appropriate mortality
table established by the board of trustees based on the
experience of the fund as recommended by the commission-retained
actuary and using the applicable postretirement interest rate
assumption specified in section 356.215, subdivision 4d.
(d) For benefits payable under this subdivision following
the death of a deferred member, the benefit must be calculated
as of the date of termination from service and increased by five
percent per year until January 1, 1981, and by three percent per
year thereafter, compounded annually.
Subd. 8. [SURVIVING CHILD; DEPENDENT DEFINITION.] The
beneficiary designated by the employee shall be the surviving
spouse of such employee. If there is no surviving spouse, the
designated beneficiary may be a dependent surviving child or
dependent parent of such employee as dependency is defined in
sections 422A.01 to 422A.25. If the beneficiary designated by
the employee is not of the class of persons provided for in this
subdivision, or if the designated beneficiary predeceases the
employee, a refund shall be made as provided for in section
422A.22, in lieu of a life income. If the employee does not
elect to designate a beneficiary to receive a life income as
herein provided, the designated beneficiary, if of the class of
persons set forth in this subdivision, may elect within 60 days
after the date of death of the employee to receive a life income
computed and determined as though the employee had retired on
the date of death under the option 2 plan of retirement, as
provided for in sections 422A.01 to 422A.25, and had designated
such person as beneficiary. For purposes of subdivision 2, a
surviving child is an unmarried child of the deceased member
under the age of 18, or under the age of 22 if a full-time
student at an accredited school, college, or university. For
purposes of subdivision 7, a dependent surviving child or
dependent parent must meet the definition of dependent, as
defined in section 422A.01, subdivision 12, at the time of the
active or deferred member's death.
Subd. 9. [LUMP-SUM DEATH BENEFIT.] If any employee who has
contributed to the survivor's benefit account as herein provided
dies before the effective date of retirement on a service or
disability pension and is not survived by a beneficiary eligible
to receive a monthly allowance as herein provided If no monthly
survivor benefit is payable under subdivision 2 or 7, there
shall be paid from the survivor's survivor benefit account to a
beneficiary designated by the employee on a form prescribed by
the executive director a lump-sum death benefit of $750 if death
occurs prior to the end of the employee's tenth year of
service credit or of $1500 if the employee had prior to death
completed ten or more calendar years of service credit. Upon
reinstatement of a former employee to the service, credit for
such past service or for any part thereof shall be granted only
upon repayment of the amount of the separation refund, with
interest, from the time of separation Any benefit under this
subdivision may be paid in addition to a benefit payable under
subdivision 1.
Subd. 10. [BENEFIT INCREASES.] If the amount of annuity
payable from the Minnesota postretirement investment fund to any
class of annuitants is adjusted pursuant to section 11A.18, the
amount of benefits payable from the survivor's benefit fund
pursuant to subdivisions 7 or 8 for that class of annuitants
shall also be adjusted at the same time and rate. Annuities
payable under this section must be adjusted at the same time and
rate as retirement annuities in the retirement benefit fund.
Subd. 11. [EFFECT OF SPOUSE REMARRIAGE.] A monthly
survivor benefit is must not suspended, be discontinued or
terminated, or otherwise stopped due to a surviving spouse's
remarriage.
Subd. 12. [DETERMINATION OF ANNUITY.] The survivor
annuities payable under this section must be computed and
determined under a procedure specified by the actuary retained
by the legislative commission on pensions and retirement
utilizing the appropriate mortality table based on the
experience of the fund as recommended by that actuary and
approved by the legislative commission on pensions and
retirement and using the applicable postretirement interest rate
assumption specified in section 356.215, subdivision 4d.
Sec. 8. [422A.231] [COST ALLOCATION.]
(a) Notwithstanding any law to the contrary, all current
and future contribution requirements due to this article are
payable by the participating contributing employing units other
than the state.
(b) In each actuarial valuation of the retirement fund, the
actuary retained by the legislative commission on pensions and
retirement shall include an exhibit on the impact of the benefit
increases contained in this article on the survivor benefit
fund. The actuary shall calculate the expected change in the
present value of the future benefits payable from the survivor
benefit fund attributable to this article, using the actuarial
method and assumptions applicable to the Minneapolis employees
retirement fund, from the prior actuarial valuation and shall
compare that result with the actual change in the present value
of future benefits payable from the survivor benefit fund
attributable to this article from the prior actuarial valuation.
(c) The executive director shall assess each participating
employer, other than the state, its proportional share of the
net increase amount calculated under paragraph (b). The
assessment must be made on the first business day of the
following February, plus compound interest at an annual rate of
six percent on the amount from the actuarial valuation date to
the date of payment.
Sec. 9. [REPEALER.]
Minnesota Statutes 1998, section 422A.16, subdivision 3a,
is repealed.
Sec. 10. [EFFECTIVE DATE.]
(a) This article is effective upon approval by the
Minneapolis city council and compliance with Minnesota Statutes,
section 645.021.
(b) All sections of this article must be approved for the
approval of any section to be effective.
ARTICLE 18
EMPLOYER MATCHING CONTRIBUTION
TAX-SHELTERED ANNUITY
CHANGES
Section 1. Minnesota Statutes 1998, section 356.24,
subdivision 1, is amended to read:
Subdivision 1. [RESTRICTION; EXCEPTIONS.] (a) It is
unlawful for a school district or other governmental subdivision
or state agency to levy taxes for, or contribute public funds to
a supplemental pension or deferred compensation plan that is
established, maintained, and operated in addition to a primary
pension program for the benefit of the governmental subdivision
employees other than:
(1) to a supplemental pension plan that was established,
maintained, and operated before May 6, 1971;
(2) to a plan that provides solely for group health,
hospital, disability, or death benefits;
(3) to the individual retirement account plan established
by chapter 354B;
(4) to a plan that provides solely for severance pay under
section 465.72 to a retiring or terminating employee;
(5) for employees other than personnel employed by the
state university board or the community college board and
covered by the board of trustees of the Minnesota state colleges
and universities supplemental retirement plan under chapter
354C, if provided for in a personnel policy of the public
employer or in the collective bargaining agreement between the
public employer and the exclusive representative of public
employees in an appropriate unit, in an amount matching employee
contributions on a dollar for dollar basis, but not to exceed an
employer contribution of $2,000 a year per employee;
(i) to the state of Minnesota deferred compensation plan
under section 352.96; or
(ii) in payment of the applicable portion of the premium on
a tax-sheltered annuity contract qualified under section 403(b)
of the Internal Revenue Code, if purchased from a qualified
insurance company, or to a qualified investment entity, as
defined in subdivision 1a, and, in either case, if the employing
unit has complied with any applicable pension plan provisions of
the Internal Revenue Code with respect to the tax-sheltered
annuity program during the preceding calendar year; or
(6) for personnel employed by the state university board or
the community college board and not covered by clause (5), to
the supplemental retirement plan under chapter 354C, if provided
for in a personnel policy or in the collective bargaining
agreement of the public employer with the exclusive
representative of the covered employees in an appropriate unit,
in an amount matching employee contributions on a dollar for
dollar basis, but not to exceed an employer contribution of
$2,000 a year for each employee.
(b) Subd. 1a. [QUALIFIED INSURANCE COMPANY; QUALIFIED
INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance
company is a company that:
(1) meets the definition in section 60A.02, subdivision 4;
(2) is licensed to engage in life insurance or annuity
business in the state;
(3) is determined by the commissioner of commerce to have a
rating within the top two rating categories by a recognized
national rating agency or organization that regularly rates
insurance companies; and
(4) is determined by the state board of investment to be
among the ten up to 20 applicant insurance companies with
competitive investment options and investment returns on annuity
products.
(b) A qualified investment entity is an open-end investment
company that:
(1) is registered under the federal Investment Company Act
of 1940;
(2) is licensed to do business in the state;
(3) is determined by the commissioner of commerce to be in
sound financial standing; and
(4) is determined by the state board of investment to be
among up to five applicant investment entities with competitive
investment options and investment returns.
(c) The state board of investment determination must be
made on or before January 1, 1993 July 1, 2000, and must be
reviewed periodically. The state board of investment may retain
actuarial services to assist it in this determination and in its
periodic review. The state board of investment may annually
establish a budget for its costs in any determination and
periodic review processes. The state board of investment may
charge a proportional share of all costs related to the periodic
review to those qualified insurance companies and qualified
investment entities currently under contract and may charge a
proportional share of all costs related to soliciting and
evaluating bids in a determination process to each company and
investment entity selected by the state board of investment.
All contracts must be approved before execution by the state
board of investment. The state board of investment shall
establish policies and procedures under section 11A.04, clause
(2), to carry out this paragraph.
(c) Subd. 1b. [VENDOR RESTRICTIONS.] A personnel policy
for unrepresented employees or a collective bargaining agreement
may establish limits on the number of vendors under paragraph
(b), clause (5), subdivision 1 that it will utilize and
conditions under which the vendors may contact employees both
during working hours and after working hours.
Sec. 2. [COMMISSION STUDY.]
The legislative commission on pensions and retirement shall
study the issue of the appropriate means to provide partially
employer-funded tax-sheltered savings opportunities for
educational employees, including the establishment of a single
comprehensive program structure for all applicable educational
employers and the elimination of any restriction on investment
vendors in providing partially employer-funded investment
opportunities to educational employees.
Sec. 3. [EFFECTIVE DATE.]
Section 1 is effective May 15, 2000. Section 2 is
effective on the day following final enactment.
ARTICLE 19
MNSCU INDIVIDUAL RETIREMENT
ACCOUNT PLAN CHANGES
Section 1. Minnesota Statutes 1998, section 43A.27,
subdivision 3, is amended to read:
Subd. 3. [RETIRED EMPLOYEES.] (a) A person may elect to
purchase at personal expense individual and dependent hospital,
medical, and dental coverages if the person is:
(1) a retired employee of the state or an organization
listed in subdivision 2 or section 43A.24, subdivision 2, who,
at separation of service:
(i) is immediately eligible to receive a retirement benefit
under chapter 354B or an annuity under a retirement program
sponsored by the state or such organization of the state and;
(ii) immediately meets the age and service requirements in
section 352.115, subdivision 1; and
(ii) (iii) has five years of service or meets the service
requirement of the collective bargaining agreement or plan,
whichever is greater; or
(2) a retired employee of the state who is at least 50
years of age and has at least 15 years of state service.
(b) The commissioner shall offer at least one plan which is
actuarially equivalent to those made available through
collective bargaining agreements or plans established pursuant
to under section 43A.18 to employees in positions equivalent to
that from which retired.
(c) A spouse of a deceased retired employee who received an
annuity under a state retirement program person eligible under
paragraph (a) may purchase the coverage listed in this
subdivision if the spouse was a dependent under the retired
employee's coverage at the time of the employee's retiree's
death.
(d) Coverages must be coordinated with relevant health
insurance benefits provided through the federally sponsored
Medicare program. Until the retired employee reaches age 65,
the retired employee and dependents must be pooled in the same
group as active employees for purposes of establishing premiums
and coverage for hospital, medical, and dental insurance.
Coverage for retired employees and their dependents may not
discriminate on the basis of evidence of insurability or
preexisting conditions unless identical conditions are imposed
on active employees in the group that the employee left.
Appointing authorities shall provide notice to employees no
later than the effective date of their retirement of the right
to exercise the option provided in this subdivision. The
retired employee must notify the commissioner or designee of the
commissioner within 30 days after the effective date of the
retirement of intent to exercise this option.
Sec. 2. Minnesota Statutes 1998, section 136F.48, is
amended to read:
136F.48 [EMPLOYER-PAID HEALTH INSURANCE.]
(a) This section applies to a person who:
(1) retires from the Minnesota state university colleges
and universities system, the technical college system, or the
community college system, or from a successor system employing
state university, technical college, or community college
faculty, with at least ten years of combined service credit in a
system under the jurisdiction of the board of trustees of the
Minnesota state colleges and universities;
(2) was employed on a full-time basis immediately preceding
retirement as a state university, technical college, or
community college faculty member or as an unclassified
administrator in one of those systems the Minnesota state
colleges and universities system;
(3) begins drawing a retirement benefit from the individual
retirement account plan or an annuity from the teachers
retirement association, from the general state employees
retirement plan or the unclassified state employees retirement
program of the Minnesota state retirement system, or from a
first class city teacher retirement plan; and
(4) returns to work on not less than a one-third time basis
and not more than a two-thirds time basis in the system from
which the person retired under an agreement in which the person
may not earn a salary of more than $35,000 in a calendar year
from employment after retirement in the system from which the
person retired.
(b) Initial participation, the amount of time worked, and
the duration of participation under this section must be
mutually agreed upon by the president of the institution where
the person returns to work and the employee. The president may
require up to one-year notice of intent to participate in the
program as a condition of participation under this section. The
president shall determine the time of year the employee shall
work. The employer or the president may not require a person to
waive any rights under a collective bargaining agreement as a
condition of participation under this section.
(c) For a person eligible under paragraphs (a) and (b), the
employing board shall make the same employer contribution for
hospital, medical, and dental benefits as would be made if the
person were employed full time.
(d) For work under paragraph (a), a person must receive a
percentage of the person's salary at the time of retirement that
is equal to the percentage of time the person works compared to
full-time work.
(e) If a collective bargaining agreement covering a person
provides for an early retirement incentive that is based on age,
the incentive provided to the person must be based on the
person's age at the time employment under this section ends.
However, the salary used to determine the amount of the
incentive must be the salary that would have been paid if the
person had been employed full time for the year immediately
preceding the time employment under this section ends.
(f) A person who returns to work under this section is a
member of the appropriate bargaining unit and is covered by the
appropriate collective bargaining contract. Except as provided
in this section, the person's coverage is subject to any part of
the contract limiting rights of part-time employees.
Sec. 3. [352.1155] [NO ANNUITY REDUCTION.]
Subdivision 1. [ELIGIBILITY.] Except as indicated in
subdivision 4, the annuity reduction provisions of section
352.115, subdivision 10, do not apply to a person who:
(1) retires from the Minnesota state colleges and
universities system with at least ten years of combined service
credit in a system under the jurisdiction of the board of
trustees of the Minnesota state colleges and universities;
(2) was employed on a full-time basis immediately preceding
retirement as a faculty member or as an unclassified
administrator in that system;
(3) begins drawing an annuity from the general state
employees retirement plan of the Minnesota state retirement
system; and
(4) returns to work on not less than a one-third time basis
and not more than a two-thirds time basis in the system from
which the person retired under an agreement in which the person
may not earn a salary of more than $35,000 in a calendar year
from employment after retirement in the system from which the
person retired.
Subd. 2. [APPROVAL REQUIREMENTS.] Initial participation,
the amount of time worked, and the duration of participation
under this section must be mutually agreed upon by the president
of the institution where the person returns to work and the
employee. The president may require up to one-year notice of
intent to participate in the program as a condition of
participation under this section. The president shall determine
the time of year the employee shall work. The employer or the
president may not require a person to waive any rights under a
collective bargaining agreement as a condition of participation
under this section.
Subd. 3. [SERVICE CREDIT PROHIBITION.] Notwithstanding any
law to the contrary, a person eligible under this section may
not, based on employment to which the waiver in this section
applies, earn further service credit in a Minnesota public
defined benefit plan and is not eligible to participate in a
Minnesota public defined contribution plan, other than a
volunteer fire plan governed by chapter 424A. No employer or
employee contribution to any of these plans may be made on
behalf of such a person.
Subd. 4. [EXEMPTION LIMIT.] For a person eligible under
this section who earns more than $35,000 in a calendar year from
reemployment in the Minnesota state colleges and universities
system following retirement, the annuity reduction provisions of
section 352.115, subdivision 10, apply only to income over
$35,000.
Subd. 5. [CONTINUING RIGHTS.] A person who returns to work
under this section is a member of the appropriate bargaining
unit and is covered by the appropriate collective bargaining
contract. Except as provided in this section, the person's
coverage is subject to any part of the contract limiting rights
of part-time employees.
Sec. 4. Minnesota Statutes 1998, section 354.445, is
amended to read:
354.445 [NO ANNUITY REDUCTION.]
(a) The annuity reduction provisions of section 354.44,
subdivision 5, do not apply to a person who:
(1) retires from the Minnesota state university colleges
and universities system, technical college system, or the
community college system, or from a successor system employing
state university, technical college, or community college
faculty, with at least ten years of combined service credit in a
system under the jurisdiction of the board of trustees of the
Minnesota state colleges and universities;
(2) was employed on a full-time basis immediately preceding
retirement as a state university, technical college, or
community college faculty member or as an unclassified
administrator in one of these systems that system;
(3) begins drawing an annuity from the teachers retirement
association; and
(4) returns to work on not less than a one-third time basis
and not more than a two-thirds time basis in the system from
which the person retired under an agreement in which the person
may not earn a salary of more than $35,000 in a calendar year
from employment after retirement in the system from which the
person retired.
(b) Initial participation, the amount of time worked, and
the duration of participation under this section must be
mutually agreed upon by the president of the institution where
the person returns to work and the employee. The president may
require up to one-year notice of intent to participate in the
program as a condition of participation under this section. The
president shall determine the time of year the employee shall
work. The employer or the president may not require a person to
waive any rights under a collective bargaining agreement as a
condition of participation under this section.
(c) Notwithstanding any law to the contrary, a person
eligible under paragraphs (a) and (b) may not, based on
employment to which the waiver in this section applies, earn
further service credit in the teachers retirement association
and is not eligible to participate in the individual retirement
account plan or the supplemental retirement plan established in
chapter 354B as a result of service under this section a
Minnesota public defined benefit plan and is not eligible to
participate in a Minnesota public defined contribution plan,
other than a volunteer fire plan governed by chapter 424A. No
employer or employee contribution to any of these plans may be
made on behalf of such a person.
(d) For a person eligible under paragraphs (a) and (b) who
earns more than $35,000 in a calendar year from employment after
retirement in the system from which the person retired due to
employment by the Minnesota state colleges and universities
system, the annuity reduction provisions of section 354.44,
subdivision 5, apply only to income over $35,000.
(e) A person who returns to work under this section is a
member of the appropriate bargaining unit and is covered by the
appropriate collective bargaining contract. Except as provided
in this section, the person's coverage is subject to any part of
the contract limiting rights of part-time employees.
Sec. 5. Minnesota Statutes 1998, section 354.66,
subdivision 1b, is amended to read:
Subd. 1b. [DISTRICT, DEFINED.] For purposes of this
section, the term "district" means a school district, the
community or the Minnesota state college colleges system and
the state university universities system.
Sec. 6. Minnesota Statutes 1998, section 354.66,
subdivision 1c, is amended to read:
Subd. 1c. [PARTICIPATION.] (a) Except as indicated in
paragraph (b), participation in the part-time mobility program
must be based on a full fiscal year and the employment pattern
of the teacher during the most recent fiscal year.
(b) For a teacher in the Minnesota state colleges and
universities system who teaches only during the first semester
in an academic year and retires immediately after the first
semester, participation in the part-time mobility program must
be based on one-half of a full fiscal year and the employment
pattern of the teacher during the most recent one-half of the
most recent fiscal year.
Sec. 7. Minnesota Statutes 1998, section 354.66,
subdivision 3, is amended to read:
Subd. 3. [PART-TIME TEACHING POSITION, DEFINED.] (a) For
purposes of this section, the term "part-time teaching position"
shall mean means a teaching position within the district in
which the teacher is employed for at least 50 full days or a
fractional equivalent thereof as prescribed in section 354.091,
and for which the teacher is compensated in an amount not
exceeding 80 percent of the compensation established by the
board for a full-time teacher with identical education and
experience with the employing unit.
(b) The compensation of a teacher in the state colleges and
universities system may exceed the 80 percent limit if the
teacher does not teach just one of the three quarters in the
system's full school year, provided no additional services are
performed while the teacher participates in the program. For a
teacher to which subdivision 1c, paragraph (b), applies, the
term "part-time teaching position" means a teaching position
within the district in which the teacher is employed for at
least 25 full days or a fractional equivalent thereof as
prescribed in section 354.091, and for which the teacher is
compensated in an amount not exceeding 40 percent of the
compensation established by the board for a full-time teacher,
with identical education and experience with the employing unit.
Sec. 8. Minnesota Statutes 1998, section 354B.24,
subdivision 3, is amended to read:
Subd. 3. [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In
addition to contributions required by subdivision 2, a plan
participant on an approved sabbatical leave may shall make an
optional additional a member contribution. The optional
additional member may not exceed based on the applicable member
contribution rate specified in section 354B.23, subdivision 1,
applied to the difference between the amount of salary actually
received during the sabbatical leave and the amount of full-time
salary actually received for a comparable period of an identical
length to the member would have received if not on sabbatical
leave that occurred during the fiscal year immediately preceding
the sabbatical leave.
(b) Any optional additional member contribution must be
made before the last day of the fiscal year next following the
fiscal year in which the sabbatical leave terminates. The
optional additional member contribution may not include interest
through payroll deduction as though the member were employed
full-time.
(c) When an optional additional member contribution is
made, the employing unit must make the employer contribution at
the rate set forth specified in section 354B.23, subdivision 3,
on the salary that was the basis for the optional additional
member contribution under paragraph (a).
(d) An employer contribution required under this section
must be made no later than 60 days after the date on which the
optional additional member contribution was made.
Sec. 9. Minnesota Statutes 1998, section 354B.25,
subdivision 2, is amended to read:
Subd. 2. [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS
INVESTMENT OPTIONS.] (a) The plan administrator shall arrange
for the purchase of fixed annuity contracts, variable annuity
contracts, a combination of fixed and variable annuity
contracts, or custodial accounts from financial institutions
which have been selected by the state board of investment under
subdivision 3, as the investment vehicle for the retirement
coverage of plan participants and to provide retirement benefits
to plan participants. Custodial accounts from financial
institutions shall include open-end investment companies
registered under the federal Investment Company Act of 1940, as
amended investment products.
(b) The annuity contracts or accounts investment products
must be purchased with contributions under section 354B.23 or
with money or assets otherwise provided by law by authority of
the board and deemed acceptable by the applicable financial
institution.
(c) In addition to contracts and accounts from financial
institutions, The Minnesota supplemental investment fund
established under section 11A.17 and administered by the state
board of investment is one of the investment options products
for the individual retirement account plan. Direct access must
also be provided to lower expense and no load mutual funds, as
those terms are defined by the federal securities and exchange
commission, including stock funds, bond funds, and balanced
funds. Other investment products or combination of investment
products which may be included are:
(1) savings accounts at federally insured financial
institutions;
(2) life insurance contracts, fixed and variable annuity
contracts from companies that are subject to regulation by the
commerce commissioner;
(3) investment options from open ended investment companies
registered under the federal Investment Company Act of 1940,
United States Code, title 15, sections 80a-1 to 80a-64;
(4) investment options from a firm that is a registered
investment advisor under the federal Investment Advisors Act of
1940, United States Code, title 15, sections 80b-1 to 80b-21;
and
(5) investment options of a bank as defined in United
States Code, title 15, section 80b-2, subsection (a), paragraph
2, or a bank holding company as defined in the Bank Holding
Company Act of 1956, United States Code, title 12, section 1841,
subsection (a), paragraph (1).
Sec. 10. Minnesota Statutes 1998, section 354B.25,
subdivision 3, is amended to read:
Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] (a)
The financial institutions investment options provided for under
subdivision 2 must be selected by the state board of
investment. Financial institutions include open-end investment
companies registered under the federal Investment Company Act of
1940, as amended.
(b) The state board of investment may select up to five
financial institutions to provide annuity contracts, custodial
accounts, or a combination, as investment options for the
individual retirement account plan in addition to the Minnesota
supplemental investment fund. In making its selection, at a
minimum, the state board of investment shall consider at least
the following:
(1) the experience and ability of the financial institution
to provide retirement and death benefits and products that are
suited to meet the needs of plan participants;
(2) the relationship of those retirement and death benefits
and products provided by the financial institution to their
cost; and
(3) the financial strength and stability of the financial
institution; and
(4) the fees and expenses associated with the investment
products in comparison to other products of similar risk and
rates of return.
(c) (b) After selecting a financial institution, the state
board of investment must periodically review each financial
institution selected under paragraph (b) and the offered
products. The periodic review must occur at least every three
years. In making its review, the state board of investment may
retain appropriate consulting services to assist it in its
periodic review, establish a budget for the cost of the periodic
review process, and charge a proportional share of these costs
to the reviewed financial institution.
(d) (c) Contracts with financial institutions under this
section must be executed by the board and must be approved by
the state board of investment before execution.
(e) (d) The state board of investment shall also establish
policies and procedures under section 11A.04, clause (2), to
carry out the provisions of this subdivision.
Sec. 11. Minnesota Statutes 1998, section 354B.25,
subdivision 5, is amended to read:
Subd. 5. [INDIVIDUAL RETIREMENT ACCOUNT PLAN
ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary
administrative expenses of the individual retirement account
plan must may be paid by charged to plan participants by the
plan sponsor in the following manner:
(1) from plan participants with amounts invested in the
Minnesota supplemental investment fund, the plan administrator
may charge an administrative expense assessment in an amount
such that annual total fees charged for plan administration
cannot exceed 40/100 of one percent of the assets of the
Minnesota supplemental investment funds; and
(2) from plan participants with amounts through annuity
contracts and custodial accounts purchased under subdivision 2,
paragraph (a), the plan administrator may charge an
administrative expense assessment of a designated amount, not to
exceed two percent of member and employer contributions, as
those contributions are made form of an annual fee, an asset
based fee, a percentage of the contributions to the plan, or a
combination thereof.
(b) Any administrative expense charge that is not actually
needed for the administrative expenses of the individual
retirement account plan must be refunded to member accounts.
(c) The board of trustees shall report annually, before
October 1, to the advisory committee created in subdivision 1a
on administrative expenses of the plan. The report must include
a detailed accounting of charges for administrative expenses
collected from plan participants and expenditure of the
administrative expense charges. The administrative expense
charges collected from plan participants must be kept in a
separate account from any other funds under control of the board
of trustees and may be used only for the necessary and
reasonable administrative expenses of the plan.
Sec. 12. [354B.31] [IRAP PART-TIME TEACHER MOBILITY
PROGRAM.]
Subdivision 1. [PARTICIPATION REQUIREMENTS.] A faculty
member who has three years or more of service in the Minnesota
state colleges and universities system, by agreement with the
board or with the authorized representative of the board, may be
assigned to teaching service in a part-time teaching position
under subdivision 2.
Subd. 2. [PART-TIME TEACHING POSITION; DEFINED.] For
purposes of this section, "part-time teaching position" means a
teaching position within the Minnesota state colleges and
universities system in which the teacher is employed for at
least 50 full days or a fractional equivalent as prescribed in
section 354.091, and for which the faculty member is compensated
in an amount not exceeding 80 percent of the compensation
established by the board for a full-time faculty member with
identical education and experience with the employing unit.
Subd. 3. [RETIREMENT CONTRIBUTIONS.] A faculty member
assigned to a part-time position under this section shall
continue to make employee contributions to the individual
retirement account plan during the period of part-time
employment on the same basis and in the same amounts as would
have been paid if the person had been employed on a full-time
basis provided that, prior to June 30 each year the member and
the board make that portion of the required employer
contribution to the plan, in any proportion which they may agree
upon, that is based on the difference between the amount of
compensation that would have been paid if the person had been
employed on a full-time basis and the amount of compensation
actually received by the person for the services rendered in the
part-time assignment. The employing unit shall make that
portion of the required employer contributions to the plan on
behalf of the person that is based on the amount of compensation
actually received by the person for the services rendered in the
part-time assignment. The employee and employer contributions
shall be based upon the rates of contribution prescribed by
section 354B.23. Employee contributions for part-time teaching
service pursuant to this section shall not continue for more
than ten years.
Subd. 4. [OTHER MEMBERSHIP PRECLUDED.] A faculty member
entitled to make employee contributions for part-time teaching
service pursuant to this section shall not be entitled during
the same period of time to be a member of, accrue allowable
service credit in or make employee contributions to any other
Minnesota public employee pension plan, except a volunteer
firefighters relief association governed by sections 69.771 to
69.776.
Subd. 5. [INSURANCE.] If the board enters into an
agreement authorized by this section, the board shall continue
any insurance programs furnished or authorized a full-time
teacher on an identical basis and with identical sharing of
costs for a part-time teacher pursuant to this section.
However, the requirements of this subdivision may be modified by
a collective bargaining agreement between a board and an
exclusive representative pursuant to chapter 179A. Teachers as
defined in section 136F.43 employed on a less than 75 percent
time basis pursuant to this section are eligible for state paid
insurance benefits as if the teachers were employed full-time.
Subd. 6. [ELIGIBILITY FOR CREDIT.] Only teachers who are
public employees as defined in section 179A.03, subdivision 14,
during the school year preceding the period of part-time
employment pursuant to this section qualify for employee
contributions to the retirement plan for part-time teaching
service under subdivision 4. Notwithstanding section 179A.03,
subdivision 14, clauses (e) and (f), teachers who are employed
on a part-time basis for purposes of this section and who would
therefore be disqualified from the bargaining unit by one or
both of those provisions, continue to be in the bargaining unit
during the period of part-time employment under this section for
purposes of compensation, fringe benefits, and the grievance
procedure.
Subd. 7. [BOARD POWER NOT RESTRICTED.] This section does
not limit the authority of the board to assign a teacher to a
part-time teaching position which does not qualify for full
accrual of service credit from and employee contributions to the
retirement fund under this section.
Subd. 8. [SUBSTITUTE TEACHING.] Subdivision 4 does not
prohibit a teacher who qualifies for full accrual of service
credit from and employee contributions to the retirement fund
pursuant to this section in any year from being employed as a
substitute teacher by any school district during that year.
Notwithstanding sections 354.091 and 354.42, a teacher may not
qualify for full accrual of service credit from and employee
contributions to the retirement fund for other teaching service
rendered for any part of any year for which the teacher
qualifies for employee contributions to the retirement plan
pursuant to this section.
Sec. 13. Minnesota Statutes 1998, section 354C.12,
subdivision 4, is amended to read:
Subd. 4. [ADMINISTRATIVE EXPENSES.] (a) The board of
trustees of the Minnesota state colleges and universities is
authorized to pay the necessary and reasonable administrative
expenses of the supplemental retirement plan and may bill
participants to recover these expenses. The administrative fees
or charges must may be paid by charged to participants in the
following manner: as an annual fee, an asset based fee, a
percentage of contributions to the plan, or a contribution
thereof.
(1) from participants whose contributions are invested with
the state board of investment, the plan administrator may
recover administrative expenses in the manner authorized by the
Minnesota state colleges and universities in an amount such that
annual total fees charged for plan administration cannot exceed
40/100 of one percent of the assets of the Minnesota
supplemental investment funds; or
(2) from participants where contributions are invested
through contracts purchased from any other authorized source,
the plan administrator may assess an amount of up to two percent
of the employee and employer contributions.
(b) Any recovered or assessed amounts that are not needed
for the necessary and reasonable administrative expenses of the
plan must be refunded to member accounts.
(c) The board of trustees shall report annually, before
October 1, to the advisory committee created in section 354B.25,
subdivision 1a, on administrative expenses of the plan. The
report must include a detailed accounting of charges for
administrative expenses collected from plan participants and
expenditure of the administrative expense charges. The
administrative expense charges collected from plan participants
must be kept in a separate account from any other funds under
control of the board of trustees and may be used only for the
necessary and reasonable administrative expenses of the plan.
Sec. 14. [EFFECTIVE DATE.]
Sections 1 to 13 are effective on July 1, 1999.
ARTICLE 20
OTHER CHANGES
Section 1. Minnesota Statutes 1998, section 3.85,
subdivision 3, is amended to read:
Subd. 3. [MEMBERSHIP.] The commission consists of six five
members of the senate appointed by the subcommittee on
committees of the committee on rules and administration and six
five members of the house of representatives appointed by the
speaker. Members shall be appointed at the commencement of each
regular session of the legislature for a two-year term beginning
January 16 of the first year of the regular session. Vacancies
that occur while the legislature is in session shall be filled
like regular appointments. If the legislature is not in
session, senate vacancies shall be filled by the last
subcommittee on committees of the senate committee on rules and
administration or other appointing authority designated by the
senate rules, and house vacancies shall be filled by the last
speaker of the house, or if the speaker is not available, by the
last chair of the house rules committee.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day following final enactment.
ARTICLE 21
KANDIYOHI COUNTY AND LITCHFIELD CITY
VOLUNTEER RESCUE SQUAD MEMBERS ADDED TO
PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN
Section 1. Minnesota Statutes 1998, section 353D.01,
subdivision 2, is amended to read:
Subd. 2. [ELIGIBILITY.] (a) Eligibility to participate in
the defined contribution plan is available to:
(1) elected local government officials of a governmental
subdivision who elect to participate in the plan under section
353D.02, subdivision 1, and who, for the elected service
rendered to a governmental subdivision, are not members of the
public employees retirement association within the meaning of
section 353.01, subdivision 7;
(2) physicians who, if they did not elect to participate in
the plan under section 353D.02, subdivision 2, would meet the
definition of member under section 353.01, subdivision 7; and
(3) basic and advanced life support emergency medical
service personnel employed by or providing services for any
public ambulance service or privately operated ambulance service
that receives an operating subsidy from a governmental entity
that elects to participate under section 353D.02, subdivision
3.; and
(4) members of a municipal rescue squad associated with
Litchfield in Meeker county, or of a county rescue squad
associated with Kandiyohi county, if an independent nonprofit
rescue squad corporation, incorporated under chapter 317A,
performing emergency management services, and if not affiliated
with a fire department or ambulance service and if its members
are not eligible for membership in that fire department's or
ambulance service's relief association or comparable pension
plan.
(b) For purposes of this chapter, an elected local
government official includes a person appointed to fill a
vacancy in an elective office. Service as an elected local
government official only includes service for the governmental
subdivision for which the official was elected by the
public-at-large. Service as an elected local government
official ceases and eligibility to participate terminates when
the person ceases to be an elected official. An elected local
government official does not include an elected county sheriff.
(c) Elected local government officials, physicians, and
first response personnel and emergency medical service
personnel, and rescue squad personnel who are currently covered
by a public or private pension plan because of their employment
or provision of services are not eligible to participate in the
public employees defined contribution plan.
(d) A former participant is a person who has terminated
eligible employment or service and has not withdrawn the value
of the person's individual account.
Sec. 2. Minnesota Statutes 1998, section 353D.02, is
amended by adding a subdivision to read:
Subd. 4. [ELIGIBLE RESCUE SQUAD PERSONNEL.] The
municipality or county, as applicable, associated with a rescue
squad under section 353D.01, subdivision 2, paragraph (a),
clause (4), may elect to participate in the plan. If the
municipality or county, as applicable, elects to participate,
the eligible personnel may elect to participate or decline to
participate. An eligible individual's election must be made
within 30 days of the service's election to participate or 30
days of the date on which the individual begins to provide
service to the rescue squad, whichever is later. Elections
under this subdivision by a government unit or individual are
irrevocable. The municipality or county, as applicable, must
specify by resolution eligibility requirements for rescue squad
personnel which must be satisfied if the individual is to be
authorized to make the election under this subdivision.
Sec. 3. Minnesota Statutes 1998, section 353D.03,
subdivision 3, is amended to read:
Subd. 3. [AMBULANCE SERVICE, RESCUE SQUAD PERSONNEL
CONTRIBUTION.] A public ambulance service or privately operated
ambulance service that receives an operating subsidy from a
governmental entity that elects to participate in the plan shall
fund benefits for its qualified personnel who individually elect
to participate. Personnel who are paid for their services may
elect to make member contributions in an amount not to exceed
the service's contribution on their behalf. Ambulance service
contributions on behalf of salaried employees must be a fixed
percentage of salary. An ambulance service making contributions
for volunteer or largely uncompensated personnel, or a
municipality or county making contributions on behalf of rescue
squad members who are volunteers or largely uncompensated
personnel, may assign a unit value for each call or each period
of alert duty for the purpose of calculating ambulance
service or rescue squad service contributions, as applicable.
Sec. 4. [EFFECTIVE DATE.]
Sections 1 to 3 are effective on the day following final
enactment.
ARTICLE 22
PUBLIC PENSION FACILITIES
Section 1. Minnesota Statutes 1998, section 3.751,
subdivision 1, is amended to read:
Subdivision 1. [WAIVER OF IMMUNITY.] When a controversy
arises out of a contract for work, services, the delivery of
goods, or debt obligations of the state incurred under article
XI of the Minnesota Constitution, or revenue obligations of a
retirement fund incurred under section 356.89 entered into by a
state agency through established procedure, in respect to which
controversy a party to the contract would be entitled to redress
against the state in a court, if the state were suable, and no
claim against the state has been made in a bill pending in the
legislature for the same redress against it, the state waives
immunity from suit in connection with the controversy and
confers jurisdiction on the district court to determine it in
the manner provided for civil actions in the district court.
Only a party to the contract may bring action against the state.
Sec. 2. Minnesota Statutes 1998, section 353.03,
subdivision 4, is amended to read:
Subd. 4. [OFFICES.] The commissioner of administration
shall make provision for suitable office space in the state
capitol or other state office buildings, or at such other
location in St. Paul as is determined by the commissioner for
the use of the board of trustees and its executive director.
The commissioner shall give the board at least four months
notice for any proposed removal from their present location.
Any and all rental charges shall be paid by the trustees from
the public employees retirement fund.
Sec. 3. [356.89] [PUBLIC PENSION FACILITIES.]
Subdivision 1. [DEFINITIONS.] (a) The definitions in this
subdivision apply to this section.
(b) "Boards" mean the board of directors of the Minnesota
state retirement system, the board of trustees of the public
employees retirement association, and the board of trustees of
the teachers retirement association.
(c) "Commissioner" means the commissioner of administration.
Subd. 2. [BUILDING; RELATED FACILITIES.] (a) The
commissioner of administration may provide a building and
related facilities to be jointly occupied by the board of
directors of the Minnesota state retirement system, the board of
trustees of the public employees retirement association, and the
board of trustees of the teachers retirement association for the
administration of their public pension systems.
(b) Design of the facilities is not subject to section
16B.33. The competitive acquisition process set forth in
chapter 16C does not apply if the process set forth in
subdivision 3 is followed.
(c) The boards and the commissioner must submit the plans
for a public pension facility under this section to the chair of
the house ways and means committee and to the chair of the
senate state government finance committee for their approval
before the plans are implemented.
Subd. 3. [CONTRACTING PROCEDURES.] (a) The commissioner
may enter into a contract for facilities with a contractor to
furnish the architectural, engineering, and related services as
well as the labor, materials, supplies, equipment, and related
construction services on the basis of a request for
qualifications and competitive responses received through a
request for proposals process that must include the items listed
in paragraphs (b) to (i).
(b) Before issuing a request for qualifications and a
request for proposals, the commissioner, with the assistance of
the boards, shall prepare performance criteria and
specifications that include:
(1) a general floor plan or layout indicating the general
dimensions of the public building and space requirements;
(2) design criteria for the exterior and site area;
(3) performance specifications for all building systems and
components to ensure quality and cost efficiencies;
(4) conceptual floor plans for systems space;
(5) preferred types of interior finishes, styles of
windows, lighting and outlets, doors, and features such as
built-in counters and telephone wiring;
(6) mechanical and electrical requirements;
(7) special interior features required; and
(8) a completion schedule.
(c) The commissioner shall first solicit statements of
qualifications from eligible contractors and select more than
one qualified contractor based upon experience, technical
competence, past performance, capability to perform, and other
appropriate facts. Contractors selected under this process must
be, employ, or have as a partner, member, coventurer, or
subcontractor, persons licensed and registered under chapter 326
to provide the services required to design and complete the
project. The commissioner does not have to select any of the
respondents if none reasonably fulfill the criteria set forth in
this paragraph.
(d) The contractors selected shall be asked to respond to a
request for proposals. Responses must include site plans,
design concept, elevation, statement of material to be used,
floor layouts, a detailed development budget, and a total cost
to complete the project. The proposal must indicate that the
contractor obtained at least two proposals from subcontractors
for each item of work and must set forth how the subcontractors
were selected. The commissioner, with the assistance of the
boards, shall evaluate the proposals based upon design, cost,
quality, aesthetics, and the best overall value to the state
pension funds. The commissioner need not select any of the
proposals submitted and reserves the right to reject any and all
proposals, and may terminate the process or revise the request
for proposals and solicit new proposals if the commissioner
determines that the best interests of the pension funds would be
better served by doing so. Proposals submitted are nonpublic
data until the contract is awarded.
(e) The contractor selected must comply with sections
574.26 to 574.261. Before executing a final contract, the
contractor selected shall certify a firm construction price and
completion date.
(f) The commissioner may consider building sites in the
city of St. Paul and surrounding suburbs.
(g) Any land, building, or facility leased, constructed, or
acquired and any leasehold interest acquired under this section
must be held by the state in trust for the three retirement
systems as tenants in common. Each retirement system fund must
consider its interest as a fixed asset of its pension fund in
accordance with governmental accounting standards.
(h) The commissioner may lease to another governmental
subdivision any portion of the funds' building and lands that is
not required for their direct use upon terms and conditions they
deem to be in the best interest of the pension funds. Any
income accruing from the rentals must be separately accounted
for and utilized to offset ongoing administrative expenses and
any excess must be carried forward for future administrative
expenses. The commissioner may also enter into lease agreements
for the establishment of satellite offices should the boards
find them to be necessary in order to assure their members
reasonable access to their services. The commissioner may lease
under section 16B.24 any portion of the facilities not required
for the direct use of the boards.
(i) The boards shall formulate and adopt a written working
agreement that sets forth the nature of each retirement system's
ownership interest, the duties and obligations of each system
toward the construction, operation, and maintenance costs of its
facilities, and identifies one retirement fund to serve as
manager for operating and maintenance purposes. The boards may
contract with independent third parties for maintenance-related
activities, services, and supplies, and may use the services of
the department of administration where economically feasible to
do so. If the boards cannot agree or resolve a dispute about
operations or maintenance of the facilities, they may request
the commissioner of administration to appoint a representative
from the department's real estate management division to serve
as arbitrator of the dispute with authority to issue a written
resolution of the dispute.
Subd. 4. [REVENUE BONDS.] The commissioner of finance, on
request of the governor, may sell and issue revenue bonds in an
aggregate principal amount up to $38,000,000 to achieve the
purposes described in subdivisions 1 and 2, plus the amount
needed to pay issuance costs and interest costs and to establish
necessary reserves to secure the bonds. The commissioner of
finance may issue bonds for the purpose of refunding bonds
issued under this subdivision. The bonds may be sold and issued
on terms and in a manner the commissioner of finance determines
to be in the best interests of the state. The proceeds of the
bonds must be credited to a bond proceeds account in the pension
building fund, which the commissioner of finance must create in
the state treasury.
Subd. 5. [SECURITY.] The boards may pledge any or all
assets of the boards as security for the bonds. The bonds and
the interest on them must be paid solely from and secured by all
assets of the boards pledged and appropriated for these purposes
to the debt service fund created in subdivision 6 and any
investment income thereon and any reserve established for this
purpose. The bonds are not public debt, and the full faith,
credit, and taxing powers of the state are not pledged for their
payment. The bonds and the interest on them must not be paid,
directly or indirectly, in whole or in part, from a tax of
statewide application on any class of property, income,
transaction, or privilege.
Subd. 6. [DEBT SERVICE FUND.] There is established in the
state treasury a separate and special pension building debt
service fund. Money in the funds managed by the boards is
appropriated to the boards for transfer to the pension building
debt service fund. Money appropriated and transferred to the
fund and investment income thereon on hand or required to be
transferred to the fund must be used and is irrevocably
appropriated to pay when due the principal of and interest on
the bonds authorized in subdivision 4.
Subd. 7. [COVENANTS; AGREEMENTS.] The commissioner of
finance may, for and on behalf of the state, enter into
covenants and agreements not inconsistent with subdivisions 1 to
6 as may be necessary or desirable to facilitate the sale and
issuance of the bonds on terms favorable to the state,
including, but not limited to, covenants and agreements relating
to the payment of and security for the bonds, tax exemption, and
disclosure of information required by federal and state
securities laws. The covenants and agreements of the
commissioner of finance constitute an enforceable contract of
the state and the state pledges and agrees with the holders of
any bonds that the state will not limit or alter the rights
vested in the commissioner of finance to fulfill the terms of
the covenants or agreements made with the holders of the bonds,
or in any way impair the rights and remedies of the holders
until the bonds, together with the interest thereon, with
interest on any unpaid installments of interest, and all costs
and expenses in connection with any action or proceeding by or
on behalf of the holders, are fully met and discharged. The
commissioner of finance may include this pledge and agreement of
the state in any covenant or agreement with the holders of the
bonds. Sections 16A.672 and 16A.675 apply to the bonds.
Sec. 4. [APPROPRIATION.]
$38,000,000 is appropriated from the pension building fund
created in Minnesota Statutes, section 356.89, to design,
construct, furnish, and equip a new facility to be jointly
occupied by the Minnesota state retirement system, the public
employees retirement association, and the teachers retirement
association, as provided in section 356.89.
Sec. 5. [REPORT.]
The executive directors of the Minnesota state retirement
system, the public employees retirement association, and the
teachers retirement association must jointly report to the
legislature by July 15, 2001, on a plan to consolidate
administrative services for the three pension systems if the
systems share a building.
Sec. 6. [EFFECTIVE DATE.]
Sections 1 to 5 are effective the day following final
enactment.
Presented to the governor May 21, 1999
Signed by the governor May 25, 1999, 11:39 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes