SF 3038

Introduction - 80th Legislature (1997 - 1998)

Posted on 12/15/2009 12:00 a.m.

  1.1                          A bill for an act 
  1.2             relating to retirement; Minneapolis employees 
  1.3             retirement fund; increasing certain shorter service 
  1.4             death-while-active retirement benefits, providing 
  1.5             annuity escalation; amending Minnesota Statutes 1996, 
  1.6             sections 422A.06, subdivisions 3 and 6; 422A.22, 
  1.7             subdivisions 4 and 5; and 422A.23; repealing Minnesota 
  1.8             Statutes 1996, section 422A.16, subdivision 3a. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1996, section 422A.06, 
  1.11  subdivision 3, is amended to read: 
  1.12     Subd. 3.  [DEPOSIT ACCUMULATION FUND.] The deposit 
  1.13  accumulation fund consists of the assets held in the fund, 
  1.14  increased by including amounts contributed by or for employees, 
  1.15  amounts contributed by the city, amounts contributed by 
  1.16  municipal activities supported in whole or in part by revenues 
  1.17  other than taxes and amounts contributed by any public 
  1.18  corporation, amounts paid by the state and by income from 
  1.19  investments.  There must be paid from the fund the amounts 
  1.20  required to be transferred to the retirement benefit fund, or 
  1.21  the disability benefit fund, refunds of contributions including 
  1.22  the death-while-active refund specified in section 422A.22, 
  1.23  subdivision 4, any other death benefits payable on death before 
  1.24  retirement that are not payable from the survivors' benefit 
  1.25  fund, postretirement increases in retirement allowances granted 
  1.26  under Laws 1965, chapter 688, or Laws 1969, chapter 859, and 
  1.27  expenses of the administration of the retirement fund which were 
  2.1   not charged by the retirement board against the income of the 
  2.2   retirement benefit fund from investments as the cost of handling 
  2.3   the investments of the retirement benefit fund. 
  2.4      Sec. 2.  Minnesota Statutes 1996, section 422A.06, 
  2.5   subdivision 6, is amended to read: 
  2.6      Subd. 6.  [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 
  2.7   fund shall consist consists of the amount held for survivor 
  2.8   benefits, increased by contributions for survivor benefits made 
  2.9   by and for employees, including contributions made by the 
  2.10  employer, by any municipal activity supported in whole or in 
  2.11  part by revenue other than taxes or by any public corporation.  
  2.12  A proportionate share of income from investments shall must be 
  2.13  allocated to this fund.  There shall be paid from such fund the 
  2.14  Survivor benefits specified in section 422A.23 except that the 
  2.15  refund of net accumulated deductions from the salary of a 
  2.16  contributing member shall upon death in service be paid from the 
  2.17  deposit accumulation fund must be paid from this fund. 
  2.18     Sec. 3.  Minnesota Statutes 1996, section 422A.22, 
  2.19  subdivision 4, is amended to read: 
  2.20     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] Upon the death of a 
  2.21  contributing an active member while still in the service of the 
  2.22  city, and before reaching the compulsory age of retirement prior 
  2.23  to termination of service, there shall be paid to such person 
  2.24  the beneficiary or persons as beneficiaries designated by the 
  2.25  member shall have nominated by written designation on a form 
  2.26  specified by the executive director and filed with the 
  2.27  retirement board, in such form as the retirement board shall 
  2.28  require, the net accumulated amount of employee deductions from 
  2.29  salary, pay, or compensation, including five percent interest, 
  2.30  to the member's credit on date of compounded annually to the 
  2.31  date of the member's death.  The amount must not include any 
  2.32  contributions made by the employee or on the employee's behalf, 
  2.33  or any interest or investment earnings on those contributions, 
  2.34  which were allocated to the survivor benefit fund under section 
  2.35  422A.06, subdivision 6.  If the employee fails to make a 
  2.36  designation, or if the person or persons beneficiary or 
  3.1   beneficiaries designated by such the employee predeceases such 
  3.2   the employee, the net accumulated amount of deductions from 
  3.3   salary, pay, or compensation including interest, to the credit 
  3.4   of such employee on date of death shall amount must be paid to 
  3.5   such the deceased employee's estate. 
  3.6      Sec. 4.  Minnesota Statutes 1996, section 422A.22, 
  3.7   subdivision 5, is amended to read: 
  3.8      Subd. 5.  Upon reinstatement reemployment of a former 
  3.9   employee to the service, in employment covered by the 
  3.10  Minneapolis employees retirement fund, service credit for such 
  3.11  past service or for any part thereof shall which was forfeited 
  3.12  by taking a refund must be granted reinstated only upon 
  3.13  repayment of the amount of the separation refund, with six 
  3.14  percent annual interest, from the time of separation payment of 
  3.15  the refund until the date repaid.  
  3.16     Sec. 5.  Minnesota Statutes 1996, section 422A.23, is 
  3.17  amended to read: 
  3.18     422A.23 [SURVIVOR BENEFITS.] 
  3.19     Subdivision 1.  [PAYMENT OF CITY INSTALLMENT ACCUMULATED 
  3.20  AMOUNT.] (a) If a contributing an active or deferred member dies 
  3.21  after having been in the service with ten or more years of 
  3.22  service credit, and before actual retirement, as determined by 
  3.23  the retirement board, the present worth of the city's annual 
  3.24  installments of $60 then to the credit of the contributing 
  3.25  member, shall be paid to a beneficiary designated by such 
  3.26  contributing member in such form as the retirement board shall 
  3.27  require, who shall be the surviving spouse, or surviving child, 
  3.28  or children of such member or, if there be no surviving spouse 
  3.29  or surviving child or children, then to a person actually 
  3.30  dependent on and receiving principal support from such member, 
  3.31  or surviving mother or father, or grandchildren, or surviving 
  3.32  brother or sister, or surviving children of the deceased brother 
  3.33  or sister of such member except as noted in paragraph (d), the 
  3.34  individual specified in paragraph (b) is eligible to receive the 
  3.35  benefit specified in paragraph (c). 
  3.36     (b) An individual eligible for the benefit specified in 
  4.1   paragraph (c) is a beneficiary designated by the member on a 
  4.2   form specified by the executive director.  If the beneficiary 
  4.3   designated by the member is not one of the class of persons 
  4.4   named in the preceding sentence, such benefit from the 
  4.5   accumulation of city deposits shall be paid in the following 
  4.6   order:  (1) to the surviving spouse, the whole thereof; (2) if 
  4.7   there be no surviving spouse, to the surviving children, share 
  4.8   and share alike; (3) if there be no surviving spouse or child or 
  4.9   children, to the dependent or dependents as those terms are 
  4.10  herein defined, of the member, share and share alike; (4) if 
  4.11  there be no surviving spouse, child or children, or dependents, 
  4.12  to the surviving mother and father, share and share alike; (5) 
  4.13  if there be no surviving mother and father, to the 
  4.14  grandchildren, in equal shares; if there be no grandchildren, to 
  4.15  the surviving brothers and sisters of the member, in equal 
  4.16  shares; (6) if there be no surviving brothers and sisters, to 
  4.17  the surviving children of the deceased brothers and sisters of 
  4.18  the member, in equal shares; or (7) if there is none of the 
  4.19  foregoing persons who survives the member, the accumulation of 
  4.20  the city deposits shall be applied to the funeral expenses of 
  4.21  the member failed to designate a beneficiary, or if the 
  4.22  beneficiary or beneficiaries designated by the employee 
  4.23  predecease the employee, the benefit in paragraph (c) is payable 
  4.24  to the deceased employee's estate. 
  4.25     (c) The benefit is a lump sum payment of the present value 
  4.26  of the city's or other contributing employer's annual 
  4.27  installments of $60 to the credit of the member. 
  4.28     (d) No benefit is payable under this subdivision if a 
  4.29  monthly survivor benefit is paid under another subdivision of 
  4.30  this section. 
  4.31     Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] Upon the death 
  4.32  of a contributing (a) If an active member after having been in 
  4.33  the city service not less than dies prior to termination of 
  4.34  service with at least 18 months but before the effective date of 
  4.35  retirement, the board shall in lieu of the settlement 
  4.36  hereinbefore provided pay to the surviving spouse and/or 
  5.1   children of the member under the age of 18, or under the age of 
  5.2   22 if a full-time student at an accredited school, college or 
  5.3   university, and single, the following monthly benefit: 
  5.4      (a) Surviving spouse $325 per month, except for benefits 
  5.5   beginning after July 1, 1983, which shall be 30 percent of 
  5.6   member's average salary in effect over the last six months of 
  5.7   allowable service preceding the month in which the death 
  5.8   occurred. 
  5.9      (b) Each surviving child $150 per month, except for 
  5.10  benefits beginning after July 1, 1983, which shall be ten 
  5.11  percent of the member's average salary in effect over the last 
  5.12  six months of allowable service preceding the month in which the 
  5.13  death occurred but less than 20 years of service credit, the 
  5.14  surviving spouse or surviving child or children is eligible to 
  5.15  receive the survivor benefit specified in paragraph (b) or (c), 
  5.16  as applicable.  Payments for the Payment of a benefit of for 
  5.17  any surviving child under the age of 18 years shall be made to 
  5.18  the surviving parent, or if there be none, to the legal guardian 
  5.19  of such the surviving child.  The maximum monthly benefit shall 
  5.20  not exceed a total of $750. 
  5.21     (c) Effective for payments made after June 30, 1991, 
  5.22  surviving spouse and surviving child benefits under paragraphs 
  5.23  (a) and (b) beginning on or before July 1, 1983, are increased 
  5.24  to $500 per month and $225 per month, respectively.  The maximum 
  5.25  monthly payment under paragraph (b) is increased to $900.  The 
  5.26  increased cost resulting from the benefit increases in this 
  5.27  paragraph must be allocated to each employing unit listed in 
  5.28  section 422A.101, subdivisions 1a, 2, and 2a, on the basis of 
  5.29  the additional accrued liability resulting from increased 
  5.30  benefits paid to the survivors of employees from that unit. 
  5.31     (b) If the surviving spouse or surviving child benefit 
  5.32  commenced before July 1, 1983, the surviving spouse benefit is 
  5.33  $750 and the surviving child benefit is $225. 
  5.34     (c) If the surviving spouse or surviving child benefit 
  5.35  commences after June 30, 1983, the surviving spouse benefit is 
  5.36  30 percent of the member's average salary in effect over the 
  6.1   last six months of allowable service preceding the month in 
  6.2   which death occurs, or $750, whichever is greater.  The 
  6.3   surviving child benefit is ten percent of the member's average 
  6.4   salary in effect over the last six months of allowable service 
  6.5   preceding the month in which death occurs, or $250, whichever is 
  6.6   greater.  The sum of surviving spouse and surviving child 
  6.7   benefits payable under this paragraph shall not exceed 50 
  6.8   percent of the member's average salary in effect over the last 
  6.9   six months of allowable service or $1,250, whichever is greater. 
  6.10     (d) Surviving child benefits under this subdivision 
  6.11  terminate when the child no longer meets the definition of 
  6.12  surviving child in subdivision 8. 
  6.13     Subd. 5.  [ADMINISTRATION.] Benefits herein provided shall 
  6.14  in this section following the death of an active employee or 
  6.15  deferred member, as applicable, commence with on the first day 
  6.16  of the month following the month in which the active employee or 
  6.17  deferred member dies and shall end with the last day of the 
  6.18  month preceding the month in which eligibility 
  6.19  ceases.  Eligibility for the benefits herein provided shall be 
  6.20  determined by the retirement board and its determination shall 
  6.21  be final.  Each beneficiary or parent or guardian of a dependent 
  6.22  child or legal representative shall furnish such Information as 
  6.23  the board may deem deemed necessary by the executive director to 
  6.24  determine eligibility for the benefits provided by this section, 
  6.25  must be submitted. and Failure to furnish any required 
  6.26  information shall be sufficient grounds for the denial or 
  6.27  discontinuance of benefits.  A determination made by the 
  6.28  executive director may be appealed to the retirement board, 
  6.29  whose determination is final.  If the surviving spouse of the 
  6.30  deceased active employee or deferred member becomes entitled to 
  6.31  a retirement allowance by reason of membership in this fund, the 
  6.32  surviving spouse shall is authorized to receive the retirement 
  6.33  allowance in addition to the surviving spouse's benefit to which 
  6.34  the surviving spouse is entitled if any.  The cost of all 
  6.35  monthly survivor's benefits provided in this section shall be is 
  6.36  an obligation of the members and of the city, any of its boards, 
  7.1   departments, commissions or public corporations or other 
  7.2   applicable employing units. 
  7.3      Subd. 6.  [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 
  7.4   retirement board shall create a reserve account for survivor's 
  7.5   benefits from which shall be paid on an actuarial basis all 
  7.6   survivor benefits due and payable.  At the end of each fiscal 
  7.7   year, as part of the annual actuarial valuation of the fund 
  7.8   prepared by the commission-retained actuary, a determination of 
  7.9   the normal cost of the benefits payable from the survivor's 
  7.10  benefit account shall be made and the board shall reduce or 
  7.11  increase the employee contribution rate of one-fourth of one 
  7.12  percent if and when it is determined based on the annual 
  7.13  actuarial valuation that the member contribution rate is in 
  7.14  excess of or is less than the amount necessary to pay for 50 
  7.15  percent of the calculated normal cost of the survivor benefits 
  7.16  provided in this section. 
  7.17     Subd. 7.  [LONG SERVICE ACTIVE MEMBER SURVIVOR COVERAGE.] 
  7.18  (a) If the contributing active or deferred member dies after 
  7.19  having been in the service of the city 20 or more years, and 
  7.20  before the effective date of retirement, as determined by the 
  7.21  retirement board, the board shall pay with 20 or more years of 
  7.22  service credit, a beneficiary as defined in paragraph (b) is 
  7.23  eligible to receive the benefit specified in paragraph (c). 
  7.24     (b) The beneficiary eligible for a benefit under paragraph 
  7.25  (c) is the surviving spouse of the deceased employee.  If there 
  7.26  is no surviving spouse, the beneficiary may be a dependent 
  7.27  surviving child or dependent parent designated by the employee 
  7.28  on a form prescribed by the executive director. 
  7.29     (c) The benefit payable to the beneficiary designated in 
  7.30  paragraph (b) is a monthly allowance for life to the designated 
  7.31  beneficiary of the employee.  The monthly allowance herein 
  7.32  provided for shall be is the actuarial equivalent of a single 
  7.33  life service allowance specified in section 422A.15, subdivision 
  7.34  1, which would have been payable to the employee on the date of 
  7.35  death, notwithstanding the age requirement stated in section 
  7.36  422A.15, subdivision 1.  For purposes of this section, the 
  8.1   amount of any excess contributions or voluntary additions by the 
  8.2   member shall not be included in the calculations in determining 
  8.3   the monthly allowance.  
  8.4      (d) If the benefit in paragraph (c) is paid to a dependent 
  8.5   parent, the monthly benefit amount cannot exceed the monthly 
  8.6   amount that would have been paid to the member, under a single 
  8.7   life service allowance specified in section 422A.15, subdivision 
  8.8   1, if the employee had retired on the date of death, 
  8.9   notwithstanding the age requirement statute in section 422A.15, 
  8.10  subdivision 1. 
  8.11     The survivor allowance under this subdivision shall be 
  8.12  computed and determined under a procedure specified by the 
  8.13  commission-retained actuary utilizing the appropriate mortality 
  8.14  table established by the board of trustees based on the 
  8.15  experience of the fund as recommended by the commission-retained 
  8.16  actuary and using the applicable postretirement interest rate 
  8.17  assumption specified in section 356.215, subdivision 4d. 
  8.18     (e) For benefits payable under this subdivision following 
  8.19  the death of a deferred member, the benefit must be calculated 
  8.20  as of the date of termination from service and increased by five 
  8.21  percent per year until January 1, 1981, and by three percent per 
  8.22  year thereafter compounded annually. 
  8.23     Subd. 8.  [LUMP SUM DEATH BENEFIT SURVIVING CHILD; 
  8.24  DEPENDENT DEFINITION.] The beneficiary designated by the 
  8.25  employee shall be the surviving spouse of such employee.  If 
  8.26  there is no surviving spouse, the designated beneficiary may be 
  8.27  a dependent surviving child or dependent parent of such employee 
  8.28  as dependency is defined in sections 422A.01 to 422A.25.  If the 
  8.29  beneficiary designated by the employee is not of the class of 
  8.30  persons provided for in this subdivision, or if the designated 
  8.31  beneficiary predeceases the employee, a refund shall be made as 
  8.32  provided for in section 422A.22, in lieu of a life income.  If 
  8.33  the employee does not elect to designate a beneficiary to 
  8.34  receive a life income as herein provided, the designated 
  8.35  beneficiary, if of the class of persons set forth in this 
  8.36  subdivision, may elect within 60 days after the date of death of 
  9.1   the employee to receive a life income computed and determined as 
  9.2   though the employee had retired on the date of death under the 
  9.3   option 2 plan of retirement, as provided for in sections 422A.01 
  9.4   to 422A.25, and had designated such person as beneficiary.  For 
  9.5   purposes of subdivision 2, a surviving child is an unmarried 
  9.6   child of the deceased member under the age of 18, or under the 
  9.7   age of 22 if a full-time student at an accredited school, 
  9.8   college, or university.  For purposes of subdivision 7, a 
  9.9   dependent surviving child or dependent parent must meet the 
  9.10  definition of dependent, as defined in section 422A.01, 
  9.11  subdivision 12, at the time of the active or deferred member's 
  9.12  death. 
  9.13     Subd. 9.  [LUMP SUM DEATH BENEFIT.] If any employee who has 
  9.14  contributed to the survivor's benefit account as herein provided 
  9.15  dies before the effective date of retirement on a service or 
  9.16  disability pension and is not survived by a beneficiary eligible 
  9.17  to receive a monthly allowance as herein provided If no monthly 
  9.18  survivor benefit is payable under subdivision 2 or 7, there 
  9.19  shall be paid from the survivor's survivor benefit account to a 
  9.20  beneficiary designated by the employee on a form prescribed by 
  9.21  the executive director a lump sum death benefit of $750 if death 
  9.22  occurs prior to the end of the employee's tenth year of 
  9.23  service credit or of $1500 if the employee had prior to death 
  9.24  completed ten or more calendar years of service credit.  Upon 
  9.25  reinstatement of a former employee to the service, credit for 
  9.26  such past service or for any part thereof shall be granted only 
  9.27  upon repayment of the amount of the separation refund, with 
  9.28  interest, from the time of separation Any benefit under this 
  9.29  subdivision may be paid in addition to a benefit payable under 
  9.30  subdivision 1. 
  9.31     Subd. 10.  [BENEFIT INCREASES.] If the amount of annuity 
  9.32  payable from the Minnesota postretirement investment fund to any 
  9.33  class of annuitants is adjusted pursuant to section 11A.18, the 
  9.34  amount of benefits payable from the survivor's benefit fund 
  9.35  pursuant to subdivisions 7 or 8 for that class of annuitants 
  9.36  shall also be adjusted at the same time and rate.  Monthly 
 10.1   annuities payable under this section shall be adjusted at the 
 10.2   same time and rate as retirement annuities in the retirement 
 10.3   benefit fund. 
 10.4      Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
 10.5   survivor benefit is must not suspended, be discontinued or 
 10.6   terminated, or otherwise stopped due to a surviving spouse's 
 10.7   remarriage. 
 10.8      Subd. 12.  [DETERMINATION OF ANNUITY.] The survivor 
 10.9   annuities payable under this section shall be computed and 
 10.10  determined under a procedure specified by the actuary retained 
 10.11  by the legislative commission on pensions and retirement 
 10.12  utilizing the appropriate mortality table based on the 
 10.13  experience of the fund as recommended by that actuary and 
 10.14  approved by the legislative commission on pensions and 
 10.15  retirement and using the applicable postretirement interest rate 
 10.16  assumption specified in section 356.215, subdivision 4d. 
 10.17     Subd. 13.  [ADDITIONAL REFUND.] Benefits payable under this 
 10.18  section are in addition to a refund, if applicable, under 
 10.19  section 422A.22, subdivision 4.  
 10.20     Sec. 6.  [TRANSITIONAL IMPLEMENTATION.] 
 10.21     If the deceased active or deferred member had less than 20 
 10.22  years of service credit at the time of death, and the surviving 
 10.23  spouse benefit was more than $500 and commenced after July 1, 
 10.24  1983, and before the effective date of this act, the monthly 
 10.25  surviving spouse benefit amount most recently in effect prior to 
 10.26  the effective date of this act is to be adjusted upwards by the 
 10.27  annual benefit increase percentages that were applicable to 
 10.28  retirees with assets in the retirement benefit fund, for the 
 10.29  period from the death of the deceased active or deferred member 
 10.30  to the date of the most recent increase prior to the effective 
 10.31  date of this act.  This revised benefit is the new base upon 
 10.32  which further adjustments under Minnesota Statutes, section 
 10.33  422A.23, subdivision 10, are to be applied, if applicable. 
 10.34     Sec. 7.  [REPEALER.] 
 10.35     Minnesota Statutes 1996, section 422A.16, subdivision 3a, 
 10.36  is repealed. 
 11.1      Sec. 8.  [EFFECTIVE DATE.] 
 11.2      Sections 1 to 7 are effective upon approval by the 
 11.3   Minneapolis city council and compliance with Minnesota Statutes, 
 11.4   section 645.021.