1.1                          A bill for an act 
  1.2             relating to retirement; establishing the 
  1.3             postretirement health care savings plan for state 
  1.4             employees; appropriating money; amending Minnesota 
  1.5             Statutes 2000, section 356.24, subdivision 1; 
  1.6             proposing coding for new law in Minnesota Statutes, 
  1.7             chapter 352. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [352.98] [POSTRETIREMENT HEALTH CARE SAVINGS 
  1.10  PLAN.] 
  1.11     Subdivision 1.  [PLAN CREATED.] The Minnesota state 
  1.12  retirement system shall establish a plan, known as the 
  1.13  postretirement health care savings plan, through which state 
  1.14  employers and employees may save to cover postretirement health 
  1.15  care costs.  The plan shall make available one or more trusts, 
  1.16  authorized under the Internal Revenue Code to be eligible for 
  1.17  tax-preferred or tax-free treatment, through which employers and 
  1.18  employees can save to cover postretirement health care costs. 
  1.19     Subd. 2.  [CONTRACTING AUTHORIZED.] The Minnesota state 
  1.20  retirement system is authorized to contract with public and 
  1.21  private entities to provide investment services, recordkeeping, 
  1.22  benefit payments, and other functions necessary for the 
  1.23  administration of the plan. 
  1.24     Subd. 3.  [CONTRIBUTIONS.] (a) Contributions to the plan 
  1.25  shall be determined through a personnel policy or in a 
  1.26  collective bargaining agreement of a state public employer with 
  2.1   the exclusive representative of the covered employees in an 
  2.2   appropriate unit.  The Minnesota state retirement system may 
  2.3   offer different types of trusts permitted under the Internal 
  2.4   Revenue Code to best meet the needs of different employee units. 
  2.5      (b) Contributions to the plan by or on behalf of the 
  2.6   employee shall be held in trust for reimbursement of employee 
  2.7   and dependent health-related expenses following retirement from 
  2.8   state employment.  The Minnesota state retirement system shall 
  2.9   maintain a separate account of the contributions made by or on 
  2.10  behalf of each participant and the earnings thereon.  The 
  2.11  Minnesota state retirement system shall make available a limited 
  2.12  range of investment options, and each employee may direct the 
  2.13  investment of the accumulations in the employee's account among 
  2.14  the investment options made available by the Minnesota state 
  2.15  retirement system. 
  2.16     Subd. 4.  [REIMBURSEMENT FOR HEALTH-RELATED 
  2.17  EXPENSES.] Following termination of state service, the Minnesota 
  2.18  state retirement system shall reimburse employees at least 
  2.19  quarterly for submitted health-related expenses, until the 
  2.20  employee exhausts the accumulation in the employee's account.  
  2.21  If an employee dies prior to exhausting the employee's account 
  2.22  balance, the employee's dependents shall be eligible to be 
  2.23  reimbursed for health care expenses from the account until the 
  2.24  account balance is exhausted.  If an account balance remains 
  2.25  after the death of a participant and all of the participant's 
  2.26  legal dependents, the remainder of the account shall be paid to 
  2.27  the employee's beneficiaries or, if none, to the employee's 
  2.28  estate. 
  2.29     Subd. 5.  [FEES.] The Minnesota state retirement plan is 
  2.30  authorized to charge uniform fees to participants to cover the 
  2.31  ongoing cost of operating the plan.  Any fees not needed shall 
  2.32  revert to participant accounts. 
  2.33     Subd. 6.  [ADVISORY COMMITTEE.] (a) The Minnesota state 
  2.34  retirement system shall establish a participant advisory 
  2.35  committee for the plan, made up of one representative appointed 
  2.36  by each employee unit participating in the plan.  Each 
  3.1   participating unit shall be responsible for the expenses of its 
  3.2   own representative. 
  3.3      (b) The advisory committee shall meet at least twice per 
  3.4   year and shall be consulted on plan offerings and vendor 
  3.5   selection.  By October 1 of each year, the Minnesota state 
  3.6   retirement system shall give the advisory committee a statement 
  3.7   of fees collected and the use of the fees. 
  3.8      Subd. 7.  [CONTRACTING WITH PRIVATE ENTITIES.] Nothing in 
  3.9   this section shall prohibit employers from contracting with 
  3.10  private entities to provide for postretirement health care 
  3.11  reimbursement plans. 
  3.12     Sec. 2.  Minnesota Statutes 2000, section 356.24, 
  3.13  subdivision 1, is amended to read: 
  3.14     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
  3.15  for a school district or other governmental subdivision or state 
  3.16  agency to levy taxes for, or contribute public funds to a 
  3.17  supplemental pension or deferred compensation plan that is 
  3.18  established, maintained, and operated in addition to a primary 
  3.19  pension program for the benefit of the governmental subdivision 
  3.20  employees other than: 
  3.21     (1) to a supplemental pension plan that was established, 
  3.22  maintained, and operated before May 6, 1971; 
  3.23     (2) to a plan that provides solely for group health, 
  3.24  hospital, disability, or death benefits; 
  3.25     (3) to the individual retirement account plan established 
  3.26  by chapter 354B; 
  3.27     (4) to a plan that provides solely for severance pay under 
  3.28  section 465.72 to a retiring or terminating employee; 
  3.29     (5) for employees other than personnel employed by the 
  3.30  state university board or the community college board and 
  3.31  covered by the board of trustees of the Minnesota state colleges 
  3.32  and universities supplemental retirement plan under chapter 
  3.33  354C, if provided for in a personnel policy of the public 
  3.34  employer or in the collective bargaining agreement between the 
  3.35  public employer and the exclusive representative of public 
  3.36  employees in an appropriate unit, in an amount matching employee 
  4.1   contributions on a dollar for dollar basis, but not to exceed an 
  4.2   employer contribution of $2,000 a year per employee; 
  4.3      (i) to the state of Minnesota deferred compensation plan 
  4.4   under section 352.96; or 
  4.5      (ii) in payment of the applicable portion of the 
  4.6   contribution made to any investment eligible under section 
  4.7   403(b) of the Internal Revenue Code, if the employing unit has 
  4.8   complied with any applicable pension plan provisions of the 
  4.9   Internal Revenue Code with respect to the tax-sheltered annuity 
  4.10  program during the preceding calendar year; or 
  4.11     (6) for personnel employed by the state university board or 
  4.12  the community college board and not covered by clause (5), to 
  4.13  the supplemental retirement plan under chapter 354C, if provided 
  4.14  for in a personnel policy or in the collective bargaining 
  4.15  agreement of the public employer with the exclusive 
  4.16  representative of the covered employees in an appropriate unit, 
  4.17  in an amount matching employee contributions on a dollar for 
  4.18  dollar basis, but not to exceed an employer contribution of 
  4.19  $2,700 a year for each employee; or 
  4.20     (7) to a supplemental plan to save for postretirement 
  4.21  health care expenses qualified for tax-preferred treatment under 
  4.22  the Internal Revenue Code, if provided for in a personnel policy 
  4.23  or in the collective bargaining agreement of a public employer 
  4.24  with the exclusive representative of the covered employees in an 
  4.25  appropriate unit. 
  4.26     Sec. 3.  [APPROPRIATION.] 
  4.27     $150,000 is appropriated to the Minnesota state retirement 
  4.28  system from the general fund to cover the costs of establishing 
  4.29  the plan created in section 1.  Any amount not needed shall 
  4.30  revert to the general fund on June 30, 2003.