1.1                          A bill for an act 
  1.2             relating to retirement; requiring the Minneapolis 
  1.3             police relief association to establish a voluntary 
  1.4             employee benefit organization; proposing coding for 
  1.5             new law in Minnesota Statutes, chapter 423B. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [423B.22] [VOLUNTARY EMPLOYEE BENEFIT 
  1.8   ORGANIZATION.] 
  1.9      Subdivision 1.  [FINDINGS.] The legislature finds that the 
  1.10  cost of health care absorbs a significant and growing percentage 
  1.11  of government resources and personal income.  The legislature 
  1.12  also finds that it has set aside funds to meet current and 
  1.13  future retirement obligations for its public employees and 
  1.14  thereby adequately funded these obligations, thereby obviating 
  1.15  future expenditures of government resources.  The legislature 
  1.16  also finds that local government, state government, and the 
  1.17  federal government have not been able to effectively address 
  1.18  either the short-term increases in health care costs or the 
  1.19  long-term funding needs to adequately provide health care to 
  1.20  both active and retired public employees.  The legislature also 
  1.21  finds that health care costs have become increasingly onerous to 
  1.22  retired public employees and present a major economic concern to 
  1.23  public employees upon their retirement.  The legislature 
  1.24  believes that finding a means to prefund health costs without 
  1.25  state and local government undertaking these obligations is both 
  2.1   prudent and sound.  The legislature also believes that the 
  2.2   federal government has at its disposal the best means to address 
  2.3   health care cost issues.  The legislature also finds that a 
  2.4   voluntary employee benefit organization may be a new way for 
  2.5   Minnesota public pension plans to partially address this issue.  
  2.6      Subd. 2.  [CREATION.] The association shall create, 
  2.7   maintain, and, if necessary, administer an Internal Revenue Code 
  2.8   section 501(c)(9) voluntary employee benefit organization for 
  2.9   the benefit of their members.  If required, the association may 
  2.10  incorporate a separate nonprofit entity under chapter 317A to 
  2.11  obtain any necessary approvals for the organization through the 
  2.12  association or through a separate nonprofit entity under chapter 
  2.13  317A, if required.  This voluntary employee benefit organization 
  2.14  shall provide for the payment of health-care-related benefits to 
  2.15  members and their surviving spouses and dependents.  
  2.16  Substantially, all the operations of the voluntary employee 
  2.17  benefit organization shall be in furtherance of providing 
  2.18  health-care-related benefits.  
  2.19     Subd. 3.  [GOVERNANCE AND MEMBERSHIP.] Elected members of 
  2.20  the board shall manage, operate, and administer the voluntary 
  2.21  employee benefit organization.  To the extent permissible by 
  2.22  section 501(c)(9) of the Internal Revenue Code, all members of 
  2.23  the association are eligible to participate in the voluntary 
  2.24  employee benefit organization.  Participation in the voluntary 
  2.25  employee benefit organization is voluntary. 
  2.26     Subd. 4.  [FUNDING.] The individual accounts of those 
  2.27  members choosing to participate in the voluntary employee 
  2.28  benefit organization may, consistent with federal law, be funded 
  2.29  by any of the following methods: 
  2.30     (1) a transfer of assets to the voluntary employee benefit 
  2.31  organization for the member's health insurance account 
  2.32  authorized in section 423B.14; 
  2.33     (2) contributions of those association active members with 
  2.34  25 or more years of service not directed to a health insurance 
  2.35  account established in section 423B.14; 
  2.36     (3) a portion of any disability benefit or postretirement 
  3.1   adjustment the member is entitled to under this chapter.  The 
  3.2   member shall designate that portion of benefit that the member 
  3.3   wishes to transfer to the voluntary employee benefit 
  3.4   organization on forms developed by the association.  A member's 
  3.5   benefit shall be offset dollar for dollar by the amount the 
  3.6   member wishes to transfer to the voluntary employee benefit 
  3.7   organization; or 
  3.8      (4) a transfer of funds from the city of Minneapolis to a 
  3.9   member's account in the voluntary employee benefit organization 
  3.10  pursuant to a collective bargaining agreement. 
  3.11     Sec. 2.  [EFFECTIVE DATE.] 
  3.12     Section 1 is effective the day after the governing body of 
  3.13  Minneapolis and its chief clerical officer timely complete their 
  3.14  compliance with Minnesota Statutes, section 645.021.