Office of the Revisor of Statutes
SF 3355
Introduction - 94th Legislature (2025 - 2026)
Posted on 04/10/2025 09:32 a.m.
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19
1.20 1.21 1.22 1.23
2.1 2.2 2.3 2.4 2.5 2.6
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2.12 2.13 2.14 2.15 2.16
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6.30 6.31 6.32 6.33 7.1 7.2
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10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11
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11.1 11.2
A bill for an act
relating to retirement; Public Employees Retirement Association; general employees
retirement plan; expanding coverage governing privatization to include
governmental subdivisions; making administrative changes; revising the method
for calculating withdrawal liability; expanding the annual reporting requirement;
amending Minnesota Statutes 2024, sections 353F.01; 353F.02, subdivisions 3,
4b, 5a, 6, by adding subdivisions; 353F.025; 353F.03; 353F.04; 353F.05; 353F.051,
subdivisions 1, 2; 353F.052; 353F.057; 353F.06; 353F.07; 353F.08; 353F.09;
repealing Minnesota Statutes 2024, section 353F.02, subdivision 4a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 353F.01, is amended to read:
353F.01 PURPOSE AND INTENT.
The purpose of this chapter is to ensure, to the extent possible, that persons employed
deleted text begin at public medical facilities whodeleted text end new text begin by governmental subdivisions thatnew text end 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
deleted text begin medical facilitydeleted text end new text begin governmental subdivisionnew text end .
Sec. 2.
Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to
read:
new text begin Subd. 2a. new text end
new text begin Association. new text end
new text begin
"Association" means the Public Employees Retirement Association
established under chapter 353.
new text end
Sec. 3.
Minnesota Statutes 2024, section 353F.02, subdivision 3, is amended to read:
Subd. 3.
Effective date of privatization.
"Effective date of privatization" means the
date that deleted text begin the operation of a medical facility is assumed by anotherdeleted text end new text begin a governmental subdivision
becomes a privatizednew text end employer or the date that a deleted text begin medical facilitydeleted text end new text begin governmental subdivisionnew text end
is purchased deleted text begin by another employerdeleted text end new text begin in a privatizationnew text end and active membership in the deleted text begin Public
Employees Retirementdeleted text end association consequently terminates.
Sec. 4.
Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to
read:
new text begin Subd. 3b. new text end
new text begin Funding ratio. new text end
new text begin
"Funding ratio" means the actuarial value of assets of the
general employees retirement fund, divided by the present value of accrued benefits for the
fund, expressed as a percentage.
new text end
Sec. 5.
Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to
read:
new text begin Subd. 3c. new text end
new text begin General employees retirement fund. new text end
new text begin
"General employees retirement fund"
means the general employees retirement fund as defined under section 353.27, subdivision
1.
new text end
Sec. 6.
Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to
read:
new text begin Subd. 3d. new text end
new text begin General employees retirement plan. new text end
new text begin
"General employees retirement plan"
or "general plan" means the general employees retirement plan of the association established
under chapter 353.
new text end
Sec. 7.
Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to
read:
new text begin Subd. 3e. new text end
new text begin Governmental subdivision. new text end
new text begin
"Governmental subdivision" has the meaning
given in section 353.01, subdivision 6.
new text end
Sec. 8.
Minnesota Statutes 2024, section 353F.02, subdivision 4b, is amended to read:
Subd. 4b.
Privatization.
"Privatization" means deleted text begin a medical facility that privatizes when
the facilitydeleted text end new text begin the process of privatizing, through which a governmental subdivisionnew text end ceases to
be a governmental subdivision for any reason other than that the deleted text begin medical facilitydeleted text end new text begin
governmental subdivisionnew text end closes or permanently ceases to operate.
Sec. 9.
Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision to
read:
new text begin Subd. 4c. new text end
new text begin Privatize or privatizing. new text end
new text begin
"Privatize" or "privatizing" means to engage in a
transaction, including a sale to, acquisition by, or merger with an entity or a sale to or
acquisition by one or more individuals, or a series of such transactions that result in a
governmental subdivision ceasing to be a governmental subdivision on or after the effective
date of privatization. Privatize or privatizing does not mean ceasing to be a governmental
subdivision because the subdivision closed or permanently ceased to operate.
new text end
Sec. 10.
Minnesota Statutes 2024, section 353F.02, subdivision 5a, is amended to read:
Subd. 5a.
Privatized deleted text begin former publicdeleted text end employer.
"Privatized deleted text begin former publicdeleted text end employer"
means deleted text begin a medical facility that was included in the definition ofdeleted text end new text begin an entity that was anew text end
governmental subdivision deleted text begin under section 353.01, subdivision 6,deleted text end on the day before the effective
date of privatization deleted text begin that is privatizeddeleted text end and whose employees are deleted text begin certified for participation
under this chapterdeleted text end new text begin privatized employeesnew text end .
Sec. 11.
Minnesota Statutes 2024, section 353F.02, subdivision 6, is amended to read:
Subd. 6.
Privatized deleted text begin former publicdeleted text end employee.
(a) "Privatized deleted text begin former publicdeleted text end employee"
means a person whonew text begin , before the effective date of the privatization of a governmental
subdivisionnew text end :
(1) was employed by the deleted text begin privatized former public employer on the day before the effective
date of privatization; ordeleted text end new text begin governmental subdivision; and
new text end
deleted text begin
(2) terminated employment with the privatized former public employer on the day before
the effective date; and
deleted text end
deleted text begin (3)deleted text end new text begin (2)new text end was a deleted text begin participant indeleted text end new text begin member ofnew text end the general employees retirement plan deleted text begin of the
Public Employees Retirement Association at the time of termination of employment with
the privatized former public employerdeleted text end new text begin for the period of employment with the governmental
subdivisionnew text end .
(b) Privatized deleted text begin former publicdeleted text end employee does not mean a person who, on the day before
the effective date of privatization, was simultaneously employed with the privatized deleted text begin former
publicdeleted text end employer and by a governmental subdivision deleted text begin under section 353.01, subdivision 6,deleted text end
and who, after the effective date of privatization, continues to accrue service credit under
section 353.01, subdivision 16, through simultaneous employment with a governmental
subdivision.
Sec. 12.
Minnesota Statutes 2024, section 353F.02, is amended by adding a subdivision
to read:
new text begin Subd. 6a. new text end
new text begin Privatizing active employee. new text end
new text begin
"Privatizing active employee" means a privatized
employee who was employed by the privatizing governmental subdivision on the day before
the effective date of the privatization.
new text end
Sec. 13.
Minnesota Statutes 2024, section 353F.025, is amended to read:
353F.025 deleted text begin CERTIFICATION AND DECERTIFICATION OF MEDICAL
FACILITIES AND OTHER PUBLIC EMPLOYING UNITSdeleted text end new text begin WITHDRAWAL
LIABILITYnew text end .
Subdivision 1.
Eligibility determinationnew text begin and calculation of withdrawal liabilitynew text end .
(a)
deleted text begin The chief clericaldeleted text end new text begin This section applies to any governmental subdivision that privatizes.
new text end
new text begin (b) Before the effective date of privatization, an new text end officer of deleted text begin adeleted text end new text begin thenew text end governmental subdivision
deleted text begin maydeleted text end new text begin that is privatizing or that has control or ownership of an entity that is privatizing must new text end
submit new text begin to the executive director new text end a resolution from the governing body deleted text begin to the executive
director of the Public Employees Retirement Association which supports providing coverage
under this chapter for employees of that governmental subdivision who are privatized, and
which states that the governing body will pay for actuarial calculations, as further specified
in paragraph (c).deleted text end new text begin of the governmental subdivision stating the following:
new text end
new text begin
(1) that it is the intention of the governmental subdivision to privatize or to engage in a
privatization that will result in the controlled or owned entity becoming privatized; and
new text end
new text begin
(2) that the governmental subdivision will reimburse the association for the cost to
calculate withdrawal liability under paragraph (d).
new text end
deleted text begin (b)deleted text end new text begin (c)new text end The governing body must also provide new text begin to the executive director new text end a copy of deleted text begin any
applicabledeleted text end new text begin thenew text end purchase deleted text begin ordeleted text end new text begin ,new text end leasenew text begin , or other transactionnew text end agreement and any other information
requested by the executive director to allow the executive director to deleted text begin verify that under the
proposed employer change,deleted text end new text begin determine whethernew text end the deleted text begin newdeleted text end employer deleted text begin does not qualify asdeleted text end new text begin , after
the privatization, will benew text end a governmental subdivision deleted text begin under section 353.01, subdivision 6deleted text end new text begin
or a privatized employernew text end , making the employees ineligible for continued coverage as active
members of the general employees retirement plan deleted text begin of the Public Employees Retirement
Associationdeleted text end .
deleted text begin (c) Followingdeleted text end new text begin (d) If, within 30 days afternew text end receipt of deleted text begin adeleted text end new text begin thenew text end resolution and deleted text begin a determination
bydeleted text end new text begin information under paragraph (b),new text end the executive directornew text begin determinesnew text end that the deleted text begin newdeleted text end employer
deleted text begin isdeleted text end new text begin after the privatization willnew text end notnew text begin benew text end a governmental subdivision, the executive director deleted text begin shalldeleted text end new text begin
mustnew text end direct the consulting actuary retainednew text begin by the associationnew text end under section 356.214 to
deleted text begin determine whether the general employees retirement plan of the Public Employees Retirement
Association, if coverage under this chapter is provided, is expected to receive a net gain or
a net loss if privatization occurs. A net gain is expected if the actuarial liability of the special
benefit coverage provided under this chapter, if extended to the applicable employees under
the privatization, is less than the actuarial gain otherwise to accrue to the plan. A net loss
is expected if the actuarial accrued liability of the special benefit coverage provided under
this chapter, if extended to the applicable employees under the privatization, is more than
the actuarial gain otherwise to accrue to the plan. The date of the actuarial calculations used
to make this determination must be within one year of the effective date of privatizationdeleted text end new text begin
calculate the withdrawal liability to be incurred by the privatized employer on the effective
date of the privatization. Withdrawal liability and present value must be calculated as
provided in paragraphs (e) and (f), respectivelynew text end .
new text begin
(e) Withdrawal liability is equal to the present value of accrued benefits attributable to
the privatizing active employees minus the product of:
new text end
new text begin
(1) the present value of accrued benefits attributable to the privatizing active employees;
and
new text end
new text begin
(2) the general plan's funding ratio.
new text end
new text begin
If the withdrawal liability is a negative number, the withdrawal liability is zero. Withdrawal
liability must be calculated using the most recently completed actuarial valuation before
the effective date of privatization.
new text end
new text begin
(f) Present value of accrued benefits is determined using the actuarial assumptions under
section 356.215, subdivision 8, for the general plan. The present value of accrued benefits
does not include projected compensation or projected service.
new text end
new text begin
(g) The governmental subdivision must reimburse the association for the cost of
calculating the withdrawal liability.
new text end
new text begin Subd. 1a. new text end
new text begin Payment of withdrawal liability. new text end
new text begin
No later than six months after the effective
date of privatization, the privatized employer must pay the withdrawal liability calculated
under subdivision 1 to the general employees retirement fund, unless the privatized employer
elects a payment plan. In lieu of a single withdrawal liability payment, the privatized
employer may elect to pay the withdrawal liability with interest compounded annually at
the applicable rate or rates specified in section 356.59, subdivision 3, in equal annual
payments for a term of no longer than ten years. The obligation to pay under this subdivision
is binding upon the privatized employer and its successors and assignees.
new text end
Subd. 2.
Reporting privatizations.
(a) deleted text begin If the actuarial calculations under subdivision
1, paragraph (c), indicate privatization can be approved because a net gain to the general
employees retirement plan of the Public Employees Retirement association is expected, or
if paragraph (b) applies, the executive director shall, following acceptance of the actuarial
calculations bydeleted text end new text begin The association must maintain a record of the consulting actuary's calculation
of withdrawal liability under subdivision 1 and any associated report. The calculation and
any associated report must be made publicly available and provided to:
new text end
new text begin (1)new text end the board of trusteesdeleted text begin , forward notice and supporting documentation, including a copy
of the actuary's report and findings, todeleted text end new text begin ;
new text end
new text begin (2)new text end the chair and the executive director of the Legislative Commission on Pensions and
Retirementnew text begin ;new text end and
new text begin (3)new text end the chairs and the ranking minority members of thenew text begin legislativenew text end committees with
jurisdiction over governmental operations deleted text begin in the house of representatives and senatedeleted text end .
deleted text begin
(b) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the executive
director shall recommend to the board of trustees that the privatization be approved if the
chief clerical officer of the applicable governmental subdivision submits a resolution from
the governing body specifying that a lump sum payment will be made to the Public
Employees Retirement Association equal to the net loss, plus interest. The interest must be
computed using the applicable ultimate investment return assumption under section 356.215,
subdivision 8, expressed as a monthly rate, from the date of the actuarial valuation from
which the actuarial accrued liability data was used to determine the net loss in the actuarial
study under subdivision 1, to the date of payment, with annual compounding. Payment must
be made on or after the effective date of privatization.
deleted text end
deleted text begin (c)deleted text end new text begin (b)new text end The deleted text begin Public Employees Retirementdeleted text end association must maintain a list that includes
the names of all privatized deleted text begin former publicdeleted text end employers in the association'snew text begin annualnew text end comprehensive
deleted text begin annualdeleted text end financial report and on the association's website.new text begin Beginning July 1, 2027, the
association must also include in the list the amount of the withdrawal liability determined
as of the effective date of privatization and the remaining amount, if any, of withdrawal
liability due to be paid for each privatized employer.
new text end
Sec. 14.
Minnesota Statutes 2024, section 353F.03, is amended to read:
353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.
Notwithstanding any provision of chapter 353 to the contrary, a privatized deleted text begin former publicdeleted text end
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 specified in section 353.01, subdivision 47.
Sec. 15.
Minnesota Statutes 2024, section 353F.04, is amended to read:
353F.04 AUGMENTATION INTEREST RATES FOR PRIVATIZED deleted text begin FORMER
PUBLICdeleted text end EMPLOYEES.
Subdivision 1.
Enhanced augmentation rates.
(a) The deferred annuity of a privatized
deleted text begin former publicdeleted text end employee is subject to augmentation under section 353.34, subdivision 3,
except that the rate of augmentation is as specified in this section.
(b) This paragraph applies if the effective date of privatization was on or before January
1, 2007, and also applies to Hutchinson Area Health Care with a privatization effective date
of January 1, 2008. For a privatized deleted text begin former publicdeleted text end employee, the augmentation rate is 5.5
percent compounded annually until January 1 following the year in which the deleted text begin persondeleted text end new text begin
privatized employeenew text end attains age 55. After that date, the augmentation rate is 7.5 percent
compounded annually.
(c) If paragraph (b) is not applicable, and if the effective date of the privatization is after
January 1, 2007, and before January 1, 2011, then the augmentation rate is four percent
compounded annually until January 1, following the year in which the deleted text begin persondeleted text end new text begin privatized
employeenew text end attains age 55. After that date, the augmentation rate is six percent compounded
annually.
(d) If the effective date of the privatization is after December 31, 2010, the augmentation
rate depends on the result of computations specified in section 353F.025, subdivision 1. If
those computations indicate no loss or a net gain to the deleted text begin fund of thedeleted text end general employees
retirement deleted text begin plan of the Public Employees Retirement Associationdeleted text end new text begin fundnew text end , the augmentation
rate is two percent compounded annually. If the computations under that subdivision indicate
a net loss to the fund if a two percent augmentation rate is used, but a net gain or no loss if
a one percent rate is used, then the augmentation rate is one percent compounded annually.
(e) Notwithstanding paragraphs (b) to (d), after June 30, 2020, and before January 1,
2024, the augmentation rate for all privatized deleted text begin former publicdeleted text end employees under paragraphs
(b) to (d) is two percent compounded annually. After December 31, 2023, no additional
augmentation is applied to thenew text begin deferred annuities ofnew text end privatized deleted text begin former public employee's
deferred annuitydeleted text end new text begin employeesnew text end .
Subd. 2.
Exceptions.
The augmentation rates specified in subdivision 1 do not apply to
a privatized deleted text begin former publicdeleted text end employee:
(1) beginning the first of the month in which the privatized deleted text begin former publicdeleted text end employee
becomes covered again by a retirement plan enumerated in section 356.30, subdivision 3,
if the employee accrues at least six months of credited service in any single plan enumerated
in section 356.30, subdivision 3, except clause (6);
(2) beginning the first of the month in which the privatized deleted text begin former publicdeleted text end employee
becomes covered again by the general employees retirement plan deleted text begin of the Public Employees
Retirement Associationdeleted text end ;
(3) beginning the first of the month after a privatized deleted text begin former publicdeleted text end employee terminates
service with the privatized deleted text begin former publicdeleted text end employer;
(4) if the privatized deleted text begin former publicdeleted text end employee begins receipt of a retirement annuity while
employed by the privatized deleted text begin former publicdeleted text end employer; or
(5) if the effective date of privatization occurs after June 30, 2020.
Sec. 16.
Minnesota Statutes 2024, section 353F.05, is amended to read:
353F.05 AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE FOR
EARLY RETIREMENT PURPOSES.
(a) 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 353deleted text begin ,deleted text end to the contrary, the years of allowable service for a privatized deleted text begin former publicdeleted text end
employee who transfers employment on the effective date of privatization 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 privatized deleted text begin former publicdeleted text end employer
following the effective date. The privatized deleted text begin former publicdeleted text end employer shall provide any reports
that the executive director deleted text begin of the Public Employees Retirement Associationdeleted text end may reasonably
request to permit calculation of benefits.
(b) To be eligible for early retirement benefits under this section, the deleted text begin individualdeleted text end new text begin privatized
employeenew text end must separate from service with the privatized deleted text begin former publicdeleted text end employer. The
privatized deleted text begin former publicdeleted text end employee, or an individual authorized to act on behalf of that
employee, may apply for an annuity following application procedures under section 353.29,
subdivision 4.
Sec. 17.
Minnesota Statutes 2024, section 353F.051, subdivision 1, is amended to read:
Subdivision 1.
Eligibility.
A privatized deleted text begin former publicdeleted text end employee who is totally and
permanently disabled under section 353.01, subdivision 19, and who had a medically
documented preexisting condition of the disability before the termination of coverage, may
apply for a disability benefit.
Sec. 18.
Minnesota Statutes 2024, section 353F.051, subdivision 2, is amended to read:
Subd. 2.
Calculation of benefits.
A person qualifying under subdivision 1 is entitled to
receive a disability benefit calculated under section 353.33, subdivision 3. deleted text begin The disability
benefit must be augmented under section 353.71, subdivision 2, from the date of termination
to the date the disability benefit begins to accrue.
deleted text end
Sec. 19.
Minnesota Statutes 2024, section 353F.052, is amended to read:
353F.052 APPLICATION OF SURVIVING SPOUSE, DEPENDENT CHILD
PROVISION.
Notwithstanding any provisions of law to the contrary, subdivisions within section
353.32 of the edition of Minnesota Statutes published in the year before the year in which
a privatization occurred, applicable to the surviving spouse or dependent children of a former
member as defined in section 353.01, subdivision 7a, apply to the survivors of a privatized
deleted text begin former publicdeleted text end employee.
Sec. 20.
Minnesota Statutes 2024, section 353F.057, is amended to read:
353F.057 TERMINATION FROM SERVICE REQUIREMENT.
Upon termination of service from the privatized deleted text begin former publicdeleted text end employer after the effective
date of privatization, a privatized deleted text begin former publicdeleted text end employee must separate from any
employment relationship with the privatized deleted text begin former publicdeleted text end employer for at least 30 days to
qualify to receive a retirement annuity under this chapter.
Sec. 21.
Minnesota Statutes 2024, section 353F.06, is amended to read:
353F.06 APPLICATION OF REEMPLOYED ANNUITANT EARNINGS
LIMITATIONS.
If a privatized deleted text begin former publicdeleted text end employee satisfies the separation from service requirement
in section 353F.057 and thereafter resumes employment with the privatized deleted text begin former publicdeleted text end
employer or a governmental subdivision under section 353.01, subdivision 6, the reemployed
annuitant earnings limitations of section 353.37 apply.
Sec. 22.
Minnesota Statutes 2024, section 353F.07, is amended to read:
353F.07 EFFECT ON REFUND.
Notwithstanding any provision of chapter 353 to the contrary, privatized deleted text begin former publicdeleted text end
employees may receive a refund of employee accumulated contributions plus interest as
provided in section 353.34, subdivision 2, at any time after the transfer of employment to
the privatized deleted text begin former publicdeleted text end employer. If a privatized deleted text begin former publicdeleted text end employee has received
a refund from a pension plan listed in section 356.30, subdivision 3, the deleted text begin persondeleted text end new text begin privatized
employeenew text end may not repay that refund unless the deleted text begin persondeleted text end new text begin privatized employeenew text end again becomes
a member of one of those listed plans and complies with section 356.30, subdivision 2.
Sec. 23.
Minnesota Statutes 2024, section 353F.08, is amended to read:
353F.08 COUNSELING SERVICES.
The privatized deleted text begin former publicdeleted text end employer and the executive director deleted text begin of the Public Employees
Retirement Associationdeleted text end shall provide privatized deleted text begin former publicdeleted text end employees with counseling
on their benefits available under the general employees retirement plan deleted text begin of the Public
Employees Retirement Associationdeleted text end during a new text begin mutually agreed-upon new text end period deleted text begin mutually agreed
upondeleted text end before or after the effective date of privatization.
Sec. 24.
Minnesota Statutes 2024, section 353F.09, is amended to read:
353F.09 APPLICATION TO SALES OF PRIVATIZED deleted text begin FORMER PUBLICdeleted text end
EMPLOYERS.
A deleted text begin medical facility or other employing unitdeleted text end new text begin privatized employernew text end shall cease to be a
privatized deleted text begin former publicdeleted text end employer and its employees shall cease to be considered privatized
deleted text begin former publicdeleted text end employees under this chapter upon the sale of the operations of the deleted text begin medical
facility ordeleted text end employing unit to another employer or the sale of the deleted text begin medical facility ordeleted text end employing
unit to another employer. The privatized deleted text begin former publicdeleted text end employees deleted text begin shall bedeleted text end new text begin arenew text end entitled to
benefits accrued under this chapter to the date of the sale, but deleted text begin shalldeleted text end new text begin mustnew text end not accrue additional
benefits after the date of the sale.
Sec. 25. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2024, section 353F.02, subdivision 4a,
new text end
new text begin
is repealed.
new text end
Sec. 26. new text begin EFFECTIVE DATE.
new text end
new text begin
Sections 1 to 25 are effective July 1, 2027.
new text end
APPENDIX
Repealed Minnesota Statutes: 25-05335
353F.02 DEFINITIONS.
Subd. 4a.
Medical facility.
"Medical facility" means a facility that has the primary purpose of providing medical care and that satisfies the definition of governmental subdivision under section 353.01, subdivision 6.