HF 284

as introduced - 89th Legislature (2015 - 2016) Posted on 01/22/2015 02:20pm

A bill for an act
relating to retirement; making administrative changes to the Teachers Retirement
Association; changing maximum excluded earnings limits from calendar year
to fiscal year; extending the interest-free period for leave of absence service
credit purchases; making federal conformity changes affecting all state pension
plans; amending Minnesota Statutes 2014, sections 354.445; 354.72, subdivision
2; 356.635, subdivision 9, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, 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 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) was not a recipient of an early retirement incentive under section 136F.481;

(4) begins drawing an annuity from the Teachers Retirement Association; and

(5) 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 $62,000 in a deleted text begin calendar deleted text end new text begin fiscal new text end year
through 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 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 $62,000
in a deleted text begin calendar deleted text end new text begin fiscal new text end year through employment after retirement 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 $62,000.

(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.

new text begin EFFECTIVE DATE. new text end

new text begin (a) This section is effective retroactively from January 1, 2015.
new text end

new text begin (b) For purposes of the January 1, 2015, to June 30, 2015, period, the $62,000
exempt income limit must be prorated.
new text end

Sec. 2.

Minnesota Statutes 2014, section 354.72, subdivision 2, is amended to read:

Subd. 2.

Purchase procedure.

(a) A teacher may purchase credit for allowable and
formula service in the plan for a period specified in subdivision 1 if the teacher makes a
payment as specified in paragraph (b), (c), or (d), whichever applies. The employing unit,
at its option, may pay the employer portion of the amount on behalf of its employees.

(b) If payment is received by the executive director by June 30 of the fiscal year
of the strike period or new text begin by December 31 of the fiscal year following an new text end authorized leave
included under section 354.093, 354.095, or 354.096, payment must equal the total
employee and employer contribution rates, including amortization contribution rates if
applicable, multiplied by the member's average monthly salary rate on the date the leave
or strike period commenced, deleted text begin or for an extended leave under section 354.094, on the salary
received during the year immediately preceding the initial year of the leave, deleted text end multiplied
by the months and portions of a month of the leave or strike period for which the teacher
seeks allowable service credit. new text begin This paragraph also applies to an extended leave under
section 354.094, except that payment must be received by June 30 of the year of the leave,
and the salary used in the computation is the salary received during the year immediately
preceding the initial year of the leave.
new text end

(c) If payment is made after June 30 and before the following June 30 for a strike
period new text begin , new text end or deleted text begin for leaves deleted text end new text begin after December 31 of the fiscal year following a leave new text end of absence
under section 354.093, 354.095, or 354.096, deleted text begin or for an extended leave of absence under
section 354.094, deleted text end new text begin and before July 1, new text end the payment must include the amount determined in
paragraph (b) plus compound interest at a monthly rate of 0.71 percent from June 30 new text begin for
a strike period, or from December 31 for a leave under section 354.093, 354.095, or
354.096, new text end until the last day of the month in which payment is received. new text begin If payment is made
on or after July 1 and before the following July 1 for an extended leave of absence under
section 354.094, the payment must include the amount determined in paragraph (b) plus
compound interest at a monthly rate of 0.71 percent from June 30 until the last day of
the month in which payment is received.
new text end

(d) If payment is received by the executive director after the applicable last permitted
date under paragraph (c), the payment amount is the amount determined under section
356.551. Notwithstanding payment deadlines specified in section 356.551, payment under
this section may be made anytime before the effective date of retirement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2014, section 356.635, subdivision 9, is amended to read:

Subd. 9.

Military service.

Contributions, benefits, including death and disability
benefits under section 401(a)(37) of the federal Internal Revenue Code, and service credit
with respect to qualified military service must be provided according to section 414(u) of
the federal Internal Revenue Code. new text begin For deaths occurring on or after January 1, 2007, while
a member is performing qualified military service as defined in United States Code, title
38, chapter 43, to the extent required by section 401(a)(37) of the federal Internal Revenue
Code, survivors of a member in the system are entitled to any additional benefits that the
system would have provided if the member had resumed employment and then died,
including but not limited to accelerated vesting or survivor benefits that are contingent
on the member's death while employed. In any event, a deceased member's period of
qualified military service must be counted for vesting purposes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2007.
new text end

Sec. 4.

Minnesota Statutes 2014, section 356.635, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Benefit limitations. new text end

new text begin For purposes of applying the limits of section
415(b) of the federal Internal Revenue Code, a retirement benefit that is payable in any
form other than a single life annuity and that is subject to section 417(e)(3) of the federal
Internal Revenue Code must be adjusted to an actuarially equivalent single life annuity
that equals, if the annuity starting date is in a plan year beginning after 2005, the annual
amount of the single life annuity commencing at the same annuity starting date that has
the same actuarial present value as the participant's form of benefit, using whichever of the
following produces the greatest annual amount:
new text end

new text begin (1) the interest rate and the mortality table or other tabular factor specified in the
plan for adjusting benefits in the same form;
new text end

new text begin (2) a 5.5 percent interest rate assumption and the applicable mortality table; or
new text end

new text begin (3) the applicable interest rate under section 417(e)(3) of the federal Internal
Revenue Code and the applicable mortality table, divided by 1.05.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2005.
new text end