HF 519

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; teachers retirement 
  1.3             association; expanding dependent child benefit 
  1.4             eligibility; enhancing surviving spouse benefits if 
  1.5             receipt is delayed; authorizing payment of annuities 
  1.6             in death-while-active-or-deferred situations where 
  1.7             there is no surviving spouse or dependent children; 
  1.8             expanding teachers retirement association qualified 
  1.9             part-time teacher program eligibility if teacher is a 
  1.10            legislator; making administrative revisions in various 
  1.11            member data reporting provisions, beneficiary 
  1.12            designation provisions, and retirement accrual 
  1.13            provisions; expanding use of nontaxable rollovers to 
  1.14            repay refunds or purchase service credit in all public 
  1.15            plans; amending Minnesota Statutes 2002, sections 
  1.16            354.05, subdivisions 8, 8a, 22; 354.096, subdivision 
  1.17            1; 354.44, subdivision 4; 354.46, subdivisions 2, 2b, 
  1.18            5, by adding subdivisions; 354.48, subdivision 2; 
  1.19            354.52, subdivisions 4a, 6; 354.66, subdivision 2; 
  1.20            356.441; repealing Minnesota Statutes 2002, section 
  1.21            354A.107. 
  1.22  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.23                             ARTICLE 1
  1.24                  TEACHERS RETIREMENT ASSOCIATION 
  1.25                     ADMINISTRATIVE PROVISIONS
  1.26     Section 1.  Minnesota Statutes 2002, section 354.05, 
  1.27  subdivision 22, is amended to read: 
  1.28     Subd. 22.  [DESIGNATED BENEFICIARY.] "Designated 
  1.29  beneficiary" means the person, trust, or organization designated 
  1.30  by a retiree or member to receive the benefits to which a 
  1.31  beneficiary is entitled under this chapter.  A beneficiary 
  1.32  designation is valid only if it is made on an appropriate form 
  1.33  provided by the executive director that is signed by the member 
  2.1   and two witnesses to the member's signature.  The properly 
  2.2   completed form must be received by the association on or before 
  2.3   the date of death of the retiree or member.  If a retiree or a 
  2.4   member does not designate a person, trust, or organization, or 
  2.5   if the person designated predeceases the retiree or the member, 
  2.6   or the trust or organization ceases to exist before the death of 
  2.7   the retiree or the member, the designated beneficiary means the 
  2.8   estate of the deceased retiree or member. 
  2.9      Sec. 2.  Minnesota Statutes 2002, section 354.096, 
  2.10  subdivision 1, is amended to read: 
  2.11     Subdivision 1.  [CERTIFICATION.] Upon granting a family 
  2.12  leave to a member, an employing unit must certify the leave to 
  2.13  the association on a form specified by the executive director 
  2.14  before the end of the fiscal year during which the leave was 
  2.15  granted. 
  2.16     Sec. 3.  Minnesota Statutes 2002, section 354.44, 
  2.17  subdivision 4, is amended to read: 
  2.18     Subd. 4.  [RETIREMENT ANNUITY ACCRUAL DATE.] (a) An annuity 
  2.19  payment begins to accrue, providing that the age and service 
  2.20  requirements under subdivision 1 are satisfied, after the 
  2.21  termination of teaching service, or after the application for 
  2.22  retirement has been filed with the board, whichever is later, as 
  2.23  follows: 
  2.24     (1) on the 16th day of the month of termination or filing 
  2.25  if the termination or filing occurs on or before the 15th day of 
  2.26  the month; 
  2.27     (2) on the first day of the month following the month of 
  2.28  termination or filing if the termination or filing occurs on or 
  2.29  after the 16th day of the month; 
  2.30     (3) on July 1 for all school principals and other 
  2.31  administrators who receive a full annual contract salary during 
  2.32  the fiscal year for performance of a full year's contract 
  2.33  duties; or 
  2.34     (4) a later date to be the first or 16th day of a month 
  2.35  within the six-month period immediately following the 
  2.36  termination of teaching service as specified under paragraph (b) 
  3.1   by the member. 
  3.2      (b) If an application for retirement is filed with the 
  3.3   board during the six-month period immediately following the 
  3.4   termination of teaching service, the annuity may begin to accrue 
  3.5   as if the application for retirement had been filed with the 
  3.6   board on the date teaching service terminated or a later date 
  3.7   under paragraph (a), clause (4).  An annuity must not begin to 
  3.8   accrue more than one month before the date of final salary 
  3.9   receipt. 
  3.10     Sec. 4.  Minnesota Statutes 2002, section 354.46, 
  3.11  subdivision 2b, is amended to read: 
  3.12     Subd. 2b.  [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 
  3.13  no surviving spouse eligible for benefits under subdivision 2, a 
  3.14  each dependent child or children as defined in section 354.05, 
  3.15  subdivision 8a, is eligible for monthly payments.  Payments to a 
  3.16  dependent child must be paid from the date of the member's death 
  3.17  to the date the dependent child attains age 20 if the child is 
  3.18  under age 15.  If the child is 15 years or older on the date of 
  3.19  death, payment must be made for five years.  The payment to a 
  3.20  dependent child is an amount actuarially equivalent to the value 
  3.21  of a 100 percent optional annuity under subdivision 2 using the 
  3.22  age of the member and age of the dependent child at the date of 
  3.23  death in lieu of the age of the member and the spouse.  If there 
  3.24  is more than one dependent child, each dependent child shall 
  3.25  receive a proportionate share of the actuarial value of the 
  3.26  member's account.  
  3.27     Sec. 5.  Minnesota Statutes 2002, section 354.46, 
  3.28  subdivision 5, is amended to read: 
  3.29     Subd. 5.  [PAYMENT SURVIVING SPOUSE SURVIVOR BENEFIT TO 
  3.30  DESIGNATED BENEFICIARY.] A member and the spouse of the member 
  3.31  may make a joint specification in writing on a form prescribed 
  3.32  by the executive director that the benefits provided in 
  3.33  subdivision 2, or in section 354.47, subdivision 1, must be paid 
  3.34  only to a designated beneficiary or designated beneficiaries. 
  3.35  For purposes of subdivision 2, A designated beneficiary may only 
  3.36  must be either a former spouse or a biological or adopted child 
  4.1   of the member. 
  4.2      Sec. 6.  Minnesota Statutes 2002, section 354.46, is 
  4.3   amended by adding a subdivision to read: 
  4.4      Subd. 7.  [APPLICATION.] (a) Any beneficiary designations 
  4.5   and any application for benefits under this section must be in 
  4.6   writing on a form prescribed by the executive director. 
  4.7      (b) Sections 354.55, subdivision 11, and 354.60 apply to a 
  4.8   deferred annuity payable under this section. 
  4.9      (c) Unless otherwise specified, the annuity is to be 
  4.10  computed under section 354.44, subdivision 2 or 6, whichever is 
  4.11  applicable. 
  4.12     Sec. 7.  Minnesota Statutes 2002, section 354.48, 
  4.13  subdivision 2, is amended to read: 
  4.14     Subd. 2.  [APPLICATIONS.] A person described in subdivision 
  4.15  1, or another person authorized to act on behalf of the person, 
  4.16  may make written application on a form prescribed by the 
  4.17  executive director for a total and permanent disability benefit 
  4.18  only within the 18-month period following the termination of 
  4.19  teaching service.  This benefit accrues from the day following 
  4.20  the commencement of disability or the day following the last day 
  4.21  for which salary is paid, whichever is later, but does not begin 
  4.22  to accrue more than six months before the date the written 
  4.23  application is filed with the executive director.  If salary is 
  4.24  being received for either annual or sick leave during the 
  4.25  period, payments accrue from the day following the last day for 
  4.26  which this salary is paid. 
  4.27     Sec. 8.  Minnesota Statutes 2002, section 354.52, 
  4.28  subdivision 4a, is amended to read: 
  4.29     Subd. 4a.  [MEMBER DATA REPORTING REQUIREMENTS.] (a) An 
  4.30  employing unit must initially provide the member data specified 
  4.31  in paragraph (b) or any of that data not previously provided to 
  4.32  the association for payroll warrants dated after June 30, 1995, 
  4.33  in a format prescribed by the executive director.  Data changes 
  4.34  and the dates of those changes under this subdivision must be 
  4.35  reported to the association in a format prescribed by the 
  4.36  executive director on an ongoing basis within 14 calendar days 
  5.1   after the date of the end of the payroll cycle in which they 
  5.2   occur.  These data changes must be reported with the payroll 
  5.3   cycle data under subdivision 4b. 
  5.4      (b) Data on the member includes:  
  5.5      (1) legal name, address, date of birth, association member 
  5.6   number, employer-assigned employee number, and social security 
  5.7   number; 
  5.8      (2) association status, including, but not limited to, 
  5.9   basic, coordinated, exempt annuitant, exempt technical college 
  5.10  teacher, and exempt independent contractor or consultant; 
  5.11     (3) employment status, including, but not limited to, full 
  5.12  time, part time, intermittent, substitute, or part-time 
  5.13  mobility; 
  5.14     (4) employment position, including, but not limited to, 
  5.15  teacher, superintendent, principal, administrator, or other; 
  5.16     (5) employment activity, including, but not limited to, 
  5.17  hire, termination, resumption of employment, disability, or 
  5.18  death; 
  5.19     (6) leaves of absence; 
  5.20     (7) county district number assigned by the association for 
  5.21  the employing unit; 
  5.22     (8) data center identification number, if applicable; and 
  5.23     (9) gender; 
  5.24     (10) position code; and 
  5.25     (11) other information as may be required by the executive 
  5.26  director. 
  5.27     Sec. 9.  Minnesota Statutes 2002, section 354.52, 
  5.28  subdivision 6, is amended to read: 
  5.29     Subd. 6.  [NONCOMPLIANCE CONSEQUENCES.] An employing unit 
  5.30  that does not comply with the reporting requirements under this 
  5.31  section shall subdivision 2a, 4a, or 4b must pay a fine of $5 
  5.32  per calendar day until the association receives the required 
  5.33  data. 
  5.34     Sec. 10.  [EFFECTIVE DATE.] 
  5.35     Sections 1 to 9 are effective on the day following final 
  5.36  enactment. 
  6.1                              ARTICLE 2
  6.2                   TEACHERS RETIREMENT ASSOCIATION
  6.3                      BENEFIT-RELATED PROVISIONS
  6.4      Section 1.  Minnesota Statutes 2002, section 354.05, 
  6.5   subdivision 8, is amended to read: 
  6.6      Subd. 8.  [DEPENDENT CHILD.] "Dependent child" means a an 
  6.7   unmarried biological or adopted child of a deceased member, 
  6.8   including a child of the member conceived during the member's 
  6.9   lifetime and born after the member's death, who has not reached 
  6.10  the age of 18, or who is under age 22 and is a full-time student 
  6.11  throughout the normal school year, unmarried and dependent for 
  6.12  more than one-half of support upon the member.  It also means a 
  6.13  child of the member conceived during the member's lifetime and 
  6.14  born after the member's death. 
  6.15     Sec. 2.  Minnesota Statutes 2002, section 354.05, 
  6.16  subdivision 8a, is amended to read: 
  6.17     Subd. 8a.  [DEPENDENT CHILD.] For the purpose of survivor 
  6.18  benefit eligibility under section 354.46, subdivision 2b, 
  6.19  "dependent child" means any biological or adopted child of a 
  6.20  deceased member, including a child of the member conceived 
  6.21  during the member's lifetime and born after the member's death, 
  6.22  who has not reached the age of 20 and is dependent for more than 
  6.23  one-half of support upon the member.  It also includes any child 
  6.24  of the member conceived while living and born after death. 
  6.25     Sec. 3.  Minnesota Statutes 2002, section 354.46, 
  6.26  subdivision 2, is amended to read: 
  6.27     Subd. 2.  [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY 
  6.28  BENEFIT SURVIVING SPOUSE SURVIVOR COVERAGE.] (a) The surviving 
  6.29  spouse of any member or former member who has If the active or 
  6.30  deferred member was at least age 55 and had credit for at least 
  6.31  three years of allowable service on the date of death, the 
  6.32  surviving spouse is entitled to the second portion of a 100 
  6.33  percent joint and survivor annuity coverage in the event of 
  6.34  death of the member prior to retirement.  If the surviving 
  6.35  spouse does not elect to receive a surviving spouse benefit 
  6.36  under subdivision 1, if applicable, or does not elect to receive 
  7.1   a refund of accumulated member contributions under section 
  7.2   354.47, subdivision 1, the surviving spouse is entitled to 
  7.3   receive, upon written application on a form prescribed by the 
  7.4   executive director, a benefit equal to the second portion of a 
  7.5   100 percent joint and survivor annuity specified under section 
  7.6   354.45, based on the age of the active or deferred member and 
  7.7   surviving spouse at the time of death of the member, and 
  7.8   computed under section 354.44, subdivision 2 or 6, whichever is 
  7.9   applicable the age of the surviving spouse at the time the 
  7.10  benefit accrues. 
  7.11     (b) If the active or deferred member was under age 55 and 
  7.12  has credit for at least 30 years of allowable service on the 
  7.13  date of death, the surviving spouse may elect to receive the 
  7.14  second portion of a 100 percent joint and survivor annuity based 
  7.15  on the age of the active or deferred member and surviving spouse 
  7.16  on the date of death and the age of the surviving spouse at the 
  7.17  time the benefit accrues.  If section 354.44, subdivision 6, is 
  7.18  applicable, the annuity is payable using the full early 
  7.19  retirement reduction under section 354.44, subdivision 
  7.20  6, paragraph clause (3)(ii), to age 55 and one-half of the early 
  7.21  retirement reduction from age 55 to the age payment begins. 
  7.22     (c) If the active or deferred member was under age 55 and 
  7.23  has credit for at least three years of allowable service on the 
  7.24  date of death but did not yet qualify for retirement, the 
  7.25  surviving spouse may elect to receive the second portion of a 
  7.26  100 percent joint and survivor annuity based on the age of 
  7.27  the active or deferred member and the surviving spouse at the 
  7.28  time of death and the age of the surviving spouse at the time 
  7.29  the benefit accrues.  If section 354.44, subdivision 6, is 
  7.30  applicable, the annuity is calculated using the full early 
  7.31  retirement reduction under section 354.44, subdivision 6, to age 
  7.32  55 and one-half of the early retirement reduction from age 55 to 
  7.33  the age the annuity begins.  The surviving spouse eligible for a 
  7.34  surviving spouse benefit under paragraph (a) may apply for the 
  7.35  annuity at any time after the date on which the deceased 
  7.36  employee would have attained the required age for retirement 
  8.1   based on the employee's allowable service. 
  8.2      (d) The surviving spouse eligible for surviving spouse 
  8.3   benefits under paragraph (b) or (c) this subdivision may apply 
  8.4   for the annuity any time after the member's death.  This The 
  8.5   benefit accrues from the day following the date of the member's 
  8.6   death but may not begin to accrue more than six months before 
  8.7   the date the application is filed with the executive 
  8.8   director and not before the member's death.  Sections 354.55, 
  8.9   subdivision 11, and 354.60 apply to a deferred annuity payable 
  8.10  under this section.  The benefit is payable for life.  Any 
  8.11  benefit under this subdivision is in lieu of benefits under 
  8.12  subdivision 1, if applicable, and in lieu of a refund of 
  8.13  accumulated member contributions under section 354.47, 
  8.14  subdivision 1. 
  8.15     Sec. 4.  Minnesota Statutes 2002, section 354.46, is 
  8.16  amended by adding a subdivision to read: 
  8.17     Subd. 6.  [BENEFICIARY COVERAGE.] If there is no surviving 
  8.18  spouse eligible under subdivision 2 or a dependent child 
  8.19  eligible for survivor benefits under subdivision 2b, an active 
  8.20  or deferred member who has at least three years of allowable 
  8.21  service may designate a beneficiary to receive an annuity 
  8.22  benefit equal to the second half of a 100 percent joint and 
  8.23  survivor annuity specified under section 354.45, based on the 
  8.24  age of the active or deferred member at the time of death and 
  8.25  the age of the beneficiary at the time the benefit accrues.  If 
  8.26  more than one person is designated, the amount will be divided 
  8.27  as indicated by the beneficiary form filed with the executive 
  8.28  director.  A beneficiary may elect a term certain benefit under 
  8.29  subdivision 2b.  A beneficiary may delay receipt of monthly 
  8.30  benefits as long as it complies with federal and state tax laws. 
  8.31     Sec. 5.  Minnesota Statutes 2002, section 354.66, 
  8.32  subdivision 2, is amended to read: 
  8.33     Subd. 2.  [QUALIFIED PART-TIME TEACHER PROGRAM 
  8.34  PARTICIPATION REQUIREMENTS.] (a) A teacher in a Minnesota public 
  8.35  elementary school, a Minnesota secondary school, or the 
  8.36  Minnesota state colleges and universities system who has three 
  9.1   years or more of allowable service in the association or three 
  9.2   years or more of full-time teaching service in Minnesota public 
  9.3   elementary schools, Minnesota secondary schools, or the 
  9.4   Minnesota state colleges and universities system, by agreement 
  9.5   with the board of the employing district or with the authorized 
  9.6   representative of the board, may be assigned to teaching service 
  9.7   in a part-time teaching position under subdivision 3.  The 
  9.8   agreement must be executed before October 1 of the school year 
  9.9   for which the teacher requests to make retirement contributions 
  9.10  under subdivision 4.  A copy of the executed agreement must be 
  9.11  filed with the executive director of the association.  If the 
  9.12  copy of the executed agreement is filed with the association 
  9.13  after October 1 of the school year for which the teacher 
  9.14  requests to make retirement contributions under subdivision 4, 
  9.15  the employing unit shall pay the fine specified in section 
  9.16  354.52, subdivision 6, for each calendar day that elapsed since 
  9.17  the October 1 due date.  The association may not accept an 
  9.18  executed agreement that is received by the association more than 
  9.19  15 months late.  The association may not waive the fine required 
  9.20  by this section. 
  9.21     (b) Notwithstanding paragraph (a), if the teacher is also a 
  9.22  legislator: 
  9.23     (1) the agreement in paragraph (a) must be executed before 
  9.24  March 1 of the school year for which the teacher requests to 
  9.25  make retirement contributions under subdivision 4; and 
  9.26     (2) fines specified in paragraph (a) apply if the employing 
  9.27  unit does not file the executed agreement with the executive 
  9.28  director of the association by March 1. 
  9.29     Sec. 6.  Minnesota Statutes 2002, section 356.441, is 
  9.30  amended to read: 
  9.31     356.441 [REPAYMENT OF REFUNDS PAYMENT ACCEPTANCE ALLOWED.] 
  9.32     Subdivision 1.  [PAYMENT AUTHORIZATION.] The payment for 
  9.33  the purchase of allowable service credit, the repayment of a 
  9.34  refund and interest on that refund, or the payment of equivalent 
  9.35  contributions and interest for an eligible leave of absence, as 
  9.36  permitted under laws governing any public pension plan in 
 10.1   Minnesota, may be made: 
 10.2      (1) with funds distributed or transferred from a plan 
 10.3   qualified under the federal Internal Revenue Code of 1986, 
 10.4   section 401, subsection (a) or (k); 403; 408; or 457, subsection 
 10.5   (b), as amended through December 31, 1988,or an annuity 
 10.6   qualified under the federal Internal Revenue Code of 1986, 
 10.7   section 403(a).  Repayment may also be made from time to time; 
 10.8   or 
 10.9      (2) with funds distributed from an individual retirement 
 10.10  account used solely to receive a or individual retirement 
 10.11  annuity, if done solely in a manner that is eligible for 
 10.12  treatment as a nontaxable rollover from that type of a plan or 
 10.13  annuity or transfer under the applicable federal law.  The 
 10.14  repaid refund 
 10.15     Subd. 2.  [SEPARATE ACCOUNTING REQUIREMENT.] Nontaxable 
 10.16  rollovers or transfer amounts under subdivision 1 received by a 
 10.17  public pension fund must be separately accounted for as member 
 10.18  contributions not previously taxed.  Before accepting 
 10.19  any rollovers or transfers to which this section applies, the 
 10.20  executive director must require the member to provide written 
 10.21  documentation to demonstrate that the amounts to be rolled over 
 10.22  or transferred are eligible for a tax-free rollover or transfer 
 10.23  and qualify for that treatment under the federal Internal 
 10.24  Revenue Code of 1986, as amended.  
 10.25     Sec. 7.  [REPEALER.] 
 10.26     Minnesota Statutes 2002, section 354A.107, is repealed. 
 10.27     Sec. 8.  [EFFECTIVE DATE.] 
 10.28     Sections 1 to 7 are effective the day following final 
 10.29  enactment.