HF 1152

as introduced - 88th Legislature (2013 - 2014) Posted on 03/04/2013 01:55pm

A bill for an act
relating to retirement; volunteer firefighter relief associations; defining a relief
association fiscal year; clarifying leaves exempted from minimum resumption
service requirements for break-in-service service credit; mandating municipal
approval for certain interest rates creditable to deferred service credits; amending
Minnesota Statutes 2012, sections 69.771, subdivision 1; 69.774, subdivision
1; 424A.001, by adding a subdivision; 424A.01, subdivision 6; 424A.015,
subdivisions 1, 4; 424A.016, subdivision 6; 424A.02, subdivision 7; 424A.10,
subdivisions 1, 2; repealing Minnesota Statutes 2012, section 424A.10,
subdivision 5.

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

Section 1.

Minnesota Statutes 2012, section 69.771, subdivision 1, is amended to read:

Subdivision 1.

Covered relief associations.

The applicable provisions of sections
69.771 to 69.776 deleted text begin apply to deleted text end new text begin govern new text end any firefighters' relief association deleted text begin other than deleted text end new text begin defined in
section 424A.001, subdivision 4, and do not apply to new text end a relief association enumerated in
section 69.77, subdivision 1a deleted text begin , which is organized under any laws of this state, which is
composed of volunteer firefighters or is composed partially of volunteer firefighters and
partially of salaried firefighters with retirement coverage provided by the public employees
police and fire fund and which, in either case, operates subject to the service pension
minimum requirements for entitlement and maximums contained in section 424A.02, or
subject to a special law modifying those requirements or maximums deleted text end .

Sec. 2.

Minnesota Statutes 2012, section 69.774, subdivision 1, is amended to read:

Subdivision 1.

Authorized inclusion in fire state aid program; covered nonprofit
corporations.

new text begin (a) new text end This section deleted text begin shall apply deleted text end new text begin applies new text end to any independent nonprofit firefighting
corporation incorporated or organized deleted text begin pursuant to deleted text end new text begin under new text end chapter 317A which new text begin : (1) new text end operates
exclusively for firefighting purposes deleted text begin , deleted text end new text begin ; (2) new text end which is composed of volunteer firefighters deleted text begin , deleted text end new text begin ;
and (3) new text end which has a duly established separate subsidiary incorporated firefighters' relief
association which provides retirement coverage for or pays a service pension to a retired
firefighter or a retirement benefit to a surviving dependent of either an active or a retired
firefighter, and which deleted text begin operates deleted text end new text begin is new text end subject to the deleted text begin service pension minimum requirements
for entitlement to and maximums for a service pension contained in section 424A.02,
or a special law modifying those requirements or maximums deleted text end new text begin applicable provisions of
chapter 424A new text end .

new text begin (b) new text end Notwithstanding any law to the contrary, a municipality contracting with an
independent nonprofit firefighting corporation deleted text begin shall deleted text end new text begin must new text end be included in the distribution of
fire state aid to the appropriate county auditor by the state auditor only if the independent
nonprofit firefighting corporation complies with the provisions of this section.

Sec. 3.

Minnesota Statutes 2012, section 424A.001, is amended by adding a
subdivision to read:

new text begin Subd. 11. new text end

new text begin Fiscal year. new text end

new text begin The fiscal year for a volunteer firefighter relief association
begins on January 1 of each calendar year and ends on December 31 of the same calendar
year.
new text end

Sec. 4.

Minnesota Statutes 2012, section 424A.01, subdivision 6, is amended to read:

Subd. 6.

Return to active firefighting after break in service.

(a) deleted text begin The requirements
of deleted text end This deleted text begin section apply deleted text end new text begin subdivision applies new text end to all breaks in service, except deleted text begin breaks in deleted text end new text begin that the
resumption new text end service deleted text begin mandated by deleted text end new text begin requirements of this subdivision do not apply to leaves
of absence made available by new text end federal deleted text begin or deleted text end new text begin statute, such as the Family Medical Leave Act,
United States Code, title 29, section 2691, and the Uniformed Services Employment and
Reemployment Rights Act, United States Code, title 38, section 4301, and do not apply
to leaves of absence made available by new text end state deleted text begin law deleted text end new text begin statute, such as the Parental Leave Act,
section 181.941; the Leave for Organ Donations Act, section 181.9456; the Leave for
Civil Air Patrol Service Act, section 181.946; the Leave for Immediate Family Members
of Military Personnel Injured or Killed in Active Service Act, section 181.947, or the
Protection of Jurors' Employment Act, section 593.50 new text end .

(b)(1) If a firefighter who has ceased to perform or supervise fire suppression and
fire prevention duties for at least 60 days resumes performing active firefighting with the
fire department associated with the relief association, if the bylaws of the relief association
so permit, the firefighter may again become an active member of the relief association. A
firefighter who returns to active service and membership is subject to the service pension
calculation requirements under this section.

(2) A firefighter who has been granted an approved leave of absence not exceeding
one year by the fire department or by the relief association is exempt from the minimum
period of resumption service requirement of this section.

(3) A person who has a break in service not exceeding one year but has not been
granted an approved leave of absence and who has not received a service pension or
disability benefit may be made exempt from the minimum period of resumption service
requirement of this section by the relief association bylaws.

(4) If the bylaws so provide, a firefighter who returns to active relief association
membership under this paragraph may continue to collect a monthly service pension,
notwithstanding the service pension eligibility requirements under chapter 424A.

(c) If a former firefighter who has received a service pension or disability benefit
returns to active relief association membership under paragraph (b), the firefighter may
qualify for the receipt of a service pension from the relief association for the resumption
service period if the firefighter meets the service requirements of section 424A.016,
subdivision 3, or 424A.02, subdivision 2. No firefighter may be paid a service pension
more than once for the same period of service.

(d) If a former firefighter who has not received a service pension or disability benefit
returns to active relief association membership under paragraph (b), the firefighter may
qualify for the receipt of a service pension from the relief association for the original and
resumption service periods if the firefighter meets the service requirements of section
424A.016, subdivision 3, or 424A.02, subdivision 2, based on the original and resumption
years of service credit.

(e) A firefighter who returns to active lump-sum relief association membership under
paragraph (b) and who qualifies for a service pension under paragraph (c) must have,
upon a subsequent cessation of duties, any service pension for the resumption service
period calculated as a separate benefit. If a lump-sum service pension had been paid to the
firefighter upon the firefighter's previous cessation of duties, a second lump-sum service
pension for the resumption service period must be calculated by applying the service
pension amount in effect on the date of the firefighter's termination of the resumption
service for all years of the resumption service.

(f) A firefighter who had not been paid a lump-sum service pension returns to active
relief association membership under paragraph (b), who did not meet the minimum period
of resumption service requirement specified in the relief association's bylaws, but who
does meet the minimum service requirement of section 424A.02, subdivision 2, based
on the firefighter's original and resumption years of active service, must have, upon a
subsequent cessation of duties, a service pension for the original and resumption service
periods calculated by applying the service pension amount in effect on the date of the
firefighter's termination of the resumption service, or, if the bylaws so provide, based on
the service pension amount in effect on the date of the firefighter's previous cessation
of duties. The service pension for a firefighter who returns to active lump-sum relief
association membership under this paragraph, but who had met the minimum period
of resumption service requirement specified in the relief association's bylaws, must be
calculated by applying the service pension amount in effect on the date of the firefighter's
termination of the resumption service.

(g) If a firefighter receiving a monthly benefit service pension returns to active
monthly benefit relief association membership under paragraph (b), and if the relief
association bylaws do not allow for the firefighter to continue collecting a monthly service
pension, any monthly benefit service pension payable to the firefighter is suspended as
of the first day of the month next following the date on which the firefighter returns to
active membership. If the firefighter was receiving a monthly benefit service pension,
and qualifies for a service pension under paragraph (c), the firefighter is entitled to
an additional monthly benefit service pension upon a subsequent cessation of duties
calculated based on the resumption service credit and the service pension accrual amount
in effect on the date of the termination of the resumption service. A suspended initial
service pension resumes as of the first of the month next following the termination of the
resumption service. If the firefighter was not receiving a monthly benefit service pension
and meets the minimum service requirement of section 424A.02, subdivision 2, a service
pension must be calculated by applying the service pension amount in effect on the date of
the firefighter's termination of the resumption service for all years of service credit.

(h) A firefighter who was not receiving a monthly benefit service pension returns to
active relief association membership under paragraph (b), who did not meet the minimum
period of resumption service requirement specified in the relief association's bylaws, but
who does meet the minimum service requirement of section 424A.02, subdivision 2,
based on the firefighter's original and resumption years of active service, must have,
upon a subsequent cessation of duties, a service pension for the original and resumption
service periods calculated by applying the service pension amount in effect on the date of
the firefighter's termination of the resumption service, or, if the bylaws so provide, based
on the service pension amount in effect on the date of the firefighter's previous cessation
of duties. The service pension for a firefighter who returns to active relief association
membership under this paragraph, but who had met the minimum period of resumption
service requirement specified in the relief association's bylaws, must be calculated by
applying the service pension amount in effect on the date of the firefighter's termination of
the resumption service.

(i) For defined contribution plans, a firefighter who returns to active relief
association membership under paragraph (b) and who qualifies for a service pension
under paragraph (c) or (d) must have, upon a subsequent cessation of duties, any service
pension for the resumption service period calculated as a separate benefit. If a service
pension had been paid to the firefighter upon the firefighter's previous cessation of duties,
and if the firefighter meets the minimum service requirement of section 424A.016,
subdivision 3, based on the resumption years of service, a second service pension for
the resumption service period must be calculated to include allocations credited to the
firefighter's individual account during the resumption period of service and deductions
for administrative expenses, if applicable.

(j) For defined contribution plans, if a firefighter who had not been paid a service
pension returns to active relief association membership under paragraph (b), and who
meets the minimum service requirement of section 424A.016, subdivision 3, based on
the firefighter's original and resumption years of service, must have, upon a subsequent
cessation of duties, a service pension for the original and resumption service periods
calculated to include allocations credited to the firefighter's individual account during
the new text begin original and new text end resumption deleted text begin period deleted text end new text begin periods new text end of service and deductions for administrative
expenses, if applicable, less any amounts previously forfeited under section 424A.016,
subdivision 4.

Sec. 5.

Minnesota Statutes 2012, section 424A.015, subdivision 1, is amended to read:

Subdivision 1.

Separation from active service; exception.

(a) No service pension
is payable to a person while the person remains an active member of the respective fire
department, and a person who is receiving a service pension is not entitled to receive any
other benefits from the special fund of the relief association.

(b) No relief association as defined in section 424A.001, subdivision 4, may pay a
service pension or disability benefit to a former member of the relief association if that
person has not separated from active service with the fire department to which the relief
association is directly associated, unless:

(1) the person deleted text begin is employed subsequent to retirement by deleted text end new text begin discontinues volunteer
firefighter duties with new text end the municipality or the independent nonprofit firefighting
corporation, whichever applies, deleted text begin to perform deleted text end new text begin and performs new text end duties within the municipal fire
department or corporation on a full-time basis;

(2) the governing body of the municipality or of the corporation has filed its
determination with the board of trustees of the relief association that the person's
experience with and service to the fire department in that person's full-time capacity
would be difficult to replace; and

(3) the bylaws of the relief association were amended to provide for the payment of
a service pension or disability benefit for such full-time employees.

Sec. 6.

Minnesota Statutes 2012, section 424A.015, subdivision 4, is amended to read:

Subd. 4.

Transfer to individual retirement account.

A relief association that is a
qualified pension plan under section 401(a) of the Internal Revenue Code, as amended,
and that provides a single payment service pension, at the written request of the applicable
retiring member or, following the death of the active member, at the written request of the
deceased member's surviving spouse, may directly transfer on an institution-to-institution
basis the eligible member's lump-sum pension or the deleted text begin death or deleted text end survivor benefit attributable
to the member, whichever applies, to the requesting person's individual retirement account
under section 408(a) of the Internal Revenue Code, as amended.

Sec. 7.

Minnesota Statutes 2012, section 424A.016, subdivision 6, is amended to read:

Subd. 6.

Deferred service pensions.

(a) A member of a relief association is entitled
to a deferred service pension if the member deleted text begin :
deleted text end

deleted text begin (1) has completed the lesser of the minimum period of active service with the fire
department specified in the bylaws or 20 years of active service with the fire department;
deleted text end

deleted text begin (2) has completed at least five years of active membership in the relief association; and
deleted text end

deleted text begin (3) deleted text end separates from active service and membership new text begin and has completed the minimum
service and membership requirements in subdivision 2 new text end . The requirement that a member
separate from active service and membership is waived for persons who have discontinued
their volunteer firefighter duties and who are employed on a full-time basis under section
424A.015, subdivision 1.

(b) The deferred service pension is payable when the former member reaches at
least age 50, or at least the minimum age specified in the bylaws governing the relief
association if that age is greater than age 50, and when the former member makes a valid
written application.

(c) A defined contribution relief association may, if its governing bylaws so provide,
credit interest or additional investment performance on the deferred lump-sum service
pension during the period of deferral. If provided for in the bylaws, the interest must be
paid:

(1) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested by the relief association in a separate account
established and maintained by the relief association;

(2) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested in a separate investment vehicle held by the
relief association; or

(3) at the investment return on the assets of the special fund of the defined contribution
volunteer firefighter relief association in proportion to the share of the assets of the special
fund to the credit of each individual deferred member account through the accounting date
on which the investment return is recognized by and credited to the special fund.

(d) Unless the bylaws of a relief association that has elected to pay interest or
additional investment performance on deferred lump-sum service pensions under
paragraph (c) specifies a different interest or additional investment performance method,
including the interest or additional investment performance period starting date and ending
date, the interest or additional investment performance on a deferred service pension
is creditable as follows:

(1) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the date that the
member separates from active service and membership and ending on the accounting
date immediately before the deferred member commences receipt of the deferred service
pension; or

(2) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member
separates from active service and membership and ending on the date that the separate
investment vehicle is valued immediately before the date on which the deferred member
commences receipt of the deferred service pension.

(e) The deferred service pension is governed by and must be calculated under
the general statute, special law, relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the member separated from
active service with the fire department and active membership in the relief association.

Sec. 8.

Minnesota Statutes 2012, section 424A.02, subdivision 7, is amended to read:

Subd. 7.

Deferred service pensions.

(a) A member of a defined benefit relief
association is entitled to a deferred service pension if the member deleted text begin :
deleted text end

deleted text begin (1) has completed the lesser of either the minimum period of active service with the
fire department specified in the bylaws or 20 years of active service with the fire department;
deleted text end

deleted text begin (2) has completed at least five years of active membership in the relief association; and
deleted text end

deleted text begin (3) deleted text end separates from active service and membership new text begin and has completed the minimum
service and membership requirements in subdivision 1 new text end . The requirement that a member
separate from active service and membership is waived for persons who have discontinued
their volunteer firefighter duties and who are employed on a full-time basis under section
424A.015, subdivision 1.

(b) The deferred service pension is payable when the former member reaches at
least age 50, or at least the minimum age specified in the bylaws governing the relief
association if that age is greater than age 50, and when the former member makes a valid
written application.

(c) A defined benefit relief association that provides a lump-sum service pension
governed by subdivision 3 may, when its governing bylaws so provide, pay interest on the
deferred lump-sum service pension during the period of deferral. If provided for in the
bylaws, interest must be paid in one of the following manners:

(1) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested by the relief association in a separate account
established and maintained by the relief association;

(2) at the investment performance rate actually earned on that portion of the assets
if the deferred benefit amount is invested in a separate investment vehicle held by the
relief association; or

(3) at an interest rate of up to five percent, compounded annually, as set by the board
of deleted text begin directors and approved as provided in subdivision 10 deleted text end new text begin trustees new text end .

new text begin (d) Any change in the interest rate set by the board of directors under paragraph (c),
clause (3), must be ratified by the governing body of the municipality served by the fire
department to which the relief association is directly associated, or by the independent
nonprofit firefighting corporation, as applicable.
new text end

deleted text begin (d) deleted text end new text begin (e) new text end Interest under paragraph (c), clause (3), is payable new text begin beginning on the January
1 next new text end following the date on which deleted text begin the municipality has approved deleted text end the deferred service
pension interest rate deleted text begin established deleted text end new text begin as set new text end by the board of trustees new text begin was ratified by the governing
body of the municipality served by the fire department to which the relief association is
directly associated, or by the independent nonprofit firefighting corporation, as applicable new text end .

deleted text begin (e) deleted text end new text begin (f) new text end Unless the bylaws of a relief association that has elected to pay interest
or additional investment performance on deferred lump-sum service pensions under
paragraph (c) specifies a different interest or additional investment performance method,
including the interest or additional investment performance period starting date and ending
date, the interest or additional investment performance on a deferred service pension
is creditable as follows:

(1) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the new text begin first day of the
month next following the new text end date deleted text begin that deleted text end new text begin on which new text end the member separates from active service
and membership and ending on the deleted text begin accounting date deleted text end new text begin last day of the month new text end immediately
before the new text begin month in which the new text end deferred member commences receipt of the deferred
service pension; or

(2) for a relief association that has elected to pay interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member
separates from active service and membership and ending on the date that the separate
investment vehicle is valued immediately before the date on which the deferred member
commences receipt of the deferred service pension.

deleted text begin (f) deleted text end new text begin (g) new text end For a deferred service pension that is transferred to a separate account
established and maintained by the relief association or separate investment vehicle held
by the relief association, the deferred member bears the full investment risk subsequent
to transfer and in calculating the accrued liability of the volunteer firefighters relief
association that pays a lump-sum service pension, the accrued liability for deferred service
pensions is equal to the separate relief association account balance or the fair market value
of the separate investment vehicle held by the relief association.

deleted text begin (g) deleted text end new text begin (h) new text end The deferred service pension is governed by and must be calculated under
the general statute, special law, relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the member separated from
active service with the fire department and active membership in the relief association.

new text begin EFFECTIVE DATE. new text end

new text begin The amendments to paragraphs (c) to (e) are effective January
1, 2014. The amendment to paragraph (f) is effective retroactively from January 1, 2013.
new text end

Sec. 9.

Minnesota Statutes 2012, section 424A.10, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section:

(1) "qualified recipient" means an individual who receives a lump-sum distribution
of pension or retirement benefits from a volunteer firefighters' relief association or from
the voluntary statewide lump-sum volunteer firefighter retirement plan for service that the
individual has performed as a volunteer firefighter;

(2) "survivor of a deceased active or deferred volunteer firefighter" means the
surviving spouse of a deceased active or deferred volunteer firefighter deleted text begin under section
424A.001, subdivision 6, deleted text end or, if none, the surviving child or children of a deceased active
or deferred volunteer firefighter;

(3) "active volunteer firefighter" means a person who regularly renders fire
suppression service for a municipal fire department or an independent nonprofit firefighting
corporation, who has met the statutory and other requirements for relief association
membership, and who is deemed by the relief association under law and its bylaws to be a
fully qualified member of the relief association or from the voluntary statewide lump-sum
volunteer firefighter retirement plan for at least one month; and

(4) "deferred volunteer firefighter" means a former active volunteer firefighter who
terminated active firefighting service, has sufficient service credit from the applicable relief
association or from the voluntary statewide lump-sum volunteer firefighter retirement plan
to be entitled to a service pension under the bylaws of the relief association, but has not
applied for or has not received the service pension.

Sec. 10.

Minnesota Statutes 2012, section 424A.10, subdivision 2, is amended to read:

Subd. 2.

Payment of supplemental benefit.

(a) Upon the payment by a volunteer
firefighters' relief association or by the voluntary statewide lump-sum volunteer firefighter
retirement plan of a lump-sum distribution to a qualified recipient, the association must
pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the
contrary, the relief association must pay the supplemental benefit out of its special fund
and the voluntary statewide lump-sum volunteer firefighter retirement plan must pay
the supplemental benefit out of the voluntary statewide lump-sum volunteer firefighter
retirement plan. This benefit is an amount equal to ten percent of the regular lump-sum
distribution that is paid on the basis of the recipient's service as a volunteer firefighter.
In no case may the amount of the supplemental benefit exceed $1,000. A supplemental
benefit under this paragraph may not be paid to a survivor of a deceased active or deferred
volunteer firefighter in that capacity.

(b) Upon the payment by a relief association or the retirement plan of a lump-sum
survivor benefit to a survivor of a deceased active volunteer firefighter or of a deceased
deferred volunteer firefighter, the association deleted text begin may deleted text end new text begin must new text end pay a supplemental survivor
benefit to the survivor of the deceased active or deferred volunteer firefighter from the
special fund of the relief association deleted text begin if its articles of incorporation or bylaws so provide
deleted text end and the retirement plan deleted text begin may deleted text end new text begin must new text end pay a supplemental survivor benefit to the survivor of
the deceased active or deferred volunteer firefighter from the retirement fund if chapter
353G so provides. The amount of the supplemental survivor benefit is 20 percent of the
survivor benefit, but not to exceed $2,000.

(c) An individual may receive a supplemental benefit under paragraph (a) or under
paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer
firefighter benefit.

Sec. 11. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 424A.10, subdivision 5, new text end new text begin is repealed.
new text end

Sec. 12. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 7 and 9 to 11 are effective the day following final enactment.
new text end