HF 1270

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; modifying pension provisions 
  1.3             concerning the Minnesota state colleges and 
  1.4             universities; changing reporting and remittance 
  1.5             requirements for teachers retirement; modifying 
  1.6             individual retirement account plan provisions; 
  1.7             modifying higher education supplemental retirement 
  1.8             plan provisions; amending Minnesota Statutes 1996, 
  1.9             sections 136F.45, by adding subdivisions; 352.01, 
  1.10            subdivision 2a; 354.52, subdivision 4; 354B.21, 
  1.11            subdivision 3; 354B.25, subdivisions 2 and 3; 354C.11; 
  1.12            and 354C.12, subdivision 1; repealing Laws 1995, 
  1.13            chapter 262, article 1, sections 8, 9, 10, 11, and 12. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1996, section 136F.45, is 
  1.16  amended by adding a subdivision to read: 
  1.17     Subd. 3.  [TAX-SHELTERED ANNUITY ADMINISTRATIVE 
  1.18  EXPENSES.] (a) The reasonable and necessary administrative 
  1.19  expenses of the tax-sheltered annuity program may be paid by 
  1.20  plan participants.  The plan administrator may charge plan 
  1.21  participants an administrative expense assessment of a 
  1.22  designated amount, not to exceed two percent of member 
  1.23  contributions, as those contributions are made. 
  1.24     (b) Any administrative expense charge that is not actually 
  1.25  needed for the administrative expenses of the plan must be 
  1.26  refunded to member accounts in the same manner as the original 
  1.27  contributions were made. 
  1.28     Sec. 2.  Minnesota Statutes 1996, section 136F.45, is 
  1.29  amended by adding a subdivision to read: 
  2.1      Subd. 4.  [PERIODIC REVIEW.] If the board so chooses, it 
  2.2   may solicit bids or proposals for options under subdivision 1.  
  2.3   The board may retain consulting services to assist it in 
  2.4   soliciting and evaluating bids or proposals and in the periodic 
  2.5   review of companies offering options under subdivision 1.  The 
  2.6   board may annually establish a budget for its costs in the 
  2.7   soliciting, evaluating, and periodic review processes.  The 
  2.8   board may charge a proportional share of all costs related to 
  2.9   the periodic review to each company currently under contract and 
  2.10  may charge a proportional share of all costs related to 
  2.11  soliciting and evaluating bids or proposals to each company 
  2.12  selected by the board.  Contracts must provide that all options 
  2.13  in subdivision 1 must:  (1) be presented in an unbiased manner, 
  2.14  (2) be reported on a periodic basis to all employees 
  2.15  participating in the tax-sheltered annuity program, and (3) not 
  2.16  be the subject of unreasonable solicitation of state employees 
  2.17  to participate in the program.  The contract may not call for 
  2.18  any person to jeopardize the tax-deferred status of money 
  2.19  invested by state employees under this section.  All costs or 
  2.20  fees in relation to the options provided under subdivision 1 
  2.21  must be paid by the underwriting companies ultimately selected 
  2.22  by the board. 
  2.23     Sec. 3.  Minnesota Statutes 1996, section 352.01, 
  2.24  subdivision 2a, is amended to read: 
  2.25     Subd. 2a.  [INCLUDED EMPLOYEES.] (a) "State employee" 
  2.26  includes: 
  2.27     (1) employees of the Minnesota historical society; 
  2.28     (2) employees of the state horticultural society; 
  2.29     (3) employees of the Disabled American Veterans, Department 
  2.30  of Minnesota, Veterans of Foreign Wars, Department of Minnesota, 
  2.31  if employed before July 1, 1963; 
  2.32     (4) employees of the Minnesota crop improvement 
  2.33  association; 
  2.34     (5) employees of the adjutant general who are paid from 
  2.35  federal funds and who are not covered by any federal civilian 
  2.36  employees retirement system; 
  3.1      (6) employees of the state universities employed under the 
  3.2   university activities program; 
  3.3      (7) currently contributing employees covered by the system 
  3.4   who are temporarily employed by the legislature during a 
  3.5   legislative session or any currently contributing employee 
  3.6   employed for any special service as defined in clause (8) of 
  3.7   subdivision 2b; 
  3.8      (8) employees of the armory building commission; 
  3.9      (9) permanent employees of the legislature and persons 
  3.10  employed or designated by the legislature or by a legislative 
  3.11  committee or commission or other competent authority to conduct 
  3.12  a special inquiry, investigation, examination, or installation; 
  3.13     (10) trainees who are employed on a full-time established 
  3.14  training program performing the duties of the classified 
  3.15  position for which they will be eligible to receive immediate 
  3.16  appointment at the completion of the training period; 
  3.17     (11) employees of the Minnesota safety council; 
  3.18     (12) any employees on authorized leave of absence from the 
  3.19  transit operating division of the former metropolitan transit 
  3.20  commission who are employed by the labor organization which is 
  3.21  the exclusive bargaining agent representing employees of the 
  3.22  transit operating division; 
  3.23     (13) employees of the metropolitan council, metropolitan 
  3.24  parks and open space commission, metropolitan sports facilities 
  3.25  commission, metropolitan mosquito control commission, or 
  3.26  metropolitan radio board unless excluded or covered by another 
  3.27  public pension fund or plan under section 473.415, subdivision 
  3.28  3; 
  3.29     (14) judges of the tax court; and 
  3.30     (15) personnel employed on June 30, 1992, by the University 
  3.31  of Minnesota in the management, operation, or maintenance of its 
  3.32  heating plant facilities, whose employment transfers to an 
  3.33  employer assuming operation of the heating plant facilities, so 
  3.34  long as the person is employed at the University of Minnesota 
  3.35  heating plant by that employer or by its successor 
  3.36  organization.; and 
  4.1      (16) a person who renders Minnesota state retirement system 
  4.2   covered service on a part-time basis and who also renders 
  4.3   teaching or other service for the Minnesota state colleges and 
  4.4   universities system.  In such cases, the system executive 
  4.5   director shall determine whether all or none of the combined 
  4.6   service is covered by the system, however, a person whose 
  4.7   nonteaching service comprises at least 50 percent of the 
  4.8   combined employment salary is a member of the system for all 
  4.9   services with Minnesota state colleges and universities. 
  4.10     (b) Employees specified in paragraph (a), clause (15), are 
  4.11  included employees under paragraph (a) providing that employer 
  4.12  and employee contributions are made in a timely manner in the 
  4.13  amounts required by section 352.04.  Employee contributions must 
  4.14  be deducted from salary.  Employer contributions are the sole 
  4.15  obligation of the employer assuming operation of the University 
  4.16  of Minnesota heating plant facilities or any successor 
  4.17  organizations to that employer. 
  4.18     Sec. 4.  Minnesota Statutes 1996, section 354.52, 
  4.19  subdivision 4, is amended to read: 
  4.20     Subd. 4.  [REPORTING AND REMITTANCE REQUIREMENTS.] At least 
  4.21  once each month, a representative authorized by an employing 
  4.22  unit shall transmit all amounts due to the association and 
  4.23  furnish a signed statement indicating the amount due and 
  4.24  transmitted with other information required by the executive 
  4.25  director.  Signing the statement has the force and effect of an 
  4.26  oath as to the correctness of the amount due and 
  4.27  transmitted.  Except in cases where an employee has incorrectly 
  4.28  certified prior coverage, an amount due and not transmitted 
  4.29  accrues interest at an annual rate of 8.5 percent compounded 
  4.30  annually commencing 15 days after the date first due until the 
  4.31  amount is transmitted and must be paid by the employing unit.  
  4.32  These payments and other employing unit obligations not remitted 
  4.33  within 60 days of notification by the association must be 
  4.34  certified to the commissioner of finance who shall deduct the 
  4.35  amount from any state aid or appropriation amount applicable to 
  4.36  the employing unit. 
  5.1      Sec. 5.  Minnesota Statutes 1996, section 354B.21, 
  5.2   subdivision 3, is amended to read: 
  5.3      Subd 3.  [DEFAULT COVERAGE.] If an eligible person fails to 
  5.4   elect coverage by the plan under subdivision 2 or if the person 
  5.5   fails to make a timely election, the following retirement 
  5.6   coverage applies: 
  5.7      (1) for employees of the board who are employed in faculty 
  5.8   positions in the technical colleges, the state universities or 
  5.9   in the community colleges, the retirement coverage is by the 
  5.10  plan established by this chapter; 
  5.11     (2) for employees of the board who are employed in faculty 
  5.12  positions in the technical colleges, the retirement coverage is 
  5.13  by the plan established by the chapter unless the employee was a 
  5.14  member of the teachers retirement association established under 
  5.15  chapter 354 on June 30, 1995, unless the employee was a member 
  5.16  of a first class city teacher retirement fund established under 
  5.17  chapter 354A on June 30, 1995, and then the retirement coverage 
  5.18  is by the Duluth teachers retirement fund association if the 
  5.19  person was a member of that plan on June 30, 1995, or the 
  5.20  Minneapolis teachers retirement fund association if the person 
  5.21  was a member of that plan on June 30, 1995, or the St. Paul 
  5.22  teachers retirement fund association if the person was a member 
  5.23  of that plan on June 30, 1995; and 
  5.24     (3) for employees of the board who are employed in eligible 
  5.25  unclassified administrative positions, the retirement coverage 
  5.26  is by the plan established by this chapter. 
  5.27     Sec. 6.  Minnesota Statutes 1996, section 354B.25, 
  5.28  subdivision 2, is amended to read: 
  5.29     Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS.] (a) 
  5.30  The plan administrator shall arrange for the purchase of fixed 
  5.31  annuity contracts, variable annuity contracts, a combination of 
  5.32  fixed and variable annuity contracts, or custodial accounts from 
  5.33  financial institutions which have been selected by the state 
  5.34  board of investment under subdivision 3, as the investment 
  5.35  vehicle for the retirement coverage of plan participants and to 
  5.36  provide retirement benefits to plan participants.  Custodial 
  6.1   accounts from financial institutions shall include open-end 
  6.2   investment companies registered under the federal Investment 
  6.3   Company Act of 1940, as amended. 
  6.4      (b) The annuity contracts or accounts must be purchased 
  6.5   with contributions under section 354B.23 or with money or assets 
  6.6   otherwise provided by law by authority of the board and deemed 
  6.7   acceptable by the applicable financial institution. 
  6.8      (c) In addition to contracts and accounts from financial 
  6.9   institutions, the Minnesota supplemental investment fund 
  6.10  established under section 11A.17 and administered by the state 
  6.11  board of investment is one of the investment options for the 
  6.12  individual retirement account plan. 
  6.13     Sec. 7.  Minnesota Statutes 1996, section 354B.25, 
  6.14  subdivision 3, is amended to read: 
  6.15     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] (a) The 
  6.16  financial institutions provided for under subdivision 2 must be 
  6.17  selected by the state board of investment.  Financial 
  6.18  institutions include open-end investment companies registered 
  6.19  under the federal Investment Company Act of 1940, as amended. 
  6.20     (b) The state board of investment may select up to five 
  6.21  financial institutions to provide annuity contracts, custodial 
  6.22  accounts, or a combination, as investment options for the 
  6.23  individual retirement account plan in addition to the Minnesota 
  6.24  supplemental investment fund.  In making its selection, at a 
  6.25  minimum, the state board of investment shall consider at least 
  6.26  the following: 
  6.27     (1) the experience and ability of the financial institution 
  6.28  to provide retirement and death benefits that are suited to meet 
  6.29  the needs of plan participants; 
  6.30     (2) the relationship of those retirement and death benefits 
  6.31  provided by the financial institution to their cost; and 
  6.32     (3) the financial strength and stability of the financial 
  6.33  institution. 
  6.34     (c) After selecting a financial institution, the state 
  6.35  board of investment must periodically review each financial 
  6.36  institution selected under paragraph (b).  The periodic review 
  7.1   must occur at least every three years.  In making its review, 
  7.2   the state board of investment may retain appropriate consulting 
  7.3   services to assist it in its periodic review, establish a budget 
  7.4   for the cost of the periodic review process, and charge a 
  7.5   proportional share of these costs to the reviewed financial 
  7.6   institution. 
  7.7      (d) Contracts with financial institutions under this 
  7.8   section must be executed by the board and must be approved by 
  7.9   the state board of investment before execution. 
  7.10     (e) The state board of investment shall also establish 
  7.11  policies and procedures under section 11A.04, clause (2), to 
  7.12  carry out the provisions of this subdivision. 
  7.13     Sec. 8.  Minnesota Statutes 1996, section 354C.11, is 
  7.14  amended to read: 
  7.15     354C.11 [COVERAGE.] 
  7.16     Personnel employed by the board of trustees of the 
  7.17  Minnesota state colleges and universities who are in the 
  7.18  unclassified service of the state, and who have completed at 
  7.19  least two years of employment by the board or a predecessor 
  7.20  board with a full-time contract are participants in the 
  7.21  supplemental retirement plan, effective on the next following 
  7.22  July 1, if the person is employed in an eligible unclassified 
  7.23  administrative position as defined in section 354B.20, 
  7.24  subdivision 6, or is employed in an employment classification 
  7.25  included in one of the following collective bargaining units 
  7.26  under section 179A.10, subdivision 2: 
  7.27     (1) the state university instructional unit; 
  7.28     (2) the community college instructional unit; 
  7.29     (3) the technical college instructional unit; and 
  7.30     (4) the state university administrative unit; 
  7.31     (5) the general professional unit; and 
  7.32     (6) the supervisory employees unit. 
  7.33     Sec. 9.  Minnesota Statutes 1996, section 354C.12, 
  7.34  subdivision 1, is amended to read: 
  7.35     Subdivision 1.  [BASIC CONTRIBUTIONS AND DEDUCTIONS.] (a) 
  7.36  The employer of personnel covered by the supplemental retirement 
  8.1   plan as provided in section 354C.11 shall deduct a sum equal to 
  8.2   five percent of the annual salary of the person between $6,000 
  8.3   and $15,000.  The employer may take this deduction in a manner 
  8.4   that equalizes contributions throughout the year. 
  8.5      (b) The basic contribution deduction must be made in the 
  8.6   same manner as other retirement deductions are made from the 
  8.7   salary of the person under section 352.04, subdivision 4; 
  8.8   352D.04, subdivision 2; 354.42, subdivision 2; or 354A.12, 
  8.9   whichever applies. 
  8.10     (c) The employer shall also make a contribution to the 
  8.11  supplemental retirement plan on behalf of covered personnel 
  8.12  equal to the salary deduction made under paragraph (a). 
  8.13     Sec. 10.  [REPEALER.] 
  8.14     Laws 1995, chapter 262, article 1, sections 8, 9, 10, 11, 
  8.15  and 12, are repealed. 
  8.16     Sec. 11.  [EFFECTIVE DATE.] 
  8.17     Sections 1 to 10 are effective July 1, 1997.