as introduced - 87th Legislature (2011 - 2012) Posted on 04/04/2011 09:08am
A bill for an act
relating to retirement; St. Paul Teachers Retirement Fund Association; revising
postretirement adjustment procedures; reducing refund interest rate; terminating
interest payments on reemployed annuitant savings accounts; lowering deferred
annuity augmentation rate; amending Minnesota Statutes 2010, sections
354A.29, by adding subdivisions; 354A.37; 356.47, subdivision 3; repealing
Minnesota Statutes 2010, section 354A.29, subdivision 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Minnesota Statutes 2010, section 354A.29, is amended by adding a
subdivision to read:
new text begin
(a) Annually,
after June 30, the board of trustees of the St. Paul Teachers Retirement Fund Association
must determine the amount of any postretirement adjustment using the procedures in this
subdivision and subdivision 8 or 9, whichever is applicable.
new text end
new text begin
(b) On January 1, each eligible person who has been receiving an annuity or benefit
under the articles of incorporation, the bylaws, or this chapter for at least three calendar
months as of the end of the last day of the previous calendar year is eligible to receive a
postretirement increase as specified in subdivision 8 or 9.
new text end
new text begin
This section is effective July 1, 2011.
new text end
Minnesota Statutes 2010, section 354A.29, is amended by adding a subdivision
to read:
new text begin
(a)
For purposes of computing postretirement adjustments for eligible benefit recipients of the
St. Paul Teachers Retirement Fund Association, the accrued liability funding ratio based
on the actuarial value of assets of the plan as determined by the most recent actuarial
valuation prepared under sections 356.214 and 356.215 determines the postretirement
increase, as follows:
new text end
new text begin
Funding ratio new text end |
new text begin
Postretirement increase new text end |
|||
new text begin
Less than 80 percent new text end |
new text begin
1 percent new text end |
|||
new text begin
At least 80 percent but less than 90 percent new text end |
new text begin
2 percent new text end |
new text begin
(b) The amount determined under paragraph (a) is the full postretirement increase
to be applied as a permanent increase to the regular payment of each eligible member
on January 1 of the next calendar year. For any eligible member whose effective date
of benefit commencement occurred during the calendar year before the postretirement
increase is applied, the full increase amount must be prorated on the basis of whole
calendar quarters in benefit payment status in the calendar year prior to the January 1 on
which the postretirement increase is applied, calculated to the third decimal place.
new text end
new text begin
(c) If the accrued liability funding ratio based on the actuarial value of assets is at
least 90 percent, this subdivision expires and subsequent postretirement increases must be
paid as specified in subdivision 9.
new text end
new text begin
This section is effective July 1, 2011.
new text end
Minnesota Statutes 2010, section 354A.29, is amended by adding a subdivision
to read:
new text begin
(a) This subdivision applies
if subdivision 8 has expired.
new text end
new text begin
(b) A percentage adjustment must be computed and paid under this subdivision to
eligible persons under subdivision 7. This adjustment is determined by reference to the
Consumer Price Index for urban wage earners and clerical workers all items index as
reported by the Bureau of Labor Statistics within the United States Department of Labor
each year as part of the determination of annual cost-of-living adjustments to recipients of
federal old-age, survivors, and disability insurance. For calculations of postretirement
adjustments under paragraph (c), the term "average third quarter Consumer Price Index
value" means the sum of the monthly index values as initially reported by the Bureau of
Labor Statistics for the months of July, August, and September, divided by three.
new text end
new text begin
(c) Before January 1 of each year, the executive director must calculate the amount
of the postretirement adjustment by dividing the most recent average third quarter index
value by the same average third quarter index value from the previous year, subtract one
from the resulting quotient, and express the result as a percentage amount, which must be
rounded to the nearest one-tenth of one percent.
new text end
new text begin
(d) The amount calculated under paragraph (c) is the full postretirement adjustment
to be applied as a permanent increase to the regular payment of each eligible member
on January 1 of the next calendar year. For any eligible member whose effective date
of benefit commencement occurred during the calendar year before the postretirement
adjustment is applied, the full increase amount must be prorated on the basis of whole
calendar quarters in benefit payment status in the calendar year prior to the January 1 on
which the postretirement adjustment is applied, calculated to the third decimal place.
new text end
new text begin
(e) The adjustment must not be less than zero nor greater than five percent.
new text end
new text begin
This section is effective July 1, 2011.
new text end
Minnesota Statutes 2010, section 354A.37, is amended to read:
Any coordinated member who ceases to
render teaching service for the school district in which the teachers retirement fund
association is located shall be entitled to a refund in lieu of any other annuity or benefit
from the teachers retirement fund associationnew text begin ,new text end other than an annuity from a tax shelter
annuity program and fund as authorized deleted text begin pursuant todeleted text end new text begin under new text end section 354A.021, subdivision
5. The amount of the refund deleted text begin shalldeleted text end new text begin must new text end be calculated deleted text begin pursuant todeleted text end new text begin under new text end subdivision 3. The
application for the refund deleted text begin shalldeleted text end new text begin must new text end not be made prior to 30 days after the cessation of
teaching services if the coordinated member has not resumed active teaching services for
the district. Payment of the refund deleted text begin shalldeleted text end new text begin must new text end be made within 90 days after receipt of the
refund application by the board.
(a) Any coordinated member
who ceases to render teaching services for the school district in which the teachers
retirement fund association is located, with sufficient allowable service credit to meet
the minimum service requirements specified in section 354A.31, subdivision 1, shall be
entitled to a deferred retirement annuity in lieu of a refund deleted text begin pursuant todeleted text end new text begin under new text end subdivision
1. The deferred retirement annuity deleted text begin shalldeleted text end new text begin must new text end be computed deleted text begin pursuant todeleted text end new text begin under new text end section
354A.31 and shall be augmented as provided in this subdivision. The deferred annuity
deleted text begin shall commencedeleted text end new text begin commences new text end upon application after the person on deferred status attains at
least the minimum age specified in section 354A.31, subdivision 1.
(b) The monthly annuity amount that had accrued when the member ceased to
render teaching service must be augmented from the first day of the month following the
month during which the member ceased to render teaching service to the effective date
of retirement. There is no augmentation if this period is less than three months. deleted text begin For a
member of the St. Paul Teachers Retirement Fund Association, the rate of augmentation
is three percent compounded annually until January 1 of the year following the year in
which the former member attains age 55, and five percent compounded annually after that
date to the effective date of retirement if the employee became an employee before July
1, 2006, and at 2.5 percent compounded annually if the employee becomes an employee
after June 30, 2006. For a member of the Duluth Teachers Retirement Fund Association,deleted text end
The rate of augmentation is three percent compounded annually until January 1 of the year
following the year in which the former member attains age 55, five percent compounded
annually after that date to July 1, 2012, and two percent compounded annually after
that date to the effective date of retirement if the employee became an employee before
July 1, 2006, and at 2.5 percent compounded annually to July 1, 2012, and two percent
compounded annually after that date to the effective date of retirement if the employee
deleted text begin becomesdeleted text end new text begin became new text end an employee after June 30, 2006. If a person has more than one period of
uninterrupted service, a separate average salary determined under section 354A.31 must
be used for each period, and the monthly annuity amount related to each period must be
augmented as provided in this subdivision. The sum of the augmented monthly annuity
amounts determines the total deferred annuity payable. If a person repays a refund, the
service restored by the repayment must be considered as continuous with the next period
of service for which the person has credit with the fund. If a person does not render
teaching services in any one fiscal year or more consecutive fiscal years and then resumes
teaching service, the formula percentages used from the date of resumption of teaching
service are those applicable to new members. The mortality table and interest assumption
used to compute the annuity are the table established by the fund to compute other
annuities, and the interest assumption under section 356.215 in effect when the member
retires. A period of uninterrupted service for the purpose of this subdivision means a
period of covered teaching service during which the member has not been separated from
active service for more than one fiscal year.
(c) The augmentation provided by this subdivision applies to the benefit provided
in section 354A.35, subdivision 2. The augmentation provided by this subdivision does
not apply to any period in which a person is on an approved leave of absence from an
employer unit.
A former coordinated member deleted text begin of the St.
Paul Teachers Retirement Fund Association who qualifies for a refund under subdivision 1
shall receive a refund equal to the amount of the former coordinated member's accumulated
employee contributions with interest at the rate of six percent per annum compounded
annually. A former coordinated member of the Duluth Teachers Retirement Fund
Associationdeleted text end who qualifies for a refund under subdivision 1 shall receive a refund equal
to the amount of the former coordinated member's accumulated employee contributions
with interest at the rate of six percent per annum compounded annually to July 1, 2010,
new text begin if the person is a former member of the Duluth Teachers Retirement Fund Association, or
to July 1, 2011, if the person is a former member of the St. Paul Teachers Retirement Fund
Association, new text end and four percent per annum compounded annually thereafter.
Any coordinated member
who has attained the normal retirement age with less than ten years of allowable service
credit and has terminated active teaching service shall be entitled to a refund in lieu of a
proportionate annuity deleted text begin pursuant todeleted text end new text begin under new text end section 356.32. The refund deleted text begin for a member of the
St. Paul Teachers Retirement Fund Association shall be equal to the coordinated member's
accumulated employee contributions plus interest at the rate of six percent compounded
annually. The refund for a member of the Duluth Teachers Retirement Fund Association
shalldeleted text end new text begin must new text end be equal to the coordinated member's accumulated employee contributions plus
interest at the rate of six percent compounded annually to July 1, 2010, new text begin if the person is a
former member of the Duluth Teachers Retirement Fund Association, or to July 1, 2011, if
the person is a former member of the St. Paul Teachers Retirement Fund Association, new text end and
four percent per annum compounded annually thereafter.
If a coordinated
member ceases to render teaching services for the school district in which the teachers
retirement fund association is located but does not apply for a refund deleted text begin pursuant todeleted text end new text begin under
new text end subdivision 1 within five years after the end of the plan year next following the cessation
of teaching services and if the amount of the refund that the former coordinated member
would have been entitled to deleted text begin pursuant todeleted text end new text begin under new text end subdivision 3 is $500 or less, then the
amount of the refund and any accumulated interest deleted text begin shalldeleted text end new text begin must new text end be credited to and become
a part of the retirement fund. If the former coordinated member subsequently renders
teaching services for the school district in which the teachers retirement fund association
is located and the amount of the refund that the former coordinated member would have
previously been entitled to deleted text begin pursuant todeleted text end new text begin under new text end subdivision 3 is at least $5, then the amount
of the refund and any accumulated interest deleted text begin shall bedeleted text end new text begin must be new text end restored to the member's
individual account. If the amount of the refund that the former coordinated member
would have previously been entitled to deleted text begin pursuant todeleted text end new text begin under new text end subdivision 3 is at least $5 and
the former coordinated member applies for a refund deleted text begin pursuant todeleted text end new text begin under new text end subdivision 1 or
for an annuity deleted text begin pursuant todeleted text end new text begin under new text end sections 354A.31 and 354A.32 or section 356.30, the
amount of the refund and any accumulated interest deleted text begin shalldeleted text end new text begin must new text end be restored to the member's
individual account.
new text begin
This section is effective July 1, 2011.
new text end
Minnesota Statutes 2010, section 356.47, subdivision 3, is amended to read:
(a) Beginning one year after the reemployment withholding
period ends relating to the reemployment that gave rise to the limitation, and the filing of a
written application, the retired member is entitled to the payment, in a lump sum, of the
value of the person's amount under subdivision 2, plus annual compound interest. For the
general state employees retirement plan, the correctional state employees retirement plan,
the general employees retirement plan of the Public Employees Retirement Association,
the public employees police and fire retirement plan, the local government correctional
employees retirement plan, and the teachers retirement plan, the annual interest rate is six
percent from the date on which the amount was deducted from the retirement annuity to
the date of payment or until January 1, 2011, whichever is earlier, and no interest after
January 1, 2011. For the Duluth Teachers Retirement Fund Association, the annual interest
is six percent from the date on which the amount was deducted from the retirement annuity
to the date of payment or until June 30, 2010, whichever is earlier, and new text begin with new text end no interest
new text begin accrual new text end after June 30, 2010. For the St. Paul Teachers Retirement Fund Association, the
annual interest is the rate of six percent from the date that the amount was deducted from
the retirement annuity to the date of paymentnew text begin or June 30, 2011, whichever is earlier, and
with no interest accrual after June 30, 2011new text end .
(b) The written application must be on a form prescribed by the chief administrative
officer of the applicable retirement plan.
(c) If the retired member dies before the payment provided for in paragraph (a) is
made, the amount is payable, upon written application, to the deceased person's surviving
spouse, or if none, to the deceased person's designated beneficiary, or if none, to the
deceased person's estate.
(d) In lieu of the direct payment of the person's amount under subdivision 2, on
or after the payment date under paragraph (a), if the federal Internal Revenue Code so
permits, the retired member may elect to have all or any portion of the payment amount
under this section paid in the form of a direct rollover to an eligible retirement plan as
defined in section 402(c) of the federal Internal Revenue Code that is specified by the
retired member. If the retired member dies with a balance remaining payable under this
section, the surviving spouse of the retired member, or if none, the deceased person's
designated beneficiary, or if none, the administrator of the deceased person's estate may
elect a direct rollover under this paragraph.
new text begin
This section is effective July 1, 2011.
new text end
new text begin
Consistent with the requirements of Minnesota Statutes, section 354A.12,
subdivision 4, the board of the St. Paul Teachers Retirement Fund Association is
authorized to revise the bylaws and articles of incorporation so that the requirements of
this act, where applicable, apply to the basic program.
new text end
new text begin
This section is effective July 1, 2011.
new text end
new text begin
Minnesota Statutes 2010, section 354A.29, subdivision 3,
new text end
new text begin
is repealed.
new text end
new text begin
This section is effective July 1, 2011.
new text end