HF 1377

as introduced - 87th Legislature (2011 - 2012) Posted on 04/05/2011 10:20am

A bill for an act
relating to retirement; Public Employees Retirement Association general
employees retirement plan; Seaway Port Authority of Duluth; including Seaway
Port Authority of Duluth employees in PERA-general retirement coverage;
authorizing the purchase of allowable service credit for prior Seaway Port
Authority of Duluth employment; amending Minnesota Statutes 2010, section
353.01, subdivisions 2a, 6.

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

Section 1.

Minnesota Statutes 2010, section 353.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees; mandatory membership.

(a) Public employees
whose salary exceeds $425 in any month and who are not specifically excluded under
subdivision 2b or who have not been provided an option to participate under subdivision
2d, whether individually or by action of the governmental subdivision, must participate as
members of the association with retirement coverage by the general employees retirement
plan under this chapter, the public employees police and fire retirement plan under this
chapter, or the local government correctional employees retirement plan under chapter
353E, whichever applies. Membership commences as a condition of their employment on
the first day of their employment or on the first day that the eligibility criteria are met,
whichever is later. Public employees include but are not limited to:

(1) persons whose salary meets the threshold in this paragraph from employment in
one or more positions within one governmental subdivision;

(2) elected county sheriffs;

(3) persons who are appointed, employed, or contracted to perform governmental
functions that by law or local ordinance are required of a public officer, including, but
not limited to:

(i) town and city clerk or treasurer;

(ii) county auditor, treasurer, or recorder;

(iii) city manager as defined in section 353.028 who does not exercise the option
provided under subdivision 2d; or

(iv) emergency management director, as provided under section 12.25;

(4) physicians under section 353D.01, subdivision 2, who do not elect public
employees defined contribution plan coverage under section 353D.02, subdivision 2;

(5) full-time employees of the Dakota County Agricultural Society; deleted text begin and
deleted text end

(6) employees of the Minneapolis Firefighters Relief Association or Minneapolis
Police Relief Association who are not excluded employees under subdivision 2b due
to coverage by the relief association pension plan and who elected general employee
retirement plan coverage before August 20, 2009 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (7) employees of the Seaway Port Authority of Duluth who are not excluded
employees under subdivision 2b.
new text end

(b) A public employee or elected official who was a member of the association on
June 30, 2002, based on employment that qualified for membership coverage by the public
employees retirement plan or the public employees police and fire plan under this chapter,
or the local government correctional employees retirement plan under chapter 353E as of
June 30, 2002, retains that membership for the duration of the person's employment in that
position or incumbency in elected office. Except as provided in subdivision 28, the person
shall participate as a member until the employee or elected official terminates public
employment under subdivision 11a or terminates membership under subdivision 11b.

(c) If the salary of an included public employee is less than $425 in any subsequent
month, the member retains membership eligibility.

(d) For the purpose of participation in the MERF division of the general employees
retirement plan, public employees include employees who were members of the former
Minneapolis Employees Retirement Fund on June 29, 2010, and who participate as
members of the MERF division of the association.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2010, section 353.01, subdivision 6, is amended to read:

Subd. 6.

Governmental subdivision.

(a) "Governmental subdivision" means a
county, city, town, school district within this state, or a department, unit or instrumentality
of state or local government, or any public body established under state or local
authority that has a governmental purpose, is under public control, is responsible for the
employment and payment of the salaries of employees of the entity, and receives a major
portion of its revenues from taxation, fees, assessments or from other public sources.

(b) Governmental subdivision also means the Public Employees Retirement
Association, the League of Minnesota Cities, the Association of Metropolitan
Municipalities, charter schools formed under section 124D.10, service cooperatives
exercising retirement plan participation under section 123A.21, subdivision 5, joint
powers boards organized under section 471.59, subdivision 11, paragraph (a), family
service collaboratives and children's mental health collaboratives organized under
section 471.59, subdivision 11, paragraph (b) or (c), provided that the entities creating
the collaboratives are governmental units that otherwise qualify for retirement plan
membership, public hospitals owned or operated by, or an integral part of, a governmental
subdivision or governmental subdivisions, the Association of Minnesota Counties, the
Minnesota Inter-county Association, the Minnesota Municipal Utilities Association, the
Metropolitan Airports Commission, the University of Minnesota with respect to police
officers covered by the public employees police and fire retirement plan, the Minneapolis
Employees Retirement Fund for employment initially commenced after June 30, 1979, the
Range Association of Municipalities and Schools, soil and water conservation districts,
economic development authorities created or operating under sections 469.090 to
469.108, the Port Authority of the city of St. Paul, new text begin the Seaway Port Authority of Duluth,
new text end the Spring Lake Park Fire Department, incorporated, the Lake Johanna Volunteer Fire
Department, incorporated, the Red Wing Environmental Learning Center, the Dakota
County Agricultural Society, Hennepin Healthcare System, Inc., and the Minneapolis
Firefighters Relief Association and Minneapolis Police Relief Association with respect to
staff covered by the Public Employees Retirement Association general plan.

(c) Governmental subdivision does not mean any municipal housing and
redevelopment authority organized under the provisions of sections 469.001 to 469.047;
or any port authority organized under sections 469.048 to 469.089 other than the Port
Authority of the city of St. Paul new text begin or the Seaway Port Authority of Duluth new text end ; or any hospital
district organized or reorganized prior to July 1, 1975, under sections 447.31 to 447.37 or
the successor of the district; or the board of a family service collaborative or children's
mental health collaborative organized under sections 124D.23, 245.491 to 245.495, or
471.59, if that board is not controlled by representatives of governmental units.

(d) A nonprofit corporation governed by chapter 317A or organized under Internal
Revenue Code, section 501(c)(3), which is not covered by paragraph (a) or (b), is not a
governmental subdivision unless the entity has obtained a written advisory opinion from
the United States Department of Labor or a ruling from the Internal Revenue Service
declaring the entity to be an instrumentality of the state so as to provide that any future
contributions by the entity on behalf of its employees are contributions to a governmental
plan within the meaning of Internal Revenue Code, section 414(d).

(e) A public body created by state or local authority may request membership on
behalf of its employees by providing sufficient evidence that it meets the requirements in
paragraph (a).

(f) An entity determined to be a governmental subdivision is subject to the reporting
requirements of this chapter upon receipt of a written notice of eligibility from the
association.

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. new text begin PERA-GENERAL; PRIOR SEAWAY PORT AUTHORITY OF DULUTH
SERVICE CREDIT TRANSFER.
new text end

new text begin Subdivision 1. new text end

new text begin PERA-general coverage. new text end

new text begin Employees of the Seaway Port Authority
of Duluth on July 1, 2011, are public employees within the meaning of Minnesota
Statutes, section 353.01, subdivisions 2 and 2a, and are members of the general employees
retirement plan of the Public Employees Retirement Association as of that date.
new text end

new text begin Subd. 2. new text end

new text begin Service and salary credit for prior Seaway Port Authority of Duluth
employment. new text end

new text begin (a) Any employee of the Seaway Port Authority of Duluth on the effective
date of this section is eligible, on or after July 1, 2011, to transfer to the general employees
retirement plan of the Public Employees Retirement Association prior service credit
rendered in the employ of the Seaway Port Authority of Duluth as allowable service
credit, but not to exceed the maximum set forth in paragraph (c), and prior salary received
from employment by the Seaway Port Authority of Duluth as salary credit as provided in
paragraph (b).
new text end

new text begin (b) The amount of allowable service and salary credit to be transferred to the general
employees retirement plan for prior Seaway Port Authority of Duluth employment is that
portion of the total prior Seaway Port Authority of Duluth employment that bears the same
relationship that the assets transferred to the general employees retirement fund with
respect to each applicable person bear to the full actuarial value of the benefit attributable
to the prior service and salary under Minnesota Statutes, chapters 353 and 356. The full
actuarial value of the benefit attributable to the prior service under Minnesota Statutes,
chapters 353 and 356, is as provided in Minnesota Statutes, section 356.551. The assets
transferred with respect to each applicable person is the person's account balance in the
Seaway Port Authority of Duluth federal Internal Revenue Code Section 401(a) retirement
plan, the person's account balance in a federal Internal Revenue Code Section 457 deferred
compensation plan, the person's share of any purchase payment amounts that the Seaway
Port Authority of Duluth irrevocably commits to contribute to the general employees
retirement fund, and any purchase payment amount contributed by the applicable person
to the general employees retirement fund. Any amounts from the federal Internal Revenue
Code Section 401(a) retirement plan, the federal Internal Revenue Code Section 457
deferred compensation plan, or from a purchase payment amount provided by the Seaway
Port Authority of Duluth must be made on an institution-to-institution basis.
new text end

new text begin (c) If the assets transferred with respect to an applicable person under paragraph
(b) are less than the full actuarial value of the benefit attributable to the prior service, the
untransferred balance of the prior service and salary may be purchased by the applicable
person or a combination of the applicable person and the Seaway Port Authority of
Duluth under Minnesota Statutes, section 356.551. No applicable person may purchase
more allowable service and salary credit from the general employees retirement plan of
the Public Employees Retirement Association than the person's period of employment
by the Seaway Port Authority of Duluth rendered before the effective date of this section
if the employment would have been eligible service and salary for general employees
retirement plan coverage if the service had been rendered or salary received after the
effective date of this section.
new text end

new text begin (d) An applicable person must provide any documentation related to eligibility
under the general employees retirement plan that is required by the executive director.
Allowable service and salary credit for any period must be transferred and recognized
by the general employees retirement plan for an applicable person upon receipt of the
associated transferred assets.
new text end

new text begin (e) Transferred service and salary credit related to the Seaway Port Authority of
Duluth before July 1, 1989, does not make a person eligible for a retirement annuity under
Minnesota Statutes, section 353.30, subdivision 1a.
new text end

new text begin (f) Authority to have service and salary credit transferred under this section expires
on July 1, 2013, or on the date that the applicable person terminates employment by the
Seaway Port Authority of Duluth, whichever is earlier.
new text end

new text begin Subd. 3. new text end

new text begin Status of service transfer amounts. new text end

new text begin Notwithstanding any provision of
Minnesota Statutes, section 353.32, 353.34, or 353.35, to the contrary, amounts transferred
to the general employees retirement fund of the Public Employees Retirement Association
under subdivision 2 must be considered to be an accumulated member contribution
deduction.
new text end

new text begin EFFECTIVE DATE. new text end

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