HF 1460

as introduced - 90th Legislature (2017 - 2018) Posted on 02/20/2017 01:36pm

A bill for an act
relating to retirement; Minnesota State Retirement System administrative
provisions; clarifying coverage for employees of the Perpich Center for Arts
Education; clarifying coverage eligibility for University of Minnesota part-time
and temporary employees; modifying certain disability and disability application
deadline provisions; clarifying unclassified program transfer to general plan
provisions; making other administrative changes; amending Minnesota Statutes
2016, sections 352.01, subdivisions 2a, 2b; 352.113, subdivisions 4, 14; 352D.02,
subdivisions 1, 3.

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

Section 1.

Minnesota Statutes 2016, section 352.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees.

(a) "State employee" includes:

(1) employees of the Minnesota Historical Society;

(2) employees of the State Horticultural Society;

(3) employees of the Minnesota Crop Improvement Association;

(4) employees of the adjutant general whose salaries are paid from federal funds and
who are not covered by any federal civilian employees retirement system;

(5) employees of the Minnesota State Colleges and Universities who are employed under
the university or college activities program;

(6) currently contributing employees covered by the system who are temporarily
employed by the legislature during a legislative session or any currently contributing
employee employed for any special service as defined in subdivision 2b, clause (6);

(7) employees of the legislature who are appointed without a limit on the duration of
their employment;

(8) trainees who are employed on a full-time established training program performing
the duties of the classified position for which they will be eligible to receive immediate
appointment at the completion of the training period;

(9) employees of the Minnesota Safety Council;

(10) any employees who are on authorized leave of absence from the Transit Operating
Division of the former Metropolitan Transit Commission and who are employed by the
labor organization which is the exclusive bargaining agent representing employees of the
Transit Operating Division;

(11) employees of the Metropolitan Council, Metropolitan Parks and Open Space
Commission, Metropolitan Sports Facilities Commission, or Metropolitan Mosquito Control
Commission unless excluded under subdivision 2b or are covered by another public pension
fund or plan under section 473.415, subdivision 3;

(12) judges of the Tax Court;

(13) personnel who were employed on June 30, 1992, by the University of Minnesota
in the management, operation, or maintenance of its heating plant facilities, whose
employment transfers to an employer assuming operation of the heating plant facilities, so
long as the person is employed at the University of Minnesota heating plant by that employer
or by its successor organization;

(14) personnel who are employed as seasonal employees in the classified or unclassified
service;

(15) persons who are employed by the Department of Commerce as a peace officer in
the Commerce Fraud Bureau under section 45.0135 who have attained the mandatory
retirement age specified in section 43A.34, subdivision 4;

(16) employees of the University of Minnesota unless excluded under subdivision 2b,
clause (3);

(17) employees of the Middle Management Association whose employment began after
July 1, 2007, and to whom section 352.029 does not apply;

(18) employees of the Minnesota Government Engineers Council to whom section
352.029 does not apply;

(19) employees of the Minnesota Sports Facilities Authority;

(20) employees of the Minnesota Association of Professional Employees;

(21) employees of the Minnesota State Retirement System;

(22) employees of the State Agricultural Society;

(23) employees of the Gillette Children's Hospital Board who were employed in the
state unclassified service at the former Gillette Children's Hospital on March 28, 1974; deleted text begin and
deleted text end

(24) if approved for coverage by the Board of Directors of Conservation Corps Minnesota,
employees of Conservation Corps Minnesota so employed on June 30, 2003 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (25) employees of the Perpich Center for Arts Education who are covered by the general
state employees retirement plan of the Minnesota State Retirement System as of July 1,
2016.
new text end

(b) Employees specified in paragraph (a), clause (13), are included employees under
paragraph (a) if employer and employee contributions are made in a timely manner in the
amounts required by section 352.04. Employee contributions must be deducted from salary.
Employer contributions are the sole obligation of the employer assuming operation of the
University of Minnesota heating plant facilities or any successor organizations to that
employer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 352.01, subdivision 2b, is amended to read:

Subd. 2b.

Excluded employees.

"State employee" does not include:

(1) persons who are:

(i) students employed by the University of Minnesota, or within the Minnesota State
Colleges and Universities system, unless approved for coverage by the Board of Regents
of the University of Minnesota or the Board of Trustees of the Minnesota State Colleges
and Universities, whichever applies;

(ii) employed as interns for a period not to exceed six months unless included under
subdivision 2a, paragraph (a), clause (8);

(iii) employed as trainee employees unless included under subdivision 2a, paragraph
(a), clause (8); or

(iv) employed in the student worker classification as designated by Minnesota
Management and Budget;

(2) employees who are:

(i) eligible for membership in the state Teachers Retirement Association, unless the
person is an employee of the Department of Education who elected to be covered by the
general state employees retirement plan of the Minnesota State Retirement System instead
of the Teachers Retirement Association;

(ii) employees of the state who, in any year, were credited with 12 months of allowable
service as a public school teacher and, as such, are members of a retirement plan governed
by chapter 354 or 354A unless the employment is incidental employment as a state employee
that is not covered by a retirement plan governed by chapter 354 or 354A;

(iii) employees of the state who are employed by the Board of Trustees of the Minnesota
State Colleges and Universities in an unclassified position that is listed in section 43A.08,
subdivision 1, clause (9);

(iv) persons employed by the Board of Trustees of the Minnesota State Colleges and
Universities who elected retirement coverage other than by the general state employees
retirement plan of the Minnesota State Retirement System under Minnesota Statutes 1994,
section 136C.75;

(v) officers or enlisted personnel in the National Guard or in the naval militia who are
assigned to permanent peacetime duty and who are or are required to be members of a
federal retirement system under federal law;

(vi) persons employed by the Department of Military Affairs as full-time firefighters
and who, as such, are members of the public employees police and fire retirement plan;

(vii) members of the State Patrol retirement plan under section 352B.011, subdivision
10;

(viii) off-duty police officers while employed by the Metropolitan Council and persons
employed as full-time police officers by the Metropolitan Council and who, as such, are
members of the public employees police and fire retirement plan; and

(ix) employees of the state who have elected to transfer account balances derived from
state service to the unclassified state employees retirement program under section 352D.02,
subdivision 1d;

(3) employees of the University of Minnesota who are new text begin :
new text end

new text begin (i) new text end excluded from coverage by action of the Board of Regents;

new text begin (ii) employed in a part-time position and whose service does not exceed the lesser of 14
hours per week or 35 percent of the normal workweek in the employee's appropriate unit
as defined in section 179A.03, subdivision 2; or
new text end

new text begin (iii) employed in a position that is temporary or seasonal in character and:
new text end

new text begin (A) for a period not to exceed 67 working days in any calendar year; or
new text end

new text begin (B) for a period not to exceed 100 working days in any calendar year and the employee
is under age 22, was a full-time student enrolled in a nonprofit or public educational
institution before being hired by the employer, and has indicated, either in an application
for employment or by being enrolled at an educational institution for the next academic
year or term, an intention to continue as a student during or after the temporary employment;
new text end

(4) election judges and persons who are employed solely to administer elections;

(5) persons who are:

(i) engaged in public work for the state but who are employed by contractors when the
performance of the contract is authorized by the legislature or other competent authority;

(ii) employed to perform professional services where the service is incidental to the
person's regular professional duties and where compensation is paid on a per diem basis;
or

(iii) compensated on a fee payment basis or as an independent contractor;

(6) persons who are employed:

(i) on a temporary basis by the house of representatives, the senate, or a legislative
commission or agency under the jurisdiction of the Legislative Coordinating Commission;

(ii) as a temporary employee on or after July 1 for a period ending on or before October
15 of that calendar year for the Minnesota State Agricultural Society or the Minnesota State
Fair, or as an employee at any time for a special event held on the fairgrounds;

(iii) by the executive branch as a temporary employee in the classified service or as an
executive branch temporary employee in the unclassified service if appointed for a definite
period not to exceed six months, and if employment is less than six months, then in any
12-month period;

(iv) by the adjutant general if employed on an unlimited intermittent or temporary basis
in the classified service or in the unclassified service for the support of Army or Air National
Guard training facilities;

(v) by a state or federal program for training or rehabilitation as a temporary employee
if employed for a limited period from an area of economic distress and if other than a skilled
or supervisory personnel position or other than a position that has civil service status covered
by the retirement system; and

(vi) by the Metropolitan Council or a statutory board of the Metropolitan Council where
the members of the board are appointed by the Metropolitan Council as a temporary employee
if the appointment does not exceed six months;

(7) receivers, jurors, notaries public, and court employees who are not in the judicial
branch as defined in section 43A.02, subdivision 25, except referees and adjusters employed
by the Department of Labor and Industry;

(8) patient and inmate help who perform services in state charitable, penal, and
correctional institutions, including a Minnesota Veterans Home;

(9) employees of the Sibley House Association;

(10) persons who are:

(i) members of any state board or commission who serve the state intermittently and are
paid on a per diem basis, the secretary, secretary-treasurer, and treasurer of those boards if
their compensation is $5,000 or less per year, or, if they are legally prohibited from serving
more than three years, and the board of managers of the State Agricultural Society and its
treasurer unless the treasurer is also its full-time secretary;

(ii) examination monitors employed by a department, agency, commission, or board of
the state to conduct examinations that are required by law; or

(iii) appointees serving as a member of a fact-finding commission or an adjustment
panel, an arbitrator, or a labor referee under chapter 179;

(11) emergency employees who are in the classified service, but if an emergency
employee, within the same pay period, becomes a provisional or probationary employee on
other than a temporary basis, the employee must be considered a "state employee"
retroactively to the beginning of the pay period;

(12) persons who are members of a religious order who are excluded from coverage
under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
as amended, if no irrevocable election of coverage has been made under section 3121(r) of
the Internal Revenue Code of 1986, as amended;

(13) members of trades who are employed by the successor to the Metropolitan Waste
Control Commission, who have trade union pension plan coverage under a collective
bargaining agreement, and who are first employed after June 1, 1977;

(14) foreign citizens who are employed under a work permit of less than three years or
under an H-1b visa or a J-1 visa that is initially valid for less than three years of employment,
unless notice of a visa extension which allows them to work for three or more years as of
the date that the extension is granted and is supplied to the retirement plan, in which case
the person is eligible for coverage from the date of the extension; and

(15) reemployed annuitants of the general state employees retirement plan, the military
affairs personnel retirement plan, the transportation department pilots retirement plan, the
state fire marshal employees retirement plan, or the correctional state employees retirement
plan during the course of that reemployment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 352.113, subdivision 4, is amended to read:

Subd. 4.

Medical or psychological examinations; authorization for payment of
benefit.

(a) Any physician, psychologist, chiropractor, deleted text begin or deleted text end physician assistant new text begin , or nurse
practitioner new text end providing any service specified in this section must be licensed.

(b) An applicant shall provide a detailed report signed by a physician, and at least one
additional report signed by a physician, deleted text begin chiropractor, deleted text end psychologist, deleted text begin or deleted text end new text begin chiropractor, new text end physician
assistant new text begin , or nurse practitioner new text end with evidence to support an application for total and permanent
disability. The reports must include an expert opinion regarding whether the employee is
permanently and totally disabled within the meaning of section 352.01, subdivision 17, and
that the disability arose before the employee was placed on any paid or unpaid leave of
absence or terminated public service.

(c) If there is medical evidence that supports the expectation that at some point the person
applying for the disability benefit will no longer be disabled, the decision granting the
disability benefit may provide for a termination date upon which the total and permanent
disability can be expected to no longer exist. When a termination date is part of the decision
granting benefits, prior to the benefit termination the executive director shall review any
evidence provided by the disabled employee to show that the disabling condition for which
benefits were initially granted continues. If the benefits cease, the disabled employee may
follow the appeal procedures described in section 356.96 or may reapply for disability
benefits using the process described in this subdivision.

(d) Any claim to disability must be supported by a report from the employer indicating
that there is no available work that the employee can perform with the disabling condition
and that all reasonable accommodations have been considered. Upon request of the executive
director, an employer shall provide evidence of the steps the employer has taken to attempt
to provide reasonable accommodations and continued employment to the claimant.

(e) The director shall also obtain written certification from the employer stating whether
the employment has ceased or whether the employee is on sick leave of absence because
of a disability that will prevent further service to the employer and that the employee is not
entitled to compensation from the employer.

(f) The medical adviser shall consider the reports of the deleted text begin physicians, physician assistants,
psychologists, and chiropractors deleted text end new text begin physician, psychologist, chiropractor, physician assistant,
or nurse practitioner new text end and any other evidence supplied by the employee or other interested
parties. If the medical adviser finds the employee totally and permanently disabled, the
adviser shall make appropriate recommendation to the director in writing together with the
date from which the employee has been totally disabled. The director shall then determine
if the disability occurred deleted text begin within 18 months of filing the application, deleted text end while still in the
employment of the state deleted text begin , and the propriety of authorizing payment of a disability benefit as
provided in this section deleted text end new text begin and constitutes a total and permanent disability as defined in section
352.01, subdivision 17 new text end .

(g) A terminated employee may apply for a disability benefit within 18 months of
termination as long as the disability occurred while in the employment of the state. The fact
that an employee is placed on leave of absence without compensation because of disability
does not bar that employee from receiving a disability benefit.

new text begin (h) Upon appeal, the board of directors may extend the disability benefit application
deadline in paragraph (g) by an additional 18 months if the terminated employee is
determined by the board of directors to have a cognitive impairment that made it unlikely
that the terminated employee understood that there was an application deadline or that the
terminated employee was able to meet the application deadline.
new text end

deleted text begin (h) deleted text end new text begin (i) new text end Unless the payment of a disability benefit has terminated because the employee
is no longer totally disabled, or because the employee has reached normal retirement age
as provided in this section, the disability benefit must cease with the last payment received
by the disabled employee or which had accrued during the lifetime of the employee unless
there is a spouse surviving. In that event, the surviving spouse is entitled to the disability
benefit for the calendar month in which the disabled employee died.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352.113, subdivision 14, is amended to read:

Subd. 14.

Disabilitant earnings reports.

Disability benefit recipients must report all
earnings from reemployment and income from workers' compensation to the system annually
by May 15 in a format prescribed by the executive director. new text begin The executive director may
waive the earnings report requirement for any disabled employee who is not required to
undergo regular medical or psychological examinations under subdivision 6. new text end If the form is
not submitted by June 15, benefits must be suspended effective July 1. If the form deemed
acceptable by the executive director is received after the June 15 deadline, benefits shall be
reinstated retroactive to July 1.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 352D.02, subdivision 1, is amended to read:

Subdivision 1.

Coverage.

(a) Employees enumerated in paragraph (c), clauses (2), (3),
(4), (6) to (14), and (16) to (18), if they are in the unclassified service of the state or
Metropolitan Council and are eligible for coverage under the general state employees
retirement plan under chapter 352, are participants in the unclassified program under this
chapter deleted text begin unless the employee gives notice to the executive director of the Minnesota State
Retirement System within one year following the commencement of employment in the
unclassified service that the employee desires coverage under the general state employees
retirement plan. For the purposes of this chapter, an employee who does not file notice with
the executive director is deemed to have exercised the option to participate in the unclassified
program deleted text end .

(b) Persons referenced in paragraph (c), clause (5), are participants in the unclassified
program under this chapter unless the person was eligible to elect different coverage under
section 3A.07 and elected retirement coverage by the applicable alternative retirement plan.
Persons referenced in paragraph (c), clause (15), are participants in the unclassified program
under this chapter for judicial employment in excess of the service credit limit in section
490.121, subdivision 22.

(c) Enumerated employees and referenced persons are:

(1) the governor, the lieutenant governor, the secretary of state, the state auditor, and
the attorney general;

(2) an employee in the Office of the Governor, Lieutenant Governor, Secretary of State,
State Auditor, Attorney General;

(3) an employee of the State Board of Investment;

(4) the head of a department, division, or agency created by statute in the unclassified
service, an acting department head subsequently appointed to the position, or an employee
enumerated in section 15A.0815 or 15A.083, subdivision 4;

(5) a member of the legislature;

(6) an unclassified employee of the legislature or a commission or agency of the
legislature who is appointed without a limit on the duration of the employment or a temporary
legislative employee having shares in the supplemental retirement fund as a result of former
employment covered by this chapter, whether or not eligible for coverage under the
Minnesota State Retirement System;

(7) a person who is employed in a position established under section 43A.08, subdivision
1, clause (3), or in a position authorized under a statute creating or establishing a department
or agency of the state, which is at the deputy or assistant head of department or agency or
director level;

(8) the regional administrator, or executive director of the Metropolitan Council, general
counsel, division directors, operations managers, and other positions as designated by the
council, all of which may not exceed 27 positions at the council and the chair;

(9) the commissioner, deputy commissioner, and not to exceed nine positions of the
Minnesota Office of Higher Education in the unclassified service, as designated by the
Minnesota Office of Higher Education before January 1, 1992, or subsequently redesignated
with the approval of the board of directors of the Minnesota State Retirement System, unless
the person has elected coverage by the individual retirement account plan under chapter
354B;

(10) the clerk of the appellate courts appointed under article VI, section 2, of the
Constitution of the state of Minnesota, the state court administrator and judicial district
administrators;

(11) the chief executive officers of correctional facilities operated by the Department of
Corrections and of hospitals and nursing homes operated by the Department of Human
Services;

(12) an employee whose principal employment is at the state ceremonial house;

(13) an employee of the Agricultural Utilization Research Institute;

(14) an employee of the State Lottery who is covered by the managerial plan established
under section 43A.18, subdivision 3;

(15) a judge who has exceeded the service credit limit in section 490.121, subdivision
22;

(16) an employee of Enterprise Minnesota, Inc.;

(17) a person employed by the Minnesota State Colleges and Universities as faculty or
in an eligible unclassified administrative position as defined in section 354B.20, subdivision
6, who was employed by the former state university or the former community college system
before May 1, 1995, and elected unclassified program coverage prior to May 1, 1995; and

(18) a person employed by the Minnesota State Colleges and Universities who was
employed in state service before July 1, 1995, who subsequently is employed in an eligible
unclassified administrative position as defined in section 354B.20, subdivision 6, and who
elects coverage by the unclassified program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 352D.02, subdivision 3, is amended to read:

Subd. 3.

Transfer to general employees retirement plan.

(a) deleted text begin If permitted under
paragraph (b), an employee deleted text end new text begin A person in the unclassified program and new text end referred to in
subdivision 1, paragraph (c), clauses (2) to (4), (6) to (14), and (16) to (18), deleted text begin who is credited
with shares in the unclassified program and has credit for allowable service deleted text end may elect to
terminate participation in the unclassified program and be covered by the general new text begin state
new text end employees retirement plan deleted text begin . (b) An employee specified in paragraph (a) is permitted to
terminate participation in the unclassified program and be covered by deleted text end new text begin if the person files an
election to transfer to new text end the general new text begin state new text end employees retirement plan deleted text begin if the employee deleted text end new text begin with the
executive director of the Minnesota State Retirement System as provided in paragraph (b)
and the person's current employment or appointment new text end :

(1) deleted text begin was employed deleted text end new text begin began new text end before July 1, 2010, and new text begin the person new text end has at least ten years of
deleted text begin allowable service deleted text end new text begin covered employment new text end ; or

(2) deleted text begin was first employed deleted text end new text begin began new text end after June 30, 2010, and new text begin the person new text end has no more than seven
years of allowable service new text begin in the unclassified program new text end .

deleted text begin The deleted text end new text begin (b) An new text end election new text begin to transfer new text end must be in writing new text begin , new text end on a form provided by the executive
director, and deleted text begin can be made no later than one month following the termination of covered
employment. deleted text end new text begin delivered to the executive director:
new text end

new text begin (1) for persons described in paragraph (a), clause (1), no later than one month following
the termination of covered employment; or
new text end

new text begin (2) for persons described in paragraph (a), clause (2), no later than one month following
the termination of employment in a position covered by the unclassified program.
new text end

new text begin For purposes of this chapter, an employee who does not file an election to transfer with
the executive director is deemed to have exercised the option to participate in the unclassified
program.
new text end

(c) If the transfer election is made, the executive director shall redeem the employee's
total shares and credit to the employee's account in the general employees retirement plan
the amount of contributions that would have been credited had the employee been covered
by the general employees retirement plan during the employee's entire covered employment.
The balance of money redeemed and not credited to the employee's account must be
transferred to the general employees retirement plan, except that the executive director must
determine:

(1) the employee contributions paid to the unclassified program; and

(2) the employee contributions that would have been paid to the general employees
retirement plan for the comparable period, if the individual had been covered by that plan.

If clause (1) is greater than clause (2), the difference must be refunded to the employee
as provided in section 352.22. If clause (2) is greater than clause (1), the difference must
be paid by the employee within six months of electing general employees retirement plan
coverage or before the effective date of the annuity, whichever is sooner.

(d) An election under paragraph (b) to transfer coverage to the general employees
retirement plan is irrevocable during any period of covered employment.

(e) A person referenced in subdivision 1, paragraph (c), clause (1), (5), or (15), who is
credited with employee shares in the unclassified program is not permitted to terminate
participation in the unclassified program and be covered by the general employees retirement
plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end