as introduced - 87th Legislature (2011 - 2012) Posted on 04/18/2011 09:22am
Engrossments | ||
---|---|---|
Introduction | Posted on 04/18/2011 |
A bill for an act
relating to retirement; all Minnesota public retirement plans other than lump
sum volunteer fire plans; revising actuarial valuation interest rate assumptions;
amending Minnesota Statutes 2010, sections 356.215, subdivision 8; 356.216.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Minnesota Statutes 2010, section 356.215, subdivision 8, is amended to read:
(a) The actuarial valuation must use the
applicable following preretirement interest assumption andnew text begin , if section 356.415 does not
apply, new text end the applicable following postretirement interest assumption:
plan |
preretirement interest rate assumption |
postretirement interest rate assumption |
|
general state employees retirement plan |
deleted text begin
8.5%
deleted text end
new text begin
7.5% new text end |
deleted text begin
6.0%
deleted text end
new text begin
5.0% new text end |
|
correctional state employees retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
State Patrol retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
legislators retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
elective state officers retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
judges retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
general public employees retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
public employees police and fire retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
local government correctional service retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
teachers retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
6.0
deleted text end
new text begin
5.0 new text end |
|
Duluth teachers retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
|
St. Paul teachers retirement plan |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
deleted text begin
8.5
deleted text end
new text begin
7.5 new text end |
|
Minneapolis Police Relief Association |
6.0 |
6.0 |
|
Fairmont Police Relief Association |
5.0 |
5.0 |
|
Minneapolis Fire Department Relief Association |
6.0 |
6.0 |
|
Virginia Fire Department Relief Association |
5.0 |
5.0 |
|
Bloomington Fire Department Relief Association |
6.0 |
6.0 |
|
local monthly benefit volunteer firefighters relief associations |
5.0 |
5.0 |
(b) deleted text begin Before July 1, 2010deleted text end new text begin Except as specified in paragraph (d)new text end , the actuarial valuation
must use the applicable following single rate future salary increase assumption, the
applicable following modified single rate future salary increase assumption, or the
applicable following graded rate future salary increase assumption:
(1) single rate future salary increase assumption
plan |
future salary increase assumption |
|
legislators retirement plan |
5.0% |
|
judges retirement plan |
4.0 |
|
Minneapolis Police Relief Association |
4.0 |
|
Fairmont Police Relief Association |
3.5 |
|
Minneapolis Fire Department Relief Association |
4.0 |
|
Virginia Fire Department Relief Association |
3.5 |
|
Bloomington Fire Department Relief Association |
4.0 |
(2) age-related select and ultimate future salary increase assumption or graded rate
future salary increase assumption
plan |
future salary increase assumption |
general state employees retirement plan |
select calculation and assumption A |
correctional state employees retirement plan |
assumption G |
State Patrol retirement plan |
assumption F |
public employees police and fire fund retirement plan |
assumption B |
local government correctional service retirement plan |
assumption F |
teachers retirement plan |
assumption C |
Duluth teachers retirement plan |
assumption D |
St. Paul teachers retirement plan |
assumption E |
The select calculation is: during the
designated select period, a designated
percentage rate is multiplied by the result
of the designated integer minus T, where
T is the number of completed years of
service, and is added to the applicable
future salary increase assumption. The
designated select period is five years and the
designated integer is five for the general state
employees retirement plan. The designated
select period is ten years and the designated
integer is ten for all other retirement plans
covered by this clause. The designated
percentage rate is: (1) 0.2 percent for the
correctional state employees retirement plan,
the State Patrol retirement plan, the public
employees police and fire plan, and the local
government correctional service plan; (2)
0.6 percent for the general state employees
retirement plan; and (3) 0.3 percent for the
teachers retirement plan, the Duluth Teachers
Retirement Fund Association, and the St.
Paul Teachers Retirement Fund Association.
The select calculation for the Duluth Teachers
Retirement Fund Association is 8.00 percent
per year for service years one through seven,
7.25 percent per year for service years seven
and eight, and 6.50 percent per year for
service years eight and nine.
The ultimate future salary increase assumption is:
age |
A |
B |
C |
D |
E |
F |
G |
16 |
5.95% |
11.00% |
7.70% |
8.00% |
6.90% |
7.7500% |
7.2500% |
17 |
5.90 |
11.00 |
7.65 |
8.00 |
6.90 |
7.7500 |
7.2500 |
18 |
5.85 |
11.00 |
7.60 |
8.00 |
6.90 |
7.7500 |
7.2500 |
19 |
5.80 |
11.00 |
7.55 |
8.00 |
6.90 |
7.7500 |
7.2500 |
20 |
5.75 |
11.00 |
5.50 |
6.90 |
6.90 |
7.7500 |
7.2500 |
21 |
5.75 |
11.00 |
5.50 |
6.90 |
6.90 |
7.1454 |
6.6454 |
22 |
5.75 |
10.50 |
5.50 |
6.90 |
6.90 |
7.0725 |
6.5725 |
23 |
5.75 |
10.00 |
5.50 |
6.85 |
6.85 |
7.0544 |
6.5544 |
24 |
5.75 |
9.50 |
5.50 |
6.80 |
6.80 |
7.0363 |
6.5363 |
25 |
5.75 |
9.00 |
5.50 |
6.75 |
6.75 |
7.0000 |
6.5000 |
26 |
5.75 |
8.70 |
5.50 |
6.70 |
6.70 |
7.0000 |
6.5000 |
27 |
5.75 |
8.40 |
5.50 |
6.65 |
6.65 |
7.0000 |
6.5000 |
28 |
5.75 |
8.10 |
5.50 |
6.60 |
6.60 |
7.0000 |
6.5000 |
29 |
5.75 |
7.80 |
5.50 |
6.55 |
6.55 |
7.0000 |
6.5000 |
30 |
5.75 |
7.50 |
5.50 |
6.50 |
6.50 |
7.0000 |
6.5000 |
31 |
5.75 |
7.30 |
5.50 |
6.45 |
6.45 |
7.0000 |
6.5000 |
32 |
5.75 |
7.10 |
5.50 |
6.40 |
6.40 |
7.0000 |
6.5000 |
33 |
5.75 |
6.90 |
5.50 |
6.35 |
6.35 |
7.0000 |
6.5000 |
34 |
5.75 |
6.70 |
5.50 |
6.30 |
6.30 |
7.0000 |
6.5000 |
35 |
5.75 |
6.50 |
5.50 |
6.25 |
6.25 |
7.0000 |
6.5000 |
36 |
5.75 |
6.30 |
5.50 |
6.20 |
6.20 |
6.9019 |
6.4019 |
37 |
5.75 |
6.10 |
5.50 |
6.15 |
6.15 |
6.8074 |
6.3074 |
38 |
5.75 |
5.90 |
5.40 |
6.10 |
6.10 |
6.7125 |
6.2125 |
39 |
5.75 |
5.70 |
5.30 |
6.05 |
6.05 |
6.6054 |
6.1054 |
40 |
5.75 |
5.50 |
5.20 |
6.00 |
6.00 |
6.5000 |
6.0000 |
41 |
5.75 |
5.40 |
5.10 |
5.90 |
5.95 |
6.3540 |
5.8540 |
42 |
5.75 |
5.30 |
5.00 |
5.80 |
5.90 |
6.2087 |
5.7087 |
43 |
5.65 |
5.20 |
4.90 |
5.70 |
5.85 |
6.0622 |
5.5622 |
44 |
5.55 |
5.10 |
4.80 |
5.60 |
5.80 |
5.9048 |
5.4078 |
45 |
5.45 |
5.00 |
4.70 |
5.50 |
5.75 |
5.7500 |
5.2500 |
46 |
5.35 |
4.95 |
4.60 |
5.40 |
5.70 |
5.6940 |
5.1940 |
47 |
5.25 |
4.90 |
4.50 |
5.30 |
5.65 |
5.6375 |
5.1375 |
48 |
5.15 |
4.85 |
4.50 |
5.20 |
5.60 |
5.5822 |
5.0822 |
49 |
5.05 |
4.80 |
4.50 |
5.10 |
5.55 |
5.5404 |
5.0404 |
50 |
4.95 |
4.75 |
4.50 |
5.00 |
5.50 |
5.5000 |
5.0000 |
51 |
4.85 |
4.75 |
4.50 |
4.90 |
5.45 |
5.4384 |
4.9384 |
52 |
4.75 |
4.75 |
4.50 |
4.80 |
5.40 |
5.3776 |
4.8776 |
53 |
4.65 |
4.75 |
4.50 |
4.70 |
5.35 |
5.3167 |
4.8167 |
54 |
4.55 |
4.75 |
4.50 |
4.60 |
5.30 |
5.2826 |
4.7826 |
55 |
4.45 |
4.75 |
4.50 |
4.50 |
5.25 |
5.2500 |
4.7500 |
56 |
4.35 |
4.75 |
4.50 |
4.40 |
5.20 |
5.2500 |
4.7500 |
57 |
4.25 |
4.75 |
4.50 |
4.30 |
5.15 |
5.2500 |
4.7500 |
58 |
4.25 |
4.75 |
4.60 |
4.20 |
5.10 |
5.2500 |
4.7500 |
59 |
4.25 |
4.75 |
4.70 |
4.10 |
5.05 |
5.2500 |
4.7500 |
60 |
4.25 |
4.75 |
4.80 |
4.00 |
5.00 |
5.2500 |
4.7500 |
61 |
4.25 |
4.75 |
4.90 |
3.90 |
5.00 |
5.2500 |
4.7500 |
62 |
4.25 |
4.75 |
5.00 |
3.80 |
5.00 |
5.2500 |
4.7500 |
63 |
4.25 |
4.75 |
5.10 |
3.70 |
5.00 |
5.2500 |
4.7500 |
64 |
4.25 |
4.75 |
5.20 |
3.60 |
5.00 |
5.2500 |
4.7500 |
65 |
4.25 |
4.75 |
5.20 |
3.50 |
5.00 |
5.2500 |
4.7500 |
66 |
4.25 |
4.75 |
5.20 |
3.50 |
5.00 |
5.2500 |
4.7500 |
67 |
4.25 |
4.75 |
5.20 |
3.50 |
5.00 |
5.2500 |
4.7500 |
68 |
4.25 |
4.75 |
5.20 |
3.50 |
5.00 |
5.2500 |
4.7500 |
69 |
4.25 |
4.75 |
5.20 |
3.50 |
5.00 |
5.2500 |
4.7500 |
70 |
4.25 |
4.75 |
5.20 |
3.50 |
5.00 |
5.2500 |
4.7500 |
71 |
4.25 |
5.20 |
(3) service-related ultimate future salary increase assumption
service length |
general employees retirement plan of the Public Employees Retirement Association |
1 |
12.03% |
2 |
8.90 |
3 |
7.46 |
4 |
6.58 |
5 |
5.97 |
6 |
5.52 |
7 |
5.16 |
8 |
4.87 |
9 |
4.63 |
10 |
4.42 |
11 |
4.24 |
12 |
4.08 |
13 |
3.94 |
14 |
3.82 |
15 |
3.70 |
16 |
3.60 |
17 |
3.51 |
18 |
3.50 |
19 |
3.50 |
20 |
3.50 |
21 |
3.50 |
22 |
3.50 |
23 |
3.50 |
24 |
3.50 |
25 |
3.50 |
26 |
3.50 |
27 |
3.50 |
28 |
3.50 |
29 |
3.50 |
30 or more |
3.50 |
(c) deleted text begin Before July 2, 2010deleted text end new text begin Except as specified in paragraph (d)new text end , the actuarial
valuation must use the applicable following payroll growth assumption for calculating
the amortization requirement for the unfunded actuarial accrued liability where the
amortization retirement is calculated as a level percentage of an increasing payroll:
plan |
payroll growth assumption |
|
general state employees retirement plan |
4.50% |
|
correctional state employees retirement plan |
4.50 |
|
State Patrol retirement plan |
4.50 |
|
legislators retirement plan |
4.50 |
|
judges retirement plan |
4.00 |
|
general employees retirement plan of the Public Employees Retirement Association |
4.00 |
|
public employees police and fire retirement plan |
4.50 |
|
local government correctional service retirement plan |
4.50 |
|
teachers retirement plan |
4.50 |
|
Duluth teachers retirement plan |
4.50 |
|
St. Paul teachers retirement plan |
5.00 |
(d) deleted text begin After July 1, 2010,deleted text end The assumptions set forth in paragraphs (b) and (c) deleted text begin continue
todeleted text end applydeleted text begin ,deleted text end new text begin for the applicable retirement plan new text end unless a different salary assumption or a
different payroll increase assumption:
(1) has been proposed by the governing board of the applicable retirement plan;
(2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the
most recent actuarial valuation report if section 356.214 does not apply; and
(3) has been approved or deemed approved under subdivision 18.
new text begin
This section is effective the day following final enactment.
new text end
Minnesota Statutes 2010, section 356.216, is amended to read:
(a) The provisions of section 356.215 that govern the contents of actuarial valuations
must apply to any local police or fire pension fund or relief association required to make
an actuarial report under this section, except as follows:
(1) in calculating normal cost and other requirements, if required to be expressed as
a level percentage of covered payroll, the salaries used in computing covered payroll must
be the maximum rate of salary on which retirement and survivorship credits and amounts
of benefits are determined and from which any member contributions are calculated and
deducted;
(2) in lieu of the amortization date specified in section 356.215, subdivision 11,
the appropriate amortization target date specified in section 69.77, subdivision 4, or
69.773, subdivision 4, clause (c), must be used in calculating any required amortization
contribution, except that if the actuarial report for the Bloomington Fire Department Relief
Association indicates an unfunded actuarial accrued liability, the unfunded obligation is
to be amortized on a level dollar basis by December 31 of the year occurring 20 years
later, and if subsequent actuarial valuations for the Bloomington Fire Department Relief
Association determine a net actuarial experience loss incurred during the year which
ended as of the day before the most recent actuarial valuation date, any unfunded liability
due to that loss is to be amortized on a level dollar basis by December 31 of the year
occurring 20 years later and except that the amortization date for the Minneapolis Police
Relief Association is December 31, 2020;
(3) in addition to the tabulation of active members and annuitants provided for in
section 356.215, subdivision 13, the member contributions for active members for the
calendar year and the prospective annual retirement annuities under the benefit plan for
active members must be reported;
(4) actuarial valuations required under section 69.773, subdivision 2, must be made
at least every four years and actuarial valuations required under section 69.77 shall be
made annually;
(5) the actuarial balance sheet showing accrued assets valued at market value if the
actuarial valuation is required to be prepared at least every four years or valued as current
assets under section 356.215, subdivision 1, paragraph (b) or (f), whichever applies, if the
actuarial valuation is required to be prepared annually, actuarial accrued liabilities, and the
unfunded actuarial accrued liability must include the following required reserves:
(i) for active members:
1. retirement benefits;
2. disability benefits;
3. refund liability due to death or withdrawal;
4. survivors' benefits;
(ii) for deferred annuitants' benefits;
(iii) for former members without vested rights;
(iv) for annuitants;
1. retirement annuities;
2. disability annuities;
3. surviving spouses' annuities;
4. surviving children's annuities;
In addition to those required reserves, separate items must be shown for additional
benefits, if any, which may not be appropriately included in the reserves listed above; and
(6) actuarial valuations are due by the first day of the seventh month after the end of
the fiscal year which the actuarial valuation covers.
(b) For the Minneapolis Firefighters Relief Association or the Minneapolis Police
Relief Association, deleted text begin the following provisions additionally apply:
deleted text end
deleted text begin (1)deleted text end in calculating the actuarial balance sheet, unfunded actuarial accrued liability,
and amortization contribution of the relief association, "current assets" means the value of
all assets at cost, including realized capital gains and losses, plus or minus, whichever
applies, the average value of total unrealized capital gains or losses for the most recent
three-year period ending with the end of the plan year immediately preceding the actuarial
valuation report transmission datedeleted text begin ; anddeleted text end new text begin .
new text end
deleted text begin
(2) in calculating the applicable portions of the actuarial valuation, an annual
preretirement interest assumption of six percent, an annual postretirement interest
assumption of six percent, and an annual salary increase assumption of four percent must
be used.
deleted text end
new text begin
This section is effective the day following final enactment.
new text end