HF 1668

as introduced - 87th Legislature (2011 - 2012) Posted on 05/05/2011 09:52am

A bill for an act
relating to retirement; Public Employees Retirement Association; optional
correction of erroneous employee deductions and employer contributions
provision for city of Duluth and Duluth Airport Authority.

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

Section 1. new text begin CITY OF DULUTH AND DULUTH AIRPORT AUTHORITY;
CORRECTING ERRONEOUS EMPLOYEE DEDUCTIONS, EMPLOYER
CONTRIBUTIONS, AND ADJUSTING OVERPAID BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin Notwithstanding any provisions of Minnesota Statutes,
section 353.27, subdivisions 7 and 7b, or Minnesota Statutes 2010, chapters 353 and 356,
to the contrary, this section establishes the procedures by which the executive director of
the Public Employees Retirement Association shall adjust erroneous employee deductions
and employer contributions paid on behalf of active employees and former members
by the city of Duluth and by the Duluth Airport Authority on amounts determined by
the executive director to be invalid salary under Minnesota Statutes, section 353.01,
subdivision 10, reported between January 1, 1997, and October 23, 2008, and for
adjusting benefits that were paid to former members and their beneficiaries based upon
invalid salary amounts.
new text end

new text begin Subd. 2. new text end

new text begin Refunds of employee deductions. new text end

new text begin (a) The executive director shall refund
to active employees or former members who are not receiving retirement annuities or
benefits all erroneous employee deductions identified by the city of Duluth or by the
Duluth Airport Authority as deductions taken from amounts determined to be invalid
salary. The refunds must include interest at the rate specified in Minnesota Statutes,
section 353.34, subdivision 2, from the date each invalid employee deduction was received
through the date each refund is paid.
new text end

new text begin (b) The refund payment for active employees must be sent to the applicable members
who are employees of the city of Duluth or who are employees of the Duluth Airport
Authority, whichever is applicable.
new text end

new text begin (c) Refunds to former members must be mailed by the executive director of the
Public Employees Retirement Association to the former member's last known address.
new text end

new text begin Subd. 3. new text end

new text begin Benefit adjustments. new text end

new text begin (a) For a former member who is receiving a
retirement annuity or disability benefit, or for a person receiving an optional annuity or
survivor benefit, the executive director must:
new text end

new text begin (1) adjust the annuity or benefit payment to the correct monthly benefit amount
payable by reducing the average salary under Minnesota Statutes, section 353.01,
subdivision 17a, by the invalid salary amounts;
new text end

new text begin (2) determine the amount of the overpaid benefits paid from the effective date of the
annuity or benefit payment to July 1, 2009;
new text end

new text begin (3) calculate the amount of employee deductions taken in error on invalid salary,
including interest at the rate specified in Minnesota Statutes, section 353.34, subdivision
2, from the date each invalid employee deduction was received through the first day of the
month in which the refund under paragraph (b), or action to recover net overpayments
under subdivision 4, occurs; and
new text end

new text begin (4) determine the net amount of overpaid benefits by reducing the amount of the
overpaid annuity or benefit as determined in clause (2) by the amount of the erroneous
employee deductions with interest determined in clause (3).
new text end

new text begin (b) If a former member's erroneous employee deductions plus interest determined
under this section exceeds the amount of the person's overpaid benefits, the balance must
be refunded to the person to whom the annuity or benefit is being paid.
new text end

new text begin (c) The executive director shall recover the net amount of all overpaid annuities or
benefits as provided under subdivision 4.
new text end

new text begin Subd. 4. new text end

new text begin Employer credits and obligations. new text end

new text begin (a) The executive director shall
provide a credit without interest to the city of Duluth and to the Duluth Airport Authority
for the amount of that governmental subdivision's erroneous employer contributions. The
credit must first be used to offset the net amount of the overpaid retirement annuities and
the disability and survivor benefits that remain after applying the amount of erroneous
employee deductions with interest as provided under subdivision 3, paragraph (a),
clause (4). The remaining erroneous employer contributions, if any, must be credited
against future employer contributions required to be paid by the applicable governmental
subdivision. If the overpaid benefits exceed the employer contribution credit, the balance
of the overpaid benefits is the obligation of the city of Duluth or the Duluth Airport
Authority, whichever is applicable.
new text end

new text begin (b) The Public Employees Retirement Association board of trustees shall determine
the period of time and manner for the collection of overpaid retirement annuities and
benefits, if any, from the city of Duluth and the Duluth Airport Authority.
new text end

new text begin Subd. 5. new text end

new text begin Treatment of invalid salary amounts in process. new text end

new text begin (a) The governing body
of the city of Duluth or the Duluth Airport Authority, as applicable, may elect to limit the
period of adjustment for amounts determined to be invalid salary to apply to the fiscal
year in which the error was reported to, and the salary determined to be invalid by, the
Public Employees Retirement Association, and the immediate two preceding fiscal years,
by a resolution of the applicable governing body transmitted to the Public Employees
Retirement Association executive director within 30 days following the effective date
of this section.
new text end

new text begin (b) If the governing body of the applicable governmental subdivision declines the
treatment permitted under paragraph (a) or fails to submit a resolution in a timely manner,
the statute of limitations specified in paragraph (a) does not apply.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) This section is effective for the city of Duluth the day after
the Duluth city council and the chief clerical officer of the city of Duluth timely complete
their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for
members who are, and former members who were, employees of the city of Duluth.
new text end

new text begin (b) This section is effective for the Duluth Airport Authority the day after the Duluth
Airport Authority board of directors and the chief clerical officer of the Duluth Airport
Authority timely complete their compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3, for members who are, and former members who were, employees
of the Duluth Airport Authority.
new text end