HF 1755

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; Public Employees Retirement
Association; increasing contribution rates for certain
covered employees and employers; amending Minnesota
Statutes 2004, section 353.27, subdivisions 2, 3, 3a,
by adding a subdivision.

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

Section 1.

Minnesota Statutes 2004, section 353.27,
subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

(a) The employee
contribution is the following applicable percentage of new text begin the new text end total
salary amount for a "basic member" and for a "coordinated
member":

Basic Coordinated
Program Program
deleted text begin Before January 1, 2002 deleted text end deleted text begin 8.75 deleted text end deleted text begin 4.75
Effective January 1, 2002
deleted text end new text begin Effective before January 1, 2006 new text end 9.10 5.10
new text begin Effective January 1, 2006 new text end new text begin 9.10 new text end new text begin 5.50
Effective January 1, 2007 new text end new text begin 9.10 new text end new text begin 5.75
Effective January 1, 2008 new text end new text begin 9.10 new text end new text begin 6.00 plus any
contribution
rate adjustment
under
subdivision 3b
new text end

(b) These contributions must be made by deduction from
salary new text begin as defined in section 353.01, subdivision 10, new text end in the
manner provided in subdivision 4. deleted text begin Where deleted text end new text begin If new text end any portion of a
member's salary is paid from other than public funds, deleted text begin such deleted text end new text begin the
new text end member's employee contribution must be based on the total salary
received new text begin by the member new text end from all sources.

Sec. 2.

Minnesota Statutes 2004, section 353.27,
subdivision 3, is amended to read:

Subd. 3.

Employer contribution.

(a) The employer
contribution is the following applicable percentage of new text begin the new text end total
salary amount new text begin for "basic members" and for "coordinated members" new text end :

Basic Coordinated
Program Program
deleted text begin Before January 1, 2002 deleted text end deleted text begin 8.75 deleted text end deleted text begin 4.75
Effective January 1, 2002
deleted text end new text begin Effective before January 1, 2006 new text end 9.10 5.10
new text begin Effective January 1, 2006 new text end new text begin 9.10 new text end new text begin 5.50
Effective January 1, 2007 new text end new text begin 9.10 new text end new text begin 5.75
Effective January 1, 2008 new text end new text begin 9.10 new text end new text begin 6.00 plus any
contribution
rate adjustment
under
subdivision 3b
new text end

(b) This contribution must be made from funds available to
the employing subdivision by the means and in the manner
provided in section 353.28.

Sec. 3.

Minnesota Statutes 2004, section 353.27,
subdivision 3a, is amended to read:

Subd. 3a.

Additional employer contribution.

(a) An
additional employer contribution must be made equal to deleted text begin (1) 2.68
percent of deleted text end the new text begin following applicable percentage of the new text end total
salary deleted text begin of each deleted text end new text begin amount for new text end "basic deleted text begin member deleted text end new text begin members new text end " deleted text begin ; deleted text end and deleted text begin (2)
.43 percent of the total salary of each deleted text end new text begin for new text end "coordinated deleted text begin member.
deleted text end new text begin members new text end " new text begin :
new text end

new text begin Basic new text end new text begin Coordinated
Program new text end new text begin Program
Effective before January 1, 2006 new text end new text begin 2.68 new text end new text begin .43
Effective January 1, 2006 new text end new text begin 2.68 new text end new text begin .50
Effective January 1, 2009 new text end new text begin 2.68 new text end new text begin .75
Effective January 1, 2010 new text end new text begin 2.68 new text end new text begin 1.00
new text end

These contributions must be made from funds available to
the employing subdivision by the means and in the manner
provided in section 353.28.

(b) new text begin The coordinated program contribution rates set forth in
paragraph (a) effective for January 1, 2009, or January 1, 2010,
must not be implemented if, following receipt of the July 1,
2008, or July 1, 2009, annual actuarial valuation reports under
section 356.215, respectively, the actuarially required
contributions are equal to or less than the total rates under
this section in effect as of January 1, 2008.
new text end

new text begin (c) new text end This subdivision is repealed once the actuarial value
of the assets of the plan equal or exceed the actuarial accrued
liability of the plan as determined by the actuary retained by
the Legislative Commission on Pensions and Retirement under
section 356.215. The repeal is effective on the first day of
the first full pay period occurring after March 31 of the
calendar year following the issuance of the actuarial valuation
upon which the repeal is based.

Sec. 4.

Minnesota Statutes 2004, section 353.27, is
amended by adding a subdivision to read:

new text begin Subd. 3b. new text end

new text begin Change in employee and employer contributions
in certain instances. new text end

new text begin (a) For purposes of this section, a
contribution sufficiency exists if the total of the employee
contribution under subdivision 2, the employer contribution
under subdivision 3, the additional employer contribution under
subdivision 3a, and any additional contribution previously
imposed under this subdivision exceeds the total of the normal
cost, the administrative expenses, and the amortization
contribution of the retirement plan as reported in the most
recent actuarial valuation of the retirement plan prepared by
the actuary retained under section 356.214 and prepared under
section 356.215 and the standards for actuarial work of the
Legislative Commission on Pensions and Retirement. For purposes
of this section, a contribution deficiency exists if the total
of the employee contributions under subdivision 2, the employer
contributions under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional
contribution previously imposed under this subdivision is less
than the total of the normal cost, the administrative expenses,
and the amortization contribution of the retirement plan as
reported in the most recent actuarial valuation of the
retirement plan prepared by the actuary retained under section
356.214 and prepared under section 356.215 and the standards for
actuarial work of the Legislative Commission on Pensions and
Retirement.
new text end

new text begin (b) Employee and employer contributions under subdivisions
2 and 3 must be adjusted:
new text end

new text begin (1) if, after July 1, 2010, the regular actuarial
valuations of the general employees retirement plan of the
Public Employees Retirement Association under section 356.215
indicate that there is a contribution sufficiency under
paragraph (a) equal to or greater than 0.5 percent of covered
payroll for two consecutive years, the coordinated program
employee and employer contribution rates must be decreased as
determined under paragraph (c) to a level such that the
sufficiency equals no more than 0.25 percent of covered payroll
based on the most recent actuarial valuation; or
new text end

new text begin (2) if, after July 1, 2010, the regular actuarial
valuations of the general employees retirement plan of the
Public Employees Retirement Association under section 356.215
indicate that there is a deficiency equal to or greater than 0.5
percent of covered payroll for two consecutive years, the
coordinated program employee and employer contribution rates
must be increased as determined under paragraph (c) to a level
such that no deficiency exists based on the most recent
actuarial valuation.
new text end

new text begin (c) The contribution rate increase or decrease must be
determined by the executive director of the Public Employees
Retirement Association and is effective on the next July 1
following the determination by the executive director that a
contribution deficiency or sufficiency has existed for two
consecutive fiscal years based on the most recent actuarial
valuations under section 356.215. If the actuarially required
contribution exceeds or is less than the total support provided
by the combined employee and employer contribution rates by more
than 0.5 percent of covered payroll, the coordinated program
employee and employer contribution rates must be adjusted
incrementally over one or more years to a level such that there
remains a contribution sufficiency of no more than 0.25 percent
of covered payroll.
new text end

new text begin (d) No incremental adjustment may exceed 0.25 percent for
either the coordinated program employee and employer
contribution rates per year in which any adjustment is
implemented. A contribution rate adjustment under this
subdivision must not be made until at least two years have
passed since fully implementing a previous adjustment under this
subdivision.
new text end

Sec. 5. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 4 are effective January 1, 2006.
new text end