HF 2126

as introduced - 90th Legislature (2017 - 2018) Posted on 03/06/2017 01:21pm

A bill for an act
relating to retirement; Minnesota State Retirement System; revising augmentation
interest rates for certain terminated privatized employees; amending Minnesota Statutes 2016, section 352F.04, subdivisions 1, 2, by adding subdivisions.

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

Section 1.

Minnesota Statutes 2016, section 352F.04, subdivision 1, is amended to read:

Subdivision 1.

Enhanced augmentation rates.

deleted text begin (a) deleted text end The deferred annuity of a terminated
hospital employee deleted text begin who attained that status before June 2, 2006, deleted text end is subject to augmentation
under Minnesota Statutes 1994, section 352.72, subdivision 2, except that the rate of
augmentation is 5.5 percent compounded annually until new text begin the earlier of new text end January 1 following
the year in which the person attains age 55 new text begin or December 31, 2020 new text end . From deleted text begin that date to the
effective date of retirement deleted text end new text begin January 1 following the year in which the person attains age 55
to December 31, 2020 new text end , the augmentation rate is 7.5 percent compounded annually.

deleted text begin (b) If a terminated hospital employee attained that status on or after June 2, 2006, the
augmentation rate is four percent compounded annually until January 1, following the year
in which the person attains age 55. From that date to the effective date of retirement, the
augmentation rate is six percent compounded annually.
deleted 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

Sec. 2.

Minnesota Statutes 2016, section 352F.04, is amended by adding a subdivision to
read:

new text begin Subd. 1a. new text end

new text begin Regular augmentation rates. new text end

new text begin From January 1, 2021, to the effective date of
retirement, the augmentation rate applicable to the deferred annuity of a terminated hospital
employee is 4.5 percent, compounded annually.
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

Sec. 3.

Minnesota Statutes 2016, section 352F.04, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Exceptions deleted text end new text begin Exception new text end .

The deleted text begin increased deleted text end new text begin enhanced new text end augmentation rates specified
in subdivision 1 do not apply if the terminated new text begin hospital new text end employee deleted text begin :
deleted text end

deleted text begin (1) becomes covered again by a retirement plan enumerated in section 356.30, subdivision
3; or
deleted text end

deleted text begin (2) deleted text end begins receipt of a retirement annuity new text begin under chapter 352 before age 62 new text end while employed
by the employer which assumed operations of the medical facility or other public employing
unit or purchased the medical facility or other public employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from July 1, 2015.
new text end

Sec. 4.

Minnesota Statutes 2016, section 352F.04, is amended by adding a subdivision to
read:

new text begin Subd. 3. new text end

new text begin Return to covered employment. new text end

new text begin (a) If a terminated hospital employee becomes
covered by a retirement plan enumerated in section 356.30, subdivision 3, the employee
shall be entitled to whichever of the following annuities produces the highest monthly
payment:
new text end

new text begin (1) the deferred annuity and augmentation to which the employee would have been
entitled under subdivision 1 reduced by the dollar amount of any annuity earned under any
enumerated retirement plan after the effective date defined in section 352F.02, subdivision
3;
new text end

new text begin (2) a combined service annuity calculated under section 356.30; or
new text end

new text begin (3) an annuity calculated under section 352.72 for coverage by more than one retirement
system using the augmentation rates set forth in section 352.72, subdivision 2, paragraph
(a).
new text end

new text begin (b) This subdivision applies to any terminated hospital employee who begins to receive
a retirement annuity under chapter 352 on or after July 1, 2015.
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

Sec. 5. new text begin ANNUITY ADJUSTMENT.
new text end

new text begin Under Minnesota Statutes, section 352F.04, subdivision 3, if any terminated hospital
employee began to receive a retirement annuity under Minnesota Statutes, chapter 352, as
adjusted under Minnesota Statutes, chapter 352F, on or after July 1, 2015, but prior to the
effective date of this section, the terminated hospital employee's annuity must be recalculated
under Minnesota Statutes, section 352F.04, subdivision 3, and, if the monthly amount as
recalculated exceeds the monthly amount being received by the terminated hospital employee,
the Minnesota State Retirement System shall:
new text end

new text begin (1) begin paying the recalculated monthly amount as of the first payment date after the
effective date of this section; and
new text end

new text begin (2) pay the sum of the difference between the amount the terminated hospital employee
received each month since commencement of the annuity and the amount the terminated
hospital employee would have received under Minnesota Statutes, section 352F.04,
subdivision 3, for that month. The sum of the difference each month shall be paid in a lump
sum to the terminated hospital employee along with the first payment of the recalculated
amount under clause (1).
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