HF 2453

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; modifying the investment related to postretirement
adjustment of the Minneapolis Firefighters' Relief Association; amending
Minnesota Statutes 2006, section 423C.06, subdivision 2.

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

Section 1.

Minnesota Statutes 2006, section 423C.06, subdivision 2, is amended to read:

Subd. 2.

Actuarial assets of special fund less than 102 percent.

(a) When
the actuarial assets of the special fund in any year are less than 102 percent of its
accrued liabilities according to the most recent annual actuarial valuation of the special
fund prepared in accordance with sections 356.215 and 356.216, investment-related
postretirement adjustments shall be determined and paid pursuant to this subdivision.
Payment of the annual postretirement adjustment may be made only if there is excess
investment income.

(b) The board shall determine by May 1 of each year whether or not the special
fund has excess investment income. The amount of excess investment income, if any,
must be stated as a dollar amount and reported by the executive secretary to the mayor
and governing body of the city, the state auditor, the commissioner of finance, and the
executive director of the Legislative Commission on Pensions and Retirement. The dollar
amount of excess investment income up to one percent of the assets of the special fund
must be applied for the purpose specified in paragraph (c). Excess investment income
must not be considered as income to or assets of the special fund for actuarial valuations
of the special fund for that year under this section and sections 69.77, 356.215, and
356.216, except to offset the annual postretirement adjustment. Additional investment
income is any realized or unrealized investment income other than the excess investment
income and must be included in the actuarial valuations performed under this section
and sections 69.77, 356.215, and 356.216.

(c) The amount determined under paragraph (b) must be applied as follows:
the association shall apply deleted text begin the first one-half of deleted text end one percent of assets that constitute
excess investment income to the payment of an annual postretirement adjustment to
eligible members deleted text begin and the second one-half of one percent of assets which constitute
excess investment income shall be applied to reduce the state amortization state aid or
supplementary amortization state aid payments otherwise due the association under
section 423A.02 for the current calendar year deleted text end . The amounts of all payments to eligible
members shall not exceed deleted text begin one-half of deleted text end one percent of the assets of the fund. The amount
of each eligible member's postretirement adjustment shall be calculated by dividing the
total number of units to which eligible members are entitled into the excess investment
income available for distribution to eligible members, and then multiplying that result by
the number of units to which each eligible member is entitled. If this amount exceeds the
total monthly benefit that the eligible member was entitled to in the prior year under the
terms of this chapter, the association shall pay the eligible member the lesser amount.
Payment of the annual postretirement adjustment must be in a lump-sum amount on June
1 following the determination date in any year. In the event an eligible member dies prior
to the payment of the annual postretirement adjustment, the executive secretary shall pay
the eligible member's estate the amount to which the member was entitled.