as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
|Introduction||Posted on 01/22/1998|
1.1 A bill for an act 1.2 relating to retirement; creating a local government 1.3 correctional service retirement plan; amending 1.4 Minnesota Statutes 1996, sections 356.302, subdivision 1.5 7; and 356.303, subdivision 4; Minnesota Statutes 1997 1.6 Supplement, sections 356.19, by adding a subdivision; 1.7 356.20, subdivision 2; and 356.30, subdivision 3; 1.8 proposing coding for new law as Minnesota Statutes, 1.9 chapter 353E. 1.10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.11 Section 1. [353E.01] [LOCAL GOVERNMENT CORRECTIONAL 1.12 SERVICE RETIREMENT PLAN.] 1.13 Subdivision 1. [PLAN ADMINISTRATION; FUND.] The public 1.14 employees local government correctional service retirement plan 1.15 is a separate plan administered by the public employees 1.16 retirement association. The association shall maintain a 1.17 special fund known as the public employees local government 1.18 correctional service retirement fund. 1.19 Subd. 2. [REVENUE SOURCES.] Member contributions under 1.20 section 353E.03, subdivision 1, and employer contributions under 1.21 section 353E.03, subdivision 2, and other amounts authorized by 1.22 law, including any investment income or invested fund assets, 1.23 must be deposited in the fund. 1.24 Subd. 3. [INVESTMENT.] The public employees local 1.25 government correctional service retirement fund participates in 1.26 the Minnesota postretirement investment fund. The amounts 1.27 provided in section 353.271 must be deposited in that fund. The 2.1 balance of any assets of the fund must be deposited in the 2.2 Minnesota combined investment fund as provided in section 2.3 11A.14, if applicable, or otherwise under section 11A.23. 2.4 Subd. 4. [COLLECTION OF CONTRIBUTIONS.] The collection of 2.5 member and employer contributions are governed by section 2.6 353.27, subdivisions 4, 7, 7a, 7b, 10, 11, 12, and 13. 2.7 Subd. 5. [FUND DISBURSEMENT RESTRICTED.] The public 2.8 employees local government correctional service retirement fund 2.9 and its share of participation in the Minnesota postretirement 2.10 investment fund may be disbursed only for the purposes provided 2.11 for in this chapter. The proportional share of the expenses of 2.12 the association and any benefits provided in this chapter, other 2.13 than benefits payable from the Minnesota postretirement 2.14 investment fund, must be paid from the correctional service 2.15 retirement fund. Retirement annuities, disability benefits, 2.16 survivorship benefits, and any refunds of accumulated deductions 2.17 may be paid only from the correctional service retirement fund 2.18 after those needs have been certified by the executive director 2.19 and the amounts withdrawn from the share of participation in the 2.20 Minnesota postretirement fund under section 11A.18. The amounts 2.21 necessary to make the payments from the correctional service 2.22 retirement fund and the participation in the Minnesota 2.23 postretirement investment fund are annually appropriated from 2.24 those funds for those purposes. 2.25 Sec. 2. [353E.02] [CORRECTIONAL SERVICE EMPLOYEES.] 2.26 A local government correctional service employee is a 2.27 person who: 2.28 (1) is an "essential employee" as defined in section 2.29 179A.03, subdivision 7; 2.30 (2) is employed in a county-administered jail or 2.31 correctional facility or in a regional correctional facility 2.32 administered by multiple counties; 2.33 (3) spends at least 75 percent of the employee's working 2.34 time in direct contact with persons confined in the jail or 2.35 facility, as certified by the employer to the executive director 2.36 of the association; and 3.1 (4) is a "public employee" as defined in section 353.01, 3.2 and is not a member of the public employees retirement 3.3 association police and fire fund. 3.4 Sec. 3. [353E.03] [CORRECTIONAL SERVICE PLAN 3.5 CONTRIBUTIONS.] 3.6 Subdivision 1. [MEMBER CONTRIBUTIONS.] A local government 3.7 correctional service employee shall make an employee 3.8 contribution in an amount equal to .. percent of salary. 3.9 Subd. 2. [EMPLOYER CONTRIBUTIONS.] The employer shall 3.10 contribute for a local government correctional service employee 3.11 an amount equal to ... percent of salary. 3.12 Sec. 4. [353E.04] [CORRECTIONAL SERVICE PLAN RETIREMENT 3.13 ANNUITY.] 3.14 Subdivision 1. [ELIGIBILITY REQUIREMENTS.] After 3.15 separation from public employment, an employee covered under 3.16 section 353E.02 who has attained the age of at least 55 years 3.17 and has credit for not less than three years of coverage in the 3.18 local government correctional service plan is entitled, upon 3.19 application, to a normal retirement annuity. Instead of a 3.20 normal retirement annuity, a retiring employee may elect to 3.21 receive the optional annuity provided in section 353.30, 3.22 subdivision 3. 3.23 Subd. 2. [AVERAGE SALARY BASE.] In calculating the annuity 3.24 under subdivision 3, "average salary" means an amount equivalent 3.25 to the average of the highest salary earned as a local 3.26 government correctional employee upon which employee 3.27 contributions were paid for any five successive years of 3.28 allowable service. Average salary must be based on all 3.29 allowable service if this service is less than five years. 3.30 Subd. 3. [ANNUITY AMOUNT.] The average salary as defined 3.31 in subdivision 2, multiplied by the percent specified in section 3.32 356.19, subdivision 5a, for each year of allowable service, 3.33 determines the amount of the normal annuity. If a person has 3.34 earned allowable service in the public employees retirement 3.35 association or the public employees police and fire fund prior 3.36 to participation under this chapter, the annuity representing 4.1 such service must be computed in accordance with the formula 4.2 under sections 353.29 and 353.30 or 353.651, whichever applies. 4.3 Subd. 4. [EARLY RETIREMENT.] An employee covered under 4.4 section 353E.02 who has attained the age of at least 50 years 4.5 and has credit for not less than three years of coverage in the 4.6 local government correctional service plan is entitled, upon 4.7 application, to a reduced retirement annuity equal to the 4.8 annuity calculated under subdivision 3, reduced so that the 4.9 reduced annuity is the actuarial equivalent of the annuity that 4.10 would be payable if the employee deferred receipt of the annuity 4.11 from the day the annuity begins to accrue to age 55. 4.12 Subd. 5. [ACCRUAL AND DURATION.] The annuity under this 4.13 section begins to accrue as provided in section 353.29, 4.14 subdivision 7. The annuity is payable for the life of the 4.15 recipient, or in accordance with the terms of any optional 4.16 annuity form selected. 4.17 Subd. 6. [MULTIPLE SERVICE LIMITATION.] A former employee 4.18 who has both regular and local government correctional service 4.19 must, if qualified, receive an annuity based on both periods of 4.20 service, but no period of service may be used more than once in 4.21 calculating the annuity. 4.22 Sec. 5. [353E.05] [AUGMENTATION IN CERTAIN CASES.] 4.23 Subdivision 1. [AUGMENTATION FOR PRIOR SERVICE 4.24 BENEFITS.] Unless prior service has been transferred or unless a 4.25 combined service annuity under section 356.30 has been elected, 4.26 an employee who becomes a local government correctional employee 4.27 after being a member of the public employees retirement 4.28 association or the public employees police and fire fund is 4.29 covered under section 353.71, subdivision 2, with respect to 4.30 that prior service. An employee who becomes a member of the 4.31 public employees retirement association or the public employees 4.32 police and fire fund after being a local government correctional 4.33 employee is also covered under section 353.71, subdivision 2, 4.34 with respect to that prior service, unless calculated under 4.35 section 356.30. 4.36 Sec. 6. [353E.06] [DISABILITY BENEFITS.] 5.1 Subdivision 1. [DUTY DISABILITY QUALIFICATION 5.2 REQUIREMENTS.] A local government correctional employee who 5.3 becomes disabled and physically or mentally unfit to perform the 5.4 duties of the position as a direct result of an injury, 5.5 sickness, or other disability incurred in or arising out of any 5.6 act of duty that renders the employee physically or mentally 5.7 unable to perform the employee's duties, is entitled to a 5.8 disability benefit based on covered service under this chapter 5.9 only in an amount equal to 50 percent of the average salary 5.10 defined in section 353E.04, subdivision 2, plus an additional 5.11 percent equal to that specified in section 356.19, subdivision 5.12 5, for each year of covered service under this chapter in excess 5.13 of 25 years. 5.14 Subd. 2. [NONDUTY DISABILITY QUALIFICATION 5.15 REQUIREMENTS.] A local government correctional employee who has 5.16 at least one year of covered service under this chapter and 5.17 becomes disabled and physically or mentally unfit to perform the 5.18 duties of the position because of sickness or injury occurring 5.19 while not engaged in covered employment, is entitled to a 5.20 disability benefit based on covered service under this chapter. 5.21 The disability benefit must be computed in the same manner as an 5.22 annuity under section 353E.04, subdivision 3, and as though the 5.23 employee had at least ten years of covered correctional service. 5.24 Subd. 3. [OPTIONAL ANNUITY.] A disabled local government 5.25 correctional employee may elect the normal disability benefit or 5.26 an optional annuity as provided in section 353.30, subdivision 5.27 3. The election of an optional annuity must be made before the 5.28 commencement of payment of the disability benefit and is 5.29 effective on the date on which the disability benefit begins to 5.30 accrue as provided in section 353.33, subdivision 2. Upon 5.31 becoming effective, the optional annuity begins to accrue on the 5.32 same date as provided for the disability benefit. 5.33 Subd. 4. [DISABILITY BENEFIT APPLICATION.] A claim or 5.34 demand for a disability benefit must be initiated by written 5.35 application in the manner and form prescribed by the executive 5.36 director, filed in the office of the association, showing 6.1 compliance with the statutory conditions qualifying the 6.2 applicant for a disability benefit. A member or former member 6.3 who became disabled during a period of membership may file an 6.4 application for disability benefits within three years following 6.5 termination of local government correctional service, but not 6.6 after that time has elapsed. The disability benefit begins to 6.7 accrue the day following the commencement of disability, 90 days 6.8 preceding the filing of the application, or, if annual or sick 6.9 leave is paid for more than the 90-day period, from the date 6.10 salary ceased, whichever is latest. No payment may accrue 6.11 beyond the end of the month in which entitlement has 6.12 terminated. If the disabilitant dies before negotiating the 6.13 check for the month in which death occurs, payment must be made 6.14 to the optional annuitant or beneficiary. 6.15 Subd. 5. [DISABILITY BENEFIT TERMINATION.] The disability 6.16 benefit paid to a disabled local government correctional 6.17 employee terminates at the end of the month in which the 6.18 employee reaches age 65. If the disabled local government 6.19 correctional employee is still disabled when the employee 6.20 reaches age 65, the employee is deemed to be a retired employee 6.21 and, if the employee had elected an optional annuity under 6.22 subdivision 3, must receive an annuity in accordance with the 6.23 terms of the optional annuity previously elected. If the 6.24 employee had not elected an optional annuity under subdivision 6.25 3, the employee may elect either to receive a normal retirement 6.26 annuity computed in the manner provided in section 353E.04, 6.27 subdivision 3, or to receive an optional annuity as provided in 6.28 section 353.30, subdivision 3, based on the same length of 6.29 service as used in the calculation of the disability benefit. 6.30 Election of an optional annuity must be made within 90 days 6.31 before attaining the age of 65 years, or reaching the five-year 6.32 anniversary of the effective date of the disability benefit, 6.33 whichever is later. 6.34 Subd. 6. [RESUMPTION OF EMPLOYMENT.] Should a disabled 6.35 employee resume a gainful occupation from which earnings are 6.36 less than salary received at the date of disability or the 7.1 salary currently paid for similar positions, or should the 7.2 employee be entitled to receive workers' compensation benefits, 7.3 the disability benefit must be continued in an amount that, when 7.4 added to such earnings and workers' compensation benefits, does 7.5 not exceed the salary received at the date of disability or the 7.6 salary currently payable for the same employment position or an 7.7 employment position substantially similar to the one the person 7.8 held as of the date of the disability, whichever is greater. 7.9 Subd. 7. [COMBINED SERVICE DISABILITY BENEFIT.] If the 7.10 employee is entitled to receive a disability benefit as provided 7.11 in subdivision 1 or 2 and has credit for less covered 7.12 correctional service than the length of service upon which the 7.13 correctional disability benefit is based, and also has credit 7.14 for regular plan service, the employee is entitled to a 7.15 disability benefit or deferred retirement annuity based on the 7.16 regular plan service only for the service that, when combined 7.17 with the correctional service, exceeds the number of years on 7.18 which the correctional disability benefit is based. The 7.19 disabled employee who also has credit for regular plan service 7.20 must in all respects qualify under section 353.33 to be entitled 7.21 to receive a disability benefit based on the regular plan 7.22 service, except that the service may be combined to satisfy 7.23 length of service requirements. Any deferred annuity to which 7.24 the employee may be entitled based on regular plan service must 7.25 be augmented as provided in section 353.71 while the employee is 7.26 receiving a disability benefit under this section. 7.27 Sec. 7. [353E.07] [SURVIVOR BENEFITS.] 7.28 Subdivision 1. [MEMBER AT LEAST AGE 50.] If a member or 7.29 former member of the local government correctional service 7.30 retirement plan who has attained the age of at least 50 years 7.31 and has credit for not less than three years of allowable 7.32 service, dies before the annuity or disability benefit has 7.33 become payable, notwithstanding any designation of beneficiary 7.34 to the contrary, the surviving spouse may elect to receive, in 7.35 lieu of a refund with interest provided in section 353.32, 7.36 subdivision 1, an annuity equal to the 100 percent joint and 8.1 survivor annuity for which the member could have qualified had 8.2 the member terminated service on the date of death. 8.3 Subd. 2. [MEMBER NOT YET AGE 50.] If the member was under 8.4 age 50, dies, and had credit for not less than three years of 8.5 allowable service on the date of death but did not yet qualify 8.6 for retirement, the surviving spouse may elect to receive a 100 8.7 percent joint and survivor annuity based on the age of the 8.8 employee and the surviving spouse at the time of death. The 8.9 annuity is payable using the early retirement reduction under 8.10 section 353E.04, subdivision 4, to age 50 and one-half the early 8.11 retirement reduction from age 50 to the age payment begins. 8.12 Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply 8.13 to a deferred annuity or surviving spouse benefit payable under 8.14 this subdivision. 8.15 Subd. 3. [ELECTION; ACCRUAL.] A surviving spouse election 8.16 under subdivisions 1 and 2 may be made at any time after the 8.17 date of death of the employee. The surviving spouse benefit 8.18 begins to accrue as of the first of the next month following the 8.19 date on which the application for the benefit was filed. 8.20 Subd. 4. [SURVIVING SPOUSE COVERAGE; TERM CERTAIN.] In 8.21 lieu of the 100 percent optional annuity under subdivision 1, 8.22 the surviving spouse of a deceased employee may elect to receive 8.23 survivor coverage in a term certain of ten, 15, or 20 years. 8.24 The monthly term certain annuity must be actuarially equivalent 8.25 to the 100 percent optional annuity under subdivision 1 and must 8.26 be based on tables approved by the actuary retained by the 8.27 legislative commission on pensions and retirement. The optional 8.28 annuity ceases upon the expiration of the term certain period. 8.29 If a survivor elects a term certain annuity and dies before the 8.30 expiration of the specified term certain period, the commuted 8.31 value of the remaining annuity payments must be paid in a lump 8.32 sum to the survivor's estate. 8.33 Subd. 5. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is 8.34 no surviving spouse eligible for benefits under subdivisions 1, 8.35 2, and 4, a dependent child as defined in section 353.01, 8.36 subdivision 15a, is eligible for a dependent child survivor 9.1 benefit. Benefits to a dependent child must be paid from the 9.2 date of the employee's death to the date the dependent child 9.3 attains age 20 if the child is under age 15 on the date of 9.4 death. If the child is 15 years or older on the date of death, 9.5 the benefit is payable for five years. The payment to a 9.6 dependent child is an amount actuarially equivalent to the value 9.7 of a 100 percent joint and survivor optional annuity using the 9.8 age of the employee and age of the dependent child at the date 9.9 of death in lieu of the age of the surviving spouse. If there 9.10 is more than one dependent child, each dependent child shall 9.11 receive a proportionate share of the actuarial value of the 9.12 employee's account, with the amount of the benefit payable to 9.13 each child to be determined based on the portion of the total 9.14 eligibility period that each child is eligible. The process for 9.15 calculating the dependent child survivor benefit must be 9.16 approved by the actuary retained by the legislative commission 9.17 on pensions and retirement. 9.18 Subd. 6. [PAYMENT TO DESIGNATED BENEFICIARY.] An amount 9.19 equal to any excess of the accumulated contributions that were 9.20 credited to the account of the deceased employee over and above 9.21 the total of the annuities paid and payable to the surviving 9.22 spouse or dependent children must be paid to the deceased 9.23 member's last designated beneficiary or, if none, to the legal 9.24 representative of the estate of the deceased member. 9.25 Subd. 7. [ELECTION THAT SECTION DOES NOT APPLY.] A member 9.26 may specify in writing that this section does not apply and that 9.27 payment must be made only to the designated beneficiary, as 9.28 otherwise provided by this chapter. 9.29 Sec. 8. [353E.08] [SCOPE AND APPLICATION.] 9.30 The general provisions of chapter 353 apply to the local 9.31 government correctional service retirement plan except where 9.32 otherwise specifically provided in sections 353E.01 to 353E.07. 9.33 Sec. 9. Minnesota Statutes 1997 Supplement, section 9.34 356.19, is amended by adding a subdivision to read: 9.35 Subd. 5a. [LOCAL GOVERNMENT CORRECTIONAL SERVICE 9.36 PLAN.] The applicable benefit accrual rate is 2.0 percent. 10.1 Sec. 10. Minnesota Statutes 1997 Supplement, section 10.2 356.20, subdivision 2, is amended to read: 10.3 Subd. 2. [COVERED PUBLIC PENSION FUNDS.] This section 10.4 applies to the following public pension plans: 10.5 (1) State employees retirement fund. 10.6 (2) Public employees retirement fund. 10.7 (3) Teachers retirement association. 10.8 (4) State patrol retirement fund. 10.9 (5) Minneapolis teachers retirement fund association. 10.10 (6) St. Paul teachers retirement fund association. 10.11 (7) Duluth teachers retirement fund association. 10.12 (8) Minneapolis employees retirement fund. 10.13 (9) University of Minnesota faculty retirement plan. 10.14 (10) University of Minnesota faculty supplemental 10.15 retirement plan. 10.16 (11) Judges retirement fund. 10.17 (12) Any police or firefighter's relief association 10.18 enumerated in section 69.77, subdivision 1a, or 69.771, 10.19 subdivision 1. 10.20 (13) Public employees police and fire fund. 10.21 (14) Minnesota state retirement system correctional 10.22 officers retirement fund. 10.23 (15) Local government correctional service retirement plan. 10.24 Sec. 11. Minnesota Statutes 1997 Supplement, section 10.25 356.30, subdivision 3, is amended to read: 10.26 Subd. 3. [COVERED FUNDS.] This section applies to the 10.27 following retirement funds: 10.28 (1) state employees retirement fund, established pursuant 10.29 to chapter 352; 10.30 (2) correctional employees retirement program, established 10.31 pursuant to chapter 352; 10.32 (3) unclassified employees retirement plan, established 10.33 pursuant to chapter 352D; 10.34 (4) state patrol retirement fund, established pursuant to 10.35 chapter 352B; 10.36 (5) legislators retirement plan, established pursuant to 11.1 chapter 3A; 11.2 (6) elective state officers' retirement plan, established 11.3 pursuant to chapter 352C; 11.4 (7) public employees retirement association, established 11.5 pursuant to chapter 353; 11.6 (8) public employees police and fire fund, established 11.7 pursuant to chapter 353; 11.8 (9) local government correctional service retirement plan, 11.9 established pursuant to chapter 353E; 11.10 (10) teachers retirement association, established pursuant 11.11 to chapter 354; 11.12
(10)(11) Minneapolis employees retirement fund, 11.13 established pursuant to chapter 422A; 11.14 (11)(12) Minneapolis teachers retirement fund association, 11.15 established pursuant to chapter 354A; 11.16 (12)(13) St. Paul teachers retirement fund association, 11.17 established pursuant to chapter 354A; 11.18 (13)(14) Duluth teachers retirement fund association, 11.19 established pursuant to chapter 354A; and 11.20 (14)(15) judges' retirement fund, established by sections 11.21 490.121 to 490.132. 11.22 Sec. 12. Minnesota Statutes 1996, section 356.302, 11.23 subdivision 7, is amended to read: 11.24 Subd. 7. [COVERED RETIREMENT PLANS.] This section applies 11.25 to the following retirement plans: 11.26 (1) state employees retirement fund, established by chapter 11.27 352; 11.28 (2) unclassified employees retirement plan, established by 11.29 chapter 352D; 11.30 (3) public employees retirement association, established by 11.31 chapter 353; 11.32 (4) teachers retirement association, established by chapter 11.33 354; 11.34 (5) Duluth teachers retirement fund association, 11.35 established by chapter 354A; 11.36 (6) Minneapolis teachers retirement fund association, 12.1 established by chapter 354A; 12.2 (7) St. Paul teachers retirement fund association, 12.3 established by chapter 354A; 12.4 (8) Minneapolis employees retirement fund, established by 12.5 chapter 422A; 12.6 (9) correctional employees retirement plan, established by 12.7 chapter 352; 12.8 (10) state patrol retirement fund, established by chapter 12.9 352B; 12.10 (11) public employees police and fire fund, established by 12.11 chapter 353; and12.12 (12) local government correctional service retirement plan, 12.13 established by chapter 353E; and 12.14 (13) judges' retirement fund, established by sections 12.15 490.121 to 490.132. 12.16 Sec. 13. Minnesota Statutes 1996, section 356.303, 12.17 subdivision 4, is amended to read: 12.18 Subd. 4. [COVERED RETIREMENT PLANS.] This section applies 12.19 to the following retirement plans: 12.20 (1) legislators retirement plan, established by chapter 3A; 12.21 (2) state employees retirement fund, established by chapter 12.22 352; 12.23 (3) correctional employees retirement plan, established by 12.24 chapter 352; 12.25 (4) state patrol retirement fund, established by chapter 12.26 352B; 12.27 (5) elective state officers retirement plan, established by 12.28 chapter 352C; 12.29 (6) unclassified employees retirement plan, established by 12.30 chapter 352D; 12.31 (7) public employees retirement association, established by 12.32 chapter 353; 12.33 (8) public employees police and fire fund, established by 12.34 chapter 353; 12.35 (9) local government correctional service retirement plan, 12.36 established by chapter 353E; 13.1 (10) teachers retirement association, established by 13.2 chapter 354; 13.3 (10)(11) Duluth teachers retirement fund association, 13.4 established by chapter 354A; 13.5 (11)(12) Minneapolis teachers retirement fund association, 13.6 established by chapter 354A; 13.7 (12)(13) St. Paul teachers retirement fund association, 13.8 established by chapter 354A; 13.9 (13)(14) Minneapolis employees retirement fund, 13.10 established by chapter 422A; and 13.11 (14)(15) judges' retirement fund, established by sections 13.12 490.121 to 490.132. 13.13 Sec. 14. [EFFECTIVE DATE.] 13.14 Sections 1 to 13 are effective the first payroll period 13.15 beginning after July 1, 1998, and apply to service after that 13.16 date.