HF 2683

as introduced - 91st Legislature (2019 - 2020) Posted on 03/25/2019 02:37pm

A bill for an act
relating to retirement; Minnesota State; eliminating the expiration of an early
retirement incentive program; modifying eligibility rules in the higher education
supplemental retirement plan; making various nonsubstantive style and form
changes; amending Minnesota Statutes 2018, sections 136F.47; 136F.481; 354.05,
subdivision 2a; 354.51, subdivision 5; 354A.011, subdivision 27; 354B.20,
subdivisions 4, 7, 12, by adding a subdivision; 354B.22, subdivision 2; 354B.23,
subdivision 5; 354C.11, subdivisions 1, 2; 354C.12, subdivisions 1, 2; 355.01,
subdivision 3c; 355.091; proposing coding for new law in Minnesota Statutes,
chapter 354B; repealing Minnesota Statutes 2018, sections 354B.20, subdivision
8; 354B.21, subdivisions 1, 1a, 2, 3, 3a, 3b, 4, 5, 6, 7.

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

Section 1.

Minnesota Statutes 2018, section 136F.47, is amended to read:

136F.47 PENSION PLAN.

The board shall assume the administrative responsibility for the individual retirement
account plans in chapters 354B and 354C formerly administered separately by the State
University Board and the Community College Board. The separate plans and the former
plan administration must be merged into a single individual retirement account plan and
plan administration covering eligible employees of the board, eligible employees of system
institutions, and other eligible employee groups who are covered by the plan under section
deleted text begin 354B.21 deleted text end new text begin 354B.211 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 2.

Minnesota Statutes 2018, section 136F.481, is amended to read:

136F.481 EARLY SEPARATION INCENTIVE PROGRAM.

(a) Notwithstanding any provision of law to the contrary, the board may offer a targeted
early separation incentive program for its employees.

(b) The early separation incentive program may include one or both of the following:

(1) cash incentives, not to exceed one year of base salary; or

(2) employer contributions to the postretirement health care savings plan established
under section 352.98.

(c) To be eligible to receive an incentive, an employee must be at least age 55 and must
have at least five years of employment by the Minnesota State Colleges and Universities
System. The board shall establish and periodically revise the eligibility requirements for
system employees to receive an incentive. The board shall file a copy of its proposed revised
eligibility requirements with the chairs and ranking members of the senate committee with
higher education within its jurisdiction and the senate finance division with higher education
within its jurisdiction and with the chair and ranking members of the committee in the house
of representatives with higher education within its jurisdiction and of the house of
representatives Committee on Ways and Means, at least 30 days before the final adoption
of the proposed revised eligibility requirements by the board, shall post the same document
on the system website at the same time, and shall hold a public hearing on the proposed
eligibility requirements. The type and any additional amount of the incentive to be offered
may vary by employee classification, as specified by the board.

(d) The president of a college or university, consistent with paragraphs (b) and (c), may
designate:

(1) specific departments or programs at the college or university whose employees are
eligible to be offered the incentive program; or

(2) positions at the college or university eligible to be offered the incentive program.

(e) The chancellor, consistent with paragraphs (b) and (c), may designate:

(1) system office divisions whose employees are eligible to be offered the incentive
program; or

(2) positions at the system office eligible to be offered the incentive program.

(f) Acceptance of the offered incentive must be voluntary on the part of the employee
and must be in writing. The incentive may only be offered at the sole discretion of the
president of the applicable college or university.

(g) A decision by the president of a college or university or by the chancellor not to offer
an incentive may not be challenged.

(h) The cost of the incentive is payable by the college or university on whose behalf the
president offered the incentive or from the system office budget if the chancellor offered
the incentive. If a college or university is merged, the remaining cost of any early separation
incentive must be borne by the successor institution. If a college or university is closed, the
remaining cost of any early separation incentive must be borne by the board.

(i) Annually, the chancellor and the president of each college or university must report
on the number and types of early separation incentives which were offered and utilized
under this section. The report must be filed annually with the board and with the Legislative
Reference Library on or before September 1.

deleted text begin (j) The early retirement incentive authority under this section expires on June 30, 2019.
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. 3.

Minnesota Statutes 2018, section 354.05, subdivision 2a, is amended to read:

Subd. 2a.

Exceptions.

(a) Notwithstanding subdivision 2, a person specified in paragraph
(b) is not a member of the association except for purposes of Social Security coverage unless
the person is covered by section deleted text begin 354B.21 deleted text end new text begin 354B.211 new text end , and elects coverage by the Teachers
Retirement Association.

(b) A teacher is excluded from association membership other than Social Security
coverage under paragraph (a) if the person is covered by the individual retirement account
plan established under chapter 354B.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 4.

Minnesota Statutes 2018, section 354.51, subdivision 5, is amended to read:

Subd. 5.

Payment of shortages.

(a) Except as provided in paragraph (b), in the event
that full required member contributions are not deducted from the salary of a teacher,
payment of shortages in member deductions on salary earned are the sole obligation of the
employing unit and are payable by the employing unit upon notification by the executive
director of the shortage. The amount of the shortage shall be paid with interest at the
applicable annual rate or rates specified in section 356.59, subdivision 4, compounded
annually, from the end of the fiscal year in which the shortage occurred to the end of the
month in which payment is made and the interest must be credited to the fund. The employing
unit shall also pay the employer contributions as specified in section 354.42, subdivisions
3 and 5 for the shortages. If the shortage payment is not paid by the employing unit within
60 days of notification, and if the executive director does not use the recovery procedure
in section 354.512, the executive director shall certify the amount of the shortage to the
applicable county auditor, who shall spread a levy in the amount of the shortage payment
over the taxable property of the taxing district of the employing unit if the employing unit
is supported by property taxes. Payment may not be made for shortages in member deductions
on salary paid or payable under paragraph (b) or for shortages in member deductions for
persons employed by the Minnesota State Colleges and Universities system in a faculty
position or in an eligible unclassified administrative position and whose employment was
less than 25 percent of a full academic year, exclusive of the summer session, for the
applicable institution that exceeds the most recent 36 months.

(b) For a person who is employed by the Minnesota State Colleges and Universities
system in a faculty position or in an eligible unclassified administrative position and whose
employment was less than 25 percent of a full academic year, exclusive of the summer
session, for the applicable institution, upon the person's election under section deleted text begin 354B.21 deleted text end new text begin
354B.211 new text end of retirement coverage under this chapter, the shortage in member deductions on
the salary for employment by the Minnesota State Colleges and Universities system institution
of less than 25 percent of a full academic year, exclusive of the summer session, for the
applicable institution for the most recent 36 months and the associated employer contributions
must be paid by the Minnesota State Colleges and Universities system institution, plus
interest at the applicable annual rate or rates specified in section 356.59, subdivision 4,
compounded annually, from the end of the fiscal year in which the shortage occurred to the
end of the month in which the Teachers Retirement Association coverage election is made.
An individual electing coverage under this paragraph shall repay the amount of the shortage
in member deductions, plus interest, through deduction from salary or compensation
payments within the first year of employment after the election under section deleted text begin 354B.21 deleted text end new text begin
354B.211 new text end , subject to the limitations in section 16D.16. The Minnesota State Colleges and
Universities system may use any means available to recover amounts which were not
recovered through deductions from salary or compensation payments. No payment of the
shortage in member deductions under this paragraph may be made for a period longer than
the most recent 36 months.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 5.

Minnesota Statutes 2018, section 354A.011, subdivision 27, is amended to read:

Subd. 27.

Teacher.

(a) "Teacher" means any person who renders service for deleted text begin a public
school district, other than a charter school, located in the corporate limits of deleted text end new text begin :
new text end

new text begin (1) Independent School District No. 625, new text end St. Paul, as any of the following:

deleted text begin (1) deleted text end new text begin (i) new text end a full-time employee in a position for which a valid license from the deleted text begin state
Department of Education deleted text end new text begin Professional Educator Licensing and Standards Board new text end is required;

deleted text begin (2) an employee of the teachers retirement fund association located in the city of St.
Paul;
deleted text end

deleted text begin (3) deleted text end new text begin (ii) new text end a part-time employee in a position for which a valid license from the deleted text begin state
Department of Education deleted text end new text begin Professional Educator Licensing and Standards Board new text end is required;
or

deleted text begin (4) deleted text end new text begin (iii) new text end a part-time employee in a position for which a valid license from the deleted text begin state
Department of Education deleted text end new text begin Professional Educator Licensing and Standards Board new text end is required
who also renders other nonteaching services for the school district, unless the board of
trustees of the teachers retirement fund association determines that the combined employment
is on the whole so substantially dissimilar to teaching service that the service may not be
covered by the association deleted text begin . deleted text end new text begin ;
new text end

new text begin (2) the teachers retirement fund association located in the city of St. Paul as an employee;
or
new text end

new text begin (3) the Minnesota State Colleges and Universities as an employee who has continuing
coverage under this chapter through section 354B.211, subdivision 3, paragraph (c).
new text end

(b) The term does not mean any person who renders service in the school district as any
of the following:

(1) an independent contractor or the employee of an independent contractor;

(2) an employee who is a full-time teacher covered by the Teachers Retirement
Association under chapter 354;

(3) an employee who is exempt from licensure pursuant to section 122A.30; new text begin or
new text end

deleted text begin (4) an employee who is a teacher in a technical college located in a city of the first class
unless the person elects coverage by the first class city teacher retirement fund association
under section 354B.21, subdivision 2;
deleted text end

deleted text begin (5) a teacher employed by a charter school, irrespective of the location of the school;
deleted text end

deleted text begin (6) an employee who is a part-time teacher in a technical college in the city of St. Paul
and who has elected coverage by the first class city teacher retirement fund association
under section 354B.21, subdivision 2, but (i) the teaching service is incidental to the regular
nonteaching occupation of the person; (ii) the applicable technical college stipulates annually
in advance that the part-time teaching service will not exceed 300 hours in a fiscal year;
and (iii) the part-time teaching actually does not exceed 300 hours in the fiscal year to which
the certification applies; or
deleted text end

deleted text begin (7) deleted text end new text begin (4) new text end a person who is receiving a retirement annuity from the teachers retirement fund
association and is employed after retirement by the school district associated with the
retirement fund association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 6.

Minnesota Statutes 2018, section 354B.20, subdivision 4, is amended to read:

Subd. 4.

Covered employment.

deleted text begin (a) deleted text end "Covered employment" means employment by deleted text begin a
person eligible for coverage by this retirement program under section 354B.21 in a faculty
position or in an eligible unclassified administrative position deleted text end new text begin an employee in the fiscal year
in which the employee first attains eligible employee status, as determined under section
354B.211, subdivision 1, and thereafter all employment by that individual in an eligible
unclassified administrative position as defined in subdivision 6 or in an eligible unclassified
faculty position as defined in subdivision 6a new text end .

deleted text begin (b) "Covered employment" does not mean employment specified in paragraph (a) by a
faculty member employed in the Minnesota State Colleges and Universities system if the
person's initial appointment is specified as constituting less than 25 percent of a full academic
year, exclusive of summer session, for the applicable institution.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 7.

Minnesota Statutes 2018, section 354B.20, is amended by adding a subdivision to
read:

new text begin Subd. 6a. new text end

new text begin Eligible unclassified faculty position. new text end

new text begin "Eligible unclassified faculty position"
means employment by an employing unit in:
new text end

new text begin (1) a classification included in the:
new text end

new text begin (i) state university instructional unit;
new text end

new text begin (ii) state university administrative faculty unit; or
new text end

new text begin (iii) state college instructional unit under section 179A.10, subdivision 2; or
new text end

new text begin (2) an employment position that meets the definition of "teacher" under section 354.05,
subdivision 2, or 354A.011, subdivision 27.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 8.

Minnesota Statutes 2018, section 354B.20, subdivision 7, is amended to read:

Subd. 7.

Employing unit.

"Employing unit," if the agency employs any persons covered
by the individual retirement account plan under section deleted text begin 354B.21 deleted text end new text begin 354B.211 new text end , means:

(1) the board;

(2) the Minnesota Office of Higher Education; and

(3) the Higher Education Facilities Authority.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 9.

Minnesota Statutes 2018, section 354B.20, subdivision 12, is amended to read:

Subd. 12.

Participant.

"Participant" means a person who is employed in covered
employment by the board and who elects coverage by the plan under section deleted text begin 354B.21 deleted text end new text begin
354B.211 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 10.

Minnesota Statutes 2018, section 354B.22, subdivision 2, is amended to read:

Subd. 2.

Public pension coverage as condition of employment.

Coverage by a public
pension plan under section deleted text begin 354B.21 deleted text end new text begin 354B.211 new text end is a condition of initial employment or
continued employment deleted text begin as a faculty member deleted text end new text begin in an eligible unclassified faculty position new text end or
new text begin an new text end eligible unclassified administrative position by the board or other employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 11.

new text begin [354B.211] COVERAGE.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin (a) The following persons are eligible to have coverage by
the individual retirement account plan or coverage by another plan as further specified in
this section:
new text end

new text begin (1) employees who are employed for at least 25 percent of a full academic year, exclusive
of the summer session, in eligible unclassified faculty positions under section 354B.20,
subdivision 6a; and
new text end

new text begin (2) employees who are employed for at least 25 percent of a full fiscal year in eligible
unclassified administrative positions under section 354B.20, subdivision 6.
new text end

new text begin (b) An employee who becomes eligible under clause (1) or (2) remains eligible regardless
of (i) a break in service, or (ii) the percentage of full time worked in any covered employment.
new text end

new text begin Subd. 2. new text end

new text begin Default coverage. new text end

new text begin (a) The default retirement coverage specified under this
subdivision for an eligible employee applies to all covered employment unless the eligible
employee makes a coverage election under subdivision 4.
new text end

new text begin (b) The individual retirement account plan is the default coverage if:
new text end

new text begin (1) the eligible employee does not have continuing coverage under subdivision 3; and
new text end

new text begin (2) the eligible employee:
new text end

new text begin (i) was employed before July 1, 2011; or
new text end

new text begin (ii) is employed on or after July 1, 2011 and does not have allowable service credit or
an account in any retirement plan listed in section 356.30, subdivision 3.
new text end

new text begin (c) The Teachers Retirement Association is the default coverage if the eligible employee
(1) does not have continuing coverage under subdivision 3, paragraphs (c) or (d), (2) is
employed on or after July 1, 2011, and (3) has allowable service credit or an account in any
retirement plan listed in section 356.30, subdivision 3.
new text end

new text begin (d) At the time of hire, the employee must certify to the employer the existence of any
allowable service credit or an account within any plan listed in section 356.30, subdivision
3. If an employee fails to provide certification, the Minnesota State Colleges and Universities
system and its board shall be held harmless and, notwithstanding any law to the contrary,
any resulting cost or financial liability becomes the employee's responsibility.
new text end

new text begin Subd. 3. new text end

new text begin Coverage continuation; certain technical college employees. new text end

new text begin (a) If an
employee was employed in a technical college faculty position with Teachers Retirement
Association coverage on or before June 30, 1997, that coverage continues for all covered
employment unless the employee elects coverage under paragraph (e).
new text end

new text begin (b) If an employee was employed in a technical college faculty position on or before
June 30, 1995, and covered by a former first class city teacher retirement fund association,
the Teachers Retirement Association shall provide coverage for all covered employment
unless the employee elects coverage under paragraph (e).
new text end

new text begin (c) If an employee was employed in a technical college faculty position with St. Paul
Teachers Retirement Fund Association coverage on or before June 30, 1995, that coverage
continues for all covered employment unless the employee elects coverage under paragraph
(e).
new text end

new text begin (d) If an employee was employed in a technical college position with Public Employee
Retirement Association coverage on or before June 30, 1995, that coverage continues for
all covered employment unless the employee elects coverage under paragraph (e).
new text end

new text begin (e) If an employee under this subdivision changes employment within the Minnesota
State Colleges and Universities system, the employee is authorized to elect prospective
coverage by the individual retirement account plan pursuant to subdivision 4 for all
subsequent covered employment.
new text end

new text begin Subd. 4. new text end

new text begin Coverage; election for new employment position. new text end

new text begin (a) Unless a timely coverage
election is made as specified below, an eligible employee retains the default coverage
specified in subdivision 2 for all covered employment.
new text end

new text begin (1) An eligible employee who has default coverage with the individual retirement account
plan under subdivision 2 may elect prospective Teachers Retirement Association coverage.
new text end

new text begin (2) An eligible employee who has default coverage with the Teachers Retirement
Association under subdivision 2 may elect prospective coverage by the individual retirement
account plan.
new text end

new text begin (b) An election under paragraph (a) must be made within one year of commencing
covered employment. If an election is not made within one year of commencing covered
employment and the employee separated from such covered employment prior to completion
of the year, an election may be made within 90 days of returning to covered employment.
new text end

new text begin (c) Except as provided in subdivision 6, purchasing service credit in the Teachers
Retirement Association for any period of Minnesota State Colleges and Universities system
employment occurring before the election under this section is prohibited.
new text end

new text begin (d) An election made under this subdivision is irrevocable unless a subsequent election
is made under subdivision 6.
new text end

new text begin Subd. 5. new text end

new text begin Required notice. new text end

new text begin (a) No later than 90 days before the end of any applicable
election period specified in this section, the employer must provide an eligible employee
the following information:
new text end

new text begin (1) the eligible employee's default retirement coverage;
new text end

new text begin (2) the form for electing alternative coverage other than the default coverage; and
new text end

new text begin (3) the website addresses for the plan providing default coverage and comparable
information for the applicable optional coverage.
new text end

new text begin (b) The election of coverage forms must include a certification statement that the
employee has received and reviewed materials on the alternative and default coverages prior
to making the election.
new text end

new text begin Subd. 6. new text end

new text begin Coverage; election for tenure. new text end

new text begin (a) A faculty member, defined as a person
employed in an eligible unclassified faculty position under section 354B.20, subdivision
6a, who is a member of the individual retirement account plan may elect to transfer retirement
coverage to the Teachers Retirement Association within one year of the faculty member
first achieving tenure or its equivalent at a Minnesota state college or university.
new text end

new text begin (b) A faculty member electing Teachers Retirement Association coverage must purchase
service credit in the Teachers Retirement Association for the entire period of time covered
under the individual retirement account plan. The purchase payment amount must be
determined under section 356.551. The Teachers Retirement Association may charge a
faculty member transferring coverage a reasonable fee to cover the costs associated with
computing the actuarial cost of purchasing service credit and making the transfer.
new text end

new text begin (c) A faculty member purchasing service credit in the Teachers Retirement Association
may use:
new text end

new text begin (1) any balances in the faculty member's individual retirement account plan or higher
education supplemental retirement plan established under chapter 354C; or
new text end

new text begin (2) any source specified in section 356.441, subdivision 1.
new text end

new text begin If the total amount of payments under this paragraph are less than the total purchase payment
amount under section 356.551, and the employee fails to make timely payments as determined
by the Teachers Retirement Association, all payment amounts must be refunded to the
applicable source.
new text end

new text begin Subd. 7. new text end

new text begin Coverage; acting, interim, or temporary appointments. new text end

new text begin An employee on a
leave of absence from a classified position who is appointed to an acting, interim, or
temporary unclassified position retains the retirement coverage that the employee had in
the prior classified position for up to one year of covered employment. If the employee
continues in the unclassified position, the employee has the option to make an election under
subdivision 4, provided no previous election had been made under that subdivision.
new text end

new text begin Subd. 8. new text end

new text begin Coverage; certain part-time employees. new text end

new text begin Notwithstanding subdivision 1, an
employee in a part-time eligible unclassified administrative position or eligible unclassified
faculty position that constitutes less than 25 percent of a full academic year is eligible for
Teachers Retirement Association coverage for all covered employment if the person certifies
to the employer existing membership in the Teachers Retirement Association.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 12.

Minnesota Statutes 2018, section 354B.23, subdivision 5, is amended to read:

Subd. 5.

Omitted member deductions.

(a) If the employing unit that employs a plan
participant fails to deduct the member contribution from the participant's salary and a period
of less than 60 days from the date on which the deduction should have been made has
elapsed, the employing unit must obtain the omitted member deduction by an additional
payroll deduction during the pay period next following the discovery of the omission.

(b) If the employing unit of a plan participant fails to deduct the member contribution
from the participant's salary and that omission continues for at least 60 days from the date
on which the deduction should have been made, the employing unit must pay the amount
representing the omitted member contribution, and the full required employer contribution,
plus compound interest at deleted text begin an annual rate of 8.5 percent deleted text end new text begin the applicable annual rate or rates
specified in section 356.59, subdivision 2 new text end . The contributions and any interest must be made
within one year of the date on which the omission was discovered.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 13.

Minnesota Statutes 2018, section 354C.11, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

Individuals employed by the Board of Trustees of the
Minnesota State Colleges and Universities are authorized to participate in the supplemental
retirement plan, effective deleted text begin on the next following July 1, after meeting deleted text end new text begin upon hire if the
individual meets the new text end eligibility requirements specified in subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 14.

Minnesota Statutes 2018, section 354C.11, subdivision 2, is amended to read:

Subd. 2.

Eligibility.

(a) An individual deleted text begin must participate deleted text end new text begin is automatically enrolled new text end in the
supplemental retirement plan if the individual is employed by the Board of Trustees in the
unclassified service of the state and has completed at least two years with a full-time contract
of applicable unclassified employment with the board or an applicable predecessor board
in any of the positions specified in paragraph (b).

(b) Eligible positions or employment classifications are:

(1) an unclassified administrative position as defined in section 354B.20, subdivision
6;

(2) an employment classification included in one of the following collective bargaining
units under section 179A.10, subdivision 2:

(i) the state university instructional unit;

(ii) the state college instructional unit; and

(iii) the state university administrative unit; or

(3) an unclassified employee of the board:

(i) included in the general professional unit or the supervisory employees unit under
section 179A.10, subdivision 2; or

(ii) an employee who is excluded from one of those units due to the employee's
confidential status under section 179A.10, subdivision 1, clause (7).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 15.

Minnesota Statutes 2018, section 354C.12, subdivision 1, is amended to read:

Subdivision 1.

Basic contributions and deductions.

(a) The employer of personnel
covered by the supplemental retirement plan as provided in section 354C.11 shall deduct deleted text begin a
sum deleted text end new text begin an amount new text end equal to five percent of the annual salary of the person deleted text begin between $6,000 and
$15,000 deleted text end new text begin , not to exceed the employer contribution amount defined in section 356.24,
subdivision 1, clause (6) new text end . The employer may accomplish this deduction by making equal
deductions each payroll period, based on anticipated annual salary. The employer may adjust
these deductions as necessary to deduct the correct amount annually. Deductions cease upon
termination of employment covered by the supplemental retirement plan.

(b) The basic contribution deduction must be made in the same manner as other retirement
deductions are made from the salary of the person under section 352.04, subdivision 4;
352D.04, subdivision 2; 354.42, subdivision 2; or 354A.12, whichever applies.

(c) The employer shall also make a contribution to the supplemental retirement plan on
behalf of covered personnel equal to the salary deduction made under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 16.

Minnesota Statutes 2018, section 354C.12, subdivision 2, is amended to read:

Subd. 2.

Omitted deductions.

If the employer of personnel covered by the supplemental
retirement plan as provided in section 354C.11 fails to deduct the member basic contribution
from the covered employee's salary and a period of less than 60 days from the date on which
the deduction should have been made has elapsed, the employer must obtain the omitted
member deduction by an additional payroll deduction during the pay period next following
the discovery of the omission. If the employer fails to deduct the member basic contribution
from the covered employee's salary and that omission continues for at least 60 days from
the date on which the member basic contribution deduction should have been made, the
employer must pay the amount representing the omitted member basic contribution, and
the full required omitted employer basic contribution, plus compound interest at deleted text begin an annual
rate of 8.5 percent deleted text end new text begin the applicable annual rate or rates specified in section 356.59, subdivision
2 new text end . The contributions must be made within one year of the date on which the omission was
discovered.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 17.

Minnesota Statutes 2018, section 355.01, subdivision 3c, is amended to read:

Subd. 3c.

Higher education employee.

"Higher education employee" means an employee
of the state of Minnesota who performs services in a Minnesota State Colleges and
Universities system in a position covered by the individual retirement account plan under
section deleted text begin 354B.21 deleted text end new text begin 354B.211 new text end and who remains a member of the Teachers Retirement
Association for purposes of Social Security coverage only.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 18.

Minnesota Statutes 2018, section 355.091, is amended to read:

355.091 DIVISION OF RETIREMENT PLANS.

(a) The public retirement plans enumerated in paragraph (b) must be divided into two
parts in accordance with section 218(d)(6)(c) of the Social Security Act, with one part
composed of plan members who did not elect Social Security coverage in the applicable
referendum and the other part composed of plan members who did elect Social Security
coverage in the applicable referendum.

(b) The applicable public retirement plans are:

(1) the elective state officers retirement plan;

(2) the judges retirement plan;

(3) the legislators retirement plan;

(4) the Minneapolis Teachers Retirement Fund Association;

(5) the general employees retirement plan of the Public Employees Retirement
Association;

(6) the St. Paul Teachers Retirement Fund Association; and

(7) the Teachers Retirement Association.

(c) Plan participants and persons electing participation under section deleted text begin 354B.21 deleted text end new text begin 354B.211 new text end
remain members of the Teachers Retirement Association for purposes of Social Security
coverage only, and remain covered by the applicable agreement entered into under section
355.01, but are not members of the Teachers Retirement Association for any other purpose
while employed in covered employment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 19. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, sections 354B.20, subdivision 8; and 354B.21, subdivisions
1, 1a, 2, 3, 3a, 3b, 4, 5, 6, and 7, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

APPENDIX

Repealed Minnesota Statutes: 19-4571

354B.20 DEFINITIONS.

Subd. 8.

Faculty.

"Faculty" means an employment position that meets the definition of either section 354.05, subdivision 2, or 354A.011, subdivision 27.

354B.21 COVERAGE.

Subdivision 1.

Eligibility.

The following persons are eligible to have coverage by the individual retirement account plan or coverage by another plan as further specified in this section:

(1) employees of the board who are employed as faculty in an employment classification included in the state university instructional unit or the state college instructional unit under section 179A.10, subdivision 2;

(2) the chancellor and employees of the board in eligible unclassified administrative positions;

(3) the employees in eligible unclassified administrative positions in the state universities;

(4) the employees in eligible unclassified administrative positions in the technical colleges; and

(5) the employees in eligible unclassified administrative positions of the Minnesota Office of Higher Education or of the community colleges.

Subd. 1a.

Required notice; counseling.

(a) No later than 90 days before the end of any applicable election period specified in this section, the employer must provide to a person beginning work in a position subject to this section for which an option to elect alternative retirement plan coverage is authorized the following information:

(1) the default retirement coverage;

(2) election procedures, if applicable, for electing coverage other than the default coverage; and

(3) the website and the telephone number for the plan providing default coverage and comparable information for the plan which the person is eligible to elect.

(b) The election of coverage forms must include a certification statement that the employee has received and reviewed materials on the optional coverage and the default coverage prior to making the election.

Subd. 2.

Coverage; election.

(a) An eligible person employed by the board has the default coverage specified in subdivision 3, or other subdivisions of this section, whichever is applicable, and retains that coverage for the period of covered employment unless a timely election to change that coverage is made as specified in this section.

(b) An eligible person under subdivision 3, paragraph (b) or (c), is authorized to elect prospective Teachers Retirement Association plan coverage.

(c) An eligible person under subdivision 3, paragraph (d), is authorized to elect prospective coverage by the plan established by this chapter.

(d) The election under paragraph (a) must be made within one year of commencing eligible Minnesota State Colleges and Universities system employment. If an election is not made within the specified election period due to a termination of Minnesota State Colleges and Universities system employment, an election may be made within 90 days of returning to eligible Minnesota State Colleges and Universities system employment. Except as specified in paragraph (f), all elections are irrevocable.

(e) Except as provided in paragraph (f), a purchase of service credit in the Teachers Retirement Association plan for any period or periods of Minnesota State Colleges and Universities system employment occurring before the election under this section is prohibited.

(f) Notwithstanding other paragraphs in this subdivision, a faculty member who is a member of the individual retirement account plan may elect to transfer retirement coverage to the teachers retirement plan within one year of the faculty member first achieving tenure or its equivalent at a Minnesota state college or university. The faculty member electing Teachers Retirement Association coverage under this paragraph must purchase service credit in the Teachers Retirement Association for the entire period of time covered under the individual retirement account plan and the purchase payment amount must be determined under section 356.551. The Teachers Retirement Association may charge a faculty member transferring coverage a reasonable fee to cover the costs associated with computing the actuarial cost of purchasing service credit and making the transfer. A faculty member transferring from the individual retirement account plan to the Teachers Retirement Association may use any balances to the credit of the faculty member in the individual retirement account plan, any balances to the credit of the faculty member in the higher education supplemental retirement plan established under chapter 354C, or any source specified in section 356.441, subdivision 1, to purchase the service credit in the Teachers Retirement Association. If the total amount of payments under this paragraph are less than the total purchase payment amount under section 356.551, the payment amounts must be refunded to the applicable source.

Subd. 3.

Default coverage.

(a) Prior to making an election under subdivision 2, or if an eligible person fails to elect coverage by the plan under subdivision 2 or if the person fails to make a timely election, the coverage specified in this subdivision applies.

(b) If an eligible person is employed by the board before July 1, 2011, in an eligible unclassified administrative position or in a faculty position in a technical college, community college, or state university, the retirement coverage is by the plan established by this chapter, unless otherwise specified in this section.

(c) An eligible person described in paragraph (b), except that first employment by the board is on or after July 1, 2011, has retirement coverage by the plan established by this chapter if the eligible person has no:

(1) allowable service credit in any plan listed in section 356.30, subdivision 3; or

(2) prior employment covered by the state unclassified employees retirement program under chapter 352D.

(d) An eligible person described in paragraph (c) has retirement coverage by the Teachers Retirement Association if the person has:

(1) prior employment covered by the state unclassified employees retirement program under chapter 352D and has not withdrawn or transferred assets from that account; or

(2) allowable service credit in a plan listed in section 356.30, subdivision 3.

(e) To ensure that coverage is provided by the proper plan, the employee must certify to the board the existence of any service credit in any plan listed in section 356.30, subdivision 3, or whether the person retains a state unclassified employees retirement program account. If an employee fails to correctly certify prior membership in a plan or the existence of an unclassified program account, the Minnesota State Colleges and Universities system and its board shall be held harmless, and notwithstanding any law to the contrary, any resulting cost or financial liability becomes the employee's responsibility.

Subd. 3a.

Plan coverage and election; certain past service technical college faculty.

(a) Notwithstanding subdivision 3, if an employee of the board was employed in a faculty position in a technical college on June 30, 1997, with coverage by the Teachers Retirement Association, the employee retains that coverage. If the employee was a technical college faculty member on June 30, 1995, covered by a first class city teacher retirement fund established under chapter 354A, the retirement coverage continues with the St. Paul Teachers Retirement Fund Association, whichever is applicable. If the person was a technical college faculty member on June 30, 1995, covered by the former Minneapolis Teachers Retirement Fund Association or the former Duluth Teachers Retirement Fund Association, the Teachers Retirement Association shall provide coverage.

(b) An employee under paragraph (a) who has coverage by the St. Paul Teachers Retirement Fund Association retains that coverage for the duration of the person's employment by the board unless, within one year of a change in employment within the Minnesota State Colleges and Universities system, the person elects the individual retirement account plan for all future employment by the board. The election is irrevocable.

Subd. 3b.

Coverage of certain former technical college faculty members.

A person who was employed as a teacher by a technical college before July 1, 1995, and who subsequently is reclassified into a different employment position while continuing to perform the same or essentially the same employment duties and consequently shifts from the technical college instructional collective bargaining unit to another state collective bargaining unit retains coverage by the Teachers Retirement Association or the applicable first class city teachers retirement fund association, whichever applies.

Subd. 4.

Coverage in the event of acting, interim, or temporary appointments.

(a) A person previously employed by the board and subsequently appointed by the board to an acting, interim, or temporary faculty or eligible unclassified administrative position by the board retains the retirement coverage that the person had in the prior board position. If the participant's status becomes permanent, the participant has the option to make an election of retirement coverage appropriate to the retirement plan in which the employment position should have retirement coverage consistent with subdivision 2.

(b) A person who is appointed to an acting, interim, or temporary faculty position by the board and who was not employed in a faculty position by the board immediately before that appointment must elect coverage as provided in subdivision 2.

Subd. 5.

Payment for certain prior uncovered service.

(a) A person employed in a faculty position or in an eligible unclassified administrative position by the board who was initially excluded from participation in the individual retirement account plan coverage, who was not covered by any other Minnesota public pension plan for that service, and who is subsequently eligible to participate in the individual retirement account plan may make member contributions for that period of prior uncovered teaching employment or eligible unclassified administrative employment with the board.

(b) The member contributions for prior uncovered board service are the amount that the person would have paid if the prior service had been covered employment. The payment must be made to the individual retirement account plan administrator and may be made only by payroll deduction. The payment must be made by the later of:

(1) 45 days of the start of covered employment; or

(2) the end of the fiscal year in which covered employment began.

(c) The board must contribute an amount to match any contribution made by a plan participant under this subdivision.

(d) Payments of contributions for prior uncovered board service under this subdivision must be invested in the same manner as the regular contributions made by or on behalf of the plan participant.

Subd. 6.

Continuation of coverage.

Except as otherwise specified in this section, once a person is employed in a position that qualifies for participation in the individual retirement account plan and elects to participate in the plan, all subsequent service by the person as a faculty member or in an eligible unclassified administrative position employed by the board or other employing unit is covered by the individual retirement account plan.

Subd. 7.

Coverage; certain part-time employees.

A person employed in a part-time faculty position or in a part-time eligible unclassified administrative position who does not meet the definition of covered employment under section 354B.20, subdivision 4, because the employment does not meet the threshold required under that provision, must certify prior membership in the Teachers Retirement Association to the Minnesota State Colleges and Universities system. If the certification is incorrect, the employee, and not the employer, is required to pay interest on the employee and employer contributions, and, if applicable, on the employer additional contributions to the Teachers Retirement Association under section 354.52, subdivision 4.