HF 2701

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; modifications
of an administrative nature; clarifying physician and St. Paul Port Authority
employee coverage; clarifying termination of membership procedures; adding
indefinite layoff definition; clarifying board management and election provisions;
specifying board legal authority; revising various receipts, disbursements, and
collection provisions for consistency with federal requirements; clarifying
disability benefit termination procedures; simplifying and removing obsolete
bounce-back annuity language; removing five-year term certain survivor
coverage option; clarifying various disability and returning disability provisions;
removing authority for privately operated ambulance services to contribute to the
Public Employees Retirement Association defined contribution plan; authorizing
counties to certify positions to be included in the local government correctional
service plan as sufficiently similar to existing positions; making a temporary
returning disabilitant provision permanent; amending Minnesota Statutes 2004,
sections 353.01, subdivisions 2a, 11a, 11b, 12, 16, by adding a subdivision;
353.03, subdivisions 1, 1a, by adding a subdivision; 353.27, subdivisions 7, 7a,
7b; 353.29, subdivision 8; 353.30, subdivisions 3a, 3b; 353.32, subdivisions
1a, 1b; 353.33, subdivisions 1, 9; 353.34, subdivision 1; 353.656, subdivision
4; 353D.01, subdivision 2; 353D.02, subdivision 3; 353E.02, subdivisions 2, 3;
Minnesota Statutes 2005 Supplement, sections 353.01, subdivision 2d; 353.28,
subdivision 6; Laws 2004, chapter 267, article 8, section 41; proposing coding
for new law in Minnesota Statutes, chapter 353.

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

Section 1.

Minnesota Statutes 2004, section 353.01, subdivision 2a, is amended to read:

Subd. 2a.

Included employees.

(a) Public employees whose salary from one
governmental subdivision exceeds $425 in any month shall participate as members of the
association. If the salary is less than $425 in a subsequent month, the employee retains
membership eligibility. Eligible public employees shall participate as members of the
association with retirement coverage by the public employees retirement plan or the public
employees police and fire retirement plan under this chapter, or the local government
correctional employees retirement plan under chapter 353E, whichever applies, as a
condition of their employment on the first day of employment unless they:

(1) are specifically excluded under subdivision 2b;

(2) do not exercise their option to elect retirement coverage in the association as
provided in subdivision 2d, paragraph (a); or

(3) are employees of the governmental subdivisions listed in subdivision 2d,
paragraph (b), where the governmental subdivision has not elected to participate as a
governmental subdivision covered by the association.

(b) A public employee who was a member of the association on June 30, 2002,
based on employment that qualified for membership coverage by the public employees
retirement plan or the public employees police and fire plan under this chapter, or the local
government correctional employees retirement plan under chapter 353E as of June 30,
2002, retains that membership until the employee terminates public employment under
subdivision 11a or terminates membership under subdivision 11b.

new text begin (c) Public employees under paragraph (a) includes physicians under section
353D.01, subdivision 2, who do not elect public employees defined contribution plan
coverage under section 353D.02, subdivision 2.
new text end

Sec. 2.

Minnesota Statutes 2005 Supplement, section 353.01, subdivision 2d, is
amended to read:

Subd. 2d.

Optional membership.

(a) Membership in the association is optional
by action of the individual employee for the following public employees who meet the
conditions set forth in subdivision 2a:

(1) members of the coordinated plan who are also employees of labor organizations
as defined in section 353.017, subdivision 1, for their employment by the labor
organization only if they elect to have membership under section 353.017, subdivision 2;

(2) persons who are elected or persons who are appointed to elected positions other
than local governing body elected positions who elect to participate by filing a written
election for membership;

(3) members of the association who are appointed by the governor to be a state
department head and who elect not to be covered by the general state employees retirement
plan of the Minnesota State Retirement System under section 352.021;

(4) city managers as defined in section 353.028, subdivision 1, who do not elect to be
excluded from membership in the association under section 353.028, subdivision 2; and

(5) employees of the Port Authority of the city of St. Paul deleted text begin who were at least age 45 deleted text end
on January 1, 2003, new text begin who were at least age 45 on that date, new text end and who elect to participate by
filing a written election for membership.

(b) Membership in the association is optional by action of the governmental
subdivision for the employees of the following governmental subdivisions under the
conditions specified:

(1) the Minnesota Association of Townships if the board of the association, at its
option, certifies to the executive director that its employees are to be included for purposes
of retirement coverage, in which case the status of the association as a participating
employer is permanent;

(2) a county historical society if the county in which the historical society is located,
at its option, certifies to the executive director that the employees of the historical society
are to be county employees for purposes of retirement coverage under this chapter. The
status as a county employee must be accorded to all similarly situated county historical
society employees and, once established, must continue as long as a person is an employee
of the county historical society; and

(3) Hennepin Healthcare System, Inc., a public corporation, with respect to
employees other than paramedics, emergency medical technicians, and protection officers,
if the corporate board establishes alternative retirement plans for certain classes of
employees of the corporation and certifies the employees to be excluded from future
retirement coverage.

(c) For employees who are covered by paragraph (a), clause (1), (2), or (3), or
covered by paragraph (b), clause (1) or (2), if the necessary membership election is
not made, the employee is excluded from retirement coverage under this chapter. For
employees who are covered by paragraph (a), clause (4), if the necessary election is not
made, the employee must become a member and have retirement coverage under this
chapter. For employees specified in paragraph (b), clause (3), membership continues until
the exclusion option is exercised for the designated class of employee. The option to
become a member, once exercised under this subdivision, may not be withdrawn until
termination of public service as defined under subdivision 11a.

Sec. 3.

Minnesota Statutes 2004, section 353.01, subdivision 11a, is amended to read:

Subd. 11a.

Termination of public service.

(a) "Termination of public service"
occurs when a member resigns or is dismissed from public service by the employing
governmental subdivision deleted text begin or when a position ends and the member who held the position
is not considered by the governmental subdivision to be on a temporary layoff, deleted text end and
the employee does not, within 30 days of the date the employment relationship ended,
return to an employment position in the same governmental subdivision new text begin or when the
employer-employee relationship is severed due to the expiration of a layoff under
subdivision 12 or 12c new text end .

(b) The termination of public service must be recorded in the association records
upon receipt of an appropriate notice from the governmental subdivision.

Sec. 4.

Minnesota Statutes 2004, section 353.01, subdivision 11b, is amended to read:

Subd. 11b.

Termination of membership.

(a) "Termination of membership" means
the conclusion of membership in the association new text begin for a person who has not terminated
public service under subdivision 11a new text end and occurs:

(1) deleted text begin upon termination of public service under subdivision 11a;
deleted text end

deleted text begin (2) when a member does not return to work within 30 days of the expiration of
an authorized temporary layoff under subdivision 12 or an authorized leave of absence
under subdivision 31 as evidenced by the appropriate record filed by the governmental
subdivision; or
deleted text end

deleted text begin (3) deleted text end when a person files a written election new text begin with the association new text end to discontinue
employee deductions under section 353.27, subdivision 7, paragraph (a), clause (1) new text begin ;
new text end

new text begin (2) when a city manager files a written election with the association to discontinue
employee deductions under section 353.028, subdivision 2; or
new text end

new text begin (3) when a member transfers to a temporary position and becomes excluded from
membership under subdivision 2b, clause (4) new text end .

(b) The termination of membership new text begin under clause (3) new text end must be reported to the
association by the governmental subdivision.

deleted text begin (c) If the employee subsequently returns to a position in the same governmental
subdivision, the employee shall not again be required to earn a salary in excess of $425 per
month to qualify for membership, unless the employee has taken a refund of accumulated
employee deduction plus interest under section deleted text begin 353.34, subdivision 1 deleted text end .
deleted text end

Sec. 5.

Minnesota Statutes 2004, section 353.01, subdivision 12, is amended to read:

Subd. 12.

Authorized temporary new text begin or seasonal new text end layoff.

"Authorized temporary
new text begin or seasonal new text end layoff," including seasonal leave of absence, means a suspension of public
service new text begin for a limited period during a year new text end authorized by the employing governmental
subdivision for a deleted text begin period not exceeding three months in any calendar year, as evidenced by
appropriate record of the employer and promptly transmitted to the association deleted text end new text begin member
who is expected to return to the same position at the end of the layoff period and for which
there has been no termination of public service under subdivision 11a new text end .

Sec. 6.

Minnesota Statutes 2004, section 353.01, is amended by adding a subdivision
to read:

new text begin Subd. 12c. new text end

new text begin Indefinite layoff. new text end

new text begin "Indefinite layoff" occurs when a member is placed on
a layoff that is not a temporary or seasonal layoff under subdivision 12, for which no date
has been specified by the employing governmental subdivision for the employee's return
to work, and there has been no termination of public service under subdivision 11a.
new text end

Sec. 7.

Minnesota Statutes 2004, section 353.01, subdivision 16, is amended to read:

Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service"
means:

(1) service during years of actual membership in the course of which employee
contributions were made, periods covered by payments in lieu of salary deductions under
section 353.35;

(2) service in years during which the public employee was not a member but for
which the member later elected, while a member, to obtain credit by making payments to
the fund as permitted by any law then in effect;

(3) a period of authorized leave of absence with pay from which deductions for
employee contributions are made, deposited, and credited to the fund;

(4) a period of authorized personal, parental, or medical leave of absence without
pay, including a leave of absence covered under the federal Family Medical Leave Act,
that does not exceed one year, and during or for which a member obtained service credit
for each month in the leave period by payments to the fund made in place of salary
deductions. The payments must be made in an amount or amounts based on the member's
average salary on which deductions were paid for the last six months of public service, or
for that portion of the last six months while the member was in public service, to apply to
the period in either case that immediately precedes the commencement of the leave of
absence. If the employee elects to pay the employee contributions for the period of any
authorized personal, parental, or medical leave of absence without pay, or for any portion
of the leave, the employee shall also, as a condition to the exercise of the election, pay
to the fund an amount equivalent to the required employer and the additional employer
contributions, if any, for the employee. The payment must be made within one year from
the expiration of the leave of absence or within 20 days after termination of public service
under subdivision 11a, whichever is earlier. The employer, by appropriate action of its
governing body which is made a part of its official records and which is adopted before the
date of the first payment of the employee contribution, may certify to the association in
writing its commitment to pay the employer and additional employer contributions from
the proceeds of a tax levy made under section 353.28. Payments under this paragraph must
include interest at an annual rate of 8.5 percent compounded annually from the date of the
termination of the leave of absence to the date payment is made. An employee shall return
to public service and render a minimum of three months of allowable service in order to
be eligible to pay employee and employer contributions for a subsequent authorized leave
of absence without pay. Upon payment, the employee must be granted allowable service
credit for the purchased period;

(5) a periodic, repetitive leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per annual normal work
cycle as certified to the association by the employer. A participating member obtains
service credit by making employee contributions in an amount or amounts based on the
member's average salary that would have been paid if the leave had not been taken. The
employer shall pay the employer and additional employer contributions on behalf of the
participating member. The employee and the employer are responsible to pay interest on
their respective shares at the rate of 8.5 percent a year, compounded annually, from the
end of the normal cycle until full payment is made. An employer shall also make the
employer and additional employer contributions, plus 8.5 percent interest, compounded
annually, on behalf of an employee who makes employee contributions but terminates
public service. The employee contributions must be made within one year after the end of
the annual normal working cycle or within 20 days after termination of public service,
whichever is sooner. The association shall prescribe the manner and forms to be used by a
governmental subdivision in administering a periodic, repetitive leave. Upon payment, the
member must be granted allowable service credit for the purchased period;

(6) an authorized temporary new text begin or seasonal new text end layoff under subdivision 12, limited to three
months allowable service per authorized temporary new text begin or seasonal new text end layoff in one calendar year.
An employee who has received the maximum service credit allowed for an authorized
temporary new text begin or seasonal new text end layoff must return to public service and must obtain a minimum of
three months of allowable service subsequent to the layoff in order to receive allowable
service for a subsequent authorized temporary new text begin or seasonal new text end layoff; or

(7) a period during which a member is absent from employment by a governmental
subdivision by reason of service in the uniformed services, as defined in United States
Code, title 38, section 4303(13), if the member returns to public service upon discharge
from service in the uniformed service within the time frames required under United
States Code, title 38, section 4312(e), provided that the member did not separate from
uniformed service with a dishonorable or bad conduct discharge or under other than
honorable conditions. The service is credited if the member pays into the fund equivalent
employee contributions based upon the contribution rate or rates in effect at the time
that the uniformed service was performed multiplied by the full and fractional years
being purchased and applied to the annual salary rate. The annual salary rate is the
average annual salary during the purchase period that the member would have received
if the member had continued to be employed in covered employment rather than to
provide uniformed service, or, if the determination of that rate is not reasonably certain,
the annual salary rate is the member's average salary rate during the 12-month period of
covered employment rendered immediately preceding the period of the uniformed service.
Payment of the member equivalent contributions must be made during a period which
begins with the date on which the individual returns to public employment and that is three
times the length of the military leave period, or within five years of the date of discharge
from the military service, whichever is less. If the determined payment period is less than
one year, the contributions required under this clause to receive service credit may be
made within one year of the discharge date. Payment may not be accepted following 20
days after termination of public service under subdivision 11a. If the member equivalent
contributions provided for in this clause are not paid in full, the member's allowable
service credit must be prorated by multiplying the full and fractional number of years of
uniformed service eligible for purchase by the ratio obtained by dividing the total member
contributions received by the total member contributions otherwise required under this
clause. The equivalent employer contribution, and, if applicable, the equivalent additional
employer contribution must be paid by the governmental subdivision employing the
member if the member makes the equivalent employee contributions. The employer
payments must be made from funds available to the employing unit, using the employer
and additional employer contribution rate or rates in effect at the time that the uniformed
service was performed, applied to the same annual salary rate or rates used to compute the
equivalent member contribution. The governmental subdivision involved may appropriate
money for those payments. The amount of service credit obtainable under this section may
not exceed five years unless a longer purchase period is required under United States Code,
title 38, section 4312. The employing unit shall pay interest on all equivalent member and
employer contribution amounts payable under this clause. Interest must be computed at
a rate of 8.5 percent compounded annually from the end of each fiscal year of the leave
or the break in service to the end of the month in which the payment is received. Upon
payment, the employee must be granted allowable service credit for the purchased period.

(b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for
state officers and employees displaced by the Community Corrections Act, chapter 401,
and transferred into county service under section 401.04, "allowable service" means the
combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and
section 352.01, subdivision 11.

(c) For a public employee who has prior service covered by a local police or
firefighters relief association that has consolidated with the Public Employees Retirement
Association or to which section 353.665 applies, and who has elected the type of benefit
coverage provided by the public employees police and fire fund either under section
353A.08 following the consolidation or under section 353.665, subdivision 4, "applicable
service" is a period of service credited by the local police or firefighters relief association
as of the effective date of the consolidation based on law and on bylaw provisions
governing the relief association on the date of the initiation of the consolidation procedure.

(d) No member may receive more than 12 months of allowable service credit in a
year either for vesting purposes or for benefit calculation purposes.

(e) MS 2002 (Expired)

Sec. 8.

Minnesota Statutes 2004, section 353.03, subdivision 1, is amended to read:

Subdivision 1.

Management; composition; election.

new text begin (a) new text end The management of the
public employees retirement fund is vested in an 11-member board of trustees consisting
of ten members and the state auditor deleted text begin who deleted text end new text begin . The state auditor new text end may designate a deputy
auditor with expertise in pension matters as the auditor's representative on the board. The
governor shall appoint five trustees to four-year terms, one of whom shall be designated to
represent school boards, one to represent cities, one to represent counties, one who is a
retired annuitant, and one who is a public member knowledgeable in pension matters. The
membership of the association, including recipients of retirement annuities and disability
and survivor benefits, shall elect five trustees new text begin for terms of four years new text end , one of whom must
be a member of the police and fire fund and one of whom must be a former member
who met the definition of public employee under section 353.01, subdivisions 2 and
2a, for at least five years prior to terminating membership or a member who receives a
disability benefit deleted text begin , for terms of four years deleted text end . new text begin Terms expire on January 31 of the fourth year,
and positions are vacant until newly elected members are seated. new text end Except as provided in
this subdivision, trustees elected by the membership of the association must be public
employees and members of the association.

new text begin (b) new text end For seven days beginning October 1 of each year preceding a year in which
an election is held, the association shall accept at its office filings in person or by mail
of candidates for the board of trustees. A candidate shall submit at the time of filing a
nominating petition signed by 25 or more members of the deleted text begin fund deleted text end new text begin association new text end . No name may
be withdrawn from nomination by the nominee after October 15. At the request of a
candidate for an elected position on the board of trustees, the board shall mail a statement
of up to 300 words prepared by the candidate to all persons eligible to vote in the election
of the candidate. The board may adopt policies new text begin , subject to review and approval by the
secretary of state under paragraph (e), new text end to govern new text begin the new text end form and length of these statements,
timing of mailings, and deadlines for submitting materials to be mailed. deleted text begin These policies
must be approved by the secretary of state. deleted text end The secretary of state shall resolve disputes
between the board and a candidate concerning application of these policies to a particular
statement.

new text begin (c) By January 10 of each year in which elections are to be held, the board shall
distribute by mail to the members ballots listing the candidates. No member may vote for
more than one candidate for each board position to be filled. A ballot indicating a vote for
more than one person for any position is void. No special marking may be used on the
ballot to indicate incumbents. Ballots mailed to the association must be postmarked no
later than January 31. The ballot envelopes must be so designated and the ballots counted
in a manner that ensures that each vote is secret.
new text end

new text begin (d) new text end A candidate who deleted text begin : deleted text end

deleted text begin (1) deleted text end receives contributions or makes expenditures in excess of $100 deleted text begin ; deleted text end new text begin , new text end or

deleted text begin (2) deleted text end has given implicit or explicit consent for any other person to receive contributions
or make expenditures in excess of $100 for the purpose of bringing about the candidate's
election, shall file a report with the campaign finance and public disclosure board
disclosing the source and amount of all contributions to the candidate's campaign. The
campaign finance and public disclosure board shall prescribe forms governing these
disclosures. Expenditures and contributions have the meaning defined in section 10A.01.
These terms do not include the mailing made by the association board on behalf of the
candidate. A candidate shall file a report within 30 days from the day that the results of
the election are announced. The Campaign Finance and Public Disclosure Board shall
maintain these reports and make them available for public inspection in the same manner
as the board maintains and makes available other reports filed with it. deleted text begin By January 10
of each year in which elections are to be held the board shall distribute by mail to the
members ballots listing the candidates. No member may vote for more than one candidate
for each board position to be filled. A ballot indicating a vote for more than one person for
any position is void. No special marking may be used on the ballot to indicate incumbents.
The last day for mailing ballots to the fund is January 31. Terms expire on January 31 of
the fourth year, and positions are vacant until newly elected members are qualified. The
ballot envelopes must be so designed and the ballots counted in a manner that ensures
that each vote is secret. deleted text end

new text begin (e) new text end The secretary of state shall deleted text begin supervise deleted text end new text begin review and approve the procedures defined
by the board of trustees for conducting new text end the elections new text begin specified in this subdivision, including
board policies adopted under paragraph (b) new text end .

new text begin (f) new text end The board of trustees and the executive director shall undertake their activities
consistent with chapter 356A.

Sec. 9.

Minnesota Statutes 2004, section 353.03, subdivision 1a, is amended to read:

Subd. 1a.

Vacancy, how filled.

Any vacancy on the board caused by death,
resignation, or removal of any trustee, or occurring because an elected trustee ceases to be
a public employee and an active member of the association, must be filled by the board
for trustees elected by members, and by the governor for other trustees, for the unexpired
portion of the term in which the vacancy occurs. new text begin The board shall adopt policies and
procedures governing how the vacancy of an elected trustee is to be filled.
new text end

Sec. 10.

Minnesota Statutes 2004, section 353.03, is amended by adding a subdivision
to read:

new text begin Subd. 2b. new text end

new text begin Board legal authority. new text end

new text begin The board is authorized to take legal action when
necessary to effectively administer the various plans administered by the association,
consistent with applicable articles of incorporation, bylaws, law, and rules, as applicable,
and including but not limited to the recapture of overpaid annuities, benefits, or refunds,
and the correction of omitted or deficient deductions.
new text end

Sec. 11.

Minnesota Statutes 2004, section 353.27, subdivision 7, is amended to read:

Subd. 7.

Adjustment for erroneous receipts or disbursements.

(a) Except
as provided in paragraph (b), erroneous employee deductions and erroneous employer
contributions and additional employer contributions for a person, who otherwise does not
qualify for membership under this chapter, are considered:

(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
determination of the error by the association, the person may continue membership in the
association while employed in the same position for which erroneous deductions were
taken, or file a written election to terminate membership and apply for a refund new text begin upon
termination of public service new text end or defer an annuity under section 353.34; or

(2) invalid, if the initial erroneous employee deduction began on or after January
1, 1990. Upon determination of the error, the association shall deleted text begin require the employer
to discontinue erroneous employee deductions and erroneous employer contributions
and additional employer contributions. Upon discontinuance, the association shall
deleted text end refund all erroneous employee deductions deleted text begin to the person, with interest, under section
353.34, subdivision 2, deleted text end and all erroneous employer contributions deleted text begin and additional employer
contributions to the employer deleted text end new text begin as specified in paragraph (d) new text end . No person may claim a right
to continued or past membership in the association based on erroneous deductions which
began on or after January 1, 1990.

(b) Erroneous deductions taken from the salary of a person who did not qualify
for membership in the association by virtue of concurrent employment before July 1,
1978, which required contributions to another retirement fund or relief association
established for the benefit of officers and employees of a governmental subdivision, are
invalid. Upon discovery of the error, the association shall remove all new text begin invalid new text end service and
new text begin upon termination of public service, the association shall new text end refund all erroneous employee
deductions to the person, with interest under section 353.34, subdivision 2, and all
erroneous employer contributions to the employer. This paragraph has both retroactive
and prospective application.

(c) Employer contributions and employee deductions taken in error from amounts
which are not salary under section 353.01, subdivision 10, are invalid upon discovery by
the association and deleted text begin may deleted text end new text begin must new text end be refunded deleted text begin at any time deleted text end new text begin as specified in paragraph (d) new text end .

(d) new text begin Upon discovery of the receipt of erroneous deductions and contributions under
paragraph (a), clause (2), or paragraph (c), the association must require the employer to
discontinue the erroneous employee deductions and erroneous employer contributions.
Upon discontinuation, the association must refund the invalid employee deductions to the
person without interest and invalid employer contributions to the employer or provide a
credit against future contributions payable by the employer for the amount of all erroneous
deductions and contributions. In the event a retirement annuity or disability benefit had
been computed using invalid service or salary, the association must adjust the annuity or
benefit and recover the overpayment under subdivision 7b.
new text end

new text begin (e) new text end In the event a salary warrant or check from which a deduction for the retirement
fund was taken has been canceled or the amount of the warrant or check returned to the
funds of the department making the payment, a refund of the sum deducted, or a portion of
it that is required to adjust the deductions, must be made to the department or institution.

new text begin (f) Any refund to a member under this subdivision that would cause the plan to fail
to be a qualified plan under section 401(a) of the Internal Revenue Code, as amended, may
not be refunded and instead must be credited against future contributions payable by the
employer. The employer receiving the credit is responsible for refunding to the applicable
employee any amount that had been erroneously deducted from the person's salary.
new text end

Sec. 12.

Minnesota Statutes 2004, section 353.27, subdivision 7a, is amended to read:

Subd. 7a.

Deductions or contributions transmitted by error.

(a) If employee
deductions and employer contributions were erroneously transmitted to the association,
but should have been transmitted to another Minnesota public pension plan, the
association shall transfer the erroneous employee deductions and employer contributions
to the appropriate retirement fund new text begin or individual account, as applicable, new text end without interest.
The time limitations in subdivisions 7 and 12 do not apply.

(b) For purposes of this subdivision, a Minnesota public pension plan means a
plan specified in section 356.30, subdivision 3, or the deleted text begin plan deleted text end new text begin plans new text end governed by deleted text begin chapter deleted text end new text begin
chapters 353D and new text end 354B.

Sec. 13.

Minnesota Statutes 2004, section 353.27, subdivision 7b, is amended to read:

Subd. 7b.

Overpayments to members.

In the event of an overpayment to a
member, new text begin retiree, beneficiary, or other person, new text end the executive director shall recover the
overpayment by suspending or reducing the payment of a retirement annuity, refund,
disability benefit, survivor benefit, or optional annuity under this chapter until all
outstanding money has been recovered.

Sec. 14.

Minnesota Statutes 2005 Supplement, section 353.28, subdivision 6, is
amended to read:

Subd. 6.

Collection of unpaid amounts.

(a) If a governmental subdivision which
receives the direct proceeds of property taxation fails to pay an amount due under chapter
353, 353A, 353B, 353C, or 353D, the executive director shall certify the amount to the
governmental subdivision for payment. If the governmental subdivision fails to remit the
sum so due in a timely fashion, the executive director shall certify the amount to the
applicable county auditor for collection. The county auditor shall collect the amount
out of the revenue of the governmental subdivision, or shall add the amount to the levy
of the governmental subdivision and make payment directly to the association. This
tax must be levied, collected, and apportioned in the manner that other taxes are levied,
collected, and apportioned.

(b) If a governmental subdivision which is not funded directly from the proceeds
of property taxation fails to pay an amount due under this chapter, the executive director
shall certify the amount to the governmental subdivision for payment. If the governmental
subdivision fails to pay the amount for a period of 60 days after certification, the executive
director shall certify the amount to the commissioner of finance, who shall deduct the
amount from any subsequent state-aid payment or state appropriation amount applicable
to the governmental subdivision new text begin and make payment directly to the association new text end .

Sec. 15.

Minnesota Statutes 2004, section 353.29, subdivision 8, is amended to read:

Subd. 8.

Annuities; payment; evidence of receipt.

Payment of any annuity or
benefit for a given month shall be mailed by the association to the annuitant, recipient
of a disability benefit, or survivor, new text begin or automatically deposited under section 356.401,
subdivision 2, new text end during the first week of that month. deleted text begin Evidence of receipt of warrants issued
by the association in payment of an annuity or benefit shall be submitted by the payee
thereof to the association periodically at times specified by the board of trustees, together
with a written declaration that the annuitant or recipient of a disability benefit has or
has not returned to public service; that the surviving dependent spouse has or has not
remarried; and shall be furnished on forms provided by the executive director thereof,
before the association shall pay to the disability recipient or survivor for the next ensuing
month, the benefit to which the person otherwise may be entitled. In lieu of the evidence
of receipt of warrants for recipients of an annuity or a benefit, deleted text end The board may contract
for professional services to identify deceased annuitants and benefit recipients through a
review of nationally maintained death records.

Sec. 16.

Minnesota Statutes 2004, section 353.30, subdivision 3a, is amended to read:

Subd. 3a.

Bounce-back annuity.

(a) If a former member or disabilitant selects a
joint and survivor annuity option under subdivision 3 new text begin on or after July 1, 1989 new text end , the former
member or disabilitant must receive a normal single life annuity if the designated optional
annuity beneficiary dies before the former member or disabilitant. Under this option, no
reduction may be made in the person's annuity to provide for restoration of the normal
single life annuity in the event of the death of the designated optional annuity beneficiary.

(b) deleted text begin A former member or disabilitant who selected an optional joint and survivor
annuity before July 1, 1989, but did not choose an option that provides that the normal
single life annuity is payable to the former member or the disabilitant if the designated
optional annuity beneficiary dies first, is eligible for restoration of the normal single life
annuity if the designated optional annuity beneficiary dies first, without further actuarial
reduction of the person's annuity. A former member or disabilitant who selected an
optional joint and survivor annuity, but whose designated optional annuity beneficiary died
before July 1, 1989, shall receive a normal single life annuity after that date, but shall not
receive retroactive payments for periods before that date deleted text end new text begin The annuity adjustment specified
in paragraph (a) also applies to joint and survivor annuity options under subdivision
3 elected prior to July 1, 1989. The annuity adjustment under this paragraph occurs on
July 1, 1989, or on the first day of the first month following the death of the designated
optional annuity beneficiary, whichever is later. This paragraph should not be interpreted
as authorizing retroactive payments new text end .

deleted text begin (c) A former member or disabilitant who took a further actuarial reduction to elect
an optional joint and survivor annuity that provides that the normal annuity is payable to
the former member or disabilitant if the designated optional beneficiary dies first but has
not died before July 1, 1989, shall have their annuity increased as of July 1, 1989, to the
amount the person would have received if, at the time of retirement or disability, the person
had selected only optional survivor coverage that would not have provided for restoration
of the normal annuity upon the death of the designated optional annuity beneficiary. Any
annuity or benefit increase under this paragraph is effective only for payments made after
June 30, 1989, and is not retroactive for payments made before July 1, 1989.
deleted text end

Sec. 17.

Minnesota Statutes 2004, section 353.30, subdivision 3b, is amended to read:

Subd. 3b.

Bounce-back annuity.

(a) The board of trustees must provide a joint
and survivor annuity option to members of the police and fire fund. deleted text begin Under this option, a deleted text end new text begin
If a joint and survivor annuity is elected on or after July 1, 1989, the new text end former member or
disabilitant must receive a normal single life annuity if the designated optional annuity
beneficiary dies before the former member or disabilitant. Under this option, no reduction
may be made in the person's annuity to provide for restoration of the normal single life
annuity in the event of the death of the designated optional annuity beneficiary.

(b) deleted text begin A former member or disabilitant of the police and fire fund who selected an
optional joint and survivor annuity before July 1, 1989, but did not choose an option
that provides that the normal single life annuity is payable to the former member or
the disabilitant if the designated optional annuity beneficiary dies first, is eligible for
restoration of the normal single life annuity if the designated optional annuity beneficiary
dies first, without further actuarial reduction of the person's annuity. A former member
or disabilitant who selected an optional joint and survivor annuity, but whose designated
optional annuity beneficiary died before July 1, 1989, shall receive a normal single life
annuity after that date, but shall not receive retroactive payments for periods before that
date deleted text end new text begin The annuity adjustment specified in paragraph (a) also applies to joint and survivor
annuity options under subdivision 3 elected prior to July 1, 1989. The annuity adjustment
under this paragraph occurs on July 1, 1989, or on the first day of the first month following
the death of the designated optional annuity beneficiary, whichever is later. This paragraph
should not be interpreted as authorizing retroactive payments new text end .

deleted text begin (c) A former member or disabilitant who took a further actuarial reduction to elect
an optional joint and survivor annuity that provides that the normal annuity is payable to
the former member or disabilitant if the designated optional beneficiary dies first but has
not died before July 1, 1989, shall have their annuity increased as of July 1, 1989, to the
amount the person would have received if, at the time of retirement or disability, the person
had selected only optional survivor coverage that would not have provided for restoration
of the normal annuity upon the death of the designated optional annuity beneficiary. Any
annuity or benefit increase under this paragraph is effective only for payments made after
June 30, 1989, and is not retroactive for payments made before July 1, 1989.
deleted text end

Sec. 18.

Minnesota Statutes 2004, section 353.32, subdivision 1a, is amended to read:

Subd. 1a.

Surviving spouse optional annuity.

(a) If a member or former member
who has credit for not less than three years of allowable service and dies before the
annuity or disability benefit begins to accrue under section 353.29, subdivision 7, or
353.33, subdivision 2, notwithstanding any designation of beneficiary to the contrary, the
surviving spouse may elect to receive, instead of a refund with interest under subdivision
1, or surviving spouse benefits otherwise payable under section 353.31, an annuity equal
to the 100 percent joint and survivor annuity that the member could have qualified for
had the member terminated service on the date of death.

(b) If the member was under age 55 and has credit for at least 30 years of allowable
service on the date of death, the surviving spouse may elect to receive a 100 percent joint
and survivor annuity based on the age of the member and surviving spouse on the date
of death. The annuity is payable using the full early retirement reduction under section
353.30, subdivisions 1b and 1c, to age 55 and one-half of the early retirement reduction
from age 55 to the age payment begins.

(c) If the member was under age 55 and has credit for at least three years of
allowable service on the date of death but did not qualify for retirement, the surviving
spouse may elect to receive the 100 percent joint and survivor annuity based on the age of
the member and surviving spouse at the time of death. The annuity is payable using the
full early retirement reduction under section 353.30, subdivision 1, 1b, 1c, or 5, to age 55
and one-half of the early retirement reduction from age 55 to the age payment begins.

new text begin (d) new text end Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20, a former spouse of the member, if any, is entitled to a portion of the monthly surviving
spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
with the association. If there is no surviving spouse or child or children, a former spouse
may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
marriage dissolution decree but not a monthly surviving spouse optional annuity despite
the terms of a marriage dissolution decree filed with the association.

new text begin (e) new text end The surviving spouse eligible for surviving spouse benefits under paragraph (a)
may apply for the annuity at any time after the date on which the deceased employee
would have attained the required age for retirement based on the employee's allowable
service. The surviving spouse eligible for surviving spouse benefits under paragraph (b)
or (c) may apply for an annuity any time after the member's death. The annuity must be
computed under sections 353.29, subdivisions 2 and 3; new text begin and new text end 353.30, subdivisions 1, 1a,
1b, 1c, and 5 deleted text begin ; and 353.31, subdivision 3 deleted text end .

new text begin (f) new text end Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
annuity or surviving spouse benefit payable under this subdivision. No payment may
accrue beyond the end of the month in which entitlement to the annuity has terminated
or upon expiration of the term certain benefit payment under subdivision 1b. An amount
equal to any excess of the accumulated contributions that were credited to the account of
the deceased employee over and above the total of the annuities paid and payable to the
surviving spouse must be paid to the deleted text begin deceased member's last designated beneficiary or, if
none, as specified under subdivision 1 deleted text end new text begin surviving spouse's estate new text end .

new text begin (g) new text end A member may specify in writing that this subdivision does not apply and that
payment may be made only to the designated beneficiary as otherwise provided by this
chapter. new text begin The waiver of a surviving spouse annuity under this section does not make a
dependent child eligible for benefits under subdivision 1c.
new text end

Sec. 19.

Minnesota Statutes 2004, section 353.32, subdivision 1b, is amended to read:

Subd. 1b.

Survivor coverage term certain.

new text begin (a) new text end In lieu of the 100 percent optional
annuity under subdivision 1a, or a refund under subdivision 1, the surviving spouse of
a deceased member may elect to receive survivor coverage for a term certain of deleted text begin five,
deleted text end ten, 15, or 20 years, but monthly payments must not exceed 75 percent of the average
high-five monthly salary of the deceased member. The monthly term certain annuity must
be actuarially equivalent to the 100 percent optional annuity under subdivision 1a.

new text begin (b) new text end If a surviving spouse elects a term certain annuity and dies before the expiration
of the specified term certain period, the commuted value of the remaining annuity
payments must be paid in a lump sum to the survivor's estate.

Sec. 20.

Minnesota Statutes 2004, section 353.33, subdivision 1, is amended to read:

Subdivision 1.

Age, service, and salary requirements.

A coordinated member
who has at least three years of allowable service and becomes totally and permanently
disabled before normal retirement age, and a basic member who has at least three years
of allowable service and who becomes totally and permanently disabled is entitled to a
disability benefit in an amount new text begin determined new text end under subdivision 3. If the disabled person's
public service has terminated at any time, at least two of the required three years of
allowable service must have been rendered after last becoming deleted text begin a deleted text end new text begin an active new text end member. A
repayment of a refund must be made within six months after the effective date of disability
benefits under subdivision 2 or within six months after the date of the filing of the
disability application, whichever is later. No purchase of prior service or payment made
in lieu of salary deductions otherwise authorized under section 353.01, subdivision 16,
deleted text begin 353.017, subdivision 4, or 353.36, subdivision 2, deleted text end may be made after the occurrence of the
disability for which an application under this section is filed.

Sec. 21.

Minnesota Statutes 2004, section 353.33, subdivision 9, is amended to read:

Subd. 9.

Return to deleted text begin public service deleted text end new text begin employment new text end .

new text begin (a) new text end Any person receiving a
disability benefit new text begin under this section new text end who is restored to deleted text begin active public service except persons
receiving benefits as provided in deleted text end new text begin employment not covered by new text end subdivision 7 deleted text begin , deleted text end new text begin or 7a new text end shall
have new text begin the disability benefit discontinued on the first day of the month following the return
to employment.
new text end

new text begin (b) If the person is employed by a governmental subdivision as defined under
section 353.01, subdivision 6, new text end deductions new text begin must be new text end taken for the retirement fund and upon
subsequent retirement have the retirement annuity payable based upon all allowable
service including that upon which the disability benefits were based.

new text begin (c) If the employment is not through public service covered under this chapter, the
account may be placed on a deferred status and the subsequent retirement annuity will
be calculated as provided in section 353.34, subdivision 3, if the person meets the length
of allowable service requirement stated in that subdivision; or the person may request a
refund of any remaining employee deductions. The refund shall be in an amount equal
to the accumulated employee deductions plus six percent interest compounded annually
less the sum of the disability benefits paid to the member.
new text end

Sec. 22.

new text begin [353.335] DISABILITANT EARNINGS REPORTS.
new text end

new text begin Disability benefit recipients must report all earnings from reemployment and income
from workers' compensation to the association annually by May 15 in a format prescribed
by the executive director. If the form is not submitted by May 15, benefits will be
suspended effective June 1. Upon receipt of the form, if the disability benefit recipient
is deemed to be eligible for continued payment, benefits will be reinstated retroactive
to June 1.
new text end

Sec. 23.

Minnesota Statutes 2004, section 353.34, subdivision 1, is amended to read:

Subdivision 1.

Refund or deferred annuity.

(a) A former member is entitled
to a refund of accumulated employee deductions under subdivision 2, or to a deferred
annuity under subdivision 3. Application for a refund may not be made prior to the date
of termination of public service deleted text begin or the termination of membership, whichever is sooner deleted text end .
Except as specified in paragraph (b), a refund must be paid within 120 days following
receipt of the application unless the applicant has again become a public employee
required to be covered by the association.

(b) If an individual was deleted text begin granted an authorized temporary deleted text end new text begin placed on new text end layoff new text begin under
subdivision 12 or 12c new text end , a refund is not payable before termination of deleted text begin membership deleted text end new text begin service
new text end under deleted text begin section 353.01, subdivision 11b, clause (3) deleted text end new text begin subdivision 11a new text end .

(c) An individual who terminates public service covered by the Public Employees
Retirement Association general plan, the Public Employees Retirement Association police
and fire plan, or the public employees local government corrections service retirement
plan, and who new text begin is employed by a different employer and new text end becomes an active member
covered by one of the other two plans, may receive a refund of employee contributions
plus six percent interest compounded annually from the plan in which the member
terminated service.

Sec. 24.

Minnesota Statutes 2004, section 353.656, subdivision 4, is amended to read:

Subd. 4.

Limitation on disability benefit payments.

(a) No member is entitled to
receive a disability benefit payment when there remains to the member's credit unused
annual leave or sick leave or under any other circumstances when, during the period of
disability, there has been no impairment of the person's salary as a police officer deleted text begin or deleted text end new text begin , new text end a
firefighter, new text begin or a paramedic as defined in section 353.64, subdivision 10, new text end whichever applies.

(b) If a disabled member resumes a gainful occupation with earnings deleted text begin less than deleted text end new text begin ,
that when added to the normal disability benefit, and workers' compensation benefit
if applicable, exceed new text end the disabilitant reemployment earnings limit, the amount of the
disability benefit must be reduced as provided in this paragraph. The disabilitant
reemployment earnings limit is the greater of:

(1) the salary earned at the date of disability; or

(2) 125 percent of the new text begin base new text end salary currently paid by the employing governmental
subdivision for similar positions.

The disability benefit must be reduced by one dollar for each three dollars by which
the total amount of the current disability benefit, any workers' compensation benefits new text begin if
applicable new text end , and actual earnings exceed the greater disabilitant reemployment earnings
limit. In no event may the disability benefit as adjusted under this subdivision exceed
the disability benefit originally allowed.

Sec. 25.

Minnesota Statutes 2004, section 353D.01, subdivision 2, is amended to read:

Subd. 2.

Eligibility.

(a) Eligibility to participate in the defined contribution plan
is available to:

(1) elected local government officials of a governmental subdivision who elect to
participate in the plan under section 353D.02, subdivision 1, and who, for the elected
service rendered to a governmental subdivision, are not members of the Public Employees
Retirement Association within the meaning of section 353.01, subdivision 7;

(2) physicians who, if they did not elect to participate in the plan under section
353D.02, subdivision 2, would meet the definition of member under section 353.01,
subdivision 7;

(3) basic and advanced life support emergency medical service personnel employed
by deleted text begin or providing services for deleted text end any public ambulance service deleted text begin or privately operated ambulance
service that receives an operating subsidy from a governmental entity deleted text end that elects to
participate under section 353D.02, subdivision 3;

(4) members of a municipal rescue squad associated with Litchfield in Meeker
County, or of a county rescue squad associated with Kandiyohi County, if an independent
nonprofit rescue squad corporation, incorporated under chapter 317A, performing
emergency management services, and if not affiliated with a fire department or ambulance
service and if its members are not eligible for membership in that fire department's or
ambulance service's relief association or comparable pension plan; and

(5) employees of the Port Authority of the city of St. Paul who elect to participate in
the plan under section 353D.02, subdivision 5, and who are not members of the Public
Employees Retirement Association under section 353.01, subdivision 7.

(b) For purposes of this chapter, an elected local government official includes
a person appointed to fill a vacancy in an elective office. Service as an elected local
government official only includes service for the governmental subdivision for which the
official was elected by the public-at-large. Service as an elected local government official
ceases and eligibility to participate terminates when the person ceases to be an elected
official. An elected local government official does not include an elected county sheriff.

(c) Individuals otherwise eligible to participate in the plan under this subdivision
who are currently covered by a public or private pension plan because of their employment
or provision of services are not eligible to participate in the public employees defined
contribution plan.

(d) A former participant is a person who has terminated eligible employment or
service and has not withdrawn the value of the person's individual account.

Sec. 26.

Minnesota Statutes 2004, section 353D.02, subdivision 3, is amended to read:

Subd. 3.

Eligible ambulance service personnel.

Each public ambulance service
deleted text begin or privately operated ambulance service deleted text end with eligible personnel deleted text begin that receives an operating
subsidy from a governmental entity deleted text end may elect to participate in the plan. If a service elects
to participate, its eligible personnel may elect to participate or to decline to participate. An
individual's election must be made within 30 days of the service's election to participate
or 30 days of the date on which the individual was employed by the service or began to
provide service for it, whichever date is later. An election by a service or an individual is
revocable.

Sec. 27.

Minnesota Statutes 2004, section 353E.02, subdivision 2, is amended to read:

Subd. 2.

Local government correctional service employee.

(a) A local
government correctional service employee, for purposes of subdivision 1, is a person
whom the employer certifies:

(1) is employed in a county correctional institution as a correctional guard or officer,
a joint jailer/dispatcher, or as a supervisor of correctional guards or officers or of joint
jailers/dispatchers new text begin or identical position to the positions listed in this clause as determined
by the employing governmental unit new text end ;

(2) is directly responsible for the direct security, custody, and control of the county
correctional institution and its inmates;

(3) is expected to respond to incidents within the county correctional institution as
part of the person's regular employment duties and is trained to do so; and

(4) is a "public employee" as defined in section 353.01, but is not a member of
the public employees police and fire fund.

(b) The certification required under paragraph (a) must be made in deleted text begin writing on deleted text end a
deleted text begin form deleted text end new text begin format new text end prescribed by the executive director of the Public Employees Retirement
Association.

(c) A person who was a member of the local government correctional service
retirement plan on May 15, 2000, remains a member of the plan after May 16, 2000, for
the duration of the person's employment in that county correctional institution position,
even if the person's subsequent service in this position does not meet the requirements
set forth in paragraph (a).

Sec. 28.

Minnesota Statutes 2004, section 353E.02, subdivision 3, is amended to read:

Subd. 3.

County correctional institution.

A county correctional institution is:

(1) a jail administered by a county;

(2) a correctional facility administered by a county; deleted text begin or
deleted text end

(3) a regional correctional facility administered by or on behalf of multiple counties new text begin ;
or
new text end

new text begin (4) a juvenile correctional facility administered by a county or on behalf of multiple
counties new text end .

Sec. 29.

Laws 2004, chapter 267, article 8, section 41, is amended to read:

Sec. 41. [REPEALER.]

(a) Minnesota Statutes 2002, sections 353.33, subdivision 5b; and 490.11, are
repealed on July 1, 2004.

(b) deleted text begin Sections deleted text end new text begin Section new text end 3 deleted text begin and 19 are deleted text end new text begin is new text end repealed on July 1, 2006.

Sec. 30. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 29 are effective July 1, 2006.
new text end