HF 3145

as introduced - 90th Legislature (2017 - 2018) Posted on 02/26/2018 02:51pm

A bill for an act
relating to retirement; Public Employees Retirement Association; public employees
defined contribution plan; permitting distributions while employed; clarifying
provisions; amending Minnesota Statutes 2016, section 353D.07.

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

Section 1.

Minnesota Statutes 2016, section 353D.07, is amended to read:

353D.07 BENEFITS.

Subdivision 1.

Type of plan; uniformity.

(a) The plan is a defined contribution plan deleted text begin
the benefits from which are payable upon termination of service, retirement, disability, or deleted text end
deleted text begin death. The amount of benefits is determined by the value of accumulated deleted text end new text begin . A participant's
benefit is equal to the value of the individual account established for the participant under
section 353D.04, taking into account all new text end contributions new text begin credited to the account new text end plus a
proportionate share of investment income of the fund credited to deleted text begin each individual deleted text end new text begin the new text end account.

(b) In the case of ambulance service personnel, eligibility standards must be uniform
among all ambulance service personnel of an ambulance service electing to participate.

Subd. 2.

Payment of benefits.

deleted text begin Withdrawal of a benefit based on individual participant
contributions and employer contributions plus accrued investment income is payable upon
the death or termination of a participant but not at the time an individual revokes membership
in the defined contribution plan under section 353D.02. An application by or on behalf of
the participant must be filed before any payment of benefits may be made. deleted text end new text begin (a) A participant
is entitled to receive a distribution of the participant's benefit after termination of service
for any reason, disability, death, or on or after attaining age 65 if still employed by a public
employer.
new text end

new text begin (b) Unless the distribution is required under section 353D.071, no distribution shall be
made unless the participant has submitted an application requesting a distribution; a direct
rollover; a transfer as permitted under subdivision 3, paragraph (b); or installments as
permitted under subdivision 4. If the distribution is an eligible rollover distribution as defined
in section 356.635, subdivision 4, the executive director shall provide notice to the participant
or beneficiary, as applicable, of the right to elect a direct rollover.
new text end

Subd. 3.

Form of benefit.

deleted text begin A retirement deleted text end new text begin (a) Except as provided in subdivision 4 or 6,
distribution of a participant's new text end benefit deleted text begin is payable deleted text end new text begin shall be available new text end in new text begin the form of new text end a lump sum
equal to the value of deleted text begin a deleted text end new text begin the new text end participant's account at the date of deleted text begin withdrawal. As an alternative
to a lump-sum distribution, the participant may choose to have the association transfer the
total account value deleted text end new text begin distribution.
new text end

new text begin (b) The participant may elect to (1) receive the lump sum directly, (2) have the lump
sum distributed in a direct rollover as described in section 356.635, subdivision 3, or (3)
have the lump sum transferred new text end for the purchase of an annuity payable at a designated age
to an insurance company of the participant's choice that is licensed to do business in the
state.

Subd. 4.

Disability of participant.

If deleted text begin an active deleted text end new text begin a new text end participant becomes permanently and
totally disabled as defined in section 353.01, subdivision 19, deleted text begin that deleted text end new text begin the new text end participant may
deleted text begin withdraw from the deleted text end new text begin elect distribution of the participant's benefit in a lump sum equal to the
value of the participant's new text end account new text begin or new text end in equal monthly installments new text begin in new text end an amount deleted text begin , deleted text end designated
by the participant in increments of $100 deleted text begin but not to exceed ten times the joint employer and
employee contribution for the month preceding disability. The option must be exercised by
filing an application on a form prescribed by the executive director deleted text end . Payments new text begin may new text end begin
deleted text begin on deleted text end new text begin as early as new text end the first day of the month following the month in which the disability occurred new text begin
or on a later date if elected by the participant new text end . Payments end when the participant's disabled
status ends or the account balance is exhausted, whichever occurs first.

Subd. 5.

Death of a participant.

If deleted text begin an active deleted text end new text begin a new text end participant dies new text begin while employed or before
the participant's account is distributed in its entirety new text end , the deleted text begin total value of the deleted text end account must be
paid in a lump sum to the designated beneficiary or, if none, the heirs at law of the decedent. new text begin
If the distribution is an eligible rollover distribution as defined in section 356.635, subdivision
4, the executive director shall provide an election form and notice of the right to elect a
direct rollover.
new text end

new text begin Subd. 6. new text end

new text begin Distributions while employed. new text end

new text begin If a participant is employed by a public employer
and is at least age 65, the participant may elect a distribution of all or a portion of the
participant's account, subject to the application and notice requirements in subdivision 2,
paragraph (b). The participant may elect a distribution under this subdivision no more
frequently than once each calendar year. The minimum amount of a distribution under this
subdivision is $5,000.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2018.
new text end