HF 3558

as introduced - 86th Legislature (2009 - 2010) Posted on 03/09/2010 10:34am

A bill for an act
relating to state government; requiring a reduction in the state workforce;
creating an early retirement program; proposing coding for new law in Minnesota
Statutes, chapter 43A.

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

Section 1.

new text begin [43A.347] REDUCTION IN STATE WORK FORCE; EARLY
RETIREMENT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Required reduction. new text end

new text begin The state of Minnesota shall reduce the state
government workforce and associated costs by at least 15 percent by June 30, 2015, by
using any or all of the following: early retirement, furloughs, layoffs, a hard hiring freeze,
a wage freeze, and by restructuring pension programs to defined contribution plans. The
early retirement program in this section is enacted to assist the state and its employees to
comply with the required 15 percent reduction.
new text end

new text begin Subd. 2. new text end

new text begin Early retirement program; actuarial analysis. new text end

new text begin Following enactment of
this section and prior to implementation of the early retirement program in this section, the
Department of Management and Budget shall perform an actuarial analysis to determine: a
minimum and maximum number of retirees allowable under the early retirement program
specified in this section; the percentage of the early retirement program savings to be
returned to the pension fund over a prescribed period of time in order to cover the cost to
the pension fund of the early retirement program specified in this section. The department
shall use the findings in implementing the early retirement program.
new text end

new text begin Subd. 3. new text end

new text begin Early retirement program. new text end

new text begin Notwithstanding any law to the contrary,
a state employee who terminates state service before a date to be determined by the
commissioner of management and budget, not to be more than the number of employees
determined by the department, may apply for and receive a normal retirement annuity
without any reduction due to retirement before the normal retirement age from the public
pension plan of which the employee is a member, under the following conditions:
new text end

new text begin (1) the employee must have at least eight years of service credit in the person's
public pension plan on the date of termination, and the employee's combination of age
and years of service in that pension plan on the date of termination must be equal to
or greater than 70;
new text end

new text begin (2) the employee must be at least 50 years old on the date of termination; and
new text end

new text begin (3) the employee must not have received a retirement annuity from a Minnesota
public pension plan before the date of terminating state service for purposes of this section.
new text end

new text begin Subd. 4. new text end

new text begin Purchase of additional service credit. new text end

new text begin If an employee's combination of
age and years of service in the person's public pension plan is not equal to or greater
than 70, the person may purchase up to five years of service credit, in increments of
one month, by making an additional contribution to the pension plan. For each month
of service credit purchased, the required contribution is the employee contribution rate
for the person's pension plan multiplied by the employee's monthly salary at the time the
purchase is made. A person may purchase service credit under this subdivision only if the
person terminates state service upon making the purchase.
new text end

new text begin Subd. 5. new text end

new text begin Deferred annuity. new text end

new text begin A person who meets the conditions of subdivision 2 at
the time of termination but who is not at least 50 years old may terminate state service
and apply for and receive the unreduced annuity specified in subdivision 2 when the
person attains the age of 50.
new text end

new text begin Subd. 6. new text end

new text begin Extension of deadline. new text end

new text begin To ensure that the efficient operation of state
government is not jeopardized by the simultaneous retirement of large numbers of key
personnel, an appointing authority may extend the June 30, 2015, deadline for terminating
state employment by notifying the executive director of the Minnesota State Retirement
System in writing.
new text end

new text begin Subd. 7. new text end

new text begin Best practices. new text end

new text begin In implementing this section, the commissioner of
management and budget and affected agencies shall utilize best practices as identified by
other states that have implemented early retirement programs.
new text end

new text begin Subd. 8. new text end

new text begin Hiring freeze. new text end

new text begin To promote streamlined government and reduced costs, no
state appointing authority may fill a position vacated through state employee participation
in the early retirement program unless the existence of the specific position is mandated
by law.
new text end

new text begin Subd. 9. new text end

new text begin Reemployment prohibition. new text end

new text begin An employee who receives a higher annuity
as a result of retiring under this section, instead of retiring under law in effect before
enactment of this section may not be reemployed with the state or receive payment from
the state as a consultant for five years after termination.
new text end

new text begin Subd. 10. new text end

new text begin Pension fund return. new text end

new text begin The commissioner of management and budget
must determine the annual savings realized by each state appointing authority as a result
of not paying compensation to employees who terminate service under this section.
The commissioner must transfer from the appropriation to the appointing authority to
the applicable pension fund the percent of the cost savings realized by the appointing
authority through the early retirement program under this section over the number of years
determined by the actuarial analysis in subdivision 2, to cover the increased cost to the
pension fund of the early retirement incentive.
new text end

new text begin Subd. 11. new text end

new text begin Pension reform. new text end

new text begin Following implementation of the early retirement
program, the commissioner of management and budget shall establish a panel to study and
make recommendations for reforming the state employee retirement pension program.
new text end

new text begin Subd. 12. new text end

new text begin Not applicable to elected officials. new text end

new text begin A state elected official is not a state
employee for purposes of this section.
new text end