HF 3686

as introduced - 90th Legislature (2017 - 2018) Posted on 03/12/2018 02:23pm

A bill for an act
relating to retirement; retirement systems generally; requiring annual stress testing;
proposing coding for new law in Minnesota Statutes, chapter 356.

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

Section 1.

new text begin [356.231] STRESS TESTING.
new text end

new text begin (a) The board of directors of the Minnesota State Retirement System, the board of trustees
of the Public Employees Retirement System, the board of trustees of the Teachers Retirement
Association, and the board of trustees of the St. Paul Teachers Retirement Fund Association
shall adopt a uniform method to conduct and report annual sensitivity and stress test analyses
of the pension plans they administer.
new text end

new text begin (b) The uniform method adopted shall be a method recommended by an organization
of actuaries in accordance with generally accepted and nationally recognized actuarial
standards.
new text end

new text begin (c) The stress test analyses shall include:
new text end

new text begin (1) projections that consider the effects of long-term conditions and patterns of behavior
of the investment market to assess the impact on each pension plan in periods when market
returns are significantly above or below baseline assumed returns;
new text end

new text begin (2) projections of assets, liabilities, pension debt, service costs, employee contributions,
employer contributions, net amortization, benefit payments, payroll, and funded ratio for
each pension plan for each of the next thirty years based upon the then-current actuarial
assumptions, including the assumed investment rate of return;
new text end

new text begin (3) projections for the items listed in clause (2), assuming that investment returns are
two percentage points lower than the assumed rate of return; and
new text end

new text begin (4) projections of the items listed in clause (2), if there is a one-year loss on investments
of twenty percent followed by a twenty-year period of investment returns two percentage
points below the assumed rate of return.
new text end

new text begin (d) The board of directors and boards of trustees shall deliver the stress test analyses for
each pension plan they administer to the executive director of the Legislative Commission
on Pensions and Retirement no later than March 1 each year.
new text end

new text begin (e) The Legislative Commission on Pensions and Retirement shall post, on its Web site
and in the same location as other actuarial valuation reports, the stress test analyses required
pursuant to this section.
new text end

new text begin EFFECTIVE DATE. new text end

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