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HF 4

3rd Engrossment - 87th Legislature (2011 - 2012) Posted on 05/03/2011 04:37pm

KEY: stricken = removed, old language. underscored = added, new language.


Version List Authors and Status

Bill Text Versions


Introduction Pdf Posted on 01/10/2011
1st Engrossment Pdf Posted on 01/20/2011
2nd Engrossment Pdf Posted on 02/17/2011
3rd Engrossment Pdf Posted on 05/03/2011

Current Version - 3rd Engrossment

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.


Section 1.


Subdivision 1.

Required reduction.

(a) The number of full-time equivalent
employees employed in the executive branch, and the costs directly associated with
employing those persons, must be reduced by at least 12 percent by June 30, 2013, and 15
percent by June 30, 2015, and thereafter, compared to the number of full-time equivalent
positions and the costs directly associated with those positions on January 1, 2011.

(b) An appointing authority may use any or all of the following to achieve this
requirement: attrition, a hard hiring freeze, early retirement incentives authorized in this
section, restructuring of benefit or pension programs as authorized by other law, furloughs,
and layoffs. The early retirement program in this section is enacted as a tool to assist in
complying with the required 15 percent reduction.

(c) For purposes of this section:

(1) "costs directly associated" with employing people means the cost of salaries and
benefits, including the costs of employer contributions to public pension plans; and

(2) "executive branch" does not include the Minnesota State Colleges and

Subd. 2.


Before authorizing an early retirement under subdivision 3 or
4, the commissioner must perform analysis, including actuarial analysis, as necessary to
determine the maximum number of employees to whom incentives will be offered, and the
percentage of resulting savings estimated to be needed to pay pension funds to cover costs
to the funds of the incentive in this section. The commissioner must use this analysis in
determining how to best implement this section.

Subd. 3.

Pension early retirement incentive.

(a) The commissioner of management
and budget may authorize an executive branch appointing authority to offer an early
retirement incentive under this subdivision to an employee who upon retirement would be
immediately eligible to receive an annuity from the public pension plan under which the
employee is covered immediately before separation from state service. The commissioner
may establish time periods during which the incentive may be offered and during which
the incentive must be accepted, may establish limits on the number of employees to whom
an appointing authority, or all appointing authorities collectively, may offer the incentive,
and may establish other conditions for the incentive.

(b) For an employee offered an incentive under this subdivision, for each full
year of service credit that the employee has in a plan administered by the Minnesota
State Retirement System, the Public Employees Retirement Association, or the Teachers
Retirement Association, the employee must be granted an additional month of service
credit in the plan under which the employee is covered immediately before separation
from state service under this subdivision.

(c) Upon request of an appointing authority considering offering an incentive under
this subdivision, the executive director of the public pension plan in which an employee
would be granted additional service credit under this subdivision must prepare an estimate
of the present value of the additional service credit that would be granted to an employee
under this subdivision. For each employee accepting an incentive under this subdivision,
the appointing authority offering the incentive must pay the applicable public pension
plan, from the first dollars of savings achieved through offering the incentive, the present
value of the additional service credit granted to the employee, taking into account the date
payment will be received from the appointing authority. The appointing authority must
make this payment to the pension plan within one year of the date the employee accepting
the incentive leaves state service.

Subd. 4.

Insurance early retirement incentive.

The commissioner of management
and budget may authorize an executive appointing authority to offer the incentive
originally offered under Laws 2010, chapter 337, to employees who retire from state
service during periods that the commissioner specifies before June 30, 2015. The terms and
conditions specified in Laws 2010, chapter 337, apply to an incentive offered under this
subdivision, except for the dates specified in that law for accepting the incentive and for
retiring, and except that the prohibition on reemployment or contracting is for the period
specified in this section, instead of the shorter period specified in Laws 2010, chapter 337.

Subd. 5.

Best practices.

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.

Subd. 6.

Hiring freeze.

To promote streamlined government and reduced costs,
no state appointing authority may fill by outside hire a position vacated through state
employee participation in an early retirement incentive under this section.

Subd. 7.

Reemployment prohibition.

An employee who receives an early
retirement incentive under this section may not be reemployed with the state or enter into
a contract with the state as a consultant for five years after termination.

Subd. 8.


Savings resulting from implementation of this section, after
any payments made under subdivisions 3 and 4, must cancel back to the fund in which
the savings occurred.

Subd. 9.

Not applicable to elected officials.

A state elected official is not a state
employee for purposes of this section.

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