HF 4017

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/31/2022 06:43pm

A bill for an act
relating to retirement; state auditor's volunteer fire relief association working group;
simplifying maximum benefit levels, modifying certification of service credit
process, modifying distributions to alternate payees pursuant to a domestic relations
order, clarifying payment of supplemental benefits, and making conforming
changes; amending Minnesota Statutes 2020, sections 424A.003; 424A.015,
subdivision 2; 424A.05, subdivision 3, by adding a subdivision; Minnesota Statutes
2021 Supplement, sections 353G.11, subdivision 1; 424A.02, subdivisions 3, 3a;
424A.091, subdivision 3; 424A.093, subdivision 1; 424A.10, subdivision 2;
424B.10, subdivision 1b; 424B.13, subdivision 4; 424B.22, subdivision 4; repealing
Minnesota Statutes 2021 Supplement, section 424A.02, subdivisions 2a, 2b, 2c.

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

Section 1.

Minnesota Statutes 2021 Supplement, section 353G.11, subdivision 1, is
amended to read:

Subdivision 1.

Service pension levels; lump-sum retirement division.

Except as
provided in subdivision 1a, the lump-sum retirement division of the retirement plan provides
the following levels of service pension amounts per full year of good time service credit to
be selected at the election of coverage:

(1) a minimum service pension level of $500 per year;

(2) a maximum service pension level equal to the deleted text begin largest deleted text end new text begin maximum lump-sum service
pension new text end amount permitted under section 424A.02, deleted text begin subdivision 2c deleted text end new text begin subdivision 3 new text end , deleted text begin as a
maximum lump-sum service pension amount deleted text end payable for each year of service; and

(3) service pension levels between the minimum level and the maximum level in $100
increments.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

Sec. 2.

Minnesota Statutes 2020, section 424A.003, is amended to read:

424A.003 CERTIFICATION OF SERVICE CREDIT.

(a) When a municipal fire department, a joint powers fire department, or an independent
nonprofit firefighting corporation is directly associated with the volunteer firefighters relief
association, the fire chief shall certify annually by March 31 the service credit for the
previous calendar year of each volunteer firefighter rendering active service with the fire
department.

(b) The certification shall be made to an officer of the relief association's board of trustees
and to the municipal clerk or clerk-treasurer of the largest municipality in population served
by the associated fire department.

(c) The fire chief shall notify each volunteer firefighter rendering active service with
the fire department of the amount of service credit rendered by the firefighter for the previous
calendar year. new text begin Upon request, the fire chief shall provide the firefighter with a written
explanation and documentation to support the determination of service credit. new text end The service
credit notification and a description of the process and deadlines for the firefighter to
challenge the fire chief's determination of service credit must be provided to the firefighter
at least 21 days prior to its certification to the relief association and municipality. If the
service credit amount is challenged, the fire chief shall accept and consider any additional
pertinent information and shall make a final determination of service credit.

(d) The service credit certification must be expressed as the number of completed months
of the previous year during which an active volunteer firefighter rendered at least the
minimum level of duties as specified and required by the fire department under the rules,
regulations, and policies applicable to the fire department. No more than one year of service
credit may be certified for a calendar year.

(e) If a volunteer firefighter who is a member of the relief association leaves active
firefighting service to render active military service that is required to be governed by the
federal Uniformed Services Employment and Reemployment Rights Act, as amended, the
firefighter must be certified as providing service credit for the period of the military service,
up to the applicable limit of the federal Uniformed Services Employment and Reemployment
Rights Act. If the volunteer firefighter does not return from the military service in compliance
with the federal Uniformed Services Employment and Reemployment Rights Act, the service
credits applicable to that military service credit period are forfeited and canceled at the end
of the calendar year in which the time limit set by federal law occurs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2020, section 424A.015, subdivision 2, is amended to read:

Subd. 2.

No assignment or garnishment.

new text begin Except as provided in sections 424A.05,
518.58, 518.581, and 518A.53:
new text end

new text begin (1) new text end a service pension or ancillary benefits paid or payable from the special fund of a
relief association to any person receiving or entitled to receive a service pension or ancillary
benefits is not subject to garnishment, judgment, execution, or other legal process deleted text begin , except
as provided in section 518.58, 518.581, or 518A.53. deleted text end new text begin ; and
new text end

new text begin (2) new text end no person entitled to a service pension or ancillary benefits from the special fund of
a relief association may assign any service pension or ancillary benefit payments, and the
association does not have the authority to recognize any assignment or pay over any sum
which has been assigned.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2021 Supplement, section 424A.02, subdivision 3, is amended
to read:

Subd. 3.

Determining maximum pension benefit.

(a) new text begin Except as provided in section
424B.22, subdivision 4, a defined benefit relief association may not set in its bylaws a
service pension amount above the following maximum amounts:
new text end

new text begin (1) new text end for a defined benefit relief association in which the governing bylaws provide for a
monthly deleted text begin benefit deleted text end service pension deleted text begin as an alternative form of service pension payment to a
lump-sum service pension deleted text end , the maximum new text begin monthly new text end service pension amount deleted text begin for each pension
payment type must be determined using the applicable table contained in subdivision 2b or
2c. deleted text end new text begin per month for each year of service credited is $100; and
new text end

new text begin (2) for a defined benefit relief association in which the governing bylaws provide for a
lump-sum service pension, the maximum lump-sum service pension amount for each year
of service credited is $15,000.
new text end

deleted text begin (b) If a defined benefit relief association establishes a service pension in compliance
with the applicable maximum contained in subdivision 2b or 2c and the minimum average
amount of available financing per active covered firefighter is subsequently reduced because
of a reduction in fire state aid or because of an increase in the number of active firefighters,
the relief association may continue to provide the prior service pension amount specified
in its bylaws, but may not increase the service pension amount until the minimum average
amount of available financing per firefighter under the table in subdivision 2b or 2c,
whichever applies, permits.
deleted text end

deleted text begin (c) No defined benefit relief association is authorized to provide a service pension in an
amount greater than the largest applicable flexible service pension maximum amount even
if the amount of available financing per firefighter is greater than the financing amount
associated with the largest applicable flexible service pension maximum.
deleted text end

deleted text begin (d) deleted text end new text begin (b) new text end The method of calculating service pensions must be applied uniformly for all
years of active service. Credit must be given for all years of active service, unless the bylaws
of the relief association provide that service credit is not given for:

(1) years of active service in excess of caps on service credit; or

(2) years of active service earned by a former member who:

(i) has ceased duties as a volunteer firefighter with the fire department before becoming
vested under subdivision 2; and

(ii) has not resumed active service with the fire department and active membership in
the relief association for a period as defined in the relief association's bylaws, of not less
than five years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

Sec. 5.

Minnesota Statutes 2021 Supplement, section 424A.02, subdivision 3a, is amended
to read:

Subd. 3a.

Penalty for paying pension greater than applicable maximum.

(a) If a
defined benefit relief association pays a service pension greater than the new text begin applicable new text end maximum
service pension deleted text begin associated with the applicable average deleted text end amount deleted text begin of available financing per
active covered firefighter under the table in subdivision 2b or 2c, whichever applies, the
maximum service pension deleted text end under subdivision 3, deleted text begin paragraph (b), or the applicable maximum
service pension amount specified in subdivision 3, paragraph (c), whichever is less, deleted text end the state
auditor shall:

(1) disqualify the municipality or the independent nonprofit firefighting corporation
associated with the relief association from receiving fire state aid by making the appropriate
notification to the municipality and the commissioner of revenue, with the disqualification
applicable for the next apportionment and payment of fire state aid; and

(2) order the treasurer of the applicable relief association to recover the amount of the
overpaid service pension or pensions from any retired firefighter who received an
overpayment.

(b) Fire state aid amounts from disqualified municipalities for the period of
disqualifications under paragraph (a), clause (1), must be credited to the amount of fire
insurance premium tax proceeds available for the next subsequent fire state aid
apportionment.

(c) The amount of any overpaid service pension recovered under paragraph (a), clause
(2), must be credited to the amount of fire insurance premium tax proceeds available for
the next subsequent fire state aid apportionment.

(d) The determination of the state auditor that a relief association has paid a service
pension greater than the applicable maximum must be made on the basis of the information
filed by the relief association and the municipality with the state auditor under this chapter
and any other relevant information that comes to the attention of the state auditor. The
determination of the state auditor is final. An aggrieved municipality, relief association, or
person may appeal the determination under section 480A.06.

(e) The state auditor may certify, upon learning that a relief association overpaid a service
pension based on an error in the maximum service pension calculation, the municipality or
independent nonprofit firefighting corporation associated with the relief association for fire
state aid if (1) there is evidence that the error occurred in good faith, and (2) the relief
association has initiated recovery of any overpayment amount. Notwithstanding paragraph
(c), all overpayments recovered under this paragraph must be credited to the relief
association's special fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

Sec. 6.

Minnesota Statutes 2020, section 424A.05, subdivision 3, is amended to read:

Subd. 3.

Authorized disbursements from special fund.

(a) Disbursements from the
special fund may not be made for any purpose other than one of the following:

(1) for the payment of service pensions to retired members of the relief association if
authorized and paid under law and the bylaws governing the relief association;

(2) for the purchase of an annuity for the applicable person under section 424A.015,
subdivision 3, for the transfer of service pension or benefit amounts to the applicable person's
individual retirement account under section 424A.015, subdivision 4, or to the applicable
person's account in the Minnesota deferred compensation plan under section 424A.015,
subdivision 5;

(3) for the payment of temporary or permanent disability benefits to disabled members
of the relief association if authorized and paid under law and specified in amount in the
bylaws governing the relief association;

(4) for the payment of survivor benefits or for the payment of a death benefit to the estate
of the deceased active or deferred firefighter, if authorized and paid under law and specified
in amount in the bylaws governing the relief association;

(5) for the payment of the fees, dues and assessments to the Minnesota State Fire
Department Association and to the Minnesota State Fire Chiefs Association in order to
entitle relief association members to membership in and the benefits of these associations
or organizations;

(6) for the payment of insurance premiums to the state Volunteer Firefighters Benefit
Association, or an insurance company licensed by the state of Minnesota offering casualty
insurance, in order to entitle relief association members to membership in and the benefits
of the association or organization; deleted text begin and
deleted text end

(7) for the payment of administrative expenses of the relief association as authorized
under subdivision 3b deleted text begin . deleted text end new text begin ; and
new text end

new text begin (8) for the payment of a service pension to the former spouse of a member or former
member of a relief association, if the former spouse is an alternate payee designated in a
qualified domestic relations order under subdivision 5.
new text end

(b) Checks or authorizations for electronic fund transfers for disbursements authorized
by this section must be signed by the relief association treasurer and at least one other elected
trustee who has been designated by the board of trustees to sign the checks or authorizations.
A relief association may make disbursements authorized by this subdivision by electronic
fund transfers only if the specific method of payment and internal control policies and
procedures regarding the method are approved by the board of trustees.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2020, section 424A.05, is amended by adding a subdivision to
read:

new text begin Subd. 5. new text end

new text begin Qualified domestic relations orders. new text end

new text begin (a) A "qualified domestic relations order"
means a domestic relations order that creates or recognizes the existence of an alternate
payee's right to or assigns to an alternate payee the right to receive a service pension that is
all or any portion of the service pension payable with respect to a member or former member
of a relief association.
new text end

new text begin (b) An "alternate payee" means the former spouse of a member or former member of a
relief association, including a former spouse who is a distributee as defined in section
356.635, subdivision 7, clause (3).
new text end

new text begin (c) A relief association must comply with a qualified domestic relations order purporting
to assign all or a portion of a service pension accrued under the retirement plan of the relief
association, to the extent vested, if the payment or payments required by the order are within
the limits described in section 518.58, subdivision 4, paragraph (a), clauses (1) to (4). For
the purpose of applying section 518.58, subdivision 4, paragraph (a), "plan" or "pension
plan" as used in paragraph (a) means the articles or bylaws of the relief association and
chapter 424A, as applicable to the relief association.
new text end

new text begin (d) Notwithstanding any state law to the contrary, the bylaws of a relief association may
permit distribution to an alternate payee under a qualified domestic relations order:
new text end

new text begin (1) as early as administratively practicable after the order is received by the relief
association, even if the member whose service pension is being assigned to the alternate
payee under the order has not yet reached age 50 or separated from active service with the
fire department affiliated with the relief association; and
new text end

new text begin (2) in a lump sum, even if the relief association is a defined benefit relief association
that pays monthly service pensions under section 424A.093.
new text end

new text begin (e) If the service pension is an eligible rollover distribution as defined in section 356.635,
subdivisions 4 and 5, the relief association must permit the alternate payee to elect a direct
rollover, as provided under section 356.635, subdivisions 3 to 7.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2021 Supplement, section 424A.091, subdivision 3, is amended
to read:

Subd. 3.

Remedy for noncompliance; determination.

(a) A municipality in which
there exists a firefighters relief association as specified in subdivision 1 which does not
comply with the applicable provisions of sections 424A.091 to 424A.096 or the provisions
of any applicable special law relating to the funding or financing of the association does
not qualify initially to receive, and is not entitled subsequently to retain, fire state aid under
chapter 477B until the reason for the disqualification specified by the state auditor is
remedied, whereupon the municipality or relief association, if otherwise qualified, is entitled
to again receive fire state aid for the year occurring immediately subsequent to the year in
which the disqualification is remedied.

(b) The state auditor shall determine if a municipality to which a firefighters' relief
association is directly associated or a firefighters relief association fails to comply with the
provisions of sections 424A.091 to 424A.096 or the funding or financing provisions of any
applicable special law based upon the information contained in the annual financial report
of the firefighters relief association required under section 424A.014, the actuarial valuation
of the relief association, if applicable, the relief association officers' financial requirements
of the relief association and minimum municipal obligation determination documentation
under section 424A.092, subdivisions 3 and 4; 424A.093, subdivisions 4 and 5; or 424A.094,
subdivision 2, if requested to be filed by the state auditor, the applicable municipal or
independent nonprofit firefighting corporation budget, if requested to be filed by the state
auditor, and any other relevant documents or reports obtained by the state auditor.

(c) The municipality or independent nonprofit firefighting corporation and the associated
relief association are not eligible to receive or to retain fire state aid if:

(1) the relief association fails to prepare or to file the financial report or financial
statement under section 424A.014;

(2) the relief association treasurer is not bonded in the manner and in the amount required
by section 424A.014, subdivision 4;

(3) the relief association officers fail to determine or improperly determine the accrued
liability and the annual accruing liability of the relief association under section 424A.092,
subdivisions 2, 2a, and 3, paragraph (c), clause (2), if applicable;

(4) if applicable, the relief association officers fail to obtain and file a required actuarial
valuation or the officers file an actuarial valuation that does not contain the special fund
actuarial liability calculated under the entry age normal actuarial cost method, the special
fund current assets, the special fund unfunded actuarial accrued liability, the special fund
normal cost under the entry age normal actuarial cost method, the amortization requirement
for the special fund unfunded actuarial accrued liability by the applicable target date, a
summary of the applicable benefit plan, a summary of the membership of the relief
association, a summary of the actuarial assumptions used in preparing the valuation, and a
signed statement by the actuary attesting to its results and certifying to the qualifications of
the actuary as an approved actuary under section 356.215, subdivision 1, paragraph (c);

(5) the municipality failed to provide a municipal contribution, or the independent
nonprofit firefighting corporation failed to provide a corporate contribution, in the amount
equal to the minimum municipal obligation if the relief association is governed under section
424A.092, or the amount necessary, when added to the fire state aid actually received in
the plan year in question, to at least equal in total the calculated annual financial requirements
of the special fund of the relief association if the relief association is governed under section
424A.093, and, if the municipal or corporate contribution is deficient, the municipality
failed to include the minimum municipal obligation certified under section 424A.092,
subdivision 3, or 424A.093, subdivision 5, in its budget and tax levy or the independent
nonprofit firefighting corporation failed to include the minimum corporate obligation certified
under section 424A.094, subdivision 2, in the corporate budget;

(6) the defined benefit relief association did not receive municipal ratification for the
most recent plan amendment when municipal ratification was required under section 424A.02,
subdivision 10; 424A.092, subdivision 6; or 424A.093, subdivision 6;

(7) the relief association invested special fund assets in an investment security that is
not authorized under section 424A.095;

(8) the relief association had an administrative expense that is not authorized under
section 424A.05, subdivision 3 or 3b, or the municipality had an expenditure that is not
authorized under section 424A.08;

(9) the relief association officers fail to provide a complete and accurate public pension
plan investment portfolio and performance disclosure under section 356.219;

(10) the relief association fails to obtain the acknowledgment from a broker of the
statement of investment restrictions under section 356A.06, subdivision 8b;

(11) the relief association officers permitted to occur a prohibited transaction under
section 356A.06, subdivision 9, or 424A.04, subdivision 2a, or failed to undertake correction
of a prohibited transaction that did occur; or

(12) the relief association pays a defined benefit service pension in an amount that is in
excess of the applicable new text begin maximum new text end service pension deleted text begin maximum deleted text end new text begin amount new text end under section 424A.02,
deleted text begin subdivision 2b or 2c deleted text end new text begin subdivision 3 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

Sec. 9.

Minnesota Statutes 2021 Supplement, section 424A.093, subdivision 1, is amended
to read:

Subdivision 1.

Application.

(a) This section applies to any firefighters relief association
specified in section 424A.091, subdivision 1, which pays or allows for an option of a monthly
service pension to a retiring firefighter when at least the minimum requirements for
entitlement to a service pension specified in section 424A.02, any applicable special
legislation new text begin , new text end and the articles of incorporation or bylaws of the relief association have been
met. Each firefighters relief association to which this section applies shall determine the
actuarial condition and funding costs of the special fund of the relief association in accordance
with subdivisions 2 and 3, the financial requirements of the special fund of the relief
association in accordance with subdivision 4 new text begin , new text end and the minimum obligation of the municipality
with respect to the special fund of the relief association in accordance with subdivision 5.

(b) If a firefighters relief association that previously provided a monthly benefit service
pension discontinues that practice and either replaces the monthly benefit amount with a
deleted text begin lump sum deleted text end new text begin lump-sum new text end benefit amount consistent with section 424A.02, deleted text begin subdivision 2c deleted text end new text begin
subdivision 3, paragraph (a), clause (2) new text end , or purchases an annuity in the same amount as the
monthly benefit from an insurance company licensed to do business in this state, the actuarial
condition and funding costs, financial, and minimum municipal obligation requirements of
section 424A.092 apply rather than this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

Sec. 10.

Minnesota Statutes 2021 Supplement, section 424A.10, subdivision 2, is amended
to read:

Subd. 2.

Payment of supplemental benefit.

(a) Upon the payment by a volunteer
firefighters relief association or by the statewide lump-sum volunteer firefighter plan of a
lump-sum distribution to a qualified recipient, the association or retirement plan, as
applicable, must pay a supplemental benefit to the qualified recipient. Notwithstanding any
law to the contrary, the relief association must pay the supplemental benefit out of its special
fund and the statewide lump-sum volunteer firefighter plan must pay the supplemental
benefit out of the statewide lump-sum volunteer firefighter plan. This benefit is an amount
equal to ten percent of the regular lump-sum distribution that is paid on the basis of the
recipient's service as a volunteer firefighter. In no case may the amount of the supplemental
benefit exceed $1,000. A supplemental benefit under this paragraph may not be paid to a
survivor of a deceased active or deferred volunteer firefighter in that capacity.

(b) Upon the payment by a relief association or the retirement plan of a lump-sum
survivor benefit to a survivor of a deceased active volunteer firefighter or of a deceased
deferred volunteer firefighter, the association or retirement plan, as applicable, must pay a
supplemental survivor benefit to the survivor of the deceased active or deferred volunteer
firefighter from the special fund of the relief association and the retirement plan must pay
a supplemental survivor benefit to the survivor of the deceased active or deferred volunteer
firefighter from the retirement fund if chapter 353G so provides. The amount of the
supplemental survivor benefit is 20 percent of the survivor benefit, but not to exceed $2,000.

(c) For purposes of this section, the term "regular lump-sum distribution" means the
pretax lump-sum distribution excluding any interest that may have been credited during a
volunteer firefighter's period of deferral.

(d) An individual may receive a supplemental benefit under paragraph (a) or under
paragraph (b), but not under both paragraphs with respect to one lump-sum volunteer
firefighter benefit.

new text begin (e) If a qualified recipient receives more than one lump-sum distribution, the qualified
recipient is eligible to receive a supplemental benefit or supplemental survivor benefit,
whichever is applicable, with each lump-sum distribution. Each supplemental benefit shall
be calculated pursuant to paragraph (a) or (b), as applicable, and shall be subject to a separate
limit.
new text end

new text begin (f) Qualified recipients who elect to receive their lump-sum distribution in installments
under section 424A.016, subdivision 5, or 424A.02, subdivision 8, are eligible to receive
one supplemental benefit calculated on the total lump-sum distribution amount under
paragraph (a) or (b), as applicable.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for supplemental benefits
paid in 2018 and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2021 Supplement, section 424B.10, subdivision 1b, is amended
to read:

Subd. 1b.

Benefits.

(a) The successor relief association following the consolidation of
two or more defined benefit relief associations must be a defined benefit relief association.

(b) Notwithstanding any provision of section 424A.02, deleted text begin subdivisions 2a to 3 deleted text end new text begin subdivision
3 new text end , to the contrary, the initial service pension amount of the subsequent defined benefit relief
association as of the effective date of consolidation is either the service pension amount
specified in clause (1) or the service pension amounts specified in clause (2), as provided
for in the consolidated relief association's articles of incorporation or bylaws:

(1) the highest dollar amount service pension amount of any prior volunteer firefighters
relief association in effect immediately before the consolidation initiation if the pension
amount was implemented consistent with section 424A.02; or

(2) for service rendered by each individual volunteer firefighter before consolidation,
the service pension amount under the consolidating volunteer firefighters relief association
that the firefighter belonged to immediately before the consolidation if the pension amount
was implemented consistent with section 424A.02 and for service rendered after the effective
date of the consolidation, the highest dollar amount service pension of any of the
consolidating volunteer firefighters relief associations in effect immediately before the
consolidation if the pension amount was implemented consistent with section 424A.02.

(c) Any increase in the service pension amount beyond the amount implemented under
paragraph (a) must conform with the requirements and limitations of section 424A.02 and
sections 424A.091 to 424A.095.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

Sec. 12.

Minnesota Statutes 2021 Supplement, section 424B.13, subdivision 4, is amended
to read:

Subd. 4.

Benefit increase.

(a) If the relief association has a surplus as of the end of the
relief association's most recent fiscal year before the conversion effective date, the board
of trustees may approve a resolution that increases the lump-sum benefit or monthly pension
amount or both the lump-sum and monthly pension amount, if the relief association offers
both, and amends the relief association bylaws without the consent of the affiliated
municipality or firefighting corporation, notwithstanding section 424A.02, subdivision 10.
The resulting lump-sum benefit or monthly pension amount is not limited to the maximum
lump-sum deleted text begin benefit deleted text end new text begin service pension amount new text end or new text begin maximum new text end monthly new text begin service new text end pension deleted text begin amounts deleted text end new text begin
amount new text end under section 424A.02, deleted text begin subdivisions 2a to 3 deleted text end new text begin subdivision 3 new text end .

(b) The benefit increase must not cause the liabilities of the retirement plan to exceed
the value of the assets, after taking into account full vesting as required under subdivision
2 and any administrative expenses arising from the conversion.

(c) The board of trustees shall specify whether the benefit increase will apply only to
participants who are members active as of the conversion effective date or whether the
benefit increase will apply to all participants, including members who are not active as of
the conversion effective date, notwithstanding section 424A.015, subdivision 6.

(d) The board of trustees' resolution approving an increase in the benefit level must be
considered conditional on there being sufficient assets to fund the increase and must state
that if, as of the date benefits are transferred to the defined contribution plan, there are not
sufficient assets to cover all benefit liabilities at the new higher benefit level, the benefit
level will be reduced until assets equal or are greater than liabilities. The resolution must
state that the new lower benefit level will be considered approved by the board of trustees
without further action by the board.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

Sec. 13.

Minnesota Statutes 2021 Supplement, section 424B.22, subdivision 4, is amended
to read:

Subd. 4.

Benefit increase.

(a) Notwithstanding section 424A.02, subdivision 10, the
board of trustees of a relief association may increase the benefit amount under a defined
benefit relief association without the consent of the affiliated municipality or independent
nonprofit firefighting corporation, as provided in this subdivision.

(b) If the retirement plan being terminated is a defined benefit plan, the board of trustees
may approve an amendment to the bylaws of the relief association to increase the lump-sum
or monthly pension amount or both the deleted text begin lump deleted text end new text begin lump-sum new text end and monthly pension amount, if
the relief association offers both, up to 125 percent of the deleted text begin largest deleted text end maximum lump-sum
service pension amount new text begin under section 424A.02, subdivision 3, paragraph (a), clause (2), new text end or
new text begin the maximum monthly new text end service pension amount deleted text begin payable per month in effect deleted text end under section
424A.02, deleted text begin subdivision 2b or 2c deleted text end deleted text begin , respectively, without regard to the relief association's
minimum average amount of available financing per firefighter deleted text end new text begin subdivision 3, paragraph
(a), clause (1) new text end . The amount by which the lump-sum or monthly pension amount is increased
must not cause the liabilities of the retirement plan to exceed the value of the assets, after
taking into account full vesting as required under subdivision 3 and any administrative
expenses.

(c) The board of trustees shall specify whether the benefit increase will apply to only
participants who are members active as of the date of the termination of the retirement plan
or whether the benefit increase will apply to all participants, including members who are
not active as of the plan termination date.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

Sec. 14. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2021 Supplement, section 424A.02, subdivisions 2a, 2b, and 2c, new text end new text begin are
repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2023.
new text end

APPENDIX

Repealed Minnesota Statutes: 22-06444

424A.02 DEFINED BENEFIT RELIEF ASSOCIATIONS; SERVICE PENSIONS.

Subd. 2a.

Average amount of available financing.

(a) Annually on or before August 1 as part of the certification of the financial requirements and minimum municipal obligation determined under section 424A.092, subdivision 4, or 424A.093, subdivision 5, as applicable, the secretary or some other official of the relief association designated in the bylaws of each defined benefit relief association shall calculate and certify to the governing body of the applicable municipality the average amount of available financing per active covered firefighter for the most recent three-year period.

The amount of available financing includes any amounts of fire state aid and police and firefighter retirement supplemental state aid received or receivable by the relief association, any amounts of municipal contributions to the relief association raised from levies on real estate or from other available revenue sources exclusive of fire state aid, and one-tenth of the amount of assets in excess of the accrued liabilities of the relief association calculated under section 424A.092, subdivision 2; 424A.093, subdivisions 2 and 4; or 424A.094, subdivision 2, if any.

(b) The maximum service pension which the defined benefit relief association has authority to provide for in its bylaws for payment to a member retiring after the calculation date when the minimum age and service requirements specified in subdivision 1 are met must be determined using the table in subdivision 2b or 2c, whichever applies.

Subd. 2b.

Maximum monthly amount.

For a defined benefit relief association where the governing bylaws provide for a monthly service pension to a retiring member, the maximum monthly service pension amount per month for each year of service credited that may be provided for in the bylaws is the greater of the service pension amount provided for in the bylaws on the date of the calculation of the average amount of the available financing per active covered firefighter or the maximum service pension figure corresponding to the average amount of available financing per active covered firefighter:

Minimum Average Amount of AvailableFinancing per Firefighter		Maximum Service Pension Amount Payable per Month for Each Year of Service
$ ...		$ .25
41		.50
81		1.00
122		1.50
162		2.00
203		2.50
243		3.00
284		3.50
324		4.00
365		4.50
405		5.00
486		6.00
567		7.00
648		8.00
729		9.00
810		10.00
891		11.00
972		12.00
1053		13.00
1134		14.00
1215		15.00
1296		16.00
1377		17.00
1458		18.00
1539		19.00
1620		20.00
1701		21.00
1782		22.00
1823		22.50
1863		23.00
1944		24.00
2025		25.00
2106		26.00
2187		27.00
2268		28.00
2349		29.00
2430		30.00
2511		31.00
2592		32.00
2673		33.00
2754		34.00
2834		35.00
2916		36.00
2997		37.00
3078		38.00
3159		39.00
3240		40.00
3321		41.00
3402		42.00
3483		43.00
3564		44.00
3645		45.00
3726		46.00
3807		47.00
3888		48.00
3969		49.00
4050		50.00
4131		51.00
4212		52.00
4293		53.00
4374		54.00
4455		55.00
4536		56.00
4617		57.00
4698		58.00
4779		59.00
4860		60.00
4941		61.00
5022		62.00
5103		63.00
5184		64.00
5265		65.00
5346		66.00
5427		67.00
5508		68.00
5589		69.00
5670		70.00
5751		71.00
5832		72.00
5913		73.00
5994		74.00
6075		75.00
6156		76.00
6237		77.00
6318		78.00
6399		79.00
6480		80.00
6561		81.00
6642		82.00
6723		83.00
6804		84.00
6885		85.00
6966		86.00
7047		87.00
7128		88.00
7209		89.00
7290		90.00
7371		91.00
7452		92.00
7533		93.00
7614		94.00
7695		95.00
7776		96.00
7857		97.00
7938		98.00
8019		99.00
8100		100.00
any amount in excess of
8100		100.00

Subd. 2c.

Maximum lump-sum amount.

For a defined benefit relief association in which the governing bylaws provide for a lump-sum service pension to a retiring member, the maximum lump-sum service pension amount for each year of service credited that may be provided for in the bylaws is the greater of the service pension amount provided for in the bylaws on the date of the calculation of the average amount of the available financing per active covered firefighter or the maximum service pension figure corresponding to the average amount of available financing per active covered firefighter for the applicable specified period:

Minimum Average Amount of AvailableFinancing per Firefighter		Maximum Lump-Sum Service Pension Amount Payable for Each Year of Service
$ ...		$ 10
11		20
16		30
23		40
27		50
32		60
43		80
54		100
65		120
77		140
86		160
97		180
108		200
131		240
151		280
173		320
194		360
216		400
239		440
259		480
281		520
302		560
324		600
347		640
367		680
389		720
410		760
432		800
486		900
540		1000
594		1100
648		1200
702		1300
756		1400
810		1500
864		1600
918		1700
972		1800
1026		1900
1080		2000
1134		2100
1188		2200
1242		2300
1296		2400
1350		2500
1404		2600
1458		2700
1512		2800
1566		2900
1620		3000
1672		3100
1726		3200
1753		3250
1780		3300
1820		3375
1834		3400
1888		3500
1942		3600
1996		3700
2023		3750
2050		3800
2104		3900
2158		4000
2212		4100
2265		4200
2319		4300
2373		4400
2427		4500
2481		4600
2535		4700
2589		4800
2643		4900
2697		5000
2751		5100
2805		5200
2859		5300
2913		5400
2967		5500
3021		5600
3075		5700
3129		5800
3183		5900
3237		6000
3291		6100
3345		6200
3399		6300
3453		6400
3507		6500
3561		6600
3615		6700
3669		6800
3723		6900
3777		7000
3831		7100
3885		7200
3939		7300
3993		7400
4047		7500
4101		7600
4155		7700
4209		7800
4263		7900
4317		8000
4371		8100
4425		8200
4479		8300
4533		8400
4587		8500
4641		8600
4695		8700
4749		8800
4803		8900
4857		9000
4911		9100
4965		9200
5019		9300
5073		9400
5127		9500
5181		9600
5235		9700
5289		9800
5343		9900
5397		10,000
5451		10,100
5505		10,200
5559		10,300
5613		10,400
5667		10,500
5721		10,600
5775		10,700
5829		10,800
5883		10,900
5937		11,000
5991		11,100
6045		11,200
6099		11,300
6153		11,400
6207		11,500
6261		11,600
6315		11,700
6369		11,800
6423		11,900
6477		12,000
6531		12,100
6585		12,200
6639		12,300
6693		12,400
6747		12,500
6801		12,600
6855		12,700
6909		12,800
6963		12,900
7017		13,000
7071		13,100
7125		13,200
7179		13,300
7233		13,400
7287		13,500
7341		13,600
7395		13,700
7449		13,800
7503		13,900
7557		14,000
7611		14,100
7665		14,200
7719		14,300
7773		14,400
7827		14,500
7881		14,600
7935		14,700
7989		14,800
8043		14,900
8097		15,000
any amount in excess of
8097		15,000