Minnesota Legislature
HF 4428
as introduced - 93rd Legislature (2023 - 2024) Posted on 02/29/2024 02:57pm
Bill Text Versions
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| Introduction | Posted on 02/29/2024 |
Current Version - as introduced
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A bill for an act
relating to retirement; Public Employees Retirement Association; privatized medical
facilities; modifying the calculation of withdrawal liability for privatizing medical
facilities; requiring a report; amending Minnesota Statutes 2022, sections 353F.02,
subdivisions 4a, 4b, by adding subdivisions; 353F.025, subdivisions 1, 2, by adding
a subdivision; 353F.051, subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2022, section 353F.02, is amended by adding a subdivision
to read:
new text begin Subd. 3b. new text end
new text begin Funding ratio. new text end
new text begin
"Funding ratio" means the actuarial value of assets of the
general employees retirement fund, divided by the present value of accrued benefits for the
fund, expressed as a percentage.
new text end
Sec. 2.
Minnesota Statutes 2022, section 353F.02, is amended by adding a subdivision to
read:
new text begin Subd. 3c. new text end
new text begin General employees retirement fund. new text end
new text begin
"General employees retirement fund"
means the general employees retirement fund as defined under section 353.27, subdivision
1.
new text end
Sec. 3.
Minnesota Statutes 2022, section 353F.02, subdivision 4a, is amended to read:
Subd. 4a.
Medical facility.
"Medical facility" means a new text begin hospital, health care clinic, nursing
home, boarding care home, residential hospice, supervised living facility, freestanding
outpatient surgical center, or other new text end facility new text begin or institution new text end that has the primary purpose of
providing medical care and that satisfies the definition of governmental subdivision under
section 353.01, subdivision 6.
Sec. 4.
Minnesota Statutes 2022, section 353F.02, subdivision 4b, is amended to read:
Subd. 4b.
Privatization.
"Privatization" means new text begin the process of privatizing, through which
new text end a medical facility that deleted text begin privatizes when the facilitydeleted text end new text begin is a governmental subdivision under
section 353.01, subdivision 6, new text end ceases to be a governmental subdivision for any reason other
than that the medical facility closes or permanently ceases to operate.
Sec. 5.
Minnesota Statutes 2022, section 353F.02, is amended by adding a subdivision to
read:
new text begin Subd. 4c. new text end
new text begin Privatize or privatizing. new text end
new text begin
"Privatize" or "privatizing" means to engage in a
transaction, including a sale to, acquisition by, or merger with an entity or a sale to or
acquisition by one or more individuals, or a series of such transactions that result in a medical
facility that is a governmental subdivision under section 353.01, subdivision 6, ceasing to
be a governmental subdivision on or after the effective date of privatization. Privatize or
privatizing does not mean ceasing to be a governmental subdivision because the medical
facility closed or permanently ceased to operate.
new text end
Sec. 6.
Minnesota Statutes 2022, section 353F.025, subdivision 1, is amended to read:
Subdivision 1.
Eligibility determinationnew text begin and calculation of withdrawal liabilitynew text end .
new text begin
(a)
This section applies to any medical facility that privatizes.
new text end
deleted text begin (a)deleted text end new text begin (b) Before the effective date of privatization, new text end the chief clerical officer of deleted text begin adeleted text end new text begin the
new text end governmental subdivision deleted text begin maydeleted text end new text begin with control or ownership of a privatizing medical facility
must new text end submit new text begin to the executive director new text end a resolution from the governing body deleted text begin to the executive
director of the Public Employees Retirement Association which supports providing coverage
under this chapter for employees of that governmental subdivision who are privatized,deleted text end new text begin of
the governmental subdivision. The resolution must notify the executive director that the
medical facility may privatize new text end and deleted text begin which statesdeleted text end new text begin must state new text end that the deleted text begin governing bodydeleted text end
new text begin governmental subdivision new text end will deleted text begin paydeleted text end new text begin reimburse the Public Employees Retirement Association
new text end for deleted text begin actuarial calculationsdeleted text end new text begin the cost to calculate withdrawal liabilitynew text end , as further specified in
paragraph deleted text begin (c)deleted text end new text begin (d)new text end .
deleted text begin (b)deleted text end new text begin (c)new text end The governing body must also provide new text begin to the executive director new text end a copy of any
applicable purchase or lease agreement and any other information requested by the executive
director to allow the executive director to deleted text begin verify that under the proposed employer change,deleted text end
new text begin determine whether new text end the new employer deleted text begin does not qualifydeleted text end new text begin , under the proposed privatization,
qualifiesnew text end as a governmental subdivision under section 353.01, subdivision 6deleted text begin , making the
employees ineligible for continued coverage as active members of the general employees
retirement plan of the Public Employees Retirement Associationdeleted text end .
deleted text begin (c) Followingdeleted text end new text begin (d) Within 30 days after new text end receipt of deleted text begin adeleted text end new text begin the new text end resolution and deleted text begin a determination
bydeleted text end new text begin information under paragraph (b), if new text end the executive director new text begin determines new text end that the new text begin proposed
new text end new employer is not a governmental subdivision, new text begin then new text end the executive director shall direct
the consulting actuary retained new text begin by the Public Employees Retirement Association new text end under
section 356.214 to deleted text begin determine whether the general employees retirement plan of the Public
Employees Retirement Association, if coverage under this chapter is provided, is expected
to receive a net gain or a net loss if privatization occurs. A net gain is expected if the actuarial
liability of the special benefit coverage provided under this chapter, if extended to the
applicable employees under the privatization, is less than the actuarial gain otherwise to
accrue to the plan. A net loss is expected if the actuarial accrued liability of the special
benefit coverage provided under this chapter, if extended to the applicable employees under
the privatization, is more than the actuarial gain otherwise to accrue to the plan.deleted text end new text begin calculate
the withdrawal liability to be incurred by the medical facility on the effective date of the
privatization if the privatization occurs. The withdrawal liability is equal to the present value
of accrued benefits attributable to the privatizing active employees minus the product of:
(1) the present value of accrued benefits attributable to the privatizing active employees;
and (2) the plan's funding ratio. If the withdrawal liability is a negative number, the
withdrawal liability is zero. new text end The deleted text begin date of the actuarial calculations used to make this
determinationdeleted text end new text begin withdrawal liability new text end must be deleted text begin within one year ofdeleted text end new text begin calculated using the most
recently completed actuarial valuation before new text end the effective date of privatization.new text begin The
governmental subdivision must reimburse the Public Employees Retirement Association
for the cost of calculating the withdrawal liability.
new text end
new text begin
(e) The present value of accrued benefits is determined using the actuarial assumptions
under section 356.215, subdivision 8, for the general employees retirement plan of the Public
Employees Retirement Association. The present value of accrued benefits does not include
projected compensation or projected service.
new text end
Sec. 7.
Minnesota Statutes 2022, section 353F.025, is amended by adding a subdivision
to read:
new text begin Subd. 1a. new text end
new text begin Payment of withdrawal liability. new text end
new text begin
No later than six months after the effective
date of privatization, the privatized former public employer must pay the withdrawal liability
calculated under subdivision 1, paragraph (d), to the general employees retirement fund,
unless the privatized former public employer elects a payment plan. In lieu of a single
withdrawal liability payment, the privatized former public employer may elect to pay the
withdrawal liability with interest compounded annually at the applicable rate or rates specified
in section 356.59, subdivision 3, in equal annual payments for a term of ten years. The
obligation to pay under this subdivision is binding upon the privatized former public employer
and its successors and assignees.
new text end
Sec. 8.
Minnesota Statutes 2022, section 353F.025, subdivision 2, is amended to read:
Subd. 2.
Reporting privatizations.
(a) deleted text begin If the actuarial calculations under subdivision
1, paragraph (c), indicate privatization can be approved because a net gain to the general
employees retirement plan ofdeleted text end The Public Employees Retirement Association deleted text begin is expected,
or if paragraph (b) applies, the executive director shall, following acceptance of the actuarial
calculations bydeleted text end new text begin must maintain a record of the consulting actuary's calculation of withdrawal
liability under subdivision 1, paragraph (d), and any associated report. The calculation and
any associated report must be made available to the public and provided to (1) new text end the
new text begin association's new text end board of trustees, deleted text begin forward notice and supporting documentation, including a
copy of the actuary's report and findings, todeleted text end new text begin (2) new text end the chair and deleted text begin thedeleted text end executive director of the
Legislative Commission on Pensions and Retirementnew text begin ,new text end and new text begin (3) new text end the chairs and deleted text begin thedeleted text end ranking
minority members of the new text begin legislative new text end committees with jurisdiction over governmental
operations deleted text begin in the house of representatives and senatedeleted text end .
deleted text begin
(b) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the executive
director shall recommend to the board of trustees that the privatization be approved if the
chief clerical officer of the applicable governmental subdivision submits a resolution from
the governing body specifying that a lump sum payment will be made to the Public
Employees Retirement Association equal to the net loss, plus interest. The interest must be
computed using the applicable ultimate investment return assumption under section 356.215,
subdivision 8, expressed as a monthly rate, from the date of the actuarial valuation from
which the actuarial accrued liability data was used to determine the net loss in the actuarial
study under subdivision 1, to the date of payment, with annual compounding. Payment must
be made on or after the effective date of privatization.
deleted text end
deleted text begin (c)deleted text end new text begin (b) new text end The Public Employees Retirement Association must maintain a list that includes
the names of all privatized former public employers in the association's new text begin annual new text end comprehensive
deleted text begin annualdeleted text end financial report and on the association's website.new text begin After July 1, 2025, the Public
Employees Retirement Association must also include in the list the amount of the withdrawal
liability determined as of the effective date of privatization and the remaining amount, if
any, of withdrawal liability due to be paid for each privatized former public employer.
new text end
Sec. 9.
Minnesota Statutes 2022, section 353F.051, subdivision 2, is amended to read:
Subd. 2.
Calculation of benefits.
A person qualifying under subdivision 1 is entitled to
receive a disability benefit calculated under section 353.33, subdivision 3. deleted text begin The disability
benefit must be augmented under section 353.71, subdivision 2, from the date of termination
to the date the disability benefit begins to accrue.
deleted text end
Sec. 10. new text begin EFFECTIVE DATE.
new text end
new text begin
Sections 1 to 9 are effective July 1, 2025.
new text end