HF 5292

as introduced - 93rd Legislature (2023 - 2024) Posted on 04/04/2024 02:51pm

A bill for an act
relating to retirement; resolving a conflict in the statute that dictates the established
date for full funding; deleting obsolete provisions; amending Minnesota Statutes
2023 Supplement, section 356.215, subdivision 11.

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

Section 1.

Minnesota Statutes 2023 Supplement, section 356.215, subdivision 11, is
amended to read:

Subd. 11.

Amortization contributions.

(a) In addition to the exhibit indicating the level
normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial
reporting purposes indicating the additional annual contribution sufficient to amortize the
unfunded actuarial accrued liability and must contain an exhibit indicating the additional
contribution sufficient to amortize the unfunded actuarial accrued liability. For the retirement
plans listed in subdivision 8, paragraph (a), but excluding the legislators retirement plan,
the Bloomington Fire Department Relief Association, and the local monthly benefit volunteer
firefighter relief associations, the additional contribution must be calculated on a level
percentage of covered payroll basis by the established date for full funding in effect when
the valuation is prepared, assuming annual payroll growth at the applicable percentage rate
set forth in the appendix described in subdivision 8, paragraph (c). For the legislators
retirement plan, the additional annual contribution must be calculated on a level annual
dollar amount basis.

deleted text begin (b) For any retirement plan other than a retirement plan governed by paragraph (d), (e),
(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for
calculating the actuarial accrued liability of the fund, a change in the benefit plan governing
annuities and benefits payable from the fund, a change in the actuarial cost method used in
calculating the actuarial accrued liability of all or a portion of the fund, or a combination
of the three, which change or changes by itself or by themselves without inclusion of any
other items of increase or decrease produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding is the first actuarial valuation date
occurring after June 1, 2020.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end For any retirement plan, if there has been a change in any or all of the actuarial
assumptions used for calculating the actuarial accrued liability of the fund, a change in the
benefit plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the fund,
or a combination of the three, and the change or changes, by itself or by themselves and
without inclusion of any other items of increase or decrease, produce a net increase in the
unfunded actuarial accrued liability in the fund, the established date for full funding must
be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in accordance
with the plan provisions governing annuities and retirement benefits and the actuarial
assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the investment return assumption specified in subdivision 8 in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance
with any new plan provisions governing annuities and benefits payable from the fund and
any new actuarial assumptions and the remaining plan provisions governing annuities and
benefits payable from the fund and actuarial assumptions in effect before the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the applicable
change is effective must be calculated using the applicable investment return assumption
specified in subdivision 8 in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item (iv)
must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined in
item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the investment return
assumption specified in subdivision 8 in effect after any applicable change, rounded to the
nearest integral number of years, but not to exceed 30 years from the end of the plan year
in which the determination of the established date for full funding using the procedure set
forth in this clause is made and not to be less than the period of years beginning in the plan
year in which the determination of the established date for full funding using the procedure
set forth in this clause is made and ending by the date for full funding in effect before the
change; and

(vii) the period determined under item (vi) must be added to the date as of which the
actuarial valuation was prepared and the date obtained is the new established date for full
funding.

new text begin (c) Unless paragraph (b) or (d) applies, the established date for full funding is the date
provided for each of the following plans:
new text end

deleted text begin (d) deleted text end new text begin (i) new text end for the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2048 deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (e) deleted text end new text begin (ii) new text end for the Teachers Retirement Association, the established date for full funding is
June 30, 2048, through June 30, 2025. Beginning July 1, 2025, the established date for full
funding is June 30, 2053 deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (f) deleted text end new text begin (iii) new text end for the correctional state employees retirement plan and the State Patrol retirement
plan of the Minnesota State Retirement System, the established date for full funding is June
30, 2048 deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (g) deleted text end new text begin (iv) new text end for the judges retirement plan, the established date for full funding is June 30,
2048 deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (h) deleted text end new text begin (v) new text end for the local government correctional service retirement plan and the public
employees police and fire retirement plan, the established date for full funding is June 30,
2048 deleted text begin . deleted text end new text begin ;
new text end

deleted text begin (i) deleted text end new text begin (vi) new text end for the St. Paul Teachers Retirement Fund Association, the established date for
full funding is June 30, 2048 deleted text begin . deleted text end new text begin ; and
new text end

deleted text begin (j) deleted text end new text begin (vii) new text end for the general state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, 2048.

deleted text begin (k) deleted text end new text begin (d) new text end For the retirement plans for which the annual actuarial valuation indicates an
excess of valuation assets over the actuarial accrued liability, the valuation assets in excess
of the actuarial accrued liability must be recognized as a reduction in the current contribution
requirements by an amount equal to the amortization of the excess expressed as a level
percentage of pay over a 30-year period beginning anew with each annual actuarial valuation
of the plan.

new text begin EFFECTIVE DATE. new text end

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