Minnesota Legislature
HF 899
as introduced - 92nd Legislature (2021 - 2022) Posted on 02/08/2021 02:17pm
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A bill for an act
relating to retirement; Public Employees Retirement Association; privatized medical
facilities; amending the calculation of liability for privatizing medical facilities;
amending Minnesota Statutes 2020, sections 353F.02, subdivision 4a; 353F.025,
subdivisions 1, 2, by adding a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2020, 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.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2023.
new text end
Sec. 2.
Minnesota Statutes 2020, section 353F.025, subdivision 1, is amended to read:
Subdivision 1.
Eligibility determinationnew text begin and calculation of withdrawal liabilitynew text end .
(a)
new text begin This section applies to any medical facility that privatizes.
new 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 governing body 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
calculation of 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 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 a resolution deleted text begin and a determination bydeleted text end
new text begin 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 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 incurred by the privatizing medical
facility. 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 actual 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
new text begin
(f) In this section, the 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
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2023.
new text end
Sec. 3.
Minnesota Statutes 2020, 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 in equal payments made annually and for a term of ten years. The
determination of the payments must reflect interest compounded annually at the applicable
rate or rates specified in section 356.59, subdivision 3. The obligation to pay under this
subdivision is binding upon the privatized public employer and its successors and assignees.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2023.
new text end
Sec. 4.
Minnesota Statutes 2020, 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 the 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 comprehensive
annual financial report and on the association's website.new text begin For privatized former public
employers with an effective date of privatization after July 1, 2023, the list must also include
the original withdrawal liability amount and the remaining amount of withdrawal liability
due to be paid, if any, for each privatized former public employer.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective July 1, 2023.
new text end