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HF 403

as introduced - 88th Legislature (2013 - 2014) Posted on 02/22/2013 01:42pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to retirement; State Patrol retirement plan; increasing member and
employer contributions; increasing vesting to ten years for new hires; capping
allowable service for computing annuities; reducing postretirement adjustments;
amending Minnesota Statutes 2012, sections 352B.02, subdivisions 1a, 1c;
352B.08, subdivisions 1, 2, 2a; 352B.10, subdivision 5; 352B.11, subdivision 2b;
356.415, subdivision 1e; repealing Minnesota Statutes 2012, section 352B.11,
subdivision 2c.

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

Section 1.

Minnesota Statutes 2012, section 352B.02, subdivision 1a, is amended to
read:


Subd. 1a.

Member contributions.

(a) The member contribution is the following
percentage of the member's salary:

(1) before the first day of the first pay period beginning
after July 1, deleted text begin2011deleted text endnew text begin 2014
new text end
deleted text begin10.40deleted text end new text begin12.4 new text endpercent
(2) on or after the first day of the first pay period
beginning after July 1, deleted text begin2011deleted text endnew text begin 2014, to June 30, 2016
new text end
deleted text begin12.40deleted text end new text begin13.4 new text endpercent
new text begin (3) after June 30, 2016
new text end
new text begin 14.4 percent
new text end

(b) These contributions must be made by deduction from salary as provided in
section 352.04, subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 352B.02, subdivision 1c, is amended to read:


Subd. 1c.

Employer contributions.

(a) In addition to member contributions,
department heads shall pay a sum equal to the specified percentage of the salary upon which
deductions were made, which constitutes the employer contribution to the fund as follows:

(1) before the first day of the first pay period beginning
after July 1, deleted text begin2011deleted text endnew text begin 2014
new text end
deleted text begin15.60deleted text end new text begin18.6 new text endpercent
(2) on or after the first day of the first pay period
beginning after July 1, deleted text begin2011deleted text endnew text begin 2014, to June 30, 2016
new text end
deleted text begin18.60deleted text end new text begin20.1 new text endpercent
new text begin (3) after June 30, 2016
new text end
new text begin 21.6 percent
new text end

(b) Department contributions must be paid out of money appropriated to departments
for this purpose.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 352B.08, subdivision 1, is amended to read:


Subdivision 1.

Eligibility; when to apply; accrual.

(a) Every member who is
credited with three or more years of allowable service if first employed before July 1, deleted text begin2010
deleted text endnew text begin 2013new text end, or with at least deleted text beginfivedeleted text end new text beginten new text endyears of allowable service if first employed after June 30,
deleted text begin2010deleted text endnew text begin 2013new text end, is entitled to separate from state service and upon becoming 50 years old, is
entitled to receive a life annuity, upon separation from state service.

(b) Members must apply for an annuity in a form and manner prescribed by the
executive director.

(c) No application may be made more than 90 days before the date the member is
eligible to retire by reason of both age and service requirements.

(d) An annuity begins to accrue no earlier than 180 days before the date the
application is filed with the executive director.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 4.

Minnesota Statutes 2012, section 352B.08, subdivision 2, is amended to read:


Subd. 2.

Normal retirement annuity.

new text begin(a) new text endThe annuity must be paid in monthly
installments. The annuity shall be equal to the amount determined by multiplying
the average monthly salary of the member by the percent specified in section 356.315,
subdivision 6
, for each year new text beginof allowable service new text endand deleted text beginpro ratadeleted text end new text beginprorated new text endfor new text beginadditional
new text endcompleted months of new text beginallowable new text endservicenew text begin, unless restricted under paragraph (b)new text end.

new text begin (b) Allowable service in excess of 33 years must not be used in computing the
annuity. This restriction does not apply to any member who has at least 28 years of
allowable service before July 1, 2013.
new text end

new text begin (c) When the annuity commences, any member contributions attributable to
allowable service not used to compute the annuity due to the restrictions in paragraph (b)
must be refunded using procedures specified in section 352B.11, subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 5.

Minnesota Statutes 2012, section 352B.08, subdivision 2a, is amended to read:


Subd. 2a.

Early retirement.

Any member who has become at least 50 years old
and who has at least three years of allowable service if first employed before July 1,
deleted text begin2010deleted text endnew text begin 2013new text end, or who has at least deleted text beginfivedeleted text end new text beginten new text endyears of allowable service if first employed after
June 30, deleted text begin2010deleted text endnew text begin 2013new text end, is entitled upon application to a reduced retirement annuity equal
to the annuity calculated under subdivision 2, reduced by one-tenth of one percent for
each month that the member is under age 55 at the time of retirementnew text begin,new text end if deleted text beginfirst employed
deleted text end new text beginthe effective date of retirement is new text endbefore July 1, deleted text begin2010, or reduced by two-tenths of one
percent
deleted text end new text begin2015. If the effective date of retirement is after June 30, 2015, the reduction is
0.34 percent
new text endfor each month that the member is under age 55 at the time of retirement deleted text beginif
first employed after June 30, 2010
deleted text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 6.

Minnesota Statutes 2012, section 352B.10, subdivision 5, is amended to read:


Subd. 5.

Optional annuity.

A disabilitant may elect, in lieu of spousal survivorship
coverage under section 352B.11, deleted text beginsubdivisionsdeleted text endnew text begin subdivisionnew text end 2b deleted text beginand 2cdeleted text end, the normal disability
benefit or an optional annuity as provided in section 352B.08, subdivision 3. The choice
of an optional annuity must be made in writing, on a form prescribed by the executive
director, and must be made before the commencement of the payment of the disability
benefit, or within 90 days before reaching age 55 or before reaching the five-year
anniversary of the effective date of the disability benefit, whichever is later. The optional
annuity is effective on the date on which the disability benefit begins to accrue, or the
month following the attainment of age 55 or following the five-year anniversary of the
effective date of the disability benefit, whichever is later.

Sec. 7.

Minnesota Statutes 2012, section 352B.11, subdivision 2b, is amended to read:


Subd. 2b.

Surviving spouse benefit deleted text begineligibilitydeleted text end.

(a) If an active member with
three or more years of allowable service if first employed before July 1, deleted text begin2010deleted text endnew text begin 2013new text end, or
with at least five years of allowable service if first employed after June 30, deleted text begin2010deleted text endnew text begin 2013new text end,
dies before attaining age 55, the surviving spouse is entitled to deleted text beginthedeleted text end new text begina new text endbenefit deleted text beginspecified in
subdivision 2c, paragraph (b)
deleted text endnew text begin for life equal to 50 percent of the average monthly salary
of the deceased member. On the first of the month next following the date on which the
deceased member would have attained exact age 55, in lieu of continued receipt of the
prior benefit, the surviving spouse is eligible to commence receipt of the second half of
a 100 percent joint and survivor annuity if this provides a larger benefit. The joint and
survivor annuity must be computed assuming the exact age 55 for the deceased member
and the age of the surviving spouse on the date of death
new text end.

(b) If an active member with less than three years of allowable service if first
employed before July 1, deleted text begin2010deleted text endnew text begin 2013new text end, or with fewer than five years of allowable service if
first employed after June 30, deleted text begin2010deleted text endnew text begin 2013new text end, dies at any age, the surviving spouse is entitled to
receive deleted text beginthedeleted text end new text begina new text endbenefit deleted text beginspecified in subdivision 2c, paragraph (c)deleted text endnew text begin for life equal to 50 percent
of the average monthly salary of the deceased member
new text end.

(c) If an active member with three or more years of allowable service if first
employed before July 1, deleted text begin2010deleted text endnew text begin 2013new text end, or with at least five years of allowable service if first
employed after June 30, deleted text begin2010deleted text endnew text begin 2013new text end, dies on or after attaining exact age 55, the surviving
spouse is entitled to receive deleted text beginthe benefits specified in subdivision 2c, paragraph (d)deleted text endnew text begin a benefit
for life equal to 50 percent of the average monthly salary of the deceased member, or the
second half of a 100 percent joint and survivor annuity, whichever is larger. The joint and
survivor annuity must be computed using the age of the deceased member on the date of
death and the age of the surviving spouse on that same date
new text end.

(d) If a disabilitant dies while receiving a disability benefit under section 352B.10
or before the benefit under that section commenced, and an optional annuity was not
elected under section 352B.10, subdivision 5, the surviving spouse is entitled to receive
deleted text beginthedeleted text end new text begina new text endbenefit deleted text beginspecified in subdivision 2c, paragraph (b)deleted text endnew text begin for life equal to 50 percent of the
average monthly salary of the deceased member. On the first of the month next following
the date on which the deceased member would have attained exact age 55, in lieu of
continued receipt of the prior benefit, the surviving spouse is eligible to commence receipt
of the second half of a 100 percent joint and survivor annuity if this provides a larger
benefit. The joint and survivor annuity must be computed assuming the exact age 55 for
the deceased member and the age of the surviving spouse on the date of death
new text end.

(e) If a former member with three or more years of allowable service if first employed
before July 1, deleted text begin2010deleted text endnew text begin 2013new text end, or with at least five years of allowable service if first employed
after June 30, deleted text begin2010deleted text endnew text begin 2013new text end, who terminated from service and has not received a refund or
commenced receipt of any other benefit provided by this chapter, dies, the surviving
spouse is entitled to receive deleted text beginthedeleted text end new text beginas a new text endbenefit deleted text beginspecified in subdivision 2c, paragraph (e)deleted text endnew text begin the
second half of a 100 percent joint and survivor annuity, commencing on the first of the
month next following the deceased member's date of death, or the first of the month next
following the date on which the deceased member would have attained age 55, whichever
is later. The joint and survivor annuity must be computed using the age of the deceased
member on the date of death and the age of the surviving spouse on that same date
new text end.

(f) If a former member with less than three years of allowable service if first
employed before July 1, deleted text begin2010deleted text endnew text begin 2013new text end, or with fewer than five years of allowable service if
first employed after June 30, deleted text begin2010deleted text endnew text begin 2013new text end, who terminated from service and has not received
a refund or commenced receipt of any other benefit, if applicable, provided by this chapter,
dies, the surviving spouse deleted text beginis entitled to receive the refund specified in subdivision 2c,
paragraph (f)
deleted text endnew text begin or, if none, the children or, if none, the deceased member's estate is entitled to
a refund of the employee contributions plus interest computed as specified in subdivision 1
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 8.

Minnesota Statutes 2012, section 356.415, subdivision 1e, is amended to read:


Subd. 1e.

Annual postretirement adjustments; State Patrol retirement plan.

(a) Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan are entitled to a postretirement adjustment annually on January 1, as
follows:

(1) a postretirement increase of deleted text begin1.5deleted text end new text beginone new text endpercent must be applied each year, effective
on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient
who has been receiving an annuity or a benefit for at least 18 full months before the
January 1 increase; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least six full months, an annual postretirement increase of 1/12 of deleted text begin1.5deleted text end new text beginone
new text endpercent for each month that the person has been receiving an annuity or benefit must be
applied, effective January 1, following the calendar year in which the person has been
retired for at least six months, but has been retired for less than 18 months.

(b) The increases provided by this subdivision commence on January 1, deleted text begin2011
deleted text endnew text begin 2014new text end. Increases under deleted text beginthis subdivisiondeleted text end new text beginparagraph (a) new text endfor the State Patrol retirement plan
terminate on December 31 of the calendar year in which the actuarial valuation prepared
by the approved actuary under sections 356.214 and 356.215 and the standards for
actuarial work promulgated by the Legislative Commission on Pensions and Retirement
indicates that the market value of assets of the retirement plan equals or exceeds deleted text begin90
deleted text end new text begin85 new text endpercent of the actuarial accrued liability of the retirement plan and increases under
deleted text beginsubdivision 1deleted text end new text beginparagraph (c) new text endrecommence after that date.

new text begin (c) Retirement annuity, disability benefit, or survivor benefit recipients of the State
Patrol retirement plan are entitled to a postretirement adjustment annually on January
1, as follows:
new text end

new text begin (1) a postretirement increase of 1.5 percent must be applied each year, effective on
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who
has been receiving an annuity or a benefit for at least 18 full months before the January 1
increase; and
new text end

new text begin (2) for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least six full months, an annual postretirement increase of 1/12 of 1.5 percent
for each month that the person has been receiving an annuity or benefit must be applied,
effective January 1, following the calendar year in which the person has been retired for at
least six months, but has been retired for less than 18 months.
new text end

new text begin (d) Increases under paragraph (c) for the State Patrol retirement plan terminate on
December 31 of the calendar year in which the actuarial valuation prepared by the approved
actuary under sections 356.214 and 356.215 and the standards for actuarial work adopted by
the Legislative Commission on Pensions and Retirement indicates that the market value of
assets of the retirement plan equals or exceeds 90 percent of the actuarial accrued liability
of the retirement plan and increases under subdivision 1 recommence after that date.
new text end

deleted text begin (c)deleted text end new text begin(e) new text endAn increase in annuity or benefit payments under this subdivision must be
made automatically unless written notice is filed by the annuitant or benefit recipient
with the executive director of the applicable covered retirement plan requesting that the
increase not be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 352B.11, subdivision 2c, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end