SF 620

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; Public Employees Retirement
Association; modifying augmentation rates for covered
members; amending Minnesota Statutes 2004, section
353.71, subdivision 2.

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

Section 1.

Minnesota Statutes 2004, section 353.71,
subdivision 2, is amended to read:

Subd. 2.

Deferred annuity computation; augmentation.

(a)
The deferred annuity accruing under subdivision 1, or under
sections 353.34, subdivision 3, and 353.68, subdivision 4, must
be computed on the basis of allowable service prior to the
termination of public service and augmented as provided in this
paragraph. The required reserves applicable to a deferred
annuity, or to any deferred segment of an annuity must be
determined as of the first day of the month following the month
in which the former member ceased to be a public employee, or
July 1, 1971, whichever is later. These required reserves must
be augmented new text begin as follows:
new text end

new text begin (1) new text end at the rate of five percent annually compounded
annually until January 1, 1981 deleted text begin , and deleted text end new text begin ;
new text end

new text begin (2) for members who terminate public service after January
1, 1981, and before May 16, 1989, at the rate of three percent;
new text end

new text begin (3) for members who terminate on or after May 17, 1989, and
before January 1, 2006, new text end at the rate of three percent thereafter
until January 1 of the year following the year in which the
former member attains age 55 deleted text begin . deleted text end new text begin , and new text end from that date to the
effective date of retirement, new text begin at new text end the rate deleted text begin is deleted text end new text begin of new text end five percent
compounded annually new text begin ; and
new text end

new text begin (4) for members who terminate public service on or after
January 1, 2006, at the rate of 2.5 percent until the first of
the month following the month in which the former member attains
age 55 new text end .

If a person has more than one period of uninterrupted
service, the required reserves related to each period must be
augmented as specified in this paragraph. The sum of the
augmented required reserves is the present value of the
annuity. Uninterrupted service for the purpose of this
subdivision means periods of covered employment during which the
employee has not been separated from public service for more
than two years. If a person repays a refund, the restored
service must be considered as continuous with the next period of
service for which the employee has credit with this association.
This section must not reduce the annuity otherwise payable under
this chapter. This paragraph applies to individuals who become
deferred annuitants on or after July 1, 1971. For a member who
became a deferred annuitant before July 1, 1971, the paragraph
applies from July 1, 1971, if the former active member applies
for an annuity after July 1, 1973.

(b) The retirement annuity or disability benefit of, or the
survivor benefit payable on behalf of, a former member who
terminated service before July 1, 1997, or the survivor benefit
payable on behalf of a basic or police and fire member who was
receiving disability benefits before July 1, 1997, which is
first payable after June 30, 1997, must be increased on an
actuarial equivalent basis to reflect the change in the
postretirement interest rate actuarial assumption under section
356.215, subdivision 8, from five percent to six percent under a
calculation procedure and tables adopted by the board and
approved by the actuary retained by the Legislative Commission
on Pensions and Retirement.

Sec. 2. new text begin EFFECTIVE DATE.
new text end

new text begin Section 1 is effective January 1, 2006.
new text end