SF 767

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; administrative changes in the 
  1.3             law governing the Minnesota state retirement system; 
  1.4             amending Minnesota Statutes 1994, sections 352.01, 
  1.5             subdivision 2b; 352.113, subdivision 1; 352.12, 
  1.6             subdivisions 1, 2, 2a, and 6; 352B.105; 352D.02, 
  1.7             subdivisions 1d and 3; and 490.124, subdivision 12; 
  1.8             repealing Minnesota Statutes 1994, section 352.021, 
  1.9             subdivision 5. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1994, section 352.01, 
  1.12  subdivision 2b, is amended to read: 
  1.13     Subd. 2b.  [EXCLUDED EMPLOYEES.] "State employee" does not 
  1.14  include: 
  1.15     (1) elective state officers; 
  1.16     (2) students employed by the University of Minnesota, the 
  1.17  state universities, and community colleges unless approved for 
  1.18  coverage by the board of regents, the state university board, or 
  1.19  the state board for community colleges, as the case may be; 
  1.20     (3) employees who are eligible for membership in the state 
  1.21  teachers retirement association except employees of the 
  1.22  department of education, who are not special teachers, and who 
  1.23  have chosen or may choose to be covered by the Minnesota state 
  1.24  retirement system instead of the teachers retirement 
  1.25  association; 
  1.26     (4) employees of the University of Minnesota who are 
  1.27  excluded from coverage by action of the board of regents; 
  2.1      (5) officers and enlisted personnel in the national guard 
  2.2   and the naval militia who are assigned to permanent peacetime 
  2.3   duty and who under federal law are or are required to be members 
  2.4   of a federal retirement system; 
  2.5      (6) election officers; 
  2.6      (7) persons engaged in public work for the state but 
  2.7   employed by contractors when the performance of the contract is 
  2.8   authorized by the legislature or other competent authority; 
  2.9      (8) officers and employees of the senate and house of 
  2.10  representatives or a legislative committee or commission who are 
  2.11  temporarily employed; 
  2.12     (9) receivers, jurors, notaries public, and court employees 
  2.13  who are not in the judicial branch as defined in section 43A.02, 
  2.14  subdivision 25, except referees and adjusters employed by the 
  2.15  department of labor and industry; 
  2.16     (10) patient and inmate help in state charitable, penal, 
  2.17  and correctional institutions including the Minnesota veterans 
  2.18  home; 
  2.19     (11) persons employed for professional services where the 
  2.20  service is incidental to regular professional duties and whose 
  2.21  compensation is paid on a per diem basis; 
  2.22     (12) employees of the Sibley House Association; 
  2.23     (13) the members of any state board or commission who serve 
  2.24  the state intermittently and are paid on a per diem basis; the 
  2.25  secretary, secretary-treasurer, and treasurer of those boards if 
  2.26  their compensation is $5,000 or less per year, or, if they are 
  2.27  legally prohibited from serving more than three years; and the 
  2.28  board of managers of the state agricultural society and its 
  2.29  treasurer unless the treasurer is also its full-time secretary; 
  2.30     (14) state troopers; 
  2.31     (15) temporary employees of the Minnesota state fair 
  2.32  employed on or after July 1 for a period not to extend beyond 
  2.33  October 15 of that year; and persons employed at any time by the 
  2.34  state fair administration for special events held on the 
  2.35  fairgrounds; 
  2.36     (16) emergency employees in the classified service; except 
  3.1   that if an emergency employee, within the same pay period, 
  3.2   becomes a provisional or probationary employee on other than a 
  3.3   temporary basis, the employee shall be considered a "state 
  3.4   employee" retroactively to the beginning of the pay period; 
  3.5      (17) persons described in section 352B.01, subdivision 2, 
  3.6   clauses (2) to (5); 
  3.7      (18) temporary employees in the classified service, 
  3.8   temporary employees in the unclassified service appointed for a 
  3.9   definite period of not more than six months and employed less 
  3.10  than six months in any one-year period and seasonal help in the 
  3.11  classified service employed by the department of revenue; 
  3.12     (19) trainee employees, except those listed in subdivision 
  3.13  2a, clause (10); 
  3.14     (20) persons whose compensation is paid on a fee basis; 
  3.15     (21) state employees who in any year have credit for 12 
  3.16  months service as teachers in the public schools of the state 
  3.17  and as teachers are members of the teachers retirement 
  3.18  association or a retirement system in St. Paul, Minneapolis, or 
  3.19  Duluth; 
  3.20     (22) employees of the adjutant general employed on an 
  3.21  unlimited intermittent or temporary basis in the classified and 
  3.22  unclassified service for the support of army and air national 
  3.23  guard training facilities; 
  3.24     (23) chaplains and nuns who are excluded from coverage 
  3.25  under the federal Old Age, Survivors, Disability, and Health 
  3.26  Insurance Program for the performance of service as specified in 
  3.27  United States Code, title 42, section 410(a)(8)(A), as amended, 
  3.28  if no irrevocable election of coverage has been made under 
  3.29  section 3121(r) of the Internal Revenue Code of 1986, as amended 
  3.30  through December 31, 1992; 
  3.31     (24) examination monitors employed by departments, 
  3.32  agencies, commissions, and boards to conduct examinations 
  3.33  required by law; 
  3.34     (25) members of appeal tribunals, exclusive of the chair, 
  3.35  to which reference is made in section 268.10, subdivision 4; 
  3.36     (26) persons appointed to serve as members of fact-finding 
  4.1   commissions or adjustment panels, arbitrators, or labor referees 
  4.2   under chapter 179; 
  4.3      (27) temporary employees employed for limited periods under 
  4.4   any state or federal program for training or rehabilitation 
  4.5   including persons employed for limited periods from areas of 
  4.6   economic distress except skilled and supervisory personnel and 
  4.7   persons having civil service status covered by the system; 
  4.8      (28) full-time students employed by the Minnesota 
  4.9   historical society intermittently during part of the year and 
  4.10  full-time during the summer months; 
  4.11     (29) temporary employees, appointed for not more than six 
  4.12  months, of the metropolitan council and of any of its statutory 
  4.13  boards, if the board members are appointed by the metropolitan 
  4.14  council; 
  4.15     (30) persons employed in positions designated by the 
  4.16  department of employee relations as student workers; 
  4.17     (31) members of trades employed by the successor to the 
  4.18  metropolitan waste control commission with trade union pension 
  4.19  plan coverage under a collective bargaining agreement first 
  4.20  employed after June 1, 1977; 
  4.21     (32) persons employed in subsidized on-the-job training, 
  4.22  work experience, or public service employment as enrollees under 
  4.23  the federal Comprehensive Employment and Training Act after 
  4.24  March 30, 1978, unless the person has as of the later of March 
  4.25  30, 1978, or the date of employment sufficient service credit in 
  4.26  the retirement system to meet the minimum vesting requirements 
  4.27  for a deferred annuity, or the employer agrees in writing on 
  4.28  forms prescribed by the director to make the required employer 
  4.29  contributions, including any employer additional contributions, 
  4.30  on account of that person from revenue sources other than funds 
  4.31  provided under the federal Comprehensive Employment and Training 
  4.32  Act, or the person agrees in writing on forms prescribed by the 
  4.33  director to make the required employer contribution in addition 
  4.34  to the required employee contribution; 
  4.35     (33) off-duty peace officers while employed by the 
  4.36  metropolitan council; 
  5.1      (34) persons who are employed as full-time police officers 
  5.2   by the metropolitan council and as police officers are members 
  5.3   of the public employees police and fire fund; 
  5.4      (35) persons who are employed as full-time firefighters by 
  5.5   the department of military affairs and as firefighters are 
  5.6   members of the public employees police and fire fund; 
  5.7      (36) foreign citizens with a work permit of less than three 
  5.8   years, or an H-1b/JV visa valid for less than three years of 
  5.9   employment, unless notice of extension is supplied which allows 
  5.10  them to work for three or more years as of the date the 
  5.11  extension is granted, in which case they are eligible for 
  5.12  coverage from the date extended; and 
  5.13     (37) persons who are employed by the higher education board 
  5.14  and who elect to remain members of the public employees 
  5.15  retirement association or the Minneapolis employees retirement 
  5.16  fund, whichever applies, under section 136C.75. 
  5.17     Sec. 2.  Minnesota Statutes 1994, section 352.113, 
  5.18  subdivision 1, is amended to read: 
  5.19     Subdivision 1.  [AGE AND SERVICE REQUIREMENTS.] An employee 
  5.20  covered by the system, who is less than normal retirement age 
  5.21  and who becomes totally and permanently disabled after three or 
  5.22  more years of allowable service, is entitled to a disability 
  5.23  benefit in an amount provided in subdivision 3.  If the disabled 
  5.24  employee's state service has terminated at any time, the 
  5.25  employee must have at least two years of allowable service after 
  5.26  last becoming a state employee covered by the system.  Refunds 
  5.27  may be repaid under section 352.23 before the effective accrual 
  5.28  date of the disability benefit under subdivision 2 provided 
  5.29  payment is made within six months of date of disability. 
  5.30     Sec. 3.  Minnesota Statutes 1994, section 352.12, 
  5.31  subdivision 1, is amended to read: 
  5.32     Subdivision 1.  [DEATH BEFORE TERMINATION OF SERVICE.] If 
  5.33  an employee dies before state service has terminated and neither 
  5.34  a survivor annuity nor a reversionary annuity is payable, or if 
  5.35  a former employee who has sufficient service credit to be 
  5.36  entitled to an annuity dies before the benefit has become 
  6.1   payable, the director shall make a refund to the last designated 
  6.2   beneficiary or, if there is none, to the surviving spouse or, if 
  6.3   none, to the employee's surviving children in equal shares or, 
  6.4   if none, to the employee's surviving parents in equal shares or, 
  6.5   if none, to the representative of the estate in an amount equal 
  6.6   to the accumulated employee contributions plus interest at the 
  6.7   rate of six percent per annum compounded annually.  Interest 
  6.8   must be computed as provided in section 352.22, subdivision 2, 
  6.9   to the first day of the month in which the refund is 
  6.10  processed and based on fiscal year balances.  Upon the death of 
  6.11  an employee who has received a refund that was later repaid in 
  6.12  full, interest must be paid on the repaid refund only from the 
  6.13  date of repayment.  If the repayment was made in installments, 
  6.14  interest must be paid only from the date installment payments 
  6.15  began.  The designated beneficiary, surviving spouse, or 
  6.16  representative of the estate of an employee who had received a 
  6.17  disability benefit is not entitled to interest upon any balance 
  6.18  remaining to the decedent's credit in the fund at the time of 
  6.19  death, unless death occurred before any payment could be 
  6.20  negotiated.  
  6.21     Sec. 4.  Minnesota Statutes 1994, section 352.12, 
  6.22  subdivision 2, is amended to read: 
  6.23     Subd. 2.  [SURVIVING SPOUSE BENEFIT.] (a) If an employee or 
  6.24  former employee has credit for at least three years allowable 
  6.25  service and dies before an annuity or disability benefit has 
  6.26  become payable, notwithstanding any designation of beneficiary 
  6.27  to the contrary, the surviving spouse of the employee may elect 
  6.28  to receive, in lieu of the refund with interest under 
  6.29  subdivision 1, an annuity equal to the joint and 100 percent 
  6.30  survivor annuity which the employee or former employee could 
  6.31  have qualified for had the employee terminated service on the 
  6.32  date of death. 
  6.33     (b) If the employee was under age 55 and has credit for at 
  6.34  least 30 years of allowable service on the date of death, the 
  6.35  surviving spouse may elect to receive a 100 percent joint and 
  6.36  survivor annuity based on the age of the employee and surviving 
  7.1   spouse on the date of death.  The annuity is payable using the 
  7.2   full early retirement reduction under section 352.116, 
  7.3   subdivision 1, paragraph (a), to age 55 and one-half of the 
  7.4   early retirement reduction from age 55 to the age payment begins.
  7.5      (c) If the employee was under age 55 and has credit for at 
  7.6   least three years of allowable service credit on the date of 
  7.7   death but did not yet qualify for retirement, the surviving 
  7.8   spouse may elect to receive a 100 percent joint and survivor 
  7.9   annuity based on the age of the employee and surviving spouse at 
  7.10  the time of death.  The annuity is payable using the full early 
  7.11  retirement reduction under section 352.116, subdivision 1 or 1a, 
  7.12  to age 55 and one-half of the early retirement reduction from 
  7.13  age 55 to the age payment begins.  
  7.14     The surviving spouse eligible for surviving spouse benefits 
  7.15  under paragraph (a) may apply for the annuity at any time after 
  7.16  the date on which the deceased employee or former employee would 
  7.17  have attained the required age for retirement based on 
  7.18  the employee's allowable service earned.  The surviving spouse 
  7.19  eligible for surviving spouse benefits under paragraph (b) or 
  7.20  (c) may apply for the annuity at any time after the employee's 
  7.21  death.  The annuity must be computed under sections 352.115, 
  7.22  subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 1a, and 
  7.23  3.  Sections 352.22, subdivision 3, and 352.72, subdivision 2, 
  7.24  apply to a deferred annuity or surviving spouse benefit payable 
  7.25  under this subdivision.  The annuity must cease with the last 
  7.26  payment received by the surviving spouse in the lifetime of the 
  7.27  surviving spouse, or upon expiration of a term certain benefit 
  7.28  payment to a surviving spouse under subdivision 2a.  An amount 
  7.29  equal to the excess, if any, of the accumulated contributions 
  7.30  credited to the account of the deceased employee in excess of 
  7.31  the total of the benefits paid and payable to the surviving 
  7.32  spouse must be paid to the deceased employee's or former 
  7.33  employee's last designated beneficiary or, if none, as specified 
  7.34  under subdivision 1.  
  7.35     Any employee or former employee may request in writing that 
  7.36  this subdivision not apply and that payment be made only to a 
  8.1   designated beneficiary as otherwise provided by this chapter. 
  8.2      Sec. 5.  Minnesota Statutes 1994, section 352.12, 
  8.3   subdivision 2a, is amended to read: 
  8.4      Subd. 2a.  [SURVIVING SPOUSE COVERAGE TERM CERTAIN.] In 
  8.5   lieu of the 100 percent optional annuity under subdivision 2, or 
  8.6   refund under subdivision 1, the surviving spouse of a deceased 
  8.7   employee or former employee may elect to receive survivor 
  8.8   coverage in a term certain of five, ten, 15, or 20 years, but 
  8.9   monthly payments must not exceed 75 percent of the average 
  8.10  high-five monthly salary of the deceased employee or former 
  8.11  employee.  The monthly term certain annuity must be actuarially 
  8.12  equivalent to the 100 percent optional annuity under subdivision 
  8.13  2. 
  8.14     If a survivor elects a term certain annuity and dies before 
  8.15  the expiration of the specified term certain period, the 
  8.16  commuted value of the remaining annuity payments must be paid in 
  8.17  a lump sum to the survivor's estate. 
  8.18     Sec. 6.  Minnesota Statutes 1994, section 352.12, 
  8.19  subdivision 6, is amended to read: 
  8.20     Subd. 6.  [DEATH AFTER SERVICE TERMINATION.] Except as 
  8.21  provided in subdivision 1, if a former employee covered by the 
  8.22  system dies and has not received an annuity, a retirement 
  8.23  allowance, or a disability benefit, a refund must be made to the 
  8.24  last designated beneficiary or, if there is none, to the 
  8.25  surviving spouse or, if none, to the employee's surviving 
  8.26  children in equal shares or, if none, to the employee's 
  8.27  surviving parents in equal shares or, if none, to the 
  8.28  representative of the estate in an amount equal to accumulated 
  8.29  employee contributions.  The refund must include interest at the 
  8.30  rate of six percent per year compounded annually.  The interest 
  8.31  must be computed to the first day of the month in which the 
  8.32  refund is processed and be based on fiscal year balances as 
  8.33  provided in section 352.22, subdivision 2. 
  8.34     Sec. 7.  Minnesota Statutes 1994, section 352B.105, is 
  8.35  amended to read: 
  8.36     352B.105 [TERMINATION OF DISABILITY BENEFITS.] 
  9.1      Disability benefits payable under section 352B.10 shall 
  9.2   terminate at the end of the month the beneficiary becomes 55 65 
  9.3   years old.  If the beneficiary is still disabled when the 
  9.4   beneficiary becomes 55 65 years old, the beneficiary shall be 
  9.5   deemed to be a retired member and, if the beneficiary had chosen 
  9.6   an optional annuity under section 352B.10, subdivision 5, shall 
  9.7   receive an annuity in accordance with the terms of the optional 
  9.8   annuity previously chosen.  If the beneficiary had not chosen an 
  9.9   optional annuity under section 352B.10, subdivision 5, the 
  9.10  beneficiary may choose to receive either a normal retirement 
  9.11  annuity computed under section 352B.08, subdivision 2, or an 
  9.12  optional annuity as provided in section 352B.08, subdivision 3. 
  9.13  An optional annuity must be chosen within 90 days of attaining 
  9.14  age 65 or reaching the five-year anniversary of the effective 
  9.15  date of the disability benefit, whichever is later.  If an 
  9.16  optional annuity is chosen, the optional annuity shall begin to 
  9.17  accrue the first of the month following attainment of age 65 or 
  9.18  the five-year anniversary of the effective date of the 
  9.19  disability benefit, whichever is later. 
  9.20     Sec. 8.  Minnesota Statutes 1994, section 352D.02, 
  9.21  subdivision 1d, is amended to read: 
  9.22     Subd. 1d.  [ELECTION OF PROGRAM PARTICIPATION.] An employee 
  9.23  who is a participant in the unclassified program by virtue of 
  9.24  employment in a position listed in subdivision 1 may elect to 
  9.25  remain in the unclassified program upon subsequent employment, 
  9.26  without intervening public or private employment, in an 
  9.27  unlimited, full-time unclassified position that is not listed in 
  9.28  subdivision 1.  To elect participation in the unclassified 
  9.29  program, the employee must give notice to the executive director 
  9.30  of the Minnesota state retirement system within one year of the 
  9.31  commencement of employment in an unclassified position that is 
  9.32  not listed in subdivision 1.  Upon receipt of the notice, the 
  9.33  executive director shall transfer to the employee's account in 
  9.34  the unclassified program an amount equal to the employer and 
  9.35  employee contributions with six percent interest to the regular 
  9.36  plan on the employee's behalf from the commencement of 
 10.1   employment in the position not listed in subdivision 1 to the 
 10.2   receipt of the notice by the executive director. 
 10.3      Sec. 9.  Minnesota Statutes 1994, section 352D.02, 
 10.4   subdivision 3, is amended to read: 
 10.5      Subd. 3.  An election to not participate is irrevocable 
 10.6   during any period of covered employment.  An employee credited 
 10.7   with employee shares in the unclassified program, after 
 10.8   acquiring credit for ten three years of allowable service but 
 10.9   prior to termination of covered employment, may, notwithstanding 
 10.10  other provisions of this subdivision, elect to terminate 
 10.11  participation in the unclassified plan and be covered by the 
 10.12  regular plan by filing such election with the executive 
 10.13  director.  The executive director shall thereupon redeem the 
 10.14  employee's total shares and shall credit to the employee's 
 10.15  account in the regular plan the amount of contributions that 
 10.16  would have been so credited had the employee been covered by the 
 10.17  regular plan during the employee's entire covered employment.  
 10.18  The balance of money so redeemed and not credited to the 
 10.19  employee's account shall be transferred to the state 
 10.20  contribution reserve of the state employees retirement fund, 
 10.21  except that (1) the employee contribution paid to the 
 10.22  unclassified plan must be compared to (2) the employee 
 10.23  contributions that would have been paid to the general plan for 
 10.24  the comparable period, if the individual had been covered by 
 10.25  that plan.  If clause (1) is greater than clause (2), the 
 10.26  difference must be refunded to the employee as provided in 
 10.27  section 352.22.  If clause (2) is greater than clause (1), the 
 10.28  difference must be paid by the employee within six months of 
 10.29  electing general plan coverage or before the effective date of 
 10.30  the annuity, whichever is sooner.  
 10.31     Sec. 10.  Minnesota Statutes 1994, section 490.124, 
 10.32  subdivision 12, is amended to read: 
 10.33     Subd. 12.  [REFUND.] (a) Any person who ceases to be a 
 10.34  judge but who does not qualify for a retirement annuity or other 
 10.35  benefit under section 490.121 shall be entitled to a refund in 
 10.36  an amount equal to all the person's contributions to the judges' 
 11.1   retirement fund plus interest computed to the first day of the 
 11.2   month in which the refund is processed based on fiscal year 
 11.3   balances or monthly balances, whichever applies, at an annual 
 11.4   rate of five six percent compounded annually.  
 11.5      (b) A refund of contributions under paragraph (a) 
 11.6   terminates all service credits and all rights and benefits of 
 11.7   the judge and the judge's survivors.  A person who becomes a 
 11.8   judge again after taking a refund under paragraph (a) may 
 11.9   reinstate previously terminated service credits, rights, and 
 11.10  benefits by repaying all refunds.  A repayment must include 
 11.11  interest at an annual rate of 8.5 percent compounded annually. 
 11.12     Sec. 11.  [REPEALER.] 
 11.13     Minnesota Statutes 1994, section 352.021, subdivision 5, is 
 11.14  repealed. 
 11.15     Sec. 12.  [EFFECTIVE DATE.] 
 11.16     Sections 1 to 11 are effective the day following final 
 11.17  enactment.