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Minnesota Legislature

Office of the Revisor of Statutes

SF 983

as introduced - 88th Legislature (2013 - 2014) Posted on 05/20/2013 02:55pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to retirement; judges retirement plan; reducing postretirement
adjustments; increasing normal retirement age for new judges; revising member
and employer contribution rates; permitting existing judges to elect to be treated
as a new judge for benefit and contribution purposes; amending Minnesota
Statutes 2012, sections 356.315, by adding a subdivision; 356.415, subdivision
1, by adding a subdivision; 490.121, subdivision 21f; 490.123, subdivisions
1a, 1b; 490.124, subdivision 1; proposing coding for new law in Minnesota
Statutes, chapter 490.

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

Section 1.

Minnesota Statutes 2012, section 356.315, is amended by adding a
subdivision to read:


new text begin Subd. 8a. new text end

new text begin Judges plan. new text end

new text begin The applicable benefit accrual rate is 2.5 percent.
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. 2.

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


Subdivision 1.

Annual postretirement adjustments; generally.

(a) Except as
otherwise provided in subdivision 1a, 1b, 1c, 1d, deleted text beginordeleted text end 1e, new text beginor 1f, new text endretirement annuity, disability
benefit, or survivor benefit recipients of a covered retirement plan are entitled to a
postretirement adjustment annually on January 1, as follows:

(1) a postretirement increase of 2.5 percent must be applied each year, effective
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 12 full months prior to the January 1
increase; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a
benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5
percent for each month that the person has been receiving an annuity or benefit must be
applied, effective on January 1 following the calendar year in which the person has been
retired for less than 12 months.

(b) The increases provided by this subdivision commence on January 1, 2010.

(c) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the covered retirement plan requesting that the increase not be made.

(d) The retirement annuity payable to a person who retires before becoming eligible
for Social Security benefits and who has elected the optional payment as provided in
section 353.29, subdivision 6, must be treated as the sum of a period certain retirement
annuity and a life retirement annuity for the purposes of any postretirement adjustment.
The period certain retirement annuity plus the life retirement annuity must be the
annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement
adjustment granted on the period certain retirement annuity must terminate when the
period certain retirement annuity terminates.

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 356.415, is amended by adding a subdivision
to read:


new text begin Subd. 1f. new text end

new text begin Annual postretirement adjustments; Minnesota State Retirement
System judges retirement plan.
new text end

new text begin (a) The increases provided under this subdivision begin
on January 1, 2014, and are in lieu of increases under subdivision 1 or 1a for retirement
annuity, disability benefit, or survivor benefit recipients of the judges retirement plan.
new text end

new text begin (b) Retirement annuity, disability benefit, or survivor benefit recipients of the
judges 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 1.75 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 1.75
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 (c) Increases under this subdivision 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 judges retirement
plan equals or exceeds 70 percent of the actuarial accrued liability of the retirement plan.
Increases under subdivision 1 or 1a, whichever is applicable, begin after that date.
new text end

new text begin (d) An 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 end

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 490.121, subdivision 21f, is amended to read:


Subd. 21f.

Normal retirement date.

new text begin(a) For a judge in the tier I program, new text end"normal
retirement date" means the date deleted text beginadeleted text end new text beginthe new text endjudge attains deleted text beginthedeleted text end age deleted text beginofdeleted text end 65.

new text begin (b) For a judge in the tier II program, "normal retirement date" means the date
the judge attains age 66.
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.

new text begin [490.1221] JUDGES PLAN PROGRAMS.
new text end

new text begin Members of the judges retirement plan are members of either the tier I or tier II
program. A tier I program judge is a person who was first appointed or elected as a judge
before July 1, 2013, who was not eligible for the tier II program because the judge had
five or more years of allowable service, or did not elect that program. A tier II program
judge is a person who:
new text end

new text begin (1) was first appointed or elected as a judge after June 30, 2013; or
new text end

new text begin (2) was first appointed or elected as a judge before July 1, 2013, and made an
election under section 11 to be in the tier II program.
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. 6.

new text begin [490.1222] APPLICATION OF SERVICE CREDIT LIMIT.
new text end

new text begin The service credit limit specified in section 490.121, subdivision 22, does not apply
to a judge in the tier II program.
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. 7.

Minnesota Statutes 2012, section 490.123, subdivision 1a, is amended to read:


Subd. 1a.

Member contribution rates.

(a) A judge deleted text beginwho is covered by the federal
Old Age, Survivors, Disability, and Health Insurance Program and
deleted text end new text beginin the tier I program
new text endwhose service does not exceed the service credit limit in section 490.121, subdivision 22,
shall contribute to the fund from each salary payment a sum equal to deleted text begin8.00deleted text end new text begin9.00 new text endpercent
of salary.

new text begin (b) A judge in the tier II program shall contribute to the fund from each salary
payment a sum equal to 7.00 percent of salary.
new text end

deleted text begin (b) The contributiondeleted text end new text begin(c) Contributions new text endunder this subdivision deleted text beginisdeleted text end new text beginare new text endpayable by salary
deduction. The deduction must be made by the state court administrator under section
352.04, subdivisions 4, 5, and 8.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning on the first day of the first
full payroll period following an increase in judicial salaries of at least one percent due to
action by the legislature during calendar year 2013 or later.
new text end

Sec. 8.

Minnesota Statutes 2012, section 490.123, subdivision 1b, is amended to read:


Subd. 1b.

Employer contribution rate.

(a) The employer contribution rate to the
fund on behalf of a judge is deleted text begin20.5deleted text end new text begin22.5 new text endpercent of salary. The employer obligation continues
after a judge exceeds the service credit limit in section 490.121, subdivision 22.

(b) The employer contribution must be paid by the state court administrator. The
employer contribution is payable at the same time as member contributions are made
under subdivision 1a or as employee contributions are made to the unclassified program
governed by chapter 352D for judges whose service exceeds the limit in section 490.121,
subdivision 22, are remitted.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the first day of the first full payroll
period after June 30, 2013.
new text end

Sec. 9.

Minnesota Statutes 2012, section 490.124, subdivision 1, is amended to read:


Subdivision 1.

deleted text beginBasicdeleted text end Retirement annuity.

(a) Except as qualified hereinafter from
and after the mandatory retirement date, the normal retirement date, the early retirement
date, or one year from the disability retirement date, as the case may be, a retiring judge is
eligible to receive a retirement annuity from the judges' retirement fund.

(b) new text beginFor a tier I program judge, new text endthe retirement annuity is an amount equal to:

(1) the percent specified in section 356.315, subdivision 7, multiplied by the judge's
final average compensation with that result then multiplied by the number of years and
fractions of years of allowable service rendered before July 1, 1980; plus

(2) the percent specified in section 356.315, subdivision 8, multiplied by the judge's
final average compensation with that result then multiplied by the number of years and
fractions of years of allowable service rendered after June 30, 1980.

new text begin (c) For a tier II program judge who was first appointed or elected as a judge before
July 1, 2013, the retirement annuity is an amount equal to:
new text end

new text begin (1) the percent specified in section 356.315, subdivision 8, multiplied by the judge's
final average compensation with that result then multiplied by the number of years and
fractions of years of allowable service rendered before January 1, 2014; plus
new text end

new text begin (2) the percentage specified in section 356.315, subdivision 8a, multiplied by the
judge's final average compensation with that result then multiplied by the number of years
and fractions of years of allowable service rendered after December 31, 2013.
new text end

new text begin (d) For a tier II program judge who was first appointed or elected as a judge after
June 30, 2013, the retirement annuity is an amount equal to the percent specified in section
356.315,
new text end new text begin subdivision 8a, multiplied by the judge's final average compensation with that
result then multiplied by the number of years and fractions of years of allowable service.
new text end

deleted text begin (c)deleted text end new text begin(e) For a judge in the tier I program, new text endservice that exceeds the service credit limit in
section 490.121, subdivision 22, must be excluded in calculating the retirement annuity, but
the compensation earned by the judge during this period of judicial service must be used in
determining a judge's final average compensation and calculating the retirement annuity.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10. new text beginMEMBER CONTRIBUTION INCREASE CONDITION.
new text end

new text begin Any increase in judicial salaries, due to action by the legislature during calendar year
2013 or later, is not applicable to a judge in the tier I program if the member contribution
rate applicable to a judge in the tier I program under section 7 is not deducted from the
salary of the judge.
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. 11. new text beginTIER II PROGRAM ELECTION; PRE-JULY 1, 2013, JUDGES.
new text end

new text begin Subdivision 1. new text end

new text begin Authority. new text end

new text begin A person who was first appointed or elected as a judge
covered by the Minnesota State Retirement System judges retirement plan before July 1,
2013, is eligible to elect treatment as a tier II program judge if the judge has less than five
years of allowable service on the date the judge makes a valid election under subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Election procedure. new text end

new text begin An eligible judge under subdivision 1 may elect to be
subject to provisions of Minnesota Statutes, chapter 490, applicable to a tier II program
judge rather than the tier I program by electing that treatment before January 1, 2014, on a
form provided by the executive director of the Minnesota State Retirement System.
new text end

new text begin Subd. 3. new text end

new text begin Effect of election. new text end

new text begin (a) The election is irrevocable.
new text end

new text begin (b) Any eligible judge who fails to make an election remains in the tier I program.
new text end

new text begin (c) If the tier II program is elected, contributions based on revised member
contribution rates under Minnesota Statutes, section 490.123, subdivision 1a, begin on the
first day of the first full pay period occurring after January 1, 2014.
new text end

new text begin EFFECTIVE DATE. new text end

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