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SF 1167

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/26/2021 01:48pm

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to retirement; Public Employees Retirement Association police and fire
plan; amending disability provisions for members who are age 55 and older;
amending Minnesota Statutes 2020, section 353.656, subdivisions 1, 1a, 1b, 3, 3a,
5a.

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

Section 1.

Minnesota Statutes 2020, section 353.656, subdivision 1, is amended to read:


Subdivision 1.

Duty disability; computation of benefits.

(a) A member of the police
and fire plandeleted text begin, other thandeleted text end new text beginwho (1) is not new text enda firefighter covered by section 353.6511, or a police
officer covered by section 353.6512, deleted text beginwho is determined to qualify fordeleted text end new text begin(2) has a condition
that meets the definition of a
new text endduty disability deleted text beginas defined indeleted text end new text beginunder new text endsection 353.01, subdivision
41, new text begin(3) has filed a valid application under section 353.031, and (4) is under age 55, new text endis entitled
to receive disability benefits during the period of such disability in an amount equal to 60
percent of the new text beginmember's new text endaverage salary as defined deleted text beginindeleted text end new text beginunder new text endsection 353.01, subdivision 17a,
plus an additional 3.0 percent of that average salary for each year of service in excess of 20
years.

(b) deleted text beginTo be eligible for a benefit under paragraph (a), thedeleted text end new text beginA new text endmember deleted text beginmust havedeleted text endnew text begin of the
police and fire plan who meets the requirements under paragraph (a), clauses (1) to (3), but
who is age 55 or older, is 100 percent vested in and entitled to receive a retirement annuity.
The amount of the retirement annuity must be the greater of
new text end:

(1) deleted text beginnot met the age and vesting requirements fordeleted text end new text begina disability benefit calculated under
paragraph (a); or
new text end

new text begin (2) new text enda retirement annuity new text begincalculated new text endunder section 353.651, subdivision deleted text begin1; ordeleted text endnew text begin 3.
new text end

deleted text begin (2) met the age and vesting requirements under that subdivision, but does not have at
least 20 years of allowable service credit.
deleted text end

deleted text begin (c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a period
of 60 months from the disability benefit accrual date and at the end of that period is subject
to provisions of subdivision 5a.
deleted text end

deleted text begin (d)deleted text end new text begin(c) new text endIf the disability under this subdivision occurs before the member has at least five
years of allowable service credit in the police and fire plan, the disability benefit must be
computed on the average salary from which deductions were made for contribution to the
police and fire fund.

Sec. 2.

Minnesota Statutes 2020, section 353.656, subdivision 1a, is amended to read:


Subd. 1a.

Total and permanent duty disability; computation of benefits.

(a) A member
of the police and fire plandeleted text begin, other thandeleted text end new text beginwho (1) is not new text enda firefighter covered by section 353.6511,
or a police officer covered by section 353.6512, deleted text beginwhose disablingdeleted text end new text begin(2) has a new text endcondition deleted text beginis
determined to be
deleted text end new text beginthat meets the definition of new text enda duty disability new text beginunder section 353.01,
subdivision 41, and
new text endthat is also a deleted text beginpermanent anddeleted text end total new text beginand permanent new text enddisability as defined
deleted text begin indeleted text end new text beginunder new text endsection 353.01, subdivision 19, new text beginand (3) has filed a valid application under section
353.031,
new text endis entitled to receive, for life, disability benefits in an amount equal to 60 percent
of the new text beginmember's new text endaverage salary as defined deleted text beginindeleted text end new text beginunder new text endsection 353.01, subdivision 17a, plus
an additional 3.0 percent of that average salary for each year of service in excess of 20 years.

(b) A disability benefit payable under paragraph (a) is subject to eligibility review under
section 353.33, subdivision 6, but the review may be waived if the executive director receives
a written statement from the association's medical advisor that no improvement can be
expected in the member's disabling condition that was the basis for payment of the benefit
under paragraph (a). A member receiving a disability benefit under this subdivision who is
found to no longer deleted text beginbe permanently and totally disableddeleted text end new text beginhave a total and permanent disability
new text end as defined under section 353.01, subdivision 19, but continues to deleted text beginmeet the definition for
receipt of
deleted text end new text beginhave new text enda duty disability new text beginas defined new text endunder section 353.01, subdivision 41, is subject
to subdivision 1 upon written notice from the association's medical advisor that the person
deleted text begin isdeleted text end no longer deleted text beginconsidered permanently and totally disableddeleted text endnew text begin has a total and permanent disabilitynew text end,
and may, upon application, elect an optional annuity under subdivision 1b.

(c) If a member approved for disability benefits under this subdivision dies before
attaining normal retirement age as defined deleted text beginindeleted text end new text beginunder new text endsection 353.01, subdivision 37, paragraph
(b), or within 60 months of the effective date of the disability, whichever is later, the
surviving spouse is entitled to receive a survivor benefit under section 353.657, subdivision
2, paragraph (a), clause (1), if the death is the direct result of the disabling condition for
which disability benefits were approved, or section 353.657, subdivision 2, paragraph (a),
clause (2), if the death is not directly related to the disabling condition for which benefits
were approved under this subdivision.

(d) If the election of an actuarial equivalent optional annuity is not made at the time
new text begin payment of new text endthe deleted text beginpermanent anddeleted text end total new text beginand permanent new text enddisability benefit accrues, an election
must be made within 90 days before the member attains normal retirement age as defined
under section 353.01, subdivision 37, paragraph (b), or deleted text beginhavingdeleted text end new text beginhas new text endcollected total and
permanent disability benefits for 60 months, whichever is later. If a member receiving
disability benefits who has dependent children dies, subdivision 6a, paragraph (c), applies.

Sec. 3.

Minnesota Statutes 2020, section 353.656, subdivision 1b, is amended to read:


Subd. 1b.

Optional annuity election.

(a) A disabled member of the police and fire fund
may elect to receive the normal disability benefit or an actuarial equivalent optional annuity.
If the election of an actuarial equivalent optional annuity is made before the commencement
of payment of the disability benefit, the optional annuity must begin to accrue on the same
date as the disability benefit covering only the disability benefit recipient would have accrued.

(b) If an election of an optional annuity is not made before the commencement of the
disability benefit, the disability benefit recipient may elect an optional annuity:

(1) within 90 days before normal retirement age;

(2) upon the filing of an application to convert to an early retirement annuity, if electing
to convert to an early retirement annuity before the normal retirement age;new text begin or
new text end

deleted text begin (3) within 90 days before the expiration of the 60-month period for which a disability
benefit is paid, if the disability benefit is payable because the disabled member did not have
at least 20 years of allowable service at normal retirement age; or
deleted text end

deleted text begin (4)deleted text end new text begin(3) new text endupon deleted text beginbeing determineddeleted text end new text begina determination new text endthat the disability benefit recipient
continues to be disabled under subdivision 1, but deleted text beginisdeleted text end no longer deleted text begintotally and permanently
disabled
deleted text end new text beginhas a total and permanent disability new text endunder subdivision 1a.

(c) If a disabled member who has named a joint and survivor optional annuity beneficiary
dies before the disability benefit ceases and is recalculated under subdivision 5a, the
beneficiary eligible to receive the joint and survivor annuity may elect to have the annuity
converted at the times designated in paragraph (b), clause (1)deleted text begin,deleted text end new text beginor new text end(2), deleted text beginor (3),deleted text end whichever
allows for the earliest payment of a higher joint and survivor annuity option resulting from
recalculation under subdivision 5a, paragraph (e).

(d) A disabled member may name a person other than the spouse as beneficiary of a
joint and survivor annuity only if the spouse of the disabled member permanently waives
surviving spouse coverage on the disability application form prescribed by the executive
director.

(e) If the spouse of the member permanently waives survivor coverage, the dependent
child or children, if any, continue to be eligible for dependent child benefits under section
353.657, subdivision 3, and the designated optional annuity beneficiary may draw the
monthly benefit.

(f) Any optional annuity under this subdivision, plus dependent child benefits, if
applicable, are subject to the maximum and minimum family benefit amounts specified in
section 353.657, subdivision 3a.

Sec. 4.

Minnesota Statutes 2020, section 353.656, subdivision 3, is amended to read:


Subd. 3.

Regular disability benefit.

(a) A member of the police and fire plandeleted text begin, other
than
deleted text end new text beginwho (1) is not new text enda firefighter covered by section 353.6511, or a police officer covered
by section 353.6512, deleted text beginwho qualifies fordeleted text end new text begin(2) has at least one year of allowable service, (3) has
a condition that meets the definition of
new text enda regular disability deleted text beginbenefit as defined indeleted text end new text beginunder new text endsection
353.01, subdivision 46, new text begin(4) has filed a valid application under section 353.031, and (5) is
under age 55,
new text endis entitled to receive a disability benefitdeleted text begin, after filing a valid application,deleted text end in an
amount equal to 45 percent of the new text beginmember's new text endaverage salary as defined deleted text beginindeleted text end new text beginunder new text endsection
353.01, subdivision 17a.

(b) deleted text beginTo be eligible for a benefit under paragraph (a), thedeleted text end new text beginA new text endmember deleted text beginmust have at least
one year of allowable service credit and have
deleted text endnew text begin of the police and fire plan who meets the
requirements under paragraph (a), clauses (1) to (4), but who is age 55 or older, is entitled
to receive a retirement annuity. The amount of the retirement annuity is the greater of
new text end:

(1) deleted text beginnot met the age anddeleted text end new text begina disability benefit calculated under paragraph (a), not subject
to the
new text endvesting requirements deleted text beginfordeleted text end new text beginunder section 353.01, subdivision 47; or
new text end

new text begin (2) new text enda retirement annuity new text begincalculated new text endunder section 353.651, subdivision deleted text begin1; ordeleted text endnew text begin 3, subject
to the vesting requirements under section 353.01, subdivision 47.
new text end

deleted text begin (2) met the age and vesting requirements under that subdivision, but does not have at
least 15 years of allowable service credit.
deleted text end

deleted text begin (c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a period
of 60 months from the disability benefit accrual date and, at the end of that period, is subject
to provisions of subdivision 5a.
deleted text end

deleted text begin (d)deleted text end new text begin(c) new text endFor a member who is employed as a full-time firefighter by the Department of
Military Affairs of the state of Minnesota, allowable service as a full-time state Military
Affairs Department firefighter credited by the Minnesota State Retirement System may be
used in meeting the minimum allowable service requirement of this subdivision.

Sec. 5.

Minnesota Statutes 2020, section 353.656, subdivision 3a, is amended to read:


Subd. 3a.

Total and permanent regular disability; computation of benefits.

(a) A
member of the police and fire plan, deleted text beginother thandeleted text end new text beginwho (1) is not new text enda firefighter covered by section
353.6511, or a police officer covered by section 353.6512, deleted text beginwhose disablingdeleted text end new text begin(2) has a
new text end condition deleted text beginis determined to bedeleted text end new text beginthat meets the definition of new text enda regular disability under section
353.01, subdivision 46, new text beginand new text endthat is also a deleted text beginpermanent anddeleted text end total new text beginand permanent new text enddisability as
defined deleted text beginindeleted text end new text beginunder new text endsection 353.01, subdivision 19, new text beginand (3) has filed a valid application under
section 353.031,
new text endis entitled to receive, for life, a disability benefit in an amount equal to 45
percent of the new text beginmember's new text endaverage salary as defined deleted text beginindeleted text end new text beginunder new text endsection 353.01, subdivision 17a,
plus an additional 3.0 percent of that average salary for each year of service in excess of 15
years.

(b) A disability benefit payable under paragraph (a) is subject to eligibility review under
section 353.33, subdivision 6, but the review may be waived if the executive director receives
a written statement from the association's medical advisor that no improvement can be
expected in the member's disabling condition that was the basis for payment of the benefit
under paragraph (a). A member receiving a disability benefit under this subdivision who is
found to no longer be deleted text beginpermanently and totally disableddeleted text end new text beginhave a total and permanent disability
new text end as defined under section 353.01, subdivision 19, but continues to deleted text beginmeet the definition for
receipt of
deleted text end new text beginhave new text enda regular disability new text beginas defined new text endunder section 353.01, subdivision 46, is subject
to subdivision 3 upon written notice from the association's medical advisor that the person
deleted text begin isdeleted text end no longer deleted text beginconsidered permanently and totally disableddeleted text endnew text begin has a total and permanent disabilitynew text end.

(c) A member approved for disability benefits under this subdivision may elect to receive
a normal disability benefit or an actuarial equivalent optional annuity. If the election of an
actuarial equivalent optional annuity is not made at the time new text beginpayment of new text endthe total and
permanent disability benefit accrues, an election must be made within 90 days before the
member attains normal retirement age as defined deleted text beginindeleted text end new text beginunder new text endsection 353.01, subdivision 37,
paragraph (b), or deleted text beginhavingdeleted text end new text beginhas new text endcollected disability benefits for 60 months, whichever is later.
No surviving spouse benefits are payable if the member dies during the period in which a
normal total and permanent disability benefit is being paid. If a member receiving disability
benefits who has dependent children dies, subdivision 6a, paragraph (c), applies.

Sec. 6.

Minnesota Statutes 2020, section 353.656, subdivision 5a, is amended to read:


Subd. 5a.

Cessation of disability benefit.

(a) The association shall cease the payment
of any disability benefit the first of the month following the reinstatement of a member to
full time or less than full-time service in a position covered by the police and fire fund.

(b) A disability benefit paid to a disabled member of the police and fire plan, that was
granted under laws in effect after June 30, 2007, terminatesnew text begin:
new text end

new text begin (1)new text end at the end of the month in which the memberdeleted text begin:
deleted text end

deleted text begin (1)deleted text end reaches normal retirement age;new text begin or
new text end

deleted text begin (2) if the disability benefit is payable for a 60-month period as determined under
subdivisions 1 and 3, as applicable, the first of the month following the expiration of the
60-month period; or
deleted text end

deleted text begin (3)deleted text end new text begin(2) new text endif the disabled member so chooses, new text beginat new text endthe end of the month in which the member
has elected to convert to an early retirement annuity under section 353.651, subdivision 4.

(c) If the police and fire plan member continues to be disabled when the disability benefit
terminates under this subdivision, the member is deemed to be retired. The individual is
entitled to receive a normal retirement annuity or an early retirement annuity under section
353.651, whichever is applicable, as further specified in paragraph (d) or (e). If the individual
did not previously elect an optional annuity under subdivision 1b, paragraph (a), the
individual may elect an optional annuity under subdivision 1b, paragraph (b).

(d) A member of the police and fire plan who is receiving a disability benefit under this
section may, upon application, elect to receive an early retirement annuity under section
353.651, subdivision 4, at any time after attaining age 50, but must convert to a retirement
annuity no later than the end of the month in which the disabled member attains normal
retirement age. An early retirement annuity elected under this subdivision must be calculated
on the disabled member's accrued years of service and average salary as defined deleted text beginindeleted text end new text beginunder
new text end section 353.01, subdivision 17a, and when elected, the member is deemed to be retired.

(e) When an individual's disability benefit terminates under paragraph (b), clause (1) deleted text beginor
(2)
deleted text end, and is recalculated as a retirement annuity, the annuity must be based on clause (1) or
(2), whichever provides the greater amount:

(1) the benefit amount at the time of reclassification, including all prior adjustments
provided under Minnesota Statutes 2008, section 11A.18, through January 1, 2009, and
thereafter as provided in section 356.415; or

(2) a benefit amount computed on the member's actual years of accrued allowable service
credit and the law in effect at the time the disability benefit first accrued, plus any increases
that would have applied since that date under Minnesota Statutes 2008, section 11A.18,
through January 1, 2009, and thereafter as provided in section 356.415.

Sec. 7. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective July 1, 2021, and apply to disability applications received
by the executive director on or after that date.
new text end