SF 1303

as introduced - 92nd Legislature (2021 - 2022) Posted on 05/28/2021 03:34pm

A bill for an act
relating to retirement; St. Paul Teachers Retirement Fund Association; modifying
employee contribution rates and making administrative changes; amending
Minnesota Statutes 2020, sections 354A.12, subdivision 1; 354A.31, subdivision
7.

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

Section 1.

Minnesota Statutes 2020, section 354A.12, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

(a) The contribution required to be paid by
each member of the St. Paul Teachers Retirement Fund Association is the percentage of
total salary specified below for the applicable association and program:

	Program	Percentage of Total Salary
St. Paul Teachers Retirement Fund Association
	basic program after June 30, 2016	10 percent
	basic program after June 30, deleted text begin 2022 deleted text end new text begin 2023 new text end	10.25 percent
	coordinated program after June 30, 2016	7.5 percent
	coordinated program after June 30, deleted text begin 2022 deleted text end new text begin 2023 new text end	7.75 percent

(b) Contributions must be made by deduction from salary and must be remitted directly
to the St. Paul Teachers Retirement Fund Association at least once each month.

(c) When an employee contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2020, section 354A.31, subdivision 7, is amended to read:

Subd. 7.

Reduction for early retirement.

(a) This subdivision applies to a person who
has become at least 55 years old and first becomes a coordinated member after June 30,
1989, and to any other coordinated member who has become at least 55 years old and whose
annuity is higher when calculated using the retirement annuity formula percentage in
subdivision 4, paragraph (d), in conjunction with this subdivision than when calculated
under subdivision 4, paragraph (c), in conjunction with subdivision 6. An employee who
retires under the formula annuity before the normal retirement age shall be paid the normal
annuity reduced as described in paragraph (b) if the person retires on or after July 1, 2019,
or in paragraph (c) if the person retires before July 1, 2019, as applicable.

(b) A coordinated member who retires before the normal retirement age and on or after
July 1, 2019, is entitled to receive a retirement annuity calculated using the retirement
annuity formula percentage in subdivision 4, paragraph (d), reduced as described in clause
(1) or (2), as applicable.

(1) If the member retires when the member is younger than age 62 or with fewer than
30 years of service, the annuity must be reduced by an early reduction factor for each year
that the member's age of retirement precedes normal retirement age. The early reduction
factors are four percent per year for deleted text begin ages deleted text end new text begin members whose age at retirement is at least new text end 55
deleted text begin through deleted text end new text begin but not yet new text end 59 and seven percent per year for deleted text begin ages 60 through deleted text end new text begin members whose age
at retirement is at least 59 but not yet new text end normal retirement age. The resulting annuity must be
further adjusted to take into account augmentation as if the employee had deferred receipt
of the annuity until normal retirement age and the annuity were augmented at the applicable
annual rate, compounded annually, from the day the annuity begins to accrue until normal
retirement age. The applicable annual rate is the rate in effect on the employee's effective
date of retirement and shall be considered as fixed for the employee. The applicable annual
rates are the following:

(i) until June 30, 2019, 2.5 percent;

(ii) a rate that changes each month, beginning July 1, 2019, through June 30, 2024, which
is determined by reducing the rate in item (i) to zero in equal monthly increments over the
five-year period; and

(iii) after June 30, 2024, zero percent.

After June 30, 2024, the reduced annuity commencing before normal retirement age
under this clause shall not take into account any augmentation.

(2) If the member retires when the member is at least age 62 or older and has at least 30
years of service, the member is entitled to receive a retirement annuity calculated using the
retirement annuity formula percentage in subdivision 4, paragraph (d), multiplied by the
applicable early retirement factor specified for members "Age 62 or older with 30 years of
service" in the table in paragraph (c).

(c) A coordinated member who retires before the normal retirement age and before July
1, 2019, is entitled to receive a retirement annuity calculated using the retirement annuity
formula percentage in subdivision 4, paragraph (d), multiplied by the applicable early
retirement factor specified below:

	Under age 62	Age 62 or older
	or less than 30 years of service	with 30 years of service

Normal retirement age:	65	66	65	66
Age at retirement
55	0.5376	0.4592
56	0.5745	0.4992
57	0.6092	0.5370
58	0.6419	0.5726
59	0.6726	0.6062
60	0.7354	0.6726
61	0.7947	0.7354
62	0.8507	0.7947	0.8831	0.8389
63	0.9035	0.8507	0.9246	0.8831
64	0.9533	0.9035	0.9635	0.9246
65	1.0000	0.9533	1.0000	0.9635
66		1.0000		1.0000

For normal retirement ages between ages 65 and 66, the early retirement factors must
be determined by linear interpolation between the early retirement factors applicable for
normal retirement ages 65 and 66.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from June 30, 2018.
new text end