SF 1375

as introduced - 90th Legislature (2017 - 2018) Posted on 06/21/2018 02:39pm

A bill for an act
relating to retirement; Public Employees Retirement Association; clarifying certain
membership exclusions; clarifying the definition of salary for certain leaves of
absence; eliminating an unnecessary board duty; clarifying certain refund
provisions; clarifying certain annuity application and annuity starting date
provisions; clarifying and modifying privatized employee provisions; making other
changes of an administrative nature; amending Minnesota Statutes 2016, sections
353.01, subdivisions 2b, 10, 47; 353.03, subdivision 3; 353.29, subdivisions 4, 7;
353.35, subdivision 1; 353.37, subdivision 1; 353F.02, subdivision 5a; 353F.04,
subdivision 2; 353F.05; 353F.057; 353F.06; 353F.07; 356.32, subdivision 2;
356.47, subdivision 3; proposing coding for new law in Minnesota Statutes, chapter
353F.

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

Section 1.

Minnesota Statutes 2016, section 353.01, subdivision 2b, is amended to read:

Subd. 2b.

Excluded employees.

(a) The following public employees are not eligible to
participate as members of the association with retirement coverage by the general employees
retirement plan, the local government correctional employees retirement plan under chapter
353E, or the public employees police and fire retirement plan:

(1) persons whose annual salary from one governmental subdivision never exceeds an
amount, stipulated in writing in advance, of $5,100 if the person is not a school district
employee or $3,800 if the person is a school year employee. If annual compensation from
one governmental subdivision to an employee exceeds the stipulated amount in a calendar
year or a school year, whichever applies, after being stipulated in advance not to exceed the
applicable amount, the stipulation is no longer valid and contributions must be made on
behalf of the employee under section 353.27, subdivision 12, from the first month in which
the employee received salary exceeding $425 in a month;

(2) public officers who are elected to a governing body, city mayors, or persons who
are appointed to fill a vacancy in an deleted text begin elective deleted text end new text begin elected new text end office of a governing body, whose term
of office commences on or after July 1, 2002, for the service to be rendered in that deleted text begin elective deleted text end
new text begin elected new text end position;

(3) election judges and persons employed solely to administer elections;

(4) patient and inmate personnel who perform services for a governmental subdivision;

(5) except as otherwise specified in subdivision 12a, employees who are employed solely
in a temporary position as defined under subdivision 12a, and employees who resign from
a nontemporary position and accept a temporary position within 30 days of that resignation
in the same governmental subdivision;

(6) employees who are employed by reason of work emergency caused by fire, flood,
storm, or similar disaster, but if the person becomes a probationary or provisional employee
within the same pay period, other than on a temporary basis, the person is a "public
employee" retroactively to the beginning of the pay period;

(7) employees who by virtue of their employment in one governmental subdivision are
required by law to be a member of and to contribute to any of the plans or funds administered
by the Minnesota State Retirement System, the Teachers Retirement Association, or the St.
Paul Teachers Retirement Fund Association, but this exclusion must not be construed to
prevent a person from being a member of and contributing to the Public Employees
Retirement Association and also belonging to and contributing to another public pension
plan or fund for other service occurring during the same period of time, and a person who
meets the definition of "public employee" in subdivision 2 by virtue of other service occurring
during the same period of time becomes a member of the association unless contributions
are made to another public retirement plan on the salary based on the other service or to the
Teachers Retirement Association by a teacher as defined in section 354.05, subdivision 2;

(8) persons who are members of a religious order and are excluded from coverage under
the federal Old Age, Survivors, Disability, and Health Insurance Program for the performance
of service as specified in United States Code, title 42, section 410(a)(8)(A), as amended, if
no irrevocable election of coverage has been made under section 3121(r) of the Internal
Revenue Code of 1954, as amended;

(9) persons who are:

(i) employed by a governmental subdivision who have not reached the age of 23 and
who are enrolled on a full-time basis to attend or are attending classes on a full-time basis
at an accredited school, college, or university in an undergraduate, graduate, or
professional-technical program, or at a public or charter high school;

(ii) employed as resident physicians, medical interns, pharmacist residents, or pharmacist
interns and are serving in a degree or residency program in a public hospital or in a public
clinic; or

(iii) students who are serving for a period not to exceed five years in an internship or a
residency program that is sponsored by a governmental subdivision, including an accredited
educational institution;

(10) persons who hold a part-time adult supplementary technical college license who
render part-time teaching service in a technical college;

(11) deleted text begin except for employees of deleted text end new text begin foreign citizens who are employed by a governmental
subdivision, other than new text end Hennepin County or deleted text begin employees of deleted text end Hennepin Healthcare System,
Inc., deleted text begin foreign citizens who are employed by a governmental subdivision deleted text end under a work permit
or deleted text begin under an H-1b deleted text end new text begin work new text end visa initially issued or extended for a combined period of less than
three years of employment new text begin , new text end but upon extension of the deleted text begin employment of the deleted text end new text begin work permit or
work new text end visa beyond the three-year period, new text begin if new text end the foreign deleted text begin citizen must be reported for
membership beginning on the first of the month following the extension if the monthly
earnings threshold as provided deleted text end new text begin citizen's annual salary satisfies the eligibility criteria new text end under
subdivision 2a, paragraph (a), deleted text begin is met deleted text end new text begin the foreign citizen must be reported for membership
beginning on the first day of the first full pay period following the date of the extension new text end ;

(12) public hospital employees who elected not to participate as members of the
association before 1972 and who did not elect to participate from July 1, 1988, to October
1, 1988;

(13) except as provided in section 353.86, volunteer ambulance service personnel, as
defined in subdivision 35, but persons who serve as volunteer ambulance service personnel
may still qualify as public employees under subdivision 2 and may be members of the Public
Employees Retirement Association and participants in the general employees retirement
plan or the public employees police and fire plan, whichever applies, on the basis of
compensation received from public employment service other than service as volunteer
ambulance service personnel;

(14) except as provided in section 353.87, volunteer firefighters, as defined in subdivision
36, engaging in activities undertaken as part of volunteer firefighter duties, but a person
who is a volunteer firefighter may still qualify as a public employee under subdivision 2
and may be a member of the Public Employees Retirement Association and a participant
in the general employees retirement plan or the public employees police and fire plan,
whichever applies, on the basis of compensation received from public employment activities
other than those as a volunteer firefighter;

(15) pipefitters and associated trades personnel employed by Independent School District
No. 625, St. Paul, with coverage under a collective bargaining agreement by the pipefitters
local 455 pension plan who were either first employed after May 1, 1997, or, if first employed
before May 2, 1997, elected to be excluded under Laws 1997, chapter 241, article 2, section
12;

(16) electrical workers, plumbers, carpenters, and associated trades personnel who are
employed by Independent School District No. 625, St. Paul, or the city of St. Paul, who
have retirement coverage under a collective bargaining agreement by the Electrical Workers
Local 110 pension plan, the United Association Plumbers Local 34 pension plan, or the
pension plan applicable to Carpenters Local 322 who were either first employed after May
1, 2000, or, if first employed before May 2, 2000, elected to be excluded under Laws 2000,
chapter 461, article 7, section 5;

(17) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers, painters,
allied tradesworkers, and plasterers who are employed by the city of St. Paul or Independent
School District No. 625, St. Paul, with coverage under a collective bargaining agreement
by the Bricklayers and Allied Craftworkers Local 1 pension plan, the Cement Masons Local
633 pension plan, the Glaziers and Glassworkers Local L-1324 pension plan, the Painters
and Allied Trades Local 61 pension plan, or the Twin Cities Plasterers Local 265 pension
plan who were either first employed after May 1, 2001, or if first employed before May 2,
2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article 10,
section 6;

(18) plumbers who are employed by the Metropolitan Airports Commission, with
coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan,
who either were first employed after May 1, 2001, or if first employed before May 2, 2001,
elected to be excluded under Laws 2001, First Special Session chapter 10, article 10, section
6;

(19) employees who are hired after June 30, 2002, solely to fill seasonal positions under
subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
days or less in each year of employment with the governmental subdivision;

(20) persons who are provided supported employment or work-study positions by a
governmental subdivision and who participate in an employment or industries program
maintained for the benefit of these persons where the governmental subdivision limits the
position's duration to up to five years, including persons participating in a federal or state
subsidized on-the-job training, work experience, senior citizen, youth, or unemployment
relief program where the training or work experience is not provided as a part of, or for,
future permanent public employment;

(21) independent contractors and the employees of independent contractors;

(22) reemployed annuitants of the association during the course of that reemployment;

(23) persons appointed to serve on a board or commission of a governmental subdivision
or an instrumentality thereof;

(24) persons employed as full-time fixed-route bus drivers by the St. Cloud Metropolitan
Transit Commission who are members of the International Brotherhood of Teamsters Local
638 and who are, by virtue of that employment, members of the International Brotherhood
of Teamsters Central States pension plan; and

(25) electricians or pipefitters employed by the Minneapolis Park and Recreation Board,
with coverage under a collective bargaining agreement by the IBEW local 292, or pipefitters
local 539 pension plan, who were first employed before May 2, 2015, and who elected to
be excluded under Laws 2015, chapter 68, article 11, section 5.

(b) Any person performing the duties of a public officer in a position defined in
subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
employee of an independent contractor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 2.

Minnesota Statutes 2016, section 353.01, subdivision 10, is amended to read:

Subd. 10.

Salary.

(a) Subject to the limitations of section 356.611, "salary" means:

(1) the wages or periodic compensation payable to a public employee by the employing
governmental subdivision before:

(i) employee retirement deductions that are designated as picked-up contributions under
section 356.62;

(ii) any employee-elected deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs that would have otherwise been available
as a cash payment to the employee; and

(iii) employee deductions for contributions to a supplemental plan or to a governmental
trust established under section 356.24, subdivision 1, clause (7), to save for postretirement
health care expenses, unless otherwise excluded under paragraph (b);

(2) for a public employee who is covered by a supplemental retirement plan under section
356.24, subdivision 1, clause (8), (9), (10), or (12), the employer contributions to the
applicable supplemental retirement plan when an agreement between the parties establishes
that the contributions will either result in a mandatory reduction of employees' wages through
payroll withholdings, or be made in lieu of an amount that would otherwise be paid as
wages;

(3) a payment from a public employer through a grievance proceeding, settlement, or
court order that is attached to a specific earnings period in which the employee's regular
salary was not earned or paid to the member due to a suspension or a period of involuntary
termination that is not a wrongful discharge under section 356.50; provided the amount is
not less than the equivalent of the average of the hourly base salary rate in effect during the
last six months of allowable service prior to the suspension or period of involuntary
termination, plus any applicable increases awarded during the period that would have been
paid under a collective bargaining agreement or personnel policy but for the suspension or
involuntary termination, multiplied by the average number of regular hours for which the
employee was compensated during the six months of allowable service prior to the suspension
or period of involuntary termination, but not to exceed the compensation that the public
employee would have earned if regularly employed during the applicable period;

(4) deleted text begin for a member who is absent from employment due to deleted text end new text begin compensation paid during new text end an
authorized leave of absence, other than an authorized medical leave of absence, new text begin as long as
new text end the compensation paid during deleted text begin the leave if equivalent to deleted text end new text begin a pay period is not less than the
lesser of:
new text end

new text begin (i) the product of new text end the new text begin average new text end hourly base salary rate in effect during the six months of
allowable service deleted text begin , or portions thereof, prior to deleted text end new text begin immediately preceding new text end the leave, multiplied
by the average number of regular hours for which the employee was compensated new text begin each pay
period new text end during the six months of allowable service deleted text begin prior to deleted text end new text begin immediately preceding new text end the
deleted text begin applicable deleted text end leave of absence; new text begin or
new text end

new text begin (ii) compensation equal to the value of the employee's total available accrued leave
hours;
new text end

(5) deleted text begin for a member who is absent from employment by reason of deleted text end new text begin compensation paid during
new text end an authorized medical leave of absence, new text begin other than a workers' compensation leave, as long
as new text end the compensation paid during deleted text begin the leave if specified in advance to be at least deleted text end new text begin a pay period
is not less than the lesser of:
new text end

new text begin (i) the product of new text end one-half of deleted text begin , but no more than equal to, the earnings the member
received, on which contributions were reported and allowable service credited deleted text end new text begin the average
hourly base salary rate in effect new text end during the six months new text begin of allowable service new text end immediately
preceding the deleted text begin medical deleted text end leave of absence; deleted text begin and deleted text end new text begin or
new text end

new text begin (ii) compensation equal to the value of the employee's total available accrued leave
hours;
new text end

(6) for a public employee who receives performance or merit bonus payment under a
written compensation plan, policy, or collective bargaining agreement in addition to regular
salary or in lieu of regular salary increases, the compensation paid to the employee for
attaining or exceeding performance goals, duties, or measures during a specified period of
employment.

(b) Salary does not mean:

(1) fees paid to district court reporters;

(2) unused annual leave, vacation, or sick leave payments, in the form of lump-sum or
periodic payments;

(3) for the donor, payment to another person of the value of hours donated under a
benevolent vacation, personal, or sick leave donation program;

(4) any form of severance or retirement incentive payments;

(5) an allowance payment or per diem payments for or reimbursement of expenses;

(6) lump-sum settlements not attached to a specific earnings period;

(7) workers' compensation payments or disability insurance payments, including payments
from employer self-insurance arrangements;

(8) employer-paid amounts used by an employee toward the cost of insurance coverage,
flexible spending accounts, cafeteria plans, health care expense accounts, day care expenses,
or any payments in lieu of any employer-paid group insurance coverage, including the
difference between single and family rates that may be paid to a member with single coverage
and certain amounts determined by the executive director to be ineligible;

(9) employer-paid fringe benefits, including, but not limited to:

(i) employer-paid premiums or supplemental contributions for employees for all types
of insurance;

(ii) membership dues or fees for the use of fitness or recreational facilities;

(iii) incentive payments or cash awards relating to a wellness program;

(iv) the value of any nonmonetary benefits;

(v) any form of payment made in lieu of an employer-paid fringe benefit;

(vi) an employer-paid amount made to a deferred compensation or tax-sheltered annuity
program; and

(vii) any amount paid by the employer as a supplement to salary, either as a lump-sum
amount or a fixed or matching amount paid on a recurring basis, that is not available to the
employee as cash;

(10) the amount equal to that which the employing governmental subdivision would
otherwise pay toward single or family insurance coverage for a covered employee when,
through a contract or agreement with some but not all employees, the employer:

(i) discontinues, or for new hires does not provide, payment toward the cost of the
employee's selected insurance coverages under a group plan offered by the employer;

(ii) makes the employee solely responsible for all contributions toward the cost of the
employee's selected insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees' selected insurance
coverages under a group plan offered by the employer; and

(iii) provides increased salary rates for employees who do not have any employer-paid
group insurance coverages;

(11) except as provided in section 353.86 or 353.87, compensation of any kind paid to
volunteer ambulance service personnel or volunteer firefighters, as defined in subdivision
35 or 36;

(12) the amount of compensation that exceeds the limitation provided in section 356.611;

(13) amounts paid by a federal or state grant for which the grant specifically prohibits
grant proceeds from being used to make pension plan contributions, unless the contributions
to the plan are made from sources other than the federal or state grant; and

(14) bonus pay that is not performance or merit pay under paragraph (a), clause (6).

(c) Amounts, other than those provided under paragraph (a), clause (3), provided to an
employee by the employer through a grievance proceeding, a court order, or a legal settlement
are salary only if the settlement or court order is reviewed by the executive director and the
amounts are determined by the executive director to be consistent with paragraph (a) and
prior determinations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 353.01, subdivision 47, is amended to read:

Subd. 47.

Vesting.

(a) "Vesting" means obtaining a nonforfeitable entitlement to an
annuity or benefit from a retirement plan administered by the Public Employees Retirement
Association by having credit for sufficient allowable service under paragraph (b), (c), or
(d), whichever applies.

(b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
member of the general employees retirement plan of the Public Employees Retirement
Association:

(1) a public employee who first became a member of the association before July 1, 2010,
is 100 percent vested when the person has accrued credit for not less than three years of
allowable service deleted text begin as defined under subdivision 16 deleted text end new text begin in the general employees retirement plan new text end ;
and

(2) a public employee who first becomes a member of the association after June 30,
2010, is 100 percent vested when the person has accrued credit for not less than five years
of allowable service deleted text begin as defined under subdivision 16 deleted text end new text begin in the general employees retirement
plan new text end .

(c) For purposes of qualifying for an annuity or benefit as a member of the local
government correctional deleted text begin employees deleted text end new text begin service new text end retirement plan:

(1) a public employee who first became a member of the association before July 1, 2010,
is 100 percent vested when the person has accrued credit for not less than three years of
allowable service deleted text begin as defined under subdivision 16 deleted text end new text begin in the local government correctional
service retirement plan new text end ; and

(2) a public employee who first becomes a member of the association after June 30,
2010, is vested at the following percentages when the person has accrued deleted text begin credited deleted text end new text begin credit
for new text end allowable service deleted text begin as defined under subdivision 16, as follows deleted text end new text begin in the local government
correctional service retirement plan, as follows new text end :

(i) 50 percent after five years;

(ii) 60 percent after six years;

(iii) 70 percent after seven years;

(iv) 80 percent after eight years;

(v) 90 percent after nine years; and

(vi) 100 percent after ten years.

(d) For purposes of qualifying for an annuity or benefit as a member of the public
employees police and fire retirement plan:

(1) a public employee who first became a member of the association before July 1, 2010,
is 100 percent vested when the person has accrued credit for not less than three years of
allowable service deleted text begin as defined under subdivision 16 deleted text end new text begin in the public employees police and fire
retirement plan new text end ;

(2) a public employee who first becomes a member of the association after June 30,
2010, and before July 1, 2014, is vested at the following percentages when the person has
accrued credited allowable service deleted text begin as defined under subdivision 16 deleted text end new text begin in the public employees
police and fire retirement plan new text end , as follows:

(i) 50 percent after five years;

(ii) 60 percent after six years;

(iii) 70 percent after seven years;

(iv) 80 percent after eight years;

(v) 90 percent after nine years; and

(vi) 100 percent after ten years; and

(3) a public employee who first becomes a member of the association after June 30,
2014, is vested at the following percentages when the person has accrued deleted text begin credited deleted text end new text begin credit
for new text end allowable service deleted text begin as defined under subdivision 16 deleted text end new text begin in the public employees police and
fire retirement plan new text end , as follows:

(i) 50 percent after ten years;

(ii) 55 percent after 11 years;

(iii) 60 percent after 12 years;

(iv) 65 percent after 13 years;

(v) 70 percent after 14 years;

(vi) 75 percent after 15 years;

(vii) 80 percent after 16 years;

(viii) 85 percent after 17 years;

(ix) 90 percent after 18 years;

(x) 95 percent after 19 years; and

(xi) 100 percent after 20 or more years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 353.03, subdivision 3, is amended to read:

Subd. 3.

Duties and powers.

(a) The board shall:

(1) elect a president and vice-president;

(2) approve the staffing complement, as recommended by the executive director,
necessary to administer the fund;

(3) adopt bylaws for its own government and for the management of the fund consistent
with the laws of the state and may modify them at pleasure;

(4) adopt, alter, and enforce reasonable rules consistent with the laws of the state and
the terms of the applicable benefit plans for the administration and management of the fund,
for the payment and collection of payments from members and for the payment of
withdrawals and benefits, and that are necessary in order to comply with the applicable
federal Internal Revenue Service and Department of Labor requirements;

(5) pass upon and allow or disallow all applications for membership in the fund and
allow or disallow claims for withdrawals, pensions, or benefits payable from the fund;

deleted text begin (6) authorize procedures for use of electronic signatures as defined in section 325L.02,
paragraph (h), on applications and forms required by the association;
deleted text end

deleted text begin (7) deleted text end new text begin (6) new text end adopt an appropriate mortality table based on experience of the fund as
recommended by the association actuary and approved under section 356.215, subdivision
18, with interest set at the rate specified in section 356.215, subdivision 8;

deleted text begin (8) deleted text end new text begin (7) new text end provide for the payment out of the fund of the cost of administering this chapter,
of all necessary expenses for the administration of the fund and of all claims for withdrawals,
pensions, or benefits allowed;

deleted text begin (9) deleted text end new text begin (8) new text end approve or disapprove all recommendations and actions of the executive director
made subject to its approval or disapproval by subdivision 3a; and

deleted text begin (10) deleted text end new text begin (9) new text end approve early retirement and optional annuity factors, subject to review by the
actuary retained by the Legislative Commission on Pensions and Retirement; establish the
schedule for implementation of the approved factors; and notify the Legislative Commission
on Pensions and Retirement of the implementation schedule.

(b) In passing upon all applications and claims, the board may summon, swear, hear,
and examine witnesses and, in the case of claims for disability benefits, may require the
claimant to submit to a medical examination by a physician of the board's choice, at the
expense of the fund, as a condition precedent to the passing on the claim, and, in the case
of all applications and claims, may conduct investigations necessary to determine their
validity and merit.

(c) The board may continue to authorize the sale of life insurance to members under the
insurance program in effect on January 1, 1985, but must not change that program without
the approval of the commissioner of management and budget. The association shall not
receive any financial benefit from the life insurance program beyond the amount necessary
to reimburse the association for costs incurred in administering the program. The association
shall not engage directly or indirectly in any other activity involving the sale or promotion
of goods or services, or both, whether to members or nonmembers.

(d) The board shall establish procedures governing reimbursement of expenses to board
members. These procedures must define the types of activities and expenses that qualify
for reimbursement, must provide that all out-of-state travel be authorized by the board, and
must provide for the independent verification of claims for expense reimbursement. The
procedures must comply with the applicable rules and policies of the Department of
Management and Budget and the Department of Administration.

(e) The board may purchase fiduciary liability insurance and official bonds for the
officers and members of the board of trustees and employees of the association and may
purchase property insurance or may establish a self-insurance risk reserve including, but
not limited to, data processing insurance and "extra-expense" coverage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 353.29, subdivision 4, is amended to read:

Subd. 4.

Application for annuity.

Application for a retirement annuity new text begin or optional
annuity new text end may be made by a member or by a person deleted text begin authorized to act deleted text end new text begin acting new text end on behalf of the
member new text begin , upon proof of authority satisfactory to the executive director new text end . Every application
deleted text begin for retirement deleted text end must be made deleted text begin in writing deleted text end on a form new text begin or in a format new text end prescribed by the executive
director and must be substantiated by deleted text begin written deleted text end proof of the member's age and identity. The
notarized signature of a member's spouse on a retirement annuity application acknowledging
the member's annuity selection meets the notice requirement to the spouse under section
356.46, subdivision 3. An application for a retirement annuity is not complete until all
necessary supporting documents are received by the executive director.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 353.29, subdivision 7, is amended to read:

Subd. 7.

deleted text begin Annuities; accrual deleted text end new text begin Annuity starting date new text end .

(a) Except as deleted text begin to elected public
officials deleted text end new text begin specified in paragraph (b) new text end , a retirement annuity granted under this chapter begins
deleted text begin with deleted text end new text begin on new text end the first day of the first calendar month after the date of termination of public service new text begin
or up to six months before the first of the month in which a complete application is received
by the executive director under subdivision 4, whichever is later new text end . The annuity must be paid
in equal monthly installments deleted text begin and does not accrue deleted text end new text begin , unless suspended or reduced under
section 353.37. Annuity payments shall not be paid new text end beyond the end of the month in which
entitlement to the annuity has terminated.

(b) An annuity granted to an deleted text begin elective deleted text end new text begin elected new text end public official deleted text begin accrues deleted text end new text begin may begin new text end on the
day following new text begin the new text end expiration of new text begin the new text end public office deleted text begin or expiration of the right to hold that office deleted text end new text begin
that qualified the elected official for membership under section 353.01, subdivision 2a or
2d, if a complete application is received by the executive director under subdivision 4 within
six months of the date of termination of public service new text end . The annuity for the month during
which the expiration occurred is prorated accordingly.

(c) An annuity, once granted, must not be increased, decreased, or revoked except under
this chapter.

deleted text begin (d) An annuity payment may be made retroactive for up to one year prior to that month
in which a complete application is received by the executive director under subdivision 4.
deleted text end

deleted text begin (e) deleted text end new text begin (d) new text end If an annuitant dies before negotiating the check for the month in which death
occurs, payment must first be made to the surviving spouse, or if none, then to the designated
beneficiary, or if none, lastly to the estate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 353.35, subdivision 1, is amended to read:

Subdivision 1.

Refund rights.

(a) Except as provided in paragraph (b), when any former
member accepts a refund, all existing service credits and all rights and benefits to which
the person was entitled prior to the acceptance of the refund deleted text begin must deleted text end terminate.

(b) A refund under section 353.651, subdivision 3, paragraph (c), does not result in a
forfeiture of salary credit for the allowable service credit covered by the refund.

(c) deleted text begin The deleted text end new text begin If a person forfeits service credits, rights, and benefits under paragraph (a), the
person's service credits, new text end rights new text begin , new text end and benefits deleted text begin of a former member must not deleted text end new text begin shall new text end be restored
deleted text begin until deleted text end new text begin if new text end the person returns to deleted text begin active service and acquires deleted text end new text begin employment covered by the
association for new text end at least six months of allowable service deleted text begin credit after taking the last refund deleted text end
and repays deleted text begin the refund or refunds taken and interest deleted text end new text begin all amounts previously new text end received under
section 353.34, deleted text begin subdivisions 1 and deleted text end new text begin subdivision new text end 2, plus interest at the annual rate of 8.5
percent until June 30, 2015, and eight percent thereafter new text begin , new text end compounded annually new text begin , from the
date each amount was received to the date the amount is repaid new text end . deleted text begin If the person elects to restore
service credit in a particular fund from which the person has taken more than one refund,
the person must repay all refunds to that fund. All refunds deleted text end new text begin The repayment new text end must be deleted text begin repaid deleted text end
new text begin made new text end within six months of the last deleted text begin date of termination deleted text end new text begin day new text end of public service new text begin employment.
A person may have service credits, rights, and benefits restored under this paragraph once new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 8.

Minnesota Statutes 2016, section 353.37, subdivision 1, is amended to read:

Subdivision 1.

Salary maximums.

(a) The annuity of a person otherwise eligible for
an annuity from the general employees retirement plan of the Public Employees Retirement
Association, the public employees police and fire retirement plan, or the local government
correctional employees retirement plan must be suspended under subdivision 2 or reduced
under subdivision 3, whichever results in the higher annual annuity amount, deleted text begin if deleted text end new text begin upon new text end the
deleted text begin person reenters public service as a nonelective deleted text end new text begin person's employment as a nonelected new text end employee
of a governmental subdivision new text begin in a position not required by law to be a member of a plan
administered by the Minnesota State Retirement System, the Teachers Retirement
Association, or the St. Paul Teachers Retirement Fund Association, new text end or returns to work as
an employee of a labor organization that represents public employees who are association
members under this chapter new text begin , new text end and salary for the reemployment service exceeds the annual
maximum earnings allowable for that age for the continued receipt of full benefit amounts
monthly under the federal Old Age, Survivors and Disability Insurance Program as set by
the secretary of health and human services under United States Code, title 42, section 403,
in any calendar year. If the person has not yet reached the minimum age for the receipt of
Social Security benefits, the maximum salary for the person is equal to the annual maximum
earnings allowable for the minimum age for the receipt of Social Security benefits.

(b) The provisions of paragraph (a) do not apply to the members of the general employees
plan of the Public Employees Retirement Association who were former members of MERF.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 353F.02, subdivision 5a, is amended to read:

Subd. 5a.

Privatized former public employer.

"Privatized former public employer"
means a medical facility that was deleted text begin formerly deleted text end included in the definition of governmental
subdivision under section 353.01, subdivision 6, new text begin on the day before the effective date of
privatization, new text end that is privatized and whose employees are certified for participation under
this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 10.

Minnesota Statutes 2016, section 353F.04, subdivision 2, is amended to read:

Subd. 2.

Exceptions.

The increased augmentation rates specified in subdivision 1 do
not apply to a privatized former public employee:

(1) beginning the first of the month in which the privatized former public employee
becomes covered again by a retirement plan enumerated in section 356.30, subdivision 3,
if the employee accrues at least six months of credited service in any single plan enumerated
in section 356.30, subdivision 3, except clause (6);

(2) beginning the first of the month in which the privatized former public employee
becomes covered again by the general employees retirement plan of the Public Employees
Retirement Association;

(3) beginning the first of the month after a privatized former public employee terminates
service with the deleted text begin successor entity deleted text end new text begin privatized former public employer new text end ; or

(4) if the person begins receipt of a retirement annuity while employed by the employer
which assumed operations of or purchased the privatized former public employer.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 353F.05, is amended to read:

353F.05 AUTHORIZATION FOR ADDITIONAL ALLOWABLE SERVICE FOR
EARLY RETIREMENT PURPOSES.

(a) For the purpose of determining eligibility for early retirement benefits provided under
section 353.30, subdivision 1a, of the edition of Minnesota Statutes published in the year
before the year in which the privatization occurred, and notwithstanding any provision of
chapter 353, to the contrary, the years of allowable service for a privatized former public
employee who transfers employment on the effective date of privatization and does not
apply for a refund of contributions under section 353.34, subdivision 1, of the edition of
Minnesota Statutes published in the year before the year in which the privatization occurred,
or any similar provision, includes service with the deleted text begin successor employer to the deleted text end privatized
former public employer following the effective date. The deleted text begin successor deleted text end new text begin privatized former public
new text end employer shall provide any reports that the executive director of the Public Employees
Retirement Association may reasonably request to permit calculation of benefits.

(b) To be eligible for early retirement benefits under this section, the individual must
separate from service with the deleted text begin successor to the deleted text end privatized former public employer. The
privatized former public employee, or an individual authorized to act on behalf of that
employee, may apply for an annuity following application procedures under section 353.29,
subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 353F.057, is amended to read:

353F.057 TERMINATION FROM SERVICE REQUIREMENT.

Upon termination of service from the privatized former public employer deleted text begin or any successor
entity deleted text end after the effective date of privatization, a privatized former public employee must
separate from any employment relationship with the privatized former public employer deleted text begin or
any successor entity deleted text end for at least 30 days to qualify to receive a retirement annuity under this
chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 353F.06, is amended to read:

353F.06 APPLICATION OF REEMPLOYED ANNUITANT EARNINGS
LIMITATIONS.

If a privatized former public employee satisfies the separation from service requirement
in section 353F.057 and thereafter resumes employment with the privatized former public
employer or deleted text begin any successor entity or deleted text end a governmental subdivision under section 353.01,
subdivision 6, the reemployed annuitant earnings limitations of section 353.37 apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 14.

Minnesota Statutes 2016, section 353F.07, is amended to read:

353F.07 EFFECT ON REFUND.

Notwithstanding any provision of chapter 353 to the contrary, privatized former public
employees may receive a refund of employee accumulated contributions plus interest as
provided in section 353.34, subdivision 2, at any time after the transfer of employment to
the deleted text begin successor employer of the deleted text end privatized former public employer. If a privatized former
public employee has received a refund from a pension plan listed in section 356.30,
subdivision 3, the person may not repay that refund unless the person again becomes a
member of one of those listed plans and complies with section 356.30, subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017.
new text end

Sec. 15.

new text begin [353F.09] APPLICATION TO SALES OF PRIVATIZED FORMER PUBLIC
EMPLOYERS.
new text end

new text begin A medical facility or other employing unit shall cease to be a privatized former public
employer and its employees shall cease to be considered privatized former public employees
under this chapter upon the sale of the operations of the medical facility or employing unit
to another employer or the sale of the medical facility or employing unit to another employer.
The privatized former public employees shall be entitled to benefits accrued under this
chapter to the date of the sale, but shall not accrue additional benefits after the date of the
sale.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The section is effective for privatizations with an effective date
of privatization under section 353F.02, subdivision 3, after June 30, 2017, and for sales of
privatized former public employers after June 30, 2017.
new text end

Sec. 16.

Minnesota Statutes 2016, section 356.32, subdivision 2, is amended to read:

Subd. 2.

Covered retirement plans.

The provisions of this section apply to the following
retirement plans:

(1) the general state employees retirement plan of the Minnesota State Retirement System,
established under chapter 352;

(2) the correctional state employees retirement plan of the Minnesota State Retirement
System, established under chapter 352;

(3) the State Patrol retirement plan, established under chapter 352B;

(4) the general employees retirement plan of the Public Employees Retirement
Association, established under chapter 353;

(5) the public employees police and fire plan of the Public Employees Retirement
Association, established under chapter 353;

(6) new text begin the local government correctional service retirement plan of the Public Employees
Retirement Association, established under chapter 353E;
new text end

new text begin (7) new text end the Teachers Retirement Association, established under chapter 354; and

deleted text begin (7) deleted text end new text begin (8) new text end the St. Paul Teachers Retirement Fund Association, established under chapter
354A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 17.

Minnesota Statutes 2016, section 356.47, subdivision 3, is amended to read:

Subd. 3.

Payment.

(a) Beginning one year after the reemployment withholding period
ends relating to the reemployment that gave rise to the limitation, and the filing of a written
application, the retired member is entitled to the payment, in a lump sum, of the value of
the person's amount under subdivision 2, plus annual compound interest. For the general
state employees retirement plan, the correctional state employees retirement plan, the general
employees retirement plan of the Public Employees Retirement Association, the public
employees police and fire retirement plan, the local government correctional employees
retirement plan, and the teachers retirement plan, the annual interest rate is six percent from
the date on which the amount was deducted from the retirement annuity to the date of
payment or until January 1, 2011, whichever is earlier, and no interest after January 1, 2011.
For the St. Paul Teachers Retirement Fund Association, the annual interest is the rate of six
percent from the date that the amount was deducted from the retirement annuity to the date
of payment or June 30, 2011, whichever is earlier, and with no interest accrual after June
30, 2011.

(b) The written application must be on a form prescribed by the chief administrative
officer of the applicable retirement plan.

(c) If the retired member dies before the payment provided for in paragraph (a) is made,
the amount is payable, upon written application, to the deceased person's surviving spouse,
or if none, to the deceased person's designated beneficiary, or if none, to the deceased
person's estate.

(d) new text begin If the amount under subdivision 2 is an eligible rollover distribution as defined in
section 356.635, subdivisions 4 and 5, the applicable retirement plan shall provide notice
and an election:
new text end

new text begin (1) to the member regarding the member's right to elect a direct rollover under section
356.635, subdivisions 3 to 7, new text end in lieu of deleted text begin the deleted text end new text begin a new text end direct payment deleted text begin of the person's amount under
subdivision 2, on or after the payment date under paragraph (a), if the federal Internal
Revenue Code so permits, the retired member may elect to have all or any portion of the
payment amount under this section paid in the form of a direct rollover to an eligible
retirement plan as defined in section 402(c) of the federal Internal Revenue Code that is
specified by the retired member. If the retired member dies with a balance remaining payable
under this section, the surviving spouse of the retired member, or if none, the deceased
person's designated beneficiary, or if none, the administrator of the deceased person's estate
may elect a direct rollover under this paragraph. deleted text end new text begin ; or
new text end

new text begin (2) if paragraph (c) applies and the amount is to be paid to a person who is a distributee
as defined in section 356.635, subdivision 7, to the distributee regarding the distributee's
right to elect a direct rollover under section 356.635, subdivisions 3 to 7, in lieu of a direct
payment.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end