Minnesota Legislature
SF 1802
as introduced - 88th Legislature (2013 - 2014) Posted on 02/26/2014 09:10am
Current Version - as introduced
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A bill for an act
relating to retirement; St. Paul Teachers Retirement Fund Association; revising
the date for full funding; creating a new state aid program; appropriating money;
amending Minnesota Statutes 2012, section 356.215, subdivision 11; Minnesota
Statutes 2013 Supplement, section 354A.12, subdivisions 3a, 3c.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 3a,
is amended to read:
Subd. 3a.
deleted text begin Specialdeleted text end Direct state aid to first class city teachers retirement fund
associations.
(a) The state shall pay $346,000 as special direct state aid to the Duluth
Teachers Retirement Fund Association and $2,827,000 to the St. Paul Teachers Retirement
Fund Association.
new text begin
(b) In addition to other amounts specified in this subdivision, the state shall pay
$7,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.
new text end
deleted text begin (b)deleted text end new text begin (c) new text end The aids under this subdivision are payable October 1 annually. The
commissioner of management and budget shall pay the aids specified in this subdivision.
The amounts required are appropriated annually from the general fund to the commissioner
of management and budget.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective September 30, 2015.
new text end
Sec. 2.
Minnesota Statutes 2013 Supplement, section 354A.12, subdivision 3c, is
amended to read:
Subd. 3c.
Termination of supplemental contributions and direct matching
and state aid.
(a) The supplemental contributions payable to the St. Paul Teachers
Retirement Fund Association by Independent School District No. 625 under section
423A.02, subdivision 3, and all forms of deleted text begin statedeleted text end aid under subdivision 3a to the St. Paul
Teachers Retirement Fund Association must continue until the current assets of the fund
equal or exceed the actuarial accrued liability of the fund as determined in the most recent
actuarial report for the fund by the actuary retained under section 356.214 or until deleted text begin June
30, 2037deleted text end new text begin the established date for full funding under section 356.215, subdivision 11new text end ,
whichever occurs earlier.
(b) The aid to the Duluth Teachers Retirement Fund Association under section
423A.02, subdivision 3, and all forms of state aid under subdivision 3a to the Duluth
Teachers Retirement Fund Association must continue until the current assets of the fund
equal or exceed the actuarial accrued liability of the fund as determined in the most
recent actuarial report for the fund by the actuary retained under section 356.214 or until
the established date for full funding under section 356.215, subdivision 11, whichever
occurs earlier.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 3.
Minnesota Statutes 2012, section 356.215, subdivision 11, is amended to read:
Subd. 11.
Amortization contributions.
(a) In addition to the exhibit indicating
the level normal cost, the actuarial valuation of the retirement plan must contain an
exhibit for financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
for contribution determination purposes indicating the additional contribution sufficient
to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
subdivision 8, paragraph (c), but excluding the MERF division of the Public Employees
Retirement Association and the legislators retirement plan, the additional contribution
must be calculated on a level percentage of covered payroll basis by the established
date for full funding in effect when the valuation is prepared, assuming annual payroll
growth at the applicable percentage rate set forth in subdivision 8, paragraph (c). For all
other retirement plans and for the MERF division of the Public Employees Retirement
Association and the legislators retirement plan, the additional annual contribution must be
calculated on a level annual dollar amount basis.
(b) For any retirement plan other than the general state employees retirement plan
of the Minnesota State Retirement System or a retirement plan governed by paragraph
(d), (e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions
used for calculating the actuarial accrued liability of the fund, a change in the benefit
plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the
fund, or a combination of the three, which change or changes by itself or by themselves
without inclusion of any other items of increase or decrease produce a net increase in the
unfunded actuarial accrued liability of the fund, the established date for full funding is the
first actuarial valuation date occurring after June 1, 2020.
(c) For any retirement plan other than the general employees retirement plan of the
Public Employees Retirement Association, if there has been a change in any or all of the
actuarial assumptions used for calculating the actuarial accrued liability of the fund, a
change in the benefit plan governing annuities and benefits payable from the fund, a
change in the actuarial cost method used in calculating the actuarial accrued liability of all
or a portion of the fund, or a combination of the three, and the change or changes, by itself
or by themselves and without inclusion of any other items of increase or decrease, produce
a net increase in the unfunded actuarial accrued liability in the fund, the established date
for full funding must be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;
(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;
(iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;
(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;
(v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);
(vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in which
the determination of the established date for full funding using the procedure set forth in this
clause is made and not to be less than the period of years beginning in the plan year in which
the determination of the established date for full funding using the procedure set forth in
this clause is made and ending by the date for full funding in effect before the change; and
(vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.
(d) For the MERF division of the Public Employees Retirement Association, the
established date for full funding is June 30, 2031.
(e) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2031.
(f) For the Teachers Retirement Association, the established date for full funding is
June 30, 2037.
(g) For the correctional state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2038.
(h) For the judges retirement plan, the established date for full funding is June
30, 2038.
(i) For the public employees police and fire retirement plan, the established date
for full funding is June 30, 2038.
(j) For the St. Paul Teachers Retirement Fund Association, the established date for
full funding is June 30 deleted text begin of the 25th year from the valuation datedeleted text end new text begin , 2042new text end . In addition to
other requirements of this chapter, the annual actuarial valuation must contain an exhibit
indicating the funded ratio and the deficiency or sufficiency in annual contributions when
comparing liabilities to the market value of the assets of the fund as of the close of the
most recent fiscal year.
(k) For the general state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2040.
(l) For the retirement plans for which the annual actuarial valuation indicates an
excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end