SF 2020

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to retirement; correctional state employees retirement plan of the
Minnesota State Retirement System; authorizing certain Department of Human
Services employees transferred to plan coverage in 2006 to make back equivalent
member contributions and transfer pension service credit.

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

Section 1. new text begin TRANSFER OF PRIOR MSRS-GENERAL SERVICE CREDIT FOR
CERTAIN EMPLOYEES WITH TRANSFERRED RETIREMENT COVERAGE.
new text end

new text begin Subdivision 1. new text end

new text begin Election to transfer prior MSRS-general service credit. new text end

new text begin (a) An
eligible employee described in paragraph (b) may elect to transfer service credit in the
general state employees retirement plan of the Minnesota State Retirement System to the
correctional state employees retirement plan for eligible prior correctional employment.
new text end

new text begin (b) An eligible employee is a person who:
new text end

new text begin (1) became an employee of the state of Minnesota in October 2002;
new text end

new text begin (2) is employed as a psychologist 1 by the Department of Human Services in the
Minnesota sex offender program at the Moose Lake facility; and
new text end

new text begin (3) became eligible for retirement coverage by the correctional state employees
retirement plan of the Minnesota State Retirement System under Laws 2006, chapter
271, article 2, section 7.
new text end

new text begin (c) Eligible prior correctional employment is employment with the Department
of Human Services in the Minnesota sex offender program that preceded the effective
date of the retirement coverage transfer under Laws 2006, chapter 271, article 2, section
7, is continuous service, and is certified by the commissioner of human services and
the commissioner of employee relations to the executive director of the Minnesota
State Retirement System as service that would qualify for correctional state employees
retirement plan coverage under Minnesota Statutes, section 352.91, if the service was
rendered after July 1, 2006.
new text end

new text begin (d) The election to transfer past service credit under this section must be made
in writing by the applicable person on a form prescribed by the executive director of
the Minnesota State Retirement System and must be filed with the executive director of
the Minnesota State Retirement System on or before January 1, 2008, or the date of the
eligible employee's termination of state employment, whichever is earlier.
new text end

new text begin Subd. 2. new text end

new text begin Payment of additional equivalent member contributions. new text end

new text begin (a) An
eligible employee who elects to transfer past service credit under this section must pay
an additional member contribution for that prior service period. The additional member
contribution is the difference between the member contribution rate or rates for the
general state employees retirement plan of the Minnesota State Retirement System for
the period of employment covered by the service credit to be transferred and the member
contribution rate or rates for the correctional state employees retirement plan for the period
of employment covered by the service credit to be transferred, plus annual compound
interest at the rate of 8.5 percent.
new text end

new text begin (b) The additional equivalent member contribution must be paid in a lump sum.
Payment must accompany the election to transfer the prior service credit. No transfer
election or additional equivalent member contribution payment may be made by a person
or accepted by the executive director after January 1, 2008, or the date on which the
eligible employee terminates state employment, whichever is earlier.
new text end

new text begin Subd. 3. new text end

new text begin Payment of additional equivalent employer contributions. new text end

new text begin (a) If an
eligible employee elects to transfer past service credit under this section and pays the
additional equivalent member contribution amount under subdivision 2, the Department of
Human Services shall pay an additional equivalent employer contribution amount. The
additional employer contribution is the difference between the employer contribution rate
or rates for the general state employees retirement plan for the period of employment
covered by the service credit to be transferred and the employer contribution rate or
rates for the correctional state employees retirement plan for the period of employment
covered by the service credit to be transferred, plus annual compound interest at the
rate of 8.5 percent.
new text end

new text begin (b) The additional equivalent employer contribution must be paid in a lump sum and
must be paid within 30 days of the date on which the executive director of the Minnesota
State Retirement System certifies to the Department of Human Services that the employer
paid the additional equivalent member contribution and the amount of the additional
equivalent employer contribution.
new text end

new text begin Subd. 4. new text end

new text begin Transfer of assets. new text end

new text begin Assets related to the transferred service credit of an
eligible employee must be transferred from the general state employees retirement fund
to the correctional state employees retirement fund in an amount equal to the present
value of benefits earned under the general state employees retirement plan by the eligible
employee transferring past service to the correctional state employees retirement plan, as
determined by the actuary retained under Minnesota Statutes, section 356.214, multiplied
by the accrued liability funding ratio of the active members of the general state employees
retirement plan as derived from the most recent actuarial valuation prepared under
Minnesota Statutes, section 356.215. The transfer of assets must be made within 45 days
after the coverage transfer election is made.
new text end

new text begin Subd. 5. new text end

new text begin Effect of the asset transfer. new text end

new text begin Upon the transfer of assets under subdivision
3, the service credit in the general state employees retirement plan of the Minnesota State
Retirement System is forfeited and may not be reinstated. The transferred service credit
and the transferred assets must be credited to the correctional state employees retirement
plan and fund, respectively.
new text end

new text begin Subd. 6. new text end

new text begin Additional amortization requirement. new text end

new text begin (a) In addition to the employer
contribution required under subdivision 3 and Minnesota Statutes, section 352.92,
subdivision 2, the Department of Corrections or the Department of Human Services,
whichever applies, also must make an additional amortization payment annually with
respect to the unfunded actuarial accrued liability attributable to past service credit
transfers under this section.
new text end

new text begin (b) The additional amortization requirement is one-fifth of the initially determined
unfunded actuarial accrued liability attributable to the past service credit transfer plus 8.5
percent annual compound interest on the unfunded actuarial accrued liability remaining
after the most recent prior principal payment. The unfunded actuarial accrued liability
attributable to the past service credit transfer is the present value of the benefit obtained
by the transfer of the service credit to the correctional state employees retirement plan
reduced by the amount of the asset transfer under subdivision 4, by the amount of the
member contribution equivalent payment under subdivision 2, and by the amount of the
employer contribution equivalent payment under subdivision 3.
new text end

new text begin (c) The additional amortization requirement is payable annually in a lump sum on
or before June 30.
new text end

new text begin Subd. 7. new text end

new text begin Cost of actuarial calculations. new text end

new text begin The Department of Human Services shall
pay the cost of the actuarial calculations required by this section as billed by the executive
director of the Minnesota State Retirement System.
new text end

new text begin EFFECTIVE DATE. new text end

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