SF 2366

as introduced - 91st Legislature (2019 - 2020) Posted on 03/14/2019 08:35am

A bill for an act
relating to retirement; Public Employees Retirement Association; modifying
statewide volunteer firefighter retirement plan; allowing termination of plan
participation and coverage; directing distribution of pension benefits; proposing
coding for new law in Minnesota Statutes, chapter 353G; repealing Minnesota
Statutes 2018, section 353G.15.

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

Section 1.

new text begin [353G.18] TERMINATION OF PARTICIPATION AND DISTRIBUTION
OF BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin This section provides the procedures that apply if an entity
wishes to terminate its participation in the retirement plan and authorize the distribution of
all assets credited to the entity's account in the retirement fund held for the benefit of the
entity's former firefighters. If this section conflicts with another section of this chapter, this
section controls.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this subdivision
have the meanings given them unless the context clearly indicates otherwise.
new text end

new text begin (b) "Benefit level" means the amount of the service pension level under section 353G.11
that is multiplied by a departing firefighter's years of service to determine the departing
firefighter's pension benefit, as such amount may be increased by the executive director
under subdivision 4, paragraph (d).
new text end

new text begin (c) "Departing entity" means the entity seeking to terminate its participation in the
retirement plan and the coverage of its departing firefighters by the retirement plan.
new text end

new text begin (d) "Departing firefighter" means each former firefighter of the departing entity who:
new text end

new text begin (1) is credited with one or more years of service under the retirement plan or under the
relief association previously affiliated with the departing entity;
new text end

new text begin (2) has not yet received a distribution of the firefighter's pension benefit; and
new text end

new text begin (3) is entitled to a distribution of a pension benefit under this section.
new text end

new text begin (e) "Direct rollover" means a payment described under section 356.635, subdivisions 3
to 7. Consistent with the definition of "distributee" under section 356.635, subdivision 7, a
departing firefighter is a distributee for purpose of direct rollover election.
new text end

new text begin (f) "Distribution date" means the date as of which all assets in the entity's account are
to be distributed in the form of a payment to each departing firefighter or the survivor of
each deceased departing firefighter or as a direct rollover, if elected under section 356.635,
subdivisions 3 to 7.
new text end

new text begin (g) "Entity" means a municipality, an independent nonprofit firefighting corporation, or
a joint powers entity that operates or had operated a fire department with firefighters who
are covered by the retirement plan.
new text end

new text begin (h) "Entity's account" means the pension plan that is a component of the retirement plan
and under which the departing firefighters have accrued lump sum pension benefits and
with which the departing entity is affiliated.
new text end

new text begin (i) "Executive director" means the executive director of the Public Employees Retirement
Association.
new text end

new text begin (j) "Termination date" means the effective date of the termination of the pension plan
that is the entity's account. The termination date shall precede the distribution date.
new text end

new text begin (k) "Year of service" means a year of good time service credit certified by the departing
entity's fire chief under section 353G.07. For purposes of determining the amount of a
departing firefighter's pension benefit under this section, year of service includes any service
credit earned by the departing firefighter and certified under section 424A.003 with the
relief association previously affiliated with the departing entity. Good time service credit
ends when the departing firefighter's active service ends, notwithstanding a later termination
date as defined in paragraph (j).
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin An entity is eligible to terminate its participation in the retirement
plan under this section if the entity satisfies the following conditions:
new text end

new text begin (1) the entity has eliminated its fire department or, if its fire department is ongoing, the
fire department has ceased using the services of all departing firefighters and any other
noncareer or volunteer firefighters; and
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new text begin (2) the entity's account has assets sufficient to cover all liabilities, after taking into
account the requirement to fully vest all departing firefighters under subdivision 4, paragraph
(c), and pay administrative expenses under subdivision 4, paragraph (d).
new text end

new text begin Subd. 4. new text end

new text begin Termination procedures. new text end

new text begin (a) The participation of a departing entity in the
retirement plan and the coverage of the departing firefighters by the retirement plan shall
cease as of the date the requirements in this subdivision are completed and all assets credited
to the entity's account are distributed.
new text end

new text begin (b) The governing board of the departing entity shall adopt the resolutions under
subdivision 5 and deliver the resolutions to the executive director.
new text end

new text begin (c) The executive director shall fully vest all departing firefighters as of the termination
date and consider each departing firefighter 100 percent vested in the pension benefit accrued
by the departing firefighter under the entity's account as of the termination date.
new text end

new text begin (d) If the entity's account has assets in excess of accrued liabilities, the executive director
shall increase the benefit level in effect prior to the termination date and any lower benefit
level that applied to a departing firefighter at the time of the firefighter's separation from
service. The new benefit level must, as of the date of distribution, leave no assets in the
retirement fund attributable to the entity's account after (1) distribution of all benefits to the
departing firefighters and (2) payment of administrative expenses incurred or reasonably
anticipated to be incurred through the distribution date.
new text end

new text begin (e) The executive director shall, as soon as practicable after the termination date, distribute
all assets in the entity's account to the departing firefighters, regardless of whether a departing
firefighter has attained age 50, in the lump sum amount determined by the executive director
for each departing firefighter, taking into account the firefighter's years of service, the new
benefit level, if any, and 100 percent vesting. The distribution shall be made either as a
payment to the departing firefighter or as a direct rollover, if elected by the firefighter. If
the departing firefighter is deceased, then the firefighter's benefit shall be paid to the
firefighter's survivor under section 353G.12 or as a direct rollover, if elected by the survivor.
new text end

new text begin (f) The executive director shall pay supplemental benefits under section 424A.10, but
only to the extent that the executive director will be reimbursed under section 424A.10,
subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Entity board resolutions. new text end

new text begin If an entity wishes to cease its participation in the
retirement plan and end the coverage of its former firefighters by the retirement plan, the
entity's governing board shall approve the following resolutions in a form satisfactory to
the executive director:
new text end

new text begin (1) a statement of intent to terminate participation in the retirement plan and cease the
coverage by the retirement plan of the entity's former firefighters; and
new text end

new text begin (2) the proposed termination date. The termination date must be the last day of a month
and at least 90 days after the date the resolutions are delivered to the executive director. For
an entity that approved the resolution described in clause (1) before the date of enactment
of this section, the termination date is September 30, 2019.
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

Sec. 2. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2018, section 353G.15, new text end new text begin is repealed.
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

APPENDIX

Repealed Minnesota Statutes: 19-4562

353G.15 INDIVIDUAL RETIREMENT ACCOUNT TRANSFER.

Upon receipt of a determination that the voluntary statewide volunteer firefighter retirement plan is a qualified pension plan under section 401(a) of the Internal Revenue Code, as amended, the executive director, upon request, shall transfer a lump-sum service pension amount under sections 353G.08 and 353G.11 of a former volunteer firefighter who has terminated active firefighting services covered by the lump-sum retirement division of the statewide plan and who has attained the age of at least 50 years to the person's individual retirement account under section 408(a) of the federal Internal Revenue Code, as amended. The transfer request must be in a manner prescribed by the executive director and must be filed by the former volunteer firefighter who has sufficient service credit to be entitled to a service pension or, following the death of a participating active firefighter, must be filed by the deceased firefighter's surviving spouse.