SF 2427

as introduced - 88th Legislature (2013 - 2014) Posted on 04/11/2014 12:00pm

A bill for an act
relating to retirement; Public Employees Retirement Association; resolving city
of Duluth and Duluth Airport Authority employee salary-supplement payments
coverage following Court of Appeals decision; ratifying past actions.

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

Section 1. new text begin PERMITTING THE PURCHASE OF SALARY CREDIT BY
CERTAIN CURRENT AND FORMER CITY OF DULUTH OR DULUTH
AIRPORT AUTHORITY EMPLOYEES COVERED BY THE GENERAL
EMPLOYEES RETIREMENT PLAN OR THE PUBLIC EMPLOYEES POLICE
AND FIRE RETIREMENT PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin Due to a Court of Appeals determination that certain
salary-supplement payments, provided to certain city of Duluth and Duluth Airport
Authority employees and deposited in the employee's deferred compensation account,
should have been considered salary for pension purposes, an eligible person is authorized
to receive the treatment specified in this section if the eligible person chooses to make the
employee contribution equivalent payment specified in this section.
new text end

new text begin Subd. 2. new text end

new text begin Eligible person. new text end

new text begin (a) An eligible person:
new text end

new text begin (1) is a current or former employee of the city of Duluth or the Duluth Airport
Authority, employed by that governmental subdivision between August 1, 2007, and
December 31, 2011;
new text end

new text begin (2) was a participating member of the general employees retirement plan of the
Public Employees Retirement Association or the public employees police and fire
retirement plan for that employment; and
new text end

new text begin (3) had employer-paid amounts made to the person's deferred compensation account
for which contributions were not made to the applicable Public Employees Retirement
Association plan fund between August 1, 2007, and December 31, 2011, or the date of
the employee's termination of public service under Minnesota Statutes, section 353.01,
subdivision 11a, whichever is earlier, due to an erroneous application of law under which
the Public Employees Retirement Association executive director and board concluded
that these employer-paid amounts were not salary for pension purposes under Minnesota
Statutes, section 353.01, subdivision 10.
new text end

new text begin (b) A surviving spouse, as defined in this paragraph, is an eligible person for
purposes of this section. A surviving spouse means:
new text end

new text begin (1) the surviving spouse of an eligible person as defined in paragraph (a) who, at
the time of the eligible person's death, was a deferred annuitant of a Public Employees
Retirement Association plan specified in this section;
new text end

new text begin (2) the surviving spouse of an eligible person as defined in paragraph (a) receiving
benefits under a joint and survivor annuity from a Public Employees Retirement
Association plan specified in this section; or
new text end

new text begin (3) the surviving spouse of an eligible person as defined in paragraph (a) receiving a
survivor benefit under Minnesota Statutes, section 353.657.
new text end

new text begin Subd. 3. new text end

new text begin Employee contributions. new text end

new text begin An eligible person may make payment of an
employee contribution equivalent amount to the fund of the general employees retirement
plan of the Public Employees Retirement Association or the public employees police
and fire retirement plan, whichever provided the coverage. The employee contribution
equivalent amount is the amount of employee contributions that would have been made
by the employee based on the employer-paid amounts made to the person's deferred
compensation account for the period specified in subdivision 2, and the employee
contribution rates to the applicable Public Employees Retirement Association plan during
that period. If an employee contribution equivalent amount is paid, it must be made in
full and in a lump sum.
new text end

new text begin Subd. 4. new text end

new text begin Employer contributions. new text end

new text begin (a) If an eligible person makes the employee
equivalent contribution under subdivision 3, the city of Duluth or the Duluth Airport
Authority, whichever is the applicable employing unit, must make the corresponding
employer contributions, plus any employer supplemental and employer additional
contributions required by law during the applicable time period.
new text end

new text begin (b) Any contributions required under this subdivision must be based on the
employer-paid amounts referred to in subdivision 2, and the contribution rates applicable
during the time period for regular employer contributions, and any employer supplemental
and employer additional contributions, if applicable.
new text end

new text begin (c) Within 30 days of receipt by the executive director of the Public Employees
Retirement Association of employee equivalent contributions under subdivision 3,
the executive director shall notify the city of Duluth or the Duluth Airport Authority,
whichever is the applicable employer, of amounts due under this subdivision. These
amounts are to be remitted by the applicable employer to the executive director for deposit
in the applicable fund within 30 days of notification. If payment is not made in full within
that time period, the executive director may collect the necessary amounts by applying
Minnesota Statutes, section 353.28, subdivision 6.
new text end

new text begin Subd. 5. new text end

new text begin Benefit adjustments. new text end

new text begin Upon receipt of the applicable employee equivalent
contribution under subdivision 3 from an eligible person, the executive director shall
revise the records of the Public Employees Retirement Association and grant the person
the additional salary credit. If a retirement, disability, or survivor annuity has commenced,
the executive director must adjust the benefit being paid to include in the calculation the
additional salary on which contributions were paid, and the adjusted benefit must be paid
retroactive from the effective date of the initial benefit payment under the annuity.
new text end

new text begin Subd. 6. new text end

new text begin Restrictions. new text end

new text begin This section does not apply if service credit and other rights
under the plan were forfeited by taking a refund.
new text end

new text begin Subd. 7. new text end

new text begin Treatment of interest. new text end

new text begin Notwithstanding any provision in Minnesota
Statutes, chapter 353, to the contrary, all payments specified in this section made by an
eligible person to the executive director for deposit in the applicable Public Employees
Retirement Association fund are to be made without interest. Any payments required from
the employer under this section are also without interest, provided the employer makes
the payment to the executive director within 30 days of notification. Interest shall be
charged, as specified in Minnesota Statutes, section 353.28, on any employer obligations
not paid within the 30-day period.
new text end

new text begin Subd. 8. new text end

new text begin Notification; counseling. new text end

new text begin The executive director shall notify all active
members, deferred members, retirees, and survivors to whom this section may apply and
shall provide counseling regarding the implications of this section, including payment
requirements and likely adjustments in current or future benefit amounts if employee
equivalent contributions as specified in this section are made.
new text end

new text begin Subd. 9. new text end

new text begin Expiration of salary credit purchase authority. new text end

new text begin Payment of employee
contribution equivalent amounts, as authorized under this section, is prohibited after 180
days following the date that local approval is provided by the applicable employing unit of
the current or former employee.
new text end

new text begin Subd. 10. new text end

new text begin Ratification. new text end

new text begin Actions taken before the effective date of this section by
the executive director and board of the Public Employees Retirement Association, the
city of Duluth, the Duluth Airport Authority, and eligible persons which are otherwise
consistent with this section are ratified.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) This section is effective the day after the Duluth city
council and the chief clerical officer of the city of Duluth timely complete their compliance
with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for members who are,
and former members who were, employees of the city of Duluth, and for the surviving
spouses of former members.
new text end

new text begin (b) This section is effective the day after the Duluth Airport Authority and the
chief clerical officer of the Duluth Airport Authority timely complete their compliance
with Minnesota Statutes, section 645.021, subdivisions 2 and 3, for members who are,
and former members who were, employees of the Duluth Airport Authority, and for the
surviving spouses of former members.
new text end