SF 2474

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 11:36pm

A bill for an act
relating to retirement; Public Employees Retirement Association; purchase of
salary credit procedures in certain partial salary situations; adding new partial
salary credit purchase authority for partial paid medical leaves and budgetary
leaves; amending Minnesota Statutes 2008, section 353.0161, subdivision 2;
proposing coding for new law in Minnesota Statutes, chapter 353; repealing
Minnesota Statutes 2008, section 353.01, subdivision 40.

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

Section 1.

Minnesota Statutes 2008, section 353.0161, subdivision 2, is amended to
read:

Subd. 2.

Purchase procedure.

(a) An employee covered by a plan specified in
subdivision 1 may purchase credit for allowable service in that plan for a period specified
in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c),
whichever applies. The employing unit, at its option, may pay the employer portion of the
amount specified in paragraph (b) on behalf of its employees.

(b) If payment is received by the executive director within one year from the date the
member returned to work following the authorized leave, or within 30 days after the date
of termination of public service if the member did not return to work, the payment amount
is equal to the employee and employer contribution rates specified in law for the applicable
plan at the end of the leave period, or at termination of public service, whichever is earlier,
multiplied by the employee's average monthly salary new text begin , excluding overtime, new text end upon which
deductions were paid during the six months, or portion thereof, before the commencement
of the leave of absence and by the number of months of the leave of absence for which
the employee wants allowable service credit. Payments made under this paragraph must
include compound interest at a monthly rate of 0.71 percent from the last day of the leave
period until the last day of the month in which payment is received.

(c) If payment is received by the executive director after one year, the payment
amount is the amount determined under section 356.551. Payment under this paragraph
must be made before the date the person terminates public service under section 353.01,
subdivision 11a.

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 [353.0162] REDUCED SALARY PERIODS CREDIT PURCHASE.
new text end

new text begin (a) A member may purchase additional salary credit for a period specified in this
section.
new text end

new text begin (b) The applicable period is a period during which the member is receiving a reduced
salary from the employer while:
new text end

new text begin (1) receiving temporary workers' compensation payments related to the member's
service to the public employer;
new text end

new text begin (2) on an authorized medical leave of absence; or
new text end

new text begin (3) on an authorized partial paid leave of absence as a result of a budgetary or salary
savings program offered or mandated by a governmental subdivision.
new text end

new text begin (c) The differential salary amount is the difference between the average monthly
salary received by the member during the period of reduced salary under this section and
the average monthly salary of the member, excluding overtime, on which contributions
to the applicable plan were made during the period of the last six months of covered
employment occurring immediately before the period of reduced salary, applied to the
member's normal employment period, measured in hours or otherwise, as applicable.
new text end

new text begin (d) To receive eligible salary credit, the member shall pay an amount equal to
the applicable employee contribution rate under section 353.27, subdivision 2; 353.65,
subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the differential
salary amount; plus an employer equivalent payment equal to the applicable employer
contribution rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03,
subdivision 2, as applicable, multiplied by the differential salary amount; plus, if
applicable, an equivalent employer additional amount equal to the additional employer
contribution rate in section 353.27, subdivision 3a, multiplied by the differential salary
amount.
new text end

new text begin (e) The employer may, by appropriate action of its governing body and documented
in its official records, pay the employer equivalent contributions and, as applicable, the
equivalent employer additional contributions on behalf of the member.
new text end

new text begin (f) Payment under this section must include interest on the contribution amount
or amounts, whichever applies, at an 8.5 percent annual rate, prorated for applicable
months from the date on which the period of reduced salary specified under this section
terminates to the date on which the payment or payments are received by the executive
director. Payment under this section must be completed within the earlier of 30 days from
termination of public service by the employee under section 353.01, subdivision 11a, or
one year after the termination of the period specified in paragraph (b), as further restricted
under this section.
new text end

new text begin (g) The period for which additional allowable salary credit may be purchased is
limited to the period during which the person receives temporary workers' compensation
payments, or for those business years in which the governmental subdivision offers or
mandates a budget or salary savings program, as certified to the executive director by a
resolution of the governing body of the governmental subdivision. For an authorized
medical leave of absence, the period for which allowable salary credit may be purchased
must not exceed 12 consecutive months of authorized medical leave.
new text end

new text begin (h) To purchase salary credit for a subsequent period of temporary workers'
compensation benefits or subsequent authorized medical leave of absence, the member
must return to public service and render a minimum of three months of allowable service.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010. Purchase of reduced
salary credit may be made for a period mandated or offered by a governmental subdivision
for purposes of budget or salary savings on or after July 1, 2009, upon enactment of
this section.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 353.01, subdivision 40, 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 July 1, 2010.
new text end