SF 2491

as introduced - 91st Legislature (2019 - 2020) Posted on 03/15/2019 09:34am

A bill for an act
relating to volunteer firefighter relief associations; clarifying audit requirements;
increasing the threshold for investment reporting requirements; adding a definition
of break in service and making conforming changes; revising vesting requirements;
clarifying the service pension amount that applies in calculating the benefit payable
upon permanent disability, death, or other separation from active service; clarifying
the crediting of interest on deferred pensions; expanding the individuals eligible
to receive supplemental benefits upon the death of a firefighter; amending
Minnesota Statutes 2018, sections 69.051, subdivision 1; 356.219, subdivision 3;
424A.001, by adding a subdivision; 424A.01, subdivision 6; 424A.015, subdivision
6; 424A.016, subdivisions 3, 6; 424A.02, subdivisions 2, 7, 9, 10; 424A.10,
subdivision 1.

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

Section 1.

Minnesota Statutes 2018, section 69.051, subdivision 1, is amended to read:

Subdivision 1.

Financial report and audit.

(a) The board of the Bloomington Fire
Department Relief Association and each volunteer firefighters relief association as defined
in section 424A.001, subdivision 4, with assets of at least $500,000 or liabilities of at least
$500,000 in the prior year or in any previous year, according to the applicable actuarial
valuation or according to the financial report if no valuation is required, shall prepare a
financial report covering the special and general funds of the relief association for the
preceding fiscal year, file the financial report, and submit financial statements.

(b) The financial report must contain financial statements and disclosures which present
the true financial condition of the relief association and the results of relief association
operations in conformity with generally accepted accounting principles and in compliance
with the regulatory, financing and funding provisions of this chapter and any other applicable
laws. The financial report must be countersigned by:

(1) the municipal clerk or clerk-treasurer of the municipality in which the relief
association is located if the relief association is a firefighters relief association which is
directly associated with a municipal fire department; or

(2) by the municipal clerk or clerk-treasurer of the largest municipality in population
which contracts with the independent nonprofit firefighting corporation if the volunteer
firefighter relief association is a subsidiary of an independent nonprofit firefighting
corporation and by the secretary of the independent nonprofit firefighting corporation; or

(3) by the chief financial official of the county in which the volunteer firefighter relief
association is located or primarily located if the relief association is associated with a fire
department that is not located in or associated with an organized municipality.

(c) The financial report must be retained in its office for public inspection and must be
filed with the governing body of the government subdivision in which the associated fire
department is located after the close of the fiscal year. One copy of the financial report must
be furnished to the state auditor after the close of the fiscal year.

(d) Audited financial statements must be attested to by a certified public accountant or
by the state auditor and must be filed with the state auditor within 180 days after the close
of the fiscal year. new text begin Audits must be conducted in compliance with generally accepted
governmental auditing standards and section 6.65 governing audit procedures. new text end The state
auditor may accept this report in lieu of the report required in paragraph (c).

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.

Minnesota Statutes 2018, section 356.219, subdivision 3, is amended to read:

Subd. 3.

Content of reports.

(a) The report required by subdivision 1 must include a
written statement of the investment policy. Following that initial report, subsequent reports
must include investment policy changes and the effective date of each policy change rather
than a complete statement of investment policy, unless the state auditor requests submission
of a complete current statement. The report must also include the information required by
the following paragraphs, as applicable.

(b) If, after four years of reporting under this paragraph, the total portfolio time weighted
rate of return, net of all investment related costs and fees, provided by the public pension
plan differs by no more than 0.1 percent from the comparable return for the plan calculated
by the Office of the State Auditor, and if a public pension plan has a total market value of
deleted text begin $25,000,000 deleted text end new text begin $50,000,000 new text end or more as of the beginning of the calendar year, and if the public
pension plan's annual audit is performed by the state auditor or by the legislative auditor,
the report required by subdivision 1 must include the market value of the total portfolio and
the market value of each asset class included in the pension fund as of the beginning of the
calendar year and as of the end of the calendar year. At the discretion of the state auditor,
the public pension plan may be required to submit the market value of the total portfolio
and the market value of each investment account, investment portfolio, or asset class included
in the pension fund for each month, and the amount and date of each injection and withdrawal
to the total portfolio and to each investment account, investment portfolio, or asset class. If
the market value of a public pension plan's fund drops below deleted text begin $25,000,000 deleted text end new text begin $50,000,000 new text end in
a subsequent year, it must continue reporting under this paragraph for any subsequent year
in which the public pension plan is not fully invested as specified in subdivision 1, paragraph
(b), except that if the public pension plan's annual audit is not performed by the state auditor
or legislative auditor, paragraph (c) applies.

(c) If paragraph (b) would apply if the annual audit were provided by the state auditor
or legislative auditor, the report required by subdivision 1 must include the market value
of the total portfolio and the market value of each asset class included in the pension fund
as of the beginning of the calendar year and for each month, and the amount and date of
each injection and withdrawal to the total portfolio and to each investment account,
investment portfolio, or asset class.

(d) For public pension plans to which paragraph (b) or (c) applies, the report required
by subdivision 1 must also include a calculation of the total time-weighted rate of return
available from index-matching investments assuming the asset class performance targets
and target asset mix indicated in the written statement of investment policy. The provided
information must include a description of indices used in the analyses and an explanation
of why those indices are appropriate. This paragraph does not apply to any fully invested
plan, as defined by subdivision 1, paragraph (b). Reporting by the State Board of Investment
under this paragraph is limited to information on the Minnesota public pension plans required
to be invested by the State Board of Investment under section 11A.23.

(e) If a public pension plan has a total market value of less than deleted text begin $25,000,000 deleted text end new text begin $50,000,000
new text end as of the beginning of the calendar year and was never required to file under paragraph (b)
or (c), the report required by subdivision 1 must include the amount and date of each total
portfolio injection and withdrawal. In addition, the report must include the market value of
the total portfolio as of the beginning of the calendar year and for each quarter.

(f) Any public pension plan reporting under paragraph (b) or (c) must include computed
time-weighted rates of return with the report, in addition to all other required information,
as applicable. The chief administrative officer of the public pension plan submitting the
returns must certify, on a form prescribed by the state auditor, that the returns have been
computed by the pension plan's investment performance consultant or custodial bank. The
chief administrative officer of the public pension plan submitting the returns also must
certify that the returns are net of all costs and fees, including investment management fees,
and that the procedures used to compute the returns are consistent with Bank Administration
Institute studies of investment performance measurement and presentation standards set by
the CFA Institute. If the certifications required under this paragraph are not provided, the
reporting requirements of paragraph (c) apply.

(g) For public pension plans reporting under paragraph (e), the public pension plan must
retain supporting information specifying the date and amount of each injection and
withdrawal to each investment account and investment portfolio. The public pension plan
must also retain the market value of each investment account and investment portfolio at
the beginning of the calendar year and for each quarter. Information that is required to be
collected and retained for any given year or years under this paragraph must be submitted
to the Office of the State Auditor if the Office of the State Auditor requests in writing that
the information be submitted by a public pension plan or plans, or be submitted by the State
Board of Investment for any plan or plans for which the State Board of Investment is the
investment authority under this section. If the state auditor requests information under this
subdivision, and the public plan fails to comply, the pension plan is subject to penalties
under subdivision 5, unless penalties are waived by the state auditor under that subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 3.

Minnesota Statutes 2018, section 424A.001, is amended by adding a subdivision
to read:

new text begin Subd. 9a. new text end

new text begin Break in service. new text end

new text begin "Break in service" means temporarily ceasing all of the
following with a particular fire department:
new text end

new text begin (1) performing fire suppression duties;
new text end

new text begin (2) performing fire prevention duties;
new text end

new text begin (3) supervising fire suppression duties; and
new text end

new text begin (4) supervising fire prevention duties.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 4.

Minnesota Statutes 2018, section 424A.01, subdivision 6, is amended to read:

Subd. 6.

Return to active firefighting after break in service.

(a) This subdivision
governs the service pension calculation requirements of a firefighter who returns to active
service after a break in service and applies to all breaks in service, except that the resumption
service requirements of this subdivision do not apply to leaves of absence made available
by federal statute, such as the Family Medical Leave Act, United States Code, title 29,
section 2691, and the Uniformed Services Employment and Reemployment Rights Act,
United States Code, title 38, section 4301, and do not apply to leaves of absence made
available by state statute, such as the Parental Leave Act, section 181.941; the Leave for
Organ Donation Act, section 181.9456; the Leave for Civil Air Patrol Service Act, section
181.946; the Leave for Immediate Family Members of Military Personnel Injured or Killed
in Active Service Act, section 181.947; or the Protection of Jurors' Employment Act, section
593.50.

(b)(1) If a firefighter who has deleted text begin ceased to perform or supervise fire suppression and fire
prevention duties for at least 60 days deleted text end new text begin a break in service of any duration new text end resumes performing
active firefighting with the fire department associated with the relief association, new text begin and new text end if the
bylaws of the relief association so permit, the firefighter may again become an active member
of the relief association deleted text begin . A firefighter who returns to active service and membership is
subject to deleted text end new text begin , subject to the requirements of this paragraph and new text end the service pension calculation
requirements under this section.

new text begin (2) A firefighter who has been paid a service pension or disability benefit must wait at
least 60 days following receipt of the pension or benefit before resuming active firefighting
with the fire department and active membership in the relief association.
new text end

deleted text begin (2) deleted text end new text begin (3) new text end A firefighter who has been granted an approved leave of absence not exceeding
one year by the fire department or by the relief association is exempt from the minimum
period of resumption service requirement of this section.

deleted text begin (3) deleted text end new text begin (4) new text end A person who has a break in service not exceeding one year but has not been
granted an approved leave of absence deleted text begin and who has not received a service pension or disability
benefit deleted text end may be made exempt from the minimum period of resumption service requirement
of this section by the relief association bylaws.

deleted text begin (4) deleted text end new text begin (5) new text end If the bylaws so provide, a firefighter who returns to active relief association
membership deleted text begin under this paragraph deleted text end new text begin after a break in service of any duration new text end may continue to
collect a monthly service pension new text begin from the relief association new text end , notwithstanding the deleted text begin service
pension eligibility requirements deleted text end new text begin requirement new text end under deleted text begin chapter 424A deleted text end new text begin section 424A.02,
subdivision 1, that the firefighter has separated from active service new text end .

(c) If a former firefighter who has deleted text begin received deleted text end new text begin been paid new text end a service pension or disability
benefit returns to active relief association membership under paragraph (b), the firefighter
may qualify for the receipt of a service pension from the relief association for the resumption
service period if the firefighter meets the service requirements of section 424A.016,
subdivision 3, or 424A.02, subdivision 2 new text begin , as applicable, or meets the resumption minimum
service requirements specified in the relief association's bylaws new text end . No firefighter may be paid
a service pension more than once for the same period of service.

(d) If a former firefighter who has not deleted text begin received deleted text end new text begin been paid new text end a service pension or disability
benefit returns to active relief association membership under paragraph (b), the firefighter
may qualify for the receipt of a service pension from the relief association for the original
and resumption service periods if the firefighter meets the service requirements of section
424A.016, subdivision 3, or 424A.02, subdivision 2, based on the original and resumption
years of service credit.

(e) A firefighter who returns to active lump-sum relief association membership under
paragraph (b) and who qualifies for a service pension under paragraph (c) must have, upon
a subsequent cessation of duties, any service pension for the resumption service period
calculated as a separate benefit. If a lump-sum service pension had been paid to the firefighter
upon the firefighter's previous cessation of duties, a second lump-sum service pension for
the resumption service period must be calculated by applying the service pension amount
in effect on the date of the firefighter's termination of the resumption service for all years
of the resumption service.

(f) A firefighter who had not been paid a lump-sum service pension returns to active
relief association membership under paragraph (b), who did not meet the minimum period
of resumption service requirement specified in the relief association's bylaws, but who does
meet the minimum service requirement of section 424A.02, subdivision 2, based on the
firefighter's original and resumption years of active service, must have, upon a subsequent
cessation of duties, a service pension for the original and resumption service periods
calculated by applying the service pension amount in effect on the date of the firefighter's
termination of the resumption service, or, if the bylaws so provide, based on the service
pension amount in effect on the date of the firefighter's previous cessation of duties. The
service pension for a firefighter who returns to active lump-sum relief association membership
under this paragraph, but who had met the minimum period of resumption service requirement
specified in the relief association's bylaws, must be calculated by applying the service
pension amount in effect on the date of the firefighter's termination of the resumption service.

(g) If a firefighter receiving a monthly benefit service pension returns to active monthly
benefit relief association membership under paragraph (b), and if the relief association
bylaws do not allow for the firefighter to continue collecting a monthly service pension,
any monthly benefit service pension payable to the firefighter is suspended as of the first
day of the month next following the date on which the firefighter returns to active
membership. If the firefighter was receiving a monthly benefit service pension, and qualifies
for a service pension under paragraph (c), the firefighter is entitled to an additional monthly
benefit service pension upon a subsequent cessation of duties calculated based on the
resumption service credit and the service pension accrual amount in effect on the date of
the termination of the resumption service. A suspended initial service pension resumes as
of the first of the month next following the termination of the resumption service. If the
firefighter was not receiving a monthly benefit service pension and meets the minimum
service requirement of section 424A.02, subdivision 2, a service pension must be calculated
by applying the service pension amount in effect on the date of the firefighter's termination
of the resumption service for all years of service credit.

(h) A firefighter who was not receiving a monthly benefit service pension returns to
active relief association membership under paragraph (b), who did not meet the minimum
period of resumption service requirement specified in the relief association's bylaws, but
who does meet the minimum service requirement of section 424A.02, subdivision 2, based
on the firefighter's original and resumption years of active service, must have, upon a
subsequent cessation of duties, a service pension for the original and resumption service
periods calculated by applying the service pension amount in effect on the date of the
firefighter's termination of the resumption service, or, if the bylaws so provide, based on
the service pension amount in effect on the date of the firefighter's previous cessation of
duties. The service pension for a firefighter who returns to active relief association
membership under this paragraph, but who had met the minimum period of resumption
service requirement specified in the relief association's bylaws, must be calculated by
applying the service pension amount in effect on the date of the firefighter's termination of
the resumption service.

(i) For defined contribution plans, a firefighter who returns to active relief association
membership under paragraph (b) and who qualifies for a service pension under paragraph
(c) or (d) must have, upon a subsequent cessation of duties, any service pension for the
resumption service period calculated as a separate benefit. If a service pension had been
paid to the firefighter upon the firefighter's previous cessation of duties, and if the firefighter
meets the minimum service requirement of section 424A.016, subdivision 3, new text begin or meets the
resumption minimum service requirements specified in the relief association's bylaws, as
applicable, new text end based on the resumption years of service, a second service pension for the
resumption service period must be calculated to include allocations credited to the firefighter's
individual account during the resumption period of service and deductions for administrative
expenses, if applicable.

(j) For defined contribution plans, if a firefighter who had not been paid a service pension
returns to active relief association membership under paragraph (b), and who meets the
minimum service requirement of section 424A.016, subdivision 3, based on the firefighter's
original and resumption years of service, must have, upon a subsequent cessation of duties,
a service pension for the original and resumption service periods calculated to include
allocations credited to the firefighter's individual account during the original and resumption
periods of service and deductions for administrative expenses, if applicable, less any amounts
previously forfeited under section 424A.016, subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 5.

Minnesota Statutes 2018, section 424A.015, subdivision 6, is amended to read:

Subd. 6.

Governing benefit plan provisions.

A service pension or ancillary benefit
payable under this chapter is governed by and must be calculated under the general statute,
special law, relief association articles of incorporation, deleted text begin and deleted text end new text begin or new text end relief association bylaw
provisions applicable on the new text begin earlier of the following dates:
new text end

new text begin (1) the new text end date on which the member deleted text begin separated deleted text end new text begin separates new text end from active service with the fire
department and active membership in the relief association deleted text begin . deleted text end new text begin ; or
new text end

new text begin (2) the date on which the member begins a break in service with the fire department that
continues until the member separates from active service with the fire department and active
membership in the relief association.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 6.

Minnesota Statutes 2018, section 424A.016, subdivision 3, is amended to read:

Subd. 3.

deleted text begin Reduced deleted text end Vesting schedule.

If the articles of incorporation or bylaws of a
defined contribution relief association deleted text begin so deleted text end provide deleted text begin , a relief association may pay a reduced
service pension not to exceed the nonforfeitable percentage of the account balance to a
retiring member who has completed fewer than 20 years of service. The reduced service
pension may be paid when the retiring member meets the minimum age and service
requirements of subdivision 2. The nonforfeitable percentage of pension amounts are as
follows: deleted text end new text begin a vesting schedule that satisfies the requirements of this subdivision, the relief
association may pay a reduced service pension to a retiring member. For purposes of this
section, "vests," "vesting," or "vested" means a nonforfeitable, unconditional, or legally
enforceable right. A member vests in the member's account in accordance with the vesting
schedule set forth in the relief association's articles of incorporation or bylaws. Provided a
member meets the minimum age and service requirements of subdivision 2, the member is
entitled to a service pension equal to the member's account, but only to the extent vested as
provided in the vesting schedule set forth in the articles of incorporation or bylaws. In no
event may the articles of incorporation or bylaws:
new text end

new text begin (1) require that a member have more than 20 years of active service to become 100
percent vested in the member's account; or
new text end

new text begin (2) provide for a larger vesting percentage than is provided in the following schedule
with respect to the completed number of years of active service indicated in the schedule:
new text end

	Completed Years of new text begin Active new text end Service		deleted text begin Nonforfeitable deleted text end new text begin Vested new text end Percentage of Pension Amount
	5		40 percent
	6		52 percent
	7		64 percent
	8		76 percent
	9		88 percent
	10	deleted text begin and thereafter deleted text end new text begin or more new text end	100 percent

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 7.

Minnesota Statutes 2018, section 424A.016, subdivision 6, is amended to read:

Subd. 6.

Deferred service pensions.

(a) A member of a relief association is entitled to
a deferred service pension if the member separates from active service and membership and
has completed the minimum service and membership requirements in subdivision 2. The
requirement that a member separate from active service and membership is waived for
persons who have discontinued their volunteer firefighter duties and who are employed on
a full-time basis under section 424A.015, subdivision 1.

(b) The deferred service pension is payable when the former member reaches at least
age 50, or at least the minimum age specified in the bylaws governing the relief association
if that age is greater than age 50, and when the former member makes a valid written
application.

(c) A defined contribution relief association may, if its governing bylaws so provide,
credit interest or additional investment performance on the deferred lump-sum service
pension during the period of deferral. If provided for in the bylaws, the interest must be
deleted text begin paid deleted text end new text begin credited new text end :

(1) at the investment performance rate actually earned on that portion of the assets if the
deferred benefit amount is invested by the relief association in a separate account established
and maintained by the relief association;

(2) at the investment performance rate actually earned on that portion of the assets if the
deferred benefit amount is invested in a separate investment vehicle held by the relief
association; or

(3) at the investment return on the assets of the special fund of the defined contribution
volunteer firefighters relief association in proportion to the share of the assets of the special
fund to the credit of each individual deferred member account through the accounting date
on which the investment return is recognized by and credited to the special fund.

(d) Unless the bylaws of a relief association that has elected to pay interest or additional
investment performance on deferred lump-sum service pensions under paragraph (c) specifies
a different interest or additional investment performance method, including the interest or
additional investment performance period starting date and ending date, the interest or
additional investment performance on a deferred service pension is creditable as follows:

(1) for a relief association that has elected to deleted text begin pay deleted text end new text begin credit new text end interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the date that the member
separates from active service and membership and ending on the accounting date immediately
before the deferred member commences receipt of the deferred service pension; or

(2) for a relief association that has elected to deleted text begin pay deleted text end new text begin credit new text end interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member separates
from active service and membership and ending on the date that the separate investment
vehicle is valued immediately before the date on which the deferred member commences
receipt of the deferred service pension.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 8.

Minnesota Statutes 2018, section 424A.02, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Nonforfeitable portion of service pension deleted text end new text begin Vesting schedule new text end .

deleted text begin (a) deleted text end If the articles
of incorporation or bylaws of a defined benefit relief association deleted text begin so deleted text end provide deleted text begin , the relief
association may pay a reduced service pension to a retiring member who has completed
fewer than 20 years of service. The reduced service pension may be paid when the retiring
member meets the minimum age and service requirements of subdivision 1. deleted text end new text begin a vesting
schedule that satisfies the requirements of this subdivision, the relief association may pay
a reduced service pension to a retiring member. For purposes of this section, "vests,"
"vesting," or "vested" means a nonforfeitable, unconditional, or legally enforceable right.
A member vests in the member's accrued service pension in accordance with the vesting
schedule set forth in the relief association's articles of incorporation or bylaws. Provided a
member meets the minimum age and service requirements of subdivision 1, the member is
entitled to the member's accrued service pension, but only to the extent vested as provided
in the vesting schedule set forth in the articles of incorporation or bylaws. In no event may
the articles of incorporation or bylaws:
new text end

deleted text begin (b) The amount of the reduced service pension may not exceed the amount calculated
by multiplying the service pension appropriate for the completed years of service as specified
in the bylaws multiplied by the applicable nonforfeitable percentage of pension.
deleted text end

deleted text begin (c) For a defined benefit volunteer firefighters relief association that pays a lump-sum
service pension, a monthly benefit service pension, or a lump-sum service pension or a
monthly benefit service pension as alternative benefit forms, the nonforfeitable percentage
of pension amounts are as follows:
deleted text end

new text begin (1) require that a member have more than 20 years of active service to become 100
percent vested in the member's accrued service pension; or
new text end

new text begin (2) provide for a larger vesting percentage than is provided in the following schedule
with respect to the completed number of years of active service indicated in the schedule:
new text end

	Completed Years of new text begin Active new text end Service		deleted text begin Nonforfeitable deleted text end new text begin Vested new text end Percentage of Pension Amount
	5		40 percent
	6		deleted text begin 44 deleted text end new text begin 52 new text end percent
	7		deleted text begin 48 deleted text end new text begin 64 new text end percent
	8		deleted text begin 52 deleted text end new text begin 76 new text end percent
	9		deleted text begin 56 deleted text end new text begin 88 new text end percent
	deleted text begin 10 deleted text end		deleted text begin 60 percent deleted text end
	deleted text begin 11 deleted text end		deleted text begin 64 percent deleted text end
	deleted text begin 12 deleted text end		deleted text begin 68 percent deleted text end
	deleted text begin 13 deleted text end		deleted text begin 72 percent deleted text end
	deleted text begin 14 deleted text end		deleted text begin 76 percent deleted text end
	deleted text begin 15 deleted text end		deleted text begin 80 percent deleted text end
	deleted text begin 16 deleted text end		deleted text begin 84 percent deleted text end
	deleted text begin 17 deleted text end		deleted text begin 88 percent deleted text end
	deleted text begin 18 deleted text end		deleted text begin 92 percent deleted text end
	deleted text begin 19 deleted text end		deleted text begin 96 percent deleted text end
	deleted text begin 20 deleted text end new text begin 10 new text end	deleted text begin and thereafter deleted text end new text begin or more new text end	100 percent

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 9.

Minnesota Statutes 2018, section 424A.02, subdivision 7, is amended to read:

Subd. 7.

Deferred service pensions.

(a) A member of a defined benefit relief association
is entitled to a deferred service pension if the member separates from active service and
membership and has completed the minimum service and membership requirements in
subdivision 1. The requirement that a member separate from active service and membership
is waived for persons who have discontinued their volunteer firefighter duties and who are
employed on a full-time basis under section 424A.015, subdivision 1.

(b) The deferred service pension is payable when the former member reaches at least
age 50, or at least the minimum age specified in the bylaws governing the relief association
if that age is greater than age 50, and when the former member makes a valid written
application.

(c) A defined benefit relief association that provides a lump-sum service pension governed
by subdivision 3 may, when its governing bylaws so provide, deleted text begin pay deleted text end new text begin credit new text end interest on the
deferred lump-sum service pension during the period of deferral. If provided for in the
bylaws, interest must be deleted text begin paid deleted text end new text begin credited new text end in one of the following manners:

(1) at the investment performance rate actually earned on that portion of the assets if the
deferred benefit amount is invested by the relief association in a separate account established
and maintained by the relief association;

(2) at the investment performance rate actually earned on that portion of the assets if the
deferred benefit amount is invested in a separate investment vehicle held by the relief
association; or

(3) at an interest rate of up to five percent, compounded annually, as set by the board of
trustees.

(d) Any change in the interest rate set by the board of trustees under paragraph (c), clause
(3), must be ratified by the governing body of the municipality or joint powers entity served
by the fire department to which the relief association is directly associated, or by the
independent nonprofit firefighting corporation, as applicable.

(e) Interest under paragraph (c), clause (3), is deleted text begin payable deleted text end new text begin credited new text end beginning on the January
1 next following the date on which the deferred service pension interest rate as set by the
board of trustees was ratified by the governing body of the municipality or joint powers
entity served by the fire department to which the relief association is directly associated, or
by the independent nonprofit firefighting corporation, as applicable.

(f) Unless the bylaws of a relief association that has elected to deleted text begin pay deleted text end new text begin credit new text end interest or
additional investment performance on deferred lump-sum service pensions under paragraph
(c) specifies a different interest or additional investment performance method, including
the interest or additional investment performance period starting date and ending date, the
interest or additional investment performance on a deferred service pension is creditable as
follows:

(1) for a relief association that has elected to deleted text begin pay deleted text end new text begin credit new text end interest or additional investment
performance under paragraph (c), clause (1) or (3), beginning on the first day of the month
next following the date on which the member separates from active service and membership
and ending on the last day of the month immediately before the month in which the deferred
member commences receipt of the deferred service pension; or

(2) for a relief association that has elected to deleted text begin pay deleted text end new text begin credit new text end interest or additional investment
performance under paragraph (c), clause (2), beginning on the date that the member separates
from active service and membership and ending on the date that the separate investment
vehicle is valued immediately before the date on which the deferred member commences
receipt of the deferred service pension.

(g) For a deferred service pension that is transferred to a separate account established
and maintained by the relief association or separate investment vehicle held by the relief
association, the deferred member bears the full investment risk subsequent to transfer and
in calculating the accrued liability of the volunteer firefighters relief association that pays
a lump-sum service pension, the accrued liability for deferred service pensions is equal to
the separate relief association account balance or the fair market value of the separate
investment vehicle held by the relief association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 10.

Minnesota Statutes 2018, section 424A.02, subdivision 9, is amended to read:

Subd. 9.

Limitation on ancillary benefits.

A defined benefit relief association, including
any volunteer firefighters relief association governed by Laws 2013, chapter 111, article 5,
sections 31 to 42, or any volunteer firefighters division of a relief association governed by
chapter 424, may only pay ancillary benefits which would constitute an authorized
disbursement as specified in section 424A.05 subject to the following requirements or
limitations:

(1) with respect to a defined benefit relief association in which governing bylaws provide
solely for a lump-sum service pension to a retiring member, or provide a retiring member
the choice of either a lump-sum service pension or a monthly service pension and the
lump-sum service pension was chosen, no ancillary benefit may be paid to any former
member or paid to any person on behalf of any former member after the former member (i)
terminates active service with the fire department and active membership in the relief
association; and (ii) commences receipt of a service pension as authorized under this section;
and

(2) with respect to any defined benefit relief association, no ancillary benefit paid or
payable to any member, to any former member, or to any person on behalf of any member
or former member, may exceed in amount the total earned service pension of the member
or former member. The total earned service pension must be calculated by multiplying the
service pension amount specified in the bylaws of the relief association at the time of death
or disability, whichever applies, by the years of service credited to the member or former
member. The years of service must be determined as of (i) the date the member or former
member became entitled to the ancillary benefit; or (ii) the date the member or former
member died entitling a survivor or the estate of the member or former member to an
ancillary benefit. The ancillary benefit must be calculated without regard to whether the
member had attained the minimum amount of service and membership credit specified in
the governing bylaws. For active members, the amount of a permanent disability benefit or
a survivor benefit must be equal to the member's total earned service pension except that
the bylaws of a defined benefit relief association may provide for the payment of a survivor
benefit in an amount not to exceed five times the yearly service pension amount specified
in the bylaws on behalf of any member who dies before having performed five years of
active service in the fire department with which the relief association is affiliated. new text begin For
deferred members, the amount of a permanent disability benefit or a survivor benefit must
be calculated using the service pension amount in effect on the date specified in section
424A.015, subdivision 6, unless the bylaws of the relief association specify a different
service pension amount to be used for the calculation.
new text end

(3)(i) If a lump sum survivor or death benefit is payable under the articles of incorporation
or bylaws, the benefit must be paid:

(A) as a survivor benefit to the surviving spouse of the deceased firefighter;

(B) as a survivor benefit to the surviving children of the deceased firefighter if no
surviving spouse;

(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no
surviving spouse or surviving children; or

(D) as a death benefit to the estate of the deceased active or deferred firefighter if no
surviving children and no beneficiary designated.

(ii) If there are no surviving children, the surviving spouse may waive, in writing, wholly
or partially, the spouse's entitlement to a survivor benefit.

(4)(i) If a monthly benefit survivor or death benefit is payable under the articles of
incorporation or bylaws, the benefit must be paid:

(A) as a survivor benefit to the surviving spouse of the deceased firefighter;

(B) as a survivor benefit to the surviving children of the deceased firefighter if no
surviving spouse;

(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no
surviving spouse or surviving children; or

(D) as a death benefit to the estate of the deceased active or deferred firefighter if no
surviving spouse, no surviving children, and no beneficiary designated.

(ii) If there are no surviving children, the surviving spouse may waive, in writing, wholly
or partially, the spouse's entitlement to a survivor benefit.

(iii) For purposes of this clause, if the relief association bylaws authorize a monthly
survivor benefit payable to a designated beneficiary, the relief association bylaws may limit
the total survivor benefit amount payable.

(5) For purposes of this section, for a monthly benefit volunteer fire relief association
or for a combination lump-sum and monthly benefit volunteer fire relief association where
a monthly benefit service pension has been elected by or a monthly benefit is payable with
respect to a firefighter, a designated beneficiary must be a natural person. For purposes of
this section, for a lump-sum volunteer fire relief association or for a combination lump-sum
and monthly benefit volunteer fire relief association where a lump-sum service pension has
been elected by or a lump-sum benefit is payable with respect to a firefighter, a trust created
under chapter 501C may be a designated beneficiary. If a trust is payable to the surviving
children organized under chapter 501C as authorized by this section and there is no surviving
spouse, the survivor benefit may be paid to the trust, notwithstanding a requirement of this
section to the contrary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 11.

Minnesota Statutes 2018, section 424A.02, subdivision 10, is amended to read:

Subd. 10.

Local approval of bylaw amendments; filing requirements.

(a) Each defined
benefit relief association to which this section applies must file a revised copy of its governing
bylaws with the state auditor upon the adoption of any amendment to its governing bylaws
by the relief association or upon the approval of any amendment to its governing bylaws
granted by the governing body of deleted text begin each deleted text end new text begin the new text end municipality served by the fire department to
which the relief association is directly associated new text begin or by the independent nonprofit firefighting
corporation, as applicable new text end . Failure of the relief association to file a copy of the bylaws or
any bylaw amendments with the state auditor disqualifies the municipality from the
distribution of any future fire state aid until this filing requirement has been completed.

(b) If the special fund of the relief association does not have a surplus over full funding
under section 424A.092, subdivision 3, paragraph (c), clause (5), or 424A.093, subdivision
4, and if the municipality is required to provide financial support to the special fund of the
relief association under section 424A.092 or 424A.093, no bylaw amendment which would
affect the amount of, the manner of payment of, or the conditions for qualification for service
pensions or ancillary benefits or disbursements other than administrative expenses authorized
under section 69.80 payable from the special fund of the relief association is effective until
it has been ratified as required under section 424A.092, subdivision 6, or 424A.093,
subdivision 6. If the special fund of the relief association has a surplus over full funding
under section 424A.092, subdivision 3, or 424A.093, subdivision 4, and if the municipality
is not required to provide financial support to the special fund under this section, the relief
association may adopt or amend without municipal ratification its articles of incorporation
or bylaws which increase or otherwise affect the service pensions or ancillary benefits
payable from the special fund if authorized under section 424A.092, subdivision 6, or
424A.093, subdivision 6.

(c) If the relief association pays only a lump-sum pension, the financial requirements
are to be determined by the board of trustees following the preparation of an estimate of
the expected increase in the accrued liability and annual accruing liability of the relief
association attributable to the change. If the relief association pays a monthly benefit service
pension, the financial requirements are to be determined by the board of trustees following
either an updated actuarial valuation including the proposed change or an estimate of the
expected actuarial impact of the proposed change prepared by the actuary of the relief
association. If a relief association adopts or amends its articles of incorporation or bylaws
without municipal ratification under this subdivision, and, subsequent to the amendment or
adoption, the financial requirements of the special fund under this section are such so as to
require financial support from the municipality, the provision which was implemented
without municipal ratification is no longer effective without municipal ratification, and any
service pensions or ancillary benefits payable after that date must be paid only in accordance
with the articles of incorporation or bylaws as amended or adopted with municipal
ratification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020.
new text end

Sec. 12.

Minnesota Statutes 2018, section 424A.10, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of this section:

(1) "qualified recipient" means a volunteer firefighter who receives a lump-sum
distribution of pension or retirement benefits from a volunteer firefighters relief association
or from the voluntary statewide lump-sum volunteer firefighter retirement plan;

(2) "survivor of a deceased active or deferred volunteer firefighter" means the surviving
spouse of a deceased active or deferred volunteer firefighter or, if none, the surviving child
or children of a deceased active or deferred volunteer firefighter new text begin , or, if none, the designated
beneficiary of the deceased active or deferred volunteer firefighter, or, if no beneficiary has
been designated, the estate of the deceased active or deferred volunteer firefighter new text end ;

(3) "active volunteer firefighter" means a person who:

(i) regularly renders fire suppression service, the performance or supervision of authorized
fire prevention duties, or the performance or supervision of authorized emergency medical
response activities for a fire department;

(ii) has met the statutory and other requirements for relief association membership; and

(iii) is deemed by the relief association under law and its bylaws to be a fully qualified
member of the relief association or from the voluntary statewide lump-sum volunteer
firefighter retirement plan for at least one month;

(4) "deferred volunteer firefighter" means a former active volunteer firefighter who:

(i) terminated active firefighting service, the performance or supervision of authorized
fire prevention duties, or the performance or supervision of authorized emergency medical
response activities; and

(ii) has sufficient service credit from the applicable relief association or from the voluntary
statewide lump-sum volunteer firefighter retirement plan to be entitled to a service pension
under the bylaws of the relief association, but has not applied for or has not received the
service pension; and

(5) "volunteer firefighter" includes an individual whose services were utilized to perform
or supervise fire prevention duties if authorized under section 424A.01, subdivision 5, and
individuals whose services were used to perform emergency medical response duties or
supervise emergency medical response activities if authorized under section 424A.01,
subdivision 5a.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2020, and applies to
supplemental benefits paid by a relief association in 2019 and thereafter for the death of an
active or deferred volunteer firefighter that occurred on or after January 1, 2019.
new text end