Minnesota Legislature
SF 2521
as introduced - 89th Legislature (2015 - 2016) Posted on 03/11/2016 09:11am
Current Version - as introduced
1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12
2.13
2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 3.36 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30
4.31
4.32 4.33 4.34 4.35 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 5.33 5.34 5.35 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19
6.20
A bill for an act
relating to retirement; Teachers Retirement Association financial solvency
measures; increasing employer contribution rates; reducing deferral amount
and implementing forfeiture procedure for reemployed annuitants; extending
the amortization target date; reducing postretirement adjustment increase
rates; amending Minnesota Statutes 2014, section 354.42, subdivision 3;
Minnesota Statutes 2015 Supplement, sections 356.215, subdivision 11; 356.415,
subdivision 1d.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2014, section 354.42, subdivision 3, is amended to read:
Subd. 3.
Employer.
(a) The regular employer contribution to the fund by Special
School District No. 1, Minneapolis, is an amount equal to the applicable following
percentage of salary of each coordinated member and the applicable percentage of salary
of each basic member specified in paragraph (c).
The additional employer contribution to the fund by Special School District No. 1,
Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a
coordinated member or who is a basic member.
(b) The regular employer contribution to the fund by Independent School District
No. 709, Duluth, is an amount equal to the applicable percentage of salary of each old law
or new law coordinated member specified for the coordinated program in paragraph (c).
(c) The employer contribution to the fund for every other employer is an amount
equal to the applicable following percentage of the salary of each coordinated member and
the applicable following percentage of the salary of each basic member:
| Period |
Coordinated Member |
Basic Member |
|||
|
deleted text begin
from July 1, 2013, until June 30, 2014 deleted text end |
deleted text begin
7 percent deleted text end |
deleted text begin
11 percent deleted text end |
|||
| after June 30, 2014new text begin , through June 30, 2017 new text end |
7.5 percent |
11.5 percent |
|||
|
new text begin
after June 30, 2017 new text end |
new text begin
8.5 percent new text end |
new text begin
11.5 percent new text end |
|||
(d) When an employer contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid for each employer unit with the
first payroll cycle reported.
(e) After June 30, 2015, if a contribution rate revision is made under subdivisions
4a, 4b, and 4c, the employer contributions under paragraphs (a), (b), and (c) must be
adjusted accordingly.
new text begin
(f) Effective July 1, 2017, the employer shall make the regular employer contributions
specified in paragraph (c) on behalf of any retired member of the Teachers Retirement
Association who resumes teaching in any employer unit to which this chapter applies.
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.
Minnesota Statutes 2015 Supplement, section 356.215, subdivision 11, is
amended to read:
Subd. 11.
Amortization contributions.
(a) In addition to the exhibit indicating
the level normal cost, the actuarial valuation of the retirement plan must contain an
exhibit for financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit
for contribution determination purposes indicating the additional contribution sufficient
to amortize the unfunded actuarial accrued liability. For the retirement plans listed in
subdivision 8, paragraph (c), but excluding the legislators retirement plan, the additional
contribution must be calculated on a level percentage of covered payroll basis by the
established date for full funding in effect when the valuation is prepared, assuming annual
payroll growth at the applicable percentage rate set forth in subdivision 8, paragraph (d).
For all other retirement plans and for the legislators retirement plan, the additional annual
contribution must be calculated on a level annual dollar amount basis.
(b) For any retirement plan other than a retirement plan governed by paragraph (d),
(e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions
used for calculating the actuarial accrued liability of the fund, a change in the benefit
plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the
fund, or a combination of the three, which change or changes by itself or by themselves
without inclusion of any other items of increase or decrease produce a net increase in the
unfunded actuarial accrued liability of the fund, the established date for full funding is the
first actuarial valuation date occurring after June 1, 2020.
(c) For any retirement plan, if there has been a change in any or all of the actuarial
assumptions used for calculating the actuarial accrued liability of the fund, a change in
the benefit plan governing annuities and benefits payable from the fund, a change in the
actuarial cost method used in calculating the actuarial accrued liability of all or a portion
of the fund, or a combination of the three, and the change or changes, by itself or by
themselves and without inclusion of any other items of increase or decrease, produce a net
increase in the unfunded actuarial accrued liability in the fund, the established date for full
funding must be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the fund must be determined in
accordance with the plan provisions governing annuities and retirement benefits and the
actuarial assumptions in effect before an applicable change;
(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;
(iii) the unfunded actuarial accrued liability of the fund must be determined in
accordance with any new plan provisions governing annuities and benefits payable from
the fund and any new actuarial assumptions and the remaining plan provisions governing
annuities and benefits payable from the fund and actuarial assumptions in effect before
the change;
(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the
applicable change is effective must be calculated using the applicable interest assumption
specified in subdivision 8 in effect after any applicable change;
(v) the level annual dollar or level percentage amortization contribution under item
(iv) must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);
(vi) the period in which the unfunded actuarial accrued liability amount determined
in item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in which
the determination of the established date for full funding using the procedure set forth in this
clause is made and not to be less than the period of years beginning in the plan year in which
the determination of the established date for full funding using the procedure set forth in
this clause is made and ending by the date for full funding in effect before the change; and
(vii) the period determined under item (vi) must be added to the date as of which
the actuarial valuation was prepared and the date obtained is the new established date
for full funding.
(d) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2031.
(e) For the Teachers Retirement Association, the established date for full funding is
June 30, deleted text begin 2037deleted text end new text begin 2046new text end .
(f) For the correctional state employees retirement plan of the Minnesota State
Retirement System, the established date for full funding is June 30, 2038.
(g) For the judges retirement plan, the established date for full funding is June
30, 2038.
(h) For the public employees police and fire retirement plan, the established date
for full funding is June 30, 2038.
(i) For the St. Paul Teachers Retirement Fund Association, the established date for
full funding is June 30, 2042. In addition to other requirements of this chapter, the annual
actuarial valuation must contain an exhibit indicating the funded ratio and the deficiency
or sufficiency in annual contributions when comparing liabilities to the market value of
the assets of the fund as of the close of the most recent fiscal year.
(j) For the general state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, 2040.
(k) For the retirement plans for which the annual actuarial valuation indicates an
excess of valuation assets over the actuarial accrued liability, the valuation assets in
excess of the actuarial accrued liability must be recognized as a reduction in the current
contribution requirements by an amount equal to the amortization of the excess expressed
as a level percentage of pay over a 30-year period beginning anew with each annual
actuarial valuation of the plan.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 3.
Minnesota Statutes 2015 Supplement, section 356.415, subdivision 1d, is
amended to read:
Subd. 1d.
Teachers Retirement Association annual postretirement adjustments.
(a) Retirement annuity, disability benefit, or survivor benefit recipients of the Teachers
Retirement Association are entitled to a postretirement adjustment annually on January
1, as follows:
(1) deleted text begin for each January 1 until funding stability is restored,deleted text end new text begin effective January 1, 2017,
through December 31, 2021, new text end a postretirement increase of deleted text begin twodeleted text end new text begin one new text end percent must be applied
each yeardeleted text begin , effective on January 1,deleted text end to the monthly annuity or benefit amount of each
annuitant or benefit recipient who has been receiving an annuity or a benefit for at least 12
full months as of the June 30 of the calendar year immediately before the adjustment;
(2) deleted text begin for each January 1 until funding stability is restoreddeleted text end new text begin effective January 1, 2017,
through December 31, 2021new text end , for each annuitant or benefit recipient who has been receiving
an annuity or a benefit for at least one full month, but less than 12 full months as of the
June 30 of the calendar year immediately before the adjustment, an annual postretirement
increase of 1/12 of deleted text begin twodeleted text end new text begin one new text end percent for each month the person has been receiving an
annuity or benefit must be applied;
(3) deleted text begin for each January 1 following the restoration of funding stabilitydeleted text end new text begin effective January
1, 2022, and thereafternew text end , a postretirement increase of deleted text begin 2.5deleted text end new text begin 1.75 new text end percent must be applied each
yeardeleted text begin , effective January 1,deleted text end to the monthly annuity or benefit amount of each annuitant
or benefit recipient who has been receiving an annuity or a benefit for at least 12 full
months as of the June 30 of the calendar year immediately before the adjustmentnew text begin . For each
annuitant or benefit recipient who has been receiving an annuity or a benefit for at least
one full month, but less than 12 full months as of June 30 of the calendar year immediately
before the adjustment, an annual postretirement increase of 1/12 of 1.75 percent for each
month the person has been receiving an annuity or benefit must be appliednew text end ; and
(4) deleted text begin for each January 1 following the restoration of funding stabilitydeleted text end new text begin effective January
1, 2022, and thereafternew text end , for each annuitant or benefit recipient who has been receiving an
annuity or a benefit for at least one new text begin full new text end month, but less than 12 full months as of the June
30 of the calendar year immediately before the adjustment, an annual postretirement
increase of 1/12 of deleted text begin 2.5deleted text end new text begin 1.75 new text end percent for each month the person has been receiving an
annuity or benefit must be applied.
deleted text begin
(b) Funding stability is restored when the market value of assets of the Teachers
Retirement Association equals or exceeds 90 percent of the actuarial accrued liabilities
of the Teachers Retirement Association in the two most recent prior actuarial valuations
prepared under section 356.215 and the standards for actuarial work by the approved
actuary retained by the Teachers Retirement Association under section 356.214.
deleted text end
deleted text begin
(c) After having met the definition of funding stability under paragraph (b), the
increase provided in paragraph (a), clauses (1) and (2), rather than an increase under
subdivision 1, or the increase under paragraph (a), clauses (3) and (4), is again to be applied
in a subsequent year or years if the market value of assets of the plan equals or is less than:
deleted text end
deleted text begin
(1) 85 percent of the actuarial accrued liabilities of the plan for two consecutive
actuarial valuations; or
deleted text end
deleted text begin
(2) 80 percent of the actuarial accrued liabilities of the plan for the most recent
actuarial valuation.
deleted text end
deleted text begin (d)deleted text end new text begin (b) new text end An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the Teachers Retirement Association requesting that the increase
not be made.
deleted text begin (e)deleted text end new text begin (c) new text end The retirement annuity payable to a person who retires before becoming
eligible for Social Security benefits and who has elected the optional payment as provided
in section 354.35 must be treated as the sum of a period-certain retirement annuity
and a life retirement annuity for the purposes of any postretirement adjustment. The
period-certain retirement annuity plus the life retirement annuity must be the annuity
amount payable until age 62, 65, or normal retirement age, as selected by the member
at retirement, for an annuity amount payable under section 354.35. A postretirement
adjustment granted on the period-certain retirement annuity must terminate when the
period-certain retirement annuity terminates.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end