SF 2648

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; volunteer firefighter relief 
  1.3             associations; authorizing the voluntary consolidation 
  1.4             of two or more relief associations; authorizing the 
  1.5             voluntary conversion of defined benefit relief 
  1.6             associations to defined contribution relief 
  1.7             associations; proposing coding for new law as 
  1.8             Minnesota Statutes, chapters 424B; and 424C. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10                             ARTICLE 1 
  1.11              AUTHORIZATION OF VOLUNTARY CONSOLIDATION 
  1.12            OF VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS 
  1.13     Section 1.  [424B.01] [VOLUNTARY CONSOLIDATION OF VOLUNTEER 
  1.14  FIREFIGHTER RELIEF ASSOCIATIONS AUTHORIZED.] 
  1.15     It is the intent and policy of the legislature in this 
  1.16  chapter to authorize, on a voluntary elective basis, volunteer 
  1.17  firefighter relief associations and the applicable 
  1.18  municipalities to effect a consolidation of the relief 
  1.19  associations into a new volunteer firefighter relief association 
  1.20  under the provisions of this chapter. 
  1.21     Sec. 2.  [424B.02] [DEFINITIONS.] 
  1.22     Subdivision 1.  [GENERALLY.] When used in this chapter, 
  1.23  each of the following words and phrases must have the meaning 
  1.24  given in this section unless the context clearly indicates 
  1.25  otherwise. 
  1.26     Subd. 2.  [ASSETS.] "Assets" means the investment 
  1.27  securities and other items of value held by the special fund of 
  2.1   the relief association. 
  2.2      Subd. 3.  [BENEFICIARY.] "Beneficiary" means the natural 
  2.3   person designated by any active, deferred, or retired member of 
  2.4   a consolidating volunteer firefighter relief association as the 
  2.5   recipient of any remainder interest to the credit of the 
  2.6   designating person under the relief association benefit plan 
  2.7   upon the death of the designating person. 
  2.8      Subd. 4.  [BENEFIT PLAN.] "Benefit plan" means that portion 
  2.9   of a pension plan which deals specifically with the service 
  2.10  pension and retirement benefit coverage provided by the 
  2.11  volunteer firefighter relief association, including but not 
  2.12  limited to, the types of coverage, the initial and continuing 
  2.13  eligibility for and entitlement to service pensions and 
  2.14  retirement benefits, and the amount of service pensions and 
  2.15  retirement benefits. 
  2.16     Subd. 5.  [BOARD OF TRUSTEES.] "Board of trustees" means 
  2.17  the managing board of the volunteer firefighter relief 
  2.18  association. 
  2.19     Subd. 6.  [CHIEF ADMINISTRATIVE OFFICER.] "Chief 
  2.20  administrative officer" means the person who has primary 
  2.21  responsibility for the execution of the administrative affairs 
  2.22  of the municipality, in the case of a municipality, or of the 
  2.23  volunteer firefighter relief association in the case of a 
  2.24  volunteer firefighter relief association or the designee of that 
  2.25  person. 
  2.26     Subd. 7.  [DEFERRED MEMBER.] "Deferred member" means a 
  2.27  person who has credit for sufficient service in the volunteer 
  2.28  firefighter relief association to gain entitlement to an 
  2.29  eventual service pension but who has not yet applied for or 
  2.30  started receipt of that service pension. 
  2.31     Subd. 8.  [EFFECTIVE DATE OF THE CONSOLIDATION.] "Effective 
  2.32  date of the consolidation" means the date on which the 
  2.33  consolidation is designated to occur under section 424B.06. 
  2.34     Subd. 9.  [EXISTING RELIEF ASSOCIATION BENEFIT 
  2.35  PLAN.] "Existing relief association benefit plan" means the 
  2.36  benefit plan of the volunteer firefighter relief association in 
  3.1   effect on the day before the initiation of the consolidation 
  3.2   procedure. 
  3.3      Subd. 10.  [MAJORITY VOTE.] "Majority vote" means one-half 
  3.4   of the number of votes cast on the consolidation question, plus 
  3.5   one vote. 
  3.6      Subd. 11.  [MEMBERSHIP OF THE VOLUNTEER FIREFIGHTER RELIEF 
  3.7   ASSOCIATION.] "Membership of the volunteer firefighter relief 
  3.8   association" means the active, deferred, disabled, and retired 
  3.9   members and the survivors of the active, deferred, disabled, and 
  3.10  retired members of the volunteer firefighter relief association, 
  3.11  to the extent that the category is eligible to receive a pension 
  3.12  or benefit under the benefit plan of the relief association. 
  3.13     Subd. 12.  [MINIMUM REQUIRED PROPORTION OF RELIEF 
  3.14  ASSOCIATION MEMBERSHIP.] "Minimum required proportion of relief 
  3.15  association membership" means 20 percent of the membership of 
  3.16  the volunteer firefighter relief association. 
  3.17     Subd. 13.  [OTHER ITEMS OF VALUE.] "Other items of value" 
  3.18  means any real property, personal property, or interest in real 
  3.19  or personal property not evidenced by or appropriately 
  3.20  characterized as a security as that term is defined by section 
  3.21  524.1-201, clause (32). 
  3.22     Subd. 14.  [PUBLIC HEARING.] "Public hearing" means a 
  3.23  meeting held by the board of trustees of the volunteer 
  3.24  firefighter relief association or the governing body of the 
  3.25  municipality in which the relief association is located, 
  3.26  whichever applies, in a place and at a time accessible to 
  3.27  members of the general public, which is reasonably calculated to 
  3.28  allow for participation by all affected interest, for which 
  3.29  proper notice has been given and at which the views of the 
  3.30  general public may be heard. 
  3.31     Subd. 15.  [REFERENDUM.] "Referendum" means a vote of the 
  3.32  total membership of a relief association on the question of the 
  3.33  consolidation of two or more volunteer firefighter relief 
  3.34  associations as provided in section 424B.05, that occurs upon 
  3.35  the initiation of the consolidation and is conducted through the 
  3.36  use of a secret, written ballot in accordance with procedures 
  4.1   established by the board of trustees of the volunteer 
  4.2   firefighter relief association for the issuance and collection 
  4.3   of ballots. 
  4.4      Subd. 16.  [STATE BOARD OF INVESTMENT.] "State board of 
  4.5   investment" means the state board of investment established by 
  4.6   article XI, section 8, of the Minnesota Constitution and 
  4.7   operating under chapter 11A. 
  4.8      Subd. 17.  [SURVIVOR.] "Survivor" means the person who has 
  4.9   or the persons who have, as of the death of the active, 
  4.10  deferred, or retired member of the volunteer firefighter relief 
  4.11  association, the relationship to the member of the legally 
  4.12  married spouse or a dependent minor child as defined or 
  4.13  specified by the benefit plan of the volunteer firefighter 
  4.14  relief association. 
  4.15     Subd. 18.  [VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION.] 
  4.16  "Volunteer firefighter relief association" means a relief 
  4.17  association as defined in section 424A.001, subdivision 4. 
  4.18     Sec. 3.  [424B.03] [VOLUNTARY CONSOLIDATION OPTION.] 
  4.19     Notwithstanding any provision of law to the contrary, a 
  4.20  volunteer firefighter relief association may consolidate with 
  4.21  one or more other volunteer firefighter relief associations to 
  4.22  form a consolidated volunteer firefighter relief association 
  4.23  under this chapter. 
  4.24     Sec. 4.  [424B.04] [CONSOLIDATION QUESTION INITIATION.] 
  4.25     Subdivision 1.  [SOURCE OF INITIATION OF CONSOLIDATION 
  4.26  QUESTION.] The consolidation of two or more volunteer 
  4.27  firefighter relief associations may be initiated in a manner 
  4.28  specified in this section. 
  4.29     Subd. 2.  [INITIATION BY FIRE DEPARTMENT CONSOLIDATION.] If 
  4.30  two or more municipal fire departments, two or more nonprofit 
  4.31  firefighting corporations, or one or more municipal fire 
  4.32  departments and one or more nonprofit firefighting corporations 
  4.33  undertake formal actions to consolidate, the initial formal 
  4.34  action on the proposed fire department consolidation by all 
  4.35  applicable municipalities, nonprofit firefighting corporations, 
  4.36  or a combination, automatically initiates the question on the 
  5.1   consolidation of the volunteer firefighter relief associations 
  5.2   associated with those fire departments.  The relief association 
  5.3   consolidation question continues even if the proposed fire 
  5.4   department consolidation that gave rise to the relief 
  5.5   association consolidation question is terminated or fails to 
  5.6   proceed. 
  5.7      Subd. 3.  [MUNICIPAL INITIATION.] Upon the passage by the 
  5.8   governing bodies of two or more municipalities of resolutions 
  5.9   indicating an intent to initiate the question of the 
  5.10  consolidation of two or more volunteer firefighter relief 
  5.11  associations into a consolidated volunteer firefighter relief 
  5.12  association, the consolidation question is initiated. 
  5.13     Subd. 4.  [RELIEF ASSOCIATION BOARD INITIATION.] At their 
  5.14  discretion, the boards of trustees of two or more volunteer 
  5.15  firefighter relief associations, by majority vote of each board 
  5.16  adopting a resolution indicating an intent to initiate the 
  5.17  question of the consolidation of the volunteer firefighter 
  5.18  relief associations into a consolidated volunteer firefighter 
  5.19  relief association, may initiate the consolidation question. 
  5.20     Subd. 5.  [RELIEF ASSOCIATION MEMBERSHIP INITIATION.] The 
  5.21  question of the consolidation of the affected volunteer 
  5.22  firefighter relief associations into a consolidated volunteer 
  5.23  firefighter relief association may be initiated upon the 
  5.24  tendering of signed petitions from at least the minimum required 
  5.25  proportion of the membership of each volunteer firefighter 
  5.26  relief association with the boards of trustees of the applicable 
  5.27  volunteer firefighter relief association.  The chief 
  5.28  administrative officer of each applicable volunteer firefighter 
  5.29  relief association must validate the petition signatures and 
  5.30  ascertain the minimum required proportion of the relief 
  5.31  association membership. 
  5.32     Sec. 5.  [424B.05] [PROCESSING THE CONSOLIDATION QUESTION.] 
  5.33     Subdivision 1.  [BOARD OF TRUSTEE RESPONSE.] Upon 
  5.34  initiation of the consolidation question under section 424B.04, 
  5.35  the board of trustees of each volunteer firefighter relief 
  5.36  association to which the consolidation question applies shall 
  6.1   hold a public hearing on the consolidation issue and shall 
  6.2   formulate and adopt a board resolution setting forth its 
  6.3   recommendation to the remainder of the volunteer firefighter 
  6.4   relief association membership and to the applicable municipality 
  6.5   on the consolidation issue and setting forth the procedure for a 
  6.6   membership referendum on the consolidation question under 
  6.7   subdivision 2.  The public hearing must be held within one month 
  6.8   of the date on which the consolidation question initiation 
  6.9   occurred.  The board of trustees resolution must be adopted at 
  6.10  the next regular scheduled meeting following the public 
  6.11  hearing.  The resolution of the board of trustees must be filed 
  6.12  with the chief administrative officer of the applicable 
  6.13  municipality or municipalities, filed with the chief 
  6.14  administrative officers of the other volunteer firefighter 
  6.15  relief associations to which the consolidation question also 
  6.16  applies, and made generally available to the membership of the 
  6.17  volunteer firefighter relief association. 
  6.18     Subd. 2.  [MEMBERSHIP REFERENDUM PROCEDURE.] (a) The 
  6.19  resolution of the board of trustees of the volunteer firefighter 
  6.20  relief association setting forth the membership referendum 
  6.21  procedure must provide for a referendum by the membership of the 
  6.22  relief association. 
  6.23     (b) The referendum must be conducted by a secret written 
  6.24  ballot in a manner agreeable to the chief administrative officer 
  6.25  of the relief association and the mayor of each applicable 
  6.26  municipality. 
  6.27     (c) The resolution must specify the language of the 
  6.28  referendum question, the time and place for the referendum, the 
  6.29  procedure for referendum balloting, and the form and content of 
  6.30  any informational or explanatory materials that may be 
  6.31  distributed with the referendum ballot. 
  6.32     (d) Approval or disapproval of the consolidation question 
  6.33  must be determined by majority vote. 
  6.34     (e) A ballot must be provided to each relief association 
  6.35  member and each relief association member is entitled to one 
  6.36  vote. 
  7.1      (f) A referendum on the consolidation question may be 
  7.2   conducted jointly with a referendum on a conversion to a defined 
  7.3   contribution plan under section 424C.06. 
  7.4      Subd. 3.  [TIME LIMIT FOR APPROVAL; MUNICIPAL 
  7.5   CONSIDERATION.] (a) The referendum must be conducted within 30 
  7.6   days of the passage of the resolution under subdivision 1. 
  7.7      (b) If the referendum results in membership approval of the 
  7.8   consolidation question, and if the referendum in at least one 
  7.9   other volunteer firefighter relief association results in 
  7.10  membership approval of the consolidation question, the governing 
  7.11  bodies of the affected municipalities must approve or disapprove 
  7.12  the consolidation question by governing body resolution within 
  7.13  two months of the date of the last applicable membership 
  7.14  referendum. 
  7.15     Subd. 4.  [IMPACT OF DISAPPROVAL.] If the consolidation 
  7.16  question is disapproved or a time limit expires, no 
  7.17  consolidation question may be initiated until after January 1 of 
  7.18  the calendar year next following the date of the disapproval or 
  7.19  the time limit expiration. 
  7.20     Subd. 5.  [APPROVAL OR DISAPPROVAL CERTIFICATION.] (a) Upon 
  7.21  action on the consolidation question by the membership 
  7.22  referendum or by the applicable municipality to approve or 
  7.23  disapprove the result of that action must be certified by the 
  7.24  chief administrative officer of the acting entity to all other 
  7.25  applicable entities. 
  7.26     (b) If a volunteer firefighter relief association 
  7.27  consolidation is approved with respect to two or more volunteer 
  7.28  firefighter relief associations, the chief administrative 
  7.29  officer of each consolidating volunteer firefighter relief must 
  7.30  notify the secretary of state, the commissioner of revenue, and 
  7.31  the state auditor of that consolidation. 
  7.32     Sec. 6.  [424B.06] [PRECONSOLIDATION REQUIRED ACTIVITIES.] 
  7.33     Subdivision 1.  [JOINT RELIEF ASSOCIATION BOARD 
  7.34  ACTIONS.] If the consolidation question is approved by two or 
  7.35  more volunteer firefighter relief associations and by the 
  7.36  affected municipalities under section 424B.05, the boards of 
  8.1   trustees of the applicable volunteer firefighter relief 
  8.2   associations or representatives of the applicable volunteer 
  8.3   firefighter relief association boards of trustees, duly selected 
  8.4   for this purpose, must meet jointly and undertake the following: 
  8.5      (1) establish the effective date for the relief association 
  8.6   consolidation; 
  8.7      (2) designate the incorporators of the consolidation 
  8.8   volunteer firefighter relief association; 
  8.9      (3) determine whether or not to also undertake a conversion 
  8.10  of the consolidated relief association to a defined contribution 
  8.11  plan under chapter 424C; 
  8.12     (4) determine the amount of future service pension and 
  8.13  other benefit coverage to be provided by the consolidated 
  8.14  volunteer firefighter relief association, which must be 
  8.15  consistent with chapter 424A; and 
  8.16     (5) adopt the applicable articles of incorporation and 
  8.17  bylaws. 
  8.18     Subd. 2.  [INDIVIDUAL RELIEF ASSOCIATION ACTIONS.] If the 
  8.19  consolidation question is approved by two or more volunteer 
  8.20  firefighter relief associations and by the affected 
  8.21  municipalities under section 424B.05, the board of trustees of 
  8.22  each affected volunteer firefighter relief association must 
  8.23  undertake the following: 
  8.24     (1) direct the chief administrative officer of the 
  8.25  volunteer firefighter relief association to assemble the books 
  8.26  and records of the relief association and, if necessary, update 
  8.27  those books and records; 
  8.28     (2) if the volunteer firefighter relief association 
  8.29  provides a monthly benefit service pension and is hence governed 
  8.30  by section 69.773, take the steps necessary to obtain a new 
  8.31  actuarial valuation of the relief association or, if the 
  8.32  volunteer firefighter relief association provides a lump sum 
  8.33  service pension and is hence governed by section 69.772, direct 
  8.34  the chief administrative officer of the relief association to 
  8.35  calculate the liability and funding requirements under section 
  8.36  69.772, as of the established effective date of the relief 
  9.1   association consolidation; 
  9.2      (3) direct that the current market value of all investment 
  9.3   securities and other assets and items of value be determined if 
  9.4   the security, asset, or item has a readily identifiable market 
  9.5   value, and if not, direct the chief administrative officer of 
  9.6   the relief association to liquidate the asset; 
  9.7      (4) direct the chief administrative officer of the 
  9.8   volunteer firefighter relief association to invest future net 
  9.9   income to the special fund in cash equivalent investment 
  9.10  securities or other short-term debt investments with a maturity 
  9.11  that does not exceed the period remaining until the established 
  9.12  effective date for relief association consolidation; and 
  9.13     (5) direct the chief administrative officer of the 
  9.14  volunteer firefighter relief association to identify the 
  9.15  accounts receivable and assess their prospects for payment or 
  9.16  liquidation. 
  9.17     Subd. 3.  [DISPOSITION OF CERTAIN ASSETS.] (a) If there is 
  9.18  a relief association asset without a readily identifiable market 
  9.19  value that is not able to be liquidated in a timely fashion for 
  9.20  an amount equal or greater than its book value as of the 
  9.21  initiation of the consolidation question, the municipality or 
  9.22  independent nonprofit firefighting corporation, whichever 
  9.23  applies, must transfer cash to the relief association special 
  9.24  fund equal to that book value.  Upon the transfer of cash, the 
  9.25  applicable municipality or independent nonprofit firefighting 
  9.26  corporation becomes the owner of affected asset. 
  9.27     (b) Accounts receivable without a high assessed prospect 
  9.28  for payment or liquidated by the established effective date for 
  9.29  relief association consolidation may not be included in the 
  9.30  ascertained value of the assets of the special fund of the 
  9.31  relief association.  The successor consolidated volunteer 
  9.32  firefighter relief association retains ownership of the accounts 
  9.33  receivable after consolidation. 
  9.34     Sec. 7.  [424B.07] [CONSOLIDATION PROCEDURES.] 
  9.35     Subdivision 1.  [ARTICLES OF INCORPORATION AND BYLAWS.] (a) 
  9.36  Before the established effective date of the consolidation, the 
 10.1   officers of the consolidating volunteer firefighter relief 
 10.2   associations must incorporate the new consolidated volunteer 
 10.3   firefighter relief association under chapters 317A, 422A, and 
 10.4   this chapter.  Three representatives from each consolidating 
 10.5   volunteer firefighter relief association are the incorporators 
 10.6   of the new consolidated volunteer firefighter relief association.
 10.7      (b) The incorporators of the new consolidated volunteer 
 10.8   firefighter relief association must adopt articles of 
 10.9   incorporation and bylaws for the relief association. 
 10.10     Subd. 2.  [GOVERNANCE.] (a) The incorporators of the 
 10.11  consolidated volunteer firefighter relief association shall 
 10.12  function as the board of trustees of the relief association 
 10.13  until the board of trustees under paragraph (b) is assembled. 
 10.14     (b) The composition of the board of trustees of the 
 10.15  consolidated volunteer firefighter relief association must 
 10.16  comply with section 424A.04, except that: 
 10.17     (1) the mayors of the respective municipalities are not ex 
 10.18  officio members of the board; 
 10.19     (2) the chief finance person of each applicable 
 10.20  municipality or independent nonprofit firefighting corporation 
 10.21  is an ex officio member of the board; 
 10.22     (3) the fire chief of each applicable fire department is an 
 10.23  ex officio member of the board; and 
 10.24     (4) the active membership of the relief association 
 10.25  representation is equal to the number of ex officio members of 
 10.26  the board, elected by the active membership to three year terms, 
 10.27  which must be staggered. 
 10.28     (c) The officers of the consolidated volunteer firefighter 
 10.29  relief association must be elected by the membership, are not 
 10.30  required to be board of trustee members, and may be ex officio 
 10.31  members of the board of trustees. 
 10.32     Subd. 3.  [RELIEF ASSOCIATION ADMINISTRATION.] (a) On the 
 10.33  established date for relief association consolidation, the 
 10.34  administration of the consolidated relief association is the 
 10.35  responsibility of the consolidated relief association board of 
 10.36  trustees and officers. 
 11.1      (b) The secretary of each consolidating volunteer 
 11.2   firefighter relief association must transfer all books and 
 11.3   records of the consolidating relief association to the secretary 
 11.4   of the consolidated relief association as soon as is practicable 
 11.5   following the established effective date for consolidation.  The 
 11.6   treasurer of each consolidating volunteer firefighter relief 
 11.7   association must transfer the entire assets of the consolidating 
 11.8   relief association to the consolidated volunteer firefighter 
 11.9   relief association as soon as is practicable following the 
 11.10  established effective date for consolidation, with the special 
 11.11  fund assets kept separate from the general fund. 
 11.12     (c) As of the established effective date for consolidation, 
 11.13  legal title for all assets of the applicable consolidating 
 11.14  volunteer firefighter relief association is vested in the board 
 11.15  of trustees of the consolidated volunteer firefighter relief 
 11.16  association which has management responsibility for any 
 11.17  transferred assets as trustees for any person having a 
 11.18  beneficial interest arising out of benefit coverage provided by 
 11.19  the consolidating volunteer firefighter relief association or by 
 11.20  the consolidated volunteer firefighter relief association. 
 11.21     (d) The consolidated volunteer firefighter relief 
 11.22  association is the successor in interest for all claims for and 
 11.23  against the consolidating volunteer firefighter relief 
 11.24  association, except a claim against the consolidating relief 
 11.25  association or any person connected with the consolidating 
 11.26  relief association in a fiduciary capacity, based on any act or 
 11.27  acts that were not done in good faith and which constituted a 
 11.28  breach of a fiduciary obligation.  As a successor in interest, 
 11.29  the consolidated volunteer firefighter relief association may 
 11.30  assert all applicable defenses in any judicial proceeding that 
 11.31  the board of the consolidating volunteer firefighter relief 
 11.32  association would otherwise have been entitled to assist. 
 11.33     Sec. 8.  [424B.08] [TERMINATION OF CONSOLIDATING RELIEF 
 11.34  ASSOCIATIONS.] 
 11.35     Upon the transfer of records and assets of the 
 11.36  consolidating volunteer firefighter relief association to the 
 12.1   consolidated volunteer firefighter relief association, the 
 12.2   consolidating relief association ceases to exist as a legal 
 12.3   entity. 
 12.4      Sec. 9.  [424B.09] [FUTURE BENEFIT COVERAGE UNDER THE 
 12.5   CONSOLIDATED RELIEF ASSOCIATION.] 
 12.6      Unless the board of trustees, with municipal approval under 
 12.7   sections 69.772, subdivision 6, or 69.773, subdivision 6, 
 12.8   whichever applies, and 424A.02, subdivision 10, provides 
 12.9   otherwise in the articles of incorporation or bylaws of the 
 12.10  consolidated volunteer firefighter relief association, the 
 12.11  future service pension rate and other relevant benefit coverage 
 12.12  provisions are those in effect for the applicable individual on 
 12.13  the day before the established effective date for consolidation 
 12.14  if the person was a volunteer firefighter covered by a 
 12.15  consolidating volunteer firefighter relief association on that 
 12.16  date or the average rate or coverage provisions on the 
 12.17  established effective date for consolidation if the person was 
 12.18  not a volunteer firefighter covered by a consolidating volunteer 
 12.19  firefighters relief association on that date. 
 12.20     Sec. 10.  [424B.10] [FUTURE INVESTMENT AUTHORITY.] 
 12.21     (a) As soon as is practicable following the established 
 12.22  effective date for consolidation, the board of trustees of the 
 12.23  consolidated volunteer firefighter relief association must 
 12.24  invest a minimum of 25 percent of the assets of the special fund 
 12.25  with the state board of investment in the Minnesota supplemental 
 12.26  investment fund under section 11A.17.  The consolidated 
 12.27  volunteer firefighters relief association assets must be 
 12.28  invested by the state board of investment in the combination of 
 12.29  accounts of the Minnesota supplemental investment fund that 
 12.30  approximates to the extent possible the investment portfolio mix 
 12.31  applicable to the active member assets of the public employees 
 12.32  retirement association. 
 12.33     (b) The balance of the consolidated volunteer firefighter 
 12.34  relief association special fund portfolio may be invested by or 
 12.35  on behalf of the board of trustees of the relief association, 
 12.36  but must be invested in accord with the applicable provisions of 
 13.1   sections 356A.04, 356A.05, and 356A.06. 
 13.2      (c) If the consolidated volunteer firefighter relief 
 13.3   association is a defined contribution plan, the board of 
 13.4   trustees of the relief association may, but is not required to, 
 13.5   invest the individual accounts of the defined contribution plan 
 13.6   in a manner that is consistent with the designated wishes of the 
 13.7   relief association members, subject to the minimum investment in 
 13.8   the Minnesota supplemental investment fund requirement. 
 13.9      Sec. 11.  [424B.11] [STATUS OF MUNICIPAL CONTRIBUTION.] 
 13.10     A municipal contribution to the consolidated volunteer 
 13.11  firefighter relief association is not to be considered to be an 
 13.12  obligation under chapter 475. 
 13.13     Sec. 12.  [EFFECTIVE DATE.] 
 13.14     Sections 1 to 11 are effective on the day following final 
 13.15  enactment. 
 13.16                             ARTICLE 2 
 13.17            CONVERSION TO DEFINED CONTRIBUTION VOLUNTEER  
 13.18                   FIREFIGHTER RELIEF ASSOCIATION 
 13.19     Section 1.  [424C.01] [PURPOSE AND INTENT.] 
 13.20     It is the intent and policy of the legislature in this 
 13.21  chapter to authorize, on a voluntary elective basis, volunteer 
 13.22  firefighter relief associations to convert defined benefit plans 
 13.23  into defined contribution plans under the provisions of this 
 13.24  chapter with the approval of the applicable municipality. 
 13.25     Sec. 2.  [424C.02] [DEFINITIONS.] 
 13.26     Subdivision 1.  [GENERALLY.] When used in this chapter, 
 13.27  each of the following words and phrases must have the meaning 
 13.28  ascribed to it in this section unless the context clearly 
 13.29  indicates otherwise. 
 13.30     Subd. 2.  [ASSETS.] "Assets" means the investment 
 13.31  securities and other items of value held by the special fund of 
 13.32  the relief association. 
 13.33     Subd. 3.  [BENEFIT PLAN.] "Benefit plan" means that portion 
 13.34  of a pension plan which deals specifically with the service 
 13.35  pension and retirement benefit coverage provided by the 
 13.36  volunteer firefighter relief association, including but not 
 14.1   limited to, the types of coverage, the initial and continuing 
 14.2   eligibility for and entitlement to service pensions and 
 14.3   retirement benefits, and the amount of service pensions and 
 14.4   retirement benefits. 
 14.5      Subd. 4.  [BOARD OF TRUSTEES.] "Board of trustees" means 
 14.6   the managing board of the volunteer firefighter relief 
 14.7   association. 
 14.8      Subd. 5.  [CHIEF ADMINISTRATIVE OFFICER.] "Chief 
 14.9   administrative officer" means the person who has primary 
 14.10  responsibility for the execution of the administrative affairs 
 14.11  or of the volunteer firefighter relief association or the 
 14.12  designee of that person. 
 14.13     Subd. 6.  [DEFERRED MEMBER.] "Deferred member" or "deferred 
 14.14  retiree" means a person who has credit for sufficient service in 
 14.15  the volunteer firefighter relief association to gain entitlement 
 14.16  to an eventual service pension but who has not yet applied for 
 14.17  or started receipt of that service pension. 
 14.18     Subd. 7.  [DEFINED BENEFIT PLAN.] "Defined benefit plan" 
 14.19  means a type of pension benefit plan which provides for periodic 
 14.20  benefit payments at retirement which are predeterminable and 
 14.21  which have a variable financing requirement dependent upon the 
 14.22  actuarial calculation of actuarial present value requirements 
 14.23  for projected benefits. 
 14.24     Subd. 8.  [DEFINED CONTRIBUTION PLAN.] "Defined 
 14.25  contribution plan" means a type of pension benefit plan which 
 14.26  provides for a fixed contribution rate or amount and which 
 14.27  provides for periodic benefit payments calculable at retirement 
 14.28  dependent on the accumulated contributions, investment income, 
 14.29  experience gains and losses credited to the member, and the 
 14.30  expected mortality of the member. 
 14.31     Subd. 9.  [MAJORITY VOTE.] "Majority vote" means one-half 
 14.32  of the number of votes cast on the consolidation question, plus 
 14.33  one vote. 
 14.34     Subd. 10.  [MEMBERSHIP OF THE VOLUNTEER FIREFIGHTER RELIEF 
 14.35  ASSOCIATION.] "Membership of the volunteer firefighter relief 
 14.36  association" means the active, deferred, disabled, and retired 
 15.1   members and the survivors of the active, deferred, disabled, and 
 15.2   retired members of the volunteer firefighter relief association, 
 15.3   to the extent that the category is eligible to receive a pension 
 15.4   or benefit under the benefit plan of the relief association. 
 15.5      Subd. 11.  [MINIMUM REQUIRED PROPORTION OF RELIEF 
 15.6   ASSOCIATION MEMBERSHIP.] "Minimum required proportion of relief 
 15.7   association membership" means 20 percent of the membership of 
 15.8   the volunteer firefighter relief association. 
 15.9      Subd. 12.  [OTHER ITEMS OF VALUE.] "Other items of value" 
 15.10  means any real property, personal property, or interest in real 
 15.11  or personal property not evidenced by or appropriately 
 15.12  characterized as a security as that term is defined by section 
 15.13  524.1-201, clause (32). 
 15.14     Subd. 13.  [PUBLIC HEARING.] "Public hearing" means a 
 15.15  meeting held by the board of trustees of the volunteer 
 15.16  firefighter relief association in a place and at a time 
 15.17  accessible to members of the general public, which is reasonably 
 15.18  calculated to allow for participation by all affected interest, 
 15.19  for which proper notice has been given and at which the views of 
 15.20  the general public may be heard. 
 15.21     Subd. 14.  [REFERENDUM.] "Referendum" means a vote of the 
 15.22  total membership of a relief association on the question of the 
 15.23  conversion of a volunteer firefighter relief association from a 
 15.24  defined benefit plan to a defined contribution plan as provided 
 15.25  in section 424C.06, that occurs upon the initiation of the 
 15.26  conversion question and is conducted through the use of a 
 15.27  secret, written ballot in accordance with procedures established 
 15.28  by the board of trustees of the volunteer firefighter relief 
 15.29  association for the issuance and collection of ballots. 
 15.30     Subd. 15.  [VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION.] 
 15.31  "Volunteer firefighter relief association" means a relief 
 15.32  association as defined in section 424A.001, subdivision 4. 
 15.33     Sec. 3.  [424C.03] [CONVERSION TO DEFINED CONTRIBUTION PLAN 
 15.34  AUTHORIZED.] 
 15.35     Notwithstanding any provision of law to the contrary, a 
 15.36  volunteer firefighter relief association with a defined benefit 
 16.1   plan may convert that defined benefit plan to a defined 
 16.2   contribution under this chapter.  
 16.3      Sec. 4.  [424C.04] [INITIATION OF BENEFIT CONVERSION 
 16.4   QUESTION.] 
 16.5      Subdivision 1.  [BOARD OF TRUSTEE INITIATION.] The benefit 
 16.6   conversion question may be initiated by a majority vote of the 
 16.7   board of trustees of a volunteer firefighter relief association 
 16.8   approving a resolution of the board clearly indicating its 
 16.9   intent to initiate the conversion process. 
 16.10     Subd. 2.  [MEMBERSHIP INITIATION.] The benefit conversion 
 16.11  question may be initiated by the submission of signed petitions 
 16.12  to do so from a minimum required proportion of the relief 
 16.13  association membership.  The petition signatures must be 
 16.14  authenticated by the chief administrative officer of the 
 16.15  volunteer firefighter relief association. 
 16.16     Sec. 5.  [424C.05] [PREREFERENDUM PROCEDURES.] 
 16.17     Subdivision 1.  [PROCEDURE REQUIREMENTS.] (a) If the 
 16.18  benefit plan conversion question is initiated, the board of 
 16.19  trustees must hold a special hearing and meeting on the 
 16.20  initiative.  The meeting must be held within 30 days of the 
 16.21  passage of the board of trustee resolution under section 
 16.22  424C.03, subdivision 1, or the submission of the required number 
 16.23  of petitions under section 424C.03, subdivision 2. 
 16.24     (b) At the public hearing, the board of trustees shall 
 16.25  present relevant background on the potential benefit plan 
 16.26  conversion to the relief association membership and shall 
 16.27  undertake the various prereferendum actions required by this 
 16.28  section. 
 16.29     Subd. 2.  [ESTABLISHED DATE FOR BENEFIT CONVERSION.] The 
 16.30  board of trustees shall designate a date for the benefit 
 16.31  conversion to occur if approved by the relief association 
 16.32  referendum and the governing body of the applicable 
 16.33  municipality.  The board of trustees also shall establish a 
 16.34  schedule for the completion of all other prereferendum actions 
 16.35  on the benefit plan conversion. 
 16.36     Subd. 3.  [LIABILITY AND ASSET VALUATION.] (a) The board of 
 17.1   trustees shall direct that an updated actuarial valuation of the 
 17.2   volunteer firefighter relief association under section 69.773, 
 17.3   subdivision 2, be obtained, if the relief association provides a 
 17.4   monthly benefit, or that updated liability and funding 
 17.5   requirement calculations for the volunteer firefighter relief 
 17.6   association under section 69.772, subdivisions 2, 2a, and 3, be 
 17.7   prepared by the relief association secretary. 
 17.8      (b) The board of trustees also shall direct that the 
 17.9   treasurer of the relief association obtain current market values 
 17.10  for investment securities and other assets and items of value 
 17.11  held by the special fund of the relief association. 
 17.12     (c) For investment securities and other assets that do not 
 17.13  have a readily ascertainable market value, the book value of the 
 17.14  security or other asset must be written down to zero unless the 
 17.15  applicable municipality or the relief association general fund 
 17.16  purchases the security or asset for each at the book value of 
 17.17  the security or asset. 
 17.18     Subd. 3.  [PLAN CONVERSION RATE.] (a) The board of trustees 
 17.19  must designate the applicable rate or rates for converting a 
 17.20  defined benefit plan to a defined contribution plan. 
 17.21     (b) If the volunteer firefighter relief association 
 17.22  provides a monthly benefit service pension and there are any 
 17.23  monthly benefits payable to benefit recipients or potentially 
 17.24  payable to deferred retirees, the board of trustees must 
 17.25  designate the dollar amount of relief association special fund 
 17.26  assets available to be utilized in converting monthly benefits 
 17.27  in force into insurance company annuity contracts.  The annuity 
 17.28  contracts must be purchased from an insurance company qualified 
 17.29  under section 424A.02, subdivision 8a. 
 17.30     (c) If a volunteer firefighter relief association provides 
 17.31  either a monthly benefit or a lump sum service pension for 
 17.32  active members of the relief association, the board of trustees 
 17.33  must designate the dollar amount of relief association special 
 17.34  fund assets available to be utilized in converting the accrued 
 17.35  service pensions of active members into individual account 
 17.36  allocations. 
 18.1      (d) Conversion amounts must be an identical rate for all 
 18.2   individuals involved within a given membership classification. 
 18.3      (e) The total amount involved in the conversion may not 
 18.4   exceed the total market value of the special fund of the relief 
 18.5   association. 
 18.6      Subd. 4.  [MEMBERSHIP REFERENDUM DATE AND PROCESS.] The 
 18.7   board of trustees shall establish the date for a membership 
 18.8   referendum on the conversion question and shall establish the 
 18.9   process for conducting the referendum.  The process must include 
 18.10  scheduling at least one general membership information meeting 
 18.11  on the conversion question, establishing the agenda for that 
 18.12  information meeting, formulating the referendum question, and 
 18.13  designating the manner for the conduct of the balloting and the 
 18.14  determination of the referendum results. 
 18.15     Sec. 6.  [424C.06] [REFERENDUM.] 
 18.16     (a) The referendum must include the active membership of 
 18.17  the volunteer firefighter relief association, and if the relief 
 18.18  association provides a monthly benefit service pension, the 
 18.19  benefit recipients of the relief association. 
 18.20     (b) The referendum must be conducted by a secret written 
 18.21  ballot in a manner agreeable to the chief administrative officer 
 18.22  of the relief association and the mayor of each applicable 
 18.23  municipality. 
 18.24     (c) The referendum must be conducted in accord with the 
 18.25  applicable resolution of the board of trustees.  That resolution 
 18.26  must specify the language of the referendum question, the time 
 18.27  and place for the referendum, the procedure for referendum 
 18.28  balloting, and the form and content of any informational or 
 18.29  explanatory materials that may be distributed with the 
 18.30  referendum ballot. 
 18.31     (d) Approval or disapproval of the conversion question must 
 18.32  be determined by majority vote. 
 18.33     (e) A ballot must be provided to each relief association 
 18.34  member and each relief association member is entitled to one 
 18.35  vote. 
 18.36     Sec. 7.  [424C.07] [MUNICIPAL APPROVAL.] 
 19.1      (a) If the referendum question is approved, the question is 
 19.2   forwarded to the applicable municipality or independent 
 19.3   nonprofit firefighting corporation for final approval.  To 
 19.4   receive final approval, the question must be approved by 
 19.5   majority vote of the governing body of the applicable 
 19.6   municipality or independent nonprofit firefighting corporation. 
 19.7      (b) If the question is not approved by the membership of 
 19.8   any applicable volunteer firefighter relief association or is 
 19.9   not approved by the governing body of any applicable 
 19.10  municipality or independent nonprofit firefighting corporation, 
 19.11  the conversion is not approved. 
 19.12     Sec. 8.  [424C.08] [BENEFIT CONVERSION.] 
 19.13     Subdivision 1.  [CONVERSION OF CURRENT MONTHLY 
 19.14  BENEFITS.] For retired members who are receiving monthly service 
 19.15  pension benefits, if the retired member elects to have the 
 19.16  benefit converted, the relief association board of trustees is 
 19.17  authorized to purchase an annuity policy from an insurance 
 19.18  company or to convert the monthly benefit service pension into a 
 19.19  lump sum benefit amount.  The single premium insurance annuity 
 19.20  contract or lump sum benefit may not exceed the actuarial 
 19.21  present value of that person's monthly benefit service pension 
 19.22  at a five percent interest assumption and the relief 
 19.23  association's mortality table. 
 19.24     Subd. 2.  [CONVERSION FOR ACCRUED SERVICE PENSIONS.] For 
 19.25  active members as of the established date for the conversion, if 
 19.26  the active member elects to have the benefit converted, the 
 19.27  prior service credit of the active member must be converted to 
 19.28  an individual account accumulation at the rate established for 
 19.29  the benefit conversion.  The active member electing the 
 19.30  conversion must be covered by the defined contribution plan for 
 19.31  all future service. 
 19.32     Subd. 3.  [NEW FIREFIGHTERS.] For persons who newly become 
 19.33  firefighters after the established date for the conversion, the 
 19.34  defined contribution plan would apply to all of their service. 
 19.35     Subd. 4.  [BENEFIT COVERAGE IF NO BENEFIT CONVERSION.] For 
 19.36  retirees or current active members who do not elect the benefit 
 20.1   conversion, the person retains coverage by the applicable relief 
 20.2   association benefit plan in effect on the day before the 
 20.3   conversion date and benefits may not be increased.  If any 
 20.4   active member or retiree retains prior benefit plan coverage, 
 20.5   the relief association must continue to comply with the 
 20.6   applicable provisions of sections 69.771 to 69.775. 
 20.7      Subd. 5.  [NEW BYLAWS.] As soon as practicable following 
 20.8   the established date for the benefit conversion, the board of 
 20.9   trustees of the volunteer firefighter relief association must 
 20.10  formulate the relevant bylaws for the relief associations and 
 20.11  must comply with any applicable municipal approval requirement 
 20.12  of sections 69.772, subdivision 6; 69.773, subdivision 6; and 
 20.13  424.02, subdivision 10. 
 20.14     Subd. 6.  [CONVERSION ELECTION DEADLINES.] The board of 
 20.15  trustees of the relief association may establish reasonable 
 20.16  deadlines for the benefit conversion elections.  The benefit 
 20.17  conversion election by any member is irrevocable. 
 20.18     Sec. 9.  [424C.09] [SUBSEQUENT INVESTMENT PRACTICES.] 
 20.19     Subdivision 1.  [MINIMUM STATE INVESTMENT AMOUNT.] As soon 
 20.20  as practicable following the conversion, the board of trustees 
 20.21  of the relief association must invest a minimum of 25 percent of 
 20.22  its special fund assets with the state board of investment in 
 20.23  the Minnesota supplemental investment fund.  These assets must 
 20.24  be invested in the various accounts of the Minnesota 
 20.25  supplemental investment fund in a manner designated by the state 
 20.26  board of investment that approximates, to the extent possible, 
 20.27  the investment portfolio mix applicable to the public employees 
 20.28  retirement association.  The balance of the portfolio may 
 20.29  continue to be invested by or on behalf of the board of trustees 
 20.30  of the relief association and must be invested in accord with 
 20.31  the applicable provisions of section 356A.06. 
 20.32     Subd. 2.  [INDIVIDUAL ACCOUNT PREFERENCES.] The board of 
 20.33  trustees of the relief association may, but is not required to, 
 20.34  invest individual accounts of the defined contribution plan in a 
 20.35  manner that is consistent with the designated wishes of 
 20.36  individual firefighters, subject to the minimum investment in 
 21.1   the Minnesota supplemental investment fund requirement. 
 21.2      Sec. 10.  [424C.10] [SUBSEQUENT RELIEF ASSOCIATION 
 21.3   FINANCING REQUIREMENTS.] 
 21.4      Subdivision 1.  [DEFINED CONTRIBUTION FINANCING.] For the 
 21.5   defined contribution plan, a contribution rate or amount by the 
 21.6   applicable municipality or nonprofit firefighting corporation 
 21.7   must be set at the time of the conversion and that rate or 
 21.8   amount may not be reduced in the future. 
 21.9      Subd. 2.  [FINANCING REMAINING DEFINED BENEFIT PLAN 
 21.10  COVERAGE.] If a current active firefighter declines to convert 
 21.11  to the defined contribution plan, the municipal or independent 
 21.12  nonprofit firefighting corporation obligation towards the relief 
 21.13  association continues to be governed by sections 69.771 to 
 21.14  69.775, and is in addition to the municipal or nonprofit 
 21.15  firefighting corporation defined contribution plan contribution 
 21.16  rate or amount.  For nonconverting active firefighters, there 
 21.17  must be an allocation of previously accumulated special fund 
 21.18  assets between nonconverting and converting firefighters based 
 21.19  on the funding ratio for active members after deduction of the 
 21.20  actuarial accrued liabilities and equal assets for any retirees 
 21.21  or deferred retirees, but not to exceed 100 percent.  If any 
 21.22  retiree receiving a monthly benefit service pension does not 
 21.23  convert to an insurance company annuity policy, assets equal to 
 21.24  the person's actuarial accrued liability must be allocated upon 
 21.25  benefit plan conversion and any net mortality losses related to 
 21.26  the person as disclosed in regular actuarial work for the fire 
 21.27  relief association must be fully funded by the municipality or 
 21.28  nonprofit firefighting corporation in the succeeding calendar 
 21.29  year. 
 21.30     Sec. 11.  [EFFECTIVE DATE.] 
 21.31     Sections 1 to 10 are effective on the day following final 
 21.32  enactment.