SF 2798

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; teachers retirement 
  1.3             association and first class city teacher retirement 
  1.4             fund associations; authorizing the purchase of service 
  1.5             credit for prior military service, out-of-state 
  1.6             teaching service, and pre-1976 maternity leaves or 
  1.7             maternity breaks-in-service; amending Minnesota 
  1.8             Statutes 1996, section 354A.093; and Minnesota 
  1.9             Statutes 1997 Supplement, section 354.53, subdivision 
  1.10            1; proposing coding for new law in Minnesota Statutes, 
  1.11            chapters 354, 354A, and 356. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.14  354.53, subdivision 1, is amended to read: 
  1.15     Subdivision 1.  [EMPLOYEE AND EMPLOYER CONTRIBUTIONS.] Any 
  1.16  employee given A teacher who is granted a leave of absence to 
  1.17  enter military service and who returns to teaching service upon 
  1.18  discharge from military service as provided in section 192.262, 
  1.19  may obtain allowable and formula service credit for the period 
  1.20  of military service leave but shall may not receive credit for 
  1.21  any voluntary extension of military service at the instance of 
  1.22  the member beyond the initial period of enlistment, induction or 
  1.23  call to active duty.  The member shall may obtain credit by 
  1.24  paying into the fund an employee contribution based upon the 
  1.25  employee contribution rates in effect at the time that the 
  1.26  military service was performed multiplied by the annual salary 
  1.27  rate of the member for the year beginning with the date of the 
  1.28  person's return from military service and multiplied by the 
  2.1   number of years of applicable military service together with, 
  2.2   plus interest thereon at an annual rate of 8.5 percent 
  2.3   compounded annually from the time that the military service was 
  2.4   rendered to the first date of payment.  If the employee 
  2.5   contribution is paid by the teacher, the employer contribution 
  2.6   and additional contribution provided in section 354.42 must be 
  2.7   paid by the employing unit at the employer and employer 
  2.8   additional contribution rates in effect at the time that the 
  2.9   military service was performed, applied to the annual salary 
  2.10  rate of the member for the year beginning with the date of 
  2.11  return from military service, multiplied by the number of years 
  2.12  of applicable military service, plus interest thereupon at an 
  2.13  annual rate of 8.5 percent, compounded annually from the time 
  2.14  that the military service was rendered to the date of payment.  
  2.15  The employer and additional employer contribution equivalent 
  2.16  payment must be made in the manner provided in section 354.52, 
  2.17  subdivision 4. 
  2.18     Sec. 2.  [354.533] [PRIOR OR UNCREDITED INTERIM MILITARY 
  2.19  SERVICE CREDIT PURCHASE.] 
  2.20     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
  2.21  teacher who rendered a period of service in the United States 
  2.22  armed forces prior to becoming a teacher as defined in section 
  2.23  354.05, subdivision 2, failed to obtain service credit for a 
  2.24  military leave of absence period in a timely fashion under 
  2.25  section 354.53, and is not entitled to receive a current or 
  2.26  deferred retirement annuity or a disability benefit from a 
  2.27  United States armed forces pension plan for that service, and 
  2.28  has not purchased service credit from any other defined benefit 
  2.29  public employee pension plan for that period of service is 
  2.30  entitled to purchase allowable and formula service credit for 
  2.31  the initial period of enlistment, induction, or call to active 
  2.32  duty without any voluntary extension by paying the payment 
  2.33  amount specified in section 356.55. 
  2.34     Subd. 2.  [APPLICATION AND DOCUMENTATION.] The teacher 
  2.35  desiring to purchase the period of service credit under 
  2.36  subdivision 1 must apply with the executive director to make the 
  3.1   purchase.  The application must include all necessary 
  3.2   documentation of the teacher's qualifications to make the 
  3.3   purchase, signed written permission for the executive director 
  3.4   to request and receive any necessary verification of relevant 
  3.5   facts and applicable eligibility requirements, and any other 
  3.6   relevant information that the executive director may require. 
  3.7      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
  3.8   service credit for the purchase period must be granted by the 
  3.9   teachers retirement association to the purchasing teacher upon 
  3.10  receipt of the purchase payment amount. 
  3.11     Sec. 3.  [354.534] [PRIOR OUT-OF-STATE TEACHING SERVICE 
  3.12  CREDIT PURCHASE.] 
  3.13     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
  3.14  teacher who rendered teaching service for an educational 
  3.15  institution established and operated by a state, by a 
  3.16  governmental subdivision of a state, or by the federal 
  3.17  government prior to becoming a teacher as defined in section 
  3.18  354.05, subdivision 2, is not entitled by virtue of that service 
  3.19  to receive a current or deferred age and service retirement 
  3.20  annuity or a disability benefit from a defined benefit pension 
  3.21  plan established or maintained by the governmental entity 
  3.22  employing the teacher, and has not purchased service credit from 
  3.23  any other defined benefit public employee pension plan for that 
  3.24  period of service is entitled to purchase allowable and formula 
  3.25  service credit for that out-of-state teaching service period by 
  3.26  paying the payment amount specified in section 356.55. 
  3.27     Subd. 2.  [APPLICATION AND DOCUMENTATION.] The teacher 
  3.28  desiring to purchase the service credit period under subdivision 
  3.29  1 must apply with the executive director to make the purchase.  
  3.30  The application must include all necessary documentation of the 
  3.31  teacher's qualifications to make the purchase, signed written 
  3.32  permission for the executive director to request and receive any 
  3.33  necessary verification of relevant facts and applicable 
  3.34  eligibility requirements, and any other relevant information 
  3.35  that the executive director may require. 
  3.36     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
  4.1   service credit for the purchase period must be granted by the 
  4.2   teachers retirement association to the purchasing teacher upon 
  4.3   receipt of the purchase payment amount. 
  4.4      Sec. 4.  [354.535] [MATERNITY BREAK-IN-SERVICE OR LEAVE 
  4.5   SERVICE CREDIT PURCHASE.] 
  4.6      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
  4.7   teacher who was granted a maternity leave of absence by a school 
  4.8   district or other employing unit covered by the teachers 
  4.9   retirement association prior to April 20, 1976, for which the 
  4.10  teacher did not previously receive allowable and formula service 
  4.11  credit, or had a break-in-teaching-service on account of 
  4.12  maternity prior to April 20, 1976, for which the teacher did not 
  4.13  receive or purchase service credit from any other defined 
  4.14  benefit public employee pension plan is entitled to purchase one 
  4.15  year of allowable and formula service credit for each applicable 
  4.16  maternity leave of absence period or applicable maternity 
  4.17  break-in-teaching-service period by paying the payment amount 
  4.18  specified in section 356.55. 
  4.19     Subd. 2.  [APPLICATION AND DOCUMENTATION.] The teacher 
  4.20  desiring to purchase the period of service credit under 
  4.21  subdivision 1 must apply with the executive director to make the 
  4.22  purchase.  The application must include all necessary 
  4.23  documentation of the teacher's qualifications to make the 
  4.24  purchase, signed written permission for the executive director 
  4.25  to request and receive any necessary verification of relevant 
  4.26  facts and applicable eligibility requirements, and any other 
  4.27  relevant information that the executive director may require. 
  4.28     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
  4.29  service credit for the purchase period must be granted by the 
  4.30  teachers retirement association to the purchasing teacher upon 
  4.31  receipt of the purchasing payment amount. 
  4.32     Sec. 5.  Minnesota Statutes 1996, section 354A.093, is 
  4.33  amended to read: 
  4.34     354A.093 [LEAVE OF ABSENCE MILITARY SERVICE CREDIT.] 
  4.35     (a) Any teacher in the coordinated program of either the 
  4.36  Minneapolis teachers retirement fund association or the St.  
  5.1   Paul teachers retirement fund association or any teacher in the 
  5.2   new law coordinated program of the Duluth teachers retirement 
  5.3   fund association who is granted a leave of absence to enter 
  5.4   military service and who returns to active teaching service upon 
  5.5   discharge from military service as provided in section 192.262, 
  5.6   shall be is entitled to receive allowable service credit in the 
  5.7   applicable association for all or a portion of the period of 
  5.8   military service, but not for any voluntary extension of 
  5.9   military service beyond the initial period of enlistment, 
  5.10  induction or call to active duty which occurred at the instance 
  5.11  of the teacher. 
  5.12     (b) If the teacher granted the military service leave of 
  5.13  absence makes the employee contribution for a period of military 
  5.14  service leave of absence pursuant to under this section, the 
  5.15  employing unit shall make an employer contribution on behalf of 
  5.16  the teacher to the applicable association for the period of the 
  5.17  military service leave of absence in the manner described in 
  5.18  section 354A.12, subdivision 2a. 
  5.19     (c) The employee and employer contributions shall must be 
  5.20  in an amount equal to the employee and employer contribution 
  5.21  rates in effect for other active members of the association 
  5.22  covered by the same program applied to a salary figure equal to 
  5.23  the teacher's annual salary rate at the date of return from 
  5.24  military service, multiplied by the number of years constituting 
  5.25  the period of the military service leave of absence which the 
  5.26  teacher seeks to purchase.  Payment shall must include interest 
  5.27  on the amount payable pursuant to under this section at the rate 
  5.28  of six 8.5 percent compounded annually from the year the 
  5.29  military service was rendered to the date of payment. 
  5.30     (d) If the payments made by a teacher pursuant to under 
  5.31  this section are less than an amount equal to the applicable 
  5.32  contribution rate applied to a salary figure equal to the 
  5.33  teacher's annual salary rate at the date of return from military 
  5.34  service, multiplied by the number of years constituting the 
  5.35  period of the military service leave of absence, service 
  5.36  credit shall must be prorated.  The prorated service 
  6.1   credit shall must be determined by the ratio between the amount 
  6.2   of the actual payment which was made and the full contribution 
  6.3   amount payable pursuant to under this section. 
  6.4      (e) In order to be entitled to receive service credit under 
  6.5   this section, payment shall must be made within five years from 
  6.6   the date of discharge from military service. 
  6.7      Sec. 6.  [354A.097] [PRIOR UNCREDITED INTERIM MILITARY 
  6.8   SERVICE CREDIT PURCHASE.] 
  6.9      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
  6.10  teacher who rendered a period of service in the United States 
  6.11  armed forces prior to becoming a teacher as defined in section 
  6.12  354A.011, subdivision 27, or failed to obtain service credit for 
  6.13  a military leave of absence period in a timely fashion under 
  6.14  section 354A.093, and is not entitled to receive a current or 
  6.15  deferred retirement annuity or a disability benefit from a 
  6.16  United States armed forces pension plan for that service, and 
  6.17  has not purchased service credit from any other defined benefit 
  6.18  public employee pension plan for that period of service is 
  6.19  entitled to purchase allowable service credit for the initial 
  6.20  period of enlistment, induction, or call to active duty without 
  6.21  any voluntary extension by paying the payment amount specified 
  6.22  in section 356.55. 
  6.23     Subd. 2.  [APPLICATION AND DOCUMENTATION.] The teacher 
  6.24  desiring to purchase the period of service credit under 
  6.25  subdivision 1 must apply with the executive director or 
  6.26  secretary of the respective retirement fund association to make 
  6.27  the purchase.  The application must include all necessary 
  6.28  documentation of the teacher's qualifications to make the 
  6.29  purchase, signed written permission for the executive director 
  6.30  or secretary to request and receive any necessary verification 
  6.31  of relevant facts and applicable eligibility requirements, and 
  6.32  any other relevant information that the executive director or 
  6.33  secretary may require. 
  6.34     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
  6.35  for the purchase period must be granted by the applicable 
  6.36  teachers retirement fund association to the purchasing teacher 
  7.1   upon receipt of the purchase payment amount. 
  7.2      Sec. 7.  [354A.098] [PRIOR OUT-OF-STATE TEACHING SERVICE 
  7.3   CREDIT PURCHASE.] 
  7.4      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
  7.5   teacher who rendered teaching service for an educational 
  7.6   institution established and operated by a state, by a 
  7.7   governmental subdivision of a state, or by the federal 
  7.8   government prior to becoming a teacher as defined in section 
  7.9   354A.011, subdivision 27, is not entitled by virtue of that 
  7.10  service to receive a current or deferred age and service 
  7.11  retirement annuity or a disability benefit from a defined 
  7.12  benefit pension plan established or maintained by the 
  7.13  governmental entity employing the teacher, and has not purchased 
  7.14  service credit from any other defined benefit public employee 
  7.15  pension plan for that period of service is entitled to purchase 
  7.16  allowable service credit for that out-of-state teaching service 
  7.17  period by paying the payment amount specified in section 356.55. 
  7.18     Subd. 2.  [APPLICATION AND DOCUMENTATION.] The teacher 
  7.19  desiring to purchase the service credit period under subdivision 
  7.20  1 must apply with the executive director or secretary of the 
  7.21  respective teacher retirement fund association to make the 
  7.22  purchase.  The application must include all necessary 
  7.23  documentation of the teacher's qualifications to make the 
  7.24  purchase, signed written permission for the executive director 
  7.25  or secretary to request and receive any necessary verification 
  7.26  of relevant facts and applicable eligibility requirements, and 
  7.27  any other relevant information that the executive director or 
  7.28  secretary may require. 
  7.29     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
  7.30  for the purchase period must be granted by the applicable 
  7.31  teachers retirement fund association to the purchasing teacher 
  7.32  upon receipt of the purchase payment amount. 
  7.33     Sec. 8.  [354A.099] [MATERNITY BREAK-IN-SERVICE OR LEAVE 
  7.34  SERVICE CREDIT PURCHASE.] 
  7.35     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
  7.36  teacher who was granted a maternity leave of absence by a school 
  8.1   district or other employing unit covered by the teachers 
  8.2   retirement association prior to April 20, 1976, for which the 
  8.3   teacher did not previously receive allowable service credit, or 
  8.4   had a break-in-teaching-service on account of maternity prior to 
  8.5   April 20, 1976, for which the teacher did not receive or 
  8.6   purchase service credit from any other defined benefit public 
  8.7   employee pension plan is entitled to purchase one year of 
  8.8   allowable service credit for each applicable maternity leave of 
  8.9   absence period or applicable maternity break-in-teaching-service 
  8.10  period by paying the payment amount specified in section 356.55. 
  8.11     Subd. 2.  [APPLICATION AND DOCUMENTATION.] The teacher 
  8.12  desiring to purchase the period of service credit under 
  8.13  subdivision 1 must apply with the executive director or 
  8.14  secretary of the respective retirement fund association to make 
  8.15  the purchase.  The application must include all necessary 
  8.16  documentation of the teacher's qualifications to make the 
  8.17  purchase, signed written permission for the executive director 
  8.18  or secretary to request and receive any necessary verification 
  8.19  of relevant facts and applicable eligibility requirements, and 
  8.20  any other relevant information that the executive director or 
  8.21  secretary may require. 
  8.22     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
  8.23  for the purchase period must be granted by the applicable 
  8.24  teachers retirement fund association to the purchasing teacher 
  8.25  upon receipt of the purchasing payment amount. 
  8.26     Sec. 9.  [356.55] [PURCHASE OF PRIOR SERVICE CREDIT PAYMENT 
  8.27  AMOUNT DETERMINATION PROCEDURE.] 
  8.28     (a) Unless the prior service credit purchase authorization 
  8.29  special law or general statute provision explicitly specifies a 
  8.30  different purchase payment amount determination procedure, this 
  8.31  section governs the determination of the prior service credit 
  8.32  purchase payment amount of any prior service credit purchase.  
  8.33     (b) The prior service credit purchase payment amount is the 
  8.34  amount by which the actuarial accrued liability of the pension 
  8.35  plan with respect to the purchaser increases by virtue of the 
  8.36  additional service credit intended to be purchased.  The payment 
  9.1   amount is the difference between the actuarial accrued liability 
  9.2   of the purchaser based on the person's accrued service credit as 
  9.3   of the date of the intended purchase and the actuarial accrued 
  9.4   liability of the purchaser based on the person's service credit 
  9.5   with the period for purchase added.  The calculation must 
  9.6   recognize any service credit accrued to the purchaser in a 
  9.7   pension plan listed in section 356.30, subdivision 3, and any 
  9.8   service credit in a Minnesota defined benefit public employee 
  9.9   pension plan available to be reinstated by the purchaser by the 
  9.10  repayment of a refund of employee or member contributions 
  9.11  previously received.  The actuarial accrued liability amounts 
  9.12  must be calculated on the basis of the entry age normal cost 
  9.13  actuarial valuation method and the actuarial assumptions 
  9.14  governing the applicable pension plan specified in or approved 
  9.15  under sections 356.215 and 356.216, except that for a purchaser 
  9.16  who is within ten years of obtaining a normal retirement annuity 
  9.17  by virtue of age, service, or a combination thereof, the 
  9.18  applicable retirement age assumption must be retirement at the 
  9.19  earliest normal retirement age. 
  9.20     (c) The respective actuarial accrued liability amounts must 
  9.21  be calculated either by the consulting actuary retained by the 
  9.22  legislative commission on pensions and retirement or by an 
  9.23  approved actuary retained by a Minnesota public pension plan 
  9.24  listed in section 356.30, subdivision 3, if the actuarial 
  9.25  valuation process used by that approved actuary has been 
  9.26  verified under the applicable provisions of sections 3.85, 
  9.27  356.215, and 356.216 by the commission-retained actuary.  That 
  9.28  verification must occur every five years or whenever an 
  9.29  actuarial assumption for the applicable pension plan is modified 
  9.30  under section 356.215. 
  9.31     (d) A public pension plan may establish a fee to be charged 
  9.32  to the prospective purchaser for processing a prior service 
  9.33  credit purchase application and actuarial calculation.  The fee 
  9.34  must be established by the governing board of the pension plan 
  9.35  and must be uniform for comparable service credit purchase 
  9.36  applications or actuarial calculation requests.  The prior 
 10.1   service credit purchase processing fee structure must be 
 10.2   published by the applicable retirement plan in the state 
 10.3   register. 
 10.4      (e) Unless the prior service credit purchase authorization 
 10.5   special law or general statute provision explicitly specifies 
 10.6   otherwise, the prior service credit purchase payment amount 
 10.7   determined under paragraph (b) is payable by the purchaser, but 
 10.8   the former employer of the purchaser or the current employer of 
 10.9   the purchaser may, at its discretion, pay all or a portion of 
 10.10  the purchase payment amount in excess of an amount equal to the 
 10.11  employee or member contribution rate or rates in effect during 
 10.12  the prior service period applied to the actual salary rates in 
 10.13  effect during the prior service period, plus annual compound 
 10.14  interest at the rate of 8.5 percent from the date on which the 
 10.15  contributions would have been made if made contemporaneous with 
 10.16  the service period to the date on which the payment is actually 
 10.17  made. 
 10.18     Sec. 10.  [INSTRUCTION TO REVISOR.] 
 10.19     In the next and future editions of Minnesota Statutes, the 
 10.20  revisor shall replace the current headnote for Minnesota 
 10.21  Statutes, section 354.53, with the headnote "[CREDIT FOR 
 10.22  MILITARY SERVICE LEAVE OF ABSENCE.]". 
 10.23     Sec. 11.  [EFFECTIVE DATE.] 
 10.24     Sections 1 to 10 are effective July 1, 1998.