SF 3183

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to local government; authorizing political subdivisions to establish
accounts to pay for postemployment benefits owed to officers and employees;
proposing coding for new law in Minnesota Statutes, chapter 353.

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

Section 1.

new text begin [353.95] ACCOUNTS FOR POSTEMPLOYMENT BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The Public Employees Retirement Association
must establish two funds that political subdivisions may use to hold money to pay for
postemployment benefits owed to officers and employees after termination of service. One
of the funds must provide that each account within the fund is irrevocable, and that money
may be withdrawn only as permitted in this section. The other fund must provide that a
political subdivision may revoke its account within the fund and withdraw some or all of
the money in its account for any reason. All money in the two funds is appropriated to the
Public Employees Retirement Association for purposes of this section.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For purposes of this section:
new text end

new text begin (1) "political subdivision" means any entity authorized by section 471.61 to provide
benefits to its retired officers employees;
new text end

new text begin (2) "postemployment benefit" means a benefit giving rise to a liability under
statement 45 of the Government Accounting Standards Board, and therefore does not
include benefits to be paid by a Minnesota public pension plan listed in section 356.20,
subdivision 2, or section 356.30, subdivision 3, and benefits provided on a defined
contribution, individual account basis; and
new text end

new text begin (3) "plan administrator" means third party agent or administrator handling the
payment of benefits on behalf of the political subdivision consistent with the requirements
of the Government Accounting Standards Board.
new text end

new text begin Subd. 3. new text end

new text begin Account maintenance and investment. new text end

new text begin (a) A political subdivision
may establish an account in one or both of the funds created in this section. The Public
Employees Retirement Association shall maintain a separate account within each fund for
each participating political subdivision. The Public Employees Retirement Association
may charge participating political subdivisions fees for reasonable administrative costs,
and the amount of those fees is appropriated to the association from the accounts. The
Public Employees Retirement Association may establish other terms and conditions for
participation in the funds.
new text end

new text begin (b) The Public Employees Retirement Association must certify all money in the
funds to the state board of investment for investment in the combined investment funds
established in section 11A.14. Investment earnings must be credited to the account of each
individual political subdivision.
new text end

new text begin Subd. 4. new text end

new text begin Limit on deposit in revocable account. new text end

new text begin A political subdivision may not
deposit money in a revocable account if the deposit would cause the total amount in
the political subdivision's revocable and irrevocable accounts to exceed the political
subdivision's actuarially determined liabilities for postretirement benefits due to officers
and employees, as determined under standards of the Government Accounting Standards
Board.
new text end

new text begin Subd. 5. new text end

new text begin Withdrawal of funds and termination of account. new text end

new text begin (a) For a revocable
account, a political subdivision may withdraw some or all of its money or terminate the
account for any reason. Money withdrawn from a revocable account must be deposited
in a fund separate and distinct from any other funds of the political subdivision, and this
money, with accrued investment earnings, must be used only to pay postemployment
benefits to former officers and employees.
new text end

new text begin (b) For an irrevocable account:
new text end

new text begin (1) the plan administrator may withdraw money only as needed to pay
postemployment benefits owed to former officers and employees of the political
subdivision; or
new text end

new text begin (2) the political subdivision may withdraw money only to the extent the political
subdivision's actuarial liability is satisfied or otherwise defeased.
new text end

new text begin (c) A plan administrator or political subdivision requesting withdrawal of money
from an account created under this section must do so at a time and in the manner required
by the executive director of the Public Employees Retirement Association. The executive
director must ensure that withdrawals comply with the requirements of this section.
new text end

new text begin Subd. 6. new text end

new text begin Status of irrevocable fund. new text end

new text begin (a) All money in the irrevocable fund created
in this section are held in trust for the exclusive benefit of former officers and employees
of the participating political subdivisions, and are not subject to claims by creditors of
the state, the participating political subdivisions, or the current and former officers and
employees of those political subdivisions.
new text end

new text begin (b) The irrevocable fund created in this section shall be deemed an arrangement
equivalent to a trust for all legal purposes.
new text end