SF 319

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; Minneapolis employees 
  1.3             retirement fund; authorizing billing for certain 
  1.4             negative account balances; clarifying 
  1.5             death-while-active survivor refund amounts; clarifying 
  1.6             death-while-active survivor refund eligibility; 
  1.7             correcting fund reference for escalation of disability 
  1.8             and long-service survivor annuity escalation; 
  1.9             providing annuity escalation on short-service 
  1.10            death-while-active survivor benefits; amending 
  1.11            Minnesota Statutes 1998, sections 422A.06, 
  1.12            subdivisions 3 and 6; 422A.101, subdivision 4; 
  1.13            422A.18, subdivision 2; 422A.22, subdivisions 4 and 5; 
  1.14            and 422A.23; repealing Minnesota Statutes 1998, 
  1.15            section 422A.16, subdivision 3a. 
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 1998, section 422A.06, 
  1.18  subdivision 3, is amended to read: 
  1.19     Subd. 3.  [DEPOSIT ACCUMULATION FUND.] The deposit 
  1.20  accumulation fund consists of the assets held in the fund, 
  1.21  increased by including amounts contributed by or for employees, 
  1.22  amounts contributed by the city, amounts contributed by 
  1.23  municipal activities supported in whole or in part by revenues 
  1.24  other than taxes and amounts contributed by any public 
  1.25  corporation, amounts paid by the state, and by income from 
  1.26  investments.  There must be paid from the fund the amounts 
  1.27  required to be transferred to the retirement benefit fund, or 
  1.28  the disability benefit fund, refunds of contributions, death 
  1.29  benefits payable on death before retirement that are not payable 
  1.30  from the survivors' benefit fund including the 
  2.1   death-while-active refund specified in section 422A.22, 
  2.2   subdivision 4, postretirement increases in retirement allowances 
  2.3   granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 
  2.4   and expenses of the administration of the retirement fund which 
  2.5   were not charged by the retirement board against the income of 
  2.6   the retirement benefit fund from investments as the cost of 
  2.7   handling the investments of the retirement benefit fund. 
  2.8      Sec. 2.  Minnesota Statutes 1998, section 422A.06, 
  2.9   subdivision 6, is amended to read: 
  2.10     Subd. 6.  [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 
  2.11  fund shall consist consists of the amount held for survivor 
  2.12  benefits, increased by contributions for survivor benefits made 
  2.13  by and for employees, including contributions made by the 
  2.14  employer, by any municipal activity supported in whole or in 
  2.15  part by revenue other than taxes or by any public corporation.  
  2.16  A proportionate share of income from investments shall must be 
  2.17  allocated to this fund.  There shall be paid from such fund the 
  2.18  Survivor benefits specified in section 422A.23 except that the 
  2.19  refund of net accumulated deductions from the salary of a 
  2.20  contributing member shall upon death in service be paid from the 
  2.21  deposit accumulation fund must be paid from this fund. 
  2.22     Sec. 3.  Minnesota Statutes 1998, section 422A.101, 
  2.23  subdivision 4, is amended to read: 
  2.24     Subd. 4.  [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 
  2.25  INSTANCES.] (a) If a participating employing unit, other than 
  2.26  the state, has a negative asset balance in the deposit 
  2.27  accumulation fund, the executive director shall bill the 
  2.28  employing unit for the amount of the deficiency.  Any amount 
  2.29  billed will include six percent interest, compounded annually, 
  2.30  for any year or portion of a year from the billing date until 
  2.31  the date of payment. 
  2.32     (b) If assets in the deposit accumulation fund are 
  2.33  insufficient to make a transfer to the retirement benefit fund, 
  2.34  the city of Minneapolis shall pay the amount of that 
  2.35  insufficiency to the retirement benefit fund within three days 
  2.36  of certification of the insufficiency by the executive director 
  3.1   of the fund.  The city of Minneapolis may bill any other 
  3.2   participating employing unit other than the state for its 
  3.3   proportion of the amount paid.  Any amount billed by the city 
  3.4   under this paragraph will include interest as specified in 
  3.5   paragraph (a).  
  3.6      Sec. 4.  Minnesota Statutes 1998, section 422A.18, 
  3.7   subdivision 2, is amended to read: 
  3.8      Subd. 2.  [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 
  3.9   disability allowance under this section shall be the amount of 
  3.10  service allowance to which the employee would be entitled under 
  3.11  section 422A.15, notwithstanding the age requirements expressed 
  3.12  therein; or the lesser of the following amounts:  50 percent of 
  3.13  the final average compensation, or an amount equal to two 
  3.14  percent of final average compensation for each year of allowable 
  3.15  service for the first ten years, and thereafter 2.5 percent of 
  3.16  final average compensation per year of allowable service, 
  3.17  including in the latter assumed service between the date the 
  3.18  disability occurred and the 60th birthday of the employee. 
  3.19     If the amount of annuity (b) Annuities payable from the 
  3.20  Minnesota postretirement investment fund to any class of 
  3.21  annuitants is adjusted pursuant to section 11A.18, the amount of 
  3.22  benefits payable from the disability benefit fund for that class 
  3.23  of annuitants under this section shall also be adjusted at the 
  3.24  same time and rate as retirement annuities in the retirement 
  3.25  benefit fund. 
  3.26     Sec. 5.  Minnesota Statutes 1998, section 422A.22, 
  3.27  subdivision 4, is amended to read: 
  3.28     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
  3.29  of a contributing an active member while still in the service of 
  3.30  the city, and before reaching the compulsory age of 
  3.31  retirement prior to termination of service, there shall be paid 
  3.32  to such person the beneficiary or persons as beneficiaries 
  3.33  designated by the member shall have nominated by written 
  3.34  designation on a form specified by the executive director and 
  3.35  filed with the retirement board, in such form as the retirement 
  3.36  board shall require, the net accumulated amount of employee 
  4.1   deductions from salary, pay, or compensation, including interest 
  4.2   , to the member's credit on date of compounded annually to the 
  4.3   date of the member's death.  The amount must not include any 
  4.4   contributions made by the employee or on the employee's behalf, 
  4.5   or any interest or investment earnings on those contributions, 
  4.6   which were allocated to the survivor benefit fund under section 
  4.7   422A.06, subdivision 6. 
  4.8      (b) If the employee fails to make a designation, or if 
  4.9   the person or persons beneficiary or beneficiaries designated by 
  4.10  such the employee predeceases such the employee, the net 
  4.11  accumulated amount of deductions from salary, pay, or 
  4.12  compensation including interest, to the credit of such employee 
  4.13  on date of death shall benefit specified in paragraph (a) must 
  4.14  be paid to such the deceased employee's estate. 
  4.15     (c) A benefit payable under this subdivision is in addition 
  4.16  to any applicable survivor benefit under section 422A.23. 
  4.17     Sec. 6.  Minnesota Statutes 1998, section 422A.22, 
  4.18  subdivision 5, is amended to read: 
  4.19     Subd. 5.  [REPAYMENT OF REFUND.] Upon reinstatement 
  4.20  reemployment of a former covered employee to the service, in 
  4.21  employment covered by the Minneapolis employees retirement fund, 
  4.22  service credit for such past service or for any part thereof 
  4.23  shall which was forfeited by taking a refund must be granted 
  4.24  reinstated only upon repayment of the amount of the separation 
  4.25  refund, with interest, from the time of separation payment of 
  4.26  the refund until the date repaid.  
  4.27     Sec. 7.  Minnesota Statutes 1998, section 422A.23, is 
  4.28  amended to read: 
  4.29     422A.23 [SURVIVOR BENEFITS.] 
  4.30     Subdivision 1.  [PAYMENT OF CITY INSTALLMENT ACCUMULATED 
  4.31  AMOUNT.] (a) If a contributing an active or deferred member dies 
  4.32  after having been in the service with ten or more years of 
  4.33  service credit, and before actual retirement, as determined by 
  4.34  the retirement board, the present worth of the city's annual 
  4.35  installments of $60 then to the credit of the contributing 
  4.36  member, shall be paid to a beneficiary designated by such 
  5.1   contributing member in such form as the retirement board shall 
  5.2   require, who shall be the surviving spouse, or surviving child, 
  5.3   or children of such member or, if there be no surviving spouse 
  5.4   or surviving child or children, then to a person actually 
  5.5   dependent on and receiving principal support from such member, 
  5.6   or surviving mother or father, or grandchildren, or surviving 
  5.7   brother or sister, or surviving children of the deceased brother 
  5.8   or sister of such member except as noted in paragraph (d), the 
  5.9   individual specified in paragraph (b) is eligible to receive the 
  5.10  benefit specified in paragraph (c). 
  5.11     (b) An individual eligible for the benefit specified in 
  5.12  paragraph (c) is a beneficiary designated by the member on a 
  5.13  form specified by the executive director.  If the beneficiary 
  5.14  designated by the member is not one of the class of persons 
  5.15  named in the preceding sentence, such benefit from the 
  5.16  accumulation of city deposits shall be paid in the following 
  5.17  order:  (1) to the surviving spouse, the whole thereof; (2) if 
  5.18  there be no surviving spouse, to the surviving children, share 
  5.19  and share alike; (3) if there be no surviving spouse or child or 
  5.20  children, to the dependent or dependents as those terms are 
  5.21  herein defined, of the member, share and share alike; (4) if 
  5.22  there be no surviving spouse, child or children, or dependents, 
  5.23  to the surviving mother and father, share and share alike; (5) 
  5.24  if there be no surviving mother and father, to the 
  5.25  grandchildren, in equal shares; if there be no grandchildren, to 
  5.26  the surviving brothers and sisters of the member, in equal 
  5.27  shares; (6) if there be no surviving brothers and sisters, to 
  5.28  the surviving children of the deceased brothers and sisters of 
  5.29  the member, in equal shares; or (7) if there is none of the 
  5.30  foregoing persons who survives the member, the accumulation of 
  5.31  the city deposits shall be applied to the funeral expenses of 
  5.32  the member failed to designate a beneficiary, or if the 
  5.33  beneficiary or beneficiaries designated by the employee 
  5.34  predecease the employee, the benefit in paragraph (c) is payable 
  5.35  to the deceased employee's estate. 
  5.36     (c) The benefit is a lump-sum payment of the present value 
  6.1   of the city's or other contributing employer's annual 
  6.2   installments of $60 to the credit of the member. 
  6.3      (d) No benefit is payable under this subdivision if a 
  6.4   monthly survivor benefit is paid under another subdivision of 
  6.5   this section. 
  6.6      Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 
  6.7   active member dies prior to termination of service with at least 
  6.8   18 months but less than 20 years of service credit, the 
  6.9   surviving spouse or surviving child or children is eligible to 
  6.10  receive the survivor benefit specified in paragraph (b) or (c), 
  6.11  as applicable.  Payment of a benefit for any surviving child 
  6.12  under the age of 18 years shall be made to the surviving parent, 
  6.13  or if there be none, to the legal guardian of the surviving 
  6.14  child.  For purposes of this subdivision, a surviving child is 
  6.15  an unmarried child of the deceased member under the age of 18, 
  6.16  or under the age of 22 if a full-time student at an accredited 
  6.17  school, college, or university. 
  6.18     (b) If the surviving spouse or surviving child benefit 
  6.19  commenced before July 1, 1983, the surviving spouse benefit is 
  6.20  increased from $500 per month to $750 per month and the 
  6.21  surviving child benefit is $225 per month, beginning with the 
  6.22  first monthly payment payable after May 28, 1998.  The sum of 
  6.23  surviving spouse and surviving child benefits payable under this 
  6.24  paragraph shall not exceed $900 per month.  The increased cost 
  6.25  resulting from the benefit increases under this paragraph must 
  6.26  be allocated to each employing unit listed in section 422A.101, 
  6.27  subdivisions 1a, 2, and 2a, on the basis of the additional 
  6.28  accrued liability resulting from increased benefits paid to the 
  6.29  survivors of employees from that unit. 
  6.30     (c) If the surviving spouse or surviving child benefit 
  6.31  commences after June 30, 1983, the surviving spouse benefit is 
  6.32  30 percent of the member's average salary in effect over the 
  6.33  last six months of allowable service preceding the month in 
  6.34  which death occurs.  The surviving child benefit is ten percent 
  6.35  of the member's average salary in effect over the last six 
  6.36  months of allowable service preceding the month in which death 
  7.1   occurs.  The sum of surviving spouse and surviving child 
  7.2   benefits payable under this paragraph shall not exceed 50 
  7.3   percent of the member's average salary in effect over the last 
  7.4   six months of allowable service. 
  7.5      (d) Any surviving child benefit or surviving spouse benefit 
  7.6   computed under paragraph (c) and in effect for the month 
  7.7   immediately prior to May 28, 1998, is increased by 15 percent as 
  7.8   of the first payment on or after May 28, 1998. 
  7.9      (e) Surviving child benefits under this subdivision 
  7.10  terminate when the child no longer meets the definition of 
  7.11  surviving child. 
  7.12     Subd. 5.  [ADMINISTRATION.] Benefits herein provided shall 
  7.13  in this section following the death of an active employee or 
  7.14  deferred member, as applicable, commence with on the first day 
  7.15  of the month following the month in which the active employee or 
  7.16  deferred member dies and shall end with the last day of the 
  7.17  month preceding the month in which eligibility 
  7.18  ceases.  Eligibility for the benefits herein provided shall be 
  7.19  determined by the retirement board and its determination shall 
  7.20  be final.  Each beneficiary or parent or guardian of a dependent 
  7.21  child or legal representative shall furnish such Information as 
  7.22  the board may deem deemed necessary by the executive director to 
  7.23  determine eligibility for the benefits provided by this section, 
  7.24  and must be submitted.  Failure to furnish any required 
  7.25  information shall be sufficient grounds for the denial or 
  7.26  discontinuance of benefits.  A determination made by the 
  7.27  executive director may be appealed to the retirement board, 
  7.28  whose determination is final.  If the surviving spouse of the 
  7.29  deceased active employee or deferred member becomes entitled to 
  7.30  a retirement allowance by reason of membership in this fund, the 
  7.31  surviving spouse shall is authorized to receive the retirement 
  7.32  allowance in addition to the all applicable surviving spouse's 
  7.33  benefit spouse benefits to which the surviving spouse is 
  7.34  entitled as specified in this section and section 422A.22, 
  7.35  subdivision 4, if applicable.  The cost of all monthly 
  7.36  survivor's benefits provided in this section shall be is an 
  8.1   obligation of the members and of the city, any of its boards, 
  8.2   departments, commissions or public corporations or other 
  8.3   applicable employing units. 
  8.4      Subd. 6.  [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 
  8.5   retirement board shall create a reserve account for survivor's 
  8.6   benefits from which shall be paid on an actuarial basis all 
  8.7   survivor benefits due and payable.  At the end of each fiscal 
  8.8   year, as part of the annual actuarial valuation of the fund 
  8.9   prepared by the commission-retained actuary, a determination of 
  8.10  the normal cost of the benefits payable from the survivor's 
  8.11  benefit account shall be made and the board shall reduce or 
  8.12  increase the employee contribution rate of one-fourth of one 
  8.13  percent if and when it is determined based on the annual 
  8.14  actuarial valuation that the member contribution rate is in 
  8.15  excess of or is less than the amount necessary to pay for 50 
  8.16  percent of the calculated normal cost of the survivor benefits 
  8.17  provided in this section. 
  8.18     Subd. 7.  [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 
  8.19  COVERAGE.] (a) If the contributing active or deferred member 
  8.20  dies after having been in the service of the city 20 or more 
  8.21  years, and before the effective date of retirement, as 
  8.22  determined by the retirement board, the board shall pay with 20 
  8.23  or more years of service credit, a beneficiary as defined in 
  8.24  paragraph (b) is eligible to receive the benefit specified in 
  8.25  paragraph (c). 
  8.26     (b) The beneficiary eligible for a benefit under paragraph 
  8.27  (c) is the surviving spouse of the deceased employee.  If there 
  8.28  is no surviving spouse, the beneficiary may be a dependent 
  8.29  surviving child of the member or dependent parent designated by 
  8.30  the employee on a form prescribed by the executive director. 
  8.31     (c) The benefit payable to the beneficiary designated in 
  8.32  paragraph (b) is a monthly allowance for life to the designated 
  8.33  beneficiary of the employee.  The monthly allowance herein 
  8.34  provided for shall be is the actuarial equivalent of a single 
  8.35  life service allowance specified in section 422A.15, subdivision 
  8.36  1, which would have been payable to the employee on the date of 
  9.1   death, notwithstanding the age requirement stated in section 
  9.2   422A.15, subdivision 1.  For purposes of this section, the 
  9.3   amount of any excess contributions or voluntary additions by the 
  9.4   member shall not be included in the calculations in determining 
  9.5   the monthly allowance.  
  9.6      The survivor allowance under this subdivision shall be 
  9.7   computed and determined under a procedure specified by the 
  9.8   commission-retained actuary utilizing the appropriate mortality 
  9.9   table established by the board of trustees based on the 
  9.10  experience of the fund as recommended by the commission-retained 
  9.11  actuary and using the applicable postretirement interest rate 
  9.12  assumption specified in section 356.215, subdivision 4d. 
  9.13     (d) For benefits payable under this subdivision following 
  9.14  the death of a deferred member, the benefit must be calculated 
  9.15  as of the date of termination from service and increased by five 
  9.16  percent per year until January 1, 1981, and by three percent per 
  9.17  year thereafter compounded annually. 
  9.18     Subd. 8.  [SURVIVING CHILD; DEPENDENT DEFINITION.] The 
  9.19  beneficiary designated by the employee shall be the surviving 
  9.20  spouse of such employee.  If there is no surviving spouse, the 
  9.21  designated beneficiary may be a dependent surviving child or 
  9.22  dependent parent of such employee as dependency is defined in 
  9.23  sections 422A.01 to 422A.25.  If the beneficiary designated by 
  9.24  the employee is not of the class of persons provided for in this 
  9.25  subdivision, or if the designated beneficiary predeceases the 
  9.26  employee, a refund shall be made as provided for in section 
  9.27  422A.22, in lieu of a life income.  If the employee does not 
  9.28  elect to designate a beneficiary to receive a life income as 
  9.29  herein provided, the designated beneficiary, if of the class of 
  9.30  persons set forth in this subdivision, may elect within 60 days 
  9.31  after the date of death of the employee to receive a life income 
  9.32  computed and determined as though the employee had retired on 
  9.33  the date of death under the option 2 plan of retirement, as 
  9.34  provided for in sections 422A.01 to 422A.25, and had designated 
  9.35  such person as beneficiary.  For purposes of subdivision 2, a 
  9.36  surviving child is an unmarried child of the deceased member 
 10.1   under the age of 18, or under the age of 22 if a full-time 
 10.2   student at an accredited school, college, or university.  For 
 10.3   purposes of subdivision 7, a dependent surviving child or 
 10.4   dependent parent must meet the definition of dependent, as 
 10.5   defined in section 422A.01, subdivision 12, at the time of the 
 10.6   active or deferred member's death. 
 10.7      Subd. 9.  [LUMP-SUM DEATH BENEFIT.] If any employee who has 
 10.8   contributed to the survivor's benefit account as herein provided 
 10.9   dies before the effective date of retirement on a service or 
 10.10  disability pension and is not survived by a beneficiary eligible 
 10.11  to receive a monthly allowance as herein provided If no monthly 
 10.12  survivor benefit is payable under subdivision 2 or 7, there 
 10.13  shall be paid from the survivor's survivor benefit account to a 
 10.14  beneficiary designated by the employee on a form prescribed by 
 10.15  the executive director a lump-sum death benefit of $750 if death 
 10.16  occurs prior to the end of the employee's tenth year of 
 10.17  service credit or of $1500 if the employee had prior to death 
 10.18  completed ten or more calendar years of service credit.  Upon 
 10.19  reinstatement of a former employee to the service, credit for 
 10.20  such past service or for any part thereof shall be granted only 
 10.21  upon repayment of the amount of the separation refund, with 
 10.22  interest, from the time of separation Any benefit under this 
 10.23  subdivision may be paid in addition to a benefit payable under 
 10.24  subdivision 1. 
 10.25     Subd. 10.  [BENEFIT INCREASES.] If the amount of annuity 
 10.26  payable from the Minnesota postretirement investment fund to any 
 10.27  class of annuitants is adjusted pursuant to section 11A.18, the 
 10.28  amount of benefits payable from the survivor's benefit fund 
 10.29  pursuant to subdivisions 7 or 8 for that class of annuitants 
 10.30  shall also be adjusted at the same time and rate.  Annuities 
 10.31  payable under this section shall be adjusted at the same time 
 10.32  and rate as retirement annuities in the retirement benefit fund. 
 10.33     Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
 10.34  survivor benefit is must not suspended, be discontinued or 
 10.35  terminated, or otherwise stopped due to a surviving spouse's 
 10.36  remarriage. 
 11.1      Subd. 12.  [DETERMINATION OF ANNUITY.] The survivor 
 11.2   annuities payable under this section shall be computed and 
 11.3   determined under a procedure specified by the actuary retained 
 11.4   by the legislative commission on pensions and retirement 
 11.5   utilizing the appropriate mortality table based on the 
 11.6   experience of the fund as recommended by that actuary and 
 11.7   approved by the legislative commission on pensions and 
 11.8   retirement and using the applicable postretirement interest rate 
 11.9   assumption specified in section 356.215, subdivision 4d. 
 11.10     Sec. 8.  [REPEALER.] 
 11.11     Minnesota Statutes 1998, section 422A.16, subdivision 3a, 
 11.12  is repealed. 
 11.13     Sec. 9.  [EFFECTIVE DATE.] 
 11.14     Sections 1 to 8 are effective upon approval by the 
 11.15  Minneapolis city council and compliance with Minnesota Statutes, 
 11.16  section 645.021.