SF 3605

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/15/2022 10:23am

A bill for an act
relating to retirement; public employees police and fire plan; enhancing the benefit
formula; making technical changes; amending Minnesota Statutes 2020, sections
353.01, subdivision 17a; 353.35, subdivision 1; 353.651, subdivision 3.

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

Section 1.

Minnesota Statutes 2020, section 353.01, subdivision 17a, is amended to read:

Subd. 17a.

Average salary.

(a) "Average salary," unless otherwise specified, means an
amount equivalent to the average of the highest salary of the member, police officer, or
firefighter, whichever applies, upon which employee contributions were paid for any five
successive years of allowable service, based on dates of salary periods as listed on salary
deduction reports. "Average salary" includes the salary of the employee during the period
of covered employment rendered after reaching the allowable service credit limit of section
353.651, subdivision 3, paragraph deleted text begin (b) deleted text end new text begin (d) new text end . Average salary must be based upon all allowable
service if this service is less than five years.

(b) "Average salary" may not include any reduced salary paid during a period in which
the employee is entitled to benefit payments from workers' compensation for temporary
disability, unless the average salary is higher, including this period.

(c) "Average salary," for purposes of calculating benefits for a surviving spouse or
dependent children under section 353.657, subdivision 2 or 3, means the average of the
full-time monthly base salary rate in effect during the last six months of allowable service.
If the employment during the last six months of allowable service was part time, the average
salary must be prorated based on the actual number of hours worked.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2020, section 353.35, subdivision 1, is amended to read:

Subdivision 1.

Refund rights.

(a) Except as provided in paragraph (b), when any former
member accepts a refund, all existing service credits and all rights and benefits to which
the person was entitled prior to the acceptance of the refund terminate.

(b) A refund under section 353.651, subdivision 3, paragraph deleted text begin (c) deleted text end new text begin (e) new text end , does not result in
a forfeiture of salary credit for the allowable service credit covered by the refund.

(c) If a person forfeits service credits, rights, and benefits under paragraph (a), the person's
service credits, rights, and benefits shall be restored if the person returns to employment
covered by the association for at least six months of allowable service and repays all amounts
previously received under section 353.34, subdivision 2, plus interest at the applicable rate
or rates specified in section 356.59, subdivision 3, compounded annually, from the date
each amount was received to the date the amount is repaid. The repayment must be made
within six months of the last day of public service employment. A person may have service
credits, rights, and benefits restored under this paragraph only one time.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2020, section 353.651, subdivision 3, is amended to read:

Subd. 3.

Retirement annuity formula.

(a) deleted text begin The average salary as defined in section
353.01, subdivision 17a, multiplied by 3.0 percent, multiplied by years of allowable service,
multiplied by the applicable vesting percentage indicated in section 353.01, subdivision 47,
determines deleted text end new text begin Except as provided in paragraph (b), new text end the amount of the normal retirement annuity deleted text begin . deleted text end new text begin
is the average salary as defined in section 353.01, subdivision 17a, multiplied by the
percentage that applies to each year of allowable service as follows:
new text end

new text begin (1) 3.0 percent per year for the member's first twenty years of allowable service; and
new text end

new text begin (2) 3.5 percent per year thereafter.
new text end

new text begin (b) Notwithstanding clauses (1) and (2) under paragraph (a), for each year of allowable
service before July 1, 2022, the percentage that applies is 3.0 percent.
new text end

new text begin (c) new text end If the member has earned allowable service for performing services other than those
of a police officer or firefighter, the annuity representing that service must be computed
under sections 353.29 and 353.30.

deleted text begin (b) deleted text end new text begin (d) new text end For a member first enrolled in the public employees police and fire retirement
plan after June 30, 2014, the average salary as defined in section 353.01, subdivision 17a,
paragraph (a), includes salary for all years for which contributions have been reported to
the public employees police and fire retirement plan, but allowable service included in the
calculation is limited to deleted text begin 33 deleted text end new text begin 32 new text end years and the normal retirement annuity must not exceed deleted text begin 99 deleted text end new text begin
102 new text end percent of the average salary.

deleted text begin (c) deleted text end new text begin (e) new text end When the annuity begins for members of the public employees police and fire
retirement plan enrolled after June 30, 2014, a prorated share of the contributions for
allowable service exceeding deleted text begin 33 deleted text end new text begin 32 new text end years must be refunded to the member. The prorated
share of the contributions to be refunded is determined by multiplying the accumulated
deductions paid by the member to the public employees police and fire retirement plan by
a percentage determined using the number of months of service in excess of deleted text begin 396 deleted text end new text begin 384 new text end as the
numerator and the total number of months of allowable service on which contributions were
reported as the denominator. Interest as defined in section 353.34, subdivision 2, is to be
applied to the prorated share of contributions from the first of the deleted text begin 397th deleted text end new text begin 385th new text end month of
allowable service reported to the public employees police and fire retirement plan to the
first of the month the annuity begins.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end