SF 409

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; allowing certain former 
  1.3             military personnel to purchase service credit with 
  1.4             certain public pension plans for uncredited military 
  1.5             service; proposing coding for new law in Minnesota 
  1.6             Statutes, chapter 356. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [356.552] [UNCREDITED MILITARY SERVICE CREDIT 
  1.9   PURCHASE.] 
  1.10     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
  1.11  public employee who has at least three years of allowable 
  1.12  service with a public pension plan listed in section 356.30, 
  1.13  subdivision 3, and who performed service in the United States 
  1.14  armed forces before becoming a public employee, or who failed to 
  1.15  obtain service credit for a military leave of absence, is 
  1.16  entitled to purchase allowable service credit for the period of 
  1.17  active duty service, up to a maximum of five years of service 
  1.18  credit, if the employee has not purchased service credit from 
  1.19  any other defined benefit public employee pension plan for the 
  1.20  same period of service.  Service credit purchased pursuant to 
  1.21  this section must be treated as if the service credit had been 
  1.22  earned as a public employee for retirement annuity calculation 
  1.23  purposes. 
  1.24     Subd. 2.  [SERVICE CREDIT PURCHASE AMOUNT.] The prior 
  1.25  service credit purchase amount for service credit purchased 
  1.26  under subdivision 1 is the amount determined by multiplying the 
  2.1   annual salary of the prospective purchaser at the time of 
  2.2   initial public employment or upon resuming public employment 
  2.3   after military leave of absence by the combined employee, 
  2.4   employer, and any additional employer contribution rates for the 
  2.5   applicable pension plan in effect on the date of initial 
  2.6   employment or on the date when the employee resumed service 
  2.7   after military leave of absence, and then by multiplying that 
  2.8   result by the number of years of service or fractions of years 
  2.9   of service of the potential service credit purchase, and then 
  2.10  adding interest at the annual simple rate of 8.5 percent per 
  2.11  year, calculated from the date of initial employment or the date 
  2.12  the employee resumed public employment after military leave of 
  2.13  absence to the date of final payment for the service credit 
  2.14  under this section. 
  2.15     Subd. 3.  [APPLICATION AND DOCUMENTATION.] An employee who 
  2.16  desires to purchase service credit under this section must apply 
  2.17  with the executive director of the applicable pension plan to 
  2.18  make the purchase.  The application must include all necessary 
  2.19  documentation of the employee's qualifications to make the 
  2.20  purchase, signed written permission to allow the executive 
  2.21  director to request and receive necessary verification of 
  2.22  applicable facts and eligibility requirements, and any other 
  2.23  relevant information that the executive director may require. 
  2.24     Subd. 4.  [SERVICE CREDIT GRANT; METHOD OF 
  2.25  PAYMENT.] Allowable service credit for the purchase period must 
  2.26  be granted by the applicable pension plan to the purchasing 
  2.27  employee upon receipt of the purchase payment amount.  Payment 
  2.28  may be made at any time during the purchasing employee's period 
  2.29  of public employment, but must be made before the employee's 
  2.30  effective date of retirement.  The purchasing employee may elect 
  2.31  to make payment in a lump sum, in monthly installments, or by 
  2.32  payroll deduction.  If the purchasing employee elects to pay in 
  2.33  monthly installments or by payroll deduction, the employee is 
  2.34  allowed two months of payment time for every one month of 
  2.35  service credit purchased, with a maximum payment period of ten 
  2.36  years. 
  3.1      Sec. 2.  [EFFECTIVE DATE.] 
  3.2      Section 1 is effective the day following final enactment.