SF 1235

as introduced - 88th Legislature (2013 - 2014) Posted on 05/20/2013 02:43pm

A bill for an act
relating to retirement; Duluth Teachers Retirement Fund Association; increasing
member and employer contribution rates; increasing the post-July 1, 2013,
benefit accrual rate; modifying 2010 postretirement adjustment reductions;
amending Minnesota Statutes 2012, sections 354A.12, subdivisions 1, 2a;
354A.27, subdivision 7, by adding a subdivision; 354A.31, subdivision 4a;
repealing Minnesota Statutes 2012, section 354A.27, subdivision 6.

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

Section 1.

Minnesota Statutes 2012, section 354A.12, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

(a) The contribution required to be paid
by each member of a teachers retirement fund association is the percentage of total salary
specified below for the applicable association and program:

	Association and Program	Percentage of Total Salary
Duluth Teachers Retirement Fund Association
	old law and new law
	coordinated programs
	before July 1, deleted text begin2011 deleted text end new text begin 2013 new text end	deleted text begin 5.5 deleted text end new text begin6.5 new text endpercent
	effective July 1, deleted text begin2011 deleted text end new text begin 2013 new text end	deleted text begin 6.0 deleted text end new text begin7.0 new text endpercent
	effective July 1, deleted text begin2012 deleted text end new text begin 2014 new text end	deleted text begin 6.5 deleted text end new text begin7.5 new text endpercent
St. Paul Teachers Retirement Fund Association
	basic program before July 1, 2011	8 percent
	basic program after June 30, 2011	8.25 percent
	basic program after June 30, 2012	8.5 percent
	basic program after June 30, 2013	8.75 percent
	basic program after June 30, 2014	9.0 percent
	coordinated program before July 1, 2011	5.5 percent
	coordinated program after June 30, 2011	5.75 percent
	coordinated program after June 30, 2012	6.0 percent
	coordinated program after June 30, 2013	6.25 percent
	coordinated program after June 30, 2014	6.50 percent

(b) Contributions shall be made by deduction from salary and must be remitted
directly to the respective teachers retirement fund association at least once each month.

(c) When an employee contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid by the employer with the first
payroll cycle reported.

Sec. 2.

Minnesota Statutes 2012, section 354A.12, subdivision 2a, is amended to read:

Subd. 2a.

Employer regular and additional contributions.

(a) The employing
units shall make the following employer contributions to teachers retirement fund
associations:

(1) for any coordinated member of one of the following teachers retirement fund
associations in a city of the first class, the employing unit shall make a regular employer
contribution to the respective retirement fund association in an amount equal to the
designated percentage of the salary of the coordinated member as provided below:

Duluth Teachers Retirement Fund Association
	before July 1, deleted text begin2011 deleted text end new text begin 2013 new text end	deleted text begin 5.79 deleted text end new text begin 6.79 new text endpercent
	effective July 1, deleted text begin2011 deleted text end new text begin 2013 new text end	deleted text begin 6.29 deleted text end new text begin7.29 new text endpercent
	effective July 1, deleted text begin2012 deleted text end new text begin 2014 new text end	deleted text begin 6.79 deleted text end new text begin7.50 new text endpercent
St. Paul Teachers Retirement Fund Association
	before July 1, 2011	4.50 percent
	after June 30, 2011	4.75 percent
	after June 30, 2012	5.0 percent
	after June 30, 2013	5.25 percent
	after June 30, 2014	5.5 percent

(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make a regular employer contribution to the respective retirement
fund in an amount according to the schedule below:

	before July 1, 2011	8.0 percent of salary
	after June 30, 2011	8.25 percent of salary
	after June 30, 2012	8.5 percent of salary
	after June 30, 2013	8.75 percent of salary
	after June 30, 2014	9.0 percent of salary

(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make an additional employer contribution to the respective fund in
an amount equal to 3.64 percent of the salary of the basic member;

(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make an additional employer contribution to the respective fund
in an amount equal to the applicable percentage of the coordinated member's salary,
as provided below:

St. Paul Teachers Retirement Fund Association

3.84 percent

(b) The regular and additional employer contributions must be remitted directly to
the respective teachers retirement fund association at least once each month. Delinquent
amounts are payable with interest under the procedure in subdivision 1a.

(c) Payments of regular and additional employer contributions for school district
or technical college employees who are paid from normal operating funds must be made
from the appropriate fund of the district or technical college.

(d) When an employer contribution rate changes for a fiscal year, the new
contribution rate is effective for the entire salary paid by the employer with the first
payroll cycle reported.

Sec. 3.

Minnesota Statutes 2012, section 354A.27, is amended by adding a subdivision
to read:

new text begin Subd. 6a. new text end

new text begin Postretirement adjustment transition. new text end

new text begin (a) If the funded ratio of the
retirement plan based on the actuarial value of assets is at least 90 percent as reported
in the most recent actuarial valuation prepared under sections 356.214 and 356.215,
this subdivision expires and subsequent postretirement adjustments are governed by
subdivision 7.
new text end

new text begin (b) Each annuity or benefit recipient of the retirement plan who has been receiving
that annuity or benefit for at least 12 months as of the applicable January 1 is eligible to
receive a postretirement adjustment of two percent, payable on January 1.
new text end

Sec. 4.

Minnesota Statutes 2012, section 354A.27, subdivision 7, is amended to read:

Subd. 7.

Calculation of postretirement adjustments.

(a) This subdivision applies
if subdivision deleted text begin6 deleted text end new text begin6a new text endhas expired.

(b) A percentage adjustment must be computed and paid under this subdivision to
eligible persons under subdivision 5. This adjustment is determined by reference to the
Consumer Price Index for urban wage earners and clerical workers all items index as
reported by the Bureau of Labor Statistics within the United States Department of Labor
each year as part of the determination of annual cost-of-living adjustments to recipients
of federal old-age, survivors, and disability insurance. For calculations of cost-of-living
adjustments under paragraph (c), the term "average third quarter Consumer Price Index
value" means the sum of the monthly index values as initially reported by the Bureau of
Labor Statistics for the months of July, August, and September, divided by 3.

(c) Before January 1 of each year, the executive director must calculate the amount
of the cost-of-living adjustment by dividing the most recent average third quarter index
value by the same average third quarter index value from the previous year, subtract one
from the resulting quotient, and express the result as a percentage amount, which must be
rounded to the nearest one-tenth of one percent.

(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment
to be applied as a permanent increase to the regular payment of each eligible member
on January 1 of the next calendar year. For any eligible member whose effective date
of benefit commencement occurred during the calendar year before the cost-of-living
adjustment is applied, the full increase amount must be prorated on the basis of whole
calendar quarters in benefit payment status in the calendar year prior to the January 1 on
which the cost-of-living adjustment is applied, calculated to the third decimal place.

(e) The adjustment must not be less than zero nor greater than five percent.

(f) If the funding ratio of the plan as determined in the most recent actuarial
valuation using the actuarial value of assets is less than 80 percent there will be no
postretirement adjustment the following January 1.

Sec. 5.

Minnesota Statutes 2012, section 354A.31, subdivision 4a, is amended to read:

Subd. 4a.

Computation of normal coordinated retirement annuity; Duluth
fund.

(a) This subdivision applies to the new law coordinated program of the Duluth
Teachers Retirement Fund Association.

(b) The normal coordinated retirement annuity is an amount equal to a retiring
coordinated member's average salary under section 354A.011, subdivision 7a, multiplied
by the retirement annuity formula percentage.

(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
became a member or a member in a pension fund listed in section 356.30, subdivision 3,
before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a
higher annuity amount, in which case paragraph (d) applies. The retirement annuity
formula percentage for purposes of this paragraph is the percent specified in section
356.315, subdivision 1, per year for each year of coordinated new text beginprogram new text endservice for the first
ten years new text beginrendered through June 30, 2013, and the percent specified in section 356.315,
subdivision 1a, per year for each year of coordinated program service rendered after June
30, 2013, new text endand the percent specified in section 356.315, subdivision 2, for each subsequent
year of coordinated new text beginprogram new text endservice new text begin through June 30, 2013, and the percent specified in
section 356.315, subdivision 2b, per year for each year of coordinated program service
rendered after June 30, 2013 new text end.

(d) This paragraph applies to a person who is at least 55 years old and who first
becomes a member after June 30, 1989, and to any other member who is at least 55 years
old and whose annuity amount, when calculated under this paragraph and in conjunction
with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction
with subdivision 6. The retirement annuity formula percentage for purposes of this
paragraph is the percent specified in section 356.315, subdivision 2, for each year of
coordinated new text beginprogram new text endservice new text begin through June 30, 2013, and the percent specified in section
356.315, subdivision 2b, per year for each year of coordinated program service rendered
after June 30, 2013 new text end.

Sec. 6. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2012, section 354A.27, subdivision 6, new text end new text begin is repealed.
new text end

Sec. 7. new text beginEFFECTIVE DATE.
new text end

new text begin (a) Sections 1 to 6 are effective July 1, 2013.
new text end

new text begin (b) Section 3 applies to the postretirement adjustment payable on January 1, 2014.
new text end