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Minnesota Legislature

Office of the Revisor of Statutes

SF 648

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to retirement; extending certain benefits to certain members of the
Teachers Retirement Association; amending Minnesota Statutes 2006, sections
354.05, subdivision 38; 354.42, subdivisions 2, 3; 354.44, subdivision 6.

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

Section 1.

Minnesota Statutes 2006, section 354.05, subdivision 38, is amended to read:


Subd. 38.

Normal retirement age.

"Normal retirement age" means age 65deleted text begin for a
person who first became a member of the association or a member of a pension fund listed
in section 356.30, subdivision 3, before July 1, 1989. For a person who first becomes a
member of the association after June 30, 1989, normal retirement age means the higher of
age 65 or "retirement age," as defined in United States Code, title 42, section 416(l), as
amended, but not to exceed age 66
deleted text end.

Sec. 2.

Minnesota Statutes 2006, section 354.42, subdivision 2, is amended to read:


Subd. 2.

Employee.

(a) The employee contribution to the fund is an amount equal
to the following percentage of the salary of a member:

(1) after July 1, 2006, for a teacher employed by Special School District No. 1,
Minneapolis,deleted text begin 5.5deleted text endnew text begin ...new text end percent if the teacher is a coordinated member, and 9.0 percent if the
teacher is a basic member;

(2) for every other teacher, after July 1, 2006,deleted text begin 5.5deleted text endnew text begin ...new text end percent if the teacher is a
coordinated member and 9.0 percent if the teacher is a basic member.

(b) This contribution must be made by deduction from salary. Where any portion
of a member's salary is paid from other than public funds, the member's employee
contribution must be based on the entire salary received.

Sec. 3.

Minnesota Statutes 2006, section 354.42, subdivision 3, is amended to read:


Subd. 3.

Employer.

(a) The regular employer contribution to the fund by Special
School District No. 1, Minneapolis, after July 1, 2006, and before July 1, 2007, is an
amount equal todeleted text begin 5.0deleted text endnew text begin ...new text end percent of the salary of each of its teachers who is a coordinated
member and 9.0 percent of the salary of each of its teachers who is a basic member. After
July 1, 2007, the regular employer contribution to the fund by Special School District No.
1, Minneapolis, is an amount equal todeleted text begin 5.5deleted text endnew text begin ...new text end percent of salary of each coordinated member
and 9.5 percent of salary of each basic member. The additional employer contribution to
the fund by Special School District No. 1, Minneapolis, after July 1, 2006, is an amount
equal to 3.64 percent of the salary of each teacher who isdeleted text begin a coordinated member or isdeleted text end a
basic membernew text begin, and ... percent of the salary of each teacher who is a coordinated membernew text end.

(b) The employer contribution to the fund for every other employer is an amount
equal todeleted text begin 5.0deleted text endnew text begin ...new text end percent of the salary of each coordinated member and 9.0 percent of the
salary of each basic member before July 1, 2007, anddeleted text begin 5.5deleted text endnew text begin ...new text end percent of the salary of
each coordinated member and 9.5 percent of the salary of each basic member after June
30, 2007.

Sec. 4.

Minnesota Statutes 2006, section 354.44, subdivision 6, is amended to read:


Subd. 6.

Computation of formula program retirement annuity.

(a) The formula
retirement annuity must be computed in accordance with the applicable provisions of the
formulas stated in paragraph (b) or (d) on the basis of each member's average salary under
section 354.05, subdivision 13a, for the period of the member's formula service credit.

(b) This paragraph, in conjunction with paragraph (c), applies to a person whodeleted text begin first
became
deleted text endnew text begin isnew text end a member of the associationdeleted text begin or a member of a pension fund listed in section
356.30, subdivision 3, before July 1, 1989,
deleted text end unless paragraph (d), in conjunction with
paragraph (e), produces a higher annuity amount, in which case paragraph (d) applies. The
average salary as defined in section 354.05, subdivision 13a, multiplied by the following
percentages per year of formula service credit shall determine the amount of the annuity to
which the member qualifying therefor is entitled for service rendered before July 1, 2006:

Coordinated Member
Basic Member
Each year of service
during first ten
the percent specified
in section 356.315,
subdivision 1, per year
the percent
specified in
section 356.315,
subdivision 3, per
year
Each year of service
thereafter
the percent specified
in section 356.315,
subdivision 2, per year
the percent
specified in
section 356.315,
subdivision 4, per
year

For service rendered on or after July 1, 2006, the average salary as defined in section
354.05, subdivision 13a, multiplied by the following percentages per year of service
credit, determines the amount the annuity to which the member qualifying therefor is:

Coordinated Member
Basic Member
Each year of service
during first ten
the percent specified
in section 356.315,
subdivision 1a, per year
the percent
specified in
section 356.315,
subdivision 3, per
year
Each year of service after
ten years of service
the percent specified
in section 356.315,
subdivision 2b, per year
the percent
specified in
section 356.315,
subdivision 4, per
year

(c)(i) This paragraph applies deleted text beginonly to a person who first becamedeleted text end new text beginto new text enda member of
the association or a member of a pension fund listed in section 356.30, subdivision 3,
deleted text begin before July 1, 1989, anddeleted text end whose annuity is higher when calculated under paragraph (b), in
conjunction with this paragraph than when calculated under paragraph (d), in conjunction
with paragraph (e).

(ii) Where any member retires prior to normal retirement age under a formula
annuity, the member shall be paid a retirement annuity in an amount equal to the normal
annuity provided in paragraph (b) reduced by one-quarter of one percent for each month
that the member is under normal retirement age at the time of retirement except that for
any member who has 30 or more years of allowable service credit, the reduction shall be
applied only for each month that the member is under age 62.

(iii) Any member whose attained age plus credited allowable service totals 90 years
is entitled, upon application, to a retirement annuity in an amount equal to the normal
annuity provided in paragraph (b), without any reduction by reason of early retirement.

(d) This paragraph applies to a member deleted text beginwho has become at least 55 years old and
first became a member of the association after June 30, 1989, and to any other member
deleted text end
who has become at least 55 years old and whose annuity amount when calculated under
this paragraph and in conjunction with paragraph (e), is higher than it is when calculated
under paragraph (b), in conjunction with paragraph (c). For a basic member, the average
salary, as defined in section 354.05, subdivision 13a, multiplied by the percent specified
by section 356.315, subdivision 4, for each year of service for a basic member shall
determine the amount of the retirement annuity to which the basic member is entitled.
The annuity of a basic member who was a member of the former Minneapolis Teachers
Retirement Fund Association as of June 30, 2006, must be determined according to the
annuity formula under the articles of incorporation of the former Minneapolis Teachers
Retirement Fund Association in effect as of that date. For a coordinated member, the
average salary, as defined in section 354.05, subdivision 13a, multiplied by the percent
specified in section 356.315, subdivision 2, for each year of service rendered before July
1, 2006, and by the percent specified in section 356.315, subdivision 2b, for each year of
service rendered on or after July 1, 2006, determines the amount of the retirement annuity
to which the coordinated member is entitled.

(e) This paragraph applies to a person who has become at least 55 years old deleted text beginand first
becomes a member of the association after June 30, 1989, and to any other member who
has become at least 55 years old and
deleted text end whose annuity is higher when calculated under
paragraph (d) in conjunction with this paragraph than when calculated under paragraph
(b), in conjunction with paragraph (c). An employee who retires under the formula annuity
before the normal retirement age shall be paid the normal annuity provided in paragraph
(d) reduced so that the reduced annuity is the actuarial equivalent of the annuity that would
be payable to the employee if the employee deferred receipt of the annuity and the annuity
amount were augmented at an annual rate of three percent compounded annually from the
day the annuity begins to accrue until the normal retirement age if the employee became
an employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
becomes an employee after June 30, 2006.

(f) No retirement annuity is payable to a former employee with a salary that exceeds
95 percent of the governor's salary unless and until the salary figures used in computing
the highest five successive years average salary under paragraph (a) have been audited by
the Teachers Retirement Association and determined by the executive director to comply
with the requirements and limitations of section 354.05, subdivisions 35 and 35a.