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Minnesota Legislature

Office of the Revisor of Statutes

SF 2621

as introduced - 91st Legislature (2019 - 2020) Posted on 03/21/2019 03:34pm

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; increasing the limits for contributions by governmental
subdivisions to supplemental pension funds and other retirement funds on behalf
of laborers, plumbers and pipefitters, and operating engineers who are covered by
collective bargaining agreements; authorizing limited contributions to supplemental
pension funds and other retirement funds on behalf of other building trades
employees; amending Minnesota Statutes 2018, sections 353.01, subdivision 10;
356.24, subdivision 1.

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

Section 1.

Minnesota Statutes 2018, section 353.01, subdivision 10, is amended to read:


Subd. 10.

Salary.

(a) Subject to the limitations of section 356.611, "salary" means:

(1) the wages or periodic compensation payable to a public employee by the employing
governmental subdivision before:

(i) employee retirement deductions that are designated as picked-up contributions under
section 356.62;

(ii) any employee-elected deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs that would have otherwise been available
as a cash payment to the employee; and

(iii) employee deductions for contributions to a supplemental plan or to a governmental
trust established under section 356.24, subdivision 1, clause (7), to save for postretirement
health care expenses, unless otherwise excluded under paragraph (b);

(2) for a public employee who is covered by a supplemental retirement plan under section
356.24, subdivision 1, clause (8), deleted text begin(9),deleted text end (10), or deleted text begin(12)deleted text endnew text begin (14)new text end, the employer contributions to the
applicable supplemental retirement plan when an agreement between the parties establishes
that the contributions will either result in a mandatory reduction of employees' wages through
payroll withholdings, or be made in lieu of an amount that would otherwise be paid as
wages;

(3) a payment from a public employer through a grievance proceeding, settlement, or
court order that is attached to a specific earnings period in which the employee's regular
salary was not earned or paid to the member due to a suspension or a period of involuntary
termination that is not a wrongful discharge under section 356.50; provided the amount is
not less than the equivalent of the average of the hourly base salary rate in effect during the
last six months of allowable service prior to the suspension or period of involuntary
termination, plus any applicable increases awarded during the period that would have been
paid under a collective bargaining agreement or personnel policy but for the suspension or
involuntary termination, multiplied by the average number of regular hours for which the
employee was compensated during the six months of allowable service prior to the suspension
or period of involuntary termination, but not to exceed the compensation that the public
employee would have earned if regularly employed during the applicable period;

(4) compensation paid during an authorized leave of absence, other than an authorized
medical leave of absence, as long as the compensation paid during a pay period is not less
than the lesser of:

(i) the product of the average hourly base salary rate in effect during the six months of
allowable service immediately preceding the leave, multiplied by the average number of
regular hours for which the employee was compensated each pay period during the six
months of allowable service immediately preceding the leave of absence; or

(ii) compensation equal to the value of the employee's total available accrued leave
hours;

(5) compensation paid during an authorized medical leave of absence, other than a
workers' compensation leave, as long as the compensation paid during a pay period is not
less than the lesser of:

(i) the product of one-half and the average hourly base salary rate in effect during the
six months of allowable service immediately preceding the leave of absence; or

(ii) compensation equal to the value of the employee's total available accrued leave
hours; and

(6) for a public employee who receives performance or merit bonus payment under a
written compensation plan, policy, or collective bargaining agreement in addition to regular
salary or in lieu of regular salary increases, the compensation paid to the employee for
attaining or exceeding performance goals, duties, or measures during a specified period of
employment.

(b) Salary does not mean:

(1) fees paid to district court reporters;

(2) unused annual leave, vacation, or sick leave payments, in the form of lump-sum or
periodic payments;

(3) for the donor, payment to another person of the value of hours donated under a
benevolent vacation, personal, or sick leave donation program;

(4) any form of severance or retirement incentive payments;

(5) an allowance payment or per diem payments for or reimbursement of expenses;

(6) lump-sum settlements not attached to a specific earnings period;

(7) workers' compensation payments or disability insurance payments, including payments
from employer self-insurance arrangements;

(8) employer-paid amounts used by an employee toward the cost of insurance coverage,
flexible spending accounts, cafeteria plans, health care expense accounts, day care expenses,
or any payments in lieu of any employer-paid group insurance coverage, including the
difference between single and family rates that may be paid to a member with single coverage
and certain amounts determined by the executive director to be ineligible;

(9) employer-paid fringe benefits, including, but not limited to:

(i) employer-paid premiums or supplemental contributions for employees for all types
of insurance;

(ii) membership dues or fees for the use of fitness or recreational facilities;

(iii) incentive payments or cash awards relating to a wellness program;

(iv) the value of any nonmonetary benefits;

(v) any form of payment made in lieu of an employer-paid fringe benefit;

(vi) an employer-paid amount made to a deferred compensation or tax-sheltered annuity
program; and

(vii) any amount paid by the employer as a supplement to salary, either as a lump-sum
amount or a fixed or matching amount paid on a recurring basis, that is not available to the
employee as cash;

(10) the amount equal to that which the employing governmental subdivision would
otherwise pay toward single or family insurance coverage for a covered employee when,
through a contract or agreement with some but not all employees, the employer:

(i) discontinues, or for new hires does not provide, payment toward the cost of the
employee's selected insurance coverages under a group plan offered by the employer;

(ii) makes the employee solely responsible for all contributions toward the cost of the
employee's selected insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees' selected insurance
coverages under a group plan offered by the employer; and

(iii) provides increased salary rates for employees who do not have any employer-paid
group insurance coverages;

(11) except as provided in section 353.86 or 353.87, compensation of any kind paid to
volunteer ambulance service personnel or volunteer firefighters, as defined in subdivision
35 or 36;

(12) the amount of compensation that exceeds the limitation provided in section 356.611;

(13) amounts paid by a federal or state grant for which the grant specifically prohibits
grant proceeds from being used to make pension plan contributions, unless the contributions
to the plan are made from sources other than the federal or state grant; and

(14) bonus pay that is not performance or merit pay under paragraph (a), clause (6).

(c) Amounts, other than those provided under paragraph (a), clause (3), provided to an
employee by the employer through a grievance proceeding, a court order, or a legal settlement
are salary only if the settlement or court order is reviewed by the executive director and the
amounts are determined by the executive director to be consistent with paragraph (a) and
prior determinations.

Sec. 2.

Minnesota Statutes 2018, section 356.24, subdivision 1, is amended to read:


Subdivision 1.

Restriction; exceptions.

It is unlawful for a school district or other
governmental subdivision or state agency to levy taxes for or to contribute public funds to
a supplemental pension or deferred compensation plan that is established, maintained, and
operated in addition to a primary pension program for the benefit of the governmental
subdivision employees other than:

(1) to a supplemental pension plan that was established, maintained, and operated before
May 6, 1971;

(2) to a plan that provides solely for group health, hospital, disability, or death benefits;

(3) to the individual retirement account plan established by chapter 354B;

(4) to a plan that provides solely for severance pay under section 465.72 to a retiring or
terminating employee;

(5) for employees other than personnel employed by the Board of Trustees of the
Minnesota State Colleges and Universities and covered under the Higher Education
Supplemental Retirement Plan under chapter 354C, but including city managers covered
by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph
(a), or by the defined contribution plan of the Public Employees Retirement Association
under section 353.028, subdivision 3, paragraph (b), if the supplemental plan coverage is
provided for in a personnel policy of the public employer or in the collective bargaining
agreement between the public employer and the exclusive representative of public employees
in an appropriate unit or in the individual employment contract between a city and a city
manager, and if for each available investment all fees and historic rates of return for the
prior one-, three-, five-, and ten-year periods, or since inception, are disclosed in an easily
comprehended document not to exceed two pages, in an amount matching employee
contributions on a dollar for dollar basis, but not to exceed an employer contribution of
one-half of the available elective deferral permitted per year per employee, under the Internal
Revenue Code:

(i) to the state of Minnesota deferred compensation plan under section 352.965;

(ii) in payment of the applicable portion of the contribution made to any investment
eligible under section 403(b) of the Internal Revenue Code, if the employing unit has
complied with any applicable pension plan provisions of the Internal Revenue Code with
respect to the tax-sheltered annuity program during the preceding calendar year; or

(iii) any other deferred compensation plan offered by the employer under section 457
of the Internal Revenue Code;

(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges
and Universities and not covered by clause (5), to the supplemental retirement plan under
chapter 354C, if the supplemental plan coverage is provided for in a personnel policy or in
the collective bargaining agreement of the public employer with the exclusive representative
of the covered employees in an appropriate unit, in an amount matching employee
contributions on a dollar for dollar basis, but not to exceed an employer contribution of
$2,700 a year for each employee;

(7) to a supplemental plan or to a governmental trust to save for postretirement health
care expenses qualified for tax-preferred treatment under the Internal Revenue Code, if the
supplemental plan coverage is provided for in a personnel policy or in the collective
bargaining agreement of a public employer with the exclusive representative of the covered
employees in an appropriate unit;

deleted text begin (8) to the laborers national industrial pension fund or to a laborers local pension fund
for the employees of a governmental subdivision who are covered by a collective bargaining
deleted text end deleted text begin agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of $7,000 per year per employee;
deleted text end

deleted text begin (9) to the plumbers and pipefitters national pension fund or to a plumbers and pipefitters
local pension fund for the employees of a governmental subdivision who are covered by a
collective bargaining agreement that provides for coverage by that fund and that sets forth
a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per
employee;
deleted text end

deleted text begin (10)deleted text endnew text begin (8)new text end to the international union of operating engineers pension fund for the employees
of a governmental subdivision who are covered by a collective bargaining agreement that
provides for coverage by that fund and that sets forth a fund contribution rate, but not to
exceed an employer contribution of deleted text begin$5,000deleted text end new text begin$10,500 new text endper year per employee;

deleted text begin (11)deleted text endnew text begin (9)new text end to a supplemental plan organized and operated under the federal Internal Revenue
Code, as amended, that is wholly and solely funded by the employee's accumulated sick
leave, accumulated vacation leave, and accumulated severance pay;

deleted text begin (12)deleted text endnew text begin (10)new text end to the International Association of Machinists national pension fund for the
employees of a governmental subdivision who are covered by a collective bargaining
agreement that provides for coverage by that fund and that sets forth a fund contribution
rate, but not to exceed an employer contribution of $5,000 per year per employee;

deleted text begin (13)deleted text endnew text begin (11)new text end for employees of United Hospital District, Blue Earth, to the state of Minnesota
deferred compensation program, if the employee makes a contribution, in an amount that
does not exceed the total percentage of covered salary under section 353.27, subdivisions
3 and 3a;

deleted text begin (14)deleted text endnew text begin (12)new text end to the alternative retirement plans established by the Hennepin County Medical
Center under section 383B.914, subdivision 5; deleted text beginor
deleted text end

deleted text begin (15)deleted text endnew text begin (13)new text end to the International Brotherhood of Teamsters Central States pension plan for
fixed-route bus drivers employed by the St. Cloud Metropolitan Transit Commission who
are members of the International Brotherhood of Teamsters Local 638 by virtue of that
employmentdeleted text begin.deleted text endnew text begin; or
new text end

new text begin (14) to any of the following retirement funds, for employees covered by a collective
bargaining agreement that provides for coverage by the fund and sets forth fund contribution
rates, but not to exceed an employer contribution of $50,000 per year per employee:
new text end

new text begin (i) the laborers national industrial pension fund or a laborers local pension fund;
new text end

new text begin (ii) the plumbers and pipefitters national pension fund or a plumbers and pipefitters local
pension fund;
new text end

new text begin (iii) the sheet metal workers national defined benefit pension fund, a sheet metal workers
local defined benefit pension fund, or a sheet metal workers local defined contribution
retirement fund;
new text end

new text begin (iv) the elevator constructors national pension fund or the elevator constructors annuity
and 401(k) retirement plan;
new text end

new text begin (v) the national electrical benefit fund, an electricians local defined benefit pension fund,
or an electricians local defined contribution pension fund;
new text end

new text begin (vi) the carpenters and joiners defined benefit pension fund or the carpenters and joiners
defined contribution pension fund;
new text end

new text begin (vii) the sprinkler fitters national defined benefit pension fund or the sprinkler fitters
supplemental defined contribution pension fund;
new text end

new text begin (viii) the painters and allied trades national pension fund or a painters and allied trades
local defined contribution retirement fund; or
new text end

new text begin (ix) the national roofing industry pension fund or a roofers local defined contribution
fund.
new text end

new text begin EFFECTIVE DATE. new text end

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