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Minnesota Legislature

Office of the Revisor of Statutes

SF 2997

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; Teachers Retirement Association; extending the "Rule
of 90" benefit tier to post-1989 hires; amending Minnesota Statutes 2006,
sections 354.05, subdivision 38; 354.42, subdivisions 2, 3; 354.44, subdivision 1;
Minnesota Statutes 2007 Supplement, section 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 65 for a
person who deleted text beginfirst becamedeleted text end new text beginis new text enda member of the association deleted text beginor 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 endnew text begin, irrespective of the person's date of first membershipnew text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new 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) deleted text beginafter July 1, 2006,deleted text end for a teacher employed by Special School District No. 1,
Minneapolis, new text beginafter July 1, 2006, and before July 1, 2009, new text end5.5 percent if the teacher is a
coordinated member, and 9.0 percent if the teacher is a basic membernew text begin and after June 30,
2009, ... percent if the teacher is a coordinated member, and ... percent if the teacher
is a basic member
new text end;

(2) for every other teacher, after July 1, 2006, 5.5 percent if the teacher is a
coordinated member and 9.0 percent if the teacher is a basic membernew text begin and after June 30,
2009, ... percent if the teacher is a coordinated member and ... percent if the teacher
is a basic member
new text end.

(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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

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 to 5.0 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, new text beginand before July 1, 2009, new text endthe regular employer contribution to the
fund by Special School District No. 1, Minneapolis, is an amount equal to 5.5 percent
of new text beginthe new text endsalary of each coordinated member and 9.5 percent of new text beginthe new text endsalary of each basic
membernew text begin and after June 30, 2009, an amount equal to ... percent of the salary of each
coordinated member and ... percent of the salary of each basic member
new text end. 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 is a
coordinated member or is a basic member.

(b) The employer contribution to the fund for every other employer is an amount
equal to 5.0 percent of the salary of each coordinated member and 9.0 percent of the
salary of each basic member before July 1, 2007, deleted text beginanddeleted text end 5.5 percent of the salary of each
coordinated member and 9.5 percent of the salary of each basic member after June 30,
2007new text begin, and before July 1, 2009, and ... percent of the salary of each coordinated member
and ... percent of the salary of each basic member after June 30, 2009
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 4.

Minnesota Statutes 2006, section 354.44, subdivision 1, is amended to read:


Subdivision 1.

Requirements as to age and service.

new text begin(a) new text endAny member or former
member who ceases or has ceased to render teaching services in any school or institution
covered by the provisions of this chapter, and who has attained the age of at least 55 years
with not less than three years allowable service, or who has received credit for not less
than 30 years allowable service regardless of age, is entitled upon written application
to a retirement annuity.

new text begin (b) Irrespective of the person's date of first membership before July 1, 1989, or after
June 30, 1989, a member or former member who ceases or has ceased to render teaching
services with an employing unit covered by this chapter who has credit for at least 30
years of allowable service, irrespective of age, is entitled, upon filing a written application,
to a retirement annuity under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 5.

Minnesota Statutes 2007 Supplement, 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 who
deleted text begin first becamedeleted text end new text beginis new text enda member of the association deleted text beginor a member of a pension fund listed in
section 356.30, subdivision 3, before July 1, 1989
deleted text end, new text beginirrespective of the person's date of first
membership,
new text endunless 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 deleted text beginshall determinedeleted text end new text begindetermines new text endthe 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 entitled:

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 only to a person who deleted text beginfirst becamedeleted text end new text beginis new text enda member of the
association deleted text beginor a member of a pension fund listed in section 356.30, subdivision 3, before
July 1, 1989
deleted text end, new text beginirrespective of the person's date of first membership, new text endand 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 new text beginthe new text endnormal retirement age under a formula
annuity, the member deleted text beginshalldeleted text end new text beginis entitled to new text endbe 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 deleted text beginshalldeleted text end new text beginmay new text endbe 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 who has become at least 55 years old and
deleted text endnew text begin, irrespective of the person's date of
first membership,
new text end 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 deleted text beginwho has become at least 55 years old and 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 endnew text begin, irrespective of the person's date of first membership,new 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end