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SF 4203

as introduced - 91st Legislature (2019 - 2020) Posted on 03/10/2020 09:11am

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; public employees police and fire plan; amending disability
provisions; amending Minnesota Statutes 2018, section 353.656, subdivisions 1,
1a, 1b, 3, 3a, 5a, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2018, section 353.656, subdivision 1, is amended to read:


Subdivision 1.

Duty disability; computation of benefits.

(a) A member of the police
and fire plandeleted text begin, other thandeleted text end new text beginwho (1) is not new text enda firefighter covered by section 353.6511, or a police
officer covered by section 353.6512, deleted text beginwho is determined to qualify fordeleted text end new text begin(2) is under age 55,
(3) has a condition that meets the definition of a
new text endduty disability as defined in section 353.01,
subdivision 41,new text begin and (4) has filed a valid application under section 353.031,new text end is entitled to
receive disability benefits during the period of such disability in an amount equal to 60
percent of the average salary as defined in section 353.01, subdivision 17a, plus an additional
3.0 percent of that average salary for each year of service in excess of 20 years.

(b) deleted text beginTo be eligible for a benefit under paragraph (a), thedeleted text endnew text begin Anew text end member deleted text beginmust have:(1) not
met the requirements for a retirement annuity under section 353.651, subdivision 1; or
deleted text endnew text begin of
the police and fire plan who (1) is not a firefighter covered by section 353.6511, or a police
officer covered by section 353.6512,
new text end(2) deleted text beginmet the requirements under that subdivision, butdeleted text end
new text begin is age 55 or older, (3) new text enddoes not have at least 20 years of allowable service creditnew text begin, (4) has a
condition that meets the definition of a duty disability as defined in section 353.01,
subdivision 41, and (5) has filed a valid application under section 353.031, is totally vested
in and entitled to a retirement annuity under section 353.651, subdivision 3
new text end.

deleted text begin (c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a period
of 60 months from the disability benefit accrual date and at the end of that period is subject
to provisions of subdivision 5a.
deleted text end

new text begin (c) A member of the police and fire plan who (1) is age 55 or older, and (2) has more
than 20 years of service is not eligible for a benefit under this subdivision.
new text end

(d) If the disability under this subdivision occurs before the member has at least five
years of allowable service credit in the police and fire plan, the disability benefit must be
computed on the average salary from which deductions were made for contribution to the
police and fire fund.

Sec. 2.

Minnesota Statutes 2018, section 353.656, subdivision 1a, is amended to read:


Subd. 1a.

Total and permanent duty disability; computation of benefits.

(a) A member
of the police and fire plandeleted text begin, other thandeleted text end new text beginwho (1) is not new text enda firefighter covered by section 353.6511,
or a police officer covered by section 353.6512, deleted text beginwhose disablingdeleted text end new text begin(2) has a new text endcondition deleted text beginis
determined to be
deleted text end new text beginthat meets the definition of new text enda duty disability deleted text beginthatdeleted text end new text beginunder section 353.01,
subdivision 41, and
new text endis also a deleted text beginpermanent anddeleted text end total new text beginand permanent new text enddisability as defined in
section 353.01, subdivision 19,new text begin and (3) has filed a valid application under section 353.031new text end
is entitled to receive, for life, disability benefits in an amount equal to 60 percent of the
average salary as defined in section 353.01, subdivision 17a, plus an additional 3.0 percent
of that average salary for each year of service in excess of 20 years.

(b) A disability benefit payable under paragraph (a) is subject to eligibility review under
section 353.33, subdivision 6, but the review may be waived if the executive director receives
a written statement from the association's medical advisor that no improvement can be
expected in the member's disabling condition that was the basis for payment of the benefit
under paragraph (a). A member receiving a disability benefit under this subdivision who is
found to no longer be permanently and totally disabled as defined under section 353.01,
subdivision 19
, but continues to meet the definition for receipt of a duty disability under
section 353.01, subdivision 41, is subject to subdivision 1 upon written notice from the
association's medical advisor that the person is no longer considered permanently and totally
disabled, and may, upon application, elect an optional annuity under subdivision 1b.

(c) If a member approved for disability benefits under this subdivision dies before
attaining normal retirement age as defined in section 353.01, subdivision 37, paragraph (b),
or within 60 months of the effective date of the disability, whichever is later, the surviving
spouse is entitled to receive a survivor benefit under section 353.657, subdivision 2, paragraph
(a), clause (1), if the death is the direct result of the disabling condition for which disability
benefits were approved, or section 353.657, subdivision 2, paragraph (a), clause (2), if the
death is not directly related to the disabling condition for which benefits were approved
under this subdivision.

(d) If the election of an actuarial equivalent optional annuity is not made at the time the
permanent and total disability benefit accrues, an election must be made within 90 days
before the member attains normal retirement age as defined under section 353.01, subdivision
37, paragraph (b), or having collected total and permanent disability benefits for 60 months,
whichever is later. If a member receiving disability benefits who has dependent children
dies, subdivision 6a, paragraph (c), applies.

Sec. 3.

Minnesota Statutes 2018, section 353.656, subdivision 1b, is amended to read:


Subd. 1b.

Optional annuity election.

(a) A disabled member of the police and fire fund
may elect to receive the normal disability benefit or an actuarial equivalent optional annuity.
If the election of an actuarial equivalent optional annuity is made before the commencement
of payment of the disability benefit, the optional annuity must begin to accrue on the same
date as the disability benefit covering only the disability benefit recipient would have accrued.

(b) If an election of an optional annuity is not made before the commencement of the
disability benefit, the disability benefit recipient may elect an optional annuity:

(1) within 90 days before normal retirement age;

(2) upon the filing of an application to convert to an early retirement annuity, if electing
to convert to an early retirement annuity before the normal retirement age;new text begin or
new text end

deleted text begin (3) within 90 days before the expiration of the 60-month period for which a disability
benefit is paid, if the disability benefit is payable because the disabled member did not have
at least 20 years of allowable service at normal retirement age; or
deleted text end

deleted text begin (4)deleted text end new text begin(3) new text endupon deleted text beginbeing determineddeleted text endnew text begin a determinationnew text end that the disability benefit recipient
continues to be disabled under subdivision 1, but is no longer totally and permanently
disabled under subdivision 1a.

(c) If a disabled member who has named a joint and survivor optional annuity beneficiary
dies before the disability benefit ceases and is recalculated under subdivision 5a, the
beneficiary eligible to receive the joint and survivor annuity may elect to have the annuity
converted at the times designated in paragraph (b), clause (1)deleted text begin,deleted text end new text beginor new text end(2), deleted text beginor (3),deleted text end whichever
allows for the earliest payment of a higher joint and survivor annuity option resulting from
recalculation under subdivision 5a, paragraph (e).

(d) A disabled member may name a person other than the spouse as beneficiary of a
joint and survivor annuity only if the spouse of the disabled member permanently waives
surviving spouse coverage on the disability application form prescribed by the executive
director.

(e) If the spouse of the member permanently waives survivor coverage, the dependent
child or children, if any, continue to be eligible for dependent child benefits under section
353.657, subdivision 3, and the designated optional annuity beneficiary may draw the
monthly benefit.

(f) Any optional annuity under this subdivision, plus dependent child benefits, if
applicable, are subject to the maximum and minimum family benefit amounts specified in
section 353.657, subdivision 3a.

Sec. 4.

Minnesota Statutes 2018, section 353.656, subdivision 3, is amended to read:


Subd. 3.

Regular disability benefit.

(a) A member of the police and fire plandeleted text begin, other
than
deleted text end new text beginwho (1) is not new text enda firefighter covered by section 353.6511, or a police officer covered
by section 353.6512, deleted text beginwho qualifies fordeleted text end new text begin(2) is under age 55, (3) has at least one year of
allowable service, (4) has a condition that meets the definition of
new text enda regular disability deleted text beginbenefitdeleted text end
as defined in section 353.01, subdivision 46,new text begin and (5) has filed a valid applicationnew text end is entitled
to receive a disability benefitdeleted text begin, after filing a valid application,deleted text end in an amount equal to 45
percent of the average salary as defined in section 353.01, subdivision 17a.

(b) deleted text beginTo be eligible for a benefit under paragraph (a), thedeleted text endnew text begin Anew text end member deleted text beginmust have at least
one year of allowable service credit and have:
deleted text end new text beginof the police and fire plan who new text end(1) deleted text beginnot met
the requirements for a retirement annuity under section 353.651, subdivision 1, or
deleted text endnew text begin is not a
firefighter covered by section 353.6511, or a police officer covered by section 353.6512,
new text end (2) deleted text beginmet the requirements under that subdivision, but does not have at leastdeleted text end new text beginis age 55 or older,
(3) has at least one year of allowable service credit, (4) has less than
new text end15 years of allowable
service creditnew text begin, (5) has a condition that meets the definition of a regular disability as defined
in section 353.01, subdivision 46, and (6) has filed a valid application under section 353.031,
is totally vested in and entitled to a retirement annuity under section 353.651, subdivision
3
new text end.

deleted text begin (c) If paragraph (b), clause (2), applies, the disability benefit must be paid for a period
of 60 months from the disability benefit accrual date and, at the end of that period, is subject
to provisions of subdivision 5a.
deleted text end

new text begin (c) A member of the police and fire plan who (1) is age 55 or older, and (2) has more
than 15 years of service is not eligible for a benefit under this subdivision.
new text end

(d) For a member who is employed as a full-time firefighter by the Department of Military
Affairs of the state of Minnesota, allowable service as a full-time state Military Affairs
Department firefighter credited by the Minnesota State Retirement System may be used in
meeting the minimum allowable service requirement of this subdivision.

Sec. 5.

Minnesota Statutes 2018, section 353.656, subdivision 3a, is amended to read:


Subd. 3a.

Total and permanent regular disability; computation of benefits.

(a) A
member of the police and fire plandeleted text begin, other thandeleted text end new text beginwho (1) is not new text enda firefighter covered by section
353.6511, or a police officer covered by section 353.6512, deleted text beginwhose disablingdeleted text end new text begin(2) has a
new text end condition deleted text beginis determined to bedeleted text end new text beginthat meets the definition of new text enda regular disability under section
353.01, subdivision 46, new text beginand new text endthat is also a deleted text beginpermanent anddeleted text end total new text beginand permanent new text enddisability as
defined in section 353.01, subdivision 19, new text beginand (3) has filed a valid application under section
353.031,
new text endis entitled to receive, for life, a disability benefit in an amount equal to 45 percent
of the average salary as defined in section 353.01, subdivision 17a, plus an additional 3.0
percent of that average salary for each year of service in excess of 15 years.

(b) A disability benefit payable under paragraph (a) is subject to eligibility review under
section 353.33, subdivision 6, but the review may be waived if the executive director receives
a written statement from the association's medical advisor that no improvement can be
expected in the member's disabling condition that was the basis for payment of the benefit
under paragraph (a). A member receiving a disability benefit under this subdivision who is
found to no longer be permanently and totally disabled as defined under section 353.01,
subdivision 19
, but continues to meet the definition for receipt of a regular disability under
section 353.01, subdivision 46, is subject to subdivision 3 upon written notice from the
association's medical advisor that the person is no longer considered permanently and totally
disabled.

(c) A member approved for disability benefits under this subdivision may elect to receive
a normal disability benefit or an actuarial equivalent optional annuity. If the election of an
actuarial equivalent optional annuity is not made at the time the total and permanent disability
benefit accrues, an election must be made within 90 days before the member attains normal
retirement age as defined in section 353.01, subdivision 37, paragraph (b), or having collected
disability benefits for 60 months, whichever is later. No surviving spouse benefits are payable
if the member dies during the period in which a normal total and permanent disability benefit
is being paid. If a member receiving disability benefits who has dependent children dies,
subdivision 6a, paragraph (c), applies.

Sec. 6.

Minnesota Statutes 2018, section 353.656, subdivision 5a, is amended to read:


Subd. 5a.

Cessation of disability benefit.

(a) The association shall cease the payment
of any disability benefit the first of the month following the reinstatement of a member to
full time or less than full-time service in a position covered by the police and fire fund.

(b) A disability benefit paid to a disabled member of the police and fire plan, that was
granted under laws in effect after June 30, 2007, terminatesnew text begin:
new text end

new text begin (1)new text end at the end of the month in which the memberdeleted text begin: (1)deleted text end reaches normal retirement age;new text begin or
new text end

deleted text begin (2) if the disability benefit is payable for a 60-month period as determined under
subdivisions 1 and 3, as applicable, the first of the month following the expiration of the
60-month period; or
deleted text end

deleted text begin (3)deleted text end new text begin(2) new text endif the disabled member so chooses, new text beginat new text endthe end of the month in which the member
has elected to convert to an early retirement annuity under section 353.651, subdivision 4.

(c) If the police and fire plan member continues to be disabled when the disability benefit
terminates under this subdivision, the member is deemed to be retired. The individual is
entitled to receive a normal retirement annuity or an early retirement annuity under section
353.651, whichever is applicable, as further specified in paragraph (d) or (e). If the individual
did not previously elect an optional annuity under subdivision 1b, paragraph (a), the
individual may elect an optional annuity under subdivision 1b, paragraph (b).

(d) A member of the police and fire plan who is receiving a disability benefit under this
section may, upon application, elect to receive an early retirement annuity under section
353.651, subdivision 4, at any time after attaining age 50, but must convert to a retirement
annuity no later than the end of the month in which the disabled member attains normal
retirement age. An early retirement annuity elected under this subdivision must be calculated
on the disabled member's accrued years of service and average salary as defined in section
353.01, subdivision 17a, and when elected, the member is deemed to be retired.

(e) When an individual's disability benefit terminates under paragraph (b), clause (1) or
deleted text begin (2),deleted text end and is recalculated as a retirement annuity, the annuity must be based on clause (1) or
(2), whichever provides the greater amount:

(1) the benefit amount at the time of reclassification, including all prior adjustments
provided under Minnesota Statutes 2008, section 11A.18, through January 1, 2009, and
thereafter as provided in section 356.415; or

(2) a benefit amount computed on the member's actual years of accrued allowable service
credit and the law in effect at the time the disability benefit first accrued, plus any increases
that would have applied since that date under Minnesota Statutes 2008, section 11A.18,
through January 1, 2009, and thereafter as provided in section 356.415.

Sec. 7.

Minnesota Statutes 2018, section 353.656, is amended by adding a subdivision to
read:


new text begin Subd. 5b. new text end

new text begin Certain disability benefits treated as retirement annuities. new text end

new text begin An annuity
payable under subdivision 1, paragraph (b), or 3, paragraph (b), is a disability benefit only
for the purpose of determining eligibility. For all other purposes, the annuity is a retirement
annuity under section 353.651.
new text end

Sec. 8. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 7 are effective July 1, 2020, and apply to disability applications received
by the executive director on or after July 1, 2020.
new text end