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HF 899

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/08/2021 02:17pm

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

Bill Text Versions

Engrossments
Introduction Posted on 02/08/2021

Current Version - as introduced

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A bill for an act
relating to retirement; Public Employees Retirement Association; privatized medical
facilities; amending the calculation of liability for privatizing medical facilities;
amending Minnesota Statutes 2020, sections 353F.02, subdivision 4a; 353F.025,
subdivisions 1, 2, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2020, section 353F.02, subdivision 4a, is amended to read:


Subd. 4a.

Medical facility.

"Medical facility" means a new text beginhospital, health care clinic, nursing
home, boarding care home, residential hospice, supervised living facility, freestanding
outpatient surgical center, or other
new text endfacility new text beginor institution new text endthat has the primary purpose of
providing medical care and that satisfies the definition of governmental subdivision under
section 353.01, subdivision 6.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 2.

Minnesota Statutes 2020, section 353F.025, subdivision 1, is amended to read:


Subdivision 1.

Eligibility determinationnew text begin and calculation of withdrawal liabilitynew text end.

(a)
new text begin This section applies to any medical facility that privatizes.
new text end

new text begin (b) Before the effective date of privatization, new text endthe chief clerical officer of deleted text beginadeleted text end new text beginthe
new text end governmental subdivision deleted text beginmaydeleted text end new text beginwith control or ownership of a privatizing medical facility
must
new text endsubmit new text beginto the executive director new text enda resolution from the governing body deleted text beginto the executive
director of the Public Employees Retirement Association which supports providing coverage
under this chapter for employees of that governmental subdivision who are privatized,
deleted text end new text beginof
the governmental subdivision. The resolution must notify the executive director that the
medical facility may privatize
new text endand deleted text beginwhich statesdeleted text end new text beginmust state new text endthat the governing body will deleted text beginpaydeleted text end
new text begin reimburse the Public Employees Retirement Association new text endfor deleted text beginactuarial calculationsdeleted text endnew text begin the
calculation of withdrawal liability
new text end, as further specified in paragraph deleted text begin(c)deleted text endnew text begin (d)new text end.

deleted text begin (b)deleted text end new text begin(c) new text endThe governing body must also provide a copy of any applicable purchase or lease
agreement and any other information requested by the executive director to allow the
executive director to deleted text beginverify that under the proposed employer change,deleted text end new text begindetermine whether
new text end the new employer deleted text begindoes not qualifydeleted text endnew text begin, under the proposed privatization, qualifiesnew text end as a
governmental subdivision under section 353.01, subdivision 6deleted text begin, making the employees
ineligible for continued coverage as active members of the general employees retirement
plan of the Public Employees Retirement Association
deleted text end.

deleted text begin (c) Followingdeleted text end new text begin(d) Within 30 days after new text endreceipt of a resolution deleted text beginand a determination bydeleted text end
new text begin under paragraph (b), if new text endthe executive director new text begindetermines new text endthat the new text beginproposed new text endnew employer
is not a governmental subdivision, new text beginthen new text endthe executive director shall direct the consulting
actuary retained under section 356.214 to deleted text begindetermine whether the general employees retirement
plan of the Public Employees Retirement Association, if coverage under this chapter is
provided, is expected to receive a net gain or a net loss if privatization occurs. A net gain
is expected if the actuarial liability of the special benefit coverage provided under this
chapter, if extended to the applicable employees under the privatization, is less than the
actuarial gain otherwise to accrue to the plan. A net loss is expected if the actuarial accrued
liability of the special benefit coverage provided under this chapter, if extended to the
applicable employees under the privatization, is more than the actuarial gain otherwise to
accrue to the plan.
deleted text end new text begincalculate the withdrawal liability incurred by the privatizing medical
facility. The withdrawal liability is equal to the present value of accrued benefits attributable
to the privatizing active employees minus the product of: (1) the present value of accrued
benefits attributable to the privatizing active employees; and (2) the plan's funding ratio. If
the withdrawal liability is a negative number, the withdrawal liability is zero.
new text endThe deleted text begindate of
the actuarial calculations used to make this determination
deleted text end new text beginwithdrawal liability new text endmust be deleted text beginwithin
one year of
deleted text end new text begincalculated using the most recently completed actuarial valuation before new text endthe
effective date of privatization.new text begin The governmental subdivision must reimburse the Public
Employees Retirement Association for the actual cost of calculating the withdrawal liability.
new text end

new text begin (e) The present value of accrued benefits is determined using the actuarial assumptions
under section 356.215, subdivision 8, for the general employees retirement plan of the Public
Employees Retirement Association. The present value of accrued benefits does not include
projected compensation or projected service.
new text end

new text begin (f) In this section, the funding ratio means the actuarial value of assets of the general
employees retirement fund, divided by the present value of accrued benefits for the fund,
expressed as a percentage.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 3.

Minnesota Statutes 2020, section 353F.025, is amended by adding a subdivision
to read:


new text begin Subd. 1a. new text end

new text begin Payment of withdrawal liability. new text end

new text begin No later than six months after the effective
date of privatization, the privatized former public employer must pay the withdrawal liability
calculated under subdivision 1, paragraph (d), to the general employees retirement fund,
unless the privatized former public employer elects a payment plan. In lieu of a single
withdrawal liability payment, the privatized former public employer may elect to pay the
withdrawal liability in equal payments made annually and for a term of ten years. The
determination of the payments must reflect interest compounded annually at the applicable
rate or rates specified in section 356.59, subdivision 3. The obligation to pay under this
subdivision is binding upon the privatized public employer and its successors and assignees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 4.

Minnesota Statutes 2020, section 353F.025, subdivision 2, is amended to read:


Subd. 2.

Reporting privatizations.

(a) deleted text beginIf the actuarial calculations under subdivision
1, paragraph (c), indicate privatization can be approved because a net gain to the general
employees retirement plan of
deleted text end The Public Employees Retirement Association deleted text beginis expected,
or if paragraph (b) applies, the executive director shall, following acceptance of the actuarial
calculations by
deleted text end new text beginmust maintain a record of the consulting actuary's calculation of withdrawal
liability under subdivision 1, paragraph (d), and any associated report. The calculation and
any associated report must be made available to the public and provided to (1)
new text endthe
new text begin association's new text endboard of trustees, deleted text beginforward notice and supporting documentation, including a
copy of the actuary's report and findings, to
deleted text end new text begin(2) new text endthe chair and the executive director of the
Legislative Commission on Pensions and Retirementnew text begin,new text end and new text begin(3) new text endthe chairs and deleted text beginthedeleted text end ranking
minority members of the new text beginlegislative new text endcommittees with jurisdiction over governmental
operations deleted text beginin the house of representatives and senatedeleted text end.

deleted text begin (b) If the calculations under subdivision 1, paragraph (c), indicate a net loss, the executive
director shall recommend to the board of trustees that the privatization be approved if the
chief clerical officer of the applicable governmental subdivision submits a resolution from
the governing body specifying that a lump sum payment will be made to the Public
Employees Retirement Association equal to the net loss, plus interest. The interest must be
computed using the applicable ultimate investment return assumption under section 356.215,
subdivision 8
, expressed as a monthly rate, from the date of the actuarial valuation from
which the actuarial accrued liability data was used to determine the net loss in the actuarial
study under subdivision 1, to the date of payment, with annual compounding. Payment must
be made on or after the effective date of privatization.
deleted text end

deleted text begin (c)deleted text end new text begin(b) new text endThe Public Employees Retirement Association must maintain a list that includes
the names of all privatized former public employers in the association's comprehensive
annual financial report and on the association's website.new text begin For privatized former public
employers with an effective date of privatization after July 1, 2023, the list must also include
the original withdrawal liability amount and the remaining amount of withdrawal liability
due to be paid, if any, for each privatized former public employer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end