Minnesota Legislature
SF 1864
as introduced - 90th Legislature (2017 - 2018) Posted on 03/08/2017 08:57am
Current Version - as introduced
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A bill for an act
relating to retirement; statewide and major local public retirement plans; modifying
provisions for purchasing salary or service credit for periods during which the
member receives workers' compensation; amending Minnesota Statutes 2016,
sections 352.017; 353.0162; 354.72; 354A.096; repealing Minnesota Statutes 2016,
section 352.01, subdivision 13a.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2016, section 352.017, is amended to read:
352.017 AUTHORIZED LEAVE OF ABSENCE SERVICE CREDIT PURCHASE
PROCEDURE.
Subdivision 1.
new text begin Right to purchase allowable service; new text end application.
deleted text begin Except fordeleted text end new text begin (a) An
employee shall receive credit for allowable service of up to one year for any period of
authorized leave of absence without pay or for any period during which the employee is
receiving workers' compensation payments related to the employee's service to the employing
unit, if the employee or the employee's employer makes the payments required by this
section to the executive director.
new text end
new text begin (b) This section does not apply to new text end leaves or breaks in service covered by section 352.27deleted text begin ,deleted text end new text begin .
new text end
new text begin (c)new text end This section applies to all plans deleted text begin specified indeleted text end new text begin covered by new text end this chapter deleted text begin for any period
of authorized leave of absence without pay that does not exceed one year and for which the
employee obtains credit for allowable service by making payment as specified in this section
to the applicable funddeleted text end .
Subd. 2.
Purchase procedurenew text begin for a leave of absence without paynew text end .
(a) An employee
deleted text begin covered bydeleted text end new text begin in new text end a plan deleted text begin specified indeleted text end new text begin covered by new text end this chapter may purchase credit for allowable
service in that plan for deleted text begin a period specified in subdivision 1deleted text end new text begin an authorized leave of absence
without pay new text end if the employee makes deleted text begin adeleted text end new text begin the new text end payment as specified in paragraph (b) or (c),
whichever applies. The employing unit, at its option, may pay the employer portion of the
amount specified in paragraph (b) on behalf of its deleted text begin employeesdeleted text end new text begin employeenew text end .
(b) deleted text begin If payment is received by the executive director within one year from the date the
employee returned to work following the authorized leave,deleted text end The payment amount is equal
to the employee and employer contribution rates specified in law for the applicable plan at
the end of the leave period multiplied by the employee's hourly rate of salary on the date
of return from the leave deleted text begin of absencedeleted text end and by the days and months of the leave deleted text begin of absencedeleted text end for
which the employee is eligible for allowable service credit. The payment must include
compound interest at the monthly rate of 0.71 percent until June 30, 2015, and 0.667 percent
per month thereafter from the last day of the leave period until the last day of the month in
which payment is received. deleted text begin Ifdeleted text end Payment deleted text begin isdeleted text end new text begin must be new text end received by the executive director deleted text begin afterdeleted text end
new text begin within new text end one yeardeleted text begin , the payment amount is the amount determined under section 356.551.
Payment under this paragraph must be madedeleted text end new text begin from the date the employee returns to work
following the leave or, if earlier, new text end before the date of termination from public employment
covered under this chapter.
(c) If the employee terminates employment covered by this chapter during deleted text begin the leavedeleted text end or
following the leave rather than returning to covered employment, new text begin the payment amount is
equal to the employee and employer contribution rates specified in law for the applicable
plan on the day prior to the termination date, multiplied by the employee's hourly rate of
salary on that date and by the days and months of the leave prior to termination. new text end Payment
must be received by the executive director within 30 days after the termination date. deleted text begin The
payment amount is equal to the employee and employer contribution rates specified in law
for the applicable plan on the day prior to the termination date, multiplied by the employee's
hourly rate of salary on that date and by the days and months of the leave of absence prior
to termination.
deleted text end
new text begin Subd. 3. new text end
new text begin
Purchase procedure for period of workers' compensation if employee
returns to service.
new text end
new text begin
(a) An employee in a plan covered by this chapter may purchase credit
for allowable service in that plan for a leave of absence during which the employee is
receiving temporary workers' compensation payments and a reduced salary or no salary
from the employer, if the employee makes the employee contribution payment, with interest,
as specified in paragraph (b). If the employee makes the employee contribution payment,
the employing unit shall pay the employer contribution amount, with interest, as specified
in paragraph (c), on behalf of its employee.
new text end
new text begin
(b) The employee shall pay an amount equal to the employee contribution rate specified
in law for the applicable plan at the end of the leave period multiplied by the difference
between salary received, if any, and the salary the employee would normally receive if not
on leave during the period. The payment must include compound interest at the monthly
rate of 0.71 percent until June 30, 2015, and 0.667 percent per month thereafter from the
last day of the leave period until the last day of the month in which payment is received.
new text end
new text begin
(c) The employer shall pay an amount equal to the employer contribution rate specified
in law for the applicable plan at the end of the leave period multiplied by the difference
between salary received, if any, and the salary the employee would normally receive if not
on leave during the period. The payment must include compound interest at the monthly
rate of 0.71 percent until June 30, 2015, and 0.667 percent per month thereafter from the
last day of the leave period until the last day of the month in which payment is received.
new text end
new text begin
(d) Payment must be received by the executive director within one year from the date
the employee returns to work following the leave or, if earlier, before the date of termination
from public employment covered under this chapter.
new text end
new text begin Subd. 4. new text end
new text begin
Purchase procedure for period of workers' compensation if employee does
not return to service.
new text end
new text begin
(a) This subdivision applies to any employee who is eligible to
purchase credit for allowable service under subdivision 3 but who terminates employment
during or following the leave of absence during which the employee is receiving temporary
workers' compensation payments and a reduced salary or no salary from the employer. The
employee may purchase credit for allowable service if the employee makes the employee
contribution payment, with interest, as specified in paragraph (b). If the employee makes
the employee contribution payment, the employing unit shall pay the employer contribution
amount, with interest, as specified in paragraph (c), on behalf of its employee.
new text end
new text begin
(b) The employee shall pay an amount equal to the employee contribution rate specified
in law for the applicable plan on the day prior to the termination date multiplied by the
difference between salary received, if any, and the salary the employee would normally
receive if not on leave during the period.
new text end
new text begin
(c) The employer shall pay an amount equal to the employer contribution rate specified
in law for the applicable plan at the end of the leave period multiplied by the difference
between salary received, if any, and the salary the employee would normally receive if not
on leave during the period.
new text end
new text begin
(d) Payment must be received by the executive director within 30 days after the
employment termination date.
new text end
new text begin Subd. 5. new text end
new text begin Payment after the applicable due date. new text end
new text begin
If the employee wishes to purchase
credit for allowable service after the due date specified in subdivision 2, 3, or 4, as applicable
to the employee and type of leave, the payment amount is the amount determined under
section 356.551.
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
Sec. 2.
Minnesota Statutes 2016, section 353.0162, is amended to read:
353.0162 deleted text begin REDUCED SALARY PERIODSdeleted text end SALARY CREDIT PURCHASEnew text begin FOR
PERIODS OF REDUCED SALARYnew text end .
new text begin Subdivision 1. new text end
new text begin Salary credit purchase. new text end
deleted text begin (a)deleted text end A member deleted text begin may purchase additionaldeleted text end new text begin shall
receive new text end salary credit for deleted text begin adeleted text end new text begin an applicable new text end period deleted text begin specifieddeleted text end new text begin , as definednew text end in deleted text begin this sectiondeleted text end new text begin subdivision
2, if the member or the member's employer, as specified in subdivisions 6 and 7, makes the
payments under subdivision 4 to the executive directornew text end .
new text begin Subd. 2. new text end
new text begin Applicable period. new text end
deleted text begin (b)deleted text end new text begin (a) new text end The applicable period is a period during which the
member is receiving deleted text begin adeleted text end reduced new text begin or no new text end salary from the employer while the member is:
(1) receiving deleted text begin temporarydeleted text end workers' compensation payments related to the member's service
to the public employer;
(2) on an authorized leave of absence; or
(3) on an authorized partial paid leave of absence as a result of a budgetary or salary
savings program offered or mandated by a governmental subdivisionnew text begin , if certified to the
executive director by the governmental subdivisionnew text end .
new text begin
(b) The applicable period is limited to the period during which the person receives
workers' compensation or for those business years in which the governmental subdivision
offers or mandates a budget or salary savings program, as certified to the executive director
by a resolution of the governing body of the governmental subdivision. For an authorized
leave of absence, the period for which salary credit may be purchased may not exceed 12
months of authorized leave.
new text end
new text begin Subd. 3. new text end
new text begin Differential salary amount. new text end
deleted text begin (c)deleted text end The differential salary amount is the difference
between the average monthly salary received by the member during the new text begin applicable new text end period
deleted text begin of reduced salary under this sectiondeleted text end and the deleted text begin average monthlydeleted text end salary of the member, excluding
overtime, on which contributions to the applicable plan deleted text begin weredeleted text end new text begin would have been new text end made during
the period deleted text begin of the last six months of covered employment occurring immediately before the
period of reduced salary, applied todeleted text end new text begin , based onnew text end the member's normal employment period,
measured in hours or otherwise, as applicablenew text begin , and rate of paynew text end .
new text begin Subd. 4. new text end
new text begin Payments. new text end
deleted text begin (d)deleted text end To receive deleted text begin eligibledeleted text end salary credit, the member new text begin or employer, as
specified in subdivisions 6 and 7, new text end shall pay deleted text begin an amountdeleted text end new text begin to the executive director of the
applicable plan the following amounts:
new text end
new text begin (1) an employee contribution payment new text end equal todeleted text begin :deleted text end deleted text begin (1)deleted text end the applicable employee contribution
rate under section 353.27, subdivision 2; 353.65, subdivision 2; or 353E.03, subdivision 1,
as applicable, multiplied by the differential salary amountnew text begin , plus interest as described in
subdivision 5new text end ;
(2) deleted text begin plusdeleted text end an employer deleted text begin equivalentdeleted text end new text begin contributionnew text end payment equal to the applicable employer
contribution rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03,
subdivision 2, as applicable, multiplied by the differential salary amountnew text begin , plus interest as
described in subdivision 5new text end ;new text begin and
new text end
(3) deleted text begin plus,deleted text end if applicable, an deleted text begin equivalentdeleted text end new text begin additionalnew text end employer deleted text begin additional amountdeleted text end new text begin contribution
payment new text end equal to the additional employer contribution rate in section 353.27, subdivision
3a, multiplied by the differential salary amountnew text begin , plus interest as described in subdivision 5new text end .
deleted text begin
(e) The employer, by appropriate action of its governing body and documented in its
official records, may pay the employer equivalent contributions and, as applicable, the
equivalent employer additional contributions on behalf of the member.
deleted text end
new text begin Subd. 5. new text end
new text begin Interest. new text end
deleted text begin (f) Payment under this section must includedeleted text end Interest new text begin shall be paid new text end on
new text begin each of new text end the deleted text begin contribution amount ordeleted text end amountsdeleted text begin , whichever applies,deleted text end new text begin required under subdivision
4new text end at an 8.5 percent annual rate until June 30, 2015, and at an eight percent annual rate
thereafter, prorated for applicable months from the date on which the period of reduced
salary specified under this section terminates to the date on which the payment or payments
are received by the executive director.
new text begin Subd. 6. new text end
new text begin
Purchase by member and employer for period of workers' compensation.
new text end
new text begin
To receive salary credit for an applicable period described in subdivision 2, paragraph (a),
clause (1), the member shall pay the employee contribution payment described in subdivision
4, clause (1). If the employee pays the employee contribution payment, the employer, by
appropriate action of its governing body, if necessary, and documented in its official records,
shall pay, on behalf of the member, the employer contribution payment described in
subdivision 4, clause (2), and, if applicable, the additional employer contribution payment
described in subdivision 4, clause (3).
new text end
new text begin Subd. 7. new text end
new text begin Purchase by member for period of leave of absence. new text end
new text begin
To receive salary credit
for an applicable period described in subdivision 2, paragraph (a), clause (2) or (3), the
member shall pay the employee contribution payment, the employer contribution payment,
and, if applicable, the additional employer contribution payment described in subdivision
4. The employer, by appropriate action of its governing body, if necessary, and documented
in its official records, may pay, on behalf of the member, the employer contribution payment
described in subdivision 4, clause (2), and, if applicable, the additional employer contribution
payment described in subdivision 4, clause (3).
new text end
new text begin Subd. 8. new text end
new text begin Timing. new text end
Payment under this section must be completed deleted text begin withindeleted text end new text begin bynew text end the deleted text begin earlierdeleted text end new text begin
earliestnew text end ofnew text begin :
new text end
new text begin (1)new text end 30 days deleted text begin fromdeleted text end new text begin after new text end termination of public service by the employee under section
353.01, subdivision 11adeleted text begin , ordeleted text end new text begin ;
new text end
new text begin (2)new text end one year after the deleted text begin terminationdeleted text end new text begin last daynew text end of the new text begin applicable new text end period deleted text begin specified in paragraph
(b), as further restricted under this section.deleted text end new text begin ; or
new text end
deleted text begin
(g) The period for which additional allowable salary credit may be purchased is limited
to the period during which the person receives temporary workers' compensation payments
or for those business years in which the governmental subdivision offers or mandates a
budget or salary savings program, as certified to the executive director by a resolution of
deleted text end
deleted text begin
the governing body of the governmental subdivision. For an authorized leave of absence,
the period for which allowable salary credit may be purchased may not exceed 12 months
of authorized leave.
deleted text end
new text begin
(3) 30 days after the commencement of a disability benefit.
new text end
new text begin Subd. 9. new text end
new text begin Subsequent periods. new text end
deleted text begin (h)deleted text end new text begin A member shall be permitted new text end to purchase salary credit
for a subsequent new text begin applicable new text end period deleted text begin of temporary workers' compensation benefits or subsequent
authorized medical leave of absence,deleted text end new text begin only ifnew text end the member deleted text begin must returndeleted text end new text begin has returned new text end to public
service and deleted text begin renderdeleted text end new text begin renderednew text end a minimum of three months of allowable service.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 3.
Minnesota Statutes 2016, section 354.72, is amended to read:
354.72 AUTHORIZED LEAVE OF ABSENCE AND STRIKE PERIOD SERVICE
CREDIT PURCHASE PROCEDURE.
Subdivision 1.
Application.
This section applies to any strike period under section
354.05, subdivision 13, clause (6), and to any period of authorized leave of absence deleted text begin without
paydeleted text end under sections 354.093, 354.094, 354.095, and 354.096 for which the teacher obtains
credit for allowable service by making payment as specified in this section to the Teachers
Retirement Association fund. Each year of an extended leave of absence under section
354.094 is considered to be a separate leave for purposes of this section.
Subd. 2.
Purchase procedure.
(a) A teacher may purchase credit for allowable and
formula service in the plan for a period specified in subdivision 1 if the teacher makes a
payment as specified in paragraph (b), (c), or (d), whichever applies. new text begin For any period of leave
during which the teacher is receiving workers' compensation, the employing unit shall pay
the employer portion of the payment, including any amortization contributions and interest
on the employer contributions, on behalf of its employee if the teacher pays the employee
portion and interest on that portion. For any other period of leave, new text end the employing unit, at
its option, may pay the employer portion of the amount on behalf of its employees.
(b) If payment is received by the executive director by June 30 of the fiscal year of the
strike period or by December 31 of the fiscal year following an authorized leave included
under section 354.093, 354.095, or 354.096, payment must equal the total employee and
employer contribution rates, including amortization contribution rates if applicable, multiplied
by the member's average monthly salary rate on the date the leave or strike period
commenced, multiplied by the months and portions of a month of the leave or strike period
for which the teacher seeks allowable service credit. This paragraph also applies to an
extended leave under section 354.094, except that payment must be received by June 30 of
the year of the leave, and the salary used in the computation is the salary received during
the year immediately preceding the initial year of the leave.
(c) If payment is made after June 30 and before the following June 30 for a strike period,
or after December 31 of the fiscal year following a leave of absence under section 354.093,
354.095, or 354.096, and before July 1, the payment must include the amount determined
in paragraph (b) plus compound interest at a monthly rate of 0.71 percent from June 30 for
a strike period, or from December 31 for a leave under section 354.093, 354.095, or 354.096,
until the last day of the month in which payment is received. If payment is made on or after
July 1 and before the following July 1 for an extended leave of absence under section
354.094, the payment must include the amount determined in paragraph (b) plus compound
interest at a monthly rate of 0.71 percent from June 30 until the last day of the month in
which payment is received.
(d) If payment is received by the executive director after the applicable last permitted
date under paragraph (c), the payment amount is the amount determined under section
356.551. Notwithstanding payment deadlines specified in section 356.551, payment under
this section may be made anytime before the effective date of retirement.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 4.
Minnesota Statutes 2016, section 354A.096, is amended to read:
354A.096 MEDICAL LEAVE.
new text begin (a) new text end Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
Association who is on an authorized medical leave of absence and subsequently returns to
teaching service is entitled to receive allowable service credit, not to exceed one year, for
the period of leave, upon making the prescribed payment to the fund. This payment must
include the required employee and employer contributions at the rates specified in section
354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly salary
rate on the date the leave of absence commenced plus annual interest at the rate of 8.5
percent until June 30, 2015, and eight percent thereafter per year from the end of the fiscal
year during which the leave terminates to the end of the month during which payment is
made.
new text begin (b) For any period of leave during which the teacher is receiving workers' compensation,
the employing unit shall pay the employer portion of the payment, including interest on the
employer contributions, on behalf of its employee if the teacher pays the employee portion
and interest on that portion. For any other period of leave,new text end the member must pay the total
amount required unless the employing unit, at its option, pays the employer contributions.
The total amount required must be paid by the end of the fiscal year following the fiscal
year in which the leave of absence terminated or before the member retires, whichever is
earlier. Payment must be accompanied by a copy of the resolution or action of the employing
authority granting the leave and the employing authority, upon granting the leave, must
certify the leave to the association in a manner specified by the executive director. A member
may not receive more than one year of allowable service credit during any fiscal year by
making payment under this section.
new text begin (c)new text end A member may not receive disability benefits under section 354A.36 and receive
allowable service credit under this section for the same period of time.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 5. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2016, section 352.01, subdivision 13a,
new text end
new text begin
is repealed.
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
APPENDIX
Repealed Minnesota Statutes: 17-3876
352.01 DEFINITIONS.
Subd. 13a.
Reduced salary during period of workers' compensation.
An employee on leave of absence receiving temporary workers' compensation payments and a reduced salary or no salary from the employer who is entitled to allowable service credit for the period of absence, may make payment to the fund for the difference between salary received, if any, and the salary the employee would normally receive if not on leave of absence during the period. The employee shall pay an amount equal to the employee and employer contribution rate under section 352.04, subdivisions 2 and 3, on the differential salary amount for the period of the leave of absence.
The employing department, at its option, may pay the employer amount on behalf of its employees. Payment made under this subdivision must include interest at the rate of 8.5 percent until June 30, 2015, and eight percent thereafter per year, and must be completed within one year of the return from leave of absence.