HF 342

as introduced - 88th Legislature (2013 - 2014) Posted on 02/04/2013 03:04pm

A bill for an act
relating to retirement; Public Employees Retirement Association; clarifying
coverage of student employees and extending duration of excluded work-study
positions; revising military service credit purchase provision for consistency with
federal code; clarifying average salary for benefit purposes; clarifying MERF
division benefit eligibility; adding Lake County Sunrise Home to privatization
chapter; making other administrative changes; amending Minnesota Statutes
2012, sections 353.01, subdivisions 2b, 16, 17a, 29; 353.27, subdivision 7;
353.34, subdivisions 1, 2; 353.50, subdivisions 3, 6; 353.657, subdivisions 2, 2a,
3; 353F.02, subdivision 4; 356.635, subdivision 1.

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

Section 1.

Minnesota Statutes 2012, section 353.01, subdivision 2b, is amended to read:

Subd. 2b.

Excluded employees.

(a) The following public employees are not eligible
to participate as members of the association with retirement coverage by the general
employees retirement plan, the local government correctional employees retirement plan
under chapter 353E, or the public employees police and fire retirement plan:

(1) persons whose salary from one governmental subdivision never exceeds $425 in
a month;

(2) public officers who are elected to a governing body, city mayors, or persons who
are appointed to fill a vacancy in an elective office of a governing body, whose term of office
commences on or after July 1, 2002, for the service to be rendered in that elective position;

(3) election officers or election judges;

(4) patient and inmate personnel who perform services for a governmental
subdivision;

(5) except as otherwise specified in subdivision 12a, employees who are hired for
a temporary position as defined under subdivision 12a, and employees who resign from
a nontemporary position and accept a temporary position within 30 days in the same
governmental subdivision;

(6) employees who are employed by reason of work emergency caused by fire,
flood, storm, or similar disaster;

(7) employees who by virtue of their employment in one governmental subdivision
are required by law to be a member of and to contribute to any of the plans or funds
administered by the Minnesota State Retirement System, the Teachers Retirement
Association, the Duluth Teachers Retirement Fund Association, the St. Paul Teachers
Retirement Fund Association, or any police or firefighters relief association governed by
section 69.77 that has not consolidated with the Public Employees Retirement Association,
or any local police or firefighters consolidation account who have not elected the type of
benefit coverage provided by the public employees police and fire fund under sections
353A.01 to 353A.10, or any persons covered by section 353.665, subdivision 4, 5, or 6,
who have not elected public employees police and fire plan benefit coverage. This clause
must not be construed to prevent a person from being a member of and contributing to
the Public Employees Retirement Association and also belonging to and contributing to
another public pension plan or fund for other service occurring during the same period
of time. A person who meets the definition of "public employee" in subdivision 2 by
virtue of other service occurring during the same period of time becomes a member of the
association unless contributions are made to another public retirement fund on the salary
based on the other service or to the Teachers Retirement Association by a teacher as
defined in section 354.05, subdivision 2;

(8) persons who are members of a religious order and are excluded from coverage
under the federal Old Age, Survivors, Disability, and Health Insurance Program for the
performance of service as specified in United States Code, title 42, section 410(a)(8)(A),
as amended through January 1, 1987, if no irrevocable election of coverage has been made
under section 3121(r) of the Internal Revenue Code of 1954, as amended;

(9) employees of a governmental subdivision who have not reached the age of
23 and are enrolled on a full-time basis to attend or are attending classes on a full-time
basis at an accredited school, college, or university in an undergraduate, graduate, or
professional-technical program, or a public or charter high school;

(10) resident physicians, medical interns, and pharmacist residents and pharmacist
interns who are serving in a degree or residency program in public hospitals or clinics;

(11) students who are serving new text begin for up to five years new text end in an internship or residency program
sponsored by new text begin a governmental subdivision, including new text end an accredited educational institution;

(12) persons who hold a part-time adult supplementary technical college license who
render part-time teaching service in a technical college;

(13) except for employees of Hennepin County or Hennepin Healthcare System, Inc.,
foreign citizens who are employed by a governmental subdivision under a work permit, or
an H-1b visa initially issued or extended for a combined period less than three years of
employment. Upon extension of the employment beyond the three-year period, the foreign
citizens must be reported for membership beginning the first of the month thereafter
provided the monthly earnings threshold as provided under subdivision 2a is met;

(14) public hospital employees who elected not to participate as members of the
association before 1972 and who did not elect to participate from July 1, 1988, to October
1, 1988;

(15) except as provided in section 353.86, volunteer ambulance service personnel, as
defined in subdivision 35, but persons who serve as volunteer ambulance service personnel
may still qualify as public employees under subdivision 2 and may be members of the
Public Employees Retirement Association and participants in the general employees
retirement plan or the public employees police and fire plan, whichever applies, on the
basis of compensation received from public employment service other than service as
volunteer ambulance service personnel;

(16) except as provided in section 353.87, volunteer firefighters, as defined in
subdivision 36, engaging in activities undertaken as part of volunteer firefighter duties,
but a person who is a volunteer firefighter may still qualify as a public employee under
subdivision 2 and may be a member of the Public Employees Retirement Association and
a participant in the general employees retirement plan or the public employees police
and fire plan, whichever applies, on the basis of compensation received from public
employment activities other than those as a volunteer firefighter;

(17) pipefitters and associated trades personnel employed by Independent School
District No. 625, St. Paul, with coverage under a collective bargaining agreement by the
pipefitters local 455 pension plan who were either first employed after May 1, 1997, or,
if first employed before May 2, 1997, elected to be excluded under Laws 1997, chapter
241, article 2, section 12;

(18) electrical workers, plumbers, carpenters, and associated trades personnel who
are employed by Independent School District No. 625, St. Paul, or the city of St. Paul,
who have retirement coverage under a collective bargaining agreement by the Electrical
Workers Local 110 pension plan, the United Association Plumbers Local 34 pension plan,
or the pension plan applicable to Carpenters Local 87 who were either first employed after
May 1, 2000, or, if first employed before May 2, 2000, elected to be excluded under
Laws 2000, chapter 461, article 7, section 5;

(19) bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
painters, allied tradesworkers, and plasterers who are employed by the city of St. Paul
or Independent School District No. 625, St. Paul, with coverage under a collective
bargaining agreement by the Bricklayers and Allied Craftworkers Local 1 pension plan,
the Cement Masons Local 633 pension plan, the Glaziers and Glassworkers Local L-1324
pension plan, the Painters and Allied Trades Local 61 pension plan, or the Twin Cities
Plasterers Local 265 pension plan who were either first employed after May 1, 2001, or if
first employed before May 2, 2001, elected to be excluded under Laws 2001, First Special
Session chapter 10, article 10, section 6;

(20) plumbers who are employed by the Metropolitan Airports Commission, with
coverage under a collective bargaining agreement by the Plumbers Local 34 pension plan,
who either were first employed after May 1, 2001, or if first employed before May 2,
2001, elected to be excluded under Laws 2001, First Special Session chapter 10, article
10, section 6;

(21) employees who are hired after June 30, 2002, to fill seasonal positions under
subdivision 12b which are limited in duration by the employer to 185 consecutive calendar
days or less in each year of employment with the governmental subdivision;

(22) persons who are provided supported employment or work-study positions by a
governmental subdivision and who participate in an employment or industries program
maintained for the benefit of these persons where the governmental subdivision limits
the position's duration new text begin up new text end to deleted text begin three deleted text end new text begin five new text end years deleted text begin or less deleted text end , including persons participating in a
federal or state subsidized on-the-job training, work experience, senior citizen, youth, or
unemployment relief program where the training or work experience is not provided as a
part of, or for, future permanent public employment;

(23) independent contractors and the employees of independent contractors;

(24) reemployed annuitants of the association during the course of that
reemployment; and

(25) persons appointed to serve on a board or commission of a governmental
subdivision or an instrumentality thereof.

(b) Any person performing the duties of a public officer in a position defined in
subdivision 2a, paragraph (a), clause (3), is not an independent contractor and is not an
employee of an independent contractor.

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 2012, section 353.01, subdivision 16, is amended to read:

Subd. 16.

Allowable service; limits and computation.

(a) "Allowable service"
means:

(1) service during years of actual membership in the course of which employee
deductions were withheld from salary and contributions were made at the applicable rates
under section 353.27, 353.65, or 353E.03;

(2) periods of service covered by payments in lieu of salary deductions under
sections 353.27, subdivision 12, and 353.35;

(3) service in years during which the public employee was not a member but for
which the member later elected, while a member, to obtain credit by making payments to
the fund as permitted by any law then in effect;

(4) a period of authorized leave of absence with pay from which deductions for
employee contributions are made, deposited, and credited to the fund;

(5) a period of authorized personal, parental, or medical leave of absence without
pay, including a leave of absence covered under the federal Family Medical Leave Act,
that does not exceed one year, and for which a member obtained service credit for each
month in the leave period by payment under section 353.0161 to the fund made in place of
salary deductions. An employee must return to public service and render a minimum of
three months of allowable service in order to be eligible to make payment under section
353.0161 for a subsequent authorized leave of absence without pay. Upon payment, the
employee must be granted allowable service credit for the purchased period;

(6) a periodic, repetitive leave that is offered to all employees of a governmental
subdivision. The leave program may not exceed 208 hours per annual normal work cycle
as certified to the association by the employer. A participating member obtains service
credit by making employee contributions in an amount or amounts based on the member's
average salary, excluding overtime pay, that would have been paid if the leave had not been
taken. The employer shall pay the employer and additional employer contributions on
behalf of the participating member. The employee and the employer are responsible to pay
interest on their respective shares at the rate of 8.5 percent a year, compounded annually,
from the end of the normal cycle until full payment is made. An employer shall also make
the employer and additional employer contributions, plus 8.5 percent interest, compounded
annually, on behalf of an employee who makes employee contributions but terminates
public service. The employee contributions must be made within one year after the end of
the annual normal working cycle or within 30 days after termination of public service,
whichever is sooner. The executive director shall prescribe the manner and forms to be
used by a governmental subdivision in administering a periodic, repetitive leave. Upon
payment, the member must be granted allowable service credit for the purchased period;

(7) an authorized temporary or seasonal layoff under subdivision 12, limited to three
months allowable service per authorized temporary or seasonal layoff in one calendar year.
An employee who has received the maximum service credit allowed for an authorized
temporary or seasonal layoff must return to public service and must obtain a minimum of
three months of allowable service subsequent to the layoff in order to receive allowable
service for a subsequent authorized temporary or seasonal layoff;

(8) a period during which a member is absent from employment by a governmental
subdivision by reason of service in the uniformed services, as defined in United States
Code, title 38, section 4303(13), if the member returns to public service with the same
governmental subdivision upon discharge from service in the uniformed service within the
time frames required under United States Code, title 38, section 4312(e), provided that
the member did not separate from uniformed service with a dishonorable or bad conduct
discharge or under other than honorable conditions. The service must be credited if the
member pays into the fund equivalent employee contributions based upon the contribution
rate or rates in effect at the time that the uniformed service was performed multiplied
by the full and fractional years being purchased and applied to the annual salary rate.
The annual salary rate is the average annual salary deleted text begin , excluding overtime pay, deleted text end during the
purchase period that the member would have received if the member had continued to
be employed in covered employment rather than to provide uniformed service, or, if
the determination of that rate is not reasonably certain, the annual salary rate is the
member's average salary rate deleted text begin , excluding overtime pay, deleted text end during the 12-month period of
covered employment rendered immediately preceding the period of the uniformed service.
Payment of the member equivalent contributions must be made during a period that begins
with the date on which the individual returns to public employment and that is three times
the length of the military leave period, or within five years of the date of discharge from
the military service, whichever is less. If the determined payment period is less than
one year, the contributions required under this clause to receive service credit may be
made within one year of the discharge date. Payment may not be accepted following 30
days after termination of public service under subdivision 11a. If the member equivalent
contributions provided for in this clause are not paid in full, the member's allowable
service credit must be prorated by multiplying the full and fractional number of years of
uniformed service eligible for purchase by the ratio obtained by dividing the total member
contributions received by the total member contributions otherwise required under this
clause. The equivalent employer contribution, and, if applicable, the equivalent additional
employer contribution must be paid by the governmental subdivision employing the
member if the member makes the equivalent employee contributions. The employer
payments must be made from funds available to the employing unit, using the employer
and additional employer contribution rate or rates in effect at the time that the uniformed
service was performed, applied to the same annual salary rate or rates used to compute the
equivalent member contribution. The governmental subdivision involved may appropriate
money for those payments. The amount of service credit obtainable under this section may
not exceed five years unless a longer purchase period is required under United States Code,
title 38, section 4312. The employing unit shall pay interest on all equivalent member and
employer contribution amounts payable under this clause. Interest must be computed at a
rate of 8.5 percent compounded annually from the end of each fiscal year of the leave or the
break in service to the end of the month in which the payment is received. Upon payment,
the employee must be granted allowable service credit for the purchased period; or

(9) a period specified under section 353.0162.

(b) For calculating benefits under sections 353.30, 353.31, 353.32, and 353.33 for
state officers and employees displaced by the Community Corrections Act, chapter 401,
and transferred into county service under section 401.04, "allowable service" means the
combined years of allowable service as defined in paragraph (a), clauses (1) to (6), and
section 352.01, subdivision 11.

(c) For a public employee who has prior service covered by a local police or
firefighters relief association that has consolidated with the Public Employees Retirement
Association under chapter 353A or to which section 353.665 applies, and who has
elected the type of benefit coverage provided by the public employees police and fire
fund either under section 353A.08 following the consolidation or under section 353.665,
subdivision 4, "allowable service" is a period of service credited by the local police or
firefighters relief association as of the effective date of the consolidation based on law
and on bylaw provisions governing the relief association on the date of the initiation
of the consolidation procedure.

(d) No member may receive more than 12 months of allowable service credit in a
year either for vesting purposes or for benefit calculation purposes. For an active member
who was an active member of the former Minneapolis Firefighters Relief Association
on December 29, 2011, "allowable service" is the period of service credited by the
Minneapolis Firefighters Relief Association as reflected in the transferred records of the
association up to December 30, 2011, and the period of service credited under paragraph
(a), clause (1), after December 30, 2011. For an active member who was an active member
of the former Minneapolis Police Relief Association on December 29, 2011, "allowable
service" is the period of service credited by the Minneapolis Police Relief Association as
reflected in the transferred records of the association up to December 30, 2011, and the
period of service credited under paragraph (a), clause (1), after December 30, 2011.

(e) MS 2002 [Expired]

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 2012, section 353.01, subdivision 17a, is amended to read:

Subd. 17a.

Average salary.

(a) "Average salary," deleted text begin for purposes of calculating a
retirement annuity under section 353.29, subdivision 3 deleted text end new text begin unless otherwise specified new text end , means
an amount equivalent to the average of the highest salary of the member, police officer,
or firefighter, whichever applies, upon which employee contributions were paid for any
five successive years of allowable service, based on dates of salary periods as listed on
salary deduction reports. Average salary must be based upon all allowable service if
this service is less than five years.

(b) "Average salary" may not include any reduced salary paid during a period
in which the employee is entitled to benefit payments from workers' compensation for
temporary disability, unless the average salary is higher, including this period.

new text begin (c) "Average salary," for purposes of calculating benefits for a surviving spouse or
dependent children under section 353.657, subdivision 2 or 3, means the average of the
full-time monthly base salary rate in effect during the last six months of allowable service.
If the employment during the last six months of allowable service was part-time, the
average salary must be prorated based on the actual number of hours worked.
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. 4.

Minnesota Statutes 2012, section 353.01, subdivision 29, is amended to read:

Subd. 29.

Designated beneficiary.

"Designated beneficiary" means the person deleted text begin or deleted text end new text begin ,
new text end organization new text begin , trust, or estate new text end designated by a member, former member, deleted text begin disabilitant, or
retired member in writing, signed and filed with the association before the death of the
member, former member, disabilitant, or retired member, deleted text end new text begin or a person legally authorized
to act on behalf of the member or former member new text end to receive a refund of the balance of
the member's new text begin or former member's new text end accumulated deductions after death. new text begin A beneficiary
designation is valid if it is made in the form prescribed by the executive director and
is received by the association on or before the date of death of the member or former
member. If a beneficiary designation is deemed to be invalid for any reason, any remaining
balance of the member's or former member's accumulated deductions are subject to the
provisions of section 353.32, subdivisions 4 and 5.
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. 5.

Minnesota Statutes 2012, section 353.27, subdivision 7, is amended to read:

Subd. 7.

Adjustment for erroneous receipts or disbursements.

(a) Except
as provided in paragraph (b), erroneous employee deductions and erroneous employer
contributions and additional employer contributions to the general employees retirement
plan of the Public Employees Retirement Association or to the public employees police
and fire retirement plan for a person who otherwise does not qualify for membership
under this chapter, are considered:

(1) valid if the initial erroneous deduction began before January 1, 1990. Upon
determination of the error by the association, the person may continue membership in the
association while employed in the same position for which erroneous deductions were
taken, or file a written election to terminate membership and apply for a refund upon
termination of public service or defer an annuity under section 353.34; or

(2) invalid, if the initial erroneous employee deduction began on or after January 1,
1990. Upon determination of the error, the association shall refund all erroneous employee
deductions and all erroneous employer contributions as specified in paragraph (e). No
person may claim a right to continued or past membership in the association based on
erroneous deductions which began on or after January 1, 1990.

(b) Erroneous deductions taken from the salary of a person who did not qualify
for membership in the general employees retirement plan of the Public Employees
Retirement Association or in the public employees police and fire retirement plan by
virtue of concurrent employment before July 1, 1978, which required contributions to
another retirement fund or relief association established for the benefit of officers and
employees of a governmental subdivision, are invalid. Upon discovery of the error,
allowable service credit for all invalid service if forfeited and, upon termination of public
service, the association shall refund all erroneous employee deductions to the person, with
interest as determined under section 353.34, subdivision 2, and all erroneous employer
contributions without interest to the employer. This paragraph has both retroactive and
prospective application.

(c) Adjustments to correct employer contributions and employee deductions taken
in error from amounts which are not salary under section 353.01, subdivision 10, must
be made as specified in paragraph (e). The period of adjustment must be limited to the
fiscal year in which the error is discovered by the association and the immediate two
preceding fiscal years.

(d) If there is evidence of fraud or other misconduct on the part of the employee or
the employer, the board of trustees may authorize adjustments to the account of a member
or former member to correct erroneous employee deductions and employer contributions
on invalid salary and the recovery of any overpayments for a period longer than provided
for under paragraph (c).

(e) Upon discovery of the receipt of erroneous employee deductions and employer
contributions under paragraph (a), clause (2), or paragraph (c), the association must require
the employer to discontinue the erroneous employee deductions and erroneous employer
contributions reported on behalf of a member. Upon discontinuation, the association must:

(1) for a member, provide a refund in the amount of the invalid employee deductions
with interest on the invalid employee deductions at the rate specified under section 353.34,
subdivision 2, from the received date of each invalid salary transaction through the date
the credit or refund is made;

(2) for a former member who:

(i) is not receiving a retirement annuity or benefit, return the erroneous employee
deductions to the former member through a refund with interest at the rate specified under
section 353.34, subdivision 2, from the received date of each invalid salary transaction
through the date the credit or refund is made; or

(ii) is receiving a retirement annuity or disability benefit, or a person who is
receiving an optional annuity or survivor benefit, for whom it has been determined an
overpayment must be recovered, adjust the payment amount and recover the overpayments
as provided under this section; and

(3) return the invalid employer contributions reported on behalf of a member or
former member to the employer by providing a credit against future contributions payable
by the employer.

(f) In the event that a salary warrant or check from which a deduction for the
retirement fund was taken has been canceled or the amount of the warrant or check
returned to the funds of the department making the payment, a refund of the sum
deducted, or any portion of it that is required to adjust the deductions, must be made
to the department or institution.

(g) If the deleted text begin accrual date of any deleted text end new text begin association discovers that a new text end retirement annuity, survivor
benefit, or disability benefit deleted text begin is within the limitation period specified in paragraph (c), and
an overpayment has resulted deleted text end new text begin has been incorrectly calculated new text end by using invalid service or
salary, or due to any erroneous calculation procedure, the association must recalculate
the annuity or benefit payable and deleted text begin recover any deleted text end new text begin begin payment of the corrected annuity or
benefit effective the first of the month following discovery of the error. Any new text end overpayment
new text begin resulting from the incorrect calculation must be recovered new text end as provided under subdivision
7b new text begin , if the accrual date, or any adjustment in the amount of the annuity or benefit calculated
after the accrual date, except adjustments required under section 353.656, subdivision 4,
falls within the current fiscal year and the two immediate previous fiscal years new text end .

(h) Notwithstanding the provisions of this subdivision, the association may apply
the Revenue Procedures defined in the federal Internal Revenue Service Employee Plans
Compliance Resolution System and not issue a refund of erroneous employee deductions
and employer contributions or not recover a small overpayment of benefits if the cost to
correct the error would exceed the amount of the member refund or overpayment.

(i) Any fees or penalties assessed by the federal Internal Revenue Service for any
failure by an employer to follow the statutory requirements for reporting eligible members
and salary must be paid by the employer.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2012, section 353.34, subdivision 1, is amended to read:

Subdivision 1.

Refund or deferred annuity.

(a) A former member is entitled to
either a refund of accumulated employee deductions under subdivision 2, or to a deferred
annuity under subdivision 3. Application for a refund may not be made before the date of
termination of public service. deleted text begin Except as specified in paragraph (b), deleted text end A refund must be paid
within 120 days following receipt of the application unless the applicant has again become
a public employee required to be covered by the association.

(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c,
a refund is not payable before termination of service under section 353.01, subdivision 11a.

(c) An individual who terminates public service covered by the Public Employees
Retirement Association general employees retirement plan, the MERF division, the Public
Employees Retirement Association police and fire retirement plan, or the public employees
local government correctional service retirement plan, and who is employed by a different
employer and who becomes an active member covered by one of the other two plans, may
receive a refund of employee contributions plus annual compound interest from the plan
from which the member terminated service at the applicable rate specified in subdivision 2.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2012, section 353.34, subdivision 2, is amended to read:

Subd. 2.

Refund with interest.

(a) Except as provided in subdivision 1, any person
who ceases to be a public employee is entitled to receive a refund in an amount equal to
accumulated deductions with annual compound interest to the first day of the month
in which the refund is processed.

(b) For a person who ceases to be a public employee before July 1, 2011, the refund
interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after
June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the
refund interest is at the rate of four percent.

(c) If a person repays a refund and subsequently applies for another refund, the
repayment amount, including interest, is added to the fiscal year balance in which the
repayment was made.

new text begin (d) If the refund payable to a member is based on employee deductions that are
determined to be invalid under section 353.27, subdivision 7, the interest payable on the
invalid employee deductions is four percent.
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. 8.

Minnesota Statutes 2012, section 353.50, subdivision 3, is amended to read:

Subd. 3.

Service credit and benefit liability transfer.

(a) All allowable service
credit and salary credit of the members of the Minneapolis Employees Retirement Fund
as specified in the records of the Minneapolis Employees Retirement Fund through June
30, 2010, are transferred to the MERF division of the Public Employees Retirement
Association and are credited by the MERF division. deleted text begin Annuities or benefits of persons
who are active members of the former Minneapolis Employees Retirement Fund on
June 30, 2010, must be calculated under Minnesota Statutes 2008, sections 422A.11;
422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156; 422A.16;
422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, but are only eligible for automatic
postretirement adjustments after December 31, 2010, under section 356.415.
deleted text end

(b) The liability for the payment of annuities and benefits of the Minneapolis
Employees Retirement Fund retirees and benefit recipients as specified in the records of
the Minneapolis Employees Retirement Fund on June 29, 2010, is transferred to the
MERF division of the Public Employees Retirement Association on June 30, 2010.

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2012, section 353.50, subdivision 6, is amended to read:

Subd. 6.

Benefits.

(a) new text begin Retired, disabled, deferred, and inactive member benefits.
new text end The annuities and benefits of, or attributable to, retired, disabled, deferred, or inactive
Minneapolis Employees Retirement Fund members with that status as of June 30, 2010,
deleted text begin with the exception of post-December 31, 2010, postretirement adjustments, which
are governed by paragraph (b), deleted text end as calculated under Minnesota Statutes 2008, sections
422A.11; 422A.12; 422A.13; 422A.14; 422A.15; 422A.151; 422A.155; 422A.156;
422A.16; 422A.17; 422A.18; 422A.19; 422A.20; and 422A.23, continue in force deleted text begin after the
administrative consolidation under Laws 2010, chapter 359, article 11 deleted text end .

new text begin (b) Benefits; benefit eligibility for June 30, 2010, active members. Persons who
were active members of the former Minneapolis Employees Retirement Fund on June
30, 2010, upon satisfying eligibility requirements stated in the applicable sections of
Minnesota Statutes 2008 specified in paragraph (a), are entitled to annuities or benefits
specified in those sections. Eligibility for a formula retirement annuity includes the
requirement in Minnesota Statutes 2008, sections 422A.13 and 422A.16, that the
terminating member has attained retirement age, which is age 60 if the person has at least
ten years of service credit, or any age if the person has 30 or more years of service credit.
new text end

deleted text begin (b) deleted text end new text begin (c) Postretirement adjustments. new text end After December 31, 2010, annuities and
benefits from the MERF division are eligible for annual automatic postretirement
adjustments solely under section 356.415.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2012, section 353.657, subdivision 2, is amended to read:

Subd. 2.

Benefit amount.

(a) The spouse of a deceased member is entitled to
receive a monthly benefit for life equal to the following percentage of the member's
average deleted text begin full-time monthly deleted text end salary deleted text begin rate deleted text end new text begin , as defined in section 353.01, subdivision 17a,
paragraph (c), new text end as a member of the police and fire plan deleted text begin in effect over the last six months of
allowable service preceding the month in which death occurred deleted text end :

(1) if the death was a line of duty death, 60 percent of the deleted text begin stated deleted text end average salary
is payable; and

(2) if the death was not a line of duty death or if death occurred while receiving
disability benefits that accrued before July 1, 2007, 50 percent of the deleted text begin stated deleted text end average salary
is payable.

(b) deleted text begin If the member was a part-time employee in the position for which the employee
qualified for participation in the police and fire plan, the monthly survivor benefit is based
on the salary rate in effect for that member's part-time service during the last six months
of allowable service. deleted text end If the member's status changed from full time to part time deleted text begin for deleted text end new text begin due
to new text end health reasons during the last deleted text begin year deleted text end new text begin 12 months new text end of employment, new text begin notwithstanding the
definition of average salary in section 353.01, subdivision 17a, paragraph (c), the average
salary used to compute new text end the monthly survivor benefit deleted text begin is deleted text end new text begin must be new text end based on the full-time
salary rate of the position held as a member of the police and fire plan in effect over the
last six months of allowable service preceding the month in which the death occurred.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2012, section 353.657, subdivision 2a, is amended to read:

Subd. 2a.

Death while eligible survivor benefit.

(a) If a member or former member
who has attained the age of at least 50 years and either who is vested under section
353.01, subdivision 47, or who has credit for at least 30 years of allowable service,
regardless of age attained, dies before the annuity or disability benefit becomes payable,
notwithstanding any designation of beneficiary to the contrary, the surviving spouse may
elect to receive a death while eligible survivor benefit.

(b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20, a former spouse of the member, if any, is entitled to a portion of the death while
eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
filed with the association. If there is no surviving spouse or child or children, a former
spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
1, if provided for in a marriage dissolution decree but not a death while eligible survivor
benefit despite the terms of a marriage dissolution decree filed with the association.

(c) The benefit may be elected instead of a refund with interest under section 353.32,
subdivision 1, or surviving spouse benefits otherwise payable under subdivisions 1 and
2. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
which the member could have qualified for on the date of death, computed as provided in
sections 353.651, deleted text begin subdivisions 2 and deleted text end new text begin subdivision new text end 3, and 353.30, subdivision 3.

(d) The surviving spouse may apply for the annuity at any time after the date
on which the deceased employee would have attained the required age for retirement
based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
subdivision 2, apply to a deferred annuity payable under this subdivision.

(e) No payment accrues beyond the end of the month in which entitlement to
such annuity has terminated. An amount equal to the excess, if any, of the accumulated
contributions which were credited to the account of the deceased employee over and
above the total of the annuities paid and payable to the surviving spouse must be paid to
the deceased member's last designated beneficiary or, if none, to the legal representative of
the estate of such deceased member.

(f) Any member may request in writing, with the signed consent of the spouse, that
this subdivision not apply and that payment be made only to the designated beneficiary, as
otherwise provided by this chapter.

(g) 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.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2012, section 353.657, subdivision 3, is amended to read:

Subd. 3.

Dependent children.

new text begin (a) new text end A dependent child, as defined in section 353.01,
subdivision 15, is entitled to receive a monthly benefit equal to ten percent of the member's
average deleted text begin full-time monthly deleted text end salary deleted text begin rate deleted text end new text begin , as defined in section 353.01, subdivision 17a,
paragraph (c), new text end as a member of the police and fire plan deleted text begin in effect over the last six months of
allowable service preceding the month in which death occurred deleted text end .

new text begin (b) If the member's status changed from full-time to part-time due to health reasons
during the last 12 months of employment, notwithstanding the definition of average salary
in section 353.01, subdivision 17a, paragraph (c), the average salary used to compute the
monthly dependent child benefit must be based on the full-time salary rate of the position
held as a member of the police and fire plan in effect over the last six months of allowable
service preceding the month in which the death occurred.
new text end

new text begin (c) new text end Payments for the benefit of a dependent child must be made to the surviving
parent, or to the legal guardian of the child or to any adult person with whom the child
may at the time be living, provided only that the parent or other person to whom any
amount is to be paid advises the board in writing that the amount will be held or used in
trust for the benefit of the child.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2012, section 353F.02, subdivision 4, is amended to read:

Subd. 4.

Medical facility.

"Medical facility" means:

(1) Bridges Medical Services;

(2) Cedarview Care Center in Steele County;

(3) the City of Cannon Falls Hospital;

(4) the Chris Jenson Health and Rehabilitation Center in St. Louis County;

(5) new text begin Cornerstone Nursing and Rehab Center in new text end Clearwater County deleted text begin Memorial Hospital
doing business as Clearwater Health Services in Bagley deleted text end ;

(6) the Dassel Lakeside Community Home;

(7) the Douglas County Hospital, with respect to the Mental Health Unit;

(8) the Fair Oaks Lodge, Wadena;

(9) the Glencoe Area Health Center;

(10) Hutchinson Area Health Care;

new text begin (11) Lake County Sunrise Home;
new text end

deleted text begin (11) deleted text end new text begin (12) new text end the Lakefield Nursing Home;

deleted text begin (12) deleted text end new text begin (13) new text end the Lakeview Nursing Home in Gaylord;

deleted text begin (13) deleted text end new text begin (14) new text end the Luverne Public Hospital;

deleted text begin (14) deleted text end new text begin (15) new text end the Oakland Park Nursing Home;

deleted text begin (15) deleted text end new text begin (16) new text end the RenVilla Nursing Home;

deleted text begin (16) deleted text end new text begin (17) new text end the Rice Memorial Hospital in Willmar, with respect to the Department
of Radiology and the Department of Radiation/Oncology;

deleted text begin (17) deleted text end new text begin (18) new text end the St. Peter Community Health Care Center;

deleted text begin (18) deleted text end new text begin (19) new text end the Traverse Care Center in Traverse County;

deleted text begin (19) deleted text end new text begin (20) new text end the Waconia-Ridgeview Medical Center;

deleted text begin (20) deleted text end new text begin (21) new text end the Weiner Memorial Medical Center, Inc.;

deleted text begin (21) deleted text end new text begin (22) new text end the Wheaton Community Hospital; and

deleted text begin (22) deleted text end new text begin (23) new text end the Worthington Regional Hospital.

Sec. 14.

Minnesota Statutes 2012, section 356.635, subdivision 1, is amended to read:

Subdivision 1.

Retirement benefit commencement.

new text begin (a) new text end The retirement benefit of a
member who has terminated employment must begin no later than the later of April 1 of
the calendar year following the calendar year that the member attains the federal minimum
distribution age under section 401(a)(9) of the Internal Revenue Code or April 1 of the
calendar year following the calendar year in which the member terminated employment.

new text begin (b) The consent requirements of section 411(a)(11) of the Internal Revenue Code
do not apply to the extent that a distribution is required to satisfy the requirements of
section 401(a)(9).
new text end