HF 2005

as introduced - 87th Legislature (2011 - 2012) Posted on 01/30/2012 02:19pm

A bill for an act
relating to retirement; former Minneapolis Police Relief Association; providing
for successor custodian for transferred health insurance account assets; amending
Minnesota Statutes 2011 Supplement, section 353.668, subdivision 4.

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

Section 1.

Minnesota Statutes 2011 Supplement, section 353.668, subdivision 4,
is amended to read:

Subd. 4.

Transfer of assets; transfer of title to assets.

(a) On the effective date of
the consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19,
the chief administrative officer of the Minneapolis Police Relief Association shall transfer
the entire assets of the special fund of the Minneapolis Police Relief Association other
than the health insurance account to the public employees police and fire retirement fund
at market value. Unless ineligible or inappropriate, the transfer must be in the form of
investment securities and must include any accounts receivable that are determined by the
State Board of Investment as being capable of being collected. An amount, in cash, must
be transferred by the city of Minneapolis equal to the market value recognized by the relief
association of investment securities that are determined by the executive director of the
State Board of Investment not to be in compliance with the requirements and limitations
set forth in sections 11A.09, 11A.14, 11A.23, and 11A.24 or not to be appropriate for
retention in light of the established investment objectives of the State Board of Investment
or of accounts receivable determined by the executive director of the State Board of
Investment as being incapable of being collected. Legal and beneficial title to assets that
are determined noncompliant or inappropriate securities or that are uncollectible accounts
receivable are transferred to the city of Minneapolis on the effective date of consolidation
under Laws 2011, First Special Session chapter 8, article 7, section 19. Any accounts
payable on the effective date of consolidation under Laws 2011, First Special Session
chapter 8, article 7, section 19, are an obligation of the public employees police and fire
retirement fund and reduce the asset value for purposes of subdivision 6. The transferred
assets must be deposited in the public employees police and fire retirement fund. The
amount of the health insurance account as of the date of the consolidation must remain
deposited in the financial institution retained by the former Minneapolis Police Relief
Association on May 1, 2011, and that financial institution must act as the custodian of the
account. new text begin The health insurance account may be transferred from the financial institution
that holds the account to a successor financial institution on June 30, 2012, under the
requirements of this subdivision and the terms of an agreement between the Minneapolis
Police Relief Association and the successor financial institution dated December 30,
2011, that provides for the transfer. new text end The financial institution shall perform all trustee and
fiduciary duties with respect to the account as a condition to the retention of the account.
The executive director of the Minneapolis Police Relief Association, prior to the effective
date of consolidation, shall estimate three calendar years of the administrative expenses
related to the operation of the account and shall prepay those expenses from the account to
the financial institution prior to the effective date of consolidation. After the three-year
prepayment period, the beneficiaries of the account are responsible for the payment of the
administrative expenses related to the operation of the account.

(b) Upon the transfer of assets to the State Board of Investment under paragraph
(a), legal title to those transferred assets vests with the State Board of Investment on
behalf of the public employees police and fire retirement plan, and beneficial title to the
transferred assets remains with the former membership of the former Minneapolis Police
Relief Association.

(c) The public employees police and fire retirement plan and fund is the successor in
interest to all claims for or against the Minneapolis Police Relief Association. The public
employees police and fire retirement plan and fund is not liable for any claim against the
Minneapolis Police Relief Association, its governing board, or its administrative staff
acting in a fiduciary capacity, under chapter 356A or common law, which is founded upon
a claim of a breach of fiduciary duty if the act or acts constituting the claimed breach were
not undertaken in good faith. The public employees police and fire retirement plan may
assert any applicable defense to any claim in any judicial or administrative proceeding
that the Minneapolis Police Relief Association, its board, or its administrative staff would
otherwise have been entitled to assert, and the public employees police and fire retirement
plan may assert any applicable defense that it has in its capacity as a statewide agency.

(d) The Public Employees Retirement Association shall indemnify any former
fiduciary of the Minneapolis Police Relief Association consistent with the provisions of
section 356A.11. The indemnification may be effected by the purchase by the Public
Employees Retirement Association of reasonable fiduciary liability tail insurance for the
officers and directors of the former Minneapolis Police Relief Association. Consistent
with section 69.80, the relief association may purchase reasonable fiduciary liability tail
insurance for its officers and directors prior to the effective date of consolidation under
Laws 2011, First Special Session chapter 8, article 7, section 19.

(e) Office equipment and other physical assets of the special fund of the Minneapolis
Police Relief Association that are not needed by the Public Employees Retirement
Association may be sold by the special fund of the Minneapolis Police Relief Association
to the general fund of the Minneapolis Police Relief Association or to any successor
fraternal organization of the Minneapolis Police Relief Association at fair market value,
with the proceeds of that sale deposited in the public employees police and fire retirement
fund and included in the transferred asset value under subdivision 6.

new text begin EFFECTIVE DATE. new text end

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