Office of the Revisor of Statutes
Minnesota Session Laws - 1987, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1987
CHAPTER 284-H.F.No. 1213
An act relating to retirement; various public pension
plans; implementing various administrative changes;
making private certain membership data; conforming
mandatory retirement provisions for public employees
to the federal Age Discrimination in Employment
Amendments of 1986; clarifying the obligation of the
state auditor to undertake periodic public pension
plan audits; establishing combined service disability
and survivor benefits; amending Minnesota Statutes
1986, sections 13.43, by adding a subdivision; 43A.34,
subdivisions 1 and 4; 136.81, subdivision 3; 136.82,
subdivision 1; 181.81, subdivision 1; 181.811; 352.12,
subdivision 6; 352.96, subdivision 1, and by adding a
subdivision; 352D.015, subdivision 5; 353.01,
subdivisions 2b and 20; 353.03, subdivision 3; 353.27,
subdivisions 4, 10, and 12; 353.28, subdivision 5;
353.29, subdivision 8; 353.33, by adding a
subdivision; 353.34, by adding a subdivision; 353.36,
subdivision 2; 353.64, subdivisions 1 and 2; 353.656,
subdivision 6, and by adding a subdivision; 353.657;
354.05, subdivision 35, and by adding a subdivision;
354.06, subdivision 1; 354.07, subdivision 3; 354.094,
subdivision 1; 354.44, subdivisions 1a and 5; 354.46,
subdivision 5; 354.48, subdivision 7; 354.51,
subdivision 5; 354.55, subdivision 11; 354.62,
subdivision 5, and by adding a subdivision; 354A.021,
by adding a subdivision; 354A.21; 422A.09, subdivision
3; and 423.076; proposing coding for new law in
Minnesota Statutes, chapters 13 and 356; repealing
Minnesota Statutes 1986, sections 43A.34, subdivision
2; 125.12, subdivision 5; 353.64, subdivision 6;
356.301; and 473.419.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
PUBLIC PENSION PLAN DATA PRIVACY
Section 1. Minnesota Statutes 1986, section 13.43, is
amended by adding a subdivision to read:
Subd. 2a. [DATA DISCLOSURE BY STATEWIDE PENSION PLANS.]
Notwithstanding any law to the contrary, with respect to data
collected and maintained on members, survivors and beneficiaries
by statewide retirement systems that is classified as public
data in accordance with subdivision 2, those retirement systems
may be only required to disclose name, gross pension, and type
of benefit awarded, except as required by sections 13.03,
subdivisions 4 and 6; and 13.05, subdivisions 4 and 9.
Sec. 2. [13.641] [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
DATA.]
The following data on beneficiaries and survivors of public
employees retirement association members is considered private
data on individuals:
(1) address;
(2) birth date;
(3) direct deposit account number; and
(4) tax withholding data.
Sec. 3. [13.642] [TEACHERS RETIREMENT ASSOCIATION DATA.]
The following data on beneficiaries and survivors of
teachers retirement association members is considered private
data on individuals:
(1) address;
(2) birth date;
(3) direct deposit account number; and
(4) tax withholding data.
Sec. 4. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 2
MANDATORY RETIREMENT AGE FEDERAL LAW CONFORMANCE
Section 1. Minnesota Statutes 1986, section 43A.34,
subdivision 1, is amended to read:
Subdivision 1. [MANDATORY RETIREMENT AGE.] Employees in
the executive branch who are subject to the provisions of the
Minnesota state retirement system or the teacher's retirement
association and who are serving as faculty members or
administrators under a contract of unlimited terms or similar
arrangement providing for unlimited tenure at an institution of
higher education, as defined by United States Code, title 20,
section 1141(a), as amended through December 31, 1986, must
retire from employment by the state upon reaching the age of 70,
except as provided in other law. Other employees in the
executive branch who are subject to the provisions of the
Minnesota state retirement system or the teacher's retirement
association, except as provided in subdivision 3 or 4, or as
provided in section 354.44, subdivision 1a, are not subject to a
mandatory retirement age provision.
Sec. 2. Minnesota Statutes 1986, section 43A.34,
subdivision 4, is amended to read:
Subd. 4. [STATE PATROL, CONSERVATION AND CRIME BUREAU
OFFICERS EXEMPTED.] Notwithstanding any provision to the
contrary, (a) conservation officers and crime bureau officers
who were first employed on or after July 1, 1973 and who are
members of the state patrol retirement fund by reason of their
employment, and members of the Minnesota state patrol division
of the department of public safety who are members of the state
patrol retirement association by reason of their employment,
shall not continue employment after attaining the age of 60
years, except for a fractional portion of one year that will
enable the employee to complete the employee's next full year of
allowable service as defined pursuant to section 352B.01,
subdivision 3; and (b) conservation officers and crime bureau
officers who were first employed and are members of the state
patrol retirement fund by reason of their employment before July
1, 1973, shall not continue employment after attaining the
age specified in subdivision 1 of 70 years.
Sec. 3. Minnesota Statutes 1986, section 181.81,
subdivision 1, is amended to read:
Subdivision 1. [RESTRICTION ON MANDATORY RETIREMENT AGE.]
(a) It is unlawful for any private sector employer, public or
private, excluding the United States government and any of its
instrumentalities, to refuse to hire or employ, or to discharge,
dismiss, reduce in grade or position, or demote any individual
on the grounds that the individual has reached an age of less
than 70, except in cases where federal statutes or rules or
other state statutes, not including special laws compel or
specifically authorize such action. Nothing in this section
shall prohibit compulsory retirement of employees who have
attained 70 years of age or more; provided further that nothing
in this section shall prohibit compulsory retirement of an
employee who has attained at least 65 years of age and who for
the two year period immediately before retirement is employed in
an executive or a high policy making position if that employee
is entitled to an immediate nonforfeitable annual retirement
benefit from a pension, profit sharing, savings or deferred
compensation plan of an employer, or any combination of these
benefits which totals in the aggregate at least $27,000. If the
retirement benefit is in a form other than a straight life
annuity, the equivalent annualized payment value of the benefit
shall be actuarially determined according to rules promulgated
by the commissioner of labor and industry. Pilots and flight
crew members shall not be subject to the provisions of this
section or section 363.02, subdivision 6, but shall be retired
from this employment pursuant to standards contained in
regulations promulgated by the federal aviation administration
for airline pilots and flight officers and are subject to the
bona fide occupational requirements for these employees as
promulgated by the federal aviation administration.
(b) Prior to June 1, 1982 every employer shall notify an
employee in writing at least 90 days but no more than 120 days
prior to the employee's 65th birthday of the option to continue
employment beyond that date. The notice shall state in a
conspicuous manner that the employee shall respond to the notice
within 30 days of the employee's desire to continue employment
beyond the employee's 65th birthday. Every employer shall post
in a conspicuous place a notice written or approved by the
commissioner of labor and industry stating that the mandatory
retirement age is age 70. Employment shall continue for as long
as the employee desires or until the employer demonstrates that
the employee no longer can meet the bona fide requirements,
consistently applied, for the job or position or until the
employee reaches the compulsory retirement age established by
the employer. When an employer intends to terminate an employee
who is 65 years of age or older earlier than age 70 on the
ground that the employee no longer can meet the bona fide
requirements for the job or position the employer shall give the
employee 30 days notice of that intention.
(c) If there exists a date on which the accrual of pension
benefits or credits, or the contributions therefor by the
employee or the employer, or the employee's employment related
health and welfare benefits or insurance coverages are
diminished or eliminated by virtue of the employee attaining a
certain age, the employer shall notify the employee of the
changes at least 90 but not more than 120 days prior to the
effective date of the change. This section, in and of itself,
shall not be construed to require any change in the employer
contribution levels of any pension or retirement plan, or to
require any employer to increase an employer's or employee's
payments for the provision of insurance benefits contained in
any employee benefit or insurance plan.
Sec. 4. Minnesota Statutes 1986, section 181.811, is
amended to read:
181.811 [MANDATORY RETIREMENT AGE.]
Laws 1978, chapter 649 is effective April 24, 1979, subject
to the following exceptions:
(1) In the case of employees covered by a collective
bargaining agreement which was entered into between a labor
organization and an employer and which was in effect on
September 1, 1977, it shall take effect upon the termination of
the agreement or on January 1, 1980, whichever comes first.
(2) Nothing contained in Laws 1978, chapter 649 or Laws
1979, chapter 40 shall be construed as requiring the rehiring,
reinstatement or payment of additional benefits to an employee
who terminates service prior to April 24, 1979, with an employer
who employs 20 or more employees, or the rehiring, reinstatement
or payment of additional benefits to an employee who terminates
service prior to June 1, 1980, with an employer who employs less
than 20 employees, pursuant to a mandatory retirement law or
policy which mandates retirement prior to attaining 70 years of
age, or any other employee who terminates service prior to the
termination of a collectively bargained contract containing a
mandatory retirement provision.
(3) Laws 1978, chapter 649, section 3, is effective January
1, 1979. Any person who was previously a member of and has
received a refund of accumulated employee or member
contributions from one or more of the covered retirement funds
enumerated in section 356.32, subdivision 2 and who terminated
service at age 65 or older for any reason whether or not the
person was required to terminate service pursuant to a mandatory
retirement statute or a uniformly applied mandatory retirement
policy established by the employer between January 1, 1979 and
April 24, 1979 shall be entitled to repay the refund of
accumulated employee or member contributions to the respective
retirement fund with compound interest at the rate of six
percent from the date the refund was received to the date the
refund is repaid. Upon repayment of a refund, the person shall
be entitled if otherwise qualified to a proportionate annuity,
with accrual to commence upon the first day of the month
following the filing of a valid application for the annuity.
(4) Employers who employ fewer than 20 employees shall not
be subject to the provisions of Laws 1978, chapter 649, until
June 1, 1980.
Sec. 5. Minnesota Statutes 1986, section 354.44,
subdivision 1a, is amended to read:
Subd. 1a. [MANDATORY RETIREMENT.] Notwithstanding the
provisions of sections 43A.11 or 197.455 to 197.48, a member who
is serving as a faculty member or administrator under a contract
of unlimited tenure or similar arrangement providing for
unlimited tenure at an institution of higher education, as
defined in section 1201(a) of the federal Higher Education Act
of 1965, as amended through January 1, 1987, shall terminate
employment at the end of the academic year in which the member
reaches the age of 70. For purposes of this subdivision, an
academic year shall be deemed to end August 31. No other member
shall be subject to a mandatory retirement age provision. A
member who terminates employment at any time during the academic
year at the end of which the person is age 65 or older shall,
for the purpose of determining eligibility for a proportionate
retirement annuity, be considered to have been required to
terminate employment at age 65 or older pursuant to section
356.32. Nothing contained in this subdivision shall preclude an
employing unit covered by this chapter from employing a retired
teacher as a substitute or part time teacher. Any person who
has attained the age of at least 65 years, who is employed as a
substitute or part time teacher and who earns an amount equal to
the annual maximum earnings allowable for that age for the
continued receipt of full benefit amounts monthly under the
federal old age, survivors and disability insurance program as
set by the secretary of health and human services pursuant to
the provisions of United States Code, title 42, section 403, in
any academic year from employment as a substitute or part time
teacher, shall terminate employment for the remainder of that
academic year. No person who is required to terminate
employment as a teacher by virtue of this subdivision shall has
attained the age of at least 65 years and who has retired under
this chapter may resume membership in the retirement association
as a result of subsequent employment as a substitute or part
time teacher.
Sec. 6. Minnesota Statutes 1986, section 354A.21, is
amended to read:
354A.21 [MANDATORY RETIREMENT; PROPORTIONATE ANNUITY.]
Notwithstanding the provisions of sections 197.46 to 197.48
or 354A.05, a teacher subject to the provisions of this chapter
shall terminate employment at the end of the academic year in
which the teacher reaches the age of 70. A teacher who
terminates employment at any time during the academic year at
the end of which the teacher is required to terminate employment
pursuant to this section shall be entitled upon application to a
proportionate retirement annuity pursuant to section 356.32.
Nothing contained in this section shall preclude a district from
employing a retired teacher as a substitute teacher but upon
having earned an amount equal to the annual maximum earnings
allowable for that age for the continued receipt of full benefit
amounts monthly under the federal old age, survivors and
disability insurance program as set by the secretary of health
and human services pursuant to the provisions of United States
Code, title 42, section 403, in any academic year from
employment as a substitute teacher, any person over the age of
70 years shall terminate employment for the remainder of that
academic year. No person employed as a substitute teacher after
reaching the mandatory retirement age of at least 65 years and
who has retired under this chapter shall resume membership in
the teachers retirement fund association by virtue of the
employment as a substitute teacher.
Sec. 7. Minnesota Statutes 1986, section 422A.09,
subdivision 3, is amended to read:
Subd. 3. [EXCEPTIONS FROM MEMBERSHIP.] The exempt class
shall consist of:
(1) Employees who are members of any other organization or
association of the city on behalf of which a tax is levied by
the city for the purpose of paying retirement allowances to
disabled or superannuated employees.
(2) Persons filling elective position; provided that any
elective officer holding an elective city office, except a judge
of municipal court, shall, upon written application to the
retirement board, be entitled to become a member of the
contributing class of the fund, and after becoming a contributor
to the fund be entitled to all benefits conferred upon employees
of the contributing class except retirement on a service
allowance, which shall be granted only upon completion of ten or
more years of service and attaining at least age 60.
All retirement allowances shall be computed and determined
as provided herein, except that in determining the number of
years of service, credit shall be given for time served as an
elective officer or employee, or member of an executive board or
commission or any combination thereof. Persons who have served
in elective positions which qualified them for membership in the
fund prior to July 1, 1967, and who immediately thereafter hold
elective office, first being appointed to that elective office
in Hennepin county, may retain or resume membership in the fund
as an elective officer of the county. The county shall collect
and pay to the retirement fund the employee contribution as
required pursuant to section 422A.10. The employer contribution
on behalf of the elected officer shall be paid by the county.
Before receiving a retirement allowance, or any other benefit,
any person who claims credit for service pursuant to this
section shall contribute to the fund an amount equal to the
amount of contributions to the fund which the person would have
made had the person been a contributor to the fund since the
date the person first became eligible for membership in the
fund, in accordance with section 422A.10, plus six percent
compound interest.
(3) Persons serving without pay.
(4) Persons employed on a temporary basis, as doorkeepers,
ticket takers, and attendants at the municipal auditorium, park
recreation facilities, or like activities, employed less than
1000 hours, or its equivalent if employed on any other basis
than an hourly basis, in any calendar year from January 1 to
December 31, inclusive, provided that employees who were
contributing members of the fund on July 1, 1959 shall not be
affected by the exclusions contained in this section.
(5) A person who is exempted from the contributing class by
Minnesota Statutes 1974, section 422A.09, subdivision 3, clauses
(4) and (5), but who is employed by and paid, in whole or in
part, by the city or any of its boards, departments, or
commissions, operated as a department of the city government or
independently, if financed in whole or in part by city funds,
including any person employed by a public corporation, and
including any person employed by Special School District No. 1,
each of whom is not a member of any other retirement system, who
later becomes a contributing member of the fund may elect to
qualify at that time for credit by paying into the fund an
amount equal to the amount of contributions to the fund which
the person would have made had the person been a contributor to
the fund since the date the person first qualified as an exempt
member of the contributing class, in accordance with section
422A.10, plus six percent compound interest.
(6) Any person who is employed by the city or any of its
boards, departments, commissions or a public corporation and is
excluded from participation in the fund by paragraph (4) shall
be separated from the service upon reaching the age of 70
regardless of the provisions of the veterans preference act.
(7) Any person who is employed in subsidized on-the-job
training, work experience or public service employment as an
enrollee under the federal comprehensive employment and training
act from and after March 30, 1978, unless the city council of
the city of Minneapolis specifies that the person is to be
considered as a provisional member of the retirement fund
pursuant to section 356.451 or unless the person has as of the
later of March 30, 1978 or the date of employment sufficient
service credit in the retirement fund to meet the minimum
vesting requirements for a deferred retirement annuity, or the
employer agrees in writing to make the required employer
contributions, including any employer additional contributions,
on account of that person from revenue sources other than funds
provided under the federal comprehensive training and employment
act, or the person agrees in writing to make the required
employer contribution in addition to the required employee
contribution.
Sec. 8. Minnesota Statutes 1986, section 423.076, is
amended to read:
423.076 [RETIREMENT; POLICE AND FIRE DEPARTMENTS.]
A compulsory retirement age of not less than 65 years may
be established that was in effect on March 3, 1983, for persons
on the payroll of a police or fire department which does not
come within the provisions of section 423.075 without being a
violation of section 181.81 or section 363.02, subdivision 6,
may be retained.
Sec. 9. [REPEALER.]
Minnesota Statutes 1986, sections 43A.34, subdivision 2;
125.12, subdivision 5; and 473.419, are repealed.
Sec. 10. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 3
STATE UNIVERSITY AND COLLEGE SUPPLEMENTAL
RETIREMENT PLAN CHANGES
Section 1. Minnesota Statutes 1986, section 136.81,
subdivision 3, is amended to read:
Subd. 3. Prior to July 1 of each year, Each person
described in section 136.80, subdivision 1, may indicate in
writing, on forms provided by the executive director of the
teachers retirement fund, the account of the Minnesota
supplemental retirement investment fund in which salary
deductions and state matching funds attributable to salary
deductions be invested for the year beginning July 1. For that
year and thereafter until a different written indication is
made, the executive director of the teachers retirement fund
shall purchase with the salary deductions and state matching
funds attributable to the salary deductions shares in the
account of the Minnesota supplemental retirement investment fund
chosen by the person elect to purchase shares in one or a
combination of the income share account, the growth share
account, the money market account, the bond market account, or
the common stock index account established in section 11A.17.
The person may elect to participate in one or more of the
investment accounts in the fund by specifying, on a form
provided by the executive director of the teachers retirement
fund, the percentage of salary deductions and state matching
funds to be used to purchase shares in each of the accounts.
Twice in any calendar year, each person described in
section 136.80, subdivision 1, may indicate in writing on forms
provided by the teachers retirement association a choice of
options for subsequent purchases of shares. After a choice is
made, and until a different written indication is made, the
executive director shall purchase shares in the supplemental
fund as selected.
A change in choice of investment option is effective no
later than the first pay date that occurs 30 or more days after
receipt of the request for a change.
Twice in any calendar year a person described in section
136.80, subdivision 1, may also change the investment options
selected for all or a portion of the person's shares previously
purchased. If a partial transfer is made a minimum of $1,000
must be transferred and a minimum balance of $1,000 must remain
in the previously selected investment option. A change is
restricted to a transfer from one or more accounts to a single
account. Changes in investment options for the person's shares
must be effected as soon as cash flow to an account practically
permits, but not later than six months after the requested
change.
If a person fails to indicate a choice as provided herein,
the executive director of the teachers retirement fund shall
purchase shares in the income account of the Minnesota
supplemental retirement investment fund for the coming year.
The shares so purchased shall stand in the name of the board of
trustees of the teachers retirement fund, but a record shall be
kept indicating the number of shares in each account of the
Minnesota supplemental retirement investment fund purchased with
the salary deductions and state matching funds attributable to
the salary deductions of each person. The record shall be known
as the "employee's share account record." The employee's share
account record shall show, in addition to the number of shares
therein, any cash balance of salary deductions or state matching
funds attributable to those deductions which stands uninvested
in shares.
Sec. 2. Minnesota Statutes 1986, section 136.82,
subdivision 1, is amended to read:
Subdivision 1. The executive director of the teachers
retirement fund shall redeem shares in the accounts of the
Minnesota supplemental retirement investment fund standing in an
employee's share account record under the following
circumstances, but always in accordance with the laws and rules
governing the Minnesota supplemental retirement investment fund:
(1) When requested to do so in writing on forms provided by
the executive director of the teachers retirement fund by a
person having shares to the credit of the employee's share
account record, if the person is 60 55 years of age or older and
is no longer employed by the state university board or state
board for community colleges. In such case the person shall
receive the cash realized on the redemption of the shares. The
person may direct the redemption of not more than 20 percent of
the person's shares in the employee's share account record in
any one year and may not direct more than one redemption in any
one calendar month; provided, however, that the state university
board in the case of a person employed by the state university
board, and the state board for community colleges in the case of
a person employed by the state board for community colleges,
may, upon application, in their sole discretion, permit greater
withdrawals in any one year.
(2) When requested to do so in writing on forms provided by
the executive director of the teachers retirement fund by a
person having shares to the credit of the employee's share
account record, if the person has left employment by the state
university board or state board for community colleges because
of a total and permanent disability as defined in section
354.05, subdivision 14, and if the executive director of the
teachers retirement fund finds that the person is totally and
permanently disabled and will as a result be unable to return to
similar employment, the person shall receive the cash realized
on the redemption of the shares. The person may direct the
redemption of not more than 20 percent of the shares in the
employee's share account record in any one year and may not
direct more than one redemption in any one calendar month;
provided, however, that the state university board in the case
of a person employed by the state university board, and the
state board for community colleges in the case of a person
employed by the state board for community colleges, may, upon
application, in their sole discretion, permit greater
withdrawals in any one year. If the person returns to good
health, the person shall owe no restitution to the state or any
fund created by its laws for a redemption directed pursuant to
this paragraph.
(3) In the event of the death of a person having shares to
the credit of the employee's share account record and leaving a
surviving spouse, then when requested to do so in writing on
forms provided by the executive director of the teachers
retirement fund by the surviving spouse. The surviving spouse
shall receive the cash realized on the redemption of the
shares. The surviving spouse may direct the redemption of not
more than 20 percent of the shares in the deceased spouse's
employee's share account record in any one year and may not
direct more than one redemption in any one calendar month;
provided, however, that the state university board in the case
of a person employed by the state university board, and the
state board for community colleges in the case of a person
employed by the state board for community colleges, may, upon
application, in their sole discretion, permit greater
withdrawals in any one year. In that case the surviving spouse
shall receive the cash realized from the redemption of the
shares. Upon the death of the surviving spouse any shares
remaining in the employee's share account record shall be
redeemed by the executive director of the teachers retirement
fund and the cash realized therefrom distributed to the estate
of the surviving spouse.
(4) In the event of the death of a person having shares to
the credit of the employee's share account record and leaving no
surviving spouse, then the executive director of the teachers
retirement fund shall redeem all shares to the credit of the
employee's share account record and pay the cash realized
therefrom to the estate of the deceased person.
(5) When requested to do so in writing on forms provided by
the executive director of the teachers retirement fund by a
person having shares to the credit of the employee's share
account record, if the person is no longer employed by the state
university board or state board for community colleges, but does
not qualify under the provisions of paragraphs (1) to (4). In
that case one-half of the cash realized on the redemption of
shares shall be received by the person and one-half shall become
the property of the supplemental retirement plan account of the
teachers retirement fund. Annually on July 1 the cancellations
of the previous 12 months shall be prorated among the employees
share accounts in proportion to the value which each account
bears to the total value of all share accounts.
Sec. 3. [EFFECTIVE DATE.]
Section 1 is effective January 1, 1988. Section 2 is
effective July 1, 1987.
ARTICLE 4
MINNESOTA STATE RETIREMENT SYSTEM ADMINISTRATIVE CHANGES
Section 1. Minnesota Statutes 1986, section 352.12,
subdivision 6, is amended to read:
Subd. 6. [DEATH AFTER SERVICE TERMINATION.] Except as
provided in subdivision 1, if a former employee covered by the
system dies and has not received an annuity, a retirement
allowance or a disability benefit, a refundment refund shall be
made to the last designated beneficiary or, if there be none, to
the surviving spouse or, if none, to the employee's surviving
children in equal shares or, if none, to the employee's
surviving parents in equal shares or, if none, to the
representative of the estate in an amount equal to accumulated
employee contributions. The refund must include interest at the
rate of five percent per year compounded annually. The interest
must be computed to the first day of the month in which the
refund is processed and be based on fiscal year balances.
Sec. 2. Minnesota Statutes 1986, section 352.96,
subdivision 1, is amended to read:
Subdivision 1. [WRITTEN AGREEMENT FOR DEFERMENT
ENTITLEMENT TO DEFER COMPENSATION.] At the request of an officer
or employee of the state of Minnesota or, an officer or employee
of any political subdivision thereof, or an employee covered
by any of the a retirement funds fund enumerated in section
356.20, subdivision 2, the appointing authority shall by payroll
deduction defer the payment of part of the compensation of the
officer or employee. The amount to be deferred must be as
provided in a written agreement between the officer or employee
and the state of Minnesota, the political subdivision, or other
employing unit whose employees are covered by any of the public
retirement funds enumerated in section 356.20, subdivision 2,.
The agreement must be in a form specified by the executive
director of the Minnesota state retirement system in such a
manner as will qualify the deferred amount for benefits afforded
under federal and state tax laws, rules, and rulings.
Sec. 3. Minnesota Statutes 1986, section 352.96, is
amended by adding a subdivision to read:
Subd. 1a. [FAILURE TO IMPLEMENT PLAN.] Implementation of
the deferred compensation plan by the employing unit must be
completed within 30 days of the request as provided in
subdivision 1. If the employing unit fails to implement the
deferred compensation plan, the employing unit may not defer
compensation under any existing or new deferred compensation
plan from the date of the request until the date on which the
deferred compensation plan provided for in this section is
implemented. The executive director of the Minnesota state
retirement system may order any employing unit that fails to
implement the deferred compensation plan provided for in this
section upon a valid request to undertake that implementation
and may enforce that order in appropriate legal proceedings.
Sec. 4. Minnesota Statutes 1986, section 352D.015,
subdivision 5, is amended to read:
Subd. 5. [COVERED EMPLOYMENT.] "Covered employment" means
employment covered by this chapter or by chapter 352.
Sec. 5. [EFFECTIVE DATE.]
This article is effective the day following final enactment.
ARTICLE 5
PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
ADMINISTRATIVE CHANGES
Section 1. Minnesota Statutes 1986, section 353.01,
subdivision 2b, is amended to read:
Subd. 2b. [EXCLUDED EMPLOYEES.] The following persons are
excluded from the meaning of "public employee":
(a) Persons employed for professional services where such
service is incidental to regular professional duties. Service
is incidental if compensation for it amounts to no more than 25
percent of a person's total annual gross earnings for all
professional duties.
(b) Election officers.
(c) Independent contractors and their employees.
(d) Patient and inmate help in governmental subdivision
charitable, penal and correctional institutions.
(e) Members of boards, commissions, bands and others who
serve the governmental subdivision intermittently.
(f) Employees who hold positions of an essentially
temporary or seasonal character, provided such employment does
not continue for a period in excess of 120 working days in any
calendar year or in any school year for school employees.
Immediately following the expiration of such 120 working days if
such employees continue in public service and earn in excess of
$325 in any one calendar month, the department heads must then
report all such employees for membership and must cause employee
contributions to be made on behalf of such employees in
accordance with section 353.27, subdivision 4, and they shall
remain members until termination of public service.
(g) Part-time employees who receive monthly compensation
not exceeding $325, and part-time employees and elected
officials whose annual compensation is stipulated in advance, in
writing, to be not more than $3,900 per calendar year or per
school year for school employees for employment expected to be
of a full year's duration or more than the prorated portion of
$3,900 per employment period for employment expected to be of
less than a full year's duration, except that members shall
continue their membership until termination of public service.
(h) Persons who first occupy an elected office after March
1, 1978, the compensation for which does not exceed $325 per
month.
(i) Emergency employees who are employed by reason of work
caused by fire, flood, storm or similar disaster.
(j) Employees who by virtue of their employment are
required to contribute to any other pension, relief or
retirement fund established for the benefit of officers and
employees of a governmental subdivision, except as an act of the
legislature has specifically enabled participation by employees
of a designated governmental subdivision in a plan supplemental
to the public employees retirement association; provided that
this clause shall not prevent a person from contributing to the
public employees retirement association and also belonging to or
contributing to another public pension fund for other service
occurring during the same period of time.
(k) Police matrons employed in a police department of any
city who are transferred to the jurisdiction of a joint city and
county detention and corrections authority.
(l) Chaplains and nuns who have taken a vow of poverty as
members of a religious order.
(m) Full-time students who are enrolled and are regularly
attending classes at an accredited school, college or
university; provided, no person employed full time by a
governmental subdivision shall be exempt under this paragraph.
(n) Resident physicians, medical interns and pharmacist
interns who are serving in public hospitals.
(o) Appointed or elected officers, paid entirely on a fee
basis, and who were not members on June 30, 1971.
(p) Nothing in Laws 1973, chapter 753 shall be interpreted
to impair or revoke any option exercised under Laws 1963,
chapter 793.
(q) Persons employed in subsidized on-the-job training,
work experience or public service employment as enrollees under
the federal Comprehensive Employment and Training Act from and
after March 30, 1978, unless the person has as of the later of
March 30, 1978 or the date of employment sufficient service
credit in the retirement fund to meet the minimum vesting
requirements for a deferred retirement annuity, or the employer
agrees in writing on forms prescribed by the executive director
to make the required employer contributions, including any
employer additional contributions, on account of that person
from revenue sources other than funds provided under the federal
Comprehensive Training and Employment Act, or the person agrees
in writing on forms prescribed by the executive director to make
the required employer contributions in addition to the required
employee contribution.
(r) Town, city or county assessors elected or appointed
pursuant to chapter 273 who do not receive compensation in
excess of $325 per month from any one employing governmental
subdivision or who are employed pursuant to an employment
contract which sets forth the total compensation to be paid and
the length of service, not to exceed three months in duration,
required for the performance of the contract and which was
entered into in advance of the commencement of employment.
(s) (r) A person holding a part time adult supplementary
vocational technical school license who renders part time
teaching service in a vocational technical school if (1) the
service is incidental to the person's regular nonteaching
occupation; and (2) the applicable vocational technical school
stipulates annually in advance that the part time teaching
service will not exceed 300 hours in a fiscal year; and (3) the
part time teaching service actually does not exceed 300 hours in
a fiscal year.
(t) (s) A person exempt from licensure pursuant to section
125.031.
Sec. 2. Minnesota Statutes 1986, section 353.01,
subdivision 20, is amended to read:
Subd. 20. [SURVIVING SPOUSE.] "Surviving spouse" means the
unremarried spouse of a deceased member who was living with had
the same legal residence as the member at the time of death, or
at the time the member became totally and permanently disabled.
Sec. 3. Minnesota Statutes 1986, section 353.03,
subdivision 3, is amended to read:
Subd. 3. [DUTIES AND POWERS OF THE BOARD.] (a) The board
shall elect a president and vice-president. The board shall
approve the staffing complement necessary to administer the
fund. The cost of administering this chapter must be paid by
the fund.
(b) The board shall adopt bylaws for its own government and
for the management of the fund consistent with the laws of the
state and may modify them at pleasure. It shall adopt, alter,
and enforce reasonable rules consistent with the laws of the
state for the administration and management of the fund, for the
payment and collection of payments from members, and for the
payment of withdrawals and benefits. It shall pass upon and
allow or disallow all applications for membership in the fund
and shall allow or disallow claims for withdrawals, pensions, or
benefits payable from the fund. It shall adopt an appropriate
mortality table based on experience of the fund as recommended
by the association actuary, with interest set at the rate
specified in section 356.215, subdivision 4, clause (4). It
shall provide for the payment out of the fund of all necessary
expenses for the administration of the fund and of all claims
for withdrawals, pensions, or benefits allowed. The board shall
approve or disapprove all recommendations and actions of the
executive director made subject to its approval or disapproval
by subdivision 3a.
(c) In passing upon all applications and claims, the board
may summon, swear, hear, and examine witnesses and, in the case
of claims for disability benefits, may require the claimant to
submit to a medical examination by a physician of the board's
choice, at the expense of the fund, as a condition precedent to
the passing on the claim, and, in the case of all applications
and claims, may conduct investigations necessary to determine
their validity and merit. The board shall establish procedures
to assure that a benefit applicant and recipient may have a
review of a benefit eligibility or benefit amount determination
affecting the applicant or recipient. The review procedure may
afford the benefit applicant or benefit recipient an opportunity
to present views at any review proceeding conducted, but is not
a contested case under chapter 14.
(d) The board may continue to authorize the sale of life
insurance to members under the insurance program in effect on
January 1, 1985, but must not change that program without the
approval of the commissioner of finance. The association shall
not receive any financial benefit from the life insurance
program beyond the amount necessary to reimburse the association
for costs incurred in administering the program. The
association shall not engage directly or indirectly in any other
activity involving the sale or promotion of goods or services,
or both, whether to members or nonmembers.
(e) The board shall establish procedures governing
reimbursement of expenses to board members. These procedures
shall define the types of activities and expenses that qualify
for reimbursement, shall provide that all out-of-state travel
must be authorized by the board, and shall provide for
independent verification of claims for expense reimbursement.
The procedures must comply with applicable rules and policies of
the department of finance, the department of administration, and
the department of employee relations.
(f) The board may purchase fiduciary liability insurance
and official bonds for the officers and members of the board of
trustees and employees of the association and may purchase
property insurance or may establish a self-insurance risk
reserve including, but not limited to, data processing insurance
and "extra-expense" coverage.
Sec. 4. Minnesota Statutes 1986, section 353.27,
subdivision 4, is amended to read:
Subd. 4. [EMPLOYERS REPORTING REQUIREMENTS; CONTRIBUTIONS;
MEMBER STATUS.] The head of each department is hereby directed
to cause employee contributions to be deducted from the salary
of each member and to issue or approve one voucher payable to
the state treasurer for the aggregate amount so deducted from
such salaries, and at the same time to issue or approve one
voucher for the aggregate amount of the employer contributions
and the additional employer contributions for the same period of
employment as that covered by the employee contributions, and to
cause the same to be received not later than 20 calendar days
thereafter in the office of the association. The head of each
department shall, for each pay period in which employee
contributions are deducted, submit to the association a salary
deduction report, in the form prescribed by the executive
director, showing (a) the legal names and the association
membership numbers, listed in alphabetical order, of all
members; (b) the legal names of all new public employees and the
effective dates of appointment; (c) the amount of each salary
deduction; (d) the amount of salary from which each deduction
was made; (e) effective dates of all terminations of public
service on account of members and if such terminations were
caused by death or retirement, there shall be inserted after
such date the applicable word, "death" or "retirement" status
code as set by the association; (f) effective dates of all
temporary layoffs and leaves of absence and if such leaves are
sick leaves, there shall be inserted after such date the words,
"sick leave" applicable status code as set by the association;
and (g) the beginning and ending dates of the payroll period
covered and the date of actual payment. Additionally, reports
of contributions shall be accompanied by a membership enrollment
form for each new employee in the form prescribed by the
executive director, and it shall be the responsibility of
department heads to obtain such enrollment forms from new
employees to be submitted to the association within 30 days
following the date of employment. The employers shall furnish
such additional reports on magnetic media or other form of
report as may be requested by the association executive director.
Sec. 5. Minnesota Statutes 1986, section 353.27,
subdivision 10, is amended to read:
Subd. 10. [EMPLOYERS; FURNISH COPIES OF PAYROLL
ABSTRACTS.] The head of each department is required to furnish
the executive director with a carbon or duplicate copy of the
departmental payroll abstracts for the last pay period during
the months of January and July March and October, respectively,
in each year. It shall be the duty of said executive director
to check the copies of all such payroll abstracts against the
membership records of the association to ascertain whether or
not any omissions have been made by any department head in the
reporting of any new public employees for membership.
Sec. 6. Minnesota Statutes 1986, section 353.27,
subdivision 12, is amended to read:
Subd. 12. [OMITTED SALARY DEDUCTIONS; OBLIGATIONS.] In the
case of omission of required deductions from salary of an
employee, past due for a period of 60 days or less, the head of
the department shall deduct from the employee's next salary
payment and forthwith remit to the executive director the amount
of the employee contribution delinquency, with cumulative
interest thereon at the rate of six percent per annum,
compounded annually, from the date or dates each delinquent
employee contribution was first payable, such interest to be
paid by the employer. To the extent that any such omitted
required deductions are not paid by the employee, they shall
constitute a liability of the governmental subdivision which
failed to make said required deductions, with interest thereon
as hereinbefore specified. After July 1, 1973, any such omitted
required deductions, past due for a period in excess of 60 days,
shall become the sole obligation of the governmental subdivision
from the time such deductions were first payable, together with
interest thereon as hereinbefore specified. Any amount so due,
together with employer and additional employer contributions at
the rates and in the amounts specified in subdivisions 3 and 3a,
with interest thereon at the rate of six percent compounded
annually from the date they were first payable, shall be paid
from the proceeds of a tax levy made pursuant to section 353.28,
or from other funds available to the employer. Unless otherwise
indicated, this subdivision shall have both retroactive and
prospective application, and the governmental subdivision is
liable retroactively and prospectively for all amounts due
hereunder. No action for the recovery of delinquent employee
and employer contributions or interest thereon shall on
contributions may be commenced and no payment of delinquent
contributions may be made or accepted unless the association has
already commenced action for recovery of delinquent
contributions, after the expiration of three calendar years next
following the calendar year in which the contributions were
omitted.
Sec. 7. Minnesota Statutes 1986, section 353.28,
subdivision 5, is amended to read:
Subd. 5. Any amount which becomes due and payable pursuant
to this section or section 353.27, subdivision 4 shall bear
compound interest at the rate of six percent per year from the
date due for the next five calendar days, and compound interest
at the rate of ten percent per year for amounts past due in
excess of five calendar days until the date paid payment is
actually received in the office of the association, with a
minimum charge of $5 $10.
Sec. 8. Minnesota Statutes 1986, section 353.29,
subdivision 8, is amended to read:
Subd. 8. [ANNUITIES; PAYMENT; EVIDENCE OF RECEIPT.]
Payment of any annuity or benefit for a given month shall be
mailed by the association to the annuitant, recipient of a
disability benefit, or survivor, during the first week of that
month. Evidence of receipt of warrants issued by the
association in payment of an annuity or benefit shall be
submitted by the payee thereof to the association periodically
at times specified by the board of trustees, together with a
written declaration that the annuitant or recipient of a
disability benefit has or has not returned to public service;
that the surviving dependent spouse has or has not remarried;
and shall be furnished on forms provided by the executive
director thereof, before the association shall pay to
the annuitant, disability recipient, or survivor for the next
ensuing month, the annuity or benefit to which the person
otherwise may be entitled. In lieu of the evidence of receipt
of warrants for recipients of an annuity or a benefit, the board
may contract for professional services to identify deceased
annuitants and benefit recipients through a review of nationally
maintained death records.
Sec. 9. Minnesota Statutes 1986, section 353.33, is
amended by adding a subdivision to read:
Subd. 5a. [RECOVERY OF DISABILITY OVERPAYMENTS.] An
overpayment of disability benefits must be recovered by the
executive director by suspending or reducing the payment of
disability benefits, survivor benefits, survivor annuities,
refunds, or retirement annuities until all overpaid money has
been recovered.
Sec. 10. Minnesota Statutes 1986, section 353.34, is
amended by adding a subdivision to read:
Subd. 7. [SICK LEAVE.] A member who is on an authorized
sick leave and has received a maximum of one year of allowable
service in accordance with section 353.01, subdivision 16,
paragraph (4), and who does not return to public service for at
least 120 calendar days following the year of allowable service
may elect to receive a refund of accumulated deductions as
provided in subdivision 2. Application for a refund may not be
made before the expiration of 120 calendar days following the
end of one year of allowable service for employees on authorized
sick leave.
Sec. 11. Minnesota Statutes 1986, section 353.36,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTIONS; INTEREST; MATCHING
PAYMENT.] A member who has at least one year of allowable
service with the association, whose public service terminated
before July 1, 1982, and who has prior public service on which
salary deductions were not taken for the retirement fund and who
does not have the required minimum number of years of allowable
service credit to qualify for an annuity, may apply for an
annuity if otherwise qualified, and within 90 days thereafter
purchase whatever period of the member's prior public service
which is necessary to bring the member's total allowable service
credit to the minimum, provided that the most recent period of
prior uncredited public service shall be purchased first. The
member may gain allowable service credit by paying the
applicable percentage of on the salary covered under the law in
effect at the time that the prior public service was performed.
The applicable member contribution percentage, if the member is
a basic member, the applicable percentage is eight percent, and
if the member is a coordinated member, the applicable percentage
is four percent. An amount equal to the employer and employer
additional contributions specified in section 353.27,
subdivisions 3 and 3a, plus interest on the total amount
representing employee, employer and employer additional
contributions at the rate of six percent per annum compounded
annually from the date first payable to the date payment is
made, shall also be paid. The employer, at its sole discretion,
may agree to pay the amount representing the employer and
employer additional contributions pursuant to subdivision 2a.
An annuity shall accrue as provided in section 353.29,
subdivision 7, but no annuity shall be paid until the
applicant's payment is made in full for the prior public
service. If payment is not made within such 90 days, the
application for retirement shall be void.
Sec. 12. Minnesota Statutes 1986, section 353.64,
subdivision 1, is amended to read:
Subdivision 1. Any person who prior to July 1, 1961, was a
member of the police and fire fund, by virtue of being a police
officer or firefighter, shall as long as the person remains in
either position, be deemed to continue membership in the fund.
Any person who was employed by a governmental subdivision as a
police officer and was a member of the police and fire fund on
July 1, 1978 by virtue of being a police officer as defined by
this section on that date shall be entitled, if employed by the
same governmental subdivision in a position in the same
department in which the person was employed on that date, to
continue membership in the fund whether or not that person has
the power of arrest by warrant after that date. Any other
employee serving on a full-time basis as a police officer or
firefighter on or after July 1, 1961, shall become a member of
the public employees police and fire fund. Any employee serving
on less than a full-time basis as a police officer shall become
a member of the public employees police and fire fund only after
a resolution stating that the employee should be covered by the
police and fire fund is adopted by the governing body of the
governmental subdivision employing the person declaring that the
position which the person holds is that of a police officer.
Any employee serving on less than a full-time basis as a
firefighter, other than a volunteer firefighter, shall become a
member of the public employees police and fire fund only after a
resolution stating that the employee should be covered by the
police and fire fund is adopted by the governing body of the
governmental subdivision employing the person declaring that the
position which the person holds is that of a firefighter. Any
police officer or firefighter who by virtue of that employment
is required to contribute to any other pension, relief, or
retirement fund established for the benefit of officers or
employees of a governmental subdivision other than a volunteer
firefighters relief association to which sections 69.771 to
69.776 apply shall not be a member of this fund.
Sec. 13. Minnesota Statutes 1986, section 353.64,
subdivision 2, is amended to read:
Subd. 2. Before a governing body may declare a position to
be that of a police officer, the duties of the person so
employed shall, as a minimum, include services as an officer of
a designated police department or sheriff's office or person in
charge of a designated police department or sheriff's
office whose primary job it is to enforce the law, who is
licensed by the Minnesota board of peace officer standards and
training under sections 626.84 to 626.855, who is engaged in the
hazards of protecting the safety and property of others and who
has the power to arrest by warrant.
Sec. 14. Minnesota Statutes 1986, section 353.656,
subdivision 6, is amended to read:
Subd. 6. [RETIREMENT STATUS AT AGE 55.] All disability
benefits payable under this section shall terminate when the
disabled firefighter or police officer becomes 55 years of age.
If the person is still disabled when the person attains the age
of 55 years, the person shall be deemed to be a retired member
and, if the person had elected an optional annuity pursuant to
subdivision 1a, shall receive an annuity in accordance with the
terms of the optional annuity previously elected, or, if the
person had not elected an optional annuity pursuant to
subdivision 1a, may then elect to receive either a normal
retirement annuity computed pursuant to section 353.651, or an
optional annuity as provided in section 353.30, subdivision 3,
or normal retirement annuity equal to the disability benefit
paid before the person reached age 55. Any disabled person who
becomes age 55 shall have the annuity computed in accordance
with the law in effect upon attainment of age 55. Election of
an optional annuity shall be made prior to the person attaining
the age of 55 years. If an optional annuity is elected, the
election shall be effective on the date on which the person
attains the age of 55 years and the optional annuity shall begin
to accrue on the first day of the month next following the month
in which the person attains the age of 55 years.
Sec. 15. Minnesota Statutes 1986, section 353.656, is
amended by adding a subdivision to read:
Subd. 7. [DISABLED MEMBERS.] Notwithstanding the age-55
requirement of section 353.651, subdivision 1, a member of the
police and fire fund age 55 or over who has five or more years
of allowable service but less than ten years of allowable
service and who becomes disabled may elect to draw a retirement
annuity in accordance with section 353.651, subdivision 3, based
on the actual years of allowable service.
Sec. 16. Minnesota Statutes 1986, section 353.657, is
amended to read:
353.657 [SURVIVOR BENEFITS.]
Subdivision 1. In the event any member of the police and
fire fund shall die from any cause, the association shall grant
survivor benefits to any surviving spouse who was residing with
had the same legal residence as the member at the time of death
and who was married to the member for a period of at least one
year, except that if death occurs in the line of duty no time
limit is required, and to a dependent child or children,
unmarried and under the age of 18 years. The spouse and child
or children shall be entitled to monthly benefits as provided in
the following subdivisions.
Subd. 2. The spouse, for life or until remarriage, shall
receive a monthly benefit equal to 30 percent of the member's
average full-time monthly salary earned rate as a police officer
or firefighter on which employee contributions were paid over
the last full six months of allowable service preceding death in
effect over the last six months of allowable service preceding
the month in which death occurred.
Subd. 2a. If a member or former member who has attained
the age of at least 50 years and has credit for not less than
ten years allowable service or who has credit for at least 30
years of allowable service, regardless of age attained, dies
before public service has terminated, or if an employee who has
filed a valid application for an annuity or disability benefit
prior to termination of public service dies before the annuity
or benefit has become payable, notwithstanding any designation
of beneficiary to the contrary, the surviving spouse may elect
to receive, in lieu of a refund with interest provided in
section 353.32, subdivision 1, or survivor benefits otherwise
payable pursuant to subdivisions 1 and 2, 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, subdivisions 2 and 3, and 353.30,
subdivision 3. 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. No payment shall accrue 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 shall be paid to the
deceased member's last designated beneficiary or, if none, to
the legal representative of the estate of such deceased member.
Any member may request in writing that this subdivision not
apply and that payment be made only to the designated
beneficiary, as otherwise provided by this chapter.
Subd. 3. Each dependent child, until the child reaches the
age of 18 years, shall receive a monthly benefit equal to ten
percent of the member's average full-time monthly salary earned
rate as a police officer or firefighter on which employee
contributions were paid over the last full six months of
allowable service preceding death in effect over the last six
months of allowable service preceding the month in which death
occurred. Payments for the benefit of any qualified dependent
child under the age of 18 years shall be made to the surviving
parent, or if there be none, 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 shall have advised the board in writing
that the amount will be held or used in trust for the benefit of
the child. The maximum monthly benefit for any one family shall
not exceed an amount equal to 50 percent of the member's
specified average monthly salary, and the minimum benefit per
family shall not be less than 30 percent of the member's
specified average monthly salary.
Subd. 4. If the member shall die under circumstances which
entitle a surviving spouse and dependent children to receive
benefits under the workers' compensation law, the amounts so
received by them shall not be deducted from the benefits payable
under this section.
Sec. 17. [RETROACTIVE AUTHORIZATION OF PAYMENTS TO CERTAIN
DISABILITANTS.]
Notwithstanding any law to the contrary, a disabilitant who
became eligible for an annuity under section 15 after May 31,
1986, but before June 1, 1987, may receive an annuity
retroactive to the first of the month following the date of
disability.
Sec. 18. [REPEALER.]
Minnesota Statutes 1986, section 353.64, subdivision 6, is
repealed.
Sec. 19. [EFFECTIVE DATE.]
Sections 15 and 17 are effective June 1, 1986. Sections 1
to 14, 16, and 18 are effective the day following final
enactment.
ARTICLE 6
TEACHERS RETIREMENT ASSOCIATION ADMINISTRATIVE CHANGES
Section 1. Minnesota Statutes 1986, section 354.05,
subdivision 35, is amended to read:
Subd. 35. [SALARY.] "Salary" means the compensation paid
to a teacher excluding lump sum annual or sick leave payments
and all forms of severance payments in lieu of any employer paid
group insurance coverage, including the difference between
single and family rates, that may be paid to a member with
single coverage. "Salary" does not mean any form of payment
made in lieu of any other employer paid fringe benefit or
expense, or any form of severance payments. Severance
payments includes include, but is are not limited to:
(a) payments to an employee to terminate employment;
(b) payments, or that portion of payments, that are not
clearly for performance of services to the employer; and
(c) payments to an administrator or former administrator
serving as an advisor to a successor or as a consultant to the
employer under an agreement to terminate employment within two
years or less for compensation that is significantly different
than the most recent contract salary.
Sec. 2. Minnesota Statutes 1986, section 354.05, is
amended by adding a subdivision to read:
Subd. 37. [TERMINATION OF TEACHING SERVICE.] "Termination
of teaching service" means the withdrawal of a member from
active teaching service by resignation or the termination of the
member's teaching contract by the employer.
Sec. 3. Minnesota Statutes 1986, section 354.06,
subdivision 1, is amended to read:
Subdivision 1. The management of the fund shall be vested
in a board of eight trustees which shall be known as the board
of trustees of the teachers retirement fund. It shall be
composed of the following persons: the commissioner of
education, the commissioner of finance, the commissioner of
commerce, four members of the fund who shall be elected by the
members of the fund and one retiree who shall be elected by the
retirees of the fund. The five elected members of the board of
trustees shall be chosen by mail ballot in a manner which shall
be fixed by the board of trustees of the fund. In every odd
numbered year there shall be elected two members of the fund to
the board of trustees for terms of four years commencing on the
first of July next succeeding their election. In every odd
numbered year there shall be elected one retiree of the fund to
the board of trustees for a term of two years commencing on the
first of July next succeeding the election. The filing of
candidacy for a retiree election must include a petition of
endorsement signed by at least ten retirees of the fund. Each
election shall be completed by June first of each succeeding odd
numbered year. In the case of elective members, any vacancy
shall be filled by appointment by the remainder of the board,
and the appointee shall serve until the members or retirees of
the fund at the next regular election have elected a trustee to
serve for the unexpired term caused by the vacancy. No member
or retiree shall be appointed by the board, or elected by the
members of the fund as a trustee if the person is not a member
or retiree of the fund in good standing at the time of the
appointment or election. It shall be the duty of the board of
trustees to faithfully administer the law without prejudice and
consistent with the expressed intent of the legislature. They
shall act as trustees with a fiduciary obligation to the state
of Minnesota which created the fund, the taxpayers which aid in
financing it and the teachers who are its beneficiaries.
Sec. 4. Minnesota Statutes 1986, section 354.07,
subdivision 3, is amended to read:
Subd. 3. The attorney general shall be legal advisor to
the board and the executive director. The board may sue or be
sued in the name of the board of trustees of the teachers
retirement fund and in all actions brought by or against it the
board shall be represented by the attorney general. Venue of
all actions is in the Ramsey county district court.
Sec. 5. Minnesota Statutes 1986, section 354.094,
subdivision 1, is amended to read:
Subdivision 1. [SERVICE CREDIT CONTRIBUTIONS.] A member
granted an extended leave of absence pursuant to section 125.60
or 136.88, except as provided in subdivision 1a or 1b, may pay
employee contributions and receive allowable service credit
toward annuities and other benefits under this chapter, for each
year of the leave provided the member and the employing board
make the required employer contribution in any proportion they
may agree upon, during the period of the leave which shall not
exceed five years. Except as provided in subdivision 1a or 1b,
the state shall not pay employer contributions into the fund for
any year for which a member is on extended leave. The employee
and employer contributions shall be based upon the rates of
contribution prescribed by section 354.42 for the salary
received during the year immediately preceding the extended
leave. Payments for the years for which a member is receiving
service credit while on extended leave shall be made on or
before the later of June 30 of each fiscal year for which
service credit is received or within 30 days after first
notification by the association of the amount due, whichever is
later if requested by the member, is given by the association.
No payment is permitted after the following September 30.
Payments received after June 30 must include six percent
interest from June 30 through the end of the month in which
payment is received.
Sec. 6. Minnesota Statutes 1986, section 354.44,
subdivision 5, is amended to read:
Subd. 5. [RESUMPTION OF TEACHING.] Any person who retired
under any provision of any retirement law applicable to schools
and institutions covered by the provisions of this chapter and
has thereafter resumed teaching in any school or institution to
which this chapter applies shall continue to receive payments in
accordance with the annuity except that during any year in which
the person's income from the teaching service is in an amount
equal to or greater than the annual maximum earnings allowable
for that age for the continued receipt of full benefit amounts
monthly under the federal old age, survivors and disability
insurance program as set by the secretary of health and human
services pursuant to the provisions of United States Code, title
42, section 403. For the purpose of this subdivision, income
from teaching service shall include, but is not limited to:
(a) all income from for services performed as a consultant
or an independent contractor for an employer unit covered by the
provisions of this chapter; and
(b) the greater of either the income received or an amount
based on the rate paid with respect to an administrative
position, consultant, or independent contractor in an employer
unit with approximately the same number of pupils and at the
same level as the position occupied by the person who resumes
teaching service.
In the event that the person has not yet reached the
minimum age for the receipt of social security benefits, the
maximum earnings for the person shall be equal to the annual
maximum earnings allowable for the minimum age for the receipt
of social security benefits. The amount in excess of the
applicable reemployment income maximum specified in this
subdivision shall be deducted from the annuity payable for the
year immediately following the year in which the excess amount
was earned. After a person has reached the age of 70, the
person shall receive the annuity in full regardless of the
amount of income.
Sec. 7. Minnesota Statutes 1986, section 354.46,
subdivision 5, is amended to read:
Subd. 5. [PAYMENT TO DESIGNATED BENEFICIARY.] Any member
and the spouse of the member may make a joint specification in
writing on a form prescribed by the executive director that the
benefits provided in subdivision 2, or in section 354.47,
subdivision 1, shall be paid only to a designated beneficiary.
For purposes of this subdivision, a designated beneficiary may
only be either a former spouse or a child, either natural or
adopted, of the member, but more than one beneficiary may be
designated for the benefit provided in section 354.47,
subdivision 1.
Sec. 8. Minnesota Statutes 1986, section 354.48,
subdivision 7, is amended to read:
Subd. 7. [PARTIAL REEMPLOYMENT.] Should the disabled
person resume a gainful occupation and have in which earnings
are less than the person's salary at the date of disability or
the salary currently paid for similar positions, the board shall
continue the disability benefit in an amount which when added to
of such earnings does not exceed the person's plus the
disability benefit originally granted may not exceed the salary
at the date of disability or the salary currently paid for
similar positions, whichever is lower, provided the disability
benefit in such case does not exceed the disability benefit
originally allowed. If the sum of such earnings plus the
disability benefit originally granted exceeds the salary at the
date of disability, the amount of excess earnings must be
deducted from the disability benefit. The provisions of this
subdivision shall not prohibit the board from making a
determination that a member is no longer totally and permanently
disabled or that the member is engaged or is able to engage in a
substantial gainful occupation based on the results of the
regular physical examinations required by subdivision 6 or any
other physical examinations required by the board. Payment of
the disability benefit provided in this subdivision during a
period of partial reemployment shall be discontinued if the
board finds that the member is no longer totally and permanently
disabled.
Sec. 9. Minnesota Statutes 1986, section 354.51,
subdivision 5, is amended to read:
Subd. 5. In the event that full required member
contributions are not deducted from the salary of a teacher,
payment shall be made as follows:
(a) Payment of shortages in member deductions on salary
earned after July 1, 1961 June 30, 1957, and prior to July 1,
1981 shall, may be made within one year from the end of the
fiscal year in which the shortage in deductions occurred in
order to be accepted without an interest charge. If payment is
not made within this period of time, it may be paid by the
member any time prior to retirement provided that the. Payment
shall include six percent interest compounded annually from the
end of the fiscal year in which the shortage occurred to the end
of the month in which payment is made and the interest shall be
credited to the fund. If payment of a shortage in deductions is
not made, the formula service credit of the member shall be
prorated pursuant to section 354.05, subdivision 25, clause (3).
(b) Payment of shortages in member deductions on salary
earned after June 30, 1981 shall be the sole obligation of the
employing unit and shall be payable by the employing unit upon
notification by the executive director of the shortage with
interest at the rate of six percent per annum, compounded
annually, from the end of the fiscal year in which the shortage
occurred to the end of the month in which payment is made and
the interest shall be credited to the fund. Effective July 1,
1986, the employing unit shall also pay the employer
contributions as specified in section 354.42, subdivisions 3 and
5 for such shortages. If the shortage payment is not paid by
the employing unit within 60 days of notification, the executive
director shall certify the amount of the shortage payment to the
applicable county auditor, who shall spread a levy in the amount
of the shortage payment over the taxable property of the taxing
district of the employing unit if the employing unit is
supported by property taxes, or to the commissioner of finance,
who shall deduct the amount from any state aid or appropriation
amount applicable to the employing unit if the employing unit is
not supported by property taxes.
(c) Payment may not be made for shortages in member
deductions on salary earned prior to July 1, 1957.
Sec. 10. Minnesota Statutes 1986, section 354.55,
subdivision 11, is amended to read:
Subd. 11. Any person covered under section 354.44,
subdivisions 6 and 7, who ceases to render teaching service may
leave the person's accumulated deductions in the fund for the
purpose of receiving a deferred annuity at retirement.
Eligibility for an annuity under this subdivision shall be
governed pursuant to section 354.44, subdivision 1, or 354.60.
The amount of the deferred retirement annuity shall be
determined by section 354.44, subdivisions 6 and 7, and
augmented as provided herein. The required reserves related to
that portion of the annuity which had accrued at the time the
member ceased to render teaching service shall be augmented by
interest compounded annually from the first day of the month
following the month during which the member ceased to render
teaching service to the effective date of retirement. There
shall be no augmentation if this period is less than three
months or if this period commences prior to July 1, 1971. The
rates of interest used for this purpose shall be five percent
commencing July 1, 1971, until January 1, 1981, and three
percent thereafter. If a person has more than one period of
uninterrupted service, a separate average salary determined
under section 354.44, subdivision 6, must be used for each
period and the required reserves related to each period shall be
augmented by interest pursuant to this subdivision. The sum of
the augmented required reserves so determined shall be the basis
for purchasing the deferred annuity. If a person repays a
refund, the service restored by the repayment must be considered
as continuous with the next period of service for which the
person has credit with this fund. If a person does not render
teaching service in any one or more consecutive fiscal years and
then resumes teaching service, the formula percentages used from
date of resumption will be those applicable to new members. The
mortality table and interest assumption contained therein used
to compute the annuity shall be determined by the law in effect
at the time of the member's retirement. A period of
uninterrupted service for the purposes of this subdivision shall
mean a period of covered teaching service during which the
member has not been separated from active service for more than
one fiscal year.
The provisions of this subdivision shall not apply to
variable account accumulations as defined in section 354.05,
subdivision 23.
In no case shall the annuity payable herein be less than
the amount of annuity payable pursuant to section 354.44,
subdivisions 6 and 7.
The requirements and provisions for retirement prior to age
65 contained in section 354.44, subdivision 6, clause (2) shall
also apply to an employee fulfilling the requirements with a
combination of service as provided in section 354.60.
The augmentation provided by this subdivision applies to
the benefit provided in section 354.46, subdivision 2.
The augmentation provided by this subdivision shall not
apply to any period in which a person is on an approved leave of
absence from an employer unit covered by the provisions of this
chapter.
Sec. 11. Minnesota Statutes 1986, section 354.62,
subdivision 5, is amended to read:
Subd. 5. [VARIABLE RETIREMENT ANNUITY.] (1) At retirement
the amount of the member's variable account accumulation in the
employee variable annuity contribution account, based on the
valuation at the previous fiscal year end plus any contributions
made by the person since the end of the previous fiscal year,
and an equal amount from the employer variable annuity
contribution account shall be transferred to the variable
annuity reserve account, and the variable retirement annuity for
the member shall be determined by the member's age, and sex, and
the amount transferred for the member to the variable annuity
reserve account at the date of retirement. The amount of the
annuity shall be calculated on the basis of an appropriate
annuity table of mortality with an interest assumption of eight
percent, except that if the member elects to have the
accumulation transferred to the Minnesota postretirement
investment fund as authorized by clause (8), the annuity shall
be calculated with an interest assumption of five percent.
(2) Whenever the admitted value of the annuity reserve
account of the variable annuity division, as of June 30 of any
year, exceeds or is less than the then present value of all
variable annuities in force, determined in accordance with the
rate of interest and approved actuarial tables then in effect,
by at least two percent of the present value, the amount of each
variable annuity payment shall be proportionately increased or
decreased for the following year.
(3) The death benefit payable in the event of a member's
death prior to retirement shall be a lump sum refund of a
member's variable account accumulation, based on the valuation
at the previous fiscal year end plus any contributions made by
the person since the end of the previous fiscal year, to the
surviving spouse, or if there is no surviving spouse to the
designated beneficiary. Except that if a member has made an
election in accordance with joint and survivor annuity is
payable under section 354.46, subdivision 2, then the surviving
spouse shall receive a joint and survivor variable annuity as
described in section 354.44 must be paid and computed as
provided in clause (1). An amount equal to the lump sum refund
made in this clause shall be transferred from the employer
contribution account to the variable annuity turnover account.
(4) Except as provided in section 354.44, subdivision 7,
any person who ceases to be a member by reason of termination of
teaching service, shall be entitled to a lump sum refundment of
the member's variable account accumulations, based on the
valuation at the previous fiscal year end plus any contributions
made by the person since the end of the previous fiscal year.
Application for a refundment may be made no sooner than 30 days
after termination of teaching service if the applicant has not
again become a teacher. Repayment of a refundment upon
resumption of teaching is not permitted under this section. An
amount equal to the refundment to the member shall be
transferred from the employer contribution account to the
variable annuity turnover account.
(5) If a member is determined to be totally and permanently
disabled as provided in sections 354.05, subdivision 14; and
354.48, the member shall be entitled to the annuity provided in
this subdivision.
(6) Those members eligible for retirement as provided in
section 354.44, subdivision 1 shall upon application for the
annuity provided therein be entitled to the annuity provided in
this subdivision. The annuity elected in accordance with
sections 354.44, and 354.45 shall be the annuity applicable to
this subdivision.
(7) Notwithstanding section 356.18, increases in annuity
payments pursuant to this section shall be made automatically
unless written notice is filed by the annuitant with the
teachers retirement association board requesting that the
increase not be made.
(8) At retirement, a member may elect to have the amount of
the member's variable annuity accumulation in the employee
variable annuity contribution account and an equal amount from
the employer variable annuity contribution account transferred
to the Minnesota postretirement investment fund as provided in
section 354.63, subdivision 2, clause (2). This election may
also be made by a surviving spouse who receives an annuity under
clause (3). The election shall be made on a form provided by
the executive secretary director.
Sec. 12. Minnesota Statutes 1986, section 354.62, is
amended by adding a subdivision to read:
Subd. 6. [RECALCULATION OF CERTAIN ANNUITIES.] A variable
annuity effective prior to May 1, 1984, must be recalculated on
June 30, 1987, based on an appropriate annuity table of
mortality with an interest assumption of eight percent, and the
adjusted annuity must begin to accrue July 1, 1987.
Sec. 13. [EFFECTIVE DATE.]
Section 1 is effective July 1, 1987. Sections 2 to 12 are
effective the day following final enactment.
ARTICLE 7
PUBLIC PENSION PLAN AUDIT RESPONSIBILITIES
Section 1. Minnesota Statutes 1986, section 354A.021, is
amended by adding a subdivision to read:
Subd. 8. [AUDIT BY LEGISLATIVE AUDITOR.] The books and
accounts of each teachers retirement fund association must be
examined and audited periodically as considered necessary by the
state auditor. A full and detailed report of the examination
and audit must be made and a copy provided to the teachers
retirement fund association board of trustees. The cost of any
examination and audit must be paid by the teachers retirement
fund association in accordance with section 6.56. For purposes
of section 6.56, each teachers retirement fund association is
considered a state agency.
Sec. 2. [EFFECTIVE DATE.]
This article is effective July 1, 1987.
ARTICLE 8
COMBINED SERVICE DISABILITY AND SURVIVOR BENEFITS
Section 1. [356.302] [DISABILITY BENEFIT WITH COMBINED
SERVICE.]
Subdivision 1. [DEFINITIONS.] (a) The terms used in this
section are defined in this subdivision.
(b) "Average salary" means the highest average of covered
salary for the appropriate period of credited service that is
required for the calculation of a disability benefit by the
covered retirement plan and that is drawn from any period of
credited service and covered salary in a covered retirement plan.
(c) "Covered retirement plan" or "plan" means a retirement
plan listed in subdivision 7.
(d) "Duty-related" means a disabling illness or injury that
occurred while the person was actively engaged in employment
duties or that arose out of the person's active employment
duties.
(e) "General employee retirement plan" means a covered
retirement plan listed in subdivision 7, clauses (1) to (8).
(f) "Occupationally disabled" means the condition of having
any medically determinable physical or mental impairment that
makes a person unable to satisfactorily perform the minimum
requirements of the person's employment position or a
substantially similar employment position.
(g) "Public safety employee retirement plan" means a
covered retirement plan listed in subdivision 7, clauses (9) to
(11).
(h) "Totally and permanently disabled" means the condition
of having any medically determinable physical or mental
impairment that makes a person unable to engage in any
substantial gainful activity and that is expected to continue or
has continued for a period of at least one year or that is
expected to result directly in the person's death.
Subd. 2. [ENTITLEMENT.] Notwithstanding any law to the
contrary governing any covered retirement plan, a member of a
covered retirement plan may receive a combined service
disability benefit from each covered retirement plan in which
the person has credit for at least six months of allowable
service if that person meets the applicable qualifying
conditions. Subdivision 3 applies to a member of a general
employee retirement plan. Subdivision 4 applies to a member of
a public safety employee retirement plan. Subdivision 5 applies
to a member of a covered retirement plan with general employee
and public safety employee retirement plan service.
Subd. 3. [GENERAL EMPLOYEE PLAN ELIGIBILITY REQUIREMENTS.]
A disabled member of a covered retirement plan who has credit
for allowable service in a combination of general employee
retirement plans is entitled to a combined service disability
benefit if the member:
(1) is less than 65 years of age on the date of application
for the disability benefit;
(2) has become totally and permanently disabled;
(3) has credit for allowable service in any combination of
general employee retirement plans totaling at least ten years if
the person has not reached age 50 or at least five years if the
person has reached age 50;
(4) has credit for at least six months of allowable service
with the current general employee retirement plan before the
commencement of the disability;
(5) has at least five continuous years of allowable service
credit by the general employee retirement plan or has at least a
total of five years of allowable service credit by a combination
of general employee retirement plans in a 72-month period during
which no interruption of allowable service credit from a
termination of employment exceeded 29 days; and
(6) is not receiving a retirement annuity or disability
benefit from any covered general employee retirement plan at the
time of the commencement of the disability.
Subd. 4. [PUBLIC SAFETY PLAN ELIGIBILITY REQUIREMENTS.] A
disabled member of a covered retirement plan who has credit for
allowable service in a combination of public safety employee
retirement plans is entitled to a combined service disability
benefit if the member:
(1) is less than 55 years of age on the date of application
for the disability benefit;
(2) has become occupationally disabled;
(3) has credit for allowable service in any combination of
public safety employee retirement plans totaling at least one
year if the disability is duty-related or totaling at least five
years if the disability is not duty-related;
(4) has credit for at least six months of allowable service
with the current public safety employee retirement plan before
the commencement of the disability; and
(5) is not receiving a retirement annuity or disability
benefit from any covered public safety employee retirement plan
at the time of the commencement of the disability.
Subd. 5. [GENERAL AND PUBLIC SAFETY PLAN ELIGIBILITY
REQUIREMENTS.] A disabled member of a covered retirement plan
who has credit for allowable service in a combination of both
public safety employee retirement plans and general employee
retirement plans must meet the qualifying requirements in
subdivisions 3 and 4 to receive a combined service disability
benefit from the applicable general employee and public safety
employee retirement plans, except that the person need only be a
member of a covered retirement plan at the time of the
commencement of the disability and that the minimum allowable
service requirements of subdivision 3, clauses (3) and (5), and
subdivision 4, clauses (3) and (4), may be met in any
combination of covered retirement plans.
Subd. 6. [COMBINED SERVICE DISABILITY BENEFIT
COMPUTATION.] (a) The combined service disability benefit from
each covered retirement plan must be based on the allowable
service in each retirement plan, except as specified in
paragraphs (b) to (f).
(b) The disability benefit must be governed by the law in
effect for each covered retirement plan on the date of the
commencement of the member's most recent qualifying disability
as a member of a covered retirement plan.
(c) All plans must base the disability benefit on the same
average salary to the extent practicable.
(d) If the method of the covered retirement plan used to
compute a disability benefit varies based on the length of
allowable service credit, the benefit accrual formula
percentages used by the plan must recognize the allowable
service credit in the plan as a continuation of any previous
allowable service credit with other covered retirement plans.
(e) If the covered retirement plan is a defined benefit or
formula plan and the method used to compute a disability benefit
does not vary based on the length of allowable service credit,
the portion of the specified benefit amount from the plan must
bear the same proportion to the total specified benefit amount
as the allowable service credit in that plan bears to the total
allowable service credit in all covered retirement plans. If
the covered retirement plan is a defined contribution or
nonformula plan, the disability benefit amount for allowable
service under the plan is not affected, but the service and
covered salary under the plan must be used in calculations by
other covered retirement plans.
(f) A period for which a person has allowable service
credit in more than one covered retirement plan must be used
only once in determining the total allowable service credit for
calculating the combined service disability benefit, with any
period of duplicated service credit handled as provided in
section 356.30, subdivision 1, clause (3), items (i) and (j).
Subd. 7. [COVERED RETIREMENT PLANS.] This section applies
to the following retirement plans:
(1) state employees retirement fund, established by chapter
352;
(2) unclassified employees retirement plan, established by
chapter 352D;
(3) public employees retirement association, established by
chapter 353;
(4) teachers retirement fund, established by chapter 354;
(5) Duluth teachers retirement fund association,
established by chapter 354A;
(6) Minneapolis teachers retirement fund association,
established by chapter 354A;
(7) St. Paul teachers retirement fund association,
established by chapter 354A;
(8) Minneapolis employees retirement fund, established by
chapter 422A;
(9) correctional employees retirement plan, established by
chapter 352;
(10) state patrol retirement fund, established by chapter
352B; and
(11) public employees police and fire fund, established by
chapter 353.
Sec. 2. [356.303] [SURVIVOR BENEFIT WITH COMBINED
SERVICE.]
Subdivision 1. [DEFINITIONS.] (a) The terms used in this
section are defined in this subdivision.
(b) "Average salary" means the highest average of covered
salary for the appropriate period of credited service that is
required for the calculation of a survivor annuity or a survivor
benefit, whichever applies, by the covered retirement plan and
that is drawn from any period of credited service and covered
salary in a covered retirement plan.
(c) "Covered retirement plan" or "plan" means a retirement
plan listed in subdivision 4.
(d) "Deceased member" means a person who on the date of
death was an active member of a covered retirement plan and who
has reached the minimum age, if any, required by the covered
retirement plan as part of qualifying for a survivor annuity or
survivor benefit.
(e) "Surviving child" means a child of a deceased member
(1) who is unmarried, (2) who has not reached age 18, or, if a
full-time student, who has not reached a higher age specified in
the applicable covered retirement plan, and (3) if specified by
that plan, who was actually dependent on the deceased member for
a specified proportion of support before the deceased member's
death. "Surviving child" includes a natural child, an adopted
child, or a child of a deceased member who is conceived during
the member's lifetime and is born after the member's death.
(f) "Surviving spouse" means the legally married husband or
wife of the deceased member who was residing with the deceased
member on the date of death and who, if specified by the
applicable covered retirement plan, had been married to the
deceased member for a specified period of time before the death
of the deceased member.
(g) "Survivor annuity" means the entitlement to a future
amount payable to a survivor as the remainder interest of an
optional annuity form implied by law as having been chosen by a
deceased member before the date of death and effective on the
date of death or provided automatically.
(h) "Survivor benefit" means an entitlement to a future
amount payable to a survivor that is not included in the
definition of a survivor annuity.
Subd. 2. [ENTITLEMENT; ELIGIBILITY.] Notwithstanding any
law to the contrary governing a covered retirement plan, a
person who is the survivor of a deceased member of a covered
retirement plan may receive a combined service survivor benefit
from each covered retirement plan in which the deceased member
had credit for at least six months of allowable service if the
deceased member:
(1) had credit for sufficient allowable service in any
combination of covered retirement plans to meet any minimum
allowable service credit requirement of the covered retirement
fund for qualification for a survivor benefit or annuity;
(2) had credit for at least six months of allowable service
with the most recent covered retirement plan before the date of
death and was an active member of that covered retirement plan
on the date of death; and
(3) was not receiving a retirement annuity from any covered
retirement plan on the date of death.
Subd. 3. [COMBINED SERVICE SURVIVOR BENEFIT
COMPUTATION.] (a) The combined service survivor annuity or
survivor benefit from each covered retirement plan must be based
on the allowable service in each covered retirement plan, except
as provided by paragraphs (b) to (f).
(b) The survivor annuity or survivor benefit must be
governed by the law in effect for each covered retirement plan
on the date of death of the deceased member.
(c) All plans must base the survivor annuity or survivor
benefit on the same average salary.
(d) If the method of the covered retirement plan used to
compute a survivor benefit or annuity varies based on the length
of allowable service credit, the benefit accrual formula
percentages used by the plan must recognize the allowable
service credit in the plan as a continuation of any previous
allowable service credit with other covered retirement plans.
(e) If the covered retirement plan is a defined benefit or
formula plan and the method used to compute a survivor benefit
or annuity does not vary based on the length of allowable
service credit, the portion of the specified benefit or annuity
amount from the plan must bear the same proportion to the total
specified benefit or annuity amount as the allowable service
credit in that plan bears to the total allowable service credit
in all covered retirement plans. If the covered retirement plan
is a defined contribution or nonformula plan, the survivor
benefit amount for allowable service under the plan is not
affected, but the service and covered salary under the plan must
be used in calculations by other covered retirement plans.
(f) A period for which a person has allowable service
credit in more than one covered retirement plan must be used
only once in determining the total allowable service credit for
calculating the combined service survivor annuity or survivor
benefit. A period of duplicated service credit must be handled
as provided in section 356.30, subdivision 1, clause (3), items
(i) and (j).
Subd. 4. [COVERED RETIREMENT PLANS.] This section applies
to the following retirement plans:
(1) legislators retirement plan, established by chapter 3A;
(2) state employees retirement fund, established by chapter
352;
(3) correctional employees retirement plan, established by
chapter 352;
(4) state patrol retirement fund, established by chapter
352B;
(5) elective state officers retirement plan, established by
chapter 352C;
(6) unclassified employees retirement plan, established by
chapter 352D;
(7) public employees retirement association, established by
chapter 353;
(8) public employees police and fire fund, established by
chapter 353;
(9) teachers retirement fund, established by chapter 354;
(10) Duluth teachers retirement fund association,
established by chapter 354A;
(11) Minneapolis teachers retirement fund association,
established by chapter 354A;
(12) St. Paul teachers retirement fund association,
established by chapter 354A; and
(13) Minneapolis employees retirement fund, established by
chapter 422A.
Sec. 3. [REPEALER.]
Minnesota Statutes 1986, section 356.301, is repealed.
Sec. 4. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment
and applies to any active member of a covered retirement plan
whose applicable disability is determined to have begun on or
after that date. Section 2 is effective the day following final
enactment and applies to any person who became a survivor on or
after June 15, 1986. Section 3 is effective the day following
final enactment.
Approved May 28, 1987
Official Publication of the State of Minnesota
Revisor of Statutes