Office of the Revisor of Statutes
Minnesota Session Laws - 1989, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1989
CHAPTER 319-S.F.No. 783
An act relating to retirement; making a variety of
changes in the laws governing benefits, contributions,
and administrators of various statewide and local
public pension plans; use of state aid and payment of
postretirement adjustments to Minneapolis police and
firefighters; amending Minnesota Statutes 1988,
sections 3A.01, subdivision 7, and by adding a
subdivision; 3A.02, subdivisions 1, 1b, and 4; 11A.01;
11A.04; 11A.07, subdivision 4; 11A.09; 11A.13,
subdivision 1; 11A.18, subdivisions 9 and 10; 11A.19,
by adding a subdivision; 43A.316, subdivision 9;
43A.44, subdivision 2; 69.031, subdivision 5; 69.77,
subdivisions 2b and 2g; 69.775; 136.80, subdivision 1;
136.81, subdivision 1; 136.82, subdivision 1 and 2;
136.84; 352.01, subdivisions 11, 19, and by adding a
subdivision; 352.021, subdivision 5; 352.03,
subdivisions 7 and 11; 352.04, subdivisions 2 and 3;
352.113, subdivisions 1 and 12; 352.115, subdivisions
1, 2, and 3; 352.116; 352.12, subdivisions 1, 2, and
6; 352.22, subdivisions 1, 2, 2a, and 3; 352.72,
subdivisions 1, 2, and 5; 352.85, subdivision 1;
352.92, by adding a subdivision; 352.93, subdivisions
1, 2, 3, and by adding a subdivision; 352.95,
subdivisions 1, 2, and 5; 352.96, subdivision 3;
352B.01, subdivision 11; 352B.03, subdivision 1;
352B.08, subdivision 1, 2, 3, and by adding a
subdivision; 352B.10, subdivisions 1, 2, and 5;
352B.11, subdivisions 1 and 2; 352B.30, subdivision 1;
352C.091, subdivision 1; 352D.04, subdivision 1;
352D.06, subdivision 1; 352D.075, subdivision 2;
352D.09, subdivision 1; 353.01, subdivisions 2a, 2b,
10, and by adding subdivisions; 353.03, subdivision 1;
353.27, subdivisions 2 and 12; 353.28, subdivisions 5
and 6; 353.29, subdivisions 1, 2, 3, 4, and 7; 353.30;
353.32, subdivisions 1 and 1a; 353.33, subdivisions 1,
2, 3, 5, 6, 7, and 11; 353.34, subdivisions 1, 2, 3,
and 3a; 353.35; 353.64, subdivisions 1, 2, 3, and by
adding a subdivision; 353.65, subdivisions 1, 6, and
by adding a subdivision; 353.651, subdivisions 1, 2,
3, and by adding a subdivision; 353.656, subdivisions
1, 3, and 4; 353.657, subdivisions 2, 2a, and 3;
353.71, subdivisions 1, 2, and 5; 353C.06,
subdivisions 1, 2, and 4; 353C.08, subdivision 5;
354.05, subdivisions 2a, 5, 35, 37, and by adding a
subdivision; 354.06, subdivision 1; 354.07,
subdivision 3; 354.091; 354.092; 354.10, subdivision
2; 354.35; 354.41, subdivision 3; 354.42, subdivision
7; 354.44, subdivisions 1, 1a, 3, 5, 6, 7, 8, and by
adding a subdivision; 354.45, subdivision 1, and by
adding a subdivision; 354.46, subdivision 2; 354.47,
subdivisions 1 and 2; 354.48, subdivisions 1, 2, 3,
and 10; 354.49, subdivisions 2 and 3; 354.50, by
adding a subdivision; 354.55, subdivision 11; 354.60;
354.62, subdivision 2, and by adding a subdivision;
354.65; 354.66, subdivision 2; 354A.011, subdivision
20, and by adding a subdivision; 354A.021, subdivision
6; 354A.21; 354A.31, subdivisions 1, 3, 4, 5, 6, and
by adding a subdivision; 354A.32, subdivision 1, and
by adding a subdivision; 354A.35, subdivisions 1 and
2; 354A.36, subdivisions 1, 3, and 10; 354A.37,
subdivisions 2, 3, and 4; 354A.39; 354B.02; 354B.04,
subdivision 2; 354B.05, subdivisions 3 and 4; 355.90,
subdivisions 3 and 4; 356.215, subdivisions 4d and 4g;
356.216; 356.24; 356.30, subdivisions 1, 2, and 3;
356.302, subdivision 7; 356.303, subdivision 4;
356.32, subdivision 1; 356.371, subdivision 3; 356.80,
subdivisions 1 and 3; 422A.05, subdivisions 2a and 2d;
423.374; 423.45; 423.805; 423A.01, subdivision 2;
423A.21, subdivision 4; 424.06; 424A.001, subdivision
7; 424A.01, subdivision 2; 424A.02, subdivisions 1, 2,
7, and 13; 424A.04, subdivision 2; 424A.10; 490.122;
490.124, subdivision 12; proposing coding for new law
in Minnesota Statutes, chapters 3A; 352; 353; 354;
354A; 354B; 355; 356; 356A; and 490; repealing
Minnesota Statutes 1988, sections 136.88, subdivision
3; 352.03, subdivision 13; 352.73, subdivision 3;
353.01, subdivision 2c; 353.661; 353.662; 354.41,
subdivision 3; 354.531; 354.532; 354.55, subdivision
5; 354.56; 354A.32, subdivision 2; and 424A.01,
subdivision 3a; amending Laws 1955, chapter 151,
section 13, as amended; Laws 1965, chapter 446,
sections 2 and 3; Laws 1980, chapter 595, section 2,
subdivision 4; Laws 1982, chapter 574, section 5, as
amended; Laws 1985, chapter 11, section 12,
subdivision 3; and Laws 1988, chapter 709, article 3,
section 1, subdivision 4; repealing Laws 1967, chapter
815; Laws 1978, chapter 683; and Laws 1981, chapter
224, sections 2 and 5.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
MINNESOTA STATE RETIREMENT SYSTEM
Section 1. Minnesota Statutes 1988, section 43A.44,
subdivision 2, is amended to read:
Subd. 2. [BENEFITS.] Employees in shared positions shall
be eligible for the following benefits and subject to the
following obligations:
(a) (1) Membership in the Minnesota state retirement
system, the teachers retirement association or the state patrol
retirement fund, whichever is appropriate, except that,
notwithstanding any provision of section 352.01, subdivisions 11
and 16; 352B.01, subdivision 3; 354.05, subdivisions 13 and 25;
or 354.091, employees shall have allowable service for the
purpose of meeting the minimum service requirements for
eligibility to a retirement annuity or other retirement benefit
credited in full, but shall have benefit accrual service for the
purpose of computing a retirement annuity or other retirement
benefit credited on a fractional basis either weekly or annually
based upon the relationship that the number of hours of service
bears to either 40 hours per week or 2,080 hours per year, with
any salary paid for the fractional service credited on the basis
of the rate of salary applicable for a full-time week or a
full-time year.;
(b) (2) Vacation and sick leave accruals shall be prorated
in accordance with the pertinent collective bargaining agreement
or plan covering the position;
(c) (3) Employee dental, medical and hospital benefits
coverage shall be available of the same type and coverage
afforded to comparable full-time employees. Employees in shared
positions who elect such coverage shall pay, by payroll
deduction, the difference between the actual cost to the
employer and the appropriate shared time percent of the actual
cost. The remaining percent shall be paid by the employer.
Employee life insurance coverage shall be available to employees
in shared positions on the same terms as for comparable
full-time employees;
(d) (4) Dependent life insurance coverage shall be
available to employees in shared positions on the same terms as
for comparable full-time employees. Dependent medical, hospital
and dental benefits coverage shall be available to employees in
shared positions of the same type and coverage afforded to
comparable full-time employees, except that the employer shall
contribute the appropriate shared time percent of the dollar
amount contributed for comparable full-time employees electing
the same program, the remainder to be paid by payroll deduction
by the employee electing such coverage;
(e) (5) Employees in shared positions shall be entitled to
the prorated holiday provisions of the applicable collective
bargaining agreement or plan covering the position;
(f) (6) Employees in shared positions shall accrue
seniority time in every relevant category at the same rate
accorded to comparable full-time employees. No full-time
employee accepting a shared position shall suffer any loss of or
gap in seniority time in the relevant categories applicable to
the full-time employment; and
(g) (7) Any other benefits of employment for employees in
shared positions shall be prorated at a rate of the appropriate
shared time percent of those available to comparable full-time
employees, whenever the benefits are divisible. Contributions
by the employer toward the benefits, if any, shall be equal to
the appropriate shared time percent of the full-time benefits.
When not divisible, the cost of the full-time benefits normally
allocable to the employer shall be allocated, the appropriate
shared time percent to the employee in a shared position, by
payroll deduction, and the remaining percent to the employer.
Sec. 2. Minnesota Statutes 1988, section 352.01,
subdivision 11, is amended to read:
Subd. 11. [ALLOWABLE SERVICE.] "Allowable service" means:
(1) Service by an employee for which on or before July 1,
1957, the employee was entitled to allowable service credit on
the records of the system by reason of employee contributions in
the form of salary deductions, payments in lieu of salary
deductions, or in any other manner authorized by Minnesota
Statutes 1953, chapter 352, as amended by Laws 1955, chapter 239.
(2) Service by an employee for which on or before July 1,
1961, the employee chose to obtain credit for service by making
payments to the fund under Minnesota Statutes 1961, section
352.24.
(3) Except as provided in clauses (9) and (10), service by
an employee after July 1, 1957, for any calendar month in which
the employee is paid salary from which deductions are made,
deposited, and credited in the fund, including deductions made,
deposited, and credited as provided in section 352.041.
(4) Except as provided in clauses (9) and (10), service by
an employee after July 1, 1957, for any calendar month for which
payments in lieu of salary deductions are made, deposited, and
credited in the fund, as provided in section 352.27 and
Minnesota Statutes 1957, section 352.021, subdivision 4.
For purposes of clauses (3) and (4), except as provided in
clauses (9) and (10), any salary paid for a fractional part of
any calendar month is deemed the compensation for the entire
calendar month.
(5) The period of absence from their duties by employees
who are temporarily disabled because of injuries incurred in the
performance of duties and for which disability the state is
liable under the workers' compensation law until the date
authorized by the director for the commencement of payments of a
total and permanent disability benefit from the retirement fund.
(6) The unused part of an employee's annual leave allowance
for which the employee is paid salary.
(7) Any service covered by a refund repaid as provided in
section 352.23 or 352D.05, subdivision 4, except service
rendered as an employee of the adjutant general for which the
person has credit with the federal civil service retirement
system.
(8) Any service before July 1, 1978, by an employee of the
transit operating division of the metropolitan transit
commission or by an employee on an authorized leave of absence
from the transit operating division of the metropolitan transit
commission who is employed by the labor organization which is
the exclusive bargaining agent representing employees of the
transit operating division, which was credited by the
metropolitan transit commission-transit operating division
employees retirement fund or any of its predecessor plans or
funds as past, intermediate, future, continuous, or allowable
service as defined in the metropolitan transit
commission-transit operating division employees retirement fund
plan document in effect on December 31, 1977.
(9) Service after July 1, 1983, by an employee who is
employed on a part-time basis for less than 50 percent of full
time, for which the employee is paid salary from which
deductions are made, deposited, and credited in the fund,
including deductions made, deposited, and credited as provided
in section 352.041 or for which payments in lieu of salary
deductions are made, deposited, and credited in the fund as
provided in section 352.27 shall be credited on a fractional
basis either by pay period, monthly, or annually based on the
relationship that the percentage of salary earned bears to a
full-time salary, with any salary paid for the fractional
service credited on the basis of the rate of salary applicable
for a full-time pay period, month, or a full-time year. For
periods of part-time service that is duplicated service credit,
section 356.30, subdivision 1, clauses (i) and (j), govern.
(10) Any service by an employee in the Minnesota
demonstration job-sharing program under sections 43A.40 to
43A.465 which is less than 40 hours per week or 2,080 hours per
year and for which the employee is paid salary from which
deductions are made, deposited and credited in the fund, shall
be credited on a fractional basis either weekly or annually
based on the relationship that the number of hours of service
bears to either 40 hours per week or 2,080 hours per year, with
any salary paid for the fractional service credited on the basis
of the rate of salary applicable for a full-time week or a
full-time year.
The allowable service determined and credited on a
fractional basis under clauses (9) and (10) shall be used in
calculating the amount of benefits payable, but service as
determined on a fractional basis must not be used in determining
the length of service required for eligibility for benefits.
(11) (10) Any period of authorized leave of absence without
pay that does not exceed one year and for which the employee
obtained credit by payment to the fund in lieu of salary
deductions. To obtain credit, the employee shall pay an amount
equal to the employee and employer contribution rate in section
352.04, subdivisions 2 and 3, multiplied by the employee's
hourly rate of salary on the date of return from leave of
absence and by the days and months of the leave of absence
without pay for which the employee wants allowable service
credit. The employing department, at its option, may pay the
employer amount on behalf of its employees. Payments made under
this clause shall include interest at the rate of six percent
per year from the date of termination of the leave of absence to
the date payment is made unless payment is completed within one
year of the return from leave of absence.
Sec. 3. Minnesota Statutes 1988, section 352.021,
subdivision 5, is amended to read:
Subd. 5. [CONTINUING COVERAGE.] Any state employee who has
made contributions to the retirement fund for a period of one
year and who, continuing in state service after that year,
becomes eligible for membership in the state teachers retirement
association as a full-time teacher, as defined in section
354.05, subdivision 2, may continue coverage under the system by
filing in its office written notice of election to continue.
The election to be covered by the system under this subdivision
or section 352.01, subdivision 2b, clause (3), must be made on a
form approved by the director within 90 days after appointment
to the position. If the option is exercised, the employee is
not thereafter entitled to membership in the teachers retirement
association while employed by the state in a position that
entitled the employee to make this election.
Sec. 4. Minnesota Statutes 1988, section 352.03,
subdivision 11, is amended to read:
Subd. 11. [LEGAL ADVISER, ATTORNEY GENERAL.] The attorney
general shall be the legal adviser of the board and of the
director. The board may sue or be sued or petitioned under this
section in the name of the board of directors of the system. In
actions brought by it or against it, the board shall be
represented by the attorney general. and, except as provided in
section 5, subdivision 9, venue of actions shall be in the
Ramsey county district court.
Sec. 5. [352.031] [APPEALS PROCEDURE.]
Subdivision 1. [DEFINITIONS.] Unless the language or
context clearly indicates that a different meaning is intended,
for the purpose of this section, the following terms have the
meanings given them.
(a) "Board" means the board of directors of the Minnesota
state retirement system.
(b) "Documentation" includes, but is not limited to:
(1) sworn and notarized affidavits made on the personal
knowledge of any person;
(2) official letters or documents;
(3) documents from the file of the petitioner; and
(4) other relevant documents that are admissible as
evidence in a court of law.
(c) "Executive director" means the executive director of
the Minnesota state retirement system.
(d) "Person" includes any state agency or other
governmental unit that employs persons covered under statutes
listed in subdivision 2.
(e) "Record" means the petition and the documentation that
the petitioners submit with the petition; the executive
director's answer to the petition and documentation submitted
with it; and any documentation the board allows to be submitted
at or after the meeting at which the petition is considered.
Subd. 2. [NOTICE OF TERMINATION OR DENIAL.] If the
executive director terminates a benefit or denies an application
or a written request of any person claiming a right under
chapter 352, other than sections 352.96 and 352.97; chapters 3A,
352B, 352C, and 352D; sections 490.121 to 490.133; or the
applicable sections of chapters 355 and 356, the executive
director must serve upon that person written notice containing:
(1) the reasons for the termination or denial;
(2) notice that the person may petition the board for a
review of the termination or denial and that the petition for
review must be filed within 60 days of the receipt of the
written notice;
(3) a statement that failure to petition the board within
60 days will preclude the person from contesting in any other
court procedure or administrative hearing, the issues determined
by the executive director; and
(4) a copy of this section.
Subd. 3. [PETITION FOR REVIEW.] A person who claims a
right under subdivision 2 and whose benefit has been terminated
or whose application or written request has been denied may
petition for a review of that decision by the board. A petition
under this section must be served upon the executive director
personally, or by mail postmarked no later than 60 days after
the petitioner received the notice required by subdivision 2.
The petition must include the sworn, notarized statement of the
reasons the petitioner believes the decision of the executive
director should be reversed or modified and may include relevant
documentation.
Subd. 4. [ANSWER; RECORD FOR HEARING.] Within a reasonable
time after receiving a petition, the executive director must
serve the petitioner with an answer to the petition with all
relevant documentation and with notice of the time and place of
the regular or special board meeting at which the board will
consider the petition. The documentation need not duplicate the
documentation submitted by the petitioner. Not later than ten
days before the board meeting at which the petition will be
heard, the executive director must, personally or by mail,
deliver a copy of the relevant documentation to each board
member. Each board member who participates in the decision on
the petition must be familiar with all relevant documentation.
Subd. 5. [HEARING.] The board shall hold a timely hearing
on a petition for review. The board shall make its decision on
a petition solely on the relevant documentation as submitted and
the proceedings of the hearing. At the hearing, the petitioner,
the petitioner's attorney, and the executive director may state
and discuss with the board their positions with respect to the
petition. The board may allow further documentation to be
placed in the record at or subsequent to the board meeting at
which the petition is considered. If the board allows
additional documentation into the record at or subsequent to the
board meeting, it may make a final determination on the petition
at that board meeting only upon the agreement of both the
petitioner and the executive director.
Subd. 6. [TERMINATION OF BENEFITS.] If the executive
director proposes to terminate a benefit that is being paid to
any person, before terminating the benefit, the executive
director must, in addition to the other procedures prescribed
herein, give the person written or oral notice of the proposed
termination. The notice must explain the reason for the
proposed termination. The person must be given an opportunity,
verbally or in writing, to explain why the benefit should not be
terminated: if the executive director is unable to contact the
person and the executive director determines that a failure to
terminate the benefit might result in unauthorized payment by
the association, the executive director may terminate the
benefit with only a written notice containing the information
required by subdivision 2, mailed to the address to which the
benefit was last sent and, if that address is a financial
institution, to the last known address of the person.
Subd. 7. [MEDICAL ADVISOR ACTION.] If a person petitions
the board to reverse or modify a determination by the executive
director finding that the petitioner, for medical reasons, does
not or has ceased to qualify for a disability benefit, the board
may resubmit the matter to the medical advisor for
reconsideration, with or without instructions to obtain further
medical examinations. The board may make a determination
contrary to the recommendation of the medical advisor only if
there is expert medical evidence in the record to support its
contrary decision. If there is no medical opinion contrary to
the opinion of the medical advisor in the record and the medical
advisor asserts that the decision was made in accordance with
the disability standard in sections 352.01, subdivision 17;
352B.10; or 490.121, subdivision 13, the board must follow the
determination of the medical advisor. The board may make a
determination different from the recommendation of the medical
advisor on issues that do not involve a medical opinion.
Subd. 8. [BOARD FINDINGS.] After the board has made a
decision on a petition, the executive director must prepare
findings of fact, the board's reasons for its conclusions, and
the board's final order for the signature of the chair or other
board member as the board, by resolution, may designate. The
executive director shall serve the findings, conclusions, and
order on the petitioner by certified mail.
Subd. 9. [APPEALS.] Within 30 days of receipt of the
findings, conclusions, and final order, the petitioner may
appeal the board's decision by writ or certiorari to the court
of appeals. Failure to appeal to that court within the 30 days
precludes the petitioner from later raising, in any court
procedure or administrative hearing, those substantive and
procedural issues that reasonably should have been raised upon
appeal.
Subd. 10. [REFERRAL FOR ADMINISTRATIVE
HEARING.] Notwithstanding sections 14.03; 14.06; and 14.57 to
14.69, a challenge to a determination of the executive director
must be conducted exclusively under the procedures in this
section. The board in its sole discretion may refer a petition
brought under this section to the office of administrative
hearings for a contested case hearing under sections 14.57 to
14.69.
Subd. 11. [PETITIONS WITHOUT NOTICE.] A person who is not
entitled to a review under this section may nevertheless receive
review of the decision of the executive director which affects
the person's rights by petitioning the board under this section
within 60 days of the time the person knew or should have known
of the disputed decision.
Sec. 6. Minnesota Statutes 1988, section 352.116,
subdivision 3, is amended to read:
Subd. 3. [OPTIONAL ANNUITIES.] The board shall establish
an optional retirement annuity in the form of a joint and
survivor annuity. The board may also establish an optional
annuity in the form of an annuity payable for a period certain
and for life thereafter or establish an optional annuity which
takes the form of a joint and survivor annuity providing that,
if after the joint and survivor annuity becomes payable, the
person with the designated remainder interest in the annuity
dies before the former member, the annuity amount must be
reinstated to a normal single life annuity amount as of the
first day of the month after the day the person dies. In
addition, the board may also establish an optional annuity that
takes the form of an annuity calculated on the basis of the age
of the retired employee at retirement and payable for the period
before the retired employee becomes eligible for social security
old age retirement benefits in a greater amount than the amount
of the annuity calculated under subdivision 2 on the basis of
the age of the retired employee at retirement but equal so far
as possible to the social security old age retirement benefit
and the adjusted retirement annuity amount payable immediately
after the retired employee becomes eligible for social security
old age retirement benefits and payable for the period after the
retired employee becomes eligible for social security old age
retirement benefits in an amount less than the amount of the
annuity calculated under subdivisions 2 and 3. The social
security leveling option may be calculated based on broad
average social security old age retirement benefits. For each
year that the retiring employee is under age 62, up to five
percent of the total single life annuity required reserves may
be used to accelerate the optional retirement annuity. This
greater amount shall be paid until the end of the month in which
the retired employee reaches age 62, at which time the annuity
shall be reduced. The optional forms must be actuarially
equivalent to the normal single life annuity forms provided in
sections 352.115 and 352.116, whichever applies.
Sec. 7. Minnesota Statutes 1988, section 352.22,
subdivision 1, is amended to read:
Subdivision 1. [SERVICE TERMINATION.] Any employee who
ceases to be a state employee by reason of termination of state
service or layoff is entitled to a refund provided in
subdivision 2 or a deferred retirement annuity as provided in
subdivision 3. Application for a refund may be made 30 or more
days after the termination of state service or layoff if the
applicant has not again become a state employee required to be
covered by the system.
Sec. 8. Minnesota Statutes 1988, section 352.22,
subdivision 2a, is amended to read:
Subd. 2a. [AMOUNT OF CERTAIN REFUND REPAYMENTS
PROHIBITED.] For any employee who is entitled to a refund under
subdivision 1 and who, before July 1, 1978, was a member of the
metropolitan transit commission-transit operating division
employees retirement fund, the refund for contributions made
before July 1, 1978, must equal the following amounts:
(a) For any employee contributions made before January 1,
1950, the amount equal to one-half of the employee contributions
without interest;
(b) For any employee contributions made after December 31,
1949, but before January 1, 1975, the amount of the employee
contributions plus simple interest at the rate of two percent
per year; and
(c) For any employee contributions made after December 31,
1974, but before July 1, 1978, the amount of the employee
contributions plus simple interest at the rate of 3-1/2 percent
per year. The refund of contributions made on or after July 1,
1978, must be determined under subdivision 2. Interest must be
computed to the first day of the month in which the refund is
processed and must be based on fiscal year balances. No refunds
of contributions made to the metropolitan transit
commission-transit operating division employees retirement fund
received before July 1, 1978, or for service rendered before
July 1, 1978, may be repaid.
Sec. 9. Minnesota Statutes 1988, section 352.93,
subdivision 3, is amended to read:
Subd. 3. [PAYMENTS; DURATION AND AMOUNT.] The annuity
under this section shall begin to accrue as provided in section
352.115, subdivision 8, and must be paid for an additional 84
full calendar months or to the first of the month following the
month in which the employee becomes age 65, whichever occurs
first, except that payment must not cease before the first of
the month following the month in which the employee becomes 62.
It must then be reduced to the amount as calculated under
section 352.115, except that if this amount, when added to the
social security benefit based on state service the employee is
eligible to receive at the time, is less than the benefit
payable under subdivision 2, the retired employee shall receive
an amount that when added to the social security benefit will
equal the amount payable under subdivision 2.
When an annuity is reduced under this subdivision, the
percentage adjustments, if any, that have been applied to the
original annuity under section 11A.18, before the reduction,
must be compounded and applied to the reduced annuity. A former
correctional employee employed by the state in a position
covered by the regular plan or the unclassified employees
retirement program between the ages of 58 and 65 shall receive a
partial return of correctional contributions at retirement with
five percent interest based on the following formula:
Employee contributions Years and complete
contributed as a months of regular
correctional employee service between
in excess of the ages 58 and 65
contributions the X ....................
employee would have 7
contributed as a
regular employee
Sec. 10. Minnesota Statutes 1988, section 352B.08,
subdivision 3, is amended to read:
Subd. 3. [OPTIONAL ANNUITY FORMS.] In lieu of the single
life annuity provided in subdivision 2, the member or former
member with ten five years or more of service may elect an
optional annuity form. The board of the Minnesota state
retirement system shall establish a joint and survivor annuity,
payable to a designated beneficiary for life, adjusted to the
actuarial equivalent value of the single life annuity. The
board shall also establish an additional optional annuity with
an actuarial equivalent value of the single life annuity in the
form of a joint and survivor annuity which provides that the
elected annuity be reinstated to the single life annuity
provided in subdivision 2, if after commencing the elected joint
and survivor annuity, the designated beneficiary dies before the
member, which reinstatement is not retroactive but takes effect
for the first full month occurring after the death of the
designated beneficiary. The board may also establish other
actuarial equivalent value optional annuity forms. In
establishing actuarial equivalent value optional annuity forms,
each optional annuity form shall have the same present value as
a regular single life annuity using the mortality table adopted
by the board and the interest assumption specified in section
356.215, subdivision 4d, and the board shall obtain the written
recommendation of the commission-retained actuary. These
recommendations shall be a part of the permanent records of the
board.
Sec. 11. Minnesota Statutes 1988, section 352B.10,
subdivision 5, is amended to read:
Subd. 5. [OPTIONAL ANNUITY.] A disabled member not
eligible for may, in lieu of survivorship coverage under section
352B.11, subdivision 2, may choose the normal disability benefit
or an optional annuity as provided in section 352B.08,
subdivision 2. The choice of an optional annuity must be made
before commencement of payment of the disability benefit. It is
effective 30 days after receipt of this choice or on the date on
which the disability benefit begins to accrue, whichever is
later. Upon becoming effective, the optional annuity begins to
accrue on the date provided for the disability benefit.
Sec. 12. Minnesota Statutes 1988, section 352B.11,
subdivision 2, is amended to read:
Subd. 2. [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a
member serving actively as a member, a member receiving the
disability benefit provided by section 352B.10, subdivision 1,
or a former member receiving a disability benefit as provided by
section 352B.10, subdivision 3 2, dies from any cause, the
surviving spouse and dependent children are entitled to benefit
payments as follows:
(a) A member with at least five years of allowable service
or a former member with at least 20 years of allowable service
is deemed to have elected a 100 percent joint and survivor
annuity payable to a surviving spouse only on or after the date
the member or former member became or would have become 55.
(b) The surviving spouse of a member who had credit for
less than five years of service shall receive, for life, a
monthly annuity equal to 20 percent of that part of the average
monthly salary of the member from which deductions were made for
retirement. If the surviving spouse remarries, the annuity
shall cease as of the date of the remarriage.
(c) The surviving spouse of a member who had credit for at
least five years service and who died after attaining 55 years
of age, may elect to receive a 100 percent joint and survivor
annuity, for life, notwithstanding a subsequent remarriage, in
lieu of the annuity prescribed in paragraph (b).
(d) The surviving spouse of any member who had credit for
five years or more and who was not 55 years of age at death,
shall receive the benefit equal to 20 percent of the average
monthly salary as described in clause (b) until the deceased
member would have reached the age of 55 years, and beginning the
first of the month following that date, may elect to receive the
100 percent joint and survivor annuity. If the surviving spouse
remarries before the deceased member's 55th birthdate, benefits
or annuities shall cease as of the date of remarriage.
Remarriage after the deceased member's 55th birthday shall not
affect the payment of the benefit.
(e) Each dependent child shall receive a monthly annuity
equal to ten percent of that part of the average monthly salary
of the former member from which deductions were made for
retirement. A dependent child over 18 and under 22 years of age
also may receive the monthly benefit provided in this section,
if the child is continuously attending an accredited school as a
full-time student during the normal school year as determined by
the director. If the child does not continuously attend school
but separates from full-time attendance during any part of a
school year, the annuity shall cease at the end of the month of
separation. In addition, a payment of $20 per month shall be
prorated equally to surviving dependent children when the former
member is survived by one or more dependent children. Payments
for the benefit of any qualified dependent child must be made to
the surviving spouse, or if there is none, to the legal guardian
of the child. The maximum monthly benefit must not exceed 40
percent of the average monthly salary for any number of children.
(f) If the member dies under circumstances that entitle the
surviving spouse and dependent children to receive benefits
under the workers' compensation law, the workers' compensation
benefits received by them must not be deducted from the benefits
payable under this section.
(g) The surviving spouse of a deceased former member who
had credit for five or more years of allowable service, but not
the spouse of a former member receiving a disability benefit
under section 352B.10, subdivision 3 2, is entitled to receive
the 100 percent joint and survivor annuity at the time the
deceased member would have reached the age of 55 years, if the
surviving spouse has not remarried before that date. If a
former member dies who does not qualify for other benefits under
this chapter, the surviving spouse or, if none, the children or
heirs are entitled to a refund of the accumulated deductions
left in the fund plus interest at the rate of five percent per
year compounded annually.
Sec. 13. Minnesota Statutes 1988, section 352D.04,
subdivision 1, is amended to read:
Subdivision 1. (a) An employee exercising an option to
participate in the retirement program provided by this chapter
may 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, the guaranteed return account,
or the common stock index account established in section
11A.17. The employee 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, the percentage of the
employee's contributions provided in subdivision 2 to be used to
purchase shares in each of the accounts.
(b) Twice in any calendar year, a participant may indicate
in writing on forms provided by the Minnesota state retirement
system a choice of options for subsequent purchases of shares.
Until a different written indication is made by the participant,
the executive director shall purchase shares in the supplemental
fund as selected by the participant. If no initial option is
chosen, 100 percent income shares must be purchased for a
participant. A change in choice of investment option is
effective no later than the first pay date first occurring after
30 days following the receipt of the request for a change.
(c) One month before the start of a new guaranteed
investment contract, a participant or former participant may
elect to transfer all or a portion of the participant's shares
previously purchased in the income share, growth share, common
stock index, bond market, or money market accounts to the new
guaranteed investment contract in the guaranteed return
account. 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 options. Upon expiration
of a guaranteed investment contract, the participant's shares
attributable to that contract must be transferred to a new
guaranteed investment contract unless the executive director is
otherwise directed by the participant. Shares in the guaranteed
return account may not be withdrawn from the fund or transferred
to another account until the guaranteed investment contract has
expired, unless the participant qualifies for withdrawal under
section 352D.05 or for benefit payments under sections 352D.06
to 352D.075.
(d) Twice in any calendar year a participant or former
participant may also change the investment options selected for
all or a portion of the participant's shares previously
purchased in accounts other than the guaranteed return account.
However, 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. Changes in
investment options for the participant'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.
Sec. 14. Minnesota Statutes 1988, section 352D.06,
subdivision 1, is amended to read:
Subdivision 1. When a participant attains at least age 58
55, is retired from covered service, and applies for a
retirement annuity, the cash value of the participant's shares
shall be transferred to the Minnesota postretirement investment
fund and used to provide an annuity for the retired employee
based upon the participant's age when the benefit begins to
accrue according to the reserve basis used by the state
employees retirement fund in determining pensions and reserves.
Sec. 15. Minnesota Statutes 1988, section 352D.075,
subdivision 2, is amended to read:
Subd. 2. If a participant dies leaving a spouse and there
is no named beneficiary who survives to receive payment or the
spouse is named beneficiary, the spouse may receive:
(1) The value of the participant's total shares;
(2) The value of one-half of the total shares and beginning
at age 58 55 or thereafter receive an annuity based on the value
of one-half of the total shares, provided that if the spouse
dies before receiving any annuity payments the value of said
shares shall be paid to the spouse's children in equal shares,
but if no such children survive then to the parents of the
spouse in equal shares, but if no such children or parents
survive, then to the estate of the spouse; or
(3) Beginning at age 58 55 or thereafter receive an annuity
based on the value of the total shares, provided that if the
spouse dies before receiving any annuity payments the value of
said shares shall be paid to the spouse's children in equal
shares, but if no such children survive then to the parents of
the spouse in equal shares, but if no such children or parents
survive, then to the estate of the spouse; and further provided,
if said spouse dies after receiving annuity payments but before
receiving payments equal to the value of the employee shares,
the value of the employee shares remaining shall be paid to the
spouse's children in equal shares, but if no such children
survive then to the parents of the spouse in equal shares, but
if no such children or parents survive, then to the estate of
the spouse.
Sec. 16. [DEADLINE EXTENSION IN CERTAIN INSTANCES.]
Notwithstanding any provision of Minnesota Statutes,
section 352D.12, to the contrary, a participant on the effective
date of this section may transfer prior service contributions or
repay any refund under that section by September 30, 1989, or
within one year of the person's participation, whichever is
later.
Sec. 17. [REPEALER.]
Minnesota Statutes 1988, sections 352.03, subdivision 13;
and 352.73, subdivision 3, are repealed.
Sec. 18. [EFFECTIVE DATES.]
Sections 1 to 15 and 17 are effective July 1, 1989.
Section 16 is effective the day following final enactment.
ARTICLE 2
TEACHERS' RETIREMENT ASSOCIATIONS
Section 1. Minnesota Statutes 1988, section 136.81,
subdivision 1, is amended to read:
Subdivision 1. There shall be deducted from the salary of
each person described in section 136.80, subdivision 1, a sum
equal to five percent of the portion of the person's annual
salary paid between $6,000 and $15,000. The deduction is to be
made in the same manner as other retirement deductions are made
from the salary of the person only after the first $6,000 has
been paid in a fiscal year. The state employer shall make a
contribution to the plan on behalf of every covered person in an
amount equal to the deductions made from the salary of the
person. The moneys so deducted and the state employer
contribution shall be deposited to the credit of the state
university and community college supplemental retirement plan
account of the teachers retirement fund. The account is hereby
established and shall be separate and distinct from other funds,
accounts, or assets of the teachers retirement fund. The money
required to meet the obligation of the state as provided in this
subdivision shall be contributed to the executive director of
the teachers retirement association by the state. Two percent
of the amount of the salary deductions and employer
contributions must be credited to the administrative expense
reserve account of the supplemental retirement plan and must be
used for payment of necessary and reasonable administrative
expenses of the supplemental retirement plan as provided in
section 354.65.
Any deductions which are taken from the salary of a person
for the supplemental retirement plan in error shall upon
discovery and verification be refunded to the person. Any
related employer contributions must be refunded to the
employer. The retirement board executive director shall
establish a reserve which shall must reflect any gains or losses
realized due to the purchase and redemption of shares
representing salary deductions and state employer contributions
which were made in error. The balance of the reserve shall
remaining after the refund of contributions made in error must
be credited annually to the cancellation reserve established
pursuant to section 136.82, subdivision 1, clause
(5) administrative expense reserve account.
If any payroll salary deductions which are required
pursuant to under this section are omitted, the amount of the
omitted salary deductions shall may be remitted by the person to
the supplemental retirement plan investment account of the
teachers retirement association within one year from the end of
the fiscal year in which the deductions were due, and at the
time of the receipt of 90 days following the association's
written notification to the person of the omission, but not
thereafter. If the omitted salary deductions are received from
the person, the required state employer contribution shall then
must be made paid by the employer within 30 days after the
association's written notification to the employer of the amount
due.
Sec. 2. Minnesota Statutes 1988, section 136.82,
subdivision 1, is amended to read:
Subdivision 1. [GENERALLY.] (a) 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:
(b) The executive director shall redeem shares under this
subdivision when requested to do so in writing on forms provided
by the executive director by a person having shares to the
credit of the employee's share account record if the person is
age 55 or older and is no longer employed by the state
university board or state board for community colleges. In such
case the person must 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 or its designee, in the case of a
person employed by the state university board, and the state
board for community colleges or its designee, in the case of a
person employed by the state board for community colleges, may,
upon application, at their sole discretion, permit greater
withdrawals in any one year.
(c) The executive director shall redeem shares under this
subdivision when requested to do so in writing, on forms
provided by the executive director, 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. If the
executive director finds that the person is totally and
permanently disabled and will as a result be unable to return to
similar employment, the person must 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 or its
designee, in the case of a person employed by the state
university board, and the state board for community colleges or
its designee, in the case of a person employed by the state
board for community colleges, may, upon application, at their
sole discretion, permit greater withdrawals in any one year. If
the person returns to good health, the person owes no
restitution to the state or a fund established by its laws for a
redemption under this paragraph.
(d) The executive director shall redeem shares under this
subdivision 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, when requested to do so in writing, on forms
provided by the executive director, by the surviving spouse.
The surviving spouse must 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 or its designee, in the case of a person employed by the
state university board, and the state board for community
colleges or its designee, in the case of a person employed by
the state board for community colleges, may, upon application,
at their sole discretion, permit greater withdrawals in any one
year. In that case the surviving spouse must 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 must be redeemed by the executive director
and the cash realized from the redemption must be distributed to
the estate of the surviving spouse.
(e) 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, the executive director shall redeem all shares
to the credit of the employee's share account record and pay the
cash realized from the redemption to the estate of the deceased
person.
(f) The executive director shall redeem shares under this
subdivision when requested to do so in writing, on forms
provided by the executive director, 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 (b) to (e). In that case, the person
is entitled upon application to receive one-half of the cash
realized on the redemption of shares must be received by the
person and one-half becomes the property must be credited to the
administrative expense reserve account of the supplemental
retirement plan account of the teachers retirement fund for
payment of necessary and reasonable administrative expenses of
the supplemental retirement plan as provided in section 354.65.
Annually on July 1 the cancellations of the previous 12 months
must be prorated among the employees share accounts in
proportion to the value that each account bears to the total
value of all share accounts.
Sec. 3. Minnesota Statutes 1988, section 136.82,
subdivision 2, is amended to read:
Subd. 2. [REDEMPTION OF SHARES AS AN ANNUITY.] A person
who has shares to the credit of the employee's share account
record, who is 55 years of age or older and who is no longer
employed by the state university board or the state board for
community colleges or who is totally and permanently disabled
pursuant to subdivision 1, paragraph (2) (c), or who has the
status of a surviving spouse of a person who has shares to the
credit of the employee's share account pursuant to subdivision
1, paragraph (3) (d), may redeem all or part of the shares to
purchase an annuity by depositing the cash realized upon
redemption with the executive director of the teachers
retirement fund and receive in exchange an annuity for life or
an optional annuity as hereinafter provided. The election to
purchase an annuity may be made only once by any individual. If
an election is made before the date on which the person is
entitled to request redemption, the redemption shall not be made
prior to the date upon which the person would be entitled to
make the request. The annuity purchase rates shall be based on
the annuity table of mortality adopted by the board of trustees
of the teachers retirement fund for the fund as provided in
section 354.07, subdivision 1, using the interest assumption
specified in section 356.215, subdivision 4d. The amount of the
annuity for life shall be that amount which has a present value
equal to the cash realized on the redemption of the shares as of
the first day of the month next following the date of the
election to purchase an annuity. The board of trustees of the
teachers retirement fund shall establish an optional joint and
survivor annuity, an optional annuity payable for a period
certain and for life thereafter, and an optional guaranteed
refund annuity paying the annuitant a fixed amount for life with
the guarantee that in the event of death the balance of the cash
realized from the redemption of shares is payable to the
designated beneficiary. The optional forms of annuity shall be
actuarially equivalent to the single life annuity as defined in
section 354.05, subdivision 7. In establishing these optional
forms, the board of trustees shall obtain the written
recommendation of the actuary retained by the legislative
commission on pensions and retirement, and these recommendations
shall be a part of the permanent records of the board of
trustees.
Sec. 4. Minnesota Statutes 1988, section 354.05,
subdivision 35, is amended to read:
Subd. 35. [SALARY.] (a) "Salary" means the compensation
paid to a teacher excluding, upon which member contributions are
required and made, that is paid to a teacher before any
allowable reductions permitted under the federal Internal
Revenue Code of 1986, as amended through December 31, 1988, for
employee selected fringe benefits, tax sheltered annuities,
deferred compensation, or any combination of these items.
(b) "Salary" does not mean:
(1) lump sum annual or leave payments;
(2) lump sum sick leave payments and all;
(3) payments in lieu of any employer paid group insurance
coverage, including the difference between single and
family premium rates, that may be paid to a member with single
coverage. "Salary" does not mean;
(4) any form of payment made in lieu of any other employer
paid fringe benefit or expense, or;
(5) any form of severance payments;
(6) workers' compensation payments; or
(7) disability insurance payments including self-insured
disability payments.
Subd. 35a. [SEVERANCE PAYMENTS.] Severance payments
include, but are not limited to:
(a) (1) payments to an employee to terminate employment;
(b) (2) payments, or that portion of payments, that are not
clearly for the performance of services by the employee to the
employer; and
(c) (3) 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 of the execution of the
agreement for compensation that is significantly different than
the most recent contract salary; and
(4) payments under a procedure that allows the employee to
designate the time of payment if the payments are made during
the period of formula service credit used to compute a benefit
or annuity under section 354.44, subdivision 6 or 7; 354.46,
subdivision 1 or 2; or 354.48, subdivision 3.
Sec. 5. Minnesota Statutes 1988, section 354.05,
subdivision 37, is amended 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. A member is not
considered to have terminated teaching service, if before the
effective date of the termination or retirement, the member has
entered into a contract to resume teaching service with an
employing unit covered by the provisions of this chapter.
Sec. 6. Minnesota Statutes 1988, 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 or petitioned under section 7 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. Except as provided in section 7, subdivision
9, venue of all actions is in the Ramsey county district court.
Sec. 7. [354.071] [APPEALS PROCEDURE.]
Subdivision 1. [DEFINITIONS.] Unless the language or
context clearly indicates that a different meaning is intended,
for the purpose of this section, the following terms have the
meanings given.
(a) "Documentation" includes but is not limited to:
(1) sworn and notarized affidavits made on the personal
knowledge of any person;
(2) official letters or documents;
(3) documents from the file of the petitioner; and
(4) other relevant documents that are admissible as
evidence in a court of law.
(b) "Executive director" means the executive director of
the teachers retirement association.
(c) "Person" includes any state institution, school
district, or other governmental unit that employs persons
covered under statutes listed in subdivision 2.
(d) "Record" means the petition and the documentation that
the petitioners submit with the petition, the executive
director's answer to the petition and documentation submitted
with it, and any documentation the board allows to be submitted
at or after the meeting at which the petition is considered.
Subd. 2. [NOTICE OF TERMINATION OR DENIAL.] If the
executive director terminates a benefit or denies an application
or a written request of any person claiming a right under this
chapter or the applicable sections of chapters 136, 355, and
356, the executive director must serve upon that person a
written notice. The notice must contain:
(1) the reasons for the termination or denial;
(2) notice that the person may petition the board for a
review of the termination or denial and that the petition for
review must be filed within 60 days of the receipt of the
written notice;
(3) a statement that failure to petition the board within
60 days will preclude the person from contesting in any other
court procedure or administrative hearing, the issues determined
by the executive director; and
(4) a copy of this section.
Subd. 3. [PETITION FOR REVIEW.] A person who claims a
right under subdivision 2 and whose benefit has been terminated
or whose application or written request has been denied may
petition for a review of that decision by the board. A petition
under this section must be served upon the executive director
personally, or by mail postmarked no later than 60 days after
the petitioner received the notice required by subdivision 2.
The petition must include the sworn, notarized statement of the
reasons the petitioner believes the decision of the executive
director should be reversed or modified and may include relevant
documentation.
Subd. 4. [ANSWER; RECORD FOR HEARING.] Within a reasonable
time after receiving a petition, the executive director must
serve the petitioner with an answer to the petition with all
relevant documentation and with notice of the time and place of
the regular or special board meeting at which the board will
consider the petition. The documentation need not duplicate the
documentation submitted by the petitioner. Not later than ten
days before the board meeting at which the petition will be
heard and at the time the petition is considered by the board,
the executive director must, personally or by mail, deliver a
copy of the relevant documentation to each board member. Each
board member who participates in the decision on the petition
must be familiar with all relevant documentation.
Subd. 5. [HEARING.] The board shall hold a timely hearing
on a petition for review. The board shall make its decision on
a petition solely on the relevant documentation as submitted and
the proceedings of the hearing. At the hearing the petitioner,
the petitioner's attorney, and the executive director may state
and discuss with the board their positions with respect to the
petition. The board may allow further documentation to be
placed in the record at or subsequent to the board meeting at
which the petition is considered. If the board allows
additional documentation into the record at or subsequent to the
board meeting, it may make a final determination on the petition
at that board meeting only upon the agreement of both the
petitioner and the executive director.
Subd. 6. [TERMINATION OF BENEFITS.] If the executive
director proposes to terminate a benefit that is being paid to
any person, before terminating the benefit the executive
director must, in addition to the other procedures prescribed
herein, give the person written or oral notice of the proposed
termination. The notice must explain the reason for the
proposed termination. The person must be given an opportunity,
verbally or in writing, to explain why the benefit should not be
terminated. If the executive director is unable to contact the
person and the executive director determines that a failure to
terminate the benefit might result in unauthorized payment by
the association, the executive director may terminate the
benefit with only a written notice containing the information
required by subdivision 2, mailed to the address to which the
benefit was last sent and, if that address is a financial
institution, to the last known address of the person.
Subd. 7. [MEDICAL ADVISOR ACTION.] If a person petitions
the board to reverse or modify a determination by the executive
director finding that the petitioner, for medical reasons, does
not or has ceased to qualify for a disability benefit, the board
may resubmit the matter to the medical advisor for
reconsideration, with or without instructions to obtain further
medical examinations. The board may make a determination
contrary to the recommendation of the medical advisor only if
there is expert medical evidence in the record to support its
contrary decision. If there is no medical opinion contrary to
the opinion of the medical advisor in the record and the medical
advisor asserts that the decision was made in accordance with
the disability standard in section 354.05, subdivision 14, the
board must follow the determination of the medical advisor. The
board may make a determination different from the recommendation
of the medical advisor on issues that do not involve a medical
opinion.
Subd. 8. [BOARD FINDINGS.] After the board has made a
decision on a petition, the executive director must prepare
findings of fact, the board's reasons for its conclusions, and
the board's final order for the signature of the chair or other
board member as the board, by resolution, may designate. The
executive director must serve the findings, conclusions, and
order on the petitioner by certified mail.
Subd. 9. [APPEALS.] Within 30 days of receipt of the
findings, conclusions, and final order, the petitioner may
appeal the board's decision by writ of certiorari to the court
of appeals. Failure to appeal to that court within the 30 days
precludes the petitioner from later raising, in any court
procedure or administrative hearing, those substantive and
procedural issues that reasonably should have been raised upon
appeal.
Subd. 10. [REFERRAL FOR ADMINISTRATIVE
HEARING.] Notwithstanding sections 14.03, 14.06, and 14.57 to
14.69, a challenge to a determination of the executive director
must be conducted exclusively under the procedures in this
section. The board in its sole discretion may refer a petition
brought under this section to the office of administrative
hearings for a contested case hearing under sections 14.57 to
14.69.
Subd. 11. [PETITION WITHOUT NOTICE.] A person who is not
entitled to notice of a right of review under this section may
nevertheless receive review of a decision of the executive
director which affects the person's rights by petitioning the
board under this section within 60 days of the time the person
knew or should have known of the disputed decision.
Sec. 8. Minnesota Statutes 1988, section 354.091, is
amended to read:
354.091 [SERVICE CREDIT.]
In computing the time of service of a teacher, the length
of a legal school year in the district or institution where such
service was rendered shall constitute a year under sections
354.05 to 354.10, provided such year is not less than the legal
minimum school year of this state. No person shall be allowed
credit for more than one year of teaching service for any fiscal
year. Commencing July 1, 1969 1961 (1) if a teacher teaches
only a fractional part of a day, credit shall be given for a day
of teaching service for each five hours taught, and (2) if a
teacher teaches at least 170 full days in any fiscal year credit
shall be given for a full year of teaching service, and (3) if a
teacher teaches for only a fractional part of the year credit
shall be given for such fractional part of the year as the term
of service rendered bears to 170 days. Teaching service
performed prior to July 1, 1969 1961 shall be computed pursuant
to the law in effect at the time it was rendered.
In no event shall any teacher lose or gain retirement
service credit as a result of the employer converting to a four
day work week. If the employer does convert to a four day work
week, the forms for reporting and procedures for determining
service credit shall be determined by the executive director
with the approval of the board of trustees.
Sec. 9. Minnesota Statutes 1988, section 354.092, is
amended to read:
354.092 [SABBATICAL LEAVE.]
A member who is granted a sabbatical leave may receive
allowable service credit not exceeding three years in any ten
consecutive years toward a retirement annuity by paying into the
fund employee contributions during the period of leave. The
employee contribution shall be based upon the appropriate rate
of contributions and the salary received during the year
immediately preceding the leave. This payment shall be made by
the end of the fiscal year following the fiscal year in which
the leave of absence terminated, and shall be without interest.
A member shall not accrue more than three years allowable
service by reason of this section unless the allowable service
credit was paid for by the member prior to July 1, 1962. A
sabbatical leave for the purpose of this section shall be
compensated by a minimum of one-third of the salary the member
received for a comparable period during the prior fiscal year.
Before the end of the fiscal year during which any sabbatical
leave begins, the employing unit granting the leave must certify
the leave to the association on a form specified by the
executive director. Deductions for employee contributions at
the applicable rate specified in section 354.42 must be made by
the employing unit from salary paid to the member for a
sabbatical leave. The member may also make direct payment of
employee contributions at the appropriate rates specified in
section 354.42 based upon the difference between the salary
received for the sabbatical leave and the salary received for a
comparable period during the year immediately preceding the
leave. This direct payment must be made by the end of the
fiscal year following the fiscal year in which the leave of
absence terminated and must be without interest. If the
employee contributions during the period of the leave made under
this section are less than the employee contributions based on
the salary received made for a comparable period during the year
immediately preceding the leave, the allowable and formula
service credit of the member shall be prorated according to
section 354.05, subdivision 25, clause (3), except that if the
member is paid full salary for any sabbatical leave of absence,
either past or prospective, the allowable and formula service
credit shall not be prorated. A member may not receive more
than three years of allowable service credit in any ten
consecutive years under this section unless the allowable
service credit was paid for by the member before July 1, 1962.
For sabbatical leaves taken that begin after June 30, 1986, the
required employer contribution, including the amortization
amount contributions specified in section 354.42, subdivisions 3
and 5, shall must be paid by the employing unit within 30 days
after the association's written notification by the
association to the employing unit of the amount due.
Sec. 10. Minnesota Statutes 1988, section 354.10,
subdivision 2, is amended to read:
Subd. 2. [AUTOMATIC DEPOSITS.] The board may pay an
annuity or benefit to a banking institution, qualified under
chapter 48, that is a trustee for a person eligible to receive
such the annuity or benefit. Upon completion of the proper
forms as provided by the board executive director, the annuity
or benefit amount may be electronically transferred or the
annuity or benefit check may be mailed to a banking institution,
savings association or credit union for deposit to the
recipient's individual account or joint account with a the
recipient's spouse. The board shall prescribe the conditions
which shall govern these procedures.
Sec. 11. Minnesota Statutes 1988, section 354.35, is
amended to read:
354.35 [RETIREMENT BEFORE BECOMING ELIGIBLE FOR SOCIAL
SECURITY OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE AGE 65.]
Any coordinated member who retires before becoming eligible
for social security retirement benefits age 65, may elect to
receive an optional accelerated retirement annuity from the
association which provides for different annuity amounts over
different periods of retirement. The election of this
optional accelerated retirement annuity shall be exercised by
making an application to the board on a form provided by the
board. The optional accelerated retirement annuity shall take
the form of an annuity payable for the period before the member
attains the age of 65 years in a greater amount than the amount
of the annuity calculated under section 354.44 on the basis of
the age of the member at retirement but equal insofar as
possible to the social security old age retirement benefit and
the adjusted retirement annuity amount payable immediately after
the annuitant becomes eligible for social security old age
retirement benefits in an amount less than the amount of the
annuity calculated under section 354.44 on the basis of the age
of the member at retirement. The social security leveling
option may be calculated based on broad average social security
old age retirement benefits. the optional accelerated retirement
annuity shall must be the actuarial equivalent of the member's
annuity computed on the basis of the member's age at
retirement. The greater amount shall must be paid until the
member retiree reaches the age of 65 and at which that
time the payment from the association shall must be reduced.
For each year the retiree is under age 65, up to five percent of
the total life annuity required reserves may be used to
accelerate the optional retirement annuity under this section.
The method of computing the optional accelerated retirement
annuity provided in this section shall be established by the
board of trustees. In establishing the method of computing the
optional accelerated retirement annuity, the board of trustees
shall must obtain the written recommendation approval of the
commission-retained actuary. The recommendations shall written
approval must be a part of the permanent records of the board of
trustees.
Sec. 12. Minnesota Statutes 1988, section 354.42,
subdivision 7, is amended to read:
Subd. 7. [ERRONEOUS SALARY DEDUCTIONS OR DIRECT PAYMENTS.]
(1) (a) Any deductions taken from the salary of an employee for
the retirement fund in error shall, be refunded to the employee
upon discovery and verification by the school district or
institution employing unit making the deduction, be refunded to
the employee and the corresponding employer contribution and
additional employer contribution amounts attributable to the
erroneous salary deduction must be refunded to the employing
unit.
(2) In the event (b) If salary deductions and employer
contributions were erroneously transmitted to the retirement
fund and should have been transmitted to another public pension
fund enumerated in section 356.30, subdivision 3, the retirement
fund must transfer these salary deductions and employer
contributions to the appropriate public pension fund without
interest.
(c) If a salary warrant or check from which a deduction for
the retirement fund was taken has been canceled or the amount of
the warrant or check has been returned to the funds of the
school district or institution employing unit making the
payment, a refundment refund of the sum so amount deducted, or
any portion of it as that is required to adjust the salary
deductions, shall be made to the school district or institution
provided application for it is made on a form furnished by the
retirement board employing unit.
(d) Any erroneous direct payments of member paid
contributions or erroneous salary deductions that were not
refunded in the regular processing of an employing unit's annual
summary report shall be refunded to the member with interest
computed using the rate and method specified in section 354.49,
subdivision 2.
Sec. 13. Minnesota Statutes 1988, section 354.44,
subdivision 3, is amended to read:
Subd. 3. [APPLICATION FOR RETIREMENT.] Retirement may
Application for retirement must be made upon application of by
the member or of by someone acting authorized to act in the
member's behalf. Application must be made on a form prescribed
by the executive director.
Sec. 14. Minnesota Statutes 1988, section 354.44,
subdivision 5, is amended to read:
Subd. 5. [RESUMPTION OF TEACHING SERVICE AFTER
RETIREMENT.] 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 employer unit to which
this chapter applies shall is eligible to continue to receive
payments in accordance with the annuity except that annuity
payments must be reduced during any the calendar year
immediately following any calendar 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 under United States Code, title 42, section
403. The amount of the reduction must be one-half of the amount
in excess of the applicable reemployment income maximum
specified in this subdivision and must be deducted from the
annuity payable for the calendar year immediately following the
calendar year in which the excess amount was earned. If the
person has not yet reached the minimum age for the receipt of
social security benefits, the maximum earnings for the person
must be equal to the annual maximum earnings allowable for the
minimum age for the receipt of social security benefits.
If the person is retired for only a fractional part of the
calendar year during the initial year of retirement, the maximum
reemployment income specified in this subdivision must be
prorated for that calendar year.
After a person has reached the age of 70, no reemployment
income maximum is applicable regardless of the amount of income.
For the purpose of this subdivision, income from teaching
service shall include includes, but is not limited to:
(a) all income 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. 15. Minnesota Statutes 1988, section 354.44, is
amended by adding a subdivision to read:
Subd. 5a. [EXEMPTION FOR INTERIM SUPERINTENDENT.] A person
who performs services as an interim superintendent because of
the death, disability, termination, or resignation of the
previous superintendent is exempt from the earnings limitations
and reductions in annuity payments in subdivision 5 for up to 90
working days of service as an interim superintendent. During
this period of up to 90 working days, the school board may pay
the interim superintendent at any rate, up to the rate paid to
the previous superintendent. This exemption applies only if the
school board hiring the interim superintendent submits an
application for the exemption to the executive director, and the
executive director approves the application before the services
as interim superintendent begin. The application must certify
that the school board has unanimously approved the exemption
from the earnings limitations and reductions. The executive
director may prescribe a form for the application. A school
board may not apply for more than one exemption in a fiscal
year. No more than three exemptions may be approved for any
person. Only one exemption may be approved for any person in a
fiscal year.
Sec. 16. Minnesota Statutes 1988, section 354.44,
subdivision 8, is amended to read:
Subd. 8. [ANNUITY PAYMENT; EVIDENCE OF RECEIPT.] Payment
of An annuity or benefit for a given month shall must be paid
during the first week of that month. Evidence of receipt of the
check issued or acknowledgment of the amount electronically
transferred in payment of an annuity or benefit shall be
submitted by may be required from the payee or a banking
institution on a form prescribed by the executive director. The
evidence of receipt form shall may be submitted required
periodically at times specified by the board. In the event
the required evidence of receipt form is not submitted required,
future annuities or benefits shall must be withheld until the
form is submitted.
Sec. 17. Minnesota Statutes 1988, section 354.47,
subdivision 2, is amended to read:
Subd. 2. [BENEFITS OF $500 $1,500 OR LESS.] If a member or
a former member dies without having a surviving designated a
beneficiary, or if the beneficiary should die before making
application for the refundment and the amount to the credit of
such deceased member or former member, and the amount of the
benefit the decedent is $500 $1,500 or less, the retirement
board of trustees may 90 days after the date of death of the
member or former member, in the absence of probate proceedings,
make payment to the surviving spouse of the deceased member or
former members, or, if none to the next of kin under the laws of
descent of the state of Minnesota and such decedent. This
payment shall be a bar to recovery of this payment from the
association by any other person or persons. Any accrued
retirement allowance or annuity which shall have accrued at the
time of death of an annuitant, disability, or survivor benefit,
may be paid in like the same manner.
Sec. 18. Minnesota Statutes 1988, section 354.48,
subdivision 1, is amended to read:
Subdivision 1. [AGE, SERVICE AND SALARY REQUIREMENTS.] Any
A member who became is totally and permanently disabled after
and has at least five years of credited allowable service shall
be at the time that the total and permanent disability begins is
entitled to a disability benefit based on this allowable service
in an amount provided in subdivision 3. If such the disabled
person's member's teaching service has terminated at any time,
at least three of the required five years of allowable service
must have been rendered after last becoming a member. Any
member whose average salary is less than $75 per month shall is
not be entitled to disability benefits.
Sec. 19. Minnesota Statutes 1988, section 354.48,
subdivision 2, is amended to read:
Subd. 2. [APPLICATIONS.] Any person described in
subdivision 1, or another person authorized to act on behalf of
the person; may make application for a total and permanent
disability benefit only within the 18 months month period
following the termination of teaching service but not
thereafter. This benefit shall begin to accrue accrues from the
day following the commencement of disability or the day
following the date on last day for which salary ceases is paid,
whichever is later, but shall may not begin to accrue more than
90 days prior to before the date the application is filed with
the board. If salary is being received for either annual or
sick leave during the period, payments shall accrue from the
date day following the last day for which this salary ceases is
paid.
Sec. 20. Minnesota Statutes 1988, section 354.65, is
amended to read:
354.65 [ADMINISTRATIVE EXPENSES.]
Necessary and reasonable administrative expenses incurred
by the teachers retirement association shall must be prorated
and allocated to the teachers retirement fund, and the
organization's participation in both the Minnesota variable
annuity investment fund, the Minnesota postretirement investment
fund and the Minnesota supplemental investment retirement fund
in accordance with policies and procedures established by the
board of trustees of the teachers retirement association.
Sec. 21. [354A.095] [MATERNITY LEAVE.]
A basic or coordinated member of the St. Paul teachers'
retirement fund association and old or new coordinated members
of the Duluth teachers' retirement fund association, who are
granted parental or maternity leave of absence by the employing
authority, are entitled to obtain service credit not to exceed
one year for the period of leave upon payment to the applicable
fund by the end of the fiscal year in which the leave of absence
terminated. The amount of the payment must include the total
required employee and employer contributions for the period of
leave prescribed in section 354A.12. Payment must be based on
the member's average monthly salary upon return to teaching
service, and is payable without interest. Payment must be
accompanied by a certified or otherwise adequate copy of the
resolution or action of the employing authority granting or
approving the leave.
Sec. 22. Minnesota Statutes 1988, section 354A.31,
subdivision 3, is amended to read:
Subd. 3. [RESUMPTION OF TEACHING AFTER COMMENCEMENT OF A
RETIREMENT ANNUITY.] Any person who retired and is receiving a
coordinated program retirement annuity under the provisions of
sections 354A.31 to 354A.41 and who has resumed teaching service
for the school district in which the teachers retirement fund
association exists shall be is entitled to continue to receive
retirement annuity payments except that for any person under the
age of 72 years during any quarter in which the person's
compensation for the teaching service is in an amount equal to
or greater than the quarterly 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 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 quarterly 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 retirement annuity
payment payable for the quarter immediately following the
quarter in which the excess amount was earned. Any person to
whom this subdivision applies who has reached the age of at
least 72 years shall be entitled to continue to receive
retirement annuity payments in full that annuity payments must
be reduced during the calendar year immediately following the
calendar year in which the person's income from the teaching
service is in an amount 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 under the provisions of United States Code,
title 42, section 403. The amount of the reduction must be
one-half the amount in excess of the applicable reemployment
income maximum specified in this subdivision and must be
deducted from the annuity payable for the calendar year
immediately following the calendar year in which the excess
amount was earned. If the person has not yet reached the
minimum age for the receipt of social security benefits, the
maximum earnings for the person must be equal to the annual
maximum earnings allowable for the minimum age for the receipt
of social security benefits.
If the person is retired for only a fractional part of the
calendar year during the initial year of retirement, the maximum
reemployment income specified in this subdivision must be
prorated for that calendar year.
After a person has reached the age of 70, no reemployment
income maximum is applicable regardless of the amount of any
compensation received for teaching service for the school
district in which the teachers retirement fund association
exists.
Sec. 23. Minnesota Statutes 1988, section 356.30,
subdivision 2, is amended to read:
Subd. 2. [REPAYMENT OF REFUNDS.] Any A person who is
employed has service credit in a position covered by one of the
funds enumerated in subdivision 3 and who is employed or was
formerly employed in a position covered by one of these funds
but also has received a refund from any other of such these
funds, may repay such the refund to the respective fund under
such terms and conditions as that are consistent with the laws
governing such the other fund, except that the person need not
be a currently contributing member of the fund to which the
refund is repaid at the time the repayment is made. Unless
otherwise provided by statute, the repayment of a refund under
this subdivision may only be made within six months following
termination of employment from a position covered by one of the
funds enumerated in subdivision 3 or before the date of
retirement from the fund to which the refund is repaid,
whichever is earlier.
Sec. 24. Minnesota Statutes 1988, section 356.371,
subdivision 3, is amended to read:
Subd. 3. [REQUIREMENT OF NOTICE TO MEMBER'S SPOUSE.] If a
public pension fund provides optional retirement annuity forms
which include a joint and survivor optional retirement annuity
form potentially applicable to the surviving spouse of a member,
the chief administrative officer of the public pension fund
shall send a copy of the written statement required by
subdivision 2 to the spouse of the member prior to before the
member's election of an optional retirement annuity.
Following the election of an optional retirement annuity
form by the member, a copy of the completed retirement annuity
application shall and retirement annuity beneficiary form must
be sent by certified mail by the public pension fund to the
spouse of the retiring member. A signed acknowledgment must be
required from the spouse confirming receipt of a copy of the
completed retirement annuity application and retirement annuity
beneficiary form. If the required signed acknowledgment is not
received from the spouse within 30 days, the public pension fund
must send another copy of the completed retirement annuity
application and retirement annuity beneficiary form to the
spouse by certified mail.
Sec. 25. Minnesota Statutes 1988, section 356.80,
subdivision 1, is amended to read:
Subdivision 1. [INFORMATION FOR A PENDING MARRIAGE
DISSOLUTION.] (a) Upon written request by a person with access
to the data under subdivision 3 who cites this statute, a public
or private pension plan administrator must provide the court and
the parties to a marriage dissolution action involving a plan
member or former plan member with information regarding pension
benefits or rights of the plan member or former plan member.
The pension plan shall provide this information upon request of
the court or a party to the action without requiring a signed
authorization from the plan member or former plan member.
(b) The information must include the pension benefits or
rights of the plan member or former plan member as of the first
day of the month following the date of the request, or as of the
end of the previous fiscal year for the plan, and as of the date
of valuation of marital assets under section 518.58, if the
person requesting the information specifies that date. The
information must include the accrued service credit of the
person, the credited salary of the person for the most current
five-year period, a summary of the benefit plan, and any other
information relevant to the calculation of the present value of
the benefits or rights.
Sec. 26. Minnesota Statutes 1988, section 356.80,
subdivision 3, is amended to read:
Subd. 3. [ACCESS TO DATA.] Notwithstanding any provision
of chapter 13 to the contrary, an administrator may release
private or confidential data on individuals to the court, the
parties to a marriage dissolution, their attorneys, and an
actuary appointed under section 518.582, to the extent necessary
to comply with this section, but only if the administrator has
received a copy of the legal petition showing that an action for
marriage dissolution has commenced and a copy of the affidavit
of service showing that the petition has been served on the
responding party to the action.
Sec. 27. [356.81] [REPAYMENT OF REFUNDS.]
Repayment of a refund and interest on that refund permitted
under laws governing any public pension plan in Minnesota may be
made with funds distributed from a plan qualified under the
federal Internal Revenue Code of 1986, as amended through
December 31, 1988, section 401(a) or an annuity qualified under
the federal Internal Revenue Code of 1986, section 403(a).
Repayment may also be made with funds distributed from an
individual retirement account used solely to receive a
nontaxable rollover from that type of a plan or annuity. The
repaid refund must be separately accounted for as member
contributions not previously taxed. Before accepting any
transfers to which this subdivision applies, the executive
director must require the member to provide written
documentation to demonstrate that the amounts to be transferred
are eligible for a tax-free rollover and qualify for that
treatment under the federal Internal Revenue Code of 1986.
Sec. 28. [REPEALER.]
Minnesota Statutes 1988, sections 136.88, subdivision 3;
354.41, subdivision 3; 354.531; 354.532; 354.55, subdivision 5;
and 354.56, are repealed.
Sec. 29. [EFFECTIVE DATE.]
Sections 2 to 13 and 15 to 28 are effective the day
following final enactment. Section 1 is effective July 1,
1989. Section 14 is effective January 1, 1989.
ARTICLE 3
PERA
Section 1. Minnesota Statutes 1988, section 353.01,
subdivision 2a, is amended to read:
Subd. 2a. [INCLUDED EMPLOYEES.] The following persons are
included in the meaning of "public employee":
(1) elected or appointed officers and employees of elected
officers;
(2) district court reporters;
(3) officers and employees of the public employees
retirement association;
(4) employees of the league of Minnesota cities;
(5) employees of the association of metropolitan
municipalities;
(6) officers and employees of public hospitals owned or
operated by, or an integral part of, a governmental subdivision
or governmental subdivisions;
(6) (7) employees of a school district who receive separate
salaries for driving their own buses;
(7) (8) employees of the association of Minnesota counties;
(8) (9) employees of the metropolitan intercounty
association;
(9) (10) employees of the Minnesota municipal utilities
association;
(10) (11) employees of the Minnesota association of
townships when the board of the association, at its option,
certifies to the executive director that its employees are to be
included for purposes of retirement coverage, in which case
coverage of all employees of the association is permanent;
(12) employees of the metropolitan airports commission if
employment initially commenced after June 30, 1979;
(11) (13) employees of the Minneapolis employees retirement
fund, if employment initially commenced after June 30, 1979;
(12) (14) employees of the range association of
municipalities and schools;
(13) (15) employees of the soil and water conservation
districts;
(14) (16) employees of a county historical society who are
county employees;
(15) (17) employees of a county historical society located
in the county whom the county, at its option, certifies to the
executive director to be county employees for purposes of
retirement coverage under this chapter, which status must be
accorded to all similarly situated county historical society
employees and, once established, must continue as long as a
person is an employee of the county historical society and is
not excluded under subdivision 2b;
(16) (18) employees of an economic development authority
created under sections 458C.01 to 458C.23;
(17) (19) employees of the department of military affairs
of the state of Minnesota who are full-time firefighters; and
(20) employees who became members before July 1, 1988,
based on the total salary of positions held in more than one
governmental subdivision.
Sec. 2. Minnesota Statutes 1988, section 353.01,
subdivision 2b, is amended to read:
Subd. 2b. [EXCLUDED EMPLOYEES.] (a) The following persons
are excluded from the meaning of "public employee":
(1) persons who are employed for professional services
where the service is incidental to regular professional duties,
determined on the basis that compensation for the service
amounts to no more than 25 percent of the person's total annual
gross earnings for all professional duties;
(2) election officers;
(3) independent contractors and their employees;
(4) patient and inmate help personnel who perform services
in governmental subdivision charitable, penal, and or
correctional institutions of a governmental subdivision;
(5) members of boards, commissions, bands, and others who
serve the a governmental subdivision intermittently;
(6) employees whose employment is not expected to continue
for a period longer than six consecutive months;, unless it
involves employment for a probationary period that is part of a
permanent position. Immediately following the expiration of a
six-month period of employment, if the employee continues in
public service and earns more than $425 from one governmental
subdivision in any one calendar month, the department head shall
report the employee for membership and require employee
deductions be made on behalf of the employee in accordance with
section 353.27, subdivision 4. Membership eligibility of an
employee who holds concurrent temporary employment of six months
or less and part-time positions in one governmental subdivision
must be determined by the salary of each position. Membership
eligibility of an employee who holds nontemporary positions in
one governmental subdivision must be determined by the total
salary of all positions;
(7) part-time employees who receive monthly compensation
from a one governmental subdivision not exceeding $425, and
part-time employees and elected officials whose annual
compensation from a one governmental subdivision is stipulated
in advance, in writing, to be not more than $5,100 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 $5,100 per employment period for employment
expected to be of less than a full year's duration, except that
members continue their membership until termination of public
service;. Membership eligibility of an employee who holds
concurrent part-time positions under this clause must be
determined by the total salary of all such positions in one
governmental subdivision. If compensation from one governmental
subdivision to an employee under this paragraph exceeds $5,100
per calendar year or school year after being stipulated in
advance not to exceed that amount, the stipulation is no longer
valid and contributions must be made on behalf of the employee
in accordance with section 353.27, subdivision 12, from the
month in which the employee's earnings first exceeded $425;
(8) persons who first occupy an elected office after July
1, 1988, the compensation for which does not exceed $425 per
month;
(9) emergency employees who are employed by reason of work
caused by fire, flood, storm, or similar disaster;
(10) employees who by virtue of their employment as an
officer or employee of a in one governmental subdivision are
required by law to be a member of and to contribute to any of
the plans or funds administered by the state employees
retirement system, the teachers retirement fund, the state
patrol retirement fund, the Duluth teachers retirement fund
association, the Minneapolis teachers retirement fund
association, the St. Paul teachers retirement fund association,
the Minneapolis employees retirement fund, the Minnesota state
retirement system correctional officers retirement plan, or any
police or firefighters relief association governed by section
69.77 that has not consolidated with the public employees police
and fire fund and for which the employee has not elected
coverage by the public employees police and fire fund benefit
plan as provided in sections 353A.01 to 353A.10, other than 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;
Minnesota state retirement system, the teachers retirement
association, the Duluth teachers retirement fund association,
the Minneapolis teachers retirement association, the St. Paul
teachers retirement fund association, the Minneapolis employees
retirement fund, or any police or firefighters relief
association governed by section 69.77 that has not consolidated
with the public employees police and fire fund, or any police or
firefighters relief association that has consolidated with the
public employees retirement association but whose members have
not elected coverage by the public employees police and fire
fund as provided in sections 353A.01 to 353A.10. This clause
must not be construed to prevent a person from being a member of
and contributing to the public employees retirement association
and also belonging to and contributing to another public pension
fund for other service occurring during the same period of
time. A person who meets the definition of "public employee" in
subdivision 2 by virtue of other service occurring during the
same period of time shall become a member of the association
unless contributions are made to another public retirement fund
on the salary based on the other service or to the teachers
retirement association by a teacher as defined in section
354.05, subdivision 2;
(11) police matrons who are employed in a police department
of a city who are transferred to the jurisdiction of a joint
city and county detention and corrections authority;
(12) persons who are excluded from coverage under the
federal old age, survivors, disability, and health insurance
program for the performance of service as specified in United
States Code, title 42, section 410(a) (8) (A), as amended
through January 1, 1987;
(13) full-time students who are enrolled and are regularly
attending classes at an accredited school, college, or
university and who are not employed full time by a governmental
subdivision;
(14) resident physicians, medical interns, and pharmacist
residents and interns who are serving in a degree or residency
program in public hospitals and students who are serving in an
internship or residency program sponsored by an accredited
educational institution;
(15) appointed or elected officers, who are paid entirely
on a fee basis, and who were not members on June 30, 1971;
(16) persons holding who hold a part-time adult
supplementary technical institute license who render part-time
teaching service in a technical institute if the service is
incidental to the person's regular nonteaching occupation, the
applicable technical institute stipulates annually in advance
that the part-time teaching service will not exceed 300 hours in
a fiscal year, and the part-time teaching service actually does
not exceed 300 hours in a fiscal year; and;
(17) persons exempt from licensure under section 125.031;
(18) except as provided in section 353.86, volunteer
ambulance service personnel, as defined in subdivision 35, but
persons who serve as volunteer ambulance service personnel may
still qualify as public employees under subdivision 2 and may be
members of the public employees retirement association and
participants in the public employees retirement fund or the
public employees police and fire fund on the basis of
compensation received from public employment service other than
service as volunteer ambulance service personnel; and
(19) except as provided in section 353.87, volunteer
firefighters, as defined in subdivision 36, engaging in
activities undertaken as part of volunteer firefighter duties;
provided that a person who is a volunteer firefighter may still
qualify as a public employee under subdivision 2 and may be a
member of the public employees retirement association and a
participant in the public employees retirement fund or the
public employees police and fire fund on the basis of
compensation received from public employment activities other
than those as a volunteer firefighter.
(b) Immediately following the expiration of a six-month
period of employment by an employee covered by paragraph (a),
clause (6), if the employee continues in public service and
earns more than $425 from a governmental subdivision in any one
calendar month, the department head shall report the employee
for membership and cause employee contributions to be made on
behalf of the employee in accordance with section 353.27,
subdivision 4, and the employee remains a member until
termination of public service. This paragraph may not be
construed to exclude an employee from membership whose
employment is expected to continue for more than six months but
who is serving a probationary period.
(c) If compensation from a governmental subdivision to an
employee covered by paragraph (a), clause (7), exceeds $5,100
per calendar year or school year after being stipulated in
advance, the stipulation is no longer valid and contributions
must be made on behalf of the employee in accordance with
section 353.27, subdivision 12, from the month in which the
employee first exceeded $425.
(d) Paragraph (a), clause (10), does not prevent a person
from being a member of and 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. A person who meets the definition of
"public employee" in subdivision 2, by virtue of other service
occurring during the same period of time shall become a member
of the association unless contributions are made to another
public retirement fund on the salary based on the other service
or to the teachers retirement association in accordance with
section 354.05, subdivision 2.
Sec. 3. Minnesota Statutes 1988, section 353.01,
subdivision 10, is amended to read:
Subd. 10. [SALARY.] "Salary" means the periodical
compensation of a public employee, before deductions for
deferred compensation, supplemental retirement plans, or other
voluntary salary reduction programs, and also means "wages" and
includes net income from fees. Fees paid to district court
reporters are not considered a salary. Lump sum annual or lump
sum sick leave payments, severance payments, and all 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, are not deemed to be salary.
Before the time that all sick leave has been used, amounts paid
to an employee under a disability insurance policy or program
where the employer paid the premiums are considered salary, and,
after all sick leave has been used, the payment is not
considered salary. Workers' compensation payments are not
considered salary. Except as provided in sections 353.86 or
353.87, compensation of any kind paid to volunteer ambulance
service personnel or volunteer firefighters, as defined in
subdivisions 35 and 36, is not considered salary. For a public
employee who has prior service covered by a local police or
firefighters relief association that has consolidated with the
public employees police and fire fund and who has elected
coverage by the public employees police and fire fund benefit
plan as provided in section 353A.08 following the consolidation,
"salary" means the rate of salary upon which member
contributions to the special fund of the relief association were
made prior to the effective date of the consolidation as
specified by law and by bylaw provisions governing the relief
association on the date of the initiation of the consolidation
procedure and the actual periodical compensation of the public
employee after the effective date of the consolidation.
Sec. 4. Minnesota Statutes 1988, section 353.01, is
amended by adding a subdivision to read:
Subd. 11a. [TERMINATION OF PUBLIC SERVICE.] An officer or
employee who terminates employment but within 30 days returns to
employment in the same governmental subdivision or begins
employment in another position otherwise excluded from
membership is considered a member from the beginning of the
reemployment unless the total period covered by all periods of
employment is less than six months or the amount earned does not
exceed the dollar limitations in subdivision 2b, clause (7).
Sec. 5. Minnesota Statutes 1988, section 353.01, is
amended by adding a subdivision to read:
Subd. 35. [VOLUNTEER AMBULANCE SERVICE
PERSONNEL.] "Volunteer ambulance service personnel," for
purposes of this chapter, are basic and advanced life support
emergency medical service personnel employed by or providing
services for any public ambulance service or privately operated
ambulance service that receives an operating subsidy from a
governmental entity.
Sec. 6. Minnesota Statutes 1988, section 353.01, is
amended by adding a subdivision to read:
Subd. 36. [VOLUNTEER FIREFIGHTER.] For purposes of this
chapter, a person is considered a "volunteer firefighter" for
all service for which the person receives credit in an
association or fund operating under chapter 424A.
Sec. 7. Minnesota Statutes 1988, 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 60 days or less, the head of the
department shall deduct from the employee's next salary payment
and remit to the executive director the amount of the employee
contribution delinquency, with the department head shall
immediately, upon discovery, report the employee for membership
and require employee deductions be made in accordance with
subdivision 4. Omitted employee deductions due for the 60-day
period preceding enrollment must be deducted from the employee's
next salary payment and remitted to the association. The
employer shall pay any remaining omitted employee deductions
past due and any omitted employer contributions, plus cumulative
interest at the rate of six percent a year, compounded annually,
from the date or dates each delinquent omitted employee
contribution was first payable. The interest must be paid by
the employer. Omitted required deductions past due for a period
in excess of 60 days are the sole obligation of the governmental
subdivision from the time the deductions were first payable,
together with interest as specified in this subdivision. 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 at the rate of six percent
compounded annually from the date they were first payable, from
the employer must be paid from the proceeds of a tax levy made
under section 353.28 or from other funds available to the
employer. Unless otherwise indicated, An employer shall not
hold an employee liable for omitted employee deductions due for
more than the 60-day period preceding enrollment nor attempt to
recover from the employee those employee deductions paid by the
employer. Neither an employer nor an employee is responsible to
pay omitted employee deductions when an employee terminates
public service before making payment of omitted employee
deductions to the association, but the employer remains liable
to pay omitted employer contributions plus interest at the rate
of six percent compounded annually from the date the
contributions were first payable. This subdivision has both
retroactive and prospective application, and the governmental
subdivision is liable retroactively and prospectively for all
amounts due under it. No action for the recovery of omitted
employee and employer contributions or interest on contributions
may be commenced and no payment of omitted contributions may be
made or accepted unless the association has already commenced
action for recovery of omitted contributions, The association
may not commence action for the recovery of omitted employee
deductions and employer contributions after the expiration of
three calendar years after the calendar year in which the
contributions and deductions were omitted. No payment may be
made or accepted unless the association has already commenced
action for recovery of omitted deductions. An action for the
recovery of omitted contributions or interest commences five
calendar days after on the date of the mailing of any written
correspondence from the association requesting information from
the governmental unit that may lead to a recovery of omitted
contributions subdivision upon which to determine whether or not
omitted deductions occurred.
Sec. 8. Minnesota Statutes 1988, 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 payment is actually
received in the office of the association, with a minimum charge
of $10. Interest for past due payments of excess police state
aid under section 69.031, subdivision 5, must be charged at a
rate of six percent compounded annually.
Sec. 9. Minnesota Statutes 1988, section 353.28,
subdivision 6, is amended to read:
Subd. 6. If the governmental subdivision fails to pay
amounts due under this chapter or fails to make payments of
excess police state aid to the public employees police and fire
fund under section 69.031, subdivision 5, the executive director
shall certify those amounts to the governmental subdivision for
payment. If the governmental subdivision fails to remit the sum
so due in a timely fashion, the executive director shall certify
amounts to the county auditor for collection. The county
auditor shall collect such amounts out of the revenue of the
governmental subdivision, or shall add them to the levy of the
governmental subdivision and make payment directly to the
association. This tax shall be levied, collected and
apportioned in the manner other taxes are levied, collected and
apportioned.
Sec. 10. Minnesota Statutes 1988, section 353.29,
subdivision 4, is amended to read:
Subd. 4. [APPLICATION FOR ANNUITY.] Application for a
retirement annuity may be made by a member or by a person
authorized to act on behalf of the member. Every application
for retirement shall be made in writing on a form prescribed by
the executive director and shall be substantiated in writing by
written proof of the member's age of the member and
identity. No application for a retirement annuity may be
considered complete until all necessary supporting documents are
received by the executive director.
Sec. 11. Minnesota Statutes 1988, section 353.29,
subdivision 7, is amended to read:
Subd. 7. [ANNUITIES; ACCRUAL.] Except as to elected public
officials, all retirement annuities granted under the provisions
of this chapter shall commence with the first day of the first
calendar month next succeeding the date of termination of public
service and shall be paid in equal monthly installments, but no
payment shall accrue beyond the end of the month, in which
entitlement to such annuity has terminated. If the annuitant
dies prior to negotiating the check for the month in which death
occurs, payment will be made to the surviving spouse or if none
to the designated beneficiary or if none to the estate. Any
annuity granted to an elective public official shall accrue on
the day following expiration of the public office held or right
thereto, and the annuity for that month shall be prorated
accordingly. No annuity, once granted, shall be increased,
decreased, or revoked except as provided in this chapter. No
annuity payment shall be made retroactive for more than three
months prior to that month in which application therefor shall
be filed with the association a complete application is received
by the executive director as provided in subdivision 4.
Sec. 12. Minnesota Statutes 1988, section 353.33,
subdivision 1, is amended to read:
Subdivision 1. [AGE, SERVICE, AND SALARY REQUIREMENTS.]
Any member who becomes totally and permanently disabled before
age 65 and after five years of allowable service shall be
entitled to a disability benefit in an amount provided in
subdivision 3. If such the disabled person's public service has
terminated at any time, at least three of the required five
years of allowable service must have been rendered after last
becoming a member. Any member whose average salary is less than
$75 per month shall not be entitled to a disability benefit. No
repayment of a refund otherwise authorized pursuant to section
353.34 and A repayment of a refund may be made before the
effective date of disability benefits under subdivision 2. No
purchase of prior service or payment made in lieu of salary
deductions otherwise authorized pursuant to section 353.01,
subdivision 16, 353.017, subdivision 4, or 353.36, subdivision
2, may be made after the occurrence of the disability for which
an application pursuant to this section is filed.
Sec. 13. Minnesota Statutes 1988, section 353.33,
subdivision 2, is amended to read:
Subd. 2. [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim
or demand for a total and permanent disability benefit
shall must be initiated by written application in the manner and
form prescribed by the executive director, filed in the office
of the retirement association, showing compliance with the
statutory conditions qualifying the applicant for a total and
permanent disability benefit and filed with the executive
director. A member or former member who became totally and
permanently disabled during a period of membership may file
application for total and permanent disability benefits within
three years next following termination of public service, but
not thereafter. This benefit shall begin to accrue the day
following the commencement of disability, 90 days preceding the
filing of the application, or, if annual or sick leave is paid
for more than the said 90 day period, from the date salary
ceased whichever is later. No payment shall accrue beyond the
end of the month in which entitlement has terminated. If the
disabilitant dies prior to negotiating the check for the month
in which death occurs, payment will be made to the surviving
spouse, or if none, to the designated beneficiary, or if none,
to the estate. An applicant for total and permanent disability
benefits may file a retirement annuity application under section
353.29, subdivision 4, simultaneously with an application for
total and permanent disability benefits. The retirement annuity
application is void upon the determination of the entitlement
for disability benefits by the executive director. If
disability benefits are denied, the retirement annuity
application must be initiated and processed.
Sec. 14. Minnesota Statutes 1988, section 353.33,
subdivision 5, is amended to read:
Subd. 5. [BENEFITS PAID UNDER WORKERS' COMPENSATION LAW.]
Disability benefits paid shall be reimbursed and future benefits
shall be reduced by coordinated with any amounts received or
receivable, including under workers' compensation law, such as
temporary total, permanent total, temporary partial or,
permanent partial, or economic recovery compensation benefits,
in either periodic or lump sum payments from the employer under
applicable workers' compensation laws, after deduction of amount
of attorney fees, authorized under applicable workers'
compensation laws, paid by a disabilitant. If the total of the
single life annuity actuarial equivalent disability benefit and
the workers' compensation benefit exceeds: (1) the salary the
disabled member received as of the date of the disability or (2)
the salary currently payable for the same employment position or
an employment position substantially similar to the one the
person held as of the date of the disability, whichever is
greater., the disability benefit must be reduced to that amount
which, when added to the workers' compensation benefits, does
not exceed the greater of the salaries described in clauses (1)
and (2).
Sec. 15. Minnesota Statutes 1988, section 353.33,
subdivision 6, is amended to read:
Subd. 6. [CONTINUING ELIGIBILITY FOR BENEFITS.] The
eligibility for continuation of disability benefits shall be
determined by the association, which has authority to require
periodic examinations and evaluations of disabled members as
frequently as deemed necessary. Disability benefits are
contingent upon a disabled person's participation in a
vocational rehabilitation program if the executive director
determines that the disabled person may be able to return to a
gainful occupation. If a member is found to be no longer
totally and permanently disabled and is reinstated to the
payroll, payments shall be made for no more than 60 days.
Sec. 16. Minnesota Statutes 1988, section 353.33,
subdivision 7, is amended to read:
Subd. 7. [PARTIAL REEMPLOYMENT.] If, following a work or
nonwork-related injury or illness, a disabled person resumes a
gainful occupation from which earnings are less than the salary
at the date of disability or the salary currently paid for
similar positions, the board shall continue the disability
benefit in an amount that, when added to the earnings and
workers' compensation benefit, does not exceed the salary at the
date of disability or the salary currently paid for similar
positions, whichever is higher, provided the disability benefit
does not exceed the disability benefit originally allowed, plus
any postretirement adjustments payable after December 31, 1988,
in accordance with section 11A.18, subdivision 10. No
deductions for the retirement fund may be taken from the salary
of a disabled person who is receiving a disability benefit as
provided in this subdivision.
Sec. 17. Minnesota Statutes 1988, section 353.34,
subdivision 1, is amended to read:
Subdivision 1. [REFUND OR DEFERRED ANNUITY.] Any member
who ceases to be a public employee by reason of termination of
public service, or who is on a continuous layoff for more than
120 calendar days, shall be entitled to a refund of accumulated
deductions as provided in subdivision 2, or to a deferred
annuity as provided in subdivision 3. An active member of a
fund enumerated in section 356.30, subdivision 3, clause (7),
(8), or (14), who terminates public service in any of those
funds and becomes a member of another fund enumerated in those
clauses may receive a refund of employee contributions plus five
percent interest compounded annually from the fund in which the
member terminated service. Application for a refund may not be
made prior to date of termination of public service, or the
expiration of 120 days of layoff, and a refund shall be paid
within 120 days following receipt of application, provided
applicant has not again become a public employee required to be
covered by the association.
Sec. 18. Minnesota Statutes 1988, section 353.35, is
amended to read:
353.35 [CONSEQUENCES OF REFUND; REPAYMENT, RIGHTS
RESTORED.]
When any former member accepts a refund, all existing
service credits and all rights and benefits to which the person
was entitled prior to the acceptance of such the refund shall
terminate and shall not again be restored until the person
acquires not less than 18 months allowable service credit
subsequent to after taking the last refund and repays all
refunds taken and interest received under section 353.34,
subdivisions 1 and 2, plus interest at six percent per annum
compounded annually. If more than one refund has been
taken, all refunds must be repaid by the person may repay all
refunds or only the refund for the fund in which the person had
most recently been a member, with interest at six percent per
annum compounded annually. All refunds must be repaid within
three months of the last date of termination of public service.
Sec. 19. Minnesota Statutes 1988, section 353.64,
subdivision 1, is amended to read:
Subdivision 1. [POLICE AND FIRE FUND MEMBERSHIP.] 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 person who was
employed by a governmental subdivision as a police officer or a
firefighter, whichever applies, was an active member of the
local police or salaried firefighters relief association located
in that governmental subdivision by virtue of that employment as
of the effective date of the consolidation as authorized by
sections 353A.01 to 353A.10, and has elected coverage by the
public employees police and fire fund benefit plan, shall be
considered to be a member of the police and fire fund after that
date if employed by the same governmental subdivision in a
position in the same department in which the person was employed
on 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, other than a volunteer firefighter, employed by a
governmental subdivision who by virtue of that employment is
required by law to be a member of and to contribute to any
police or firefighter relief association governed by section
69.77 which has not consolidated with the public employees
police and fire fund and any police officer or firefighter of a
relief association that has consolidated with the association
for which the employee has not elected coverage by the public
employees police and fire fund benefit plan as provided in
sections 353A.01 to 353A.10 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. 20. Minnesota Statutes 1988, 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 must, as a minimum, include services employment
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. A police officer who is
periodically assigned to employment duties not within the scope
of this subdivision may contribute to the public employees
police and fire fund for all service, if a resolution declaring
that the primary position held by the person is that of a police
officer, is adopted by the governing body of the department, and
is promptly submitted to the executive director.
Sec. 21. Minnesota Statutes 1988, section 353.64,
subdivision 3, is amended to read:
Subd. 3. Before a governing body may declare a position to
be that of a firefighter, the duties of the person so employed
shall must, as a minimum, include services as an employee of a
designated fire company or person in charge of a designated fire
company or companies who is engaged in the hazards of fire
fighting. A firefighter who is periodically assigned to
employment duties outside the scope of firefighting may
contribute to the public employees police and fire fund for all
service, if a resolution declaring that the primary position
held by the person is that of a firefighter, is adopted by the
governing body of the company or companies, and is promptly
submitted to the executive director.
Sec. 22. Minnesota Statutes 1988, section 353.656,
subdivision 4, is amended to read:
Subd. 4. No member shall receive any disability benefit
payment when there remains to the member's credit unused annual
leave or sick leave or under any other circumstances, when,
during the period of disability, there has been no impairment of
salary and. Should such the member resume a gainful occupation
with earnings less than the salary earned at the date of
disability or the salary currently paid for similar positions,
the association shall continue the disability benefit in an
amount which when added to such workers' compensation benefits
and actual earnings does not exceed the salary earned at the
date of disability or the salary currently paid for similar
positions, whichever is higher, provided. In no event may the
disability benefit in such case does not exceed the disability
benefit originally allowed. In the event that the total amount
is higher, the executive director shall reduce the disability
benefit by the amount of the excess.
Sec. 23. [353.86] [VOLUNTEER AMBULANCE SERVICE PERSONNEL;
PARTICIPATION; ELECTION; LIMITATION; AND COMPENSATION.]
Subdivision 1. [PARTICIPATION.] Volunteer ambulance
service personnel, as defined in section 353.01, subdivision 35,
who are or become members of and participants in the public
employees retirement fund or the public employees police and
fire fund and make contributions to either of those funds based
on compensation for service other than volunteer ambulance
service may elect to participate in that same fund with respect
to compensation received for volunteer ambulance service,
provided that the volunteer ambulance service is not credited to
another public or private pension plan including the public
employees retirement plan established by chapter 353D and
provided further that the volunteer ambulance service is
rendered for the same governmental unit for which the
nonvolunteer ambulance service is rendered.
Subd. 2. [ELECTION.] Volunteer ambulance service personnel
to whom subdivision 1 applies may exercise the election
authorized under subdivision 1 within the earlier of the
one-year period beginning on July 1, 1989, and extending through
June 30, 1990, or the one-year period commencing on the first
day of the first month following the start of employment in a
position covered by the public employees retirement fund or the
public employees police and fire fund. The election must be
exercised by filing a written notice on a form prescribed by the
executive director of the association.
Subd. 3. [LIMITATION.] Volunteer ambulance service
personnel to whom subdivision 1 applies who exercise their
option in accordance with subdivision 2 and their governmental
employers are not required to pay omitted deductions and
contributions under section 353.27, subdivision 12, for
volunteer ambulance service rendered before July 1, 1989.
Subd. 4. [COMPENSATION.] Notwithstanding section 353.01,
subdivision 10, compensation received for service rendered by
volunteer ambulance service personnel to whom subdivision 1
applies who exercise their option in accordance with subdivision
2 shall be considered salary.
Sec. 24. [353.87] [VOLUNTEER FIREFIGHTERS; PARTICIPATION;
LIMITATION; AND REFUND.]
Subdivision 1. [PARTICIPATION.] Except as provided in
subdivision 2, a volunteer firefighter, as defined in section
353.01, subdivision 36, who, on June 30, 1989, was a member of,
and a participant in, the public employees retirement fund or
the public employees police and fire fund and was making
contributions to either of those funds based, at least in part,
on compensation for services performed as a volunteer
firefighter shall continue as a member of, and a participant in,
the public employees retirement fund or the public employees
police and fire fund and compensation for services performed as
a volunteer firefighter shall be considered salary.
Subd. 2. [OPTION.] A volunteer firefighter to whom
subdivision 1 applies has the option to terminate membership and
future participation in the public employees retirement fund or
the public employees police and fire fund upon filing of a
written notice of intention to terminate participation. Notice
must be given on a form prescribed by the executive director of
the association and must be filed in the offices of the
association not later than June 30, 1990.
Subd. 3. [LIMITATION.] No volunteer firefighter to whom
subdivision 1 applies or the governmental employer of the
volunteer firefighter is required to make back contributions to
the public employees retirement association for volunteer
firefighter services rendered before July 1, 1989,
notwithstanding the provisions of section 353.27, subdivision 12.
Subd. 4. [REFUND.] Upon timely filing of a valid notice of
termination of participation in accordance with subdivision 2, a
volunteer firefighter to whom subdivision 1 applies must be
given a refund of all past employee contributions made on
account of volunteer firefighter service with five percent
interest compounded annually.
Subd. 5. [FURTHER OPTION.] A volunteer firefighter, as
defined in section 353.01, subdivision 36, who is or becomes a
member of, and a participant in, the public employees retirement
fund or the public employees police and fire fund and makes
contributions to either of those funds based on compensation for
services other than services as a volunteer firefighter shall
have the option of making contributions to the same fund for
service performed as a volunteer firefighter with compensation
received for those volunteer firefighter services considered
salary, provided that the volunteer firefighter is not a
participant in, or covered under, a local volunteer firefighter
plan and notwithstanding the fact that the volunteer firefighter
service is performed for one governmental unit and the
nonvolunteer firefighter service is performed for another
governmental unit.
Sec. 25. Laws 1985, chapter 11, section 12, subdivision 3,
is amended to read:
Subdivision 3. [ELECTION PROCEDURES.] The board shall
accept filings for one elected position on the board in November
1985 and shall conduct an election for that position in January
1986. The board shall accept filings for two elected positions
on the board in November 1986 and shall conduct an election for
those positions in January 1987. Notwithstanding the four-year
term of office specified in Minnesota Statutes, section 353.03,
subdivision 1, the term of office for the January 1986 elected
position extends through January 1991, so that all three elected
positions are four-year terms which begin and end at the same
time. Thereafter, the board shall follow the election
procedures described in Minnesota Statutes, section 353.03,
subdivision 1, as necessary to fill the positions of elected
trustees.
Sec. 26. [REPEALER.]
Minnesota Statutes 1988, sections 353.01, subdivision 2c;
353.661; and 353.662, are repealed.
Sec. 27. [EFFECTIVE DATE.]
(a) Sections 1 to 26 are effective July 1, 1989.
(b) The past due excess police state aid interest charge
provided for in section 8 is retroactive to July 1, 1989.
ARTICLE 4
PURCHASE OF PRIOR SERVICE CREDIT
Section 1. [PURCHASE OF CREDIT FOR CERTAIN PRIOR SERVICE.]
Subdivision 1. [HIGHLAND GOLF COURSE EMPLOYEE.] A person
who was born on October 1, 1925, who was a member of the public
employees retirement association as of December 1, 1988, who is
a seasonal employee of the city of St. Paul at the Highland golf
course, and who was employed in that capacity between June 25,
1979, and July 31, 1984, is entitled to purchase allowable
service credit from the public employees retirement association
for that period of service if not otherwise credited as
allowable service by the public employees retirement association.
Subd. 2. [RAMSEY COUNTY COURT COMMISSIONER.] A member of
the public employees retirement association with prior service
as an elected court commissioner in Ramsey county between
January 1, 1963, and December 31, 1974, may purchase allowable
service credit in the association for that period of service.
Subd. 3. [HENNEPIN COUNTY EMPLOYEE.] Notwithstanding the
limitations in Minnesota Statutes, section 353.36, subdivision
2, a person whose employment with Hennepin county began in July
1973, but for whom no salary deductions were taken out for the
public employees retirement association between October 1973 and
July 1976, may purchase credit for the prior public service for
which salary deductions were omitted.
Subd. 4. [DAKOTA COUNTY RECORDER.] A member of the public
employees retirement association with prior service as an
elected county recorder in Dakota county between January 1,
1983, and December 31, 1987, may purchase allowable service
credit in the association for that period of service.
Subd. 5. [BLOOMINGTON CITY EMPLOYEE.] A person who was
born on May 11, 1927, whose employment by the city of
Bloomington began in March 1960 and continued during the years
1960 and 1961, and for whom no salary deductions were taken for
the public employees retirement association may purchase credit
for that service from the public employees retirement
association.
Subd. 6. [PURCHASE OF PRIOR SERVICE CREDIT FOR CERTAIN
MINNEAPOLIS EMPLOYEES.] Notwithstanding any law to the contrary,
a person who was born on March 3, 1949, who was employed by the
city of Minneapolis as an urban corps intern in August, 1976,
who was employed in the unclassified service of the city of
Minneapolis as an assistant to an alderman with substantially
the same duties as performed during the internship on August 25,
1978, and who is currently employed in that position and is a
member of the Minneapolis employees retirement fund may purchase
credit in that retirement fund for service during that
internship. Eligibility to make the purchase of prior service
credit expires on June 30, 1989.
Subd. 6a. [WHITE BEAR TOWNSHIP.] A person who is a town
board supervisor of White Bear township and who is or becomes a
member of the public employees retirement association on or
after the effective date of this act may purchase credit from
the association for all prior service as a town board supervisor.
Subd. 7. [CITY OF CRYSTAL COUNCIL MEMBER.] A person who
was born on April 20, 1928, who was a member of the public
employees retirement association with prior service as an
elected official on the city of Crystal's planning commission
and city council, may purchase credit for the prior service for
which salary deductions were omitted.
Subd. 8. [CITY OF SPRING LAKE PARK COUNCIL MEMBER.] A
person who was born on April 5, 1934, or April 4, 1932, may
purchase credit for prior service from the public employees
retirement association for the period when the person served on
the city council of the city of Spring Lake Park during which no
salary deductions were taken.
Subd. 9. [PURCHASE PAYMENT AMOUNT.] For a person eligible
to purchase credit for prior service under subdivisions 1 to 8,
there must be paid to the applicable fund an amount equal to the
present value, on the date of payment, of the amount of the
additional retirement annuity that would be obtained by virtue
of the purchase of the additional service credit, using the
preretirement interest rate specified in Minnesota Statutes,
section 356.215, subdivision 4d, and the mortality table adopted
for the fund and assuming continuous future service in the fund
or association until, and retirement at, the age at which the
minimum requirements of the retirement association for normal
retirement or retirement with an annuity unreduced for
retirement at an early age, including Minnesota Statutes,
section 356.30, are met with the additional service credit
purchased, and also assuming a future salary history that
includes annual salary increases at the salary increase rate
specified in Minnesota Statutes, section 356.215, subdivision
4d. The person requesting the purchase of prior service shall
establish in the records of the fund or association proof of the
service for which the purchase of prior service is requested.
The manner of the proof of service must be in accordance with
procedures prescribed by the executive director of the fund or
association.
Subd. 10. [PAYMENT; CREDITING SERVICE.] Payment must be
made in one lump sum, unless the executive director of the fund
or association agrees to accept payment in installments over a
period not to exceed three years from the date of the agreement,
with interest at a rate deemed appropriate by the executive
director. The period of allowable service may be credited to
the account of the person only after receipt of full payment by
the executive director.
Subd. 11. [OPTIONAL EMPLOYER PARTIAL PAYMENT.] Payment
must be made by the person entitled to purchase prior service.
However, the current or former employer of a person specified in
subdivisions 1 to 8, may, at its discretion, pay all or any
portion of the payment amount that exceeds an amount equal to
the employee contribution rates in effect during the period or
periods of prior service applied to the actual salary rates in
effect during the period or periods of prior service, plus
interest at the rate of six percent a year compounded annually
from the date on which the contributions would otherwise have
been made to the date on which the payment is made.
Sec. 2. Laws 1988, chapter 709, article 3, section 1,
subdivision 4, is amended to read:
Subd. 4. [OPTIONAL EMPLOYER PARTIAL PAYMENT.] Payment must
be made by the person entitled to purchase prior service.
However, the current or former employer of a person specified in
subdivision 1, clause (1), (2), (4), (5), (6), or (7) may, at
its discretion, and the metropolitan sports facilities
commission for a person specified in subdivision 1, clause (3),
shall pay all or any portion of the payment amount that exceeds
an amount equal to the employee contribution rates in effect for
the retirement fund during the period or periods of prior
service applied to the actual salary rates in effect during the
period or periods of prior service, plus interest at the rate of
six percent a year compounded annually from the date on which
the contributions would otherwise have been made to the date on
which the payment is made.
Sec. 3. [PURCHASE AMOUNT.]
Notwithstanding Laws 1988, chapter 709, article 3, section
1, subdivision 2, the amounts required to purchase credit for
prior service under Laws 1988, chapter 709, article 3, section
1, subdivision 1, clause (3), must be calculated assuming the
affected employees will retire at age 65. Notwithstanding any
contrary provision in Minnesota Statutes, section 352.116, if an
employee who purchases service under Laws 1988, chapter 709,
article 3, section 1, subdivision 1, clause (3) retires before
age 65, the annuity must be reduced so that the reduced annuity
is the actuarial equivalent of the annuity that would be payable
if the employee deferred receipt from the day the annuity begins
to accrue to age 65.
Sec. 4. [EFFECTIVE DATE.]
Sections 1 to 3 are effective the day following final
enactment. Section 2 applies retroactively to May 4, 1988.
ARTICLE 5
OTHER RETIREMENT ISSUES
Section 1. Minnesota Statutes 1988, section 353.01,
subdivision 2b, is amended to read:
Subd. 2b. [EXCLUDED EMPLOYEES.] (a) The following persons
are excluded from the meaning of "public employee":
(1) persons employed for professional services where the
service is incidental to regular professional duties, determined
on the basis that compensation for the service amounts to no
more than 25 percent of the person's total annual gross earnings
for all professional duties;
(2) election officers;
(3) independent contractors and their employees;
(4) patient and inmate help in governmental subdivision
charitable, penal, and correctional institutions;
(5) members of boards, commissions, bands, and others who
serve the governmental subdivision intermittently;
(6) employees whose employment is not expected to continue
for a period longer than six consecutive months;
(7) part-time employees who receive monthly compensation
from a governmental subdivision not exceeding $425, and
part-time employees and elected officials whose annual
compensation from a governmental subdivision is stipulated in
advance, in writing, to be not more than $5,100 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 $5,100 per employment period for employment
expected to be of less than a full year's duration, except that
members continue their membership until termination of public
service;
(8) persons who first occupy an elected office after July
1, 1988, the compensation for which does not exceed $425 per
month;
(9) emergency employees who are employed by reason of work
caused by fire, flood, storm, or similar disaster;
(10) employees who by virtue of their employment as an
officer or employee of a governmental subdivision are required
by law to be a member of and to contribute to any of the plans
or funds administered by the state employees retirement system,
the teachers retirement fund, the state patrol retirement fund,
the Duluth teachers retirement fund association, the Minneapolis
teachers retirement fund association, the St. Paul teachers
retirement fund association, the Minneapolis employees
retirement fund, the Minnesota state retirement system
correctional officers retirement plan, or any police or
firefighters relief association governed by section 69.77 that
has not consolidated with the public employees police and fire
fund and for which the employee has not elected coverage by the
public employees police and fire fund benefit plan as provided
in sections 353A.01 to 353A.10, other than 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;
(11) police matrons employed in a police department of a
city who are transferred to the jurisdiction of a joint city and
county detention and corrections authority;
(12) persons who are excluded from coverage under the
federal old age, survivors, disability, and health insurance
program for the performance of service as specified in United
States Code, title 42, section 410(a) (8) (A), as amended
through January 1, 1987;
(13) full-time students who are enrolled and are regularly
attending classes at an accredited school, college, or
university and who are not employed full time by a governmental
subdivision;
(14) resident physicians, medical interns, and pharmacist
interns who are serving in public hospitals;
(15) appointed or elected officers, paid entirely on a fee
basis, who were not members on June 30, 1971;
(16) persons holding a part-time adult supplementary
technical institute license who render part-time teaching
service in a technical institute if the service is incidental to
the person's regular nonteaching occupation, the applicable
technical institute stipulates annually in advance that the
part-time teaching service will not exceed 300 hours in a fiscal
year, and the part-time teaching service actually does not
exceed 300 hours in a fiscal year; and
(17) persons exempt from licensure under section 125.031;
and
(18) persons employed by the Minneapolis community
development agency.
(b) Immediately following the expiration of a six-month
period of employment by an employee covered by paragraph (a),
clause (6), if the employee continues in public service and
earns more than $425 from a governmental subdivision in any one
calendar month, the department head shall report the employee
for membership and cause employee contributions to be made on
behalf of the employee in accordance with section 353.27,
subdivision 4, and the employee remains a member until
termination of public service. This paragraph may not be
construed to exclude an employee from membership whose
employment is expected to continue for more than six months but
who is serving a probationary period.
(c) If compensation from a governmental subdivision to an
employee covered by paragraph (a), clause (7), exceeds $5,100
per calendar year or school year after being stipulated in
advance, the stipulation is no longer valid and contributions
must be made on behalf of the employee in accordance with
section 353.27, subdivision 12, from the month in which the
employee first exceeded $425.
(d) Paragraph (a), clause (10), does not prevent a person
from being a member of and 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. A person who meets the definition of
"public employee" in subdivision 2, by virtue of other service
occurring during the same period of time shall become a member
of the association unless contributions are made to another
public retirement fund on the salary based on the other service
or to the teachers retirement association in accordance with
section 354.05, subdivision 2.
Sec. 2. Minnesota Statutes 1988, section 355.90,
subdivision 3, is amended to read:
Subd. 3. [REFERENDUM.] A referendum on the question of
extending the provisions of United States Code, title 42,
sections 426, 426-1, and 1395c, must be held for each public
employee pension plan listed in section 356.30, subdivision 3,
except clauses (5) and (6), that has current members or
participants who do not have coverage by the federal old age,
survivors, and disability insurance program for the employment
giving rise to that pension plan membership. The state agency
shall supervise the referendum in accordance with United States
Code, title 42, section 418, on the date or dates set by the
governor for each pension plan. The notice of the referendum
provided to each employee must contain a statement sufficient to
inform the person of the rights available to the person as an
employee in Medicare qualified government employment and the
employee contribution rates applicable to the program. The
referendum is approved if a majority of the members or
participants indicate their desire to have the coverage on a
form prescribed by the state agency. If the referendum is
approved, The referendum must permit each employee the
opportunity to select or reject Medicare coverage. The governor
shall certify that fact to the Secretary of Health and Human
Services, and the that the conditions specified in United States
Code, title 42, section 418(d)(7) have been met. Coverage is
effective for all members or participants of the plan who select
it on the first of the month after the certification unless the
participant or member elects coverage effective retroactively to
April 1, 1986.
Sec. 3. Minnesota Statutes 1988, section 355.90,
subdivision 4, is amended to read:
Subd. 4. [EMPLOYEE AND EMPLOYER CONTRIBUTIONS.] (a) If the
referendum is approved, Beginning on the first of the month
after the certification of approval by the governor, the
employer of each member or participant covered by selecting
coverage under the referendum shall deduct from the wages of the
employee an amount equal to the tax that would be imposed under
United States Code, title 26, section 3101(b), if the services
of the employee for which wages were paid constituted employment
as defined in United States Code, title 26, section 3121.
(b) In addition to the deduction specified in paragraph
(a), the employer of each member or participant covered by the
referendum shall also pay an amount equal to the tax that would
be imposed under United States Code, title 26, section 3111(b),
on the same wage base specified in paragraph (a).
(c) The amounts under paragraphs (a) and (b) shall be paid
by the employer to the Secretary of the Treasury in the manner
required by the secretary.
Sec. 4. Minnesota Statutes 1988, section 356.30,
subdivision 3, is amended to read:
Subd. 3. [COVERED FUNDS.] The provisions of This
section shall apply applies to the following retirement funds:
(1) state employees retirement fund established pursuant to
chapter 352;
(2) correctional employees retirement program, established
pursuant to chapter 352;
(3) unclassified employees retirement plan, established
pursuant to chapter 352D;
(4) state patrol retirement fund, established pursuant to
chapter 352B;
(5) legislators' retirement plan, established pursuant to
chapter 3A;
(6) elective state officers' retirement plan, established
pursuant to chapter 352C;
(7) public employees retirement association, established
pursuant to chapter 353;
(8) public employees police and fire fund, established
pursuant to chapter 353;
(9) teachers retirement fund, established pursuant to
chapter 354;
(10) Minneapolis employees retirement fund, established
pursuant to chapter 422A;
(11) Minneapolis teachers retirement fund association,
established pursuant to chapter 354A;
(12) St. Paul teachers retirement fund association,
established pursuant to chapter 354A;
(13) Duluth teachers retirement fund association,
established pursuant to chapter 354A;
(14) public employees local government correctional service
retirement plan established by sections 353C.01 to 353C.10; and
(15) judges' retirement fund, established by sections
490.121 to 490.132.
Sec. 5. Minnesota Statutes 1988, section 356.302,
subdivision 7, is amended to read:
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; and
(12) judges' retirement fund, established by sections
490.121 to 490.132.
Sec. 6. Minnesota Statutes 1988, section 356.303,
subdivision 4, is amended to read:
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; and
(14) judges' retirement fund, established by sections
490.121 to 490.132.
Sec. 7. Minnesota Statutes 1988, section 490.124,
subdivision 12, is amended to read:
Subd. 12. [REFUND.] (a) Any person who ceases to be a
judge but who does not qualify for a retirement annuity or other
benefit under section 490.121 shall be entitled to a refund in
an amount equal to all the person's contributions to the judges'
retirement fund plus interest computed to the first day of the
month in which the refund is processed based on fiscal year
balances at the rate of five percent per annum compounded
annually.
(b) A refund of contributions under paragraph (a)
terminates all service credits and all rights and benefits of
the judge and the judge's survivors. A person who becomes a
judge again after taking a refund under paragraph (a) may
reinstate previously terminated service credits, rights, and
benefits by repaying all refunds. A repayment must include
interest at six percent per annum, compounded annually.
Sec. 8. Laws 1980, chapter 595, section 2, subdivision 4,
is amended to read:
Subd. 4. All employees of the agency shall be considered
employees of the housing and redevelopment authority and not the
city of Minneapolis for the purposes of exclusion from
membership in the public employee retirement association. An
employee of the agency or the Minneapolis housing and
redevelopment authority who is transferred to employment of the
department or agency or the Minneapolis industrial development
commission or the city of Minneapolis shall elect one of the
following options with respect to retirement programs within six
months after the date of transfer:
(a) The employee may continue as a member of the retirement
program established by the Minneapolis housing and redevelopment
authority and in effect on the date of transfer, and the agency
or department or the city of Minneapolis shall make the
necessary employer contributions to the program instead of
becoming a member of the public employees retirement association.
(b) The employee may become a member of the public
employees retirement association.
An employee of the city of Minneapolis who is transferred
to employment of the agency or the Minneapolis housing and
redevelopment authority shall remain a member of the retirement
fund to which the employee belonged prior to the transfer,
during the employment. An employee of the city of Minneapolis
who is a member of the Minneapolis municipal employees
retirement fund who is transferred to employment of the agency
shall remain a member of the fund during the employment.
Sec. 9. [REFUND OF EXCESS EMPLOYEE CONTRIBUTIONS.]
A former employee of the bureau of health of the city of
Saint Paul who, under Laws 1973, chapter 767, section 4, elected
to retire with benefits calculated in accordance with Minnesota
Statutes, chapter 425, as modified by Laws 1969, chapter 1102,
may, upon application to the executive director of the public
employees retirement association or a form prescribed by the
executive director, receive a refund of excess employee
contributions to the bureau of health pension fund. The amount
to be refunded is the difference between the amount actually
deducted from the employee's monthly pay from the effective date
of Laws 1969, chapter 1102, to the effective date of Laws 1973,
chapter 767, and an amount equal to six percent of the monthly
salary of a health sanitarian in the employment of the city of
Saint Paul on January 1, 1969, plus interest at the rate of six
percent a year compounded annually. The refund is payable from
the public employees retirement fund.
Sec. 10. [PAYMENT OF REFUNDS BY ASSOCIATION.]
The executive director of the public employees retirement
association shall notify each former employee of the bureau of
health of the city of Saint Paul covered by section 1 who is
receiving a retirement annuity from the public employees
retirement association of the person's right to apply for a
refund of excess contributions under that section. Application
must be made within 60 days following notice, or eligibility for
the refund expires. Upon receipt of an application for a refund
from a person, the executive director of the association shall
pay to the person a refund calculated in accordance with section
1.
Sec. 11. [EFFECTIVE DATE.]
Sections 1 and 8 are effective upon approval by the city
council of the city of Minneapolis and upon compliance with
Minnesota Statutes, section 645.021, subdivision 3, and apply
retroactively to July 13, 1980. Sections 2 to 7 are effective
the day following final enactment. Sections 4, 5, and 6 apply
retroactively to August 1, 1987. Sections 9 and 10 are
effective July 1, 1989.
ARTICLE 6
Public Employees Insurance
Section 1. Minnesota Statutes 1988, section 43A.316,
subdivision 9, is amended to read:
Subd. 9. [INSURANCE TRUST FUND.] An insurance trust fund
is established in the state treasury. The deposits consist of
the premiums received from employers participating in the
plan and transfers from the public employees insurance reserve
holding account established by section 353.65, subdivision 7.
All money in the fund is appropriated to the commissioner to pay
insurance premiums, approved claims, refunds, administrative
costs, and other related service costs. The commissioner shall
reserve an amount of money to cover the estimated costs of
claims incurred but unpaid. The state board of investment shall
invest the money according to section 11A.24. Investment income
and losses attributable to the fund shall be credited to the
fund.
Sec. 2. Minnesota Statutes 1988, section 69.031,
subdivision 5, is amended to read:
Subd. 5. [DEPOSIT OF STATE AID.] (1) The municipal
treasurer, on receiving the fire state aid, shall within 30 days
after receipt transmit it to the treasurer of the duly
incorporated firefighters' relief association if there is one
organized and the association has filed a financial report with
the municipality; but if there is no relief association
organized, or if any association dissolve, be removed, or has
heretofore dissolved, or has been removed as trustees of state
aid, then the treasurer of the municipality shall keep the money
in the municipal treasury as provided for in section 424A.08 and
shall be disbursed only for the purposes and in the manner set
forth in that section.
(2) The municipal treasurer, upon receipt of the police
state aid, shall disburse the police state aid in the following
manner:
(a) For a municipality in which a local police relief
association exists and all peace officers are members of the
association, the total state aid shall be transmitted to the
treasurer of the relief association within 30 days of the date
of receipt, and the treasurer of the relief association shall
immediately deposit the total state aid in the special fund of
the relief association;
(b) For a municipality in which police retirement coverage
is provided by the public employees police and fire fund and all
peace officers are members of the fund, the total state aid
shall be applied toward the municipality's employer contribution
to the public employees police and fire fund pursuant to section
353.65, subdivision 3, and any state aid in excess of the amount
required to meet the employer's contribution pursuant to section
353.65, subdivision 3, shall also be contributed to the public
employees police and fire fund and credited in the manner to be
specified by the board of trustees of the public employees
retirement association deposited in the public employees
insurance reserve holding account of the public employees
retirement association; or
(c) For a municipality in which both a police relief
association exists and police retirement coverage is provided in
part by the public employees police and fire fund, the
municipality may elect at its option to transmit the total state
aid to the treasurer of the relief association as provided in
clause (a), to use the total state aid to apply toward the
municipality's employer contribution to the public employees
police and fire fund subject to all the provisions set forth in
clause (b), or to allot the total state aid proportionately to
be transmitted to the police relief association as provided in
this subdivision and to apply toward the municipality's employer
contribution to the public employees police and fire fund
subject to the provisions of clause (b) on the basis of the
respective number of active full-time peace officers, as defined
in section 69.011, subdivision 1, clause (g).
(3) The county treasurer, upon receipt of the police state
aid for the county, shall apply the total state aid toward the
county's employer contribution to the public employees police
and fire fund pursuant to section 353.65, subdivision 3, and any
state aid in excess of the amount required to meet the
employer's contribution pursuant to section 353.65, subdivision
3, shall also be contributed to the public employees police and
fire fund and credited in the manner to be specified by the
board of trustees of the public employees retirement association
deposited in the public employees insurance reserve holding
account of the public employees retirement association.
Sec. 3. Minnesota Statutes 1988, section 353.65,
subdivision 1, is amended to read:
Subdivision 1. There is a special fund known as the
"public employees police and fire fund." In that fund there
shall be deposited employee contributions, employer
contributions other than the excess contribution established by
section 69.031, subdivision 5, paragraph (2), clauses (b) and
(c), and paragraph (3), and other amounts authorized by law
including all employee and employer contributions of members
transferred. Within the public employees police and fire fund
are accounts for each municipality known as the "local relief
association consolidation accounts," which are governed by
section 353A.09.
Sec. 4. Minnesota Statutes 1988, section 353.65,
subdivision 6, is amended to read:
Subd. 6. All contributions other than the excess
contribution established by section 69.031, subdivision 5,
paragraph (2), clauses (b) and (c), and paragraph (3) shall be
credited to the fund and all interest and other income of the
fund shall be credited to said fund. The retirement fund shall
be disbursed only for the purposes herein provided. The
expenses of said fund and the annuities herein provided upon
retirement shall be paid from said fund.
Sec. 5. Minnesota Statutes 1988, section 353.65, is
amended by adding a subdivision to read:
Subd. 7. The public employees insurance reserve holding
account is established in the public employees retirement
association. Excess contributions established by section
69.031, subdivision 5, paragraph (2), clauses (b) and (c), and
paragraph (3) must be deposited in the account. These
contributions and all investment earnings associated with them
must be regularly transferred to the insurance trust fund
established by section 43A.316, subdivision 9.
ARTICLE 7
MINNESOTA PUBLIC PENSION PLAN
FIDUCIARY RESPONSIBILITY AND LIABILITY ACT
Section 1. [356A.01] [DEFINITIONS.]
Subdivision 1. [SCOPE.] For purposes of this chapter, the
following terms have the meanings given them in this section.
Subd. 2. [BENEFIT.] "Benefit" means an amount, other than
an administrative expense, paid or payable from a pension plan,
including a retirement annuity, service pension, disability
benefit, survivor benefit, death benefit, funeral benefit, or
refund.
Subd. 3. [BENEFIT PROVISIONS.] "Benefit provisions" means
the portion of a pension plan that deals specifically with the
benefit coverage provided by the plan, including the kinds of
coverage, the eligibility for and entitlement to benefits, and
the amount of benefits.
Subd. 4. [BENEFIT RECIPIENT.] "Benefit recipient" means a
person who has received a benefit from a pension plan or to whom
a benefit is payable under the terms of the plan document of the
pension plan.
Subd. 5. [CHIEF ADMINISTRATIVE OFFICER.] "Chief
administrative officer" means the person who has primary
responsibility for the execution of the administrative or
management affairs of a pension plan.
Subd. 6. [COFIDUCIARY.] "Cofiduciary" means a fiduciary of
a pension plan, other than a fiduciary directly undertaking a
fiduciary activity or directly and primarily responsible for a
fiduciary activity.
Subd. 7. [COVERED GOVERNMENTAL ENTITY.] "Covered
governmental entity" means a governmental subdivision or other
governmental entity that employs persons who are plan
participants in a covered pension plan and who are eligible for
that participation because of their employment.
Subd. 8. [COVERED PENSION PLAN.] "Covered pension plan"
means a pension plan or fund listed in section 356.20,
subdivision 2, or 356.30, subdivision 3.
Subd. 9. [COVERED PENSION PLAN OTHER THAN A STATEWIDE
PLAN.] "Covered pension plan other than a statewide plan" means
a pension plan not included in the definition of a statewide
plan in subdivision 24.
Subd. 10. [DIRECT OR INDIRECT PROFIT.] "Direct or indirect
profit" means a payment of money, the provision of a service or
an item of other than nominal value, an extension of credit, a
loan, or any other special consideration to a fiduciary or a
direct relative of a fiduciary on behalf of the fiduciary in
consideration for the performance of a fiduciary activity or a
failure to perform a fiduciary activity.
Subd. 11. [DIRECT RELATIVE.] "Direct relative" means any
of the persons or spouses of persons related to one another
within the third degree of kindred under civil law.
Subd. 12. [FIDUCIARY.] "Fiduciary" means a person
identified in section 356A.02.
Subd. 13. [FIDUCIARY ACTIVITY.] "Fiduciary activity" means
an activity described in section 356A.02, subdivision 2.
Subd. 14. [FINANCIAL INSTITUTION.] "Financial institution"
means a bank, savings institution, or credit union organized
under federal or state law.
Subd. 15. [GOVERNING BOARD OF A PENSION PLAN.] "Governing
board of a pension plan" means the body of a pension plan that
is assigned or that undertakes the chief policy-making powers
and management duties of the plan.
Subd. 16. [INVESTMENT ADVISORY COUNCIL.] "Investment
advisory council" means the investment advisory council
established by section 11A.08.
Subd. 17. [LIABILITY.] "Liability" means a secured or
unsecured debt or an obligation for a future payment of money,
including an actuarial accrued liability or an unfunded
actuarial accrued liability, except where the context clearly
indicates another meaning.
Subd. 18. [OFFICE OF THE PENSION PLAN.] "Office of the
pension plan" means an administrative facility or portion of a
facility where the primary business or administrative affairs of
a pension plan are conducted and the primary and permanent
records and files of the plan are retained.
Subd. 19. [PENSION FUND.] "Pension fund" means the assets
amassed and held in a pension plan, other than the general fund,
as reserves for present and future payment of benefits and
administrative expenses.
Subd. 20. [PENSION PLAN.] "Pension plan" means all aspects
of an arrangement between a public employer and its employees
concerning the pension benefit coverage provided to the
employees.
Subd. 21. [PLAN DOCUMENT.] "Plan document" means a written
document or series of documents containing the eligibility
requirements and entitlement provisions constituting the benefit
coverage of a pension plan, including any articles of
incorporation, bylaws, governing body rules and policies,
municipal charter provisions, municipal ordinance provisions, or
general or special state law.
Subd. 22. [PLAN PARTICIPANT.] "Plan participant" means a
person who is an active member of a pension plan by virtue of
the person's employment or who is making a pension plan member
contribution.
Subd. 23. [STATE BOARD OF INVESTMENT.] "State board of
investment" means the Minnesota state board of investment
created by the Minnesota Constitution, article XI, section 8.
Subd. 24. [STATEWIDE PLAN.] "Statewide plan" means any of
the following pension plans:
(1) the Minnesota state retirement system or a pension plan
administered by it;
(2) the public employees retirement association or a
pension plan administered by it; and
(3) the teachers retirement association or a pension plan
administered by it.
Sec. 2. [356A.02] [FIDUCIARY STATUS AND ACTIVITIES.]
Subdivision 1. [FIDUCIARY STATUS.] For purposes of this
chapter, the following persons are fiduciaries:
(1) any member of the governing board of a covered pension
plan;
(2) the chief administrative officer of a covered pension
plan or of the state board of investment;
(3) any member of the state board of investment; and
(4) any member of the investment advisory council.
Subd. 2. [FIDUCIARY ACTIVITY.] The activities of a
fiduciary identified in subdivision 1 that must be carried out
in accordance with the requirements of section 356A.04 include,
but are not limited to:
(1) the investment of plan assets;
(2) the determination of benefits;
(3) the determination of eligibility for membership or
benefits;
(4) the determination of the amount or duration of
benefits;
(5) the determination of funding requirements or the
amounts of contributions;
(6) the maintenance of membership or financial records; and
(7) the expenditure of plan assets.
Sec. 3. [356A.03] [PROHIBITION OF CERTAIN PERSONS FROM
FIDUCIARY STATUS.]
Subdivision 1. [INDIVIDUAL PROHIBITION.] For the
prohibition period established by subdivision 2, a person, other
than a constitutional officer of the state, who has been
convicted of a violation listed in subdivision 3, may not serve
in a fiduciary capacity identified in section 356A.02.
Subd. 2. [PROHIBITION PERIOD.] A prohibition under
subdivision 1 is for a period of five years, beginning on the
day following conviction for a violation listed in subdivision 3
or, if the person convicted is incarcerated, the day following
unconditional release from incarceration.
Subd. 3. [APPLICABLE VIOLATIONS.] A prohibition under
subdivision 1 is imposed as a result of any of the following
violations of law:
(1) a violation of federal law specified in United States
Code, title 29, section 1111, as amended;
(2) a violation of Minnesota law that is a felony under
Minnesota law; or
(3) a violation of the law of another state, United States
territory or possession, or federally recognized Indian tribal
government, or of the Uniform Code of Military Justice, that
would be a felony under the offense definitions and sentences in
Minnesota law.
Subd. 4. [DOCUMENTATION.] In determining the applicability
of this section, the appropriate appointing authority, the state
board of investment, or the covered pension plan, as the case
may be, may rely on a disclosure form meeting the requirements
of the federal Investment Adviser Act of 1940, as amended
through the effective date of this section, and filed with the
state board of investment or the pension plan.
Sec. 4. [356A.04] [GENERAL STANDARD OF FIDUCIARY CONDUCT.]
Subdivision 1. [DUTY.] A fiduciary of a covered pension
plan owes a fiduciary duty to:
(1) the active, deferred, and retired members of the plan,
who are its beneficiaries;
(2) the taxpayers of the state or political subdivision,
who help to finance the plan; and
(3) the state of Minnesota, which established the plan.
Subd. 2. [PRUDENT PERSON STANDARD.] A fiduciary identified
in section 356A.02 shall act in good faith and shall exercise
that degree of judgment and care, under the circumstances then
prevailing, that persons of prudence, discretion, and
intelligence would exercise in the management of their own
affairs, not for speculation, considering the probable safety of
the plan capital as well as the probable investment return to be
derived from the assets.
Sec. 5. [356A.05] [DUTIES APPLICABLE TO ALL ACTIVITIES.]
(a) The activities of a fiduciary of a covered pension plan
must be carried out solely for the following purposes:
(1) to provide authorized benefits to plan participants and
beneficiaries;
(2) to incur and pay reasonable and necessary
administrative expenses; or
(3) to manage a covered pension plan in accordance with the
purposes and intent of the plan document.
(b) The activities of fiduciaries identified in section
356A.02 must be carried out faithfully, without prejudice, and
in a manner consistent with law and the plan document.
Sec. 6. [356A.06] [INVESTMENTS; ADDITIONAL DUTIES.]
Subdivision 1. [TITLE TO ASSETS.] Assets of a covered
pension plan may be held only by the plan treasurer, the state
board of investment, the depository agent of the plan, or of the
state board of investment. Legal title to plan assets must be
vested in the plan, the state board of investment, the
governmental entity that sponsors the plan, the nominee of the
plan, or the depository agent. The holder of legal title shall
function as a trustee for a person or entity with a beneficial
interest in the assets of the plan.
Subd. 2. [DIVERSIFICATION.] The investment of plan assets
must be diversified to minimize the risk of substantial
investment losses unless the circumstances at the time an
investment is made clearly indicate that diversification would
not be prudent.
Subd. 3. [ABSENCE OF PERSONAL PROFIT.] No fiduciary may
personally profit, directly or indirectly, as a result of the
investment or management of plan assets. This subdivision,
however, does not preclude the receipt by a fiduciary of
reasonable compensation, including membership in or the receipt
of benefits from a pension plan, for the fiduciary's position
with respect to the plan.
Subd. 4. [ECONOMIC INTEREST STATEMENT.] Each member of the
governing board of a covered pension plan and the chief
administrative officer of the plan shall file with the plan a
statement of economic interest. The statement must contain the
information required by section 10A.09, subdivision 5, and any
other information that the fiduciary or the governing board of
the plan determines is necessary to disclose a reasonably
foreseeable potential or actual conflict of interest. The
statement must be filed annually with the chief administrative
officer of the plan and be available for public inspection
during regular office hours at the office of the pension plan.
A disclosure form meeting the requirements of the federal
Investment Advisers Act of 1940, United States Code, title 15,
sections 80b-1 to 80b-21 as amended, and filed with the state
board of investment or the pension plan meets the requirements
of this subdivision.
Subd. 5. [INVESTMENT BUSINESS RECIPIENT DISCLOSURE.] The
chief administrative officer of a covered pension plan, with
respect to investments made by the plan, and the executive
director of the state board of investment, with respect to
investments of plan assets made by the board, shall annually
disclose in writing the recipients of investment business placed
with or investment commissions allocated among commercial banks,
investment bankers, brokerage organizations, or other investment
managers. The disclosure document must be prepared within 60
days after the close of the fiscal year of the plan and must be
available for public inspection during regular office hours at
the office of the plan. The disclosure document must also be
filed with the executive director of the legislative commission
on pensions and retirement within 90 days after the close of the
fiscal year of the plan. For the state board of investment, a
disclosure document included as part of a regular annual report
of the board is considered to have been filed on a timely basis.
Subd. 6. [LIMITED LIST OF AUTHORIZED INVESTMENT
SECURITIES.] (a) Except to the extent otherwise authorized by
law, a covered pension plan may invest its assets only in
investment securities authorized by this subdivision if the plan
does not:
(1) have assets with a book value in excess of $1,000,000;
(2) use the services of an investment advisor registered
with the Securities and Exchange Commission in accordance with
the Investment Advisors Act of 1940, or licensed as an
investment advisor in accordance with sections 80A.04,
subdivision 4, and 80A.14, subdivision 9, for the investment of
at least 60 percent of its assets, calculated on book value;
(3) use the services of the state board of investment for
the investment of at least 60 percent of its assets, calculated
on book value; or
(4) use a combination of the services of an investment
advisor meeting the requirements of clause (2) and the services
of the state board of investment for the investment of at least
75 percent of its assets, calculated on book value.
(b) Investment securities authorized for a pension plan
covered by this subdivision are:
(1) certificates of deposit issued, to the extent of
available insurance or collateralization, by a financial
institution that is a member of the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance
Corporation, is insured by the National Credit Union
Administration, or is authorized to do business in this state
and has deposited with the chief administrative officer of the
plan a sufficient amount of marketable securities as collateral
in accordance with section 118.01;
(2) savings accounts, to the extent of available insurance,
with a financial institution that is a member of the Federal
Deposit Insurance Corporation or the Federal Savings and Loan
Insurance Corporation;
(3) governmental obligations, including bonds, notes,
bills, or other fixed obligations, issued by the United States,
an agency or instrumentality of the United States, an
organization established and regulated by an act of Congress or
by a state, state agency or instrumentality, municipality, or
other governmental or political subdivision that:
(i) for the obligation in question, issues an obligation
that equals or exceeds the stated investment yield of debt
securities not exempt from federal income taxation and of
comparable quality;
(ii) for an obligation that is a revenue bond, has been
completely self-supporting for the last five years; and
(iii) for an obligation other than a revenue bond, has
issued an obligation backed by the full faith and credit of the
applicable taxing jurisdiction and has not been in default on
the payment of principal or interest on the obligation in
question or any other nonrevenue bond obligation during the
preceding ten years;
(4) corporate obligations, including bonds, notes,
debentures, or other regularly issued and readily marketable
evidences of indebtedness issued by a corporation organized
under the laws of any state that during the preceding five years
has had on average annual net pretax earnings at least 50
percent greater than the annual interest charges and principal
payments on the total issued debt of the corporation during that
period and that, for the obligation in question, has issued an
obligation rated in one of the top three quality categories by
Moody's Investors Service, Incorporated, or Standard and Poor's
Corporation; and
(5) shares in an open-end investment company registered
under the federal Investment Company Act of 1940, if the
portfolio investments of the company are limited to investments
that meet the requirements of clauses (1) to (4).
Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT
SECURITIES.] Except to the extent otherwise authorized by law or
bylaws, a covered pension plan not described by subdivision 6,
paragraph (a), may invest its assets only in accordance with
section 11A.24.
Subd. 8. [MINIMUM LIQUIDITY REQUIREMENTS.] A covered
pension plan described by subdivision 6, paragraph (a), in order
to pay benefits as they come due, shall invest a portion of its
assets in authorized short-term debt obligations that can be
immediately liquidated without accrual of a substantial
determinable penalty or loss and that have an average maturity
of no more than 90 days. The chief administrative officer of
the plan shall determine the minimum liquidity requirement of
the plan and shall retain appropriate documentation of that
determination for three years from the date of determination.
Subd. 9. [PROHIBITED TRANSACTIONS.] (a) No fiduciary of a
covered pension plan may engage in a prohibited transaction or
allow the plan to engage in a transaction that the fiduciary
knows or should know is a prohibited transaction.
(b) A prohibited transaction is any of the following
transactions, whether direct or indirect:
(1) the sale, exchange, or lease of real estate between the
pension plan and a fiduciary of the plan;
(2) the lending of money or other extension of credit
between the plan and a fiduciary of the plan;
(3) the furnishing to a plan by a fiduciary for
compensation or remuneration, of goods, services other than
those performed in the capacity of fiduciary, or facilities;
(4) the furnishing to a fiduciary by a plan of goods,
services, or facilities other than office and related space,
equipment and office supplies, and administrative services
appropriate to the recipient's fiduciary position;
(5) the transfer of plan assets to a plan fiduciary for use
by or the benefit of the fiduciary, other than the payment of
retirement plan benefits to which a fiduciary is entitled or the
payment to a fiduciary of a reasonable salary and of necessary
and reasonable expenses incurred by the fiduciary in the
performance of the fiduciary's duties; and
(6) the sale, exchange, loan, or lease of any item of value
between a plan and a fiduciary of the plan other than for a fair
market value and as a result of an arms-length transaction.
Sec. 7. [356A.07] [BENEFIT SUMMARY; ANNUAL REPORTS;
ADDITIONAL DUTIES.]
Subdivision 1. [BENEFIT PROVISIONS SUMMARY.] The chief
administrative officer of a covered pension plan shall prepare
and provide each active plan participant with a summary of the
benefit provisions of the plan document. The summary must be
provided within 30 days of the start or resumption of a
participant's membership in the plan, or within 30 days of the
date on which the start or resumption of membership was reported
to a covered pension plan by a covered governmental entity,
whichever is later. The summary must contain a notice that it
is a summary of the plan document but is not itself the plan
document, and that in the event of a discrepancy between the
summary and the plan document as amended, the plan document
governs. A copy of the plan document as amended must be
furnished to a plan participant or benefit recipient upon
request. The chief administrative officer may utilize the
services of the covered governmental entity in providing the
summary. The summary must be in a form reasonably calculated to
be understood by an average plan participant.
Subd. 2. [ANNUAL FINANCIAL REPORT.] A covered pension plan
shall provide each active plan participant and benefit recipient
with a copy of the most recent annual financial report required
by section 356.20 and a copy of the most recent actuarial
evaluation, if any, required by section 69.77, 69.773, 356.215,
or 356.216, or a summary of those reports.
Subd. 3. [DISTRIBUTION.] A covered pension plan may
distribute the summaries required by this section through
covered governmental entities so long as the plan has made
arrangements with the entities to assure, with reasonable
certainty, that the summaries will be distributed, or made
easily available, to active plan participants.
Subd. 4. [REVIEW PROCEDURE.] If a review procedure is not
specified by law for a covered pension plan, the chief
administrative officer of the plan shall propose, and the
governing board of the plan shall adopt and implement, a
procedure for reviewing a determination of eligibility,
benefits, or other rights under the plan that is adverse to a
plan participant or benefit recipient. The review procedure
must include provisions for timely notice to the plan
participant or benefit recipient and reasonable opportunity to
be heard in any review proceeding conducted and may, but need
not be, a contested case under chapter 14.
Sec. 8. [356A.08] [PLAN ADMINISTRATION; ADDITIONAL
DUTIES.]
Subdivision 1. [PUBLIC MEETINGS.] A meeting of the
governing board of a covered statewide pension plan or of a
committee of the governing board of the statewide plan is
governed by section 471.705.
Subd. 2. [LIMIT ON COMPENSATION.] No fiduciary of a
covered pension plan or a direct relative of a fiduciary may
receive any direct or indirect compensation, fee, or other item
of more than nominal value from a third party in consideration
for a pension plan disbursement.
Sec. 9. [356A.09] [FIDUCIARY BREACH; REMEDIES.]
Subdivision 1. [OCCURRENCE OF BREACH.] A fiduciary breach
occurs if a fiduciary violates the general standard of fiduciary
conduct as specified in section 356A.04 in carrying out the
activities of a fiduciary. A fiduciary breach also occurs if a
fiduciary of a covered pension plan violates the provisions of
section 356A.06, subdivision 9.
Subd. 2. [REMEDIES.] Remedies available for a fiduciary
breach by a fiduciary are those specified by statute or
available at common law.
Sec. 10. [356A.10] [COFIDUCIARY RESPONSIBILITY AND
LIABILITY.]
Subdivision 1. [COFIDUCIARY RESPONSIBILITY IN GENERAL.] A
cofiduciary has a general responsibility to oversee the
fiduciary activities of all other fiduciaries unless the
activity has been allocated or delegated in accordance with
subdivision 3. A cofiduciary also has a general responsibility
to correct or alleviate a fiduciary breach of which the
cofiduciary had or ought to have had knowledge.
Subd. 2. [COFIDUCIARY LIABILITY.] A cofiduciary is liable
for a fiduciary breach committed by another fiduciary when the
cofiduciary has a responsibility to oversee the fiduciary
activities of the other fiduciary or to correct or alleviate a
breach by that fiduciary.
Subd. 3. [LIMITATION ON COFIDUCIARY RESPONSIBILITY.] A
cofiduciary may limit cofiduciary responsibility and liability
through the allocation or delegation of fiduciary activities if
the allocation or delegation:
(1) follows appropriate procedures;
(2) is made to an appropriate person or persons; and
(3) is subject to continued monitoring of performance.
Subd. 4. [BAR TO LIABILITY IN CERTAIN INSTANCES.] A
properly made delegation or allocation of a fiduciary activity
is a bar to liability on the part of a fiduciary making the
delegation or allocation unless the fiduciary has or ought to
have knowledge of the breach and takes part in the breach,
conceals it, or fails to take reasonable steps to remedy it.
Subd. 5. [EXTENT OF COFIDUCIARY LIABILITY.] Unless
liability is barred under subdivision 4, cofiduciary liability
is joint and several, but a cofiduciary has the right to recover
from the responsible fiduciary for any damages paid by the
cofiduciary.
Sec. 11. [356A.11] [FIDUCIARY INDEMNIFICATION.]
Subdivision 1. [INDEMNIFIED FIDUCIARIES.] A fiduciary who
is a member of the governing board of a pension plan, the state
board of investment or the investment advisory council, or who
is an employee of a covered pension plan or of the state board
of investment may be indemnified from liability for fiduciary
breach. Indemnification is at the discretion of the governing
board of the plan or of the state board of investment in the
case of members of the state board or of the investment advisory
council. A decision to indemnify a fiduciary must apply to all
eligible fiduciaries of similar rank.
Subd. 2. [ALLOWABLE INDEMNIFICATION.] An indemnified
fiduciary must be held harmless from reasonable costs or
expenses incurred as a result of any actual or threatened
litigation or other proceedings.
Sec. 12. [356A.12] [JURISDICTION; SERVICE OF PROCESS; AND
STATUTE OF LIMITATIONS.]
Subdivision 1. [JURISDICTION.] The district court has
jurisdiction over a challenge of a fiduciary action or inaction.
Subd. 2. [SERVICE OF PROCESS.] For a fiduciary or
cofiduciary alleged in the complaint to be responsible for an
alleged breach, personal service of process must be obtained.
Subd. 3. [LIMITATIONS ON LEGAL ACTIONS.] A legal action
challenging a fiduciary action or inaction must be timely.
Notwithstanding any limitation in chapter 541, an action is
timely if it is brought within the earlier of the following
periods:
(1) the period ending three years after the date of the
last demonstrable act representing the alleged fiduciary breach
or after the final date for performance of the act the failure
to perform which constitutes the alleged breach; or
(2) the period ending one year after the date of the
discovery of the alleged fiduciary breach.
Sec. 13. [356A.13] [CONTINUING FIDUCIARY EDUCATION.]
Subdivision 1. [OBLIGATION OF FIDUCIARIES.] A fiduciary of
a covered pension plan shall make reasonable effort to obtain
knowledge and skills sufficient to enable the fiduciary to
perform fiduciary activities adequately. At a minimum, a
fiduciary of a covered pension plan shall comply with the
program established in accordance with subdivision 2.
Subd. 2. [CONTINUING FIDUCIARY EDUCATION PROGRAM.] The
governing boards of covered pension plans shall each develop and
periodically revise a program for the continuing education of
any of their board members and any of their chief administrative
officers who are not reasonably considered to be experts with
respect to their activities as fiduciaries. The program must be
designed to provide those persons with knowledge and skills
sufficient to enable them to perform their fiduciary activities
adequately.
Sec. 14. [EFFECTIVE DATE.]
Sections 1 to 13 are effective the day following final
enactment.
ARTICLE 8
CONFORMING AMENDMENTS TO FIDUCIARY PROVISIONS.
Section 1. [3A.011] [ADMINISTRATION OF PLAN.]
The Minnesota state retirement system shall administer the
legislators retirement plan in accordance with article 7.
Sec. 2. Minnesota Statutes 1988, section 11A.01, is
amended to read:
11A.01 [STATEMENT OF PURPOSE.]
The purpose of sections 11A.01 to 11A.25 this chapter is to
establish standards which will, in addition to the applicable
standards of article 7, to insure that state and pension assets
subject to this legislation will be responsibly invested to
maximize the total rate of return without incurring undue risk.
Sec. 3. Minnesota Statutes 1988, section 11A.04, is
amended to read:
11A.04 [DUTIES AND POWERS.]
The state board shall:
(1) Act as trustees for each fund for which it invests or
manages money in accordance with the standard of care set forth
in section 11A.09 if state assets are involved and in accordance
with article 7 if pension assets are involved.
(2) Formulate policies and procedures deemed necessary and
appropriate to carry out its functions. Procedures adopted by
the board shall must allow fund beneficiaries and members of the
public to become informed of proposed board actions. Procedures
and policies of the board shall are not be subject to the
administrative procedure act.
(3) Employ an executive director as provided in section
11A.07.
(4) Employ investment advisors and consultants as it deems
necessary.
(5) Prescribe policies concerning personal investments of
all employees of the board to prevent conflicts of interest.
(6) Maintain a record of its proceedings.
(7) As it deems necessary, establish advisory committees
subject to the provisions of section 15.059 to assist the board
in carrying out its duties.
(8) Not permit state funds to be used for the underwriting
or direct purchase of municipal securities from the issuer or
the issuer's agent.
(9) Direct the state treasurer to sell property other than
money which that has escheated to the state when the board
determines that sale of the property is in the best interest of
the state. Escheated property shall must be sold to the highest
bidder in the manner and upon terms and conditions prescribed by
the board.
(10) Undertake any other activities necessary to implement
the duties and powers set forth in this section.
(11) Establish a formula or formulas to measure management
performance and return on investment. All Public pension funds
in the state shall utilize the formula or formulas developed by
the state board.
(12) Except as otherwise provided in article XI, section 8,
of the constitution of the state of Minnesota, employ, at its
discretion, qualified private firms to invest and manage the
assets of funds over which the state board has investment
management responsibility. There is annually appropriated to
the state board, from the assets of the funds for which the
state board utilizes a private investment manager, sums
sufficient to pay the costs therefor of employing private firms.
Each year, by January 15, the board shall report to the governor
and legislature on the cost and the investment performance of
each investment manager employed by the board.
(13) Adopt an investment policy statement that includes
investment objectives, asset allocation, and the investment
management structure for the retirement fund assets under its
control. The statement may be revised at the discretion of the
state board. The state board shall seek the advice of the
council regarding its investment policy statement. Adoption of
the statement is not subject to chapter 14.
Sec. 4. Minnesota Statutes 1988, section 11A.07,
subdivision 4, is amended to read:
Subd. 4. [DUTIES AND POWERS.] The director, at the
direction of the state board, shall:
(1) Plan, direct, coordinate and execute administrative and
investment functions in conformity with the policies and
directives of the state board and the requirements of this
chapter and of article 7.
(2) Employ such professional and clerical staff as is
necessary within the complement limits established by the
legislature. Employees whose primary responsibility is to
invest or manage money or employees who hold positions
designated as unclassified pursuant to under section 43A.08,
subdivision 1a shall be, are in the unclassified service of the
state. Other employees shall be are in the classified service.
(3) Report to the state board on all operations under the
director's control and supervision.
(4) Maintain accurate and complete records of securities
transactions and official activities.
(5) Establish a policy relating to the purchase and sale of
all securities on the basis of competitive offerings or bids.
The policy is subject to board approval.
(6) Cause all securities acquired to be kept in the custody
of the state treasurer or such other depositories consistent
with article 7, as the state board deems appropriate.
(7) Prepare and file with the director of the legislative
reference library on or before, by December 31 of each year, a
report summarizing the activities of the state board, the
council, and the director during the preceding fiscal year. The
report shall must be prepared so as to provide the legislature
and the people of the state with a clear, comprehensive summary
of the portfolio composition, the transactions, the total annual
rate of return, and the yield to the state treasury and to each
of the funds whose assets are invested by the state board, and
the recipients of business placed or commissions allocated among
the various commercial banks, investment bankers, and brokerage
organizations. This The report shall must contain financial
statements for funds managed by the board prepared in accordance
with generally accepted accounting principles.
(8) Require state officials from any department or agency
to produce and provide access to any financial documents the
state board deems necessary in the conduct of their its
investment activities.
(9) Receive and expend legislative appropriations.
(10) Undertake any other activities necessary to implement
the duties and powers set forth in this subdivision consistent
with article 7.
Sec. 5. Minnesota Statutes 1988, section 11A.09, is
amended to read:
11A.09 [STANDARD OF CARE.]
In the discharge of their respective duties, the members of
the state board, director, board staff, and members of the
council and any other person charged with the responsibility of
investing money pursuant to the standards set forth in sections
11A.01 to 11A.25 shall act in good faith and shall exercise that
degree of judgment and care, under circumstances then
prevailing, which persons of prudence, discretion and
intelligence exercise in the management of their own affairs,
not for speculation, but for investment, considering the
probable safety of their capital as well as the probable income
to be derived therefrom. In addition, for the investment of
pension fund assets, the members and director of the state
board, and members of the investment advisory council shall act
in accordance with article 7.
Sec. 6. Minnesota Statutes 1988, section 11A.13,
subdivision 1, is amended to read:
Subdivision 1. [LEGAL TITLE TO FUND ASSETS.] Legal title
to the assets of state funds to be invested by the state
board shall must be in the state of Minnesota, or its nominees.
Legal title to pension funds to be invested by the state board
shall must be in the state board, or its nominees, as trustees
for any person having a beneficial interest in the applicable
fund subject to the rights of the particular funds maintaining
shares, investment participation or units in the accounts to
their credit as specified in article 7, section 6.
Sec. 7. Minnesota Statutes 1988, section 69.77,
subdivision 2g, is amended to read:
Subd. 2g. The funds of the association shall must be
invested in securities which that are proper authorized
investments pursuant to under article 7, section 11A.24 6,
subdivision 6 or 7. Notwithstanding the foregoing, up to 75
percent of the market value of the assets of the fund may be
invested in open-end investment companies registered under the
federal Investment Company Act of 1940, if the portfolio
investments of the investment companies comply with the type of
securities authorized for investment by section 11A.24,
subdivisions 2 to 5. Securities held by the association
before March 20, 1986, which the effective date of this section
that do not meet the requirements of this paragraph subdivision
may be retained after that date if they were proper investments
for the association on that date.
The governing board of the association may select and
appoint investment agencies to act for and in its behalf or may
certify funds for investment by the state board of investment
under the provisions of section 11A.17. The governing board of
the association may select and appoint a qualified private firm
to measure management performance and return on investment, and
the firm shall use the formula or formulas developed by the
state board pursuant to under section 11A.04, clause (11).
Sec. 8. Minnesota Statutes 1988, section 69.775, is
amended to read:
69.775 [INVESTMENTS.]
The special fund assets of the relief associations governed
by sections 69.771 to 69.776 shall must be invested in
securities which that are proper authorized investments
pursuant to under article 7, section 11A.24 6, subdivision 6 or
7. Notwithstanding the foregoing, up to 75 percent of the
market value of the assets of the fund may be invested in
open-end investment companies registered under the federal
Investment Company Act of 1940, if the portfolio investments of
the investment companies comply with the type of securities
authorized for investment by section 11A.24, subdivisions 2 to
5. Securities held by the associations before March 20, 1986,
which the effective date of this section that do not meet the
requirements of this section may be retained after that date if
they were proper investments for the association on that date.
The governing board of the association may select and appoint
investment agencies to act for and in its behalf or may certify
funds for investment by the state board of investment under the
provisions of section 11A.17. The governing board of the
association may select and appoint a qualified private firm to
measure management performance and return on investment, and the
firm shall use the formula or formulas developed by the state
board under section 11A.04, clause (11).
Sec. 9. Minnesota Statutes 1988, section 136.84, is
amended to read:
136.84 [TITLE TO ASSETS, PERSONAL RIGHTS.]
The right of a person who has shares to the credit of the
person's employee's share account record to redeem the shares or
any portion thereof of the shares is a personal right only
and shall is not be assignable. Legal title to the assets of
the supplemental retirement investment fund shall be in the
state of Minnesota or the state board of investment or the
nominee of either is as specified in article 7, section 6,
subdivision 1, subject to the rights of the teachers retirement
fund. Any An assignment or attempted assignment of shares to
the credit of an employee's share account record by any person
is null and void. Such Shares are exempt from garnishment or
levy under attachment or execution and from all taxation by the
state of Minnesota, except that none shall be but are not exempt
from taxation under chapter 291, unless transferred to a
surviving spouse or minor or dependent child of the decedent or
a trust for their benefit.
Sec. 10. Minnesota Statutes 1988, section 352.03,
subdivision 7, is amended to read:
Subd. 7. [DIRECTORS' FIDUCIARY OBLIGATION.] The board and
the director shall administer the law faithfully without
prejudice and undertake their activities consistent with the
expressed intent of the legislature. They shall act in their
respective capacities with a fiduciary obligation to the state
of Minnesota which created the fund, the taxpayers who aid in
financing it, and the state employees who are its
beneficiaries article 7.
Sec. 11. Minnesota Statutes 1988, section 352.92, is
amended by adding a subdivision to read:
Subd. 3. [PLAN ADMINISTRATION.] The Minnesota state
retirement system shall administer the correctional employees
retirement plan established by sections 352.90 to 352.951 in
accordance with this chapter, chapter 356, and article 7.
Sec. 12. Minnesota Statutes 1988, section 352.96,
subdivision 3, is amended to read:
Subd. 3. [EXECUTIVE DIRECTOR TO ADMINISTER SECTION.] This
section shall must be administered by the executive director of
the system under subdivision 4. Fiduciary activities of the
deferred compensation plan must be undertaken in a manner
consistent with article 7. If the state board of investment so
elects, it may solicit bids for options under subdivision 2,
clauses (2) and (3). All contracts must be approved before
execution by the state board of investment. Contracts must
provide that all options in subdivision 2 must: be presented in
an unbiased manner, be presented and in a manner conforming that
conforms to applicable rules adopted by the executive director,
be reported on a periodic basis to all employees participating
in the deferred compensation program, and not be the subject of
unreasonable solicitation of state employees to participate in
the program. The contract may not call for any person to
jeopardize the tax-deferred status of money invested by state
employees under this section. All costs or fees in relation to
the options provided under subdivision 2, clause (3), must be
paid by the underwriting companies ultimately selected by the
state board of investment.
Sec. 13. Minnesota Statutes 1988, section 352B.03,
subdivision 1, is amended to read:
Subdivision 1. [OFFICERS.] The policy-making, management,
and administrative functions governing the operation of the
state patrol retirement fund are vested in the board of
directors and executive director of the Minnesota state
retirement system with duties, authority, and responsibility as
provided in chapter 352. Fiduciary activities of the fund must
be undertaken in a manner consistent with article 7.
Sec. 14. Minnesota Statutes 1988, section 352C.091,
subdivision 1, is amended to read:
Subdivision 1. [ADMINISTRATIVE AGENCY AND STANDARDS.] The
provisions of This chapter shall must be administered by the
Minnesota state retirement system. The elected state officers
retirement plan must be administered consistent with this
chapter, chapter 356, and article 7.
Sec. 15. Minnesota Statutes 1988, section 352D.09,
subdivision 1, is amended to read:
Subdivision 1. [ADMINISTRATIVE AGENCY AND STANDARDS.] The
unclassified employees retirement plan and the provisions of
this chapter shall must be administered by the Minnesota state
retirement system. The provisions of chapter 352 shall govern
in all instances where not inconsistent with the provisions of
this chapter. Fiduciary activities of the unclassified
employees retirement plan must be undertaken in a manner
consistent with article 7.
Sec. 16. Minnesota Statutes 1988, section 353.03,
subdivision 1, is amended to read:
Subdivision 1. [MANAGEMENT; COMPOSITION; ELECTION.] The
management of the public employees retirement fund is vested in
a board of trustees consisting of the state auditor and eight
members. The governor shall appoint five trustees to four-year
terms, one of whom shall be designated to represent school
boards, one to represent cities, one to represent counties, one
who shall be is a retired annuitant, and one who is a public
member knowledgeable in pension matters. The membership of the
association shall elect three trustees for terms of four years.
Trustees elected by the membership of the association must be
public employees and members of the association. For seven days
beginning October 1 of each year preceding a year in which an
election is held, the association shall accept at its office
filings in person or by mail of candidates for the board of
trustees. A candidate shall submit at the time of filing a
nominating petition signed by 25 or more members of the fund.
No name may be withdrawn from nomination by the nominee after
October 15. At the request of a candidate for an elected
position on the board of trustees, the board shall mail a
statement of up to 300 words prepared by the candidate to all
persons eligible to vote in the election of the candidate. The
board may adopt policies to govern form and length of these
statements, timing of mailings, and deadlines for submitting
materials to be mailed. These policies must be approved by the
secretary of state. The secretary of state shall resolve
disputes between the board and a candidate concerning
application of these policies to a particular statement. A
candidate who:
(1) receives contributions or makes expenditures in excess
of $100; or
(2) has given implicit or explicit consent for any other
person to receive contributions or make expenditures in excess
of $100 for the purpose of bringing about the candidate's
election, must shall file a report with the ethical practices
board disclosing the source and amount of all contributions to
the candidate's campaign. The ethical practices board shall
prescribe forms governing these disclosures. Expenditures and
contributions have the meaning defined in section 10A.01. These
terms do not include the mailing made by the association board
on behalf of the candidate. A candidate must shall file a
report within 30 days from the day that the results of the
election are announced. The ethical practices board shall
maintain these reports and make them available for public
inspection in the same manner as the board maintains and makes
available other reports filed with it. By January 10 of each
year in which elections are to be held the board shall
distribute by mail to the members ballots listing the
candidates. No member may vote for more than one candidate for
each board position to be filled. A ballot indicating a vote
for more than one person for any position is void. No special
marking may be used on the ballot to indicate incumbents. The
last day for mailing ballots to the fund is January 31. Terms
expire on January 31 of the fourth year, and positions are
vacant until newly elected members are qualified. The ballot
envelopes must be so designed and the ballots counted in a
manner that ensures that each vote is secret.
The secretary of state shall supervise the elections. The
board of trustees and the executive director shall faithfully
administer the law without prejudice and undertake their
activities consistent with the expressed intent of the
legislature. Board members shall act as trustees with a
fiduciary obligation to the state of Minnesota, which created
the fund, the taxpayers of the governmental subdivisions that
aid in financing it, and the public employees who are its
beneficiaries. They shall act in good faith and shall exercise
that degree of judgment and care, under circumstances then
prevailing, that persons of prudence, discretion, and
intelligence exercise in the management of their own
affairs article 7.
Sec. 17. Minnesota Statutes 1988, section 354.06,
subdivision 1, is amended to read:
Subdivision 1. The management of the fund shall be is
vested in a board of eight trustees which shall be known as the
board of trustees of the teachers retirement fund. It shall be
is 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 must 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
must be elected 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 must be completed by June first of
each succeeding odd-numbered year. In the case of elective
members, any vacancy shall must 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 may 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.
Subd. 1a. [FIDUCIARY DUTY.] It shall be is the duty of the
board of trustees and the executive director to faithfully
administer the law without prejudice and undertake their
activities 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 article 7.
Sec. 18. Minnesota Statutes 1988, section 354A.021,
subdivision 6, is amended to read:
Subd. 6. [TRUSTEES' FIDUCIARY OBLIGATION.] It is the duty
of The trustees or directors of each teachers retirement fund
association to shall administer each fund in accordance with the
applicable portions of this chapter, of the articles of
incorporation, and of the bylaws, and of article 7. 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. The
purpose of this subdivision is to establish each teachers
retirement fund association as a trust under the laws of the
state of Minnesota for all purposes related to section 401(a) of
the Internal Revenue Code of the United States, including all
amendments.
Sec. 19. Minnesota Statutes 1988, section 422A.05,
subdivision 2a, is amended to read:
Subd. 2a. [FIDUCIARY DUTY.] In the discharge of their
respective duties, the members of the board, the executive
director, the board staff, and any other person charged with the
responsibility of investing money pursuant to the standards set
forth in this chapter shall act in good faith and shall exercise
that degree of judgment and care, under circumstances then
prevailing, which persons of prudence, discretion and
intelligence exercise in the management of their own affairs,
not for speculation, but for investment, considering the
probable safety of their capital as well as the probable income
to be derived therefrom. In addition, the members of the board
and the chief administrative officer shall act in a manner
consistent with article 1.
Sec. 20. Minnesota Statutes 1988, section 422A.05,
subdivision 2d, is amended to read:
Subd. 2d. [ACCOUNT TRANSFERS.] Notwithstanding any law to
the contrary, the retirement board, subject to the standards of
subdivision 2a of this section and article 7, may transfer
assets between accounts established by section 422A.06.
Sec. 21. Minnesota Statutes 1988, section 423.374, is
amended to read:
423.374 [OFFICERS OF ASSOCIATION.]
The officers of the relief association shall be a
president, one or more vice-presidents, a secretary and a
treasurer. The offices of assistant secretary and assistant
treasurer may be created by the bylaws of any such
associations. The affairs of each association shall must be
managed in accordance with article 7 by a board of directors
elected in the manner prescribed by the articles of
incorporation of the association.
The secretary and treasurer of each relief association
shall each furnish a corporate bond to the association for the
faithful performance of their duties, in such amounts as the
association from time to time may determine. Each relief
association shall and is hereby authorized to pay the premiums
on such bonds from its special fund.
Sec. 22. Minnesota Statutes 1988, section 423.45, is
amended to read:
423.45 [OFFICERS; DIRECTORS; BOND.]
The officers of the relief association shall be a
president, one or more vice-presidents, a secretary and a
treasurer. The offices of assistant secretary and assistant
treasurer may be created by the bylaws of any such
associations. The affairs of each association shall must be
managed in accordance with article 7 by a board of directors
elected in the manner prescribed by the articles of
incorporation of the association.
The secretary and treasurer of each relief association
shall each furnish a corporate bond to the association for the
faithful performance of their duties, in such amounts as the
association from time to time may determine. Each relief
association shall and is hereby authorized to pay the premiums
on such bonds from its special fund.
Sec. 23. Minnesota Statutes 1988, section 423.805, is
amended to read:
423.805 [POLICE PENSION FUND.]
The association shall establish a police pension fund or
continue to maintain the police pension fund now existing in the
city and shall have the management manage and control of the
fund. Fiduciary activities of the fund must be undertaken in a
manner consistent with article 7.
Sec. 24. Minnesota Statutes 1988, section 423A.21,
subdivision 4, is amended to read:
Subd. 4. [FIDUCIARY RESPONSIBILITY.] In the discharge of
their respective duties, the officers and trustees shall be held
to the standard of care enumerated in section 11A.09. In
addition, the trustees must act in accordance with article 7.
Each member of the board is a fiduciary and shall undertake
all fiduciary activities in accordance with the standard of care
of section 11A.09, and in a manner consistent with article 7.
No fiduciary of a relief association shall cause a relief
association to engage in a transaction if the fiduciary knows or
should know that a transaction constitutes one of the following
direct or indirect transactions:
(1) sale or exchange or leasing of any real property
between the relief association and a board member;
(2) lending of money or other extension of credit between
the relief association and a board member or member of the
relief association;
(3) furnishing of goods, services, or facilities between
the relief association and a board member; or
(4) transfer to a board member, or use by or for the
benefit of a board member, of any assets of the relief
association. Transfer of assets does not mean the payment of
relief association benefits or administrative expenses permitted
by law.
Sec. 25. Minnesota Statutes 1988, section 424.06, is
amended to read:
424.06 [OFFICERS; TRUSTEES.]
The officers of the relief association shall be a
president, one or more vice-presidents, a secretary, and a
treasurer. The offices of assistant secretary and assistant
treasurer may be created by the bylaws of any such
associations. The affairs of each association shall must be
managed in accordance with article 7 by a board of trustees
elected in the manner prescribed by the articles of
incorporation of the association.
The secretary and treasurer of each relief association
shall each furnish a corporate bond to the association for the
faithful performance of their duties, in amounts as the
association from time to time may determine. Each relief
association shall be and is hereby authorized to pay the
premiums on such bonds from its general fund.
Sec. 26. Minnesota Statutes 1988, section 424A.001,
subdivision 7, is amended to read:
Subd. 7. [FIDUCIARY RESPONSIBILITY.] In the discharge of
their respective duties, the officers and trustees shall be held
to the standard of care enumerated in section 11A.09. In
addition, the trustees must act in accordance with article 7.
Each member of the board is a fiduciary and shall undertake
all fiduciary activities in accordance with the standard of care
of section 11A.09, and in a manner consistent with article 7.
No fiduciary of a relief association shall cause a relief
association to engage in a transaction if the fiduciary knows or
should know that a transaction constitutes one of the following
direct or indirect transactions:
(1) sale or exchange or leasing of any real property
between the relief association and a board member;
(2) lending of money or other extension of credit between
the relief association and a board member or member of the
relief association;
(3) furnishing of goods, services, or facilities between
the relief association and a board member; or
(4) transfer to a board member, or use by or for the
benefit of a board member, of any assets of the relief
association. Transfer of assets does not mean the payment of
relief association benefits or administrative expenses permitted
by law.
Sec. 27. Minnesota Statutes 1988, section 424A.04,
subdivision 2, is amended to read:
Subd. 2. [FIDUCIARY DUTY.] It shall be the duty of The
board of trustees to faithfully administer any provisions of
statute or special law applicable to the relief association
without prejudice and shall undertake their activities
consistent with the expressed intent of the legislature. The
members of the board shall act as trustees with a fiduciary
obligation to the state of Minnesota which authorized the
creation of the relief association, to the taxpayers who aid in
its financing, and to the firefighters who are its beneficiaries
article 7.
Sec. 28. [490.021] [ADMINISTRATION OF VARIOUS JUDGES
RETIREMENT PLANS.]
The Minnesota state retirement system shall administer the
judges retirement plans established by sections 490.025 to
490.12 in accordance with article 7.
Sec. 29. Minnesota Statutes 1988, section 490.122, is
amended to read:
490.122 [ADMINISTRATION OF JUDGES' RETIREMENT.]
The policy-making, management, and administrative functions
governing the operation of the judges' retirement fund and the
administration of sections 490.025 490.121 to 490.132 shall be
are vested in the board of directors and executive director of
the Minnesota state retirement system with such duties,
authority, and responsibility as are provided in chapter 352.
Except as otherwise specified, no provision of chapter 352 shall
apply applies to the judges' retirement fund or any
judge. Fiduciary activities of the uniform retirement and
survivors' annuities for judges must be undertaken in a manner
consistent with article 7.
Sec. 30. [EFFECTIVE DATE.]
Sections 1 to 29 are effective the day following final
enactment.
ARTICLE 9
OTHER TEACHERS' RETIREMENT ASSOCIATIONS PROVISIONS
Section 1. Minnesota Statutes 1988, section 11A.19, is
amended by adding a subdivision to read:
Subd. 9. Effective June 30, 1989, all assets of the
variable annuity investment fund must be transferred to the
Minnesota combined investment funds to the credit of the
teachers retirement fund established under chapter 354.
Sec. 2. Minnesota Statutes 1988, section 354.50, is
amended by adding a subdivision to read:
Subd. 5. Notwithstanding section 354.62, subdivision 5,
clause (4), a member who received a refund of variable account
accumulations may repay this refund to the member's formula
account under this section.
Sec. 3. Minnesota Statutes 1988, section 354.62,
subdivision 2, is amended to read:
Subd. 2. [INDIVIDUAL ELECTION.] Each member of the
teachers retirement association may elect to participate in the
variable annuity division by filing a written notice with the
board of trustees on forms provided by the board.
(1) Employee variable annuity contributions to the variable
annuity division shall be pursuant to the option available in
section 354.44, subdivision 7, the employee variable annuity
contributions shall be an amount equal to one-half of the
employee rates specified in section 354.42, subdivision 2.
(2) Employer variable annuity contributions shall be an
amount equal to the employee variable annuity contributions
provided in clause (1). The deficiency in equal employer
variable annuity contributions which shall exist prior to July
1, 1975 shall be recovered from the additional employer
contributions made prior to July 1, 1975 pursuant to section
354.42, subdivision 5.
(3) There shall be provided for members participating in
the variable annuity division a separate account for each member
which will show the member's variable account accumulations as
defined in section 354.05, subdivision 23. The board shall
establish such other accounts in the variable annuity division
as it deems necessary for the operation of this provision.
(4) After June 30, 1974 there shall be no new participants
in this program.
(5) Any active member currently participating in the
variable annuity division may elect to cease participation in
the variable annuity division effective the July 1 following the
filing of a written notice with the board of trustees on forms
provided by the board. If this election is made, all future
contributions will go to the formula program.
(6) Effective May 16, 1989, all active and inactive members
with variable account accumulations must have their formula
service credit covered by the full formula program percentages
specified in section 354.44, subdivision 6. Each active and
inactive member's variable account accumulations must be
transferred to the member's formula account and this amount must
become part of the member's accumulated deductions. An equal
employer contribution amount must be transferred to the regular
fund of the association. These transfers must include any
employee and employer contributions made after June 30, 1988.
Sec. 4. Minnesota Statutes 1988, section 354.62, is
amended by adding a subdivision to read:
Subd. 7. [TRANSFER.] Effective June 30, 1989, all persons
receiving benefits from the variable annuity reserve account
must have the full amount of their required reserves transferred
to the Minnesota postretirement investment fund. Benefit
payments from the Minnesota postretirement investment fund must
be in the same amount as benefit payments from the variable
annuity reserve account but any future increases on these
amounts must be based on the increases applicable to the
Minnesota postretirement investment fund as determined under
section 11A.18. The first increase must be paid January 1,
1990. The additional required reserves, including the required
reserves for the first increase, that must be transferred from
the variable annuity fund to the Minnesota postretirement
investment fund must be transferred from the turnover account of
the variable annuity fund. After this transfer of additional
required reserves, any remaining balance in the turnover account
of the variable annuity fund must be transferred to the regular
fund of the association.
Sec. 5. [ENTITLEMENT TO ANNUITY.]
Notwithstanding any requirement of prior law that a member
or former member have 20 years of service credit in order for a
surviving spouse to receive a joint and survivor annuity under
the teachers' retirement association formula program established
in Minnesota Statutes, section 354.46, a surviving spouse of a
person who met the following qualifications is entitled to
receive the second portion of a 100 percent joint and survivor
annuity under the formula program:
(1) the person was age 55 or older at the time of death;
(2) the person had at least 19 years of service credit in
the teachers' retirement association; and
(3) the sum of the person's service credit in the teachers'
retirement association plus the person's employment at the
University of Minnesota exceeds 20 years.
The payments due under this section do not include
postretirement adjustments that would have been granted between
the time of the member or former member's death and the
effective date of this section.
The teachers' retirement association shall transfer to the
state board of investment, for deposit in the postretirement
investment fund, money equal to the reserves required to fund
the benefits payable under this section.
Sec. 6. [EFFECTIVE DATE.]
Sections 1 to 5 are effective the day following final
enactment. Section 5 applies retroactively to the surviving
spouses of persons who died after January 1, 1977. Annuity
payments due under section 5 must begin after the date of final
enactment. No payments are due for the period of time before
the effective date of section 5.
ARTICLE 10
VOLUNTEER FIREFIGHTERS
Section 1. Minnesota Statutes 1988, section 423A.01,
subdivision 2, is amended to read:
Subd. 2. [OPERATION OF LOCAL RELIEF ASSOCIATION UPON
MODIFICATION OF RETIREMENT COVERAGE FOR NEWLY HIRED POLICE
OFFICERS AND FIREFIGHTERS.] The following provisions shall
govern the operation of a local relief association upon the
modification of retirement coverage for newly hired police
officers or firefighters:
(1) The minimum obligation of a municipality in which the
retirement coverage for newly hired police officers or salaried
firefighters has been modified pursuant to subdivision 1 with
respect to the local relief association shall be determined and
governed in accordance with the provisions of sections 69.77,
356.215 and 356.216, except that the normal cost calculation for
the relief association shall be computed as a percentage of the
compensation paid to the active members of the relief
association. The compensation paid to persons with retirement
coverage modified pursuant to subdivision 1 shall not be
included in any of the computations made in determining the
obligation of the municipality with respect to the local relief
association.
(2) The contribution rate of members of the local relief
association shall be governed by section 69.77, unless a special
law establishing a greater member contribution rate is
applicable whereupon it shall continue to govern. The member
contribution rate of persons with retirement coverage modified
pursuant to subdivision 1 shall be governed by section 353.65.
(3) Unless otherwise provided for by law, when every active
member of the local relief association retires or terminates
from active duty, the local relief association shall cease to
exist as a legal entity and the assets of the special fund of
the relief association shall be transferred to a trust fund to
be established by the appropriate municipality for the purpose
of paying service pensions and retirement benefits to recipient
beneficiaries. Recipient beneficiaries who are competent to act
on their own behalf shall be entitled to select the prescribed
number of trustees of the trust fund as provided in this clause,
subject to the approval of the governing body of the
municipality. If there are at least five recipient
beneficiaries, the trust fund shall be managed by a board of
trustees composed of five persons selected by the recipient
beneficiaries of the fund. When there are fewer than five
recipient beneficiaries, the number of trustees selected by the
recipient beneficiaries shall be equal to the number of the
remaining recipient beneficiaries. The governing body of the
municipality shall select the additional trustees. The term of
the elected members of the board of trustees shall be indefinite
and shall continue until a vacancy occurs in one of the board of
trustee member positions. Board of trustee members shall not be
compensated for their services, but shall be reimbursed for any
expenses actually and necessarily incurred as a result of the
performance of their duties in their capacity as board of
trustee members. The municipality shall perform whatever
services are necessary to administer the trust fund. When all
obligations of the trust fund are paid, the balance of the
assets remaining in the trust fund shall revert to the
municipality for expenditure for law enforcement or firefighting
purposes, whichever is applicable.
(4) The financial requirements of the trust fund and the
minimum obligation of the municipality with respect to the trust
fund shall be determined in accordance with sections 69.77,
356.215 and 356.216 until the unfunded accrued liability of the
trust fund is fully amortized in accordance with section 69.77,
subdivision 2b. The municipality shall provide in its annual
budget for at least the aggregate amount of service pensions,
disability benefits, survivorship benefits and refunds which are
projected as payable for the following calendar year, as
determined by the board of trustees of the trust fund, less the
amount of assets in the trust fund as of the end of the most
current calendar year for which figures are available, valued
pursuant to section 356.20, subdivision 4, clause (1)(a), if the
difference between those two figures is a positive number.
(5) In calculating the amount of service pensions and other
retirement benefits payable from the local relief association
and in calculating the amount of any automatic post retirement
increases in those service pensions and retirement benefits
based on the salary paid or payable to active members or
escalated in any fashion, the salary for use as the base for the
service pension or retirement benefit calculation and the post
retirement increase calculation for the local relief association
shall be the salary for the applicable position as specified in
the articles of incorporation or bylaws of the relief
association as of the date immediately prior to the effective
date of the modification of retirement coverage for newly hired
personnel pursuant to subdivision 1, as the applicable salary is
reset by the municipality periodically, irrespective of whether
retirement coverage for persons holding the applicable position
used in calculations is provided by the relief association or by
the public employees police and fire fund. If for a local
salaried firefighters relief association, the specified position
no longer exists because of a reorganization of the fire
department as a volunteer fire department, the percentage
increase in the salary of the position of a top grade patrol
officer in the police department of the municipality must be the
basis for service pension and retirement benefit postretirement
increase calculations.
(6) If the modification of retirement coverage implemented
pursuant to subdivision 1 is applicable to a local police relief
association, the police state aid received by the municipality
shall be disbursed pursuant to section 69.031, subdivision 5,
clause (2)(c). If the modification of retirement coverage
implemented pursuant to subdivision 1 is applicable to a local
firefighters' relief association, the fire state aid received by
the applicable municipality shall be disbursed as the
municipality at its option may elect. The municipality may
elect: (a) to transmit the total fire state aid to the
treasurer of the local relief association for immediate deposit
in the special fund of the relief association; or (b) to apply
the total fire state aid toward the employer contribution of the
municipality to the public employees police and fire fund
pursuant to section 353.65, subdivision 3; or (c) to allocate
the total fire state aid proportionately between the special
fund of the local relief association and employer contribution
of the municipality to the public employees police and fire fund
on the basis of the respective number of active full time
salaried firefighters receiving retirement coverage from each.
Sec. 2. Minnesota Statutes 1988, section 424A.01,
subdivision 2, is amended to read:
Subd. 2. [STATUS OF SUBSTITUTE OR PROBATIONARY VOLUNTEER
FIREFIGHTERS.] No person who is serving as a substitute or a
probationary volunteer firefighter shall be deemed to be a
firefighter for purposes of chapter 69 or this chapter nor shall
be authorized to be a member of any volunteer firefighters'
relief association governed by chapter 69 or this chapter.
Sec. 3. Minnesota Statutes 1988, section 424A.02,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZATION.] Any A relief association,
when its articles of incorporation or bylaws so provide, may pay
out of the assets of its special fund a service pension to each
of its members who: (1) separates from active service with the
fire department; (2) reaches the age of 50 years; (3) completes
at least ten five years of active service as an active member of
the municipal fire department to which the relief association is
associated; (4) completes at least ten five years of active
membership with the relief association prior to before
separation from active service; and (5) complies with any
additional conditions as to age, service, and membership which
that are prescribed by the bylaws of the relief association.
The service pension may be paid whether or not the municipality
or nonprofit firefighting corporation to which the relief
association is associated qualifies for fire state aid under
chapter 69. In the case of a member who has completed at least
ten five years of active service as an active member of the fire
department to which the relief association is associated on the
date that the relief association is established and
incorporated, the requirement that the member complete at least
ten five years of active membership with the relief
association prior to before separation from active service may
be waived by the board of trustees of the relief association if
the member completes at least ten five years of inactive
membership with the relief association prior to before the
payment of the service pension. During the period of inactive
membership, the member shall is not be entitled to receive any
disability benefit coverage, shall is not be entitled to receive
any additional service credit towards computation of a service
pension, and shall be deemed is considered to have the status of
a person entitled to a deferred service pension pursuant
to under subdivision 7.
No municipality or nonprofit firefighting corporation is
authorized to may delegate the power to take final action in
setting a service pension or ancillary benefit amount or level
to the board of trustees of the relief association or to approve
in advance a service pension or ancillary benefit amount or
level equal to the maximum amount or level which that this
chapter would allow rather than a specific dollar amount or
level.
No relief association as defined in section 424A.001,
subdivision 4, shall may pay a service pension or disability
benefit to any a former member of the relief association if that
person has not separated from active service with the fire
department to which the relief association is directly
associated.
For the purposes of this chapter, "to separate from active
service" means to cease to perform fire suppression duties and
to cease to supervise fire suppression duties.
Sec. 4. Minnesota Statutes 1988, section 424A.02,
subdivision 2, is amended to read:
Subd. 2. [NONFORFEITABLE PORTION OF SERVICE PENSION.] If
the articles of incorporation or bylaws of a relief association
so provide, a relief association may pay a reduced service
pension to a retiring member who has completed fewer than 20
years of service. The reduced service pension may be paid when
the retiring member meets the minimum age and service
requirements of subdivision 1.
The amount of the reduced service pension shall may not
exceed the amount calculated by multiplying the service pension
appropriate for the completed years of service as specified in
the bylaws times the applicable nonforfeitable percentage of
pension. The applicable nonforfeitable percentage of pension
amounts are as follows:
Completed Years of Service Nonforfeitable Percentage
of Pension Amount
5 40 percent
6 44 percent
7 48 percent
8 52 percent
9 56 percent
10 60 percent
11 64 percent
12 68 percent
13 72 percent
14 76 percent
15 80 percent
16 84 percent
17 88 percent
18 92 percent
19 96 percent
20 and thereafter 100 percent
Sec. 5. Minnesota Statutes 1988, section 424A.02,
subdivision 7, is amended to read:
Subd. 7. [DEFERRED SERVICE PENSIONS.] A member of a relief
association to which this section applies is entitled to a
deferred service pension if the member:
(1) has completed the lesser of the minimum period of
active service with the fire department specified in the bylaws
or 20 years of active service with the fire department;
(2) has completed at least ten five years of active
membership in the relief association; and
(3) separates from active service and membership prior
to before reaching the age of 50 years or the minimum age for
retirement and commencement of a service pension specified in
the bylaws governing the relief association if that age is
greater than the age of 50 years. The deferred service
pension shall commence starts when the former member reaches the
age of 50 years or the minimum age specified in the bylaws
governing the relief association if that age is greater than the
age of 50 years and when the former member makes a valid written
application. Any A relief association which that provides a
lump sum service pension may, when its governing bylaws so
provide, pay interest on the deferred lump sum service pension
during the period of deferral. If provided for, interest shall
must be paid at the rate actually earned by the relief
association, but not to exceed the interest rate specified in
section 356.215, subdivision 4d, and shall must be compounded
annually based on calendar year balances. The deferred service
pension shall be is governed by and shall must be
calculated pursuant to any under the general statute, special
law, relief association articles of incorporation, or relief
association bylaw provisions applicable as of on the date on
which the member separated from active service with the fire
department and active membership in the relief association.
Sec. 6. Minnesota Statutes 1988, section 424A.02,
subdivision 13, is amended to read:
Subd. 13. [COMBINED SERVICE PENSIONS.] If the articles of
incorporation or bylaws of the associations so provide, a
volunteer firefighter with total service credit of ten years or
more, if every affected relief association does not require only
a five-year service vesting requirement, or five years or more,
if every affected relief association requires only a five-year
service vesting requirement, as a member of two or more relief
associations is entitled, when otherwise qualified, to a
prorated service pension from each association in which the
member has two years one year or more of service credit. The
prorated service pension must be based on the service pension
amount in effect for the relief association on the date
volunteer firefighting services covered by that relief
association terminate. To receive a service pension under this
subdivision, the firefighter must become a member of the second
or succeeding association and give notice of membership to the
prior association within two years of termination of active
service with the prior association. The notice must be attested
to by the association secretary.
Sec. 7. Minnesota Statutes 1988, section 424A.10, is
amended to read:
424A.10 [STATE SUPPLEMENTAL BENEFIT; VOLUNTEER
FIREFIGHTERS.]
Subdivision 1. [DEFINITION.] For purposes of this section,
"qualified recipient" means an individual who receives an
involuntary a lump sum distribution of pension or retirement
benefits from a firefighters' relief association for service
performed as a volunteer firefighter.
Subd. 2. [PAYMENT OF SUPPLEMENTAL BENEFIT.] Upon the
payment by a firefighters' relief association of an involuntary
a lump sum distribution to a qualified recipient, the
association must pay a supplemental benefit to the qualified
recipient. Notwithstanding any law to the contrary, the relief
association may pay the supplemental benefit out of its special
fund. The amount of this benefit equals ten percent of the
regular involuntary lump sum distribution that is paid on the
basis of service as a volunteer firefighter. In no case may the
amount of the supplemental benefit exceed $1,000.
Subd. 3. [STATE REIMBURSEMENT.] By February 15 of each
year, the relief association shall apply to the commissioner of
revenue for state reimbursement of the amount of supplemental
benefits paid under subdivision 2 during the preceding calendar
year. By March 15 the commissioner shall reimburse the relief
association for the amount of the supplemental benefits paid to
qualified recipients. The commissioner of revenue shall
prescribe the form of and supporting information that must be
supplied as part of the application for state reimbursement.
The reimbursement payment must be deposited in the special fund
of the relief association.
Subd. 4. [IN LIEU OF INCOME TAX EXCLUSION.] The
supplemental benefit provided by this section is in lieu of the
state income tax exclusion for involuntary lump sum
distributions of retirement benefits paid to volunteer
firefighters. If the law is modified to exclude or exempt
volunteer firefighters' lump sum distributions from state income
taxation, the supplemental benefits under this section may no
longer be paid beginning with the first calendar year in which
the exclusion or exemption is effective. This subdivision does
not apply to exemption of all or part of a lump sum distribution
under section 290.032 or 290.0802.
Sec. 8. [REPEALER.]
Minnesota Statutes 1988, section 424A.01, subdivision 3a,
is repealed.
ARTICLE 11
LOCAL POLICE AND FIREFIGHTERS
Section 1. Minnesota Statutes 1988, section 353.64, is
amended by adding a subdivision to read:
Subd. 9. [PENSION COVERAGE FOR CERTAIN SHERIFFS'
ASSOCIATION EMPLOYEES.] A former member of the association who
is an employee of the Minnesota sheriffs' association may elect
to be a police and fire fund member with respect to service with
the sheriffs' association, if written election to be covered is
delivered to the board within 60 days after the effective date
of this section or within 60 days after commencement of
employment, whichever is later.
Employee and employer contributions for past service are
the obligation of the employee, except that the Minnesota
sheriffs' association may pay the employer contributions. The
employer shall, in any event, deduct necessary future
contributions from the employee's salary and remit all
contributions to the association as required by this chapter.
Persons who become association members under this section
shall not be eligible for election to the board of trustees.
Sec. 2. Laws 1955, chapter 151, section 13, as amended by
Laws 1963, chapter 271, section 7; Laws 1971, chapter 549,
section 2; Laws 1980, chapter 600, section 14; and Laws 1983,
chapter 47, section 1, is amended to read:
Sec. 13. The association shall pay a pension to the
surviving spouse or any child under 18 years of age of any
pensioned and retired member, or to the surviving spouse or any
child under 18 years of age of any member who dies while in the
service of the city police department, or to the surviving
spouse or any child under 18 years of age of any member who,
after being a member of the city police department for not less
than 20 years, severs his or her connection with the department,
and dies before attaining the age of 50 years. The association
shall pay to any such surviving spouse a pension of 20 not less
than 22-1/2 units nor more than 27-1/2 units per month, as the
bylaws of the association provide, subject to Minnesota
Statutes, section 69.77, subdivision 2i. The association shall
pay to any such child under 18 years of age a pension of five
units per month until the child attains the age of 18 years,
provided, however, that if such child is married at the time of
the death of the member or marries or becomes legally adopted
after the death of the member, the child shall not be entitled
to such benefits. If the surviving spouse and children reside
together, the pension payable to the children shall be paid to
the surviving spouse and shall be used for the support of the
children. If a surviving spouse remarries, the pension
immediately ceases and the association shall not make any
further pension payments; provided further that if the
remarriage terminates for any reason, the surviving spouse,
whose benefit terminated solely because of remarriage, shall be
entitled upon reapplication to a surviving spouse's benefit;
provided, however, that such person shall not be entitled to
retroactive payments for any period of time, prior to the
effective date of this act or reapplication, whichever is
later. For the purposes of this section, all provisions
governing a child under 18 shall be extended to include a full
time student under the age of 23.
Sec. 3. [AMENDMENT AUTHORIZED.]
Subdivision 1. [AUTHORIZATION.] Subject to Minnesota
Statutes, section 69.77, subdivision 2i, the Mankato fire
department relief association may amend its constitution and
bylaws to provide for payment of disability benefits to active
regular salaried firefighters who, because of medically
determinable sickness or injury, are unable to perform their
duties as firefighters, regardless of whether the sickness was
caused in the performance of duty or the injury occurred while
on duty.
Subd. 2. [REGULAR SALARIED FIREFIGHTER NONDUTY DISABILITY
BENEFIT AMOUNT.] The nonduty disability benefit for regular
salaried firefighters must not exceed the amount of the duty
disability benefit.
Sec. 4. Laws 1982, chapter 574, section 5, as amended by
Laws 1985, chapter 261, section 16, is amended to read:
Sec. 5. [VIRGINIA POLICE; BENEFIT CHANGES FOR
PARTICIPANTS.]
If the bylaws so authorize, the following changes shall be
effective:
(a) The service pension payable to persons who retired from
the police department on or before January 12, 1966, shall be
supplemented by $100 $200 per month.
(b) For any participant who terminated employment after
20 or more years of service, the amount of the monthly service
pension payable after the participant has attained the age of at
least 50 years shall be equal to one-half 50 percent of the
prevailing pay of a police officer of the rank and position held
by the participant for a period of at least six months prior to
termination of service, or to the rank and position most
analogous thereto, plus an additional one percent for each full
year of service in excess of 20 years to a maximum of 60
percent, payable by the police department in each month during
which the retired participant receives a service pension.
(c) The amount of a monthly disability pension shall be
equal to one-half of the prevailing pay of a police officer of
the rank and position held by the participant for a period of at
least six months prior to his or her disability or the rank and
position most analogous thereto, payable by the police
department in each month during the period of the participant's
disability, subject to any integration of benefits. Disability
pensions payable for disabilities incurred on or before January
11, 1967, are increased by $100 per month.
(d) The benefit paid to the surviving spouse of a
participant who died on or before January 11, 1967, shall be
increased by $50 $100 per month, with benefits payable until the
surviving spouse's death or remarriage.
(e) The benefit paid to a surviving child shall be
increased to $50 per child per month, subject to any limitation
placed on the total amount of survivor's benefits.
Sec. 5. [MINNETONKA VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION; INCREASED NONFORFEITABLE SERVICE PENSION
PERCENTAGE.]
Notwithstanding any provision of Minnesota Statutes,
section 424A.02, subdivision 2, to the contrary, if the articles
of incorporation or the bylaws of the relief association so
provide, subject to Minnesota Statutes, section 424A.02,
subdivision 10, the Minnetonka volunteer firefighters relief
association may pay a service pension to a retiring member who
meets the minimum age, service, and other requirements of
Minnesota Statutes, section 424A.02, subdivision 1. The amount
of the service pension is that portion of a service pension
payable with 20 years of service that full years of service
credited by the relief association bear to 20 years of service.
Sec. 6. [EVELETH POLICE AND FIREFIGHTERS; BENEFIT
INCREASE.]
Notwithstanding any general or special law to the contrary,
in addition to other benefits payable, retirement benefits
payable to retired police officers and firefighters and their
surviving spouses by the Eveleth police and fire trust fund may
be increased by $100 a month. Increases may be made retroactive
to January 1, 1989.
Sec. 7. [BLOOMINGTON VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION; DUTY DISABILITY BENEFIT.]
Notwithstanding any provision of Minnesota Statutes,
section 424A.02, subdivision 9, or any other law to the
contrary, the Bloomington firefighters relief association may
provide a duty disability benefit to a volunteer firefighter who:
(1) becomes disabled from a medically determinable injury
or illness arising out of or occurring in the course of the line
of duty;
(2) is not entitled to the immediate receipt of a service
pension equal to the amount of a service pension payable to a
retiring firefighter with 20 years of service; and
(3) complies with any other requirement specified in the
bylaws of the association.
The duty disability benefit must be equal to the amount of
the service pension payable to a retiring firefighter with 20
years of service.
A Bloomington volunteer firefighter who has received a
duty-related disability benefit and who returns to active
firefighting duties with the Bloomington fire department must
accrue service credit towards a service pension for the period
of the receipt of the duty-related disability benefit.
Sec. 8. [NONDUTY DISABILITY BENEFIT.]
The Bloomington firefighters relief association may provide
a volunteer firefighter who becomes disabled from an injury or
illness not arising out of or not occurring in the course of the
line of duty with a disability benefit as the bylaws of the
relief association specify, subject to the provisions of
Minnesota Statutes, section 424A.02, subdivision 9.
Sec. 9. Laws 1965, chapter 446, section 2, is amended to
read:
Sec. 2. [DUTY-RELATED DEATH SURVIVOR BENEFITS.]
Notwithstanding Minnesota Statutes, section 424A.02,
subdivision 9, or any other provision of law to the contrary and
in lieu of the widows pension surviving spouse benefit provided
in Minnesota Statutes, Section 424.24, the firemen's
firefighters relief association in the city of Bloomington may
provide a pension surviving spouse benefit to the widow
surviving spouse of a volunteer fireman firefighter who dies as
the result of an injury or illness arising out of or in the
course of the line of duty, if the surviving spouse qualifies
under the terms of Minnesota Statutes, Section 424.24, of not
more than a sum. The surviving spouse benefit must not exceed
an amount equal to one fourth of the salary as payable from time
to time during the period of pension payment to policemen of the
highest grade, not including officers of the police department,
in the employ of the city, such pension to three-quarters of the
amount of the service pension payable to a retiring firefighter
with 20 years of service. The surviving spouse benefit must be
paid as the bylaws of the association provide for her natural
life; provided that if she remarry, such pension shall upon
remarriage, the surviving spouse benefit must cease to accrue
and terminate as of the date of her remarriage.
In event If there is a surviving child or there are
surviving children of a deceased firefighter who suffered a
duty-related death as provided in Minnesota Statutes, Section
424.24, the firemen's relief association of the city of
Bloomington may provide for a pension of not more than four
percent of the monthly salary as payable from time to time
during the period of pension payment to policemen of the highest
grade, not including officers of the department, in the employ
of the city, surviving child benefit. The surviving child
benefit must not exceed an amount equal to 12 percent of the
amount of the service pension payable to a retiring firefighter
with 20 years of service for each child up to the time each
child reaches the age of not less than 16 years or more than 18
years as the bylaws of the association provide; provided,. The
total pension hereunder survivor benefits for the widow
surviving spouse and children of the deceased member shall not
exceed one third of the monthly salary of a policeman of the
highest grade, not including officers of the police department,
in the employ of the municipality the amount of the service
pension payable to a retiring firefighter with 20 years of
service during the period of the pension payment.
Sec. 10. Laws 1965, chapter 446, section 3, is amended to
read:
Sec. 3. [DUTY-RELATED DEATH SURVIVING CHILD BENEFITS IN
CERTAIN INSTANCES.] The firemen's Bloomington firefighters
relief association of the city of Bloomington may provide
a pension surviving child benefit for the child or the children
of a deceased members member with a duty-related death after the
death of their mothers the surviving spouse, of such the amount
as the board of trustees of the association shall deem considers
necessary to properly support such the child or the children
until they reach an the age of not more than 18, as the bylaws
of the association provide; provided. The total pension
hereunder surviving child benefit for the child or the children
of the deceased member shall not exceed a sum an amount equal to
one third of the monthly salary of a policeman of the highest
grade, not including officers of the police department, in the
employ of the municipality the amount of the service pension
payable to a retiring firefighter with 20 years of service
during the period of the pension survivor benefit payment.
Sec. 11. [NONDUTY-RELATED DEATH SURVIVOR BENEFITS.]
The Bloomington firefighters relief association may provide
the surviving spouse, surviving child or surviving children of a
volunteer firefighter who dies from an injury or illness not
arising out of or not occurring in the course of the line of
duty with a survivor benefit as the bylaws of the relief
association specify, subject to the provisions of Minnesota
Statutes, section 424A.02, subdivision 9.
Sec. 12. [BYLAW AMENDMENT.]
The St. Paul police relief association and the St. Paul
fire department relief association shall amend their articles of
incorporation and bylaws to ensure that retired members of the
police department and fire department are represented on the
board of directors of the St. Paul police relief association and
the board of trustees of the St. Paul fire department relief
association in the same proportion that the number of retired
members in each relief association bears to the total membership
of each relief association. However, retired members of the St.
Paul police relief association and the St. Paul fire department
relief association are never entitled under the articles of
incorporation or bylaws to more seats on the board of directors
than the active members of the respective associations.
Sec. 13. [REPEALER.]
Laws 1967, chapter 815; Laws 1978, chapter 683; and Laws
1981, chapter 224, sections 2 and 5, are repealed.
Sec. 14. [EFFECTIVE DATES.]
Subdivision 1. Section 2 is effective upon approval by the
St. Paul city council and compliance with Minnesota Statutes,
section 645.021, subdivision 3.
Subd. 2. Section 3 is effective upon approval by the
Mankato city council and compliance with Minnesota Statutes,
section 645.021, subdivision 3.
Subd. 3. Section 4 is effective upon approval by the
Virginia city council and compliance with Minnesota Statutes,
section 645.021, subdivision 3.
Subd. 4. Section 5 is effective upon approval by the
governing body of the city of Minnetonka and compliance with
Minnesota Statutes, section 645.021, subdivision 3.
Subd. 5. Section 6 is effective upon approval by the
Eveleth city council and compliance with Minnesota Statutes,
section 645.021, subdivision 3.
Subd. 6. Sections 7 to 11 are effective upon approval by
the governing body of the city of Bloomington and compliance
with Minnesota Statutes, section 645.021, subdivision 3.
Subd. 7. Sections 12 and 13 are effective the day
following final enactment.
Subd. 8. Section 1 is effective July 1, 1989.
ARTICLE 12
HIGHER EDUCATION SUPPLEMENTAL PLAN
Section 1. Minnesota Statutes 1988, section 136.80,
subdivision 1, is amended to read:
Subdivision 1. A The supplemental retirement plan for
personnel employed by the state university board and the state
board for community colleges who are in the unclassified service
of the state commencing July 1 following the completion of the
second year of their full time contract is hereby established
and shall be governed pursuant to sections 136.81 to 136.85.
Any An unclassified employee who is employed by the state
university board or the state board for community colleges in
subsidized on-the-job training, work experience, or public
service employment as an enrollee under the federal
comprehensive employment and training act shall may not be
included in the supplemental retirement plan provided for in
sections 136.81 to 136.85 from and after March 30, 1978, unless
the unclassified employee has as of the later of March 30, 1978,
or the date of employment sufficient service credit in the
retirement fund providing primary retirement coverage to meet
the minimum vesting requirements for a deferred retirement
annuity, or the board agrees in writing to make the employer
contribution required by section 136.81 on account of that
unclassified employee from revenue sources other than funds
provided under the federal comprehensive employment and training
act, or the unclassified employee agrees in writing to make the
employer contribution required by section 136.81 in addition to
the member contribution.
Sec. 2. Minnesota Statutes 1988, section 136.81,
subdivision 1, is amended to read:
Subdivision 1. [DEDUCTIONS.] There shall be deducted The
state university board and the state board for community
colleges shall deduct from the salary of each person described
in section 136.80, subdivision 1, a sum equal to five percent of
the portion of the person's annual salary paid between $6,000
and $15,000. The deduction is to must be made in the same
manner as other retirement deductions are made from the salary
of the person only after the first $6,000 has been paid in a
fiscal year. The state employer shall make a contribution to
the plan on behalf of every covered person in an amount equal to
the deductions made from the salary of the person. If an
agreement is made under section 356.24 for additional employer
contributions, an amount equal to the additional employer
contribution must be deducted from the person's annual salary
above $15,000 as specified in this subdivision. The moneys so
money deducted and the state contribution shall must be
deposited to the credit of the state university and community
college supplemental retirement plan account of the teachers
retirement fund. The account is hereby established and
shall must be separate and distinct from other funds, accounts,
or assets of the teachers retirement fund. The money required
to meet the obligation of the state employer as provided in this
subdivision shall must be contributed to the executive director
of the teachers retirement association by the state employer.
Any Deductions which are taken from the salary of a person
for the supplemental retirement plan in error shall must, upon
discovery and verification, be refunded to the person. The
retirement board shall establish a reserve which shall
reflect reflecting any gains or losses realized due to the
purchase and redemption of shares representing salary deductions
and state employer contributions which were made in error. The
balance of the reserve shall must be credited annually to the
cancellation reserve established pursuant to under section
136.82, subdivision 1, clause (5).
If any payroll deductions which are required pursuant
to under this section are omitted, the deductions shall must be
remitted to the supplemental retirement plan investment account
of the teachers retirement association within one year from the
end of the fiscal year in which the deductions were due, and, at
the time of the receipt of the omitted deductions, the required
state contribution shall then must be made.
Sec. 3. Minnesota Statutes 1988, section 356.24, is
amended to read:
356.24 [SUPPLEMENTAL PENSION OR DEFERRED COMPENSATION
PLANS, RESTRICTIONS UPON GOVERNMENT UNITS.]
(a) It is unlawful for a school district or other
governmental subdivision or state agency to levy taxes for, or
contribute public funds to a supplemental pension or deferred
compensation plan that is established, maintained, and operated
in addition to a primary pension program for the benefit of the
governmental subdivision employees other than:
(1) to a supplemental pension plan that was established,
maintained, and operated before May 6, 1971;
(2) to a plan that provides solely for group health,
hospital, disability, or death benefits, to the individual
retirement account plan established by sections 354B.01 to
354B.04;
(3) to a plan that provides solely for severance pay under
section 465.72 to a retiring or terminating employee; or
(4) for employees other than personnel employed by the
state university board or the community college board and
covered by section 136.80, subdivision 1, to the state of
Minnesota deferred compensation plan under section 352.96, if
provided for in a personnel policy or in the collective
bargaining agreement of the public employer with the exclusive
representative of public employees in an appropriate unit, in an
amount matching employee contributions on a dollar for dollar
basis, but not to exceed an employer contribution of $2,000 a
year per employee; or
(5) for personnel employed by the state university board or
the community college board and covered by section 136.80,
subdivision 1, to the supplemental retirement plan under
sections 136.80 to 136.85, if provided for in a personnel policy
or in the collective bargaining agreement of the public employer
with the exclusive representative of the covered employees in an
appropriate unit, in an amount matching employee contributions
on a dollar for dollar basis, but not to exceed an employer
contribution of $2,000 a year for each employee.
(b) No change in benefits or employer contributions in a
supplemental pension plan to which this section applies after
May 6, 1971, is effective without prior legislative
authorization.
ARTICLE 13
BENEFIT CHANGES
Section 1. Minnesota Statutes 1988, section 352.01,
subdivision 19, is amended to read:
Subd. 19. [RETIREMENT.] "Retirement" means the time after
a state employee is entitled to an accrued annuity, as defined
in subdivision 21, payable under an application for annuity
filed in the office of the system as provided in section
352.115, subdivision 8 or, in the case of an employee who has
received a disability benefit, when that employee reaches normal
retirement age 65.
Sec. 2. Minnesota Statutes 1988, section 352.01, is
amended by adding a subdivision to read:
Subd. 25. [NORMAL RETIREMENT AGE.] "Normal retirement age"
means age 65 for a person who first became a covered employee
before July 1, 1989. For a person who first becomes a covered
employee after June 30, 1989, normal retirement age means the
higher of age 65 or "retirement age," as defined in United
States Code, title 42, section 416(l), as amended.
Sec. 3. Minnesota Statutes 1988, section 352.04,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTIONS.] The employee
contribution to the fund must be equal to 3.73 4.34 percent of
salary, beginning with the first full pay period after June 30,
1984 1989. These contributions must be made by deduction from
salary as provided in subdivision 4.
Sec. 4. Minnesota Statutes 1988, section 352.04,
subdivision 3, is amended to read:
Subd. 3. [EMPLOYER CONTRIBUTIONS.] The employer
contribution to the fund must be equal to 3.90 4.51 percent of
salary beginning with the first full pay period after June 30,
1984 1989.
Sec. 5. Minnesota Statutes 1988, section 352.113,
subdivision 1, is amended to read:
Subdivision 1. [AGE AND SERVICE REQUIREMENTS.] Any
employee covered by the system who is less than 65 years old
normal retirement age who becomes totally and permanently
disabled after five three or more years of allowable service is
entitled to a disability benefit in an amount provided in
subdivision 3. If the disabled employee's state service has
terminated at any time, the employee must have at least three
two years of allowable service after last becoming a state
employee covered by the system.
Sec. 6. Minnesota Statutes 1988, section 352.113,
subdivision 12, is amended to read:
Subd. 12. [RETIREMENT STATUS AT NORMAL RETIREMENT AGE 65.]
The disability benefit paid to a disabled employee under this
section ends when the employee reaches normal retirement age
65. If the disabled employee is still totally and permanently
disabled when the employee reaches normal retirement age 65, the
employee shall be considered to be a retired employee. If the
employee had chosen an optional annuity under subdivision 3, the
employee shall receive an annuity in accordance with the terms
of the optional annuity previously chosen. If the employee had
not chosen an optional annuity pursuant to subdivision 3, the
employee may then choose to receive either a normal retirement
annuity equal in amount to the disability benefit paid before
the employee reached normal retirement age 65 or an optional
annuity as provided in section 352.116, subdivision 3. The
choice of an optional annuity must be made before
reaching normal retirement age 65. If an optional annuity is
chosen, the choice is effective on the date the employee becomes
65 years old attains normal retirement age and the optional
annuity shall begin to accrue the first of the month following
the month in which the employee attains 65 this age.
Sec. 7. Minnesota Statutes 1988, section 352.115,
subdivision 1, is amended to read:
Subdivision 1. [AGE AND SERVICE REQUIREMENTS.] After
separation from state service, any employee (1) who has attained
the age of at least 55 years and who is entitled to credit for
at least five three years allowable service, or (2) who has
received credit for at least 30 years allowable service
regardless of age, is entitled upon application to a retirement
annuity.
Sec. 8. Minnesota Statutes 1988, section 352.115,
subdivision 2, is amended to read:
Subd. 2. [AVERAGE SALARY.] The retirement annuity
hereunder payable at normal retirement age 65 or thereafter must
be computed in accordance with the applicable provisions of the
formula stated in subdivision 3, on the basis of the employee's
average salary for the period of allowable service. This
retirement annuity is known as the "normal" retirement annuity.
For each year of allowable service, "average salary" of an
employee in determining a retirement annuity means the average
of the highest five successive years of salary upon which the
employee has made contributions to the retirement fund by
payroll deductions. Average salary must be based upon all
allowable service if this service is less than five years.
"Average salary" does not include the payment of accrued
unused annual leave or overtime paid at time of final separation
from state service if paid in a lump sum nor does it include the
reduced salary, if any, paid during the period the employee is
entitled to workers' compensation benefit payments for temporary
disability.
Sec. 9. Minnesota Statutes 1988, section 352.115,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph,
in conjunction with section 352.116, subdivision 1, applies to a
person who became a covered employee before July 1, 1989, unless
paragraph (b), in conjunction with section 352.116, subdivision
1a, produces a higher annuity amount, in which case paragraph
(b) will apply. The employee's average salary, as defined in
subdivision 2, multiplied by one percent per year of allowable
service for the first ten years and 1.5 percent for each later
year of allowable service and pro rata for completed months less
than a full year shall determine the amount of the retirement
annuity to which the employee is entitled.
(b) This paragraph applies to a person who first became a
covered employee after June 30, 1989, and to any other employee
whose annuity amount, when calculated under this paragraph and
in conjunction with section 352.116, subdivision 1a, is higher
than it is when calculated under paragraph (a), in conjunction
with section 352.116, subdivision 1. The employee's average
salary, as defined in subdivision 2, multiplied by 1.5 percent
for each year of allowable service and pro rata for months less
than a full year shall determine the amount of the retirement
annuity to which the employee is entitled.
Sec. 10. Minnesota Statutes 1988, section 352.116, is
amended to read:
352.116 [ANNUITIES UPON RETIREMENT.]
Subdivision 1. [REDUCED ANNUITY BEFORE NORMAL RETIREMENT
AGE 65.] This subdivision applies only to a person who first
became a covered employee before July 1, 1989, and whose annuity
is higher when calculated under section 352.115, subdivision 3,
paragraph (a), in conjunction with this subdivision than when
calculated under section 352.115, subdivision 3, paragraph (b),
in conjunction with subdivision 1a.
(a) Any employee who is eligible for a retirement annuity
under section 352.115, subdivision 1, and who retires before
normal retirement age 65 with credit for less than at least
three but less than 30 years of allowable service shall be paid
the normal retirement annuity provided in section 352.115,
subdivisions 2 and 3, paragraph (a), reduced so that the reduced
annuity is the actuarial equivalent of the annuity that would be
payable to by one-quarter of one percent for each month that the
employee if the employee deferred receipt of the annuity from
the day the annuity begins to accrue to is under normal
retirement age 65 at the time of retirement. Any An employee
who is eligible for a retirement annuity under section 352.115,
subdivision 1, and who retires prior to age 62 with credit for
at least 30 years of allowable service shall be paid the normal
retirement annuity provided in section 352.115, subdivisions 2
and 3, paragraph (a), reduced so that the reduced annuity is the
actuarial equivalent of the annuity that would be payable to the
employee if the employee deferred receipt of the annuity from
the day the annuity begins to accrue to by one-quarter of one
percent for each month that the employee is under age 62 at the
time of retirement.
(b) Any person whose attained age plus credited allowable
service totals 90 years is entitled, upon application, to a
retirement annuity in an amount equal to the normal annuity
provided in section 352.115, subdivisions 2 and 3, paragraph
(a), without any reduction by reason of early retirement.
Subd. 1a. [ACTUARIAL REDUCTION FOR EARLY RETIREMENT.] This
subdivision applies to a person who first became a covered
employee after June 30, 1989, and to any other employee whose
annuity is higher when calculated under section 352.115,
subdivision 3, paragraph (b), in conjunction with this
subdivision than when calculated under section 352.115,
subdivision 3, paragraph (a), in conjunction with subdivision 1.
An employee who retires before the normal retirement age shall
be paid the normal retirement annuity provided in section
352.115, subdivisions 2 and 3, paragraph (b), reduced so that
the reduced annuity is the actuarial equivalent of the annuity
that would be payable to the employee if the employee deferred
receipt of the annuity and the annuity amount were augmented at
an annual rate of three percent compounded annually from the day
the annuity begins to accrue until the normal retirement age.
Subd. 2. [NORMAL ANNUITY AT NORMAL RETIREMENT AGE 65.] Any
employee who retires after reaching normal retirement age 65
shall be paid the annuity provided in section 352.115.
Subd. 3. [OPTIONAL ANNUITIES.] The board shall establish
an optional retirement annuity in the form of a joint and
survivor annuity. The board may also establish an optional
annuity in the form of an annuity payable for a period certain
and for life thereafter or establish an optional annuity which
takes the form of a joint and survivor annuity providing that,
if after the joint and survivor annuity becomes payable, the
person with the designated remainder interest in the annuity
dies before the former member, the annuity amount must be
reinstated to a normal single life annuity amount as of the
first day of the month after the day the person dies. In
addition, the board may also establish an optional annuity that
takes the form of an annuity calculated on the basis of the age
of the retired employee at retirement and payable for the period
before the retired employee becomes eligible for social security
old age retirement benefits in a greater amount than the amount
of the annuity calculated under subdivision 2 on the basis of
the age of the retired employee at retirement but equal so far
as possible to the social security old age retirement benefit
and the adjusted retirement annuity amount payable immediately
after the retired employee becomes eligible for social security
old age retirement benefits and payable for the period after the
retired employee becomes eligible for social security old age
retirement benefits in an amount less than the amount of the
annuity calculated under subdivisions 2 and 3. The social
security leveling option may be calculated based on broad
average social security old age retirement benefits. Except as
provided in subdivision 3a, the optional forms must be
actuarially equivalent to the normal single life annuity forms
provided in sections 352.115 and 352.116, whichever applies.
Subd. 3a. [BOUNCE-BACK ANNUITY.] (a) If a retired employee
or disabilitant selects a joint and survivor annuity option
under subdivision 3, the retired employee or disabilitant must
receive a normal single-life annuity if the designated optional
annuity beneficiary dies before the retired employee or
disabilitant. Under this option, no reduction may be made in
the annuity to provide for restoration of the normal single-life
annuity in the event of the death of the designated optional
annuity beneficiary.
(b) A retired employee or disabilitant who selected an
optional joint and survivor annuity before July 1, 1989, but did
not choose an option that provides that the normal single-life
annuity is payable to the retired employee or the disabilitant
if the designated optional annuity beneficiary dies first, is
eligible for restoration of the normal single-life annuity if
the designated optional annuity beneficiary dies first, without
further actuarial reduction of the person's annuity. A retired
employee or disabilitant who selected an optional joint and
survivor annuity, but whose designated optional annuity
beneficiary died before July 1, 1989, shall receive a normal
single-life annuity after that date, but shall not receive
retroactive payments for periods before that date.
(c) A retired employee or disabilitant who took a further
actuarial reduction to elect an optional joint and survivor
annuity that provides that the normal annuity is payable to the
retired employee or disabilitant if the designated optional
beneficiary died before July 1, 1989, shall have the annuity
increased as of July 1, 1989, to the amount the person would
have received if, at the time of retirement or disability, the
person had selected only optional survivor coverage that would
not have provided for restoration of the normal annuity upon the
death of the designated optional annuity beneficiary. Any
annuity or benefit increase under this paragraph is effective
only for payments made after June 30, 1989, and is not
retroactive for payments made before July 1, 1989.
Subd. 4. [DETERMINING ACTUARIAL EQUIVALENCY.] In
establishing the procedure for determining the actuarial
equivalency of early retirement annuities as required under
subdivision 1 1a or in establishing actuarial equivalent
optional retirement annuity forms as required under subdivision
3, the board shall obtain the written recommendation of the
commission-retained actuary. The recommendations shall be a
part of the permanent records of the board.
Sec. 11. Minnesota Statutes 1988, section 352.12,
subdivision 1, is amended to read:
Subdivision 1. [DEATH BEFORE TERMINATION OF SERVICE.] If
an employee dies before state service has terminated and neither
a survivor annuity nor a reversionary annuity is payable, or if
a former employee who has sufficient service credit to be
entitled to an annuity dies before the benefit has become
payable, the director shall make a refund to the last designated
beneficiary or, if there is 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 the accumulated employee contributions plus interest thereon
to the date of death at the rate of five six percent per annum
compounded annually. Upon the death of an employee who has
received a refund that was later repaid in full, interest must
be paid on the repaid refund only from the date of repayment.
If the repayment was made in installments, interest must be paid
only from the date installment payments began. The designated
beneficiary, surviving spouse, or representative of the estate
of an employee who had received a disability benefit is not
entitled to interest upon any balance remaining to the
decedent's credit in the fund at the time of death.
Sec. 12. Minnesota Statutes 1988, section 352.12,
subdivision 2, is amended to read:
Subd. 2. [SURVIVING SPOUSE BENEFIT.] If an employee or
former employee is at least 50 years old and has credit for at
least five three years allowable service or who has credit for
at least 30 years of allowable service, regardless of age, dies
before an annuity or disability benefit has become payable,
notwithstanding any designation of beneficiary to the contrary,
the surviving spouse of the employee may elect to receive, in
lieu of the refund with interest provided in subdivision 1, an
annuity equal to the joint and 100 percent survivor annuity
which the employee could have qualified for had the employee
terminated service on the date of death. 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. The
annuity must be computed as provided in sections 352.115,
subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 1a, and 3.
Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply
to a deferred annuity payable under this subdivision. The
annuity must cease with the last payment received by the
surviving spouse in the lifetime of the surviving spouse. An
amount equal to the excess, if any, of the accumulated
contributions credited to the account of the deceased employee
in excess of the total of the benefits paid and payable to the
surviving spouse must be paid to the deceased employee's last
designated beneficiary or, if none, to the surviving children of
the deceased spouse in equal shares or, if none, to the
surviving parents of the deceased spouse or, if none, to the
representative of the estate of the deceased spouse. Any
employee may request in writing that this subdivision not apply
and that payment be made only to a designated beneficiary as
otherwise provided by this chapter.
Sec. 13. Minnesota Statutes 1988, 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 refund must be made to the
last designated beneficiary or, if there is 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 six 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. 14. Minnesota Statutes 1988, section 352.22,
subdivision 2, is amended to read:
Subd. 2. [AMOUNT OF REFUND.] Except as provided in
subdivision 3, any person who ceased to be a state employee
after June 30, 1973, by reason of termination of state service
shall receive a refund in an amount equal to employee
accumulated contributions plus interest at the rate of five six
percent per year compounded annually. Interest must be computed
to the first day of the month in which the refund is processed
and must be based on fiscal year balances.
Sec. 15. Minnesota Statutes 1988, section 352.22,
subdivision 3, is amended to read:
Subd. 3. [DEFERRED ANNUITY.] (a) Any employee with at
least five three years of allowable service when termination
occurs may elect to leave the accumulated contributions in the
fund and thereby be entitled to a deferred retirement annuity.
This annuity must be computed as provided by the law in effect
when state service terminated, on the basis of allowable service
before termination of service.
(b) An employee on layoff or on leave of absence without
pay, except a leave of absence for health reasons, who does not
return to state service shall have any annuity, deferred
annuity, or other benefit to which the employee may become
entitled computed under the law in effect on the last working
day.
(c) No application for a deferred annuity shall be made
more than 60 days before the time the former employee reaches
the required age for entitlement to the payment of the annuity.
The deferred annuity shall begin to accrue no earlier than 60
days before the date the application is filed in the office of
the system, but not (1) before the date the employee reaches the
required age for entitlement to the annuity nor (2) before the
day following the termination of state service in a position not
covered by the retirement system nor (3) before the day
following the termination of employment in a position that
requires the employee to be a member of either the public
employees retirement association or the teachers retirement
association.
(d) Application for the accumulated contributions left on
deposit with the fund may be made at any time after 30 days
following the date of termination of service.
Sec. 16. Minnesota Statutes 1988, section 352.72,
subdivision 1, is amended to read:
Subdivision 1. [ENTITLEMENT TO ANNUITY.] (a) Any person
who has been an employee covered by a retirement system listed
in paragraph (b) is entitled when qualified to an annuity from
each fund if total allowable service in all funds or in any two
of these funds totals five three or more years.
(b) This section applies to the Minnesota state retirement
system, the public employees retirement association including
the public employees retirement association police and
firefighters fund, the teachers retirement association, the
state patrol retirement association, or any other public
employee retirement system in the state with a similar
provision, except as noted in paragraph (c).
(c) This section does not apply to other funds providing
benefits for police officers or firefighters.
(d) No portion of the allowable service upon which the
retirement annuity from one fund is based shall be again used in
the computation for benefits from another fund. No refund may
have been taken from any one of these funds since service
entitling the employee to coverage under the system or the
employee's membership in any of the associations last
terminated. The annuity from each fund must be determined by
the appropriate provisions of the law except that the
requirement that a person must have at least five three years
allowable service in the respective system or association does
not apply for the purposes of this section if the combined
service in two or more of these funds equals five three or more
years.
Sec. 17. Minnesota Statutes 1988, section 352.72,
subdivision 2, is amended to read:
Subd. 2. [COMPUTATION OF DEFERRED ANNUITY.] The deferred
annuity, if any, accruing under subdivision 1, or section
352.22, subdivision 3, must be computed as provided in section
352.22, subdivision 3, on the basis of allowable service before
termination of state service and augmented as provided herein.
The required reserves applicable to a deferred annuity or to an
annuity for which a former employee was eligible but had not
applied or to any deferred segment of an annuity must be
determined as of the date the benefit begins to accrue and
augmented by interest compounded annually from the first day of
the month following the month in which the employee ceased to be
a state employee, or July 1, 1971, whichever is later, to the
first day of the month in which the annuity begins to accrue.
The rates of interest used for this purpose must be five percent
compounded annually until January 1, 1981, and after that date
three percent compounded annually thereafter until January 1 of
the year following the year in which the former employee attains
age 55. From that date to the effective date of retirement, the
rate is five percent compounded annually. If a person has more
than one period of uninterrupted service, the required reserves
related to each period must be augmented by interest under this
subdivision. The sum of the augmented required reserves so
determined is the present value of the annuity. "Uninterrupted
service" for the purpose of this subdivision means periods of
covered employment during which the employee has not been
separated from state service for more than two years. If a
person repays a refund, the service restored by the repayment
must be considered continuous with the next period of service
for which the employee has credit with this system. The formula
percentages used for each period of uninterrupted service must
be those applicable to a new employee. The mortality table and
interest assumption used to compute the annuity must be those in
effect when the employee files application for annuity. This
section shall not reduce the annuity otherwise payable under
this chapter.
Sec. 18. Minnesota Statutes 1988, section 352.72,
subdivision 5, is amended to read:
Subd. 5. [EARLY RETIREMENT.] The requirements and
provisions for retirement before normal retirement age 65 in
sections 352.115, subdivision 1, and 352.116 also apply to an
employee fulfilling the requirements with a combination of
service as provided in subdivision 1.
Sec. 19. Minnesota Statutes 1988, section 352.85,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY; RETIREMENT ANNUITY.] Any
person who is employed by the department of military affairs
other than as a full-time firefighter, who is covered by the
general employee retirement plan of the system as provided in
section 352.01, subdivision 23, who is ordered to active duty
under section 190.08, subdivision 3, who elects this special
retirement coverage under subdivision 4, who is required to
retire from federal military status at an age earlier
than normal retirement age 65 by applicable federal laws or
regulations and who terminates employment as a state employee
upon attaining that mandatory retirement age is entitled, upon
application, to a retirement annuity computed in accordance with
section 352.115, subdivisions 2 and 3, without any reduction for
early retirement under section 352.116, subdivision 1 or la.
Sec. 20. Minnesota Statutes 1988, section 352.93,
subdivision 1, is amended to read:
Subdivision 1. [BASIS OF ANNUITY; WHEN TO APPLY.] After
separation from state service an employee covered under section
352.91 who has reached age 55 years and has credit for at
least five three years of covered correctional service and
regular Minnesota state retirement system service is entitled
upon application to a retirement annuity under this section
based only on covered correctional employees' service.
Application may be made no earlier than 60 days before the date
the employee is eligible to retire by reason of both age and
service requirements.
In this section, "average salary" means the average of the
monthly salary during the employees' highest five successive
years of salary as an employee covered by the Minnesota state
retirement system. Average salary must be based upon all
allowable service if this service is less than five years.
Sec. 21. Minnesota Statutes 1988, section 352.93,
subdivision 3, is amended to read:
Subd. 3. [PAYMENTS; DURATION AND AMOUNT.] The annuity
under this section shall begin to accrue as provided in section
352.115, subdivision 8, and must be paid for an additional 84
full calendar months or to the first of the month following the
month in which the employee becomes attains normal retirement
age 65, whichever occurs first, except that payment must not
cease before the first of the month following the month in which
the employee becomes 62. It must then be reduced to the amount
as calculated under section 352.115, except that if this amount,
when added to the social security benefit based on state service
the employee is eligible to receive at the time, is less than
the benefit payable under subdivision 2, the retired employee
shall receive an amount that when added to the social security
benefit will equal the amount payable under subdivision 2.
When an annuity is reduced under this subdivision, the
percentage adjustments, if any, that have been applied to the
original annuity under section 11A.18, before the reduction,
must be compounded and applied to the reduced annuity. A former
correctional employee employed by the state in a position
covered by the regular plan between the ages age of 58 and 65
normal retirement age shall receive a partial return of
correctional contributions at retirement with five six percent
interest based on the following formula:
Employee contributions Years and complete
contributed as a months of regular
correctional employee service between ages
in excess of the age 58 and 65 the
contributions the normal retirement age
employee would have X ..................
contributed as a 7
regular employee number of years between
age 58 and normal
retirement age
Sec. 22. Minnesota Statutes 1988, section 352.95,
subdivision 2, is amended to read:
Subd. 2. [NONJOB-RELATED DISABILITY.] Any covered
correctional employee who, after at least five three years of
covered correctional service, before reaching the age of 55
becomes disabled and physically unfit to perform the duties of
the position because of sickness or injury occurring while not
engaged in covered employment, is entitled to a disability
benefit based on covered correctional service only. The
disability benefit must be computed as provided in section
352.93, subdivisions 1 and 2, and computed as though the
employee had at least ten years of covered correctional service.
Sec. 23. Minnesota Statutes 1988, section 352.95,
subdivision 5, is amended to read:
Subd. 5. [RETIREMENT STATUS AT NORMAL RETIREMENT AGE 65.]
The disability benefit paid to a disabled correctional employee
under this section shall terminate at the end of the month in
which the employee reaches age 62. If the disabled correctional
employee is still disabled when the employee reaches age 62, the
employee shall be deemed to be a retired employee. If the
employee had elected an optional annuity under subdivision 1a,
the employee shall receive an annuity in accordance with the
terms of the optional annuity previously elected. If the
employee had not elected an optional annuity under subdivision
1a, the employee may then either elect to receive a normal
retirement annuity computed in the manner provided in section
352.115 or elect to receive an optional annuity as provided in
section 352.116, subdivision 3, based on the same length of
service as used in the calculation of the disability benefit.
Election of an optional annuity must be made before reaching age
62. The reduction for retirement before normal retirement age
65 as provided in section 352.116, subdivision 1 or 1a, does not
apply. The savings clause provision of section 352.93,
subdivision 3, applies. If an optional annuity is elected, the
optional annuity shall begin to accrue on the first of the month
following the month in which the employee reaches age 62.
Sec. 24. Minnesota Statutes 1988, section 352B.01,
subdivision 11, is amended to read:
Subd. 11. [AVERAGE SALARY.] "Average monthly salary" means
the average of the highest monthly salaries for five years of
service as a member. Average monthly salary must be based upon
all allowable service if this service is less than five years.
It does not include any amounts of severance pay or any reduced
salary paid during the period the person is entitled to workers'
compensation benefit payments for temporary disability.
Sec. 25. Minnesota Statutes 1988, section 352B.08,
subdivision 1, is amended to read:
Subdivision 1. [WHO IS ELIGIBLE; WHEN TO APPLY; ACCRUAL.]
Every member who is credited with five three or more years of
allowable service is entitled to separate from state service and
upon becoming 55 years old, is entitled to receive a life
annuity, upon separation from state service. Members shall
apply for an annuity in a form and manner prescribed by the
executive director. No application may be made more than 60
days before the date the member is eligible to retire by reason
of both age and service requirements. An annuity begins to
accrue no earlier than 90 days before the date the application
is filed with the executive director.
Sec. 26. Minnesota Statutes 1988, section 352B.11,
subdivision 1, is amended to read:
Subdivision 1. [REFUND OF PAYMENTS.] A member who has not
received other benefits under this chapter is entitled to a
refund of payments made by salary deduction, plus interest, if
the member is separated, either voluntarily or involuntarily,
from state service that entitled the member to membership. In
the event of the member's death, the member's estate is entitled
to the refund. Interest must be computed at the rate of five
six percent a year, compounded annually. To receive a refund,
the member must apply on a form prescribed by the executive
director.
Sec. 27. Minnesota Statutes 1988, section 352B.11,
subdivision 2, is amended to read:
Subd. 2. [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a
member serving actively as a member, a member receiving the
disability benefit provided by section 352B.10, subdivision 1,
or a former member receiving a disability benefit as provided by
section 352B.10, subdivision 3 2, dies from any cause, the
surviving spouse and dependent children are entitled to benefit
payments as follows:
(a) A member with at least five three years of allowable
service or a former member with at least 20 years of allowable
service is deemed to have elected a 100 percent joint and
survivor annuity payable to a surviving spouse only on or after
the date the member or former member became or would have become
55.
(b) The surviving spouse of a member who had credit for
less than five three years of service shall receive, for life, a
monthly annuity equal to 20 percent of that part of the average
monthly salary of the member from which deductions were made for
retirement. If the surviving spouse remarries, the annuity
shall cease as of the date of the remarriage.
(c) The surviving spouse of a member who had credit for at
least five three years service and who died after attaining 55
years of age, may elect to receive a 100 percent joint and
survivor annuity, for life, notwithstanding a subsequent
remarriage, in lieu of the annuity prescribed in paragraph (b).
(d) The surviving spouse of any member who had credit for
five three years or more and who was not 55 years of age at
death, shall receive the benefit equal to 20 percent of the
average monthly salary as described in clause (b) until the
deceased member would have reached the age of 55 years, and
beginning the first of the month following that date, may elect
to receive the 100 percent joint and survivor annuity. If the
surviving spouse remarries before the deceased member's 55th
birthdate, benefits or annuities shall cease as of the date of
remarriage. Remarriage after the deceased member's 55th
birthday shall not affect the payment of the benefit.
(e) Each dependent child shall receive a monthly annuity
equal to ten percent of that part of the average monthly salary
of the former member from which deductions were made for
retirement. A dependent child over 18 and under 22 years of age
also may receive the monthly benefit provided in this section,
if the child is continuously attending an accredited school as a
full-time student during the normal school year as determined by
the director. If the child does not continuously attend school
but separates from full-time attendance during any part of a
school year, the annuity shall cease at the end of the month of
separation. In addition, a payment of $20 per month shall be
prorated equally to surviving dependent children when the former
member is survived by one or more dependent children. Payments
for the benefit of any qualified dependent child must be made to
the surviving spouse, or if there is none, to the legal guardian
of the child. The maximum monthly benefit must not exceed 40
percent of the average monthly salary for any number of children.
(f) If the member dies under circumstances that entitle the
surviving spouse and dependent children to receive benefits
under the workers' compensation law, the workers' compensation
benefits received by them must not be deducted from the benefits
payable under this section.
(g) The surviving spouse of a deceased former member who
had credit for five three or more years of allowable service,
but not the spouse of a former member receiving a disability
benefit under section 352B.10, subdivision 3, is entitled to
receive the 100 percent joint and survivor annuity at the time
the deceased member would have reached the age of 55 years, if
the surviving spouse has not remarried before that date. If a
former member dies who does not qualify for other benefits under
this chapter, the surviving spouse or, if none, the children or
heirs are entitled to a refund of the accumulated deductions
left in the fund plus interest at the rate of five six percent
per year compounded annually.
Sec. 28. Minnesota Statutes 1988, section 352B.30,
subdivision 1, is amended to read:
Subdivision 1. [ENTITLEMENT TO ANNUITY.] Any person who
has been an employee covered by the Minnesota state retirement
system, or a member of the public employees retirement
association including the public employees retirement
association police and firefighters' fund, or the teachers
retirement association, or the state patrol retirement fund, or
any other public employee retirement system in Minnesota having
a like provision but excluding all other funds providing
benefits for police or firefighters is entitled when qualified
to an annuity from each fund if total allowable service in all
funds or in any two of these funds totals five three or more
years. No part of the allowable service upon which the
retirement annuity from one fund is based may again be used in
the computation for benefits from another fund. The member must
not have taken a refund from any one of these funds since
service entitling the member to coverage under the system or
membership in any of the associations last terminated. The
annuity from each fund must be determined by the appropriate law
except that the requirement that a person must have at
least five three years allowable service in the respective
system or association does not apply for the purposes of this
section if the combined service in two or more of these funds
equals five three or more years.
Sec. 29. Minnesota Statutes 1988, section 353.01, is
amended by adding a subdivision to read:
Subd. 37. [NORMAL RETIREMENT AGE.] "Normal retirement age"
means age 65 for a person who first became a public employee
before July 1, 1989. For a person who first becomes a public
employee after June 30, 1989, "normal retirement age" means the
higher of age 65 or "retirement age," as defined in United
States Code, title 42, section 416(l), as amended.
Sec. 30. Minnesota Statutes 1988, section 353.27,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTION.] The employee
contribution shall be an amount (a) for a "basic member" equal
to eight 8.23 percent of total salary; and (b) for a
"coordinated member" equal to four 4.23 percent of total
salary. These contributions shall be made by deduction from
salary in the manner provided in subdivision 4. Where any
portion of a member's salary is paid from other than public
funds, such member's employee contribution shall be based on the
total salary received from all sources.
Sec. 31. Minnesota Statutes 1988, section 353.29,
subdivision 1, is amended to read:
Subdivision 1. [AGE AND ALLOWABLE SERVICE REQUIREMENTS.]
Upon separation from public service any person who has
attained the normal retirement age of at least 65 years and who
received credit for not less than five three years of allowable
service is entitled upon application to a retirement annuity.
Such retirement annuity is known as the "normal" retirement
annuity.
Sec. 32. Minnesota Statutes 1988, section 353.29,
subdivision 2, is amended to read:
Subd. 2. [AVERAGE SALARY.] In calculating the annuity
under subdivision 3, "average salary" means an amount equivalent
to the average of a member's highest salary upon which employee
contributions were paid for any five successive years of
allowable service, based on dates of salary periods as listed on
salary deduction reports. Average salary must be based upon all
allowable service if this service is less than five years. The
five successive years average salary may not include any reduced
salary paid during a period in which the employee is entitled to
benefit payments from workers' compensation for temporary
disability, unless the average salary is higher, including this
period.
Sec. 33. Minnesota Statutes 1988, section 353.29,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] (a) This paragraph,
in conjunction with section 353.30, subdivisions 1, 1a, 1b, and
1c, applies to any member who first became a public employee
before July 1, 1989, unless paragraph (b), in conjunction with
section 353.30, subdivision 5, produces a higher annuity amount,
in which case paragraph (b) will apply. The average salary as
defined in subdivision 2, multiplied by two percent for each
year of allowable service for the first ten years and thereafter
by 2.5 percent per year of allowable service and completed
months less than a full year for the "basic member", and one
percent for each year of allowable service for the first ten
years and thereafter by 1.5 percent per year of allowable
service and completed months less than a full year for the
"coordinated member," shall determine the amount of the "normal"
retirement annuity.
(b) This paragraph applies to a member who first became a
public employee after June 30, 1989, and to any other member
whose annuity amount, when calculated under this paragraph and
in conjunction with section 353.30, subdivision 5, is higher
than it is when calculated under paragraph (a), in conjunction
with section 353.30, subdivisions 1, 1a, 1b, and 1c. The
average salary, as defined in subdivision 2, multiplied by 2.5
percent for each year of allowable service and completed months
less than a full year for a basic member and 1.5 percent per
year of allowable service and completed months less than a full
year for a coordinated member, shall determine the amount of the
normal retirement annuity.
Sec. 34. Minnesota Statutes 1988, section 353.30, is
amended to read:
353.30 [ANNUITIES UPON RETIREMENT.]
Subdivision 1. Upon separation from public service any
person who first became a public employee before July 1, 1989,
and who has attained the age of at least 58 years but not more
than 65 years normal retirement age and who received credit for
not less than 20 years of allowable service is entitled upon
application to a retirement annuity in an amount equal to the
normal annuity provided in section 353.29, subdivisions 2 and 3,
paragraph (a), reduced by one-quarter of one percent for each
month that the member is under normal retirement age 65 at the
time of retirement.
Subd. 1a. Any person who first became a public employee
before July 1, 1989, and whose attained age plus credited
allowable service totals 90 years is entitled upon application
to a retirement annuity in an amount equal to the normal annuity
provided in section 353.29, subdivisions 2 and 3, paragraph (a),
without any reduction in annuity by reason of such early
retirement.
Subd. 1b. Any person who first became a public employee
before July 1, 1989, with 30 years or more of allowable service
credit, who elects early retirement under subdivision 1, shall
receive an annuity in an amount equal to the normal annuity
provided under section 353.29, subdivisions 2 and 3, paragraph
(a), reduced by one-quarter of one percent for each month that
the member is under age 62 at the time of retirement.
Subd. 1c. Any person who first became a public employee
before July 1, 1989, and who has received credit for at least 30
years of allowable service or any person who has attained the
age of at least 55 years but not more than 65 years normal
retirement age, and who has received credit for at least five
three years of allowable service is entitled upon application to
a retirement annuity in an amount equal to the normal annuity
provided in section 353.29, subdivisions 2 and 3, paragraph (a),
reduced by one-quarter of one percent for each month that the
member is under normal retirement age 65 at the time of
retirement, except that for any member who has 30 or more years
of allowable service the reduction shall be applied only for
each month that the member is under age 62 at the time of
retirement.
Subd. 3. [OPTIONAL RETIREMENT ANNUITY FORMS.] The board of
trustees shall establish optional annuities which shall take the
form of a joint and survivor annuity. Except as provided in
subdivision 3a, the optional annuity forms shall be actuarially
equivalent to the forms provided in section 353.29 and
subdivisions 1, 1a, 1b, and 1c of this section, and 5. In
establishing those optional forms, the board shall obtain the
written recommendation of the commission-retained actuary. The
recommendations shall be a part of the permanent records of
board. A member or former member may select an optional form of
annuity in lieu of accepting any other form of annuity which
might otherwise be available.
Subd. 3a. [BOUNCE-BACK ANNUITY.] (a) If a former member or
disabilitant selects a joint and survivor annuity option under
subdivision 3, the former member or disabilitant must receive a
normal single-life annuity if the designated optional annuity
beneficiary dies before the former member or disabilitant.
Under this option, no reduction may be made in the person's
annuity to provide for restoration of the normal single-life
annuity in the event of the death of the designated optional
annuity beneficiary.
(b) A former member or disabilitant who selected an
optional joint and survivor annuity before July 1, 1989, but did
not choose an option that provides that the normal single-life
annuity is payable to the former member or the disabilitant if
the designated optional annuity beneficiary dies first, is
eligible for restoration of the normal single-life annuity if
the designated optional annuity beneficiary dies first, without
further actuarial reduction of the person's annuity. A former
member or disabilitant who selected an optional joint and
survivor annuity, but whose designated optional annuity
beneficiary died before July 1, 1989, shall receive a normal
single-life annuity after that date, but shall not receive
retroactive payments for periods before that date.
(c) A former member or disabilitant who took a further
actuarial reduction to elect an optional joint and survivor
annuity that provides that the normal annuity is payable to the
former member or disabilitant if the designated optional
beneficiary died before July 1, 1989, shall have their annuity
increased as of July 1, 1989, to the amount the person would
have received if, at the time of retirement or disability, the
person had selected only optional survivor coverage that would
not have provided for restoration of the normal annuity upon the
death of the designated optional annuity beneficiary. Any
annuity or benefit increase under this paragraph is effective
only for payments made after June 30, 1989, and is not
retroactive for payments made before July 1, 1989.
Subd. 4. Any monthly payments to which any person may be
entitled under this chapter may be reduced in amount upon
application of the person entitled thereto to the association,
provided that such the person shall first relinquish in writing
all claim to that part of the full monthly payment which is the
difference between the monthly payment which that person would
be otherwise entitled to receive and the monthly payment which
that person will receive. The reduced monthly payment shall be
payment in full of all amounts due under this chapter for the
month for which the payment is made and acceptance of the
reduced monthly payment releases the retirement association from
all obligation to pay to such the person the difference between
the amount of the reduced monthly payment and the full amount of
the monthly payment which such the person would otherwise have
received. Upon application of the person who is entitled to
such monthly payment, it may be increased prospectively to not
more than the amount to which such the person would have been
entitled had no portion thereof been waived.
Subd. 5. [ACTUARIAL REDUCTION FOR EARLY RETIREMENT.] This
subdivision applies to a member who first became a public
employee after June 30, 1989, and to any other member whose
annuity is higher when calculated under section 353.29,
subdivision 3, paragraph (b), in conjunction with this
subdivision than when calculated under section 353.29,
subdivision 3, paragraph (a), in conjunction with subdivision 1,
1a, 1b, or 1c. An employee who retires before normal retirement
age shall be paid the retirement annuity provided in section
353.29, subdivision 3, paragraph (b), reduced so that the
reduced annuity is the actuarial equivalent of the annuity that
would be payable to the employee if the employee deferred
receipt of the annuity and the annuity amount were augmented at
an annual rate of three percent compounded annually from the day
the annuity begins to accrue until the normal retirement age.
Sec. 35. Minnesota Statutes 1988, section 353.32,
subdivision 1, is amended to read:
Subdivision 1. [BEFORE RETIREMENT.] If a member or former
member who terminated public service dies before retirement or
before receiving any retirement annuity and no other payment of
any kind is or may become payable to any person, a refund shall
be paid to the designated beneficiary or, if there be none, to
the surviving spouse, or, if none, to the legal representative
of the decedent's estate. Such refund shall be in an amount
equal to accumulated deductions plus interest thereon at the
rate of five six percent per annum compounded annually less the
sum of any disability or survivor benefits, if any, that may
have been paid by the fund; provided that a survivor who has a
right to benefits pursuant to section 353.31 may waive such
benefits in writing, except such benefits for a dependent child
under the age of 18 years may only be waived pursuant to an
order of the district court.
Sec. 36. Minnesota Statutes 1988, section 353.32,
subdivision 1a, is amended to read:
Subd. 1a. [SURVIVING SPOUSE OPTIONAL ANNUITY.] If a member
or former member who has attained at least age 50 and has credit
for not less than five three years of allowable service or who
has credit for not less than 30 years of allowable service,
regardless of age attained, dies before the annuity or
disability benefit begins to accrue in accordance with section
353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding
any designation of beneficiary to the contrary, the surviving
spouse may elect to receive, instead of a refund with interest
provided in subdivision 1, or survivor benefits otherwise
payable under section 353.31, an annuity equal to the 100
percent joint and survivor annuity that the member could have
qualified for had the member terminated service on the date of
death. 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. The annuity must be computed as provided in
sections 353.29, subdivisions 2 and 3; and 353.30, subdivisions
1, 1a, 1b, and 1c, and 5. Sections 353.34, subdivision 3, and
353.71, subdivision 2, apply to a deferred annuity payable under
this subdivision. No payment may accrue beyond the end of the
month in which entitlement to the annuity has terminated. An
amount equal to any excess of the accumulated contributions that
were credited to the account of the deceased employee over and
above the total of the annuities paid and payable to the
surviving spouse must be paid to the deceased member's last
designated beneficiary or, if none, to the legal representative
of the estate of the deceased member. A member may specify in
writing that this subdivision does not apply and that payment
may be made only to the designated beneficiary as otherwise
provided by this chapter.
Sec. 37. Minnesota Statutes 1988, section 353.33,
subdivision 1, is amended to read:
Subdivision 1. [AGE, SERVICE AND SALARY REQUIREMENTS.] Any
member who becomes totally and permanently disabled before
normal retirement age 65 and after five three years of allowable
service shall be entitled to a disability benefit in an amount
provided in subdivision 3. If such disabled person's public
service has terminated at any time, at least three two of the
required five three years of allowable service must have been
rendered after last becoming a member. Any member whose average
salary is less than $75 per month shall not be entitled to a
disability benefit. No repayment of a refund otherwise
authorized pursuant to section 353.34 and no purchase of prior
service or payment made in lieu of salary deductions otherwise
authorized pursuant to section 353.01, subdivision 16, 353.017,
subdivision 4, or 353.36, subdivision 2, may be made after the
occurrence of the disability for which an application pursuant
to this section is filed.
Sec. 38. Minnesota Statutes 1988, section 353.33,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF BENEFITS.] This disability
benefit is an amount equal to the normal annuity payable to a
member who has reached 65 normal retirement age with the same
number of years of allowable service and the same average
salary, as provided in section 353.29, subdivisions 2 and 3. A
"basic member" shall receive in addition a supplementary monthly
benefit computed in accordance with the following table:
Age when Supplementary
Disabled benefit
Under 56 $50
56 45
57 40
58 35
59 30
60 25
61 20
62 15
63 10
64 5
If the disability benefits provided in this subdivision
exceed the average salary as defined in section 353.29,
subdivision 2, the disability benefits shall be reduced to an
amount equal to said average salary.
Sec. 39. Minnesota Statutes 1988, section 353.33,
subdivision 11, is amended to read:
Subd. 11. [RETIREMENT STATUS AT NORMAL RETIREMENT AGE 65.]
No person shall be entitled to receive disability benefits and a
retirement annuity at the same time. The disability benefits
paid to a person hereunder shall terminate when the person
reaches normal retirement age 65. If the person is still
totally and permanently disabled when the person attains
the normal retirement age of 65 years, the person shall be
deemed to be on retirement status and, if the person had elected
an optional annuity pursuant to subdivision 3a, 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 3a, may at the option
of the person either elect to receive either a normal retirement
annuity as provided in section 353.29 or normal retirement
annuity equal to the disability benefit paid before the person
reached normal retirement age 65, whichever amount is greater,
or elect to receive an optional annuity as provided in section
353.30, subdivision 3. Any disabled person who becomes age 65
attains normal retirement age shall have the annuity computed in
accordance with the law in effect upon attainment of that age
65. Election of an optional annuity shall be made prior to the
person attaining the normal retirement age of 65 years. If an
optional annuity is elected, the election shall be effective on
the date on which the person attains the age of 65 years normal
retirement age 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 that age of 65 years.
Sec. 40. Minnesota Statutes 1988, section 353.34,
subdivision 2, is amended to read:
Subd. 2. [REFUND WITH INTEREST.] Except as provided in
subdivision 1, any person who ceases to be a public employee
shall receive a refund in an amount equal to accumulated
deductions with interest to the first day of the month in which
the refund is processed at the rate of five six percent per
annum compounded annually based on fiscal year balances.
Sec. 41. Minnesota Statutes 1988, section 353.34,
subdivision 3, is amended to read:
Subd. 3. [DEFERRED ANNUITY; ELIGIBILITY; COMPUTATION.] A
member with at least five three years of allowable service when
termination of public service occurs has the option of leaving
the accumulated deductions in the fund and being entitled to a
deferred retirement annuity commencing at normal retirement age
65 or to a deferred early retirement annuity under section
353.30, subdivision 1, 1a, 1b, or 1c, or 5. The deferred
annuity must be computed under section 353.29, subdivisions 2
and 3, on the basis of the law in effect on the date of
termination of public service and must be augmented as provided
in section 353.71, subdivision 2. A former member qualified to
apply for a deferred retirement annuity may revoke this option
at any time before the commencement of deferred annuity payments
by making application for a refund. The person is entitled to a
refund of accumulated member contributions within 30 days
following date of receipt of the application by the executive
director.
Sec. 42. Minnesota Statutes 1988, section 353.34,
subdivision 3a, is amended to read:
Subd. 3a. [DEFERRED ANNUITY; CERTAIN HOSPITAL EMPLOYEES.]
Any member employed by a public hospital, as defined in section
355.71, subdivision 3, who has at least five three years of
allowable service credit on the date the public hospital is
taken over by a private corporation or organization, may elect
to receive a deferred annuity pursuant to subdivision 3
notwithstanding the length of service requirement contained
therein.
Sec. 43. Minnesota Statutes 1988, section 353.651,
subdivision 1, is amended to read:
Subdivision 1. [AGE AND ALLOWABLE SERVICE REQUIREMENTS.]
Upon separation from public service, any police officer or
firefighter member who has attained the age of at least 55 years
and who received credit for not less than five three years of
allowable service is entitled upon application to a retirement
annuity. Such retirement annuity is known as the "normal"
retirement annuity.
Sec. 44. Minnesota Statutes 1988, section 353.651,
subdivision 2, is amended to read:
Subd. 2. [AVERAGE SALARY.] In calculating the annuity
under subdivision 3, "average salary" means an amount equivalent
to the average of the highest salary earned as a police officer
or firefighter upon which employee contributions were paid for
any five successive years of allowable service. Average salary
must be based upon all allowable service if this service is less
than five years.
The five successive years average salary may not include
any reduced salary paid during a period in which the employee is
entitled to benefit payments from workers' compensation for
temporary disability unless the average salary is higher,
including this period.
Sec. 45. Minnesota Statutes 1988, section 353.657,
subdivision 2a, is amended to read:
Subd. 2a. [DEATH WHILE ELIGIBLE SURVIVOR BENEFIT.] If a
member or former member who has attained the age of at least 50
years and has credit for not less than five three 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 a death while eligible survivor benefit. The benefit
shall be 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. The benefit must be an
annuity equal to the 100 percent joint and survivor annuity
which the member could have qualified for on the date of death,
computed as provided in sections 353.651, 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. For a
member who is employed as a full-time firefighter by the
department of military affairs of the state of Minnesota,
allowable service as a full-time state military affairs
department firefighter credited by the Minnesota state
retirement system may be used in meeting the minimum allowable
service requirement of this subdivision.
Sec. 46. Minnesota Statutes 1988, section 353.71,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY.] Any person who has been a
member of the public employees retirement association, or the
Minnesota state retirement system, or the teachers retirement
association, or any other public retirement system in the state
of Minnesota having a like provision, except a fund providing
benefits for police officers or firefighters governed by
sections 69.77 or 69.771 to 69.776, shall be entitled when
qualified to an annuity from each fund if the total allowable
service in all funds or in any two of these funds totals five
three or more years, provided no portion of the allowable
service upon which the retirement annuity from one fund is based
is again used in the computation for benefits from another fund
and provided further that the person has not taken a refund from
any one of these funds since the person's membership in that
association or system last terminated. The annuity from each
fund shall be determined by the appropriate provisions of the
law except that the requirement that a person must have at least
five three years of allowable service in the respective
association or system shall not apply for the purposes of this
section provided the combined service in two or more of these
funds equals five three or more years.
Sec. 47. Minnesota Statutes 1988, section 353.71,
subdivision 2, is amended to read:
Subd. 2. [DEFERRED ANNUITY COMPUTATION; AUGMENTATION.] The
deferred annuity, if any, accruing under subdivision 1, or
sections 353.34, subdivision 3, and 353.68, subdivision 4, shall
be computed in the manner provided in said sections, on the
basis of allowable service prior to termination of public
service and augmented as provided herein. The required reserves
applicable to a deferred annuity, or to an annuity for which a
former member was eligible but had not applied, or to any
deferred segment of an annuity shall be determined as of the
date the annuity begins to accrue and shall be augmented from
the first day of the month following the month in which the
former member ceased to be a public employee, or July 1, 1971,
whichever is later, to the first day of the month in which the
annuity begins to accrue, at the rate of five percent per annum
compounded annually until January 1, 1981, and thereafter at the
rate of three percent thereafter until January 1 of the year
following the year in which the former member attains age 55.
From that date to the effective date of retirement, the rate is
five percent per annum compounded annually. If a person has
more than one period of uninterrupted service, 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 present value of the
annuity. Uninterrupted service for the purpose of this
subdivision shall mean periods of covered employment during
which the employee has not been separated from public service
for more than two years. If a person repays a refund, the
service restored thereby shall be considered as continuous with
the next period of service for which the employee has credit
with this association. The formula percentages used for each
period of uninterrupted service shall be those as would be
applicable to a new employee. This section shall not reduce the
annuity otherwise payable under this chapter. This subdivision
shall apply to deferred annuitants of record on July 1, 1971 and
to employees who thereafter become deferred annuitants; it shall
also apply from July 1, 1971 to former members who make
application for an annuity after July 1, 1973.
Sec. 48. Minnesota Statutes 1988, section 353.71,
subdivision 5, is amended to read:
Subd. 5. [EARLY RETIREMENT.] The requirements and
provisions for retirement prior to normal retirement age 65
contained in section 353.30, shall also apply to a person
fulfilling such requirements with a combination of service as
provided in subdivision 1.
Sec. 49. Minnesota Statutes 1988, section 353C.06,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY REQUIREMENTS.] After
separation from public employment, an employee covered under
section 353C.02 who has attained the age of at least 55 years
and has credit for not less than five three years of coverage in
the local government correctional service plan is entitled, upon
application, to a normal retirement annuity. Instead of a
normal retirement annuity, a retiring employee may elect to
receive the optional annuity provided in section 353.30,
subdivision 3.
Sec. 50. Minnesota Statutes 1988, section 353C.06,
subdivision 2, is amended to read:
Subd. 2. [AVERAGE SALARY BASE.] In calculating the annuity
under subdivision 3, "average salary" means an amount equivalent
to the average of the highest salary earned as a local
government correctional employee upon which employee
contributions were paid for any five successive years of
allowable service. Average salary must be based on all
allowable service if this service is less than five years.
Sec. 51. Minnesota Statutes 1988, section 353C.06,
subdivision 4, is amended to read:
Subd. 4. [ACCRUAL AND DURATION.] The annuity under this
section begins to accrue as provided in section 353.29,
subdivision 7. The annuity is payable for the life of the
recipient, or in accordance with the terms of any optional
annuity form selected, and is payable for 84 full calendar
months or to the first of the month following the month in which
the employee becomes attains the normal retirement age 65,
whichever occurs first. After a recipient has received the
annuity calculated under this formula for 84 full calendar
months or to the first of the month following the month in which
the employee becomes attains the normal retirement age 65,
whichever occurs first, the benefit must be recomputed in
accordance with the coordinated formula in sections 353.29 and
353.30, except that if this amount, when added to the social
security benefit based on public service the employee is
eligible to receive at that time, is less than the benefit
payable under subdivision 3, the retired employee is entitled to
receive an amount payable under subdivision 3, less any amount
payable from social security based on public service used in the
benefit calculation. When an annuity is reduced under this
subdivision, any percentage of adjustments that have been
applied to the original annuity under section 11A.18, before the
reduction, must be compounded and applied to the reduced annuity.
Sec. 52. Minnesota Statutes 1988, section 353C.08,
subdivision 5, is amended to read:
Subd. 5. [DISABILITY BENEFIT TERMINATION.] The disability
benefit paid to a disabled local government correctional
employee terminates at the end of the month in which the
employee reaches age 62. If the disabled local government
correctional employee is still disabled when the employee
reaches age 62, the employee is deemed to be a retired employee
and, if the employee had elected an optional annuity under
subdivision 3, must receive an annuity in accordance with the
terms of the optional annuity previously elected. If the
employee had not elected an optional annuity under subdivision
3, the employee may elect either to receive a normal retirement
annuity computed on the coordinated formula in the manner
provided in section 353.29 or to receive an optional annuity as
provided in section 353.30, subdivision 3, based on the same
length of service as used in the calculation of the disability
benefit. Election of an optional annuity must be made before
attaining the age of 62 years. The reduction for retirement
prior to normal retirement age 65 as provided in section 353.30,
subdivisions 1 and, 1c, and 5, is not applicable. The savings
clause provision of section 353C.06, subdivision 4, is
applicable.
Sec. 53. Minnesota Statutes 1988, section 354.05, is
amended by adding a subdivision to read:
Subd. 38. [NORMAL RETIREMENT AGE.] "Normal retirement age"
means age 65 for a person who first became a member of the fund
before July 1, 1989. For a person who first becomes a member of
the fund after June 30, 1989, normal retirement age means the
higher of age 65 or "retirement age," as defined in United
States Code, title 42, section 416(l), as amended.
Sec. 54. Minnesota Statutes 1988, section 354.35, is
amended to read:
354.35 [RETIREMENT BEFORE BECOMING ELIGIBLE FOR SOCIAL
SECURITY.]
Any coordinated member who retires before becoming eligible
for social security retirement benefits, may elect to receive an
optional retirement annuity from the association which provides
for different annuity amounts over different periods of
retirement. The election of this optional retirement annuity
shall be exercised by making an application to the board on a
form provided by the board. The optional annuity shall take the
form of an annuity payable for the period before the member
attains the normal retirement age of 65 years in a greater
amount than the amount of the annuity calculated under section
354.44 on the basis of the age of the member at retirement but
equal insofar as possible to the social security old age
retirement benefit and the adjusted retirement annuity amount
payable immediately after the annuitant becomes eligible for
social security old age retirement benefits in an amount less
than the amount of the annuity calculated under section 354.44
on the basis of the age of the member at retirement. The social
security leveling option may be calculated based on broad
average social security old age retirement benefits. The
optional annuity shall be the actuarial equivalent of the
member's annuity computed on the basis of the member's age at
retirement. The greater amount shall be paid until the member
reaches the normal retirement age of 65 at which time the
payment from the association shall be reduced. The method of
computing the optional retirement annuity provided in this
section shall be established by the board of trustees. In
establishing the method of computing the optional retirement
annuity, the board of trustees shall obtain the written
recommendation of the commission-retained actuary. The
recommendations shall be a part of the permanent records of the
board of trustees.
Sec. 55. Minnesota Statutes 1988, section 354.41,
subdivision 3, is amended to read:
Subd. 3. (1) Each annuitant, age 60 or over, who is
drawing an annuity pursuant to Minnesota Statutes 1953, section
135.10 and Minnesota Statutes 1965, sections 354.44 and 354.33
shall have the right to have membership in the fund restored
upon resumption of teaching service, for the purpose of having
deductions made in accordance with sections 354.42 and 355.48.
Upon completion of five three years of allowable service, under
this subdivision the member shall be entitled to a coordinated
annuity provided in section 354.44, subdivision 6. This annuity
is in addition to any annuity previously granted under this
chapter.
(2) Any annuitant qualifying for membership in the fund
under clause (1) may file a written notice with the executive
director of the teachers retirement association requesting that
deductions provided for in section 354.42 be made from
compensation paid for subsequent teaching services. Such notice
shall remain in effect until the annuitant requests in writing
that this membership be revoked. After July 1, 1967, deductions
pursuant to section 355.48 are required for any annuitant
eligible for membership in the fund under clause (1). Teaching
service rendered by an annuitant for which no deductions were
made pursuant to section 354.42, shall not be included in any
additional annuity granted pursuant to clause (1) of this
subdivision.
(3) Teachers retirement deductions made prior to July 1,
1973 from the salary of any annuitant who was qualified for
membership in the fund under clause (1) of this subdivision at
the time such deductions were made, shall be applicable to the
computation of an annuity as provided under clause (1) of this
subdivision even if the written notice required in clause (2) of
this subdivision has not been filed. The teaching service
related to such retirement deductions shall be deemed to be
allowable service credit which is applicable to the completion
of the five three years of allowable service required in clause
(2) of this subdivision.
Sec. 56. Minnesota Statutes 1988, section 354.44,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS AS TO AGE AND SERVICE.] Any
member or former member who ceases or has ceased to render
teaching services in any school or institution covered by the
provisions of this chapter, and who has attained the age of at
least 55 years with not less than five three years allowable
service, or who has received credit for not less than 30 years
allowable service regardless of age, is entitled upon written
application to a retirement annuity.
Sec. 57. Minnesota Statutes 1988, 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 at the normal retirement
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 normal retirement 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 normal retirement 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 has attained
the normal retirement 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. 58. Minnesota Statutes 1988, section 354.44,
subdivision 6, is amended to read:
Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT
ANNUITY.] (1) The formula retirement annuity hereunder shall be
computed in accordance with the applicable provisions of the
formula formulas stated in clause (2) hereof or (4) on the basis
of each member's average salary for the period of the member's
formula service credit. For the purposes of computing the
formula benefits under the formula and variable program, if a
combination of these formulas is used, the formula percentages
used will be those percentages in each formula as continued for
the respective years of service from one formula to the next.
For all years of formula service credit "average salary"
for the purpose of determining the member's retirement annuity
means the average salary upon which contributions were made and
upon which payments were made to increase the salary limitation
provided in Minnesota Statutes 1971, section 354.511 for the
highest five successive years of formula service credit provided
however that such "average salary" shall not include any more
than the equivalent of 60 monthly salary payments. Average
salary must be based upon all years of formula service credit if
this service credit is less than five years.
(2) This clause, in conjunction with clause (3), applies to
a person who first became a member of the fund before July 1,
1989, unless clause (4), in conjunction with clause (5),
produces a higher annuity amount, in which case clause (4)
applies. The average salary as defined in clause (1),
multiplied by the following percentages per year of formula
service credit shall determine the amount of the annuity to
which the member qualifying therefor is entitled:
Coordinated Member Basic Member
Each year of service 1.0 percent 2.0 percent
during first ten per year per year
Each year of service 1.5 percent 2.5 percent
thereafter per year per year
(3) (i) This clause applies only to a person who first
became a member of the fund before July 1, 1989, and whose
annuity is higher when calculated under clause (2), in
conjunction with this clause than when calculated under clause
(4), in conjunction with clause (5).
(ii) Where any member retires prior to normal retirement
age 65 under a formula annuity, the member shall be paid a
retirement annuity in an amount equal to the normal annuity
provided in this subdivision clause (2) and subdivision 7,
paragraph (a), reduced by one-half one-quarter of one percent
for each month that the member is under normal retirement age 65
to and including age 60 and reduced by one-fourth of one percent
for each month under age 60 at the time of retirement except
that for any member who has 30 or more years of allowable
service credit, the reduction shall be applied only for each
month which that the member is under age 62.
(iii) Any member whose attained age plus credited allowable
service totals 90 years is entitled, upon application, to a
retirement annuity in an amount equal to the normal annuity
provided in clause (2), without any reduction by reason of early
retirement.
(4) This clause applies to a member who first became a
member of the fund after June 30, 1989, and to any other member
whose annuity amount when calculated under this clause and in
conjunction with clause (5), is higher than it is when
calculated under clause (2), in conjunction with clause (3).
The average salary, as defined in clause (1) multiplied by 2.5
percent for each year of service for a basic member and by 1.5
percent for each year of service for a coordinated member shall
determine the amount of the retirement annuity to which the
member is entitled.
(5) This clause applies to a person who first becomes a
member of the fund after June 30, 1989, and to any other member
whose annuity is higher when calculated under clause (4) in
conjunction with this clause than when calculated under clause
(2), in conjunction with clause (3). An employee who retires
under the formula annuity before the normal retirement age shall
be paid the normal annuity provided in clause (4) and
subdivision 7, paragraph (b), reduced so that the reduced
annuity is the actuarial equivalent of the annuity that would be
payable to the employee if the employee deferred receipt of the
annuity and the annuity amount were augmented at an annual rate
of three percent compounded annually from the day the annuity
begins to accrue until the normal retirement age.
Sec. 59. Minnesota Statutes 1988, section 354.44,
subdivision 7, is amended to read:
Subd. 7. [COMPUTATION OF FORMULA AND VARIABLE PROGRAM
RETIREMENT ANNUITY.] (a) This paragraph applies to a person who
first became a member of the fund before July 1, 1989, unless
paragraph (b) produces a higher annuity amount, in which case
paragraph (b) applies. The benefits provided in
this subdivision paragraph are the sum of the benefits provided
by the following:
(1) The benefits provided in subdivision 6, clause (2) for
formula service credit prior to the effective date of the
original election of this subdivision and subsequent to June 30,
1978 unless the member elects continued participation in the
variable program pursuant to Minnesota Statutes 1984, section
354.621, and
(2) The benefits for service credit subsequent to the
effective date of the formula and variable program but prior to
July 1, 1978 and the benefits for service credit subsequent to
June 30, 1978 if the member elects continued participation in
the variable program pursuant to Minnesota Statutes 1984,
section 354.621, shall be the average salary as defined in
subdivision 6, clause (1) of any member multiplied by the
following percentages per year of formula service credit,
Coordinated Member Basic Member
Each year of service .5 percent 1.0 percent
during first ten per year per year
Each year of service .75 percent 1.25 percent
thereafter per year per year, and
(3) The benefits provided in section 354.62, subdivision 5.
(b) This paragraph applies to a person who first became a
member of the fund before July 1, 1989, but whose annuity
amount, when calculated under this paragraph, is higher than it
is when calculated under paragraph (a). The benefits provided
in this paragraph are the sum of the benefits provided by the
following:
(1) the benefits provided in subdivision 6, clause (4), for
formula service credit before the effective date of the original
election of this subdivision and subsequent to June 30, 1978,
unless the member elects continued participation in the variable
program pursuant to Minnesota Statutes 1984, section 354.621;
(2) the benefits for service credit subsequent to the
effective date of the formula and variable program but before
July 1, 1978, and the benefits for service credit subsequent to
June 30, 1978, if the member elects continued participation in
the variable program pursuant to Minnesota Statutes 1984,
section 354.621, shall be the average salary as defined in
subdivision 6, clause (1), of any member multiplied by 1.25
percent for each year of service for a basic member and by 0.75
percent for each year of service for a coordinated member; and
(3) the benefits provided in section 354.62, subdivision 5.
Sec. 60. Minnesota Statutes 1988, section 354.45,
subdivision 1, is amended to read:
Subdivision 1. [OPTIONAL ANNUITY FORMS.] The retirement
board shall establish optional annuities at retirement which
shall take the form of an annuity payable for a period certain
and for life thereafter or the form of a joint and survivor
annuity. The board shall also establish an optional annuity
which shall take the form of a guaranteed refund annuity paying
the annuitant a fixed amount for life with the guarantee that in
the event of death the balance of the accumulated deductions and
interest accrued to the date of retirement will be paid to the
designated beneficiary. Except as provided in subdivision 1a,
any optional annuity forms shall be actuarially equivalent to
the normal forms provided in section 354.44. In establishing
these optional annuity forms, the board shall obtain the written
recommendation of the commission-retained actuary. The
recommendations shall be a part of the permanent records of the
board.
Sec. 61. Minnesota Statutes 1988, section 354.45, is
amended by adding a subdivision to read:
Subd. 1a. [BOUNCE-BACK ANNUITY.] (a) If a former member or
disabilitant selects a joint and survivor annuity option under
subdivision 1, the former member or disabilitant must receive a
normal single-life annuity if the designated optional annuity
beneficiary dies before the former member or disabilitant.
Under this option, no reduction may be made in the person's
annuity to provide for restoration of the normal single-life
annuity in the event of the death of the designated optional
annuity beneficiary.
(b) A former member or disabilitant who selected an
optional joint and survivor annuity before July 1, 1989, but did
not choose an option that provides that the normal single-life
annuity is payable to the former member or the disabilitant if
the designated optional annuity beneficiary dies first, is
eligible for restoration of the normal single-life annuity if
the designated optional annuity beneficiary dies first, without
further actuarial reduction of the person's annuity. A former
member or disabilitant who selected an optional joint and
survivor annuity, but whose designated optional annuity
beneficiary died before July 1, 1989, shall receive a normal
single-life annuity after that date, but shall not receive
retroactive payments for periods before that date.
Sec. 62. Minnesota Statutes 1988, section 354.46,
subdivision 2, is amended to read:
Subd. 2. [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY
BENEFIT.] The surviving spouse of any member or former member
who has attained the age of at least 50 years and has credit for
at least five three years of allowable service or who has credit
for at least 30 years of allowable service irrespective of age
shall be entitled to joint and survivor annuity coverage in the
event of death of the member prior to retirement. If the
surviving spouse does not elect to receive a surviving spouse
benefit provided pursuant to subdivision 1, if applicable, or
does not elect to receive a refund of accumulated member
contributions provided pursuant to section 354.47, subdivision
1, or 354.62, subdivision 5, clause (3), whichever is
applicable, the surviving spouse shall be entitled to receive,
upon written application on a form prescribed by the executive
director, a benefit equal to the second portion of a 100 percent
joint and survivor annuity as provided pursuant to section
354.45 and computed pursuant to section 354.44, subdivision 2, 6
or 7, whichever is applicable. 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 354.44,
subdivisions 6 and 7, and 354.60 apply to a deferred annuity
payable under this section. If the member was a participant in
the variable annuity division, the applicable portion of the
benefit shall be computed pursuant to section 354.62,
subdivision 5, clause (1). The benefit shall be payable for
life.
Sec. 63. Minnesota Statutes 1988, section 354.47,
subdivision 1, is amended to read:
Subdivision 1. [DEATH BEFORE RETIREMENT.] (1) If a member
dies before retirement and is covered pursuant to the provisions
of section 354.44, subdivision 2, and neither an optional
annuity, nor a reversionary annuity, nor a benefit pursuant to
section 354.46, subdivision 1 is payable to the survivors if the
member was a basic member, the surviving spouse, or if there is
no surviving spouse, the designated beneficiary shall be
entitled to an amount equal to the member's accumulated
deductions with interest credited to the account of the member
to the date of death.
(2) If a member dies before retirement and is covered
pursuant to the provisions of section 354.44, subdivisions 6 and
7, and neither an optional annuity, nor reversionary annuity,
nor the benefit described in section 354.46, subdivision 1 is
payable to the survivors if the member was a basic member, the
surviving spouse, or if there is no surviving spouse, the
designated beneficiary shall be entitled to an amount equal to
the member's accumulated deductions credited to the account of
the member as of June 30, 1957 and from July 1, 1957 to the date
of death the member's accumulated deductions plus interest at
the rate of five six percent per annum compounded annually.
(3) The amounts payable in clause (1) or (2) are in
addition to the amount payable in section 354.62, subdivision 5,
for the member's variable annuity account.
Sec. 64. Minnesota Statutes 1988, section 354.48,
subdivision 1, is amended to read:
Subdivision 1. [AGE, SERVICE AND SALARY REQUIREMENTS.] Any
member who became totally and permanently disabled after at
least five three years of allowable service shall be entitled to
a disability benefit in an amount provided in subdivision 3. If
such disabled person's teaching service has terminated at any
time, at least three two of the required five three years of
allowable service must have been rendered after last becoming a
member. Any member whose average salary is less than $75 per
month shall not be entitled to disability benefits.
Sec. 65. Minnesota Statutes 1988, section 354.48,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF BENEFITS.] (1) The amount of the
disability benefit granted to members covered under section
354.44, subdivision 2, clauses (1) and (2), is an amount equal
to double the annuity which could be purchased by the member's
accumulated deductions plus interest on the amount computed as
though the teacher were at normal retirement age 65 at the time
the benefit begins to accrue and in accordance with the law in
effect when the disability application is received. Any member
who applies for a disability benefit after June 30, 1974, and
who failed to make an election pursuant to Minnesota Statutes
1971, section 354.145, shall have the disability benefit
computed under this clause or clause (2), whichever is larger.
The benefit granted shall be determined by the following:
(a) the amount of the accumulated deductions;
(b) interest actually earned on these accumulated
deductions to the date the benefit begins to accrue;
(c) interest for the years from the date the benefit begins
to accrue to the date the member attains normal retirement age
65 at the rate of three percent;
(d) annuity purchase rates based on an appropriate annuity
table of mortality established by the board as provided in
section 354.07, subdivision 1, and using the applicable
postretirement interest rate assumption specified in section
356.215, subdivision 4d.
In addition, a supplementary monthly benefit shall be paid
to basic members only in accordance with the following table:
Age When Benefit Supplementary
Begins to Accrue Benefit
Under Age 56 $50
56 45
57 40
58 35
59 30
60 25
61 20
62 15
63 10
64 5
(2) The disability benefit granted to members covered under
section 354.44, subdivision 6 or 7 shall be computed in the same
manner as the annuity provided in section 354.44, subdivision 6
or 7 of that section, whichever is applicable. The disability
benefit shall be the formula annuity without the reduction for
each month the member is under normal retirement age 65 when the
benefit begins to accrue.
(3) For the purposes of computing a retirement annuity when
the member becomes eligible, the amounts paid for disability
benefits shall not be deducted from the individual member's
accumulated deductions. If the disability benefits provided in
this subdivision exceed the monthly average salary of the
disabled member, the disability benefits shall be reduced to an
amount equal to the disabled member's average salary.
Sec. 66. Minnesota Statutes 1988, section 354.48,
subdivision 10, is amended to read:
Subd. 10. [RETIREMENT STATUS AT NORMAL RETIREMENT AGE 65.]
No person shall be entitled to receive both a disability benefit
and a retirement annuity provided by this chapter. The
disability benefit paid to a person hereunder shall terminate at
the end of the month in which the person attains the normal
retirement age of 65 years. If the person is still totally and
permanently disabled at the beginning of the month next
following the month in which the person attains the normal
retirement age of 65 years, the person shall be deemed to be on
retirement status and, if the person had elected an optional
annuity pursuant to subdivision 3a, 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 3a, may at the option of the person
elect to receive either a straight life retirement annuity
computed pursuant to section 354.44 or a straight life
retirement annuity equal to the disability benefit paid prior to
the date on which the person attained the age of 65 years,
whichever amount is greater, or elect to receive an optional
annuity as provided in section 354.45, subdivision 1. Election
of an optional annuity shall be made prior to the person
attaining the normal retirement age of 65 years. If an optional
annuity is elected, the election shall be effective on the date
on which the person attains the normal retirement age of 65
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 that age of 65 years.
Sec. 67. Minnesota Statutes 1988, section 354.49,
subdivision 2, is amended to read:
Subd. 2. Except as provided in section 354.44, subdivision
1, any person who ceases to be a member by reason of termination
of teaching service, shall receive a refund in an amount equal
to the accumulated deductions credited to the account as of June
30, 1957, and after July 1, 1957, the accumulated deductions
with interest at the rate of five six percent per annum
compounded annually plus any variable annuity account
accumulations payable pursuant to section 354.62, subdivision 5,
clause (4). For the purpose of this subdivision, interest shall
be computed on fiscal year end balances to the first day of the
month in which the refund is issued.
Sec. 68. Minnesota Statutes 1988, section 354.49,
subdivision 3, is amended to read:
Subd. 3. Any person who has attained the normal retirement
age of at least 65 with less than five three years of credited
allowable service shall be entitled to receive a refund in an
amount equal to the person's accumulated deductions plus
interest in lieu of a proportionate annuity pursuant to section
356.32 except those covered under the provisions of section
354.44, subdivision 6 or 7 in which case the refund shall be an
amount equal to the accumulated deductions credited to the
person's account as of June 30, 1957, and after July 1, 1957,
the accumulated deductions plus interest at the rate of five six
percent compounded annually.
Sec. 69. Minnesota Statutes 1988, section 354.55,
subdivision 11, is amended to read:
Subd. 11. [DEFERRED ANNUITY; AUGMENTATION.] 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 in this subdivision. The required
reserves related to that portion of the annuity which had
accrued when 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
compounded annually commencing July 1, 1971, until January 1,
1981, and three percent compounded annually thereafter until
January 1 of the year following the year in which the former
member attains age 55. From that date to the effective date of
retirement, the rate is five percent compounded annually. 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 fiscal year or more consecutive fiscal years and then
resumes teaching service, the formula percentages used from the
date of the resumption of teaching service shall be those
applicable to new members. The mortality table and interest
assumption used to compute the annuity shall be the applicable
mortality table established by the board under section 354.07,
subdivision 1, and the interest rate assumption under section
356.215 in effect when the member retires. A period of
uninterrupted service for the purposes of this subdivision means
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 under this subdivision
be less than the amount of annuity payable pursuant to section
354.44, subdivisions 6 and 7.
The requirements and provisions for retirement before
normal retirement age 65 contained in section 354.44,
subdivision 6, clause (2) (3) or (5), 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. 70. Minnesota Statutes 1988, section 354.60, is
amended to read:
354.60 [SERVICE IN OTHER PUBLIC RETIREMENT FUNDS; ANNUITY.]
Any person who has been a member of the Minnesota state
retirement system or the public employees retirement association
including the public employees retirement association police and
fire fund or the teachers retirement association or the
Minnesota state patrol retirement association, or any other
public employee retirement system in the state of Minnesota
having a like provision but excluding all other funds providing
benefits for police officers or firefighters shall be entitled
when qualified to an annuity from each fund if the person's
total allowable service in all three funds or in any two of
these funds totals five three or more years, provided no portion
of the allowable service upon which the retirement annuity from
one fund is based is again used in the computation for benefits
from another fund and provided further that the person has not
taken a refund from any one of these three funds since the
person's membership in that association has terminated. The
annuity from each fund shall be determined by the appropriate
provisions of the law except that the requirement that an
annuitant have at least five three years' membership service or
five three years of allowable service in the respective
association shall not apply for the purposes of this section
provided the combined service in two or more of these funds
equals five three or more years.
Sec. 71. Minnesota Statutes 1988, section 354A.011, is
amended by adding a subdivision to read:
Subd. 15a. [NORMAL RETIREMENT AGE.] "Normal retirement age"
means age 65 for a person who first became a member of the
coordinated program of the Minneapolis or St. Paul teachers
retirement fund association or the new law coordinated program
of the Duluth teachers retirement fund association before July
1, 1989. For a person who first became a member of the
coordinated program of the Minneapolis or St. Paul teachers
retirement fund association or the new law coordinated program
of the Duluth teachers retirement fund association after June
30, 1989, normal retirement age means the higher of age 65 or
retirement age, as defined in United States Code, title 42,
section 416(l), as amended. For a person who is a member of the
basic program of the Minneapolis or St. Paul teachers retirement
fund association or the old law coordinated program of the
Duluth teachers retirement fund association, normal retirement
age means the age at which a teacher becomes eligible for a
normal retirement annuity computed upon meeting the age and
service requirements specified in the applicable provisions of
the articles of incorporation or bylaws of the respective
teachers retirement fund association.
Sec. 72. Minnesota Statutes 1988, section 354A.011,
subdivision 20, is amended to read:
Subd. 20. [REDUCED RETIREMENT ANNUITY.] "Reduced
retirement annuity" means for a coordinated member the
retirement annuity computed pursuant to section 354A.31,
subdivision 4, reduced pursuant to section 354A.31, subdivision
6 or 7, and paid or payable to a member upon meeting the minimum
age and service requirements specified in section 354A.31,
subdivision 1, but prior to meeting the age and service
requirements specified in section 354A.31, subdivision 5, and
for a basic member the retirement annuity computed pursuant to
and paid or payable to a member upon meeting the minimum age and
service requirements specified in but prior to meeting the age
and service requirements for a normal retirement annuity
specified in the applicable provisions of the articles of
incorporation or bylaws of the respective teachers retirement
fund association.
Sec. 73. Minnesota Statutes 1988, section 354A.21, is
amended to read:
354A.21 [PROPORTIONATE ANNUITY.]
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 normal 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. 74. Minnesota Statutes 1988, section 354A.31,
subdivision 1, is amended to read:
Subdivision 1. [AGE AND SERVICE REQUIREMENTS.] Any
coordinated member or former coordinated member who has ceased
to render teaching service for the school district in which the
teachers retirement fund association exists and who has either
attained the age of at least 55 years with not less than five
three years of allowable service credit or received credit for
not less than 30 years of allowable service regardless of age,
shall be entitled upon written application to a retirement
annuity.
Sec. 75. Minnesota Statutes 1988, section 354A.31,
subdivision 4, is amended to read:
Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT
ANNUITY.] (a) The normal coordinated retirement annuity shall be
an amount equal to a retiring coordinated member's average
salary multiplied by the retirement annuity formula percentage.
Average salary for purposes of this section shall mean an amount
equal to the average salary upon which contributions were made
for the highest five successive years of service credit, but
which shall not in any event include any more than the
equivalent of 60 monthly salary payments. Average salary must
be based upon all years of service credit if this service credit
is less than five years.
(b) This paragraph, in conjunction with subdivision 6,
applies to a person who first became a member before July 1,
1989, unless paragraph (c), in conjunction with subdivision 7,
produces a higher annuity amount, in which case paragraph (c)
will apply. The retirement annuity formula percentage for
purposes of this section shall mean paragraph is one percent per
year for each year of coordinated service for the first ten
years and 1-1/2 percent for each year of coordinated service
thereafter.
(c) This paragraph applies to a person who first becomes a
member after June 30, 1989, and to any other member whose
annuity amount, when calculated under this paragraph and in
conjunction with subdivision 7 is higher than it is when
calculated under paragraph (b), in conjunction with the
provisions of subdivision 6. The retirement annuity formula
percentage for purposes of this paragraph is 1-1/2 percent for
each year of coordinated service.
Sec. 76. Minnesota Statutes 1988, section 354A.31,
subdivision 5, is amended to read:
Subd. 5. [UNREDUCED NORMAL RETIREMENT ANNUITY.] Upon
retirement at normal retirement age 65 with at least five three
years of service credit or at age 62 with at least 30 years of
service credit, a coordinated member shall be entitled to a
normal retirement annuity calculated pursuant to subdivision 4.
Sec. 77. Minnesota Statutes 1988, section 354A.31,
subdivision 6, is amended to read:
Subd. 6. [REDUCED RETIREMENT ANNUITY.] This subdivision
applies only to a person who first became a coordinated member
before July 1, 1989, and whose annuity is higher when calculated
using the retirement annuity formula percentage in subdivision
(4), paragraph (b), in conjunction with this subdivision than
when calculated under subdivision 4, paragraph (c), in
conjunction with subdivision 7.
(a) Upon retirement at an age prior to normal retirement
age 65 with five three years of service credit or prior to age
62 with at least 30 years of service credit, a coordinated
member shall be entitled to a retirement annuity in an amount
equal to the normal retirement annuity calculated using the
retirement annuity formula percentage in subdivision (4),
paragraph (b), reduced by one-half one-quarter of one percent
for each month that the coordinated member is under the normal
retirement age of 65 if the coordinated member has less than 30
years of service credit or is under the age of 62 if the
coordinated member has at least 30 years of service credit but
is over the age of 59, and reduced by one-fourth of one percent
for each month that the coordinated member is under the age of
60.
(b) Any coordinated member whose attained age plus credited
allowable service totals 90 years is entitled, upon application,
to a retirement annuity in an amount equal to the normal
retirement annuity calculated using the retirement annuity
formula percentage in subdivision (4), paragraph (b), without
any reduction by reason of early retirement.
Sec. 78. Minnesota Statutes 1988, section 354A.31, is
amended by adding a subdivision to read:
Subd. 7. [ACTUARIAL REDUCTION FOR EARLY RETIREMENT.] This
subdivision applies to a person who first becomes a coordinated
member after June 30, 1989, and to any other coordinated member
whose annuity is higher when calculated using the retirement
annuity formula percentage in subdivision 4, paragraph (c), in
conjunction with this subdivision than when calculated under
subdivision 4, paragraph (b), in conjunction with subdivision
6. A coordinated member who retires before the full benefit age
shall be paid the retirement annuity calculated using the
retirement annuity formula percentage in subdivision 4,
paragraph (c), reduced so that the reduced annuity is the
actuarial equivalent of the annuity that would be payable to the
member if the member deferred receipt of the annuity and the
annuity amount were augmented at an annual rate of three percent
compounded annually from the day the annuity begins to accrue
until the normal retirement age.
Sec. 79. Minnesota Statutes 1988, section 354A.32,
subdivision 1, is amended to read:
Subdivision 1. [OPTIONAL FORMS GENERALLY.] The boards of
the Minneapolis and the St. Paul teachers retirement fund
associations shall each establish for the coordinated program
and the board of the Duluth teachers retirement fund association
shall establish for the new law coordinated program an optional
retirement annuity which shall take the form of a joint and
survivor annuity. Each board may also in its discretion
establish an optional annuity which shall take the form of an
annuity payable for a period certain and for life thereafter.
Each board shall also establish an optional retirement annuity
which shall take the form of a guarantee that in the event of
death the balance of the accumulated deductions shall be paid to
a designated beneficiary. Except as provided in subdivision 1a,
optional annuity forms shall be the actuarial equivalent of the
normal forms provided in section 354A.31. In establishing these
optional annuity forms, the board shall obtain the written
recommendation of the commission-retained actuary. The
recommendation shall be a part of the permanent records of the
board.
Sec. 80. Minnesota Statutes 1988, section 354A.32, is
amended by adding a subdivision to read:
Subd. 1a. [BOUNCE-BACK ANNUITY.] (a) If a former
coordinated member or disabilitant has selected a joint and
survivor annuity option under subdivision 1, the former member
or disabilitant must receive a normal single-life annuity if the
designated optional annuity beneficiary dies before the former
member or disabilitant. Under this option, no reduction may be
made in the person's annuity to provide for restoration of the
normal single-life annuity in the event of the death of the
designated optional annuity beneficiary.
(b) A former coordinated member or disabilitant who
selected an optional joint and survivor annuity before July 1,
1989, but did not choose an option that provides that the normal
single-life annuity is payable to the former member or the
disabilitant if the designated optional annuity beneficiary dies
first, is eligible for restoration of the normal single-life
annuity if the designated optional annuity beneficiary dies
first, without further actuarial reduction of the person's
annuity. A former member or disabilitant who selected an
optional joint and survivor annuity, but whose designated
optional annuity beneficiary died before July 1, 1989, shall
receive a normal single-life annuity after that date, but shall
not receive retroactive payments for periods before that date.
(c) A former coordinated member or disabilitant who took a
further actuarial reduction to elect an optional joint and
survivor annuity that provides that the normal annuity is
payable to the former member or disabilitant if the designated
optional beneficiary died before July 1, 1989, shall have the
annuity increased as of July 1, 1989, to the amount the person
would have received if, at the time of retirement or disability,
the person had selected only optional survivor coverage that
would not have provided for restoration of the normal annuity
upon the death of the designated optional annuity beneficiary.
Any annuity or benefit increase under this paragraph is
effective only for payments made after June 30, 1989, and is not
retroactive for payments made before July 1, 1989.
Sec. 81. Minnesota Statutes 1988, section 354A.35,
subdivision 1, is amended to read:
Subdivision 1. [DEATH BEFORE RETIREMENT; REFUND.] If a
coordinated member or former coordinated member dies prior to
retirement or prior to the receipt of any retirement annuity or
other benefit payment which is or may be payable and a surviving
spouse optional annuity is not payable pursuant to subdivision
2, a refund shall be paid to the person's surviving spouse, or
if there is none, to the person's designated beneficiary, or if
there is none, to the legal representative of the person's
estate. The refund shall be in an amount equal to the person's
accumulated contributions plus interest at the rate of five six
percent per annum compounded annually.
Sec. 82. Minnesota Statutes 1988, section 354A.35,
subdivision 2, is amended to read:
Subd. 2. [DEATH WHILE ELIGIBLE TO RETIRE; SURVIVING SPOUSE
OPTIONAL ANNUITY.] The surviving spouse of any coordinated
member who has attained the age of at least 50 years and has
credit for at least five three years of service or has credit
for at least 30 years of service regardless of age shall be
entitled to joint and survivor annuity coverage in the event of
death of the member prior to retirement. 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. The
member's surviving spouse shall be paid a joint and survivor
annuity as provided in section 354A.32 and computed pursuant to
section 354A.31. Sections 354A.37, subdivision 2, and 354A.39
apply to a deferred annuity payable under this section. The
benefits shall be payable for life.
Sec. 83. Minnesota Statutes 1988, section 354A.36,
subdivision 1, is amended to read:
Subdivision 1. [MINIMUM AGE, SERVICE AND SALARY
REQUIREMENTS.] Any coordinated member who has at least five
three years of allowable service credit, has an average salary
of at least $75 per month and has become totally and permanently
disabled shall be entitled to a disability benefit. If the
disabled coordinated member's allowable service credit has not
been continuous, at least three two years of the required
allowable service shall be required to have been rendered
subsequent to the last interruption in service.
Sec. 84. Minnesota Statutes 1988, section 354A.36,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF DISABILITY BENEFIT.] The
coordinated permanent disability benefit shall be an amount
equal to the normal coordinated retirement annuity computed
pursuant to section 354A.31, subdivision 4, based on allowable
service credited to the date of disability but without any
reduction for the commencement of the benefit prior to the
attainment of normal retirement age 65 or age 62 with at least
30 years of service credit as specified in section 354A.31,
subdivision 6. The disabled coordinated member shall not be
entitled to elect an optional annuity form pursuant to section
354A.32 prior to attaining normal retirement age 65 as provided
in subdivision 10.
Sec. 85. Minnesota Statutes 1988, section 354A.36,
subdivision 10, is amended to read:
Subd. 10. [RETIREMENT STATUS UPON ATTAINING NORMAL
RETIREMENT AGE 65.] No person shall be entitled to receive both
a disability benefit under this section and a retirement annuity
under section 354A.31. If a disability benefit recipient
remains totally and permanently disabled upon attaining normal
retirement age 65, the disability benefit shall terminate and
the former disability benefit recipient shall be deemed to be on
retirement status. If the former disability benefit recipient
had elected an optional annuity pursuant to subdivision 3a, the
recipient shall receive an annuity in accordance with the terms
of the optional annuity previously elected, or if the recipient
had not elected an optional annuity pursuant to subdivision 3a,
the recipient shall be entitled either to receive a retirement
annuity in an amount equal to the greater of either a single
life retirement annuity calculated pursuant to section 354A.31
or the disability benefit paid to the recipient immediately
prior to the recipient's attaining normal retirement age 65 or
elect either a single life retirement annuity as provided in
this section or an actuarial equivalent optional form retirement
annuity as provided in section 354A.32. Election of an optional
annuity shall be made prior to the person attaining the normal
retirement age of 65 years. If an optional annuity is elected,
the election shall be effective on the date on which the person
attains the normal retirement age of 65 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 normal
retirement age of 65 years.
Sec. 86. Minnesota Statutes 1988, section 354A.37,
subdivision 2, is amended to read:
Subd. 2. [ELIGIBILITY FOR DEFERRED RETIREMENT ANNUITY.]
Any coordinated member who ceases to render teaching services
for the school district in which the teachers retirement fund
association is located, with sufficient allowable service credit
to meet the minimum service requirements specified in section
354A.31, subdivision 1, shall be entitled to a deferred
retirement annuity in lieu of a refund pursuant to subdivision
1. The deferred retirement annuity shall be computed pursuant
to section 354A.31 and it shall be augmented as provided in this
subdivision. The deferred annuity shall commence upon
application after the person on deferred status attains at least
the minimum age specified in section 354A.31, subdivision 1.
The monthly annuity amount that had accrued when the member
ceased to render teaching service must be augmented 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 is no augmentation if this period is less
than three months. The rate of augmentation is three percent
compounded annually until January 1 of the year following the
year in which the former member attains age 55, and five percent
compounded annually after that date to the effective date of
retirement. If a person has more than one period of
uninterrupted service, a separate average salary determined
under section 354A.31 must be used for each period, and the
monthly annuity amount related to each period must be augmented
as provided in this subdivision. The sum of the augmented
monthly annuity amounts determines the total deferred annuity
payable. 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 the
fund. If a person does not render teaching services in any one
fiscal year or more consecutive fiscal years and then resumes
teaching service, the formula percentages used from the date of
resumption of teaching service are those applicable to new
members. The mortality table and interest assumption used to
compute the annuity are the table established by the fund to
compute other annuities, and the interest assumption under
section 356.215 in effect when the member retires. A period of
uninterrupted service for the purpose of this subdivision means
a period of covered teaching service during which the member has
not been separated from active service for more than one fiscal
year.
The augmentation provided by this subdivision applies to
the benefit provided in section 354A.35, subdivision 2. The
augmentation provided by this subdivision does not apply to any
period in which a person is on an approved leave of absence from
an employer unit.
Sec. 87. Minnesota Statutes 1988, section 354A.37,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF REFUND AMOUNT.] A former
coordinated member who qualifies for a refund pursuant to
subdivision 1 shall receive a refund equal to the amount of the
former coordinated member's accumulated contributions with
interest at the rate of five six percent per annum compounded
annually.
Sec. 88. Minnesota Statutes 1988, section 354A.37,
subdivision 4, is amended to read:
Subd. 4. [CERTAIN REFUNDS AT NORMAL RETIREMENT AGE 65.]
Any coordinated member who has attained the normal retirement
age of at least 65 with less than ten years of allowable service
credit and has terminated active teaching service shall be
entitled to a refund in lieu of a proportionate annuity pursuant
to section 356.32. The refund shall be equal to the coordinated
member's accumulated employee contributions plus interest at the
rate of five six percent compounded annually.
Sec. 89. Minnesota Statutes 1988, section 354A.39, is
amended to read:
354A.39 [SERVICE IN OTHER PUBLIC RETIREMENT FUNDS;
ANNUITY.]
Any person who has been a member of the Minnesota state
retirement system, the public employees retirement association
including the public employees retirement association police and
fire fund, the teachers retirement association, the Minnesota
state patrol retirement association, the legislators retirement
plan, the constitutional officers retirement plan, the
Minneapolis employees retirement fund, the Duluth teachers
retirement fund association new law coordinated program, the
Minneapolis teachers retirement fund association coordinated
program, the St. Paul teachers retirement fund association
coordinated program, or any other public employee retirement
system in the state of Minnesota having a like provision but
excluding all other funds providing retirement benefits for
police officers or firefighters shall be entitled when qualified
to an annuity from each fund if the person's total allowable
service in all of the funds or in any two or more of the funds
totals five three or more years, provided that no portion of the
allowable service upon which the retirement annuity from one
fund is based is used again in the computation for a retirement
annuity from another fund and provided further that the person
has not taken a refund from any of funds or associations since
the person's membership in the fund or association has
terminated. The annuity from each fund or association shall be
determined by the appropriate provisions of the law governing
each fund or association, except that the requirement that a
person must have at least five three years of allowable service
in the respective fund or association shall not apply for the
purposes of this section, provided that the aggregate service in
two or more of these funds equals five three or more years.
Sec. 90. Minnesota Statutes 1988, section 356.215,
subdivision 4d, is amended to read:
Subd. 4d. [INTEREST AND SALARY ASSUMPTIONS.] For funds
governed by chapters 3A, 352, 352B, 352C, 353, 353C, 354 other
than the variable annuity fund governed by section 354.62, and
490, the actuarial valuation shall use a preretirement interest
assumption of eight 8.5 percent, a postretirement interest
assumption of five percent, and an assumption that in each
future year the salary on which a retirement or other benefit is
based is 1.065 multiplied by the salary for the preceding year.
For funds governed by chapter 354A, the actuarial valuation
shall use preretirement and postretirement assumptions of
eight 8.5 percent and an assumption that in each future year the
salary on which a retirement or other benefit is based is 1.065
multiplied by the salary for the preceding year, but the
actuarial valuation shall reflect the payment of postretirement
adjustments to retirees shall be based on the methods specified
in the bylaws of the fund as approved by the legislature. For
all other funds, the actuarial valuation shall use a
preretirement interest assumption of five percent, a
postretirement interest assumption of five percent, and an
assumption that in each future year the salary on which a
retirement or other benefit is based is 1.035 multiplied by the
salary for the preceding year.
For funds governed by chapters 3A, 352C, and 490, the
actuarial valuation shall use a preretirement interest
assumption of eight 8.5 percent, a postretirement interest
assumption of five percent, and an assumption that in each
future year in which the salary amount payable is not
determinable from section 3.099, 15A.081, subdivision 6, or
15A.083, subdivision 1, whichever is applicable, or from
applicable compensation council recommendations under section
15A.082, the salary on which a retirement or other benefit is
based is 1.065 multiplied by the known or computed salary for
the preceding year, whichever is applicable.
Sec. 91. Minnesota Statutes 1988, section 356.215,
subdivision 4g, is amended to read:
Subd. 4g. [AMORTIZATION CONTRIBUTIONS.] In addition to the
exhibit indicating the level normal cost, the actuarial
valuation shall contain an exhibit indicating the additional
annual contribution which would be required to amortize the
unfunded actuarial accrued liability. For funds governed by
chapters 3A, 352, 352B, 352C, 353, 353C, 354, 354A, and 490, the
additional contribution shall be calculated on a level
percentage of covered payroll basis by the established date for
full funding which is in effect when the valuation is prepared.
The level percent additional contribution shall be calculated
assuming annual payroll growth of 6.5 percent. For all other
funds, the additional annual contribution shall be calculated on
a level annual dollar amount basis.
If, for any fund other than the Minneapolis employees
retirement fund, after the first actuarial valuation date
occurring after June 1, 1979 1989, there has not been a change
in the actuarial assumptions used for calculating the actuarial
accrued liability of the fund, a change in the benefit plan
governing annuities and benefits payable from the fund, a change
in the actuarial cost method used in calculating the actuarial
accrued liability of all or a portion of the fund, or a
combination of the three, which change or changes by themselves
without inclusion of any other items of increase or decrease
produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding for
the first actuarial valuation made after June 1, 1979 1989, and
each successive actuarial valuation shall be the first actuarial
valuation date which occurs after June 1, 2009 2020.
If, for any fund or plan other than the Minneapolis
employees retirement fund, after the first actuarial valuation
date occurring after June 1, 1979 1989, there has been a change
in any or all of the actuarial assumptions used for calculating
the actuarial accrued liability of the fund, a change in the
benefit plan governing annuities and benefits payable from the
fund, a change in the actuarial cost method used in calculating
the actuarial accrued liability of all or a portion of the fund,
or a combination of the three, and the change or changes, by
themselves and without inclusion of any other items of increase
or decrease, produce a net increase in the unfunded actuarial
accrued liability in the fund, the established date for full
funding shall be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the fund
shall be determined in accordance with the plan provisions
governing annuities and retirement benefits and the actuarial
assumptions in effect before an applicable change;
(ii) the level annual dollar contribution or level
percentage, whichever is applicable, which is needed to amortize
the unfunded actuarial accrued liability amount determined
pursuant to subclause (i) by the established date for full
funding in effect prior to the change shall be calculated using
the interest assumption specified in subdivision 4d in effect
before the change;
(iii) the unfunded actuarial accrued liability of the fund
shall be determined in accordance with any new plan provisions
governing annuities and benefits payable from the fund and any
new actuarial assumptions and the remaining plan provisions
governing annuities and benefits payable from the fund and
actuarial assumptions in effect before the change;
(iv) the level annual dollar contribution or level
percentage, whichever is applicable, which is needed to amortize
the difference between the unfunded actuarial accrued liability
amount calculated pursuant to subclause (i) and the unfunded
actuarial accrued liability amount calculated pursuant to
subclause (iii) over a period of 30 years from the end of the
plan year in which the applicable change is effective shall be
calculated using the applicable interest assumption specified in
subdivision 4d in effect after any applicable change;
(v) the level annual dollar or level percentage
amortization contribution pursuant to subclause (iv) shall be
added to the level annual dollar amortization contribution or
level percentage calculated pursuant to subclause (ii);
(vi) the period in which the unfunded actuarial accrued
liability amount determined in subclause (iii) will be amortized
by the total level annual dollar or level percentage
amortization contribution computed pursuant to subclause (v)
shall be calculated using the interest assumption specified in
subdivision 4d in effect after any applicable change, rounded to
the nearest integral number of years, but which shall not exceed
a period of 30 years from the end of the plan year in which the
determination of the established date for full funding using the
procedure set forth in this clause is made and which shall not
be less than the period of years beginning in the plan year in
which the determination of the established date for full funding
using the procedure set forth in this clause is made and ending
by the date for full funding in effect before the change; and
(vii) the period determined pursuant to subclause (vi)
shall be added to the date as of which the actuarial valuation
was prepared and the date obtained shall be the new established
date for full funding.
For the Minneapolis employees retirement fund, the
established date for full funding shall be June 30, 2017.
Sec. 92. Minnesota Statutes 1988, section 356.30,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1)
Notwithstanding any provisions to the contrary of the laws
governing the funds enumerated in subdivision 3, a person who
has met the qualifications of clause (2) may elect to receive a
retirement annuity from each fund in which the person has at
least six months allowable service, based on the allowable
service in each fund, subject to the provisions of clause (3).
(2) A person may receive upon retirement, in lieu of any
augmentation of deferred annuities provided by laws governing
the funds enumerated in subdivision 3, a retirement annuity from
each fund in which the person has at least six months allowable
service if
(a) the person has allowable service totaling five or more
years an amount that allows the person to receive an annuity in
any two or more of the enumerated funds;
(b) the person has at least six months of allowable service
with the last such fund earned during the last period of
employment; and
(c) the person has not begun to receive an annuity from any
enumerated fund or the person has made application for benefits
from all funds within a six-month period.
(3) The retirement annuity from each fund shall be based
upon the allowable service in each fund, except that:
(a) The laws governing annuities shall be the law in effect
on the date of final termination from the last public service
under a covered fund.
(b) The "average salary" on which the annuity from each
covered fund in which the employee has credit in a formula plan
shall be based on the employee's highest five successive years
of covered salary during the entire service in covered funds.
(c) The formula percentages to be used by each fund shall
be those percentages prescribed by each fund's formula as
continued for the respective years of allowable service from one
fund to the next, recognizing all previous allowable service
with the other covered funds.
(d) Allowable service in all the funds shall be combined in
determining eligibility for and the application of each fund's
provisions in respect to actuarial reduction in the benefit
amount for retirement prior to normal retirement.
(e) The benefit amount payable for any allowable service
under a nonformula plan of a covered fund shall not be affected
but such service and covered salary shall be used in the above
calculation.
(f) This section shall not apply to any person whose final
termination from the last public service under a covered fund is
prior to May 1, 1975.
(g) For the purpose of computing benefits under this
section the formula percentages used by any covered fund shall
in no event exceed 2-1/2 percent per year of service for any
year of service or fraction thereof.
(h) Any period of time for which a person has credit in
more than one of the covered funds shall be used only once for
the purpose of determining total allowable service.
(i) If the period of duplicated service credit is more than
six months, or the person has credit for more than six months
with each of the funds, each fund shall apply its formula to a
prorated service credit for the period of duplicated service
based on a fraction of the salary on which deductions were paid
to that fund for the period divided by the total salary on which
deductions were paid to all funds for the period.
(j) If the period of duplicated service credit is less than
six months, or when added to other service credit with that fund
is less than six months, the service credit shall be ignored and
a refund of contributions made to the person in accord with that
fund's refund provisions.
Sec. 93. Minnesota Statutes 1988, section 356.32,
subdivision 1, is amended to read:
Subdivision 1. [PROPORTIONATE RETIREMENT ANNUITY.]
Notwithstanding any provision to the contrary of the laws
governing any of the retirement funds referred to in subdivision
2, any person who is an active member of any applicable fund,
who has credit for at least one year but less than ten years of
allowable service in one or more of the applicable funds, and
who terminates active service pursuant to a mandatory retirement
law or policy or at age 65 or older, or the normal retirement
age if this age is not age 65, for any reason shall be entitled
upon making written application on the form prescribed by
executive director or executive secretary of the fund to a
proportionate retirement annuity from each applicable fund in
which the person has allowable service credit. The
proportionate annuity shall be calculated under the applicable
laws governing annuities based upon allowable service credit at
the time of retirement and the person's average salary for the
highest five successive years of allowable service or the
average salary for the entire period of allowable service if
less than five years. Nothing in this section shall prevent the
imposition of the appropriate early retirement reduction of an
annuity which commences prior to normal retirement age.
Sec. 94. [FIRST CLASS CITY TEACHER FUNDS.]
In accordance with Minnesota Statutes, section 354A.12,
subdivision 4, approval is granted for the teachers retirement
fund associations in each of the cities of the first class to
amend their articles of incorporation or bylaws in the manner
specified in this section. The amendments apply only to basic
members in the Minneapolis teachers retirement fund association
and the St. Paul teachers retirement fund association, and to
old law coordinated program members in the Duluth teachers
retirement fund association.
(a) For purposes of this paragraph, the retirement formula
percentages are:
(1) for Minneapolis teachers retirement fund: 2.25 percent
for each year of service;
(2) for St. Paul teachers retirement fund: 2.0 percent for
each year of service; and
(3) for Duluth teachers retirement fund old coordinated
plan: 1.25 percent for each year of service.
A member whose age plus credited allowable service totals
90 years, is entitled upon termination of active service and
application, to a normal retirement annuity provided in the
articles and bylaws without any reduction in the amount of the
annuity by reason of early retirement unless the benefit in
paragraph (b) in conjunction with paragraph (c) produces a
higher annuity in which case, paragraph (b) applies. A member
who retires before the normal retirement age shall be provided a
normal retirement annuity provided in the articles and bylaws,
reduced by one-fourth of one percent for each month that the
employee is under normal retirement age at the time of
retirement unless the benefit in paragraph (b) in conjunction
with paragraph (c) produces a higher annuity, in which case
paragraph (b) applies. For the Minneapolis teachers retirement
association, this paragraph applies only to basic members with
less than 30 years of service who have attained age 55. For
Minneapolis teachers retirement fund basic members who were
first hired after July 1, 1977, and who have 30 or more years of
service, the early retirement penalty contained in the articles
and bylaws is repealed.
(b) This paragraph applies only to a member whose annuity,
when calculated under this paragraph in conjunction with
paragraph (c), is higher than when calculated under paragraph
(a). The average salary, as specified in the bylaws of St. Paul
teachers retirement fund association, the bylaws of Duluth
teachers retirement fund association, and the bylaws of
Minneapolis teachers retirement fund association, multiplied by
2.5 percent for each year of service for basic members and 1.5
percent for each year of service for old coordinated members of
Duluth teachers retirement fund association, shall determine the
amount of the retirement annuity to which a member is entitled.
(c) This paragraph applies only to a member whose annuity
under paragraph (b) in conjunction with this paragraph is higher
than when calculated under paragraph (a). A member who retires
under the formula annuity specified in paragraph (b) before the
normal retirement age defined in section 354A.011, shall be paid
the normal annuity provided in paragraph (b) reduced so that the
reduced annuity is the actuarial equivalent of the annuity that
would be payable to the employee if the employee deferred
receipt of the annuity and the annuity amount were augmented at
an annual rate of three percent compounded annually from the day
the annuity begins to accrue until the normal retirement age.
(d) The interest rate to be paid on refunds is six percent
per annum compounded annually.
(e) Any joint and survivor annuity option is subject to an
automatic bounce-back annuity as provided in section 354A.32,
subdivision 1a.
(f) A member who is eligible for a deferred retirement
annuity shall have the annuity augmented as provided in section
354A.37, subdivision 2.
(g) The first class city teachers retirement funds, may
provide optional annuity forms to its retirement program which
are the actuarial equivalent of its normal retirement annuity.
For all optional forms, the board shall obtain the written
recommendation of an approved actuary and the recommendation
shall be a part of the permanent records of the board.
Sec. 95. [356.82] [SAVINGS CLAUSE.]
The intent of the legislature in sections 352.01,
subdivision 25; 353.01, subdivision 35; 354.05, subdivision 38;
and 354A.011, subdivision 15a is to create a normal retirement
age for persons first covered by those sections after the
effective date of those sections that is the same as the
retirement age in the federal Social Security law, including
future amendments to that law. If a court determines that the
legislature may not incorporate by reference the future changes
in federal Social Security law, the legislature reserves the
right to amend the appropriate sections to make the normal
retirement conform to the retirement age in the federal Social
Security law. No person first covered by any of those sections
after the effective date of those sections has a right to a
normal retirement age that is less than the retirement age in
the federal Social Security law.
Sec. 96. [356.85] [REVIEW OF RULE OF 90.]
By September 1, 1993, the executive directors of the
teachers retirement association, the state retirement system,
and each teachers retirement fund association in a city of the
first class must calculate the number of employees who were
eligible to retire without any reduction in their annuity due to
early retirement because their attained age plus credited
allowable service totaled 90 years between the effective date of
sections 352.116; 354.44, subdivision 6; 354A.31, subdivision 6,
and 98 and June 30, 1993. The executive directors must also
calculate the number of these employees who did retire early and
who received an unreduced annuity because their attained age
plus credited allowable service totaled 90 years. The executive
directors must report the results of their calculation to the
executive director of the legislative commission on pensions and
retirement. If the calculation shows that number of employees
from all of the systems combined who did retire under the rule
of 90 is more than 45 percent of the number from all the systems
who were eligible to retire under the rule of 90, sections
352.116, subdivision 1, paragraph (b), section 354.44,
subdivision 6, clause (3)(iii), section 354A.31, subdivision 6,
paragraph (b), and any provision in the bylaws or articles of
incorporation of a teachers retirement fund association in the
city of the first class that permits unreduced retirement under
the rule of 90 are not effective after June 30, 1994. The
executive directors must make a similar combined calculation
before September 1, 1998 and September 1 every five years after
that, based on use of the rule of 90 during the four year period
ending on the most recent June 30. If any calculation shows
that the number of employees who retired under the rule of 90 is
more than 45 percent of the number eligible to retire under the
rule of 90, sections 352.116, subdivision 1, paragraph (b),
section 354.44, subdivision 6, clause (3)(iii), section 354A.31,
subdivision 6, paragraph (b), and any provision in the bylaws or
articles of incorporation of a teachers retirement fund
association in the city of the first class that permits
unreduced retirement under the rule of 90 are not effective
after the following June 30. The legislature reserves the right
to amend or repeal sections 352.116, subdivision 1, paragraph
(b), section 354.44, subdivision 6, clause (3)(iii), section
354A.31, subdivision 6, paragraph (b), and any provision in the
bylaws or articles of incorporation of a teachers retirement
fund association in the city of the first class that permits
unreduced retirement under the rule of 90, effective July 1,
1994 and July 1 every fifth year after 1994.
Sec. 97. [APPROPRIATION.]
Subdivision 1. [GENERAL FUND.] There is appropriated from
the general fund to the commissioner of finance $3,916,000 in
fiscal year 1990 and $4,123,000 in fiscal year 1991 for
allocation among state agencies and the University of Minnesota
to offset the costs of increases in the employer contribution
rate for the general plan of the Minnesota state retirement
system. Of these amounts, $800,000 in fiscal year 1990 and
$850,000 in fiscal year 1991 is for allocation among state
supported accounts at the University of Minnesota in proportion
to estimated salaries paid to members of the general plan of the
Minnesota state retirement system; $3,001,000 in fiscal year
1990 and $3,152,000 in fiscal year 1991 is for allocation among
state agencies in proportion to estimated salaries paid from the
state general fund to members of the general plan of the
Minnesota state retirement system; and $115,000 in fiscal year
1990 and $121,000 in fiscal year 1991 is for allocation to state
agencies in proportion to the estimated fiscal year 1989 salary
part of the cost of services purchased by the agencies with
state general fund monies from the following internal service
funds: computer services, plant management, printing, motor
pool, central stores, micrographics, telecommunications, general
services, and office equipment.
Subd. 2. [OTHER FUNDS.] Except as limited by the direct
appropriations from the state general fund made in this section,
the amounts necessary to pay the cost of increases in the
employer contribution rate for the general plan of the Minnesota
state retirement system, are appropriated from the various funds
in the state treasury from which salaries are paid, to the
commissioner of finance, for the fiscal years ending June 30,
1990 and June 30, 1991.
Sec. 98. [REPEALER.]
Minnesota Statutes 1988, section 354A.32, subdivision 2, is
repealed.
Sec. 99. [EFFECTIVE DATE.]
Sections 1 to 96 and 98 are effective May 16, 1989.
Sections 86 and 94, paragraph (f), are effective May 16, 1989,
and apply retroactively to a person who is eligible for a
deferred retirement annuity on that date, and whose retirement
annuity has not begun to accrue. The increased employee or
member and employer contribution rates are effective on the
first day of the first pay period occurring after July 1, 1989.
ARTICLE 14
PARTIAL POSTRETIREMENT ADJUSTMENTS
Section 1. Minnesota Statutes 1988, section 11A.18,
subdivision 9, is amended to read:
Subd. 9. [CALCULATION OF POSTRETIREMENT ADJUSTMENT.]
Annually, following June 30, the state board shall determine
whether a postretirement adjustment shall be is payable and
shall determine the amount of any postretirement
adjustment which shall be that is payable.
(1) The state board shall determine whether a
postretirement adjustment shall be is payable using the
following procedure:
(a) The state board shall determine the amount of
dividends, interest, accruals and realized capital gains or
losses applicable to the most recent fiscal year ending June 30;
(b) The amount of reserves required for the annuity or
benefit payable to an annuitant and benefit recipient of the
participating public pension plans or funds shall be determined
by the commission-retained actuary as of the current June 30.
An annuitant or benefit recipient who has been receiving an
annuity or benefit for at least one year 12 full months as of
the current June 30 shall be is eligible to receive a full
postretirement adjustment. An annuitant or benefit recipient
who has been receiving an annuity or benefit for at least one
full month, but less than 12 full months as of the current June
30, is eligible to receive a partial postretirement adjustment.
Each fund shall report separately the amount of the reserves for
those annuitants and benefit recipients who are eligible to
receive a full postretirement benefit adjustment and. This
amount is known as "eligible reserves." Each fund shall also
report separately the amount of the reserves for those
annuitants and benefit recipients who are not eligible to
receive a postretirement adjustment shall be reported
separately. This amount is known as "noneligible reserves."
For an annuitant or benefit recipient who is eligible to receive
a partial postretirement adjustment, each fund shall report
separately as additional "eligible reserves" an amount that
bears the same ratio to the total reserves required for the
annuitant or benefit recipient as the number of full months of
annuity or benefit receipt as of the current June 30 bears to 12
full months. The remainder of the annuitant's or benefit
recipient's reserves shall be separately reported as additional
"noneligible reserves." The amount of the "eligible" and
"noneligible" required reserves shall be certified to the board
by the commission-retained actuary as soon as is practical
following the current June 30;
(c) The state board shall determine the amount of
investment income required to equal five percent of the total
amount of the required reserves as of the preceding June 30
adjusted by five percent of each transfer in or transfer out
multiplied by the fraction of a year from the date of transfer
to the current June 30. This amount of required investment
income shall be subtracted from the actual amount of investment
income determined according to clause (1)(a), to determine the
amount of excess investment income. If this amount is positive,
then a postretirement adjustment may be paid.
(2) The state board shall determine the amount of any
postretirement adjustment which is payable using the following
procedure:
(a) The state board shall determine the amount of excess
investment income by the method indicated in clause (1);
(b) The total "eligible" required reserves as of the first
of January next following the end of the fiscal year for the
annuitants and benefit recipients eligible to receive the a full
or partial postretirement adjustment as determined by clause
(1)(b) shall be certified to the state board by the
commission-retained actuary. The total "eligible" required
reserves shall be determined by the commission-retained actuary
on the assumption that all annuitants and benefit recipients
eligible to receive the a full or partial postretirement
adjustment will be alive on the January 1 in question;
(c) If the state board determines that the book value of
the assets of the fund is less than an amount equal to the total
amount of the current June 30 required reserves, with the book
value and required reserves to be determined after the
adjustments provided for in subdivision 11, then the state board
shall allocate five percent of the excess investment income as
an asset of the fund. The excess investment income allocated as
an asset of the fund shall not exceed the difference between
book value and required reserves. The remaining amount shall be
termed available for distribution. The book value of assets on
any given date shall be the net assets at cost less the excess
investment income determined pursuant to clause (1)(c);
(d) The resulting total amount available for distribution
shall be increased by 2-1/2 percent, and the result shall be
stated as a percentage of the total amount of the required
reserves pursuant to clause (2)(b), and if the percentage is
equal to or greater than one percent, the amount shall be
certified to each participating public pension fund or plan as
the amount of the full postretirement adjustment amount. If the
percentage is less than one percent, no postretirement
adjustment shall be payable in that year and the amount
otherwise available for distribution shall be credited to a
separate reserve established for this purpose. The reserve
shall be invested in the same manner as all other assets of the
fund and shall be credited with any investment income as
specified in clause (1)(a). Amounts credited to the reserve
shall be utilized in determining a postretirement adjustment in
the subsequent year. The amount of any full postretirement
adjustment certified by the state board as payable to the
participating public pension plans or funds shall be carried to
five decimal places and stated as a percentage.
(e) A retirement annuity payable in the event of retirement
before becoming eligible for social security benefits as
provided in section 352.116, subdivision 3; 353.29, subdivision
6; or 354.35 must be treated as the sum of a period certain
retirement annuity and a life retirement annuity for the
purposes of any postretirement adjustment. The period certain
retirement annuity plus the life retirement annuity shall be the
annuity amount payable until age 62 or 65, whichever applies. A
postretirement adjustment granted on the period certain
retirement annuity must terminate when the period certain
retirement annuity terminates.
Sec. 2. Minnesota Statutes 1988, section 11A.18,
subdivision 10, is amended to read:
Subd. 10. [PAYMENT OF POSTRETIREMENT ADJUSTMENT.] Upon
receiving the certification of the amount of the full
postretirement adjustment from the state board, each
participating public pension fund or plan shall determine the
amount of the postretirement adjustment payable to each eligible
annuitant and benefit recipient. The dollar amount of the
postretirement adjustment payable to each annuitant or benefit
recipient shall be calculated by applying the certified
postretirement adjustment percentage to the amount of the
monthly annuity or benefit payable to each eligible annuitant or
benefit recipient eligible for a full adjustment.
The dollar amount of the partial postretirement adjustment
payable to each annuitant or benefit recipient eligible for a
partial adjustment shall be calculated by first determining a
partial percentage amount that bears the same ratio to the
certified full adjustment percentage amount as the number of
full months of annuity or benefit receipt as of the current June
30 bears to 12 full months. The partial percentage amount
determined shall then be applied to the amount of the monthly
annuity or benefit payable to each annuitant or benefit
recipient eligible to receive a partial postretirement
adjustment. The postretirement adjustment adjustments shall
commence to be paid on January 1 following the calculations
required pursuant to this section and shall thereafter be
included in the monthly annuity or benefit paid to the
recipient. Notwithstanding section 356.18, any adjustment
adjustments pursuant to this section shall be paid automatically
unless the intended recipient files a written notice with the
applicable participating public pension fund or plan requesting
that the adjustment not be paid.
Sec. 3. [EFFECTIVE DATES.]
Sections 1 and 2 are effective the day following final
enactment.
ARTICLE 15
PRE 1973 RETIREES
Section 1. [356.86] [POSTRETIREMENT ADJUSTMENT; LUMP SUM
PAYMENTS.]
Subdivision 1. [ENTITLEMENT.] A person who is receiving a
retirement annuity, a disability benefit or a surviving spouse's
annuity or benefit from a retirement fund specified in
subdivision 3, clauses (1) to (8) is entitled to receive a
postretirement adjustment from the applicable retirement fund in
the amount specified in subdivision 2, if the annuity or benefit
was computed under:
(1) the laws in effect before June 1, 1973, if the person
is receiving an annuity or benefit from the retirement fund
specified in subdivision 3, clause (4); or
(2) the laws in effect before July 1, 1973, if the person
is receiving an annuity or benefit from a retirement fund
specified in subdivision 3, clause (1), (2), (3), or (5); or
(3) the metropolitan transit commission-transit operating
division employees retirement fund plan document in effect on or
before December 31, 1977, if the person is receiving a
retirement annuity, a disability benefit or a surviving spouse's
annuity or benefit from the retirement fund specified in
subdivision 3, clause (5); or
(4) the laws in effect before May 1, 1974 and before any
adjustment under Laws 1987, chapter 372, article 3, if the
person is receiving an annuity or benefit from the retirement
fund specified in subdivision 3, clause (6); or
(5) the laws in effect before January 1, 1970, if the
person is receiving an annuity or benefit from the retirement
fund specified in subdivision 3, clause (7); or
(6) the laws in effect before June 30, 1971, if the person
is receiving an annuity or benefit from the retirement fund
specified in subdivision 3, clause (8).
Subd. 2. [AMOUNT OF POSTRETIREMENT ADJUSTMENT;
PAYMENT.] (a) For any person receiving an annuity or benefit on
November 30, 1989, and entitled to receive a postretirement
adjustment under subdivision 1, the postretirement adjustment is
a lump sum payment calculated under paragraph (b) or (c).
(b) For coordinated plan members the postretirement
adjustment in 1989 is $25 for each full year of allowable
service credited to the person by the respective retirement
fund. In 1990 and each following year the postretirement
adjustment is the amount payable in the preceding year increased
by the same percentage applied to regular annuities paid from
the postretirement fund or, for the retirement funds specified
in subdivision 3, clauses (6), (7), and (8), by the same
percentage applied under the articles of incorporation and
bylaws of these funds.
(c) For basic plan members the postretirement adjustment,
in 1989 is the greater of:
(1) $25 for each full year of allowable service credited to
the person by the respective retirement fund; or
(2) the difference between:
(i) the product of $400 times the number of full years of
allowable service credited to the person by the respective
retirement fund; and
(ii) the sum of the benefits payable to the person from any
Minnesota public employee pension plan, and cash benefits
payable to the person from the social security administration.
In 1990 and each following year each basic plan member
shall receive the amount received in the preceding year
increased by the same percentage applied to regular annuities
paid from the postretirement fund or, for the retirement funds
specified in subdivision 3, clauses (6), (7), and (8), by the
same percentage applied under the articles of incorporation and
bylaws of these funds.
(d) The postretirement adjustment provided for in this
section is payable for those persons receiving an annuity or
benefit on November 30, 1989, on December 1, 1989. In
subsequent years the adjustment must be paid on December 1,
unless the beneficiary is entitled to participate in an optional
benefit receipt schedule under subdivision 4. This section does
not authorize the payment of a postretirement adjustment to an
estate. Notwithstanding section 356.18, the postretirement
adjustment provided for in this section must be paid
automatically unless the intended recipient files a written
notice with the retirement fund requesting that the
postretirement adjustment not be paid.
Subd. 3. [COVERED RETIREMENT FUNDS.] The postretirement
adjustment provided in this section applies to the following
retirement funds:
(1) public employees retirement fund;
(2) public employees police and fire fund;
(3) teachers retirement fund;
(4) state patrol retirement fund;
(5) state employees retirement fund of the Minnesota state
retirement system;
(6) Minneapolis teachers retirement fund association
established under chapter 354A;
(7) St. Paul teachers retirement fund association,
established under chapter 354A; and
(8) Duluth teachers retirement fund association established
under chapter 354A.
Subd. 4. [OPTIONAL BENEFIT PAYMENT SCHEDULE.] Basic plan
benefit recipients receiving adjustments under subdivision (2),
clause (2)(c) and whose adjustment exceeds 20 percent of their
Minnesota plan benefit may elect to have the amount of the
benefit adjustment paid in equal monthly amounts instead of
receiving a benefit adjustment on December 1 of each year.
Selection of this option must be made by the recipient in
writing on forms prepared by the retirement association.
Subd. 5. [SOCIAL SECURITY INFORMATION.] To be eligible for
a benefit adjustment calculated under subdivision 2, clause
(2)(c), a person must authorize the social security
administration to release to the retirement association
information on the person's social security cash benefits.
Subd. 6. [REPORT.] By September 30, 1990, the retirement
funds listed in subdivision 3 shall report to the legislature
and the commissioner of finance on the number of benefit
recipients eligible for each type of adjustment established in
subdivision 2, the annual cost of each type of adjustment, and
the estimated actuarial liability associated with each.
Sec. 2. [POSTRETIREMENT ADJUSTMENT; LUMP SUM PAYMENTS;
MINNEAPOLIS EMPLOYEES RETIREMENT FUND.]
Subdivision 1. [ENTITLEMENT.] Any person who is receiving
either an annuity that was computed under the laws in effect
before March 5, 1974, or a "$2 bill and annuity" annuity from
the Minneapolis employees retirement fund is entitled to receive
a postretirement adjustment from the applicable retirement fund
in the amount specified in subdivision 2.
Subd. 2. [AMOUNT OF POSTRETIREMENT ADJUSTMENT;
PAYMENT.] For any person receiving an annuity or benefit on
November 30, 1989, or on November 30, 1990, and entitled to
receive a postretirement adjustment under subdivision 1, the
postretirement adjustment under subdivision 1, the
postretirement adjustment is a lump sum payment in an amount
equal to $25 during 1989 and $25 during 1990 for each full year
of allowable service credited to the person by the respective
retirement fund.
The postretirement adjustment provided in this section is
payable for those persons receiving an annuity or benefit on
November 30, 1989, on December 1, 1989, and for those persons
receiving an annuity or benefit on November 30, 1990, on
December 1, 1990. This section does not authorize the payment
of a postretirement adjustment to an estate. Notwithstanding
Minnesota Statutes, section 356.18, the postretirement
adjustment provided for in this section must be paid
automatically unless the intended recipient files a written
notice with the retirement fund requesting that the
postretirement adjustment not be paid.
Subd. 3. [APPROPRIATION AND TERMINAL AUDIT.] To fund the
postretirement benefits provided in this section for eligible
persons in the Minneapolis employees retirement fund, there is
appropriated from the general fund the amount of $916,745 for
fiscal year 1990 and $916,745 for fiscal year 1991. The
Minneapolis employees retirement fund shall, as soon as
practical following the payment of the postretirement
adjustment, calculate the amount of any appropriation
apportioned to it that is in excess of the amounts required to
pay the postretirement adjustments provided in this section.
The calculations required by this subdivision must be reported
to and verified by the commissioner of finance. Amounts equal
to reported excess appropriations must be returned to the
general fund.
ARTICLE 16
LEGISLATORS
Section 1. Minnesota Statutes 1988, section 3A.01, is
amended by adding a subdivision to read:
Subd. 6a. [SALARY.] "Salary" means the regular
compensation payable under law to legislators and paid to the
person for service as a legislator. The term includes the
monthly compensation paid to the legislator, and the per diem
payments paid during a regular or special session to the
legislator. The term does not include per diem payments paid
other than during the regular or special session, additional
compensation attributable to a leadership position under section
3.099, subdivision 3, living expense payments under section
3.101, and special session living expense payments under section
3.103.
Sec. 2. Minnesota Statutes 1988, section 3A.01,
subdivision 7, is amended to read:
Subd. 7. [AVERAGE MONTHLY SALARY.] With regard to any
member of the legislature whose service terminates prior to the
beginning of the 1981 legislative session, "average monthly
salary" means final monthly salary during the member's final
term of office as a member of the legislature; and with regard
to any member of the legislature whose service terminates after
the beginning of the 1981 legislative session, "Average monthly
salary" means the average of the member's highest five
successive years of salary received as a member of the
legislature after the beginning of the 1981 legislative session,
or all the years and months salary after the beginning of the
1981 legislative session if the member's service after the
beginning of the 1981 legislative session is less than five
years. Any additional payments provided by law for legislative
leadership positions shall not be included in any calculation of
the average monthly salary of a legislator or former
legislator and upon which the member has made contributions
under section 3A.03, subdivision 1, payments for past service
under section 3A.02, subdivision 2, or payments in lieu of
contributions under section 3A.031.
Sec. 3. Minnesota Statutes 1988, section 3A.02,
subdivision 1, is amended to read:
Subdivision 1. [QUALIFICATIONS.] Any (a) A former
legislator is entitled, upon written application to the
director, to receive a retirement allowance monthly, if the
person:
(1) Who has served at least six full years, without regard
to the application of section 3A.10, subdivision 2, or who has
served during all or part of four regular sessions as a member
of the legislature, which service need not be continuous, but
must have been after January 1, 1965 except as hereinafter
provided; and
(2) who attains has attained the normal retirement age; and
(3) Who has retired as a member of the legislature; and
(4) Who has made all contributions provided for in section
3A.03, or who has made payments in lieu of all contributions
provided for in section 3A.03 as provided for in for past
service under subdivision 2, or has made payments in lieu of
contributions under section 3A.031; shall be entitled upon
written application to the director to receive a retirement
allowance monthly.
(b) For service rendered prior to before the beginning of
the 1979 legislative session, but not to exceed eight years of
service, the retirement allowance shall be is an amount equal to
five percent per year of service of that member's average
monthly salary. For service in excess of eight years
rendered prior to before the beginning of the 1979 legislative
session, and for service rendered after the beginning of the
1979 legislative session, the retirement allowance shall be is
an amount equal to 2-1/2 percent per year of service of that
member's average monthly salary.
(c) The retirement allowance shall accrue accrues beginning
with the first day of the month of receipt of the application
and for the remainder of the former legislator's life, provided
if the former legislator is not serving as a member of the
legislature or as a constitutional officer or commissioner as
defined in section 352C.021, subdivisions 2 and 3.
(d) Any member who has served during all or part of four
regular sessions shall be deemed is considered to have served
eight years as a member of the legislature.
(e) The retirement allowance shall cease ceases with the
last payment which had that accrued to the retired legislator
during the retired legislator's lifetime, except that the
surviving spouse, if any, shall be is entitled to the retirement
allowance for the calendar month in which the retired legislator
died.
Effective for service rendered after the beginning of the
1981 legislative session, no member may accrue credit for more
than 20 years service, nor shall member contributions thereafter
be required for more than 20 years service.
Sec. 4. Minnesota Statutes 1988, section 3A.02,
subdivision 1b, is amended to read:
Subd. 1b. [REDUCED RETIREMENT ALLOWANCE.] Upon separation
from service after the beginning of the 1981 legislative
session, a former member of the legislature who has attained the
age of at least 60 years and who is otherwise qualified in
accordance with subdivision 1 is entitled upon making written
application on forms supplied by the director to a retirement
allowance in an amount equal to the retirement allowance
specified in subdivision 1 reduced by one-half of one percent
for each month that the former member of the legislature is
under so that the reduced annuity is the actuarial equivalent of
the annuity that would be payable if the former member of the
legislature deferred receipt of the annuity and the annuity
amount were augmented at an annual rate of three percent
compounded annually from the date the annuity begins to accrue
until age 62.
Sec. 5. Minnesota Statutes 1988, section 3A.02,
subdivision 4, is amended to read:
Subd. 4. [DEFERRED ANNUITIES AUGMENTATION.] The deferred
annuity of any former legislator shall be augmented as provided
herein. The required reserves applicable to the deferred
annuity, determined as of the date the benefit begins to accrue
using an appropriate mortality table and an interest assumption
of five percent, shall be augmented from the first of the month
following termination of service, or July 1, 1973, whichever is
later, to the first day of the month in which the annuity begins
to accrue, at the rate of five percent per annum compounded
annually until January 1, 1981, and thereafter at the rate of
three percent per annum compounded annually until January 1 of
the year in which the former legislator attains age 55. From
that date to the effective date of retirement, the rate is five
percent compounded annually.
Sec. 6. [3A.031] [PAYMENTS IN LIEU OF MEMBER CONTRIBUTIONS
IN CERTAIN INSTANCES.]
A member may make a payment in lieu of member contributions
on all or a portion of the member's per diem payments that were
paid during the regular and special sessions after December 31,
1988, and before July 1, 1989. The amount of the payment is
nine percent of the regular or special session per diem payments
paid during the applicable period, plus interest at the annual
rate of six percent, compounded annually, from the date the per
diem payment was made to the date on which the payment in lieu
of member contributions is made.
Sec. 7. [TRANSITIONAL PROVISION.]
A member of the legislature on the effective date of this
section to whom the service limit in Minnesota Statutes 1988,
section 3A.02, subdivision 1, applies is entitled to again
accrue service credit in and have member contributions deducted
for crediting to the legislators retirement plan, effective with
the start of the 1989 legislative session.
Sec. 8. [REPEALER.]
Section 6 is repealed, effective July 1, 1994.
Sec. 9. [EFFECTIVE DATE.]
Sections 1 to 8 are effective the day following final
enactment. Section 7 applies retroactively to January 1, 1989.
ARTICLE 17
POLICE AND FIRE
Section 1. Minnesota Statutes 1988, section 352.116, is
amended by adding a subdivision to read:
Subd. 3a. [BOUNCE BACK ANNUITY.] (a) The board of trustees
must provide a joint and survivor annuity option to members of
the correctional employees and state patrol retirement funds.
Under this option, a former member or disabilitant must receive
a normal single life annuity if the designated optional annuity
beneficiary dies before the former member or disabilitant.
Under this option, no reduction may be made in the person's
annuity to provide for restoration of the normal single life
annuity in the event of the death of the designated optional
annuity beneficiary.
(b) A former member or disabilitant of the correctional or
state patrol fund who selected an optional joint and survivor
annuity before July 1, 1989, but did not choose an option that
provides that the normal single life annuity is payable to the
former member or the disabilitant if the designated optional
annuity beneficiary dies first, is eligible for restoration of
the normal single life annuity if the designated optional
annuity beneficiary dies first, without further actuarial
reduction of the person's annuity. A former member or
disabilitant who selected an optional joint and survivor
annuity, but whose designated optional annuity beneficiary died
before July 1, 1989, shall receive a normal single life annuity
after that date, but shall not receive retroactive payments for
periods before that date.
(c) A former member or disabilitant who took a further
actuarial reduction to elect an optional joint and survivor
annuity that provides that the normal annuity is payable to the
former member or disabilitant if the designated optional
beneficiary died before July 1, 1989, shall have their annuity
increased as of July 1, 1989, to the amount the person would
have received if, at the time of retirement or disability, the
person had selected only optional survivor coverage that would
not have provided for restoration of the normal annuity upon the
death of the designated optional annuity beneficiary. Any
annuity or benefit increase under this paragraph is effective
only for payments made after June 30, 1989, and is not
retroactive for payments made before July 1, 1989.
Sec. 2. Minnesota Statutes 1988, section 352.93,
subdivision 2, is amended to read:
Subd. 2. [CALCULATING MONTHLY ANNUITY.] The monthly
annuity under this section must be determined by multiplying the
average monthly salary by the number of years, or completed
months, of covered correctional service by 2.5 percent for the
first 25 years of correctional service and two percent for each
year after that. However, the monthly annuity must not exceed
75 percent of the average monthly salary.
Sec. 3. Minnesota Statutes 1988, section 352.93, is
amended by adding a subdivision to read:
Subd. 2a. [EARLY RETIREMENT.] Any covered correctional
employee who has attained the age of at least 50 and who has at
least five years of allowable service is entitled upon
application to a retirement annuity equal to the normal annuity
calculated under subdivision 2, reduced so that the reduced
annuity is the actuarial equivalent of the annuity that would be
payable if the employee deferred receipt of the annuity from the
day the annuity begins to accrue to age 55.
Sec. 4. Minnesota Statutes 1988, section 352.95,
subdivision 1, is amended to read:
Subdivision 1. [JOB-RELATED DISABILITY.] A covered
correctional employee less than 55 years old who becomes
disabled and physically unfit to perform the duties of the
position as a direct result of an injury, sickness, or other
disability incurred in or arising out of any act of duty that
makes the employee physically or mentally unable to perform the
duties, is entitled to a disability benefit based on covered
correctional service only. The benefit amount must equal 50
percent of the average salary defined in section 352.93, plus an
additional 2-1/2 percent for each year of covered correctional
service in excess of 20 years but not in excess of 25 years, and
two percent for each year of covered correctional service in
excess of 25 years, prorated for completed months, to a maximum
monthly benefit of 75 percent of the average monthly salary.
Sec. 5. Minnesota Statutes 1988, section 352.95,
subdivision 2, is amended to read:
Subd. 2. [NON-JOB-RELATED DISABILITY.] Any covered
correctional employee who, after at least five years one year of
covered correctional service, before reaching the age of 55
becomes disabled and physically unfit to perform the duties of
the position because of sickness or injury occurring while not
engaged in covered employment, is entitled to a disability
benefit based on covered correctional service only. The
disability benefit must be computed as provided in section
352.93, subdivisions 1 and 2, and computed as though the
employee had at least ten 15 years of covered correctional
service.
Sec. 6. Minnesota Statutes 1988, section 352B.08,
subdivision 2, is amended to read:
Subd. 2. [NORMAL RETIREMENT ANNUITY.] The annuity must be
paid in monthly installments. The annuity shall be equal to the
amount determined by multiplying the average monthly salary of
the member by 2-1/2 percent for each year and pro rata for
completed months of service not exceeding 25 years and two
percent for each year and pro rata for completed months of
service in excess of 25 years.
Sec. 7. Minnesota Statutes 1988, section 352B.08, is
amended by adding a subdivision to read:
Subd. 2a. [EARLY RETIREMENT.] Any member who has attained
the age of at least 50 and who has at least five years of
allowable service is entitled upon application to a retirement
annuity equal to the normal annuity calculated under subdivision
2, reduced so that the reduced annuity is the actuarial
equivalent of the annuity that would be payable if the member
deferred receipt of the annuity from the day the annuity begins
to accrue to age 55.
Sec. 8. Minnesota Statutes 1988, section 352B.10,
subdivision 1, is amended to read:
Subdivision 1. [INJURIES, PAYMENT AMOUNTS.] Any member
less than 55 years old, who becomes disabled and physically or
mentally unfit to perform duties as a direct result of an
injury, sickness, or other disability incurred in or arising out
of any act of duty, shall receive disability benefits while
disabled. The benefits must be paid in monthly installments
equal to the member's average monthly salary multiplied (1) by
50 percent and, (2) by plus an additional 2-1/2 percent for each
year and pro rata for completed months of service in excess of
20 years, but not exceeding 25 years and two percent for each
year and pro rata for completed months of service in excess of
25 years if any.
Sec. 9. Minnesota Statutes 1988, section 352B.10,
subdivision 2, is amended to read:
Subd. 2. [UNDER 55; DISABLED WHILE NOT ON DUTY.] If a
member terminates employment after at least five years one year
of service, before reaching the age of 55, because of sickness
or injury occurring while not on duty and not engaged in state
work entitling the member to membership, and the termination is
necessary because the member cannot perform duties, the member
is entitled to receive a disability benefit. The benefit must
be in the same amount and computed in the same way as if the
member were 55 years old at the date of disability and the
annuity were paid under section 352B.08. If disability under
this clause occurs after five one but before ten 15 years
service, the disability benefit must be computed as though the
member had ten 15 years service.
Sec. 10. Minnesota Statutes 1988, section 352B.11,
subdivision 2, is amended to read:
Subd. 2. [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a
member serving actively as a member, a member receiving the
disability benefit provided by section 352B.10, subdivision 1,
or a former member receiving a disability benefit as provided by
section 352B.10, subdivision 3, dies from any cause, the
surviving spouse and dependent children are entitled to benefit
payments as follows:
(a) A member with at least five years of allowable service
or a former member with at least 20 years of allowable service
is deemed to have elected a 100 percent joint and survivor
annuity payable to a surviving spouse only on or after the date
the member or former member became or would have become 55.
(b) The surviving spouse of a member who had credit for
less than five years of service shall receive, for life, a
monthly annuity equal to 20 50 percent of that part of the
average monthly salary of the member from which deductions were
made for retirement. If the surviving spouse remarries, the
annuity shall cease as of the date of the remarriage.
(c) The surviving spouse of a member who had credit for at
least five years service and who died after attaining 55 years
of age, may elect to receive a 100 percent joint and survivor
annuity, for life, notwithstanding a subsequent remarriage, in
lieu of the annuity prescribed in paragraph (b).
(d) The surviving spouse of any member who had credit for
five years or more and who was not 55 years of age at death,
shall receive the benefit equal to 20 50 percent of the average
monthly salary as described in clause (b) until the deceased
member would have reached the age of 55 years, and beginning the
first of the month following that date, may elect to receive the
100 percent joint and survivor annuity. If the surviving spouse
remarries before the deceased member's 55th birthdate, benefits
or annuities shall cease as of the date of remarriage.
Remarriage after the deceased member's 55th birthday shall not
affect the payment of the benefit.
(e) Each dependent child shall receive a monthly annuity
equal to ten percent of that part of the average monthly salary
of the former member from which deductions were made for
retirement. A dependent child over 18 and under 22 23 years of
age also may receive the monthly benefit provided in this
section, if the child is continuously attending an accredited
school as a full-time student during the normal school year as
determined by the director. If the child does not continuously
attend school but separates from full-time attendance during any
part of a school year, the annuity shall cease at the end of the
month of separation. In addition, a payment of $20 per month
shall be prorated equally to surviving dependent children when
the former member is survived by one or more dependent
children. Payments for the benefit of any qualified dependent
child must be made to the surviving spouse, or if there is none,
to the legal guardian of the child. The maximum monthly benefit
must not be less than 50 nor exceed 40 70 percent of the average
monthly salary for any number of children.
(f) If the member dies under circumstances that entitle the
surviving spouse and dependent children to receive benefits
under the workers' compensation law, the workers' compensation
benefits received by them must not be deducted from the benefits
payable under this section.
(g) The surviving spouse of a deceased former member who
had credit for five or more years of allowable service, but not
the spouse of a former member receiving a disability benefit
under section 352B.10, subdivision 3, is entitled to receive the
100 percent joint and survivor annuity at the time the deceased
member would have reached the age of 55 years, if the surviving
spouse has not remarried before that date. If a former member
dies who does not qualify for other benefits under this chapter,
the surviving spouse or, if none, the children or heirs are
entitled to a refund of the accumulated deductions left in the
fund plus interest at the rate of five percent per year
compounded annually.
Sec. 11. Minnesota Statutes 1988, section 353.30, is
amended by adding a subdivision to read:
Subd. 3b. [BOUNCE BACK ANNUITY.] (a) The board of trustees
must provide a joint and survivor annuity option to members of
the police and fire fund. Under this option, a former member or
disabilitant must receive a normal single life annuity if the
designated optional annuity beneficiary dies before the former
member or disabilitant. Under this option, no reduction may be
made in the person's annuity to provide for restoration of the
normal single life annuity in the event of the death of the
designated optional annuity beneficiary.
(b) A former member or disabilitant of the police and fire
fund who selected an optional joint and survivor annuity before
July 1, 1989, but did not choose an option that provides that
the normal single life annuity is payable to the former member
or the disabilitant if the designated optional annuity
beneficiary dies first, is eligible for restoration of the
normal single life annuity if the designated optional annuity
beneficiary dies first, without further actuarial reduction of
the person's annuity. A former member or disabilitant who
selected an optional joint and survivor annuity, but whose
designated optional annuity beneficiary died before July 1,
1989, shall receive a normal single life annuity after that
date, but shall not receive retroactive payments for periods
before that date.
(c) A former member or disabilitant who took a further
actuarial reduction to elect an optional joint and survivor
annuity that provides that the normal annuity is payable to the
former member or disabilitant if the designated optional
beneficiary died before July 1, 1989, shall have their annuity
increased as of July 1, 1989, to the amount the person would
have received if, at the time of retirement or disability, the
person had selected only optional survivor coverage that would
not have provided for restoration of the normal annuity upon the
death of the designated optional annuity beneficiary. Any
annuity or benefit increase under this paragraph is effective
only for payments made after June 30, 1989, and is not
retroactive for payments made before July 1, 1989.
Sec. 12. Minnesota Statutes 1988, section 353.651,
subdivision 3, is amended to read:
Subd. 3. [RETIREMENT ANNUITY FORMULA.] The average salary
as defined in subdivision 2, multiplied by 2-1/2 percent per
year of allowable service for the first 25 years and two percent
per year of allowable service thereafter, shall determine the
amount of the normal retirement annuity. If the member has
earned allowable service for performing services other than
those of a police officer or firefighter, the annuity
representing such service shall be computed in accordance with
sections 353.29 and 353.30.
Sec. 13. Minnesota Statutes 1988, section 353.651, is
amended by adding a subdivision to read:
Subd. 4. [EARLY RETIREMENT.] Any police officer or
firefighter member who has attained the age of at least 50 and
who has at least five years of allowable service is entitled
upon application to a retirement annuity equal to the normal
annuity calculated under subdivision 3, reduced so that the
reduced annuity is the actuarial equivalent of the annuity that
would be payable to the member if the member deferred receipt of
the annuity from the day the annuity begins to accrue until the
member attains age 55.
Sec. 14. Minnesota Statutes 1988, section 353.656,
subdivision 1, is amended to read:
Subdivision 1. [IN LINE OF DUTY; COMPUTATION OF BENEFITS.]
Any member of the police and fire fund less than 55 years of
age, who shall become disabled and physically unfit to perform
duties as a police officer or firefighter subsequent to June 30,
1973, as a direct result of an injury, sickness, or other
disability incurred in or arising out of any act of duty, which
shall render the member physically or mentally unable to perform
duties as a police officer or firefighter, shall receive
disability benefits during the period of such disability. The
benefits shall be in an amount equal to 50 percent of the
"average salary" pursuant to subdivision 3 plus an additional
2-1/2 percent of said average salary for each year of service in
excess of 20 years but not exceeding 25 years and two percent
for each year thereafter. Should disability under this
subdivision occur before the member has at least five years of
allowable service credit in the police and fire fund, the
disability benefit shall be computed on the "average salary"
from which deductions were made for contribution to the police
and fire fund.
Sec. 15. Minnesota Statutes 1988, section 353.656,
subdivision 3, is amended to read:
Subd. 3. [NONDUTY DISABILITY BENEFIT.] Any member who
becomes disabled after not less than five years one year of
allowable service, before reaching the age of 55, because of
sickness or injury occurring while not on duty as a police
officer or firefighter, and by reason of that sickness or injury
the member is unable to perform duties as a police officer or
firefighter, shall be entitled to receive a disability benefit.
The benefit shall be in the same amount and paid in the same
manner as if the member were 55 years of age at the date of
disability and the benefit were paid pursuant to section
353.651. If a disability under this subdivision occurs
after five one but in less than ten 15 years of allowable
service, the disability benefit shall be the same as though the
member had at least ten 15 years service. For any member who is
employed as a full-time firefighter by the department of
military affairs of the state of Minnesota, allowable service as
a full-time state military affairs department firefighter
credited by the Minnesota state retirement system may be used in
meeting the minimum allowable service requirement of this
subdivision.
Sec. 16. Minnesota Statutes 1988, section 353.657,
subdivision 2, is amended to read:
Subd. 2. The spouse, for life or until remarriage, shall
receive a monthly benefit equal to 30 50 percent of the member's
average full-time monthly salary rate as a police officer or
firefighter in effect over the last six months of allowable
service preceding the month in which death occurred.
Sec. 17. Minnesota Statutes 1988, section 353.657,
subdivision 3, is amended to read:
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 rate as
a police officer or firefighter in effect over the last six
months of allowable service preceding the month in which death
occurred. A dependent child shall receive this benefit until
age 23, so long as the child submits evidence of full-time
enrollment in an accredited post-secondary educational
institution for at least five of the 12 months immediately
preceding the month for which benefits are sought. 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 70 percent of the member's specified average monthly
salary, and the minimum benefit per family shall not be less
than 30 50 percent of the member's specified average monthly
salary.
Sec. 18. [EFFECTIVE DATE.]
Sections 1 to 17 are effective July 1, 1989.
ARTICLE 18
STATE UNIVERSITY AND COMMUNITY COLLEGE
INDIVIDUAL RETIREMENT ACCOUNT PLAN
Section 1. Minnesota Statutes 1988, section 354.05,
subdivision 2a, is amended to read:
Subd. 2a. [EXCEPTIONS.] Notwithstanding subdivision 2, a
person who is first employed as a teacher in the state
university system or the state community college system after
June 30, 1988 1989, is not a member of the fund except for
purposes of social security coverage unless the person is
covered by section 354B.02, subdivision 2, and has exercised an
option under that subdivision to remain remains a member of the
fund for all purposes.
Sec. 2. Minnesota Statutes 1988, section 354.05,
subdivision 5, is amended to read:
Subd. 5. [MEMBER OF FUND.] The term "member of fund" means
every teacher who joins and contributes to the teachers
retirement fund as provided in this chapter who has not
retired., except a teacher covered by section 354B.02,
subdivision 2 or 3, who elects to participate in the individual
retirement account plan under chapter 354B.
Sec. 3. Minnesota Statutes 1988, section 354.66,
subdivision 2, is amended to read:
Subd. 2. A teacher in the public elementary schools,
secondary schools, or technical institutes, or in the community
college system or the state university system of the state who
has 20 years or more of allowable service in the fund or 20
years or more of full time teaching service in Minnesota public
elementary schools, secondary schools, or technical
institutes, or in the community college system or the state
university system, or a teacher in the community college system
or state university system who has attained at least age 55 and
has ten years or more of full-time teaching service, may, by
agreement with the board of the employing district, be assigned
to teaching service within the district in a part-time teaching
position.
Sec. 4. [354B.015] [SOCIAL SECURITY COVERAGE.]
Plan participants under section 354B.02, subdivision 1, and
persons electing participation under section 354B.02,
subdivision 2 or 3, remain members of the teachers retirement
association for purposes of social security coverage only and
remain covered by the applicable agreement entered into under
section 355.02, but are not members of the association for any
other purpose while employed in covered employment.
Sec. 5. Minnesota Statutes 1988, section 354B.02, is
amended to read:
354B.02 [COVERED PERSONS.]
Subdivision 1. [PLAN PARTICIPANTS.] Except as provided in
subdivision 2, a person who was first employed in covered
employment after June 30, 1988 1989, shall participate in the
plan.
Subd. 2. [PERSONS WITH CERTAIN PRIOR SERVICE.] A person
with less than three years of prior allowable service as a
member of the teachers retirement association other than in
covered employment under section 354B.01, subdivision 2 or
3, who is entitled to a deferred annuity under section 354.55,
subdivision 11, and who is first employed in covered employment
after June 30, 1988 1989, may, at the person's option, remain a
member of the teacher's retirement association for all purposes
or elect to participate in the plan. This election must be made
within 60 days of the start of covered employment.
Subd. 3. [OPTIONAL PARTICIPATION.] A person with less than
three years of allowable service who was first employed in
covered employment before July 1, 1989, and who is a coordinated
member of the teachers retirement association, may elect to
transfer retirement coverage to the plan under section 6. The
election must be made on a form provided by the executive
director. An election to transfer retirement coverage to the
plan must be made before July 1, 1992, and is irrevocable. When
a member transfers coverage to the plan, all existing service
credits with the association to which the person was entitled
before the transfer terminate and may not be restored.
Sec. 6. [354B.03] [COVERAGE TRANSFER.]
Subdivision 1. [PROCEDURE.] If a person with less than
three years of allowable service elects a transfer to the plan
under section 5, subdivision 2 or 3, the executive director of
the teachers retirement association shall transfer from the
teachers retirement fund to the plan the person's member
contributions plus interest compounded annually at five percent
a year. The transfer must be made within 90 days from the date
the executive director receives notification of the election.
The transfer may not include any amount representing an employer
contribution nor any amount representing the repayment of a
refund received by the association after the date of enactment
of this act.
Subd. 2. [LIMITATIONS.] A transfer to the plan under this
section is a transfer to the financial institution selected by a
plan administrator to provide annuity contracts or custodial
accounts and must be made through the governing board of the
system in which the person electing the transfer is employed in
covered employment. No amount may be distributed to the person
electing the transfer.
Subd. 3. [ELECTION.] A person with more than three years
of allowable service credit who was first employed in covered
employment before July 1, 1989, or after June 30, 1989 as
provided in section 354B.02, subdivision 2, may elect coverage
by the plan. If coverage is elected, accumulated employer and
employee contributions and allowable service credit shall remain
with the teachers retirement fund and that person shall remain
eligible for a deferred annuity from that fund augmented with
interest at the rate of five percent computed as specified in
section 354.55, subdivision 11. Future contributions only shall
be made to the plan.
Sec. 7. Minnesota Statutes 1988, section 354B.04,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYER CONTRIBUTIONS.] The employer of persons
in covered employment who participate in the plan shall make an
employer contribution to the plan in an amount equal to the
amount prescribed by section 354.42, subdivision 3, and shall
continue to make an additional employer contribution to the
teachers retirement association in an amount equal to the amount
prescribed by section 354.42, subdivision 5.
Sec. 8. Minnesota Statutes 1988, section 354B.05,
subdivision 3, is amended to read:
Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] The state
university board and the community college board shall select no
more than three financial institutions to provide annuity
contracts or custodial accounts. Each board may at its
discretion change a selection of an institution. Investment
programs offered by the institutions must meet the requirements
of section 401(a) or 403(b) of the Internal Revenue Code of
1986, as amended. In making their selections, the boards shall
consider these criteria:
(1) the experience and ability of the financial institution
to provide retirement and death benefits suited to the needs of
the covered employees;
(2) the relationship of the benefits to their cost; and
(3) the financial strength and stability of the institution.
Sec. 9. Minnesota Statutes 1988, section 354B.05,
subdivision 4, is amended to read:
Subd. 4. [BENEFITS OWNED BY MEMBERS.] The retirement and
death benefits provided by the annuity contracts or custodial
accounts are owned by the members of the plan trust and must be
paid in accordance with the provisions of the annuity contracts
or custodial accounts plan document.
Sec. 10. [355.61] [SOCIAL SECURITY COVERAGE FOR CERTAIN
STATE UNIVERSITY OR COMMUNITY COLLEGE FACULTY.]
Plan participants under section 354B.02, subdivision 1, and
persons electing participation under section 354B.02,
subdivision 2 or 3, remain members of the teachers retirement
association for purposes of social security coverage only, and
remain covered by the applicable agreement entered into under
section 355.02, but are not members of the teachers retirement
association for any other purpose while employed in covered
employment.
Sec. 11. [EFFECTIVE DATE OF COVERAGE.]
Notwithstanding Laws 1988, chapter 709, article 11,
sections 1, 3, and 7, persons first employed in covered
employment between June 30, 1988, and July 1, 1989, are members
of the teachers retirement association for all purposes but are
eligible to elect to participate in the plan under section 6.
Sec. 12. [REPEALER.)
Section 6 is repealed October 1, 1992.
Sec. 13. [EFFECTIVE DATE.]
Sections 1 to 12 are effective July 1, 1989.
ARTICLE 19
Section 1. [CITATION.]
Sections 1 to 7 may be cited as the "pension refinancing
and incentive to retirement investment earnings act of 1989."
Sec. 2. Minnesota Statutes 1988, section 69.031,
subdivision 5, is amended to read:
Subd. 5. [DEPOSIT OF STATE AID.] (1) The municipal
treasurer, on receiving the fire state aid, shall within 30 days
after receipt transmit it to the treasurer of the duly
incorporated firefighters' relief association if there is one
organized and the association has filed a financial report with
the municipality; but if there is no relief association
organized, or if any association dissolve, be removed, or has
heretofore dissolved, or has been removed as trustees of state
aid, then the treasurer of the municipality shall keep the money
in the municipal treasury as provided for in section 424A.08 and
shall be disbursed only for the purposes and in the manner set
forth in that section.
(2) The municipal treasurer, upon receipt of the police
state aid, shall disburse the police state aid in the following
manner:
(a) For a municipality in which a local police relief
association exists and all peace officers are members of the
association, the total state aid shall be transmitted to the
treasurer of the relief association within 30 days of the date
of receipt, and the treasurer of the relief association shall
immediately deposit the total state aid in the special fund of
the relief association;
(b) For a municipality in which police retirement coverage
is provided by the public employees police and fire fund and all
peace officers are members of the fund, the total state aid
shall be applied toward the municipality's employer contribution
to the public employees police and fire fund pursuant to section
353.65, subdivision 3, and any state aid in excess of the amount
required to meet the employer's contribution pursuant to section
353.65, subdivision 3, shall also be contributed to the public
employees police and fire fund and credited in the manner to be
specified by the board of trustees of the public employees
retirement association; or
(c) For a municipality other than a city of the first class
with a population of more than 300,000 in which both a police
relief association exists and police retirement coverage is
provided in part by the public employees police and fire fund,
the municipality may elect at its option to transmit the total
state aid to the treasurer of the relief association as provided
in clause (a), to use the total state aid to apply toward the
municipality's employer contribution to the public employees
police and fire fund subject to all the provisions set forth in
clause (b), or to allot the total state aid proportionately to
be transmitted to the police relief association as provided in
this subdivision and to apply toward the municipality's employer
contribution to the public employees police and fire fund
subject to the provisions of clause (b) on the basis of the
respective number of active full-time peace officers, as defined
in section 69.011, subdivision 1, clause (g).
For a city of the first class with a population of more
than 300,000, in addition, the city may elect to allot the
appropriate portion of the total police state aid to apply
toward the employer contribution of the city to the public
employees police and fire fund based on the covered salary of
police officers covered by the fund each payroll period and to
transmit the balance to the police relief association.
(3) The county treasurer, upon receipt of the police state
aid for the county, shall apply the total state aid toward the
county's employer contribution to the public employees police
and fire fund pursuant to section 353.65, subdivision 3, and any
state aid in excess of the amount required to meet the
employer's contribution pursuant to section 353.65, subdivision
3, shall also be contributed to the public employees police and
fire fund and credited in the manner to be specified by the
board of trustees of the public employees retirement association.
Sec. 3. Minnesota Statutes 1988, section 69.77,
subdivision 2b, is amended to read:
Subd. 2b. [RELIEF ASSOCIATION FINANCIAL REQUIREMENTS;
MINIMUM MUNICIPAL OBLIGATION.] The officers of the relief
association shall determine the financial requirements of the
relief association and minimum obligation of the municipality
for the following calendar year in accordance with the
requirements of this subdivision. The financial requirements of
the relief association and the minimum obligation of the
municipality shall be determined on or before the submission
date established by the municipality pursuant to subdivision 2c.
The financial requirements of the relief association for
the following calendar year shall be based on the most recent
actuarial valuation or survey of the special fund of the
association if more than one fund is maintained by the
association, or of the association, if only one fund is
maintained, prepared in accordance with sections 356.215,
subdivisions 4 to 4k and 356.216, as required pursuant to
subdivision 2h. If an actuarial estimate is prepared by the
actuary of the relief association as part of obtaining a
modification of the benefit plan of the relief association and
the modification is implemented, the actuarial estimate shall be
used in calculating the financial requirements of the relief
association.
If the relief association has an unfunded actuarial accrued
liability as reported in the most recent actuarial valuation or
survey, the total of the amounts calculated pursuant to clauses
(a), (b), and (c) shall constitute the financial requirements of
the relief association for the following year. If the relief
association does not have an unfunded actuarial accrued
liability as reported in the most recent actuarial valuation or
survey the amount calculated pursuant to clauses (a) and (b)
shall constitute the financial requirements of the relief
association for the following year.
(a) The normal level cost requirement for the following
year, expressed as a dollar amount, which shall be determined by
applying the normal level cost of the relief association as
reported in the actuarial valuation or survey and expressed as a
percentage of covered payroll to the estimated covered payroll
of the active membership of the relief association, including
any projected increase in the active membership, for the
following year.
(b) To the dollar amount of normal cost thus determined
shall be added an amount equal to the dollar amount of the
administrative expenses of the special fund of the association
if more than one fund is maintained by the association, or of
the association if only one fund is maintained, for the most
recent year, multiplied by the factor of 1.035. For a relief
association in a municipality, the administrative expenses are
those authorized under section 69.80. No amount of
administrative expenses under this clause shall be included in
the financial requirements of a relief association in a city of
the first class with a population of more than 300,000.
(c) To the dollar amount of normal cost and expenses
determined under clauses (a) and (b) shall be added an amount
equal to the level annual dollar amount which is sufficient to
amortize the unfunded actuarial accrued liability by December
31, 2010, as determined from the actuarial valuation or survey
of the fund, using an interest assumption set at the rate
specified in section 356.215, subdivision 4d. The amortization
date specified in this clause shall apply to all local police or
salaried firefighters' relief associations and shall supersede
any amortization date specified in any applicable special law.
The minimum obligation of the municipality shall be an
amount equal to the financial requirements of the relief
association reduced by the estimated amount of member
contributions from covered salary anticipated for the following
calendar year and the estimated amounts anticipated for the
following calendar year from the applicable state aid program
established pursuant to sections 69.011 to 69.051 receivable by
the relief association after any allocation made pursuant to
section 69.031, subdivision 5, clause (2), subclause (c) or
423A.01, subdivision 2, clause (6), from the local police and
salaried firefighters' relief association amortization aid
program established pursuant to section 423A.02 and from the
supplementary amortization state-aid program established under
Laws 1984, chapter 564, section 48, and Laws 1985, chapter 261,
section 17.
Sec. 4. Minnesota Statutes 1988, section 356.216, is
amended to read:
356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE
AND FIRE FUNDS.]
(a) The provisions of section 356.215 governing the
contents of actuarial valuations shall apply to any local police
or fire pension fund or relief association required to make an
actuarial report under this section except as follows:
(1) in calculating normal cost and other requirements, if
required to be expressed as a level percentage of covered
payroll, the salaries used in computing covered payroll shall be
the maximum rate of salary from which retirement and
survivorship credits and amounts of benefits are determined and
from which any member contributions are calculated and deducted;
(2) in lieu of the amortization date specified in section
356.215, subdivision 4g, the appropriate amortization target
date specified in section 69.77, subdivision 2b, or 69.773,
subdivision 4, clause (b), shall be used in calculating any
required amortization contribution;
(3) in addition to the tabulation of active members and
annuitants provided for in section 356.215, subdivision 4i, the
member contributions for active members for the calendar year
and the prospective annual retirement annuities under the
benefit plan for active members shall be reported;
(4) actuarial valuations required pursuant to section
69.773, subdivision 2, shall be made at least every four years
and actuarial valuations required pursuant to section 69.77
shall be made annually; and
(5) the actuarial balance sheet showing accrued assets
valued at market value if the actuarial valuation is required to
be prepared at least every four years or valued as current
assets under section 356.215, subdivision 1, clause (5) (6), or
paragraph (b), whichever applies, if the actuarial valuation is
required to be prepared annually, actuarial accrued liabilities,
and the unfunded actuarial accrued liability shall include the
following required reserves:
(a) For active members
1. Retirement benefits
2. Disability benefits
3. Refund liability due to death or withdrawal
4. Survivors' benefits
(b) For deferred annuitants' benefits
(c) For former members without vested rights
(d) For annuitants
1. Retirement annuities
2. Disability annuities
3. Surviving spouses' annuities
4. Surviving children's annuities
In addition to those required reserves, separate items
shall be shown for additional benefits, if any, which may not be
appropriately included in the reserves listed above.
(6) actuarial valuations shall be due by the first day of
the seventh month after the end of the fiscal year which the
actuarial valuation covers.
(b) For a relief association in a city of the first class
with a population of more than 300,000, the following provisions
additionally apply:
(1) in calculating the actuarial balance sheet, unfunded
actuarial accrued liability, and amortization contribution of
the relief association, "current assets" means the value of all
assets at cost, including realized capital gains and losses,
plus or minus, whichever applies, the average value of total
unrealized capital gains or losses for the most recent
three-year period ending with the end of the plan year
immediately preceding the actuarial valuation report
transmission date; and
(2) in calculating the applicable portions of the actuarial
valuation, an annual preretirement interest assumption of six
percent, an annual postretirement interest assumption of six
percent, and an annual salary increase assumption of four
percent must be used.
Sec. 5. Minnesota Statutes 1988, section 423A.01,
subdivision 2, is amended to read:
Subd. 2. [OPERATION OF LOCAL RELIEF ASSOCIATION UPON
MODIFICATION OF RETIREMENT COVERAGE FOR NEWLY HIRED POLICE
OFFICERS AND FIREFIGHTERS.] The following provisions shall
govern the operation of a local relief association upon the
modification of retirement coverage for newly hired police
officers or firefighters:
(1) The minimum obligation of a municipality in which the
retirement coverage for newly hired police officers or salaried
firefighters has been modified pursuant to subdivision 1 with
respect to the local relief association shall be determined and
governed in accordance with the provisions of sections 69.77,
356.215 and 356.216, except that the normal cost calculation for
the relief association shall be computed as a percentage of the
compensation paid to the active members of the relief
association. The compensation paid to persons with retirement
coverage modified pursuant to subdivision 1 shall not be
included in any of the computations made in determining the
obligation of the municipality with respect to the local relief
association.
(2) The contribution rate of members of the local relief
association shall be governed by section 69.77, unless a special
law establishing a greater member contribution rate is
applicable whereupon it shall continue to govern. The member
contribution rate of persons with retirement coverage modified
pursuant to subdivision 1 shall be governed by section 353.65.
(3) Unless otherwise provided for by law, when every active
member of the local relief association retires or terminates
from active duty, the local relief association shall cease to
exist as a legal entity and the assets of the special fund of
the relief association shall be transferred to a trust fund to
be established by the appropriate municipality for the purpose
of paying service pensions and retirement benefits to recipient
beneficiaries. Recipient beneficiaries who are competent to act
on their own behalf shall be entitled to select the prescribed
number of trustees of the trust fund as provided in this clause,
subject to the approval of the governing body of the
municipality. If there are at least five recipient
beneficiaries, the trust fund shall be managed by a board of
trustees composed of five persons selected by the recipient
beneficiaries of the fund. When there are fewer than five
recipient beneficiaries, the number of trustees selected by the
recipient beneficiaries shall be equal to the number of the
remaining recipient beneficiaries. The governing body of the
municipality shall select the additional trustees. The term of
the elected members of the board of trustees shall be indefinite
and shall continue until a vacancy occurs in one of the board of
trustee member positions. Board of trustee members shall not be
compensated for their services, but shall be reimbursed for any
expenses actually and necessarily incurred as a result of the
performance of their duties in their capacity as board of
trustee members. The municipality shall perform whatever
services are necessary to administer the trust fund. When all
obligations of the trust fund are paid, the balance of the
assets remaining in the trust fund shall revert to the
municipality for expenditure for law enforcement or firefighting
purposes, whichever is applicable.
(4) The financial requirements of the trust fund and the
minimum obligation of the municipality with respect to the trust
fund shall be determined in accordance with sections 69.77,
356.215 and 356.216 until the unfunded accrued liability of the
trust fund is fully amortized in accordance with section 69.77,
subdivision 2b. The municipality shall provide in its annual
budget for at least the aggregate amount of service pensions,
disability benefits, survivorship benefits and refunds which are
projected as payable for the following calendar year, as
determined by the board of trustees of the trust fund, less the
amount of assets in the trust fund as of the end of the most
current calendar year for which figures are available, valued
pursuant to section 356.20, subdivision 4, clause (1)(a), if the
difference between those two figures is a positive number.
(5) In calculating the amount of service pensions and other
retirement benefits payable from the local relief association
and in calculating the amount of any automatic post retirement
increases in those service pensions and retirement benefits
based on the salary paid or payable to active members or
escalated in any fashion, the salary for use as the base for the
service pension or retirement benefit calculation and the post
retirement increase calculation for the local relief association
shall be the salary for the applicable position as specified in
the articles of incorporation or bylaws of the relief
association as of the date immediately prior to the effective
date of the modification of retirement coverage for newly hired
personnel pursuant to subdivision 1, as the applicable salary is
reset by the municipality periodically, irrespective of whether
retirement coverage for persons holding the applicable position
used in calculations is provided by the relief association or by
the public employees police and fire fund.
(6) If the modification of retirement coverage implemented
pursuant to subdivision 1 is applicable to a local police relief
association, the police state aid received by the municipality
shall be disbursed pursuant to section 69.031, subdivision 5,
clause (2)(c). If the modification of retirement coverage
implemented pursuant to subdivision 1 is applicable to a local
firefighters' relief association, the fire state aid received by
the applicable municipality other than a city of the first class
with a population of more than 300,000 shall be disbursed as the
municipality at its option may elect. The municipality may
elect: (a) to transmit the total fire state aid to the
treasurer of the local relief association for immediate deposit
in the special fund of the relief association; or (b) to apply
the total fire state aid toward the employer contribution of the
municipality to the public employees police and fire fund
pursuant to section 353.65, subdivision 3; or (c) to allocate
the total fire state aid proportionately between the special
fund of the local relief association and employer contribution
of the municipality to the public employees police and fire fund
on the basis of the respective number of active full time
salaried firefighters receiving retirement coverage from each.
For a city of the first class with a population of more
than 300,000, in addition, the city may elect to allot the
appropriate portion of the total fire state aid to apply toward
the employer contribution of the city to the public employees
police and fire fund based on the covered salary of firefighters
covered by the fund each payroll period and to transmit the
balance to the firefighters relief association.
Sec. 6. [DISPOSITION OF ASSETS UPON CONCLUSION OF BENEFIT
PAYMENTS.]
Upon the death of the last benefit recipient and the
certification by the chief administrative officer of a city of
the first class with a population of more than 300,000 to the
state auditor of the absence of any remaining person with a
benefit entitlement, the assets of the relief association or
trust fund, whichever applies, must revert to the city and may
be used by the city only for law enforcement or firefighting
expenditure purposes, whichever applies.
Sec. 7. [INVESTMENT RELATED POSTRETIREMENT ADJUSTMENTS.]
Subdivision 1. [DEFINITIONS.] For the purposes of this
section, each of the terms in this subdivision have the meanings
given them in paragraphs (a) to (h).
(a) "Annual postretirement payment" means the payment of a
lump sum postretirement benefit to an eligible member on June 1
following the determination date in any year.
(b) "City" means a city of the first class with a
population of more than 300,000.
(c) "Determination date" means December 31 of each year.
(d) "Eligible member" means a person, including a service
pensioner, a disability pensioner, a survivor, or dependent of a
deceased active member, service pensioner, or disability
pensioner, who received a pension or benefit during the 12
months before the determination date. A person who received a
pension or benefit for the entire 12 months before the
determination date are eligible for a full annual postretirement
payment. A person who received a pension or benefit for less
than 12 months before the determination date is eligible for a
prorated annual postretirement payment.
(e) "Excess investment income" means the amount by which
the time weighted total rate of return earned by the fund in the
most recent fiscal year has exceeded the actual percentage
increase in the current monthly salary of a top grade patrol
officer or top grade firefighter, whichever applies, in the most
recent fiscal year plus two percent. The excess investment
income must be expressed as a dollar amount and may not exceed
one percent of the total assets of the fund and does not exist
unless the yearly average percentage increase of the time
weighted total rate of return of the fund for the previous five
years exceeds by two percent the yearly average percentage
increase in monthly salary of a top grade patrol officer or top
grade firefighter, whichever applies, during the previous five
calendar years.
(f) "Fund" means a police relief association or
firefighters relief association, whichever applies, located in
the city and governed by Minnesota Statutes, section 69.77.
(g) "Relief association" means the police relief
association or the firefighters relief association, whichever
applies, located in the city.
(h) "Time weighted total rate of return" means the
percentage amount determined by using the formula or formulas
established by the state board of investment under Minnesota
Statutes, section 11A.04, clause (11), and in effect on January
1, 1987.
Subd. 2. [ANNUAL POSTRETIREMENT PAYMENT AUTHORIZED.]
Notwithstanding the provisions of Minnesota Statutes, chapter
69, or any other law to the contrary, the relief association may
provide annual postretirement payments to eligible members under
this section.
Subd. 3. [DETERMINATION OF EXCESS INVESTMENT INCOME.] The
board of trustees of the relief association shall determine by
May 1 of each year whether or not the relief association has
excess investment income. The amount of excess investment
income, if any, must be stated as a dollar amount and reported
by the chief administrative officer of the relief association to
the mayor and governing body of the city, the state auditor, the
commissioner of finance, and the executive director of the
legislative commission on pensions and retirement. The dollar
amount of excess investment income up to one percent of the
assets of the fund must be applied for the purpose specified in
subdivision 4. Excess investment income must not be considered
as income to or assets of the fund for actuarial valuations of
the fund for that year under sections 69.77, 356.215, and
356.216 and the provisions of this section except to offset the
annual postretirement payment. Additional investment income is
any realized or unrealized investment income other than the
excess investment income and must be included in the actuarial
valuations performed under sections 69.77, 356.215, and 356.216
and the provisions of this section.
Subd. 4. [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The
amount determined under subdivision 3 must be applied in
accordance with this subdivision. The relief association shall
apply the first one-half of one percent of excess investment
income to the payment of an annual postretirement payment as
specified in this subdivision. The second one-half of one
percent of excess investment income shall be applied to reduce
the state amortization state aid or supplementary amortization
state aid payments otherwise due to the relief association under
section 423A.02 for the current calendar year. The relief
association shall pay an annual postretirement payment to all
eligible members in an amount not to exceed one-half of one
percent of the assets of the fund. Payment of the annual
postretirement payment must be in a lump sum amount on June 1
following the determination date in any year. Payment of the
annual postretirement payment may be made only if the time
weighted total rate of return exceeds by two percent the actual
percentage increase in the current monthly salary of a top grade
patrol officer or a top grade firefighter, whichever applies, in
the most recent fiscal year and the yearly average percentage
increase of the time weighted total rate of return of the fund
for the previous five years exceeds by two percent the yearly
average percentage increase in monthly salary of a top grade
patrol officer or a top grade firefighter, whichever applies, of
the previous five years. The total amount of all payments to
members may not exceed the amount determined under subdivision
3. Payment to each eligible member must be calculated by
dividing the total number of pension units to which eligible
members are entitled into the excess investment income available
for distribution to members, and then multiplying that result by
the number of units to which each eligible member is entitled to
determine each eligible member's annual postretirement payment.
Payment to each eligible member may not exceed an amount equal
to the total monthly benefit that the eligible member was
entitled to in the prior year under the terms of the benefit
plan of the relief association or each eligible member's
proportionate share of the excess investment income, whichever
is less.
Subd. 5. [ANNUAL POSTRETIREMENT PAYMENT IN THE EVENT OF
DEATH.] In the event an eligible member dies after the
determination date and before the payment of the annual
postretirement payment, the chief administrative officer of the
relief association shall pay that eligible member's estate the
amount to which the eligible member was entitled.
Subd. 6. [REPORT ON ANNUAL POSTRETIREMENT PAYMENT.] The
chief administrative officer of the relief association shall
submit a report on the amount of all postretirement payments
made under this section and the manner in which those payments
were determined to the state auditor, the executive director of
the legislative commission on pensions and retirement, and the
city clerk of the city.
Subd. 7. [NO GUARANTEE OF ANNUAL POSTRETIREMENT PAYMENT.]
No provision of or payment made under this section may be
interpreted or relied upon by any member of the relief
association to guarantee or entitle a member to annual
postretirement payments for a period when no excess investment
income is earned by the fund.
Sec. 8. [EFFECTIVE DATE.]
Sections 1 to 7 are effective on the day following final
enactment and apply to 1988 investment performance, actuarial
valuations covering the calendar year ending December 31, 1988,
and the annual financial requirements and minimum municipal
obligation based on the 1988 actuarial valuations.
Presented to the governor May 30, 1989
Signed by the governor June 1, 1989, 10:19 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes