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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1992 

                        CHAPTER 446-H.F.No. 2438 
           An act relating to retirement; individual retirement 
          account plan; expanding plan coverage to include 
          certain higher education employees; changing the 
          formula for compounding interest on deferred annuities 
          of constitutional officers or commissioners; amending 
          Minnesota Statutes 1990, sections 136.88, subdivision 
          1; 352C.033; 352D.02, subdivisions 1 and 1a; 352D.03; 
          354B.01, subdivision 2, and by adding subdivisions; 
          354B.015; 354B.02, subdivisions 1, 4, and by adding 
          subdivisions; 354B.03, by adding a subdivision; 
          354B.04, subdivision 1; and 354B.05, subdivision 1; 
          Minnesota Statutes 1991 Supplement, section 354B.04, 
          subdivision 2; repealing Laws 1986, chapter 458, 
          section 36. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1990, section 136.88, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] As used in this section, the 
terms defined in this subdivision have the meanings given them.  
    (a) "Board" means the state board for community colleges 
and the state university board.  
    (b) "Teacher" means a person on the instructional or 
administrative staff of the community college or state 
university system who is a member of the teachers retirement 
association under chapter 354 or who is covered by the 
individual retirement account plan under chapter 354B.  It shall 
not include a chancellor or vice-chancellor.  
     Sec. 2.  Minnesota Statutes 1990, section 352C.033, is 
amended to read: 
    352C.033 [DEFERRED ANNUITIES AUGMENTATION.] 
    The deferred retirement allowance for any former 
constitutional officer or commissioner shall be augmented as 
provided in this section.  The required reserves applicable to 
the deferred retirement allowance, determined as of the date the 
retirement allowance begins to accrue using the appropriate 
mortality table and an interest assumption of five percent, 
shall be augmented from the first of the month following 
termination of service as a constitutional officer or 
commissioner, or January 1, 1979, 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 constitutional officer or commissioner attains age 
55.  From that date to the effective date of retirement, the 
rate is five percent compounded annually. 
    Sec. 3.  Minnesota Statutes 1990, section 352D.02, 
subdivision 1, is amended to read: 
    Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
paragraph (b), if they are in the unclassified service of the 
state and are eligible for coverage under the general state 
employees retirement plan under chapter 352, are participants in 
the unclassified program under this chapter unless the employee 
gives notice to the executive director of the Minnesota state 
retirement system within one year following the commencement of 
employment in the unclassified service that the employee desires 
coverage under the general state employees retirement plan.  For 
the purposes of this chapter, an employee who does not file 
notice with the executive director is deemed to have exercised 
the option to participate in the unclassified plan. 
     (b) Enumerated employees are: 
     (1) an employee in the office of the governor, lieutenant 
governor, secretary of state, state auditor, state treasurer, 
attorney general, or an employee of the state board of 
investment; 
     (2) the head of a department, division, or agency created 
by statute in the unclassified service, an acting department 
head subsequently appointed to the position, or an employee 
enumerated in section 15A.081, subdivision 1 or 15A.083, 
subdivision 4; 
     (3) a permanent, full-time unclassified employee of the 
legislature or a commission or agency of the legislature or a 
temporary legislative employee having shares in the supplemental 
retirement fund as a result of former employment covered by this 
chapter, whether or not eligible for coverage under the 
Minnesota state retirement system; 
    (4) a person other than an employee of the state board of 
technical colleges who is employed in a position established 
under section 43A.08, subdivision 1, clause (c) (3), or 
subdivision 1a, or in a position authorized under a statute 
creating or establishing a department or agency of the state, 
which is at the deputy or assistant head of department or agency 
or director level; 
    (5) the chair, chief administrator, and not to exceed nine 
positions at the division director or administrative deputy 
level of the metropolitan waste control commission as designated 
by the commission; the chair, executive director, and not to 
exceed three positions at the division director or assistant to 
the chair level of the regional transit board; a chief 
administrator who is an employee of the metropolitan transit 
commission; and the chair, executive director, and not to exceed 
nine positions at the division director or administrative deputy 
level of the metropolitan council as designated by the council; 
provided that upon initial designation of all positions provided 
for in this clause, no further designations or redesignations 
may be made without approval of the board of directors of the 
Minnesota state retirement system; 
    (6) the executive director, associate executive director, 
and not to exceed nine positions of the higher education 
coordinating board in the unclassified service, as designated by 
the higher education coordinating board; provided that upon 
initial designation of all positions provided for in this 
clause, no further designations or redesignations may be made 
without before January 1, 1992, or subsequently redesignated 
with the approval of the board of directors of the Minnesota 
state retirement system, unless the person has elected coverage 
by the individual retirement account plan under chapter 354B; 
    (7) the clerk of the appellate courts appointed under 
article VI, section 2, of the Constitution of the state of 
Minnesota; 
    (8) the chief executive officers of correctional facilities 
operated by the department of corrections and of hospitals and 
nursing homes operated by the department of human services; 
    (9) an employee whose principal employment is at the state 
ceremonial house; 
    (10) an employee of the Minnesota educational computing 
corporation; 
    (11) an employee of the world trade center board; and 
    (12) an employee of the division of the state lottery in 
the department of gaming who is covered by the managerial plan 
established under section 43A.18, subdivision 3; and 
     (13) an employee of the state board of technical colleges 
employed in a position established under section 43A.08, 
subdivision 1, clause (3), or 1a, unless the person has elected 
coverage by the individual retirement account plan under chapter 
354B. 
    Sec. 4.  Minnesota Statutes 1990, section 352D.02, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [STATE UNIVERSITY PERSONNEL.] Unless the person 
has elected coverage by the individual retirement account plan 
under chapter 354B, the following employees chancellor, 
university presidents, and unclassified managerial employees in 
the state university system shall participate in the plan if 
they are eligible for coverage under the state employees 
retirement fund, or the teachers retirement association, or 
would have been eligible for coverage under those funds but for 
this subdivision, shall participate in the plan, subject to the 
provisions of subdivision 5 and Laws 1986, chapter 458, section 
36, and.  These employees also shall have social security 
coverage under the agreement between the state and the secretary 
of health and human services:  the chancellor, university 
presidents, and unclassified managerial employees in the state 
university system employed at the level of dean or higher. 
    Sec. 5.  Minnesota Statutes 1990, section 352D.03, is 
amended to read: 
    352D.03 [TRANSFER OF ASSETS.] 
    Unless an eligible employee enumerated in section 352D.02, 
subdivision 1 or 1a, has elected coverage under the individual 
retirement account plan under chapter 354B, a sum of money 
representing the assets credited to each employee exercising the 
option contained in section 352D.02, plus an equal employer 
contribution together with interest for the employment period at 
the actuarially assumed rates during this period, compounded 
annually, shall be used for the purchase of shares on behalf of 
each employee in the accounts of the supplemental retirement 
fund established by section 11A.17.  Any employer's contribution 
to amortize the deficit in the state employee's retirement fund 
shall not, however, be used for the purchase of shares.  
    Sec. 6.  Minnesota Statutes 1990, section 354B.01, 
subdivision 2, is amended to read: 
    Subd. 2.  [COVERED EMPLOYMENT; STATE UNIVERSITIES.] 
"Covered employment," with respect to employment by the state 
university system, means employment in a position included in 
the definition of teacher under section 354.05, subdivision 2, 
other than that of an administrator covered by or eligible for 
coverage in the Minnesota state retirement system unclassified 
employees retirement plan.  "Covered employment" does not 
include employment when the initial appointment is defined as 
less than 25 percent of a full academic year, exclusive of 
summer session. 
    Sec. 7.  Minnesota Statutes 1990, section 354B.01, is 
amended by adding a subdivision to read: 
    Subd. 4.  [COVERED EMPLOYMENT; TECHNICAL COLLEGE MANAGERIAL 
EMPLOYEES.] "Covered employment," with respect to employment by 
the state board of technical colleges, means employment in a 
position described in section 352D.02, subdivision 1, paragraph 
(b), clause (13). 
    Sec. 8.  Minnesota Statutes 1990, section 354B.01, is 
amended by adding a subdivision to read: 
    Subd. 5.  [COVERED EMPLOYMENT; HIGHER EDUCATION 
COORDINATING BOARD MANAGERIAL EMPLOYEES.] "Covered employment," 
with respect to employment by the higher education coordinating 
board, means employment in a position described in section 
352D.02, subdivision 1, paragraph (b), clause (6). 
    Sec. 9.  Minnesota Statutes 1990, section 354B.015, is 
amended to read: 
    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 or the state unclassified employees retirement 
program, whichever applies, 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 or the state unclassified 
employees retirement program for any other purpose while 
employed in covered employment. 
    Sec. 10.  Minnesota Statutes 1990, section 354B.02, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PLAN PARTICIPANTS.] (a) Except as provided 
in subdivision 2, or unless the person has elected retirement 
coverage under section 352D.02, subdivision 1a, a person who was 
first employed in covered employment under section 354B.01, 
subdivision 2 or 3, after June 30, 1989, shall participate in 
the plan. 
    (b) Except as provided in subdivision 2, or unless the 
person has elected retirement coverage under section 352D.02, 
subdivision 1, paragraph (b), clause (6) or (13), a person who 
was first employed in covered employment after the effective 
date of this section shall participate in the plan. 
    Sec. 11.  Minnesota Statutes 1990, section 354B.02, is 
amended by adding a subdivision to read: 
    Subd. 3a. [UNCLASSIFIED STATE UNIVERSITY SYSTEM EMPLOYEES.] 
State university system employees who would otherwise be covered 
by section 352D.02, subdivision 1a, may elect coverage under the 
plan governed by this chapter.  Election to participate in the 
plan must be made within 120 days of the effective date of this 
section or the start of covered employment, whichever is later.  
Employees in covered employment on the effective date of this 
section who would otherwise be covered by this section, but are 
already participating in the teachers retirement association 
governed by chapter 354 or the general state employees 
retirement plan governed by chapter 352, shall remain in the 
applicable plan unless an election is made to transfer to the 
plan governed by this chapter.  The election must be made within 
120 days of eligibility under the state unclassified employees 
retirement program governed by chapter 352D.  An election to 
participate in the unclassified program or this plan is 
irrevocable during any period of service that would have been 
covered under chapter 352D or this chapter.  This election must 
be made in the form prescribed in section 352D.12. 
    Sec. 12.  Minnesota Statutes 1990, section 354B.02, is 
amended by adding a subdivision to read: 
    Subd. 3b.  [TECHNICAL COLLEGE OR HIGHER EDUCATION 
COORDINATING BOARD EMPLOYEES.] Employees in covered employment 
under section 354B.01, subdivision 4 or 5, may elect coverage 
under the plan.  Election to participate in the plan must be 
made within 120 days of the effective date of this section or 
the start of covered employment, whichever is later, and is 
irrevocable during any period of covered employment in a 
position listed in section 352D.02, subdivision 1, paragraph 
(b), clause (6) or (13), which is established by the state board 
of technical colleges.  These employees are not eligible for the 
supplemental retirement plan specified in sections 354B.07 to 
354B.09. 
    Sec. 13.  Minnesota Statutes 1990, section 354B.02, 
subdivision 4, is amended to read: 
    Subd. 4.  [PURCHASE OF PRIOR SERVICE CREDIT.] A person who 
is initially excluded from participation, but is subsequently 
appointed to a position that qualifies for participation, may 
purchase credit for the prior uncovered employment.  This 
purchase must be made by paying to the employer the amount the 
person would have paid if the prior service had been covered 
employment.  This payment must be made within 45 days of the 
start of covered employment, or by the end of the fiscal year in 
which covered employment commences, whichever is later.  
Employee payments may be made in a lump sum or by payroll 
deduction, as the employee elects.  The employer must contribute 
an amount to match any contribution made by an employee under 
this subdivision.  Contributions for prior service must be 
invested under this section.  Once a person is employed in a 
position that qualifies for participation, all subsequent 
employment by the person is under the provisions of this plan. 
    Sec. 14.  Minnesota Statutes 1990, section 354B.03, is 
amended by adding a subdivision to read: 
    Subd. 4.  [UNCLASSIFIED EMPLOYEES.] (a) If a person in 
covered employment under section 354B.01, subdivision 4 or 5, or 
a person in covered employment under section 354B.01, 
subdivision 2, who would otherwise be covered by section 
352D.02, subdivision 1a, elects to participate in the plan under 
section 354B.02, subdivision 3a or 3b, the executive director 
shall transfer from the supplemental investment fund to the plan 
the value of the employee's account, including the employee's 
member contributions and the employer's contributions.  
    (b) Except as provided in paragraph (c), the transfer must 
be made within 120 days from the date the executive director 
receives notification of the election.  
    (c) The amount of the employee's account held in a 
guaranteed investment contract may not be transferred to the 
plan until the applicable guaranteed investment contract has 
expired. 
    Sec. 15.  Minnesota Statutes 1990, section 354B.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MEMBER CONTRIBUTIONS.] (a) Persons in 
covered employment who would otherwise be eligible to 
participate in the teachers retirement association, but who 
participate in the plan, shall make a member contribution in an 
amount equal to the amount prescribed by section 354.42, 
subdivision 2.  
     (b) Persons in covered employment who would otherwise be 
eligible to participate in the state unclassified employees 
retirement program, but who participate in the plan, shall make 
a member contribution in an amount equal to the member 
contribution amount prescribed in section 352D.04, subdivision 
2, paragraph (a).  
    (c) The contribution must be made by payroll deduction each 
pay period.  
    Sec. 16.  Minnesota Statutes 1991 Supplement, section 
354B.04, subdivision 2, is amended to read: 
    Subd. 2.  [EMPLOYER CONTRIBUTIONS.] (a) The employer of 
persons in covered employment who participate in the plan 
described in subdivision 1, paragraph (a), shall make an 
employer contribution to the plan in an amount equal to the 
amount prescribed by section 354.42, subdivision 3. 
    (b) The employer of persons described in subdivision 1, 
paragraph (b), shall make an employer contribution to the plan 
in an amount equal to the amount prescribed by section 352D.04, 
subdivision 2. 
    Sec. 17.  Minnesota Statutes 1990, section 354B.05, 
subdivision 1, is amended to read: 
    Subdivision 1.  [GOVERNING BOARDS.] The state university 
board shall administer the plan for persons in covered 
employment under section 354B.01, subdivision subdivisions 2, 4, 
and 5.  The community college board shall administer the plan 
for persons in covered employment under section 354B.01, 
subdivision 3.  
    Sec. 18.  [REPEALER.] 
    Laws 1986, chapter 458, section 36, is repealed. 
    Sec. 19.  [EFFECTIVE DATE; RETROACTIVE APPLICATION.] 
    Sections 1 and 3 to 18 are effective July 1, 1992.  Section 
2 is effective on the day following final enactment and applies 
to any former constitutional officer or commissioner eligible 
for a deferred retirement allowance on that date. 
    Presented to the governor April 10, 1992 
    Became law without the governor's signature April 15, 1992