Office of the Revisor of Statutes
Minnesota Session Laws - 1992, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1992
CHAPTER 598-H.F.No. 2025
An act relating to retirement; various retirement
plans; increasing the interest rate on the repayment
of refunds and similar transactions; authorizing
purchases of prior service credit; increasing the
employer contribution rate for certain first class
city teacher retirement fund association coordinated
programs; making various changes in administrative
provisions of laws governing the first class city
teachers retirement fund associations; providing
authority for the Minneapolis teachers retirement fund
association to amend its articles of incorporation to
modify disability benefits for basic program members;
amending Minnesota Statutes 1990, sections 3A.03,
subdivision 2; 352.01, subdivision 11; 352.04,
subdivision 8; 352.23; 352.27; 352.271; 352B.11,
subdivision 4; 352C.051, subdivision 3; 352C.09,
subdivision 2; 352D.05, subdivision 4; 352D.11,
subdivision 2; 352D.12; 353.28, subdivision 5; 353.35;
353.36, subdivision 2; 353A.07, subdivision 3, as
amended; 354.41, subdivision 9; 354.50, subdivision 2;
354.51, subdivisions 4 and 5; 354.52, subdivision 4;
354.53, subdivision 1; 354A.011, subdivisions 4, 8,
11, 12, 13, 15, 21, 24, and 27; 354A.021, subdivision
6; 354A.05; 354A.08; 354A.096; 354A.12, subdivision 2;
354A.31, subdivision 3; 354A.36, subdivision 3;
354A.38, subdivision 3; and 490.124, subdivision 12;
Minnesota Statutes 1991 Supplement, sections 353.01,
subdivision 16; 353.27, subdivisions 12, 12a, and 12b;
354.094, subdivision 1; and 354A.011, subdivision 26;
repealing Minnesota Statutes 1990, sections 354A.011,
subdivision 2; and 354A.40, subdivisions 2 and 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
MINNESOTA STATE RETIREMENT SYSTEM
Section 1. Minnesota Statutes 1990, section 3A.03,
subdivision 2, is amended to read:
Subd. 2. [REFUND.] (1) Any person who has made
contributions pursuant to subdivision 1 who is no longer a
member of the legislature is entitled to receive upon
application to the director a refund of all contributions
credited to the member's account with interest at the an annual
rate of six percent per annum compounded annually.
(2) The refund of contributions as provided in clause (1)
above terminates all rights of a former member of the
legislature or survivors of the former member under this
chapter. Should the former member of the legislature again be a
member of the legislature after having taken a refund as
provided above, the member shall be considered a new member.
However, a new member may reinstate the rights and credit for
service forfeited, provided the new member repays all refunds
taken plus interest at the an annual rate of six 8.5 percent
per annum compounded annually.
(3) No person shall be required to apply for or accept a
refund.
Sec. 2. Minnesota Statutes 1990, 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.
The allowable service determined and credited on a
fractional basis 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.
(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 an annual rate of six
8.5 percent per year compounded annually 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 1990, section 352.04,
subdivision 8, is amended to read:
Subd. 8. [DEPARTMENT REQUIRED TO PAY OMITTED SALARY
DEDUCTIONS.] (a) If a department fails to take deductions past
due for a period of 60 days or less from an employee's salary as
provided in this section, those deductions must be taken on
later payroll abstracts.
(b) If a department fails to take deductions past due for a
period in excess of 60 days from an employee's salary as
provided in this section, the department, and not the employee,
shall pay the employee and employer contributions and an amount
equivalent to six 8.5 percent of the total amount due in lieu of
interest.
(c) If a department fails to take deductions past due for a
period of 60 days or less and the employee is no longer in state
service so that the required deductions cannot be taken from the
salary of the employee, the department shall nevertheless pay
the required employer contributions. If any department fails to
take deductions past due for a period in excess of 60 days and
the employee is no longer in state service, the omitted
contributions shall be recovered under paragraph (b).
(d) If an employee from whose salary required deductions
were past due for a period of 60 days or less leaves state
service before the payment of the omitted deductions and
subsequently returns to state service, the unpaid amount is
considered the equivalent of a refund. The employee accrues no
right by reason of the unpaid amount, except that the employee
may pay the amount of omitted deductions as provided in section
352.23.
Sec. 4. Minnesota Statutes 1990, section 352.23, is
amended to read:
352.23 [TERMINATION OF RIGHTS.]
When any employee accepts a refund as provided in section
352.22, all existing service credits and all rights and benefits
to which the employee was entitled before accepting the refund
terminate. They must not again be restored until the former
employee acquires at least one year's allowable service credit
after taking the last refund. In that event, the employee may
repay all refunds previously taken from the retirement fund.
Repayment of refunds entitles the employee only to credit for
service covered by (1) salary deductions, (2) payments made in
lieu of salary deductions, and (3) payments made to obtain
credit for service as permitted by laws in effect when payment
was made. If an employee before taking one or more refunds had
credit for prior service or for military service without payment
in either case, the employee may obtain credit for any forfeited
service before July 1, 1929, and for any forfeited military
service by making payments at a contribution rate of three
percent of the average salary upon which deductions for the
retirement fund were based, for the three-year period
immediately preceding repayment of refund for service credit
before July 1, 1929, and on the salary received at the time of
entering military service to restore military service credit.
Payments and for purchase of prior military service under this
section and repayment of refunds are to be paid with interest at
six an annual rate of 8.5 percent per year compounded annually.
They may be paid in a lump sum or by payroll deduction in the
manner provided in section 352.04.
Sec. 5. Minnesota Statutes 1990, section 352.27, is
amended to read:
352.27 [CREDIT FOR MILITARY SERVICE.]
Any employee given a leave of absence to enter military
service who returns to state service upon discharge from
military service as provided in section 192.262, may obtain
credit for the period of military service. The employee is not
entitled to credit for any voluntary extension of military
service at the instance of the employee beyond the initial
period of enlistment, induction, or call to active duty, nor to
credit for any period of service following a voluntary return to
military service. An employee may obtain credit by paying into
the fund an employee contribution based upon the salary received
at the date of return from military service. The amount of this
contribution must be the applicable amounts required in section
352.04, subdivision 2, plus interest at six an annual rate of
8.5 percent per year compounded annually. The matching employer
contribution and additional contribution provided in section
352.04 must be paid by the department employing the employee
upon return to state service from funds available to the
department at the time and in the manner provided in section
352.04.
Sec. 6. Minnesota Statutes 1990, section 352.271, is
amended to read:
352.271 [METROPOLITAN TRANSIT COMMISSION-TRANSIT OPERATING
DIVISION EMPLOYEES; CREDIT FOR MILITARY SERVICE.]
Any employee of the metropolitan transit commission
operating division who was on a leave of absence to enter
military service on July 1, 1978, who has not taken a refund of
employee contributions as authorized by article 12 of the
metropolitan transit commission-transit operating division
employees retirement fund document or section 352.22,
subdivision 2a, and who returns to service as an employee of the
metropolitan transit commission-transit operating division upon
discharge from military service as provided in section 192.262
is entitled to allowable service credit for the period of
military service. If an employee has taken a refund of employee
contributions, and would otherwise be entitled to allowable
service credit under this section, the employee is entitled to
allowable service credit for the period of military service upon
repayment to the executive director of the system of the amount
refunded plus interest at the an annual rate of six 8.5 percent
per year compounded annually from the date on which the refund
was taken to the date of repayment. No employee is entitled to
allowable service credit for any voluntary extensions of
military service at the instance of the employee beyond any
initial period of enlistment, induction, or call to active duty.
Sec. 7. Minnesota Statutes 1990, section 352B.11,
subdivision 4, is amended to read:
Subd. 4. [REENTRY INTO STATE SERVICE.] When a former
member, who has become separated from state service that
entitled the member to membership and has received a refund of
retirement payments, reenters the state service in a position
that entitles the member to membership, that member shall
receive credit for the period of prior allowable state service
if the member repays into the fund the amount of the refund,
plus interest on it at the an annual rate of six 8.5 percent
per year compounded annually, at any time before subsequent
retirement. Repayment may be made in installments or in a lump
sum.
Sec. 8. Minnesota Statutes 1990, section 352C.051,
subdivision 3, is amended to read:
Subd. 3. [REFUND REPAYMENT.] Any former constitutional
officer or commissioner who has received a refund as provided in
section 352C.09, subdivision 2, who is a currently contributing
member of a retirement fund specified or enumerated in
subdivision 1 or 2, may repay the refund to the elective state
officers retirement plan, with interest at six an annual rate of
8.5 percent per annum compounded annually.
Sec. 9. Minnesota Statutes 1990, section 352C.09,
subdivision 2, is amended to read:
Subd. 2. (1) Any person who has made contributions
pursuant to subdivision 1 who is no longer a constitutional
officer or commissioner is entitled to receive upon application
to the director a refund of all contributions credited to the
individual's account with interest at the rate of six percent
per annum compounded annually.
(2) The refund of contributions as provided in clause (1)
above terminates all rights of a former constitutional officer
or commissioner or survivors thereof under the provisions of
this chapter. Should the former constitutional officer or
commissioner again hold such office after having taken a refund
as provided above, the former officer or commissioner shall be
considered a new member and may reinstate the rights and credit
for service forfeited provided all refunds previously taken are
repaid with interest at six an annual rate of 8.5 percent per
annum compounded annually.
(3) No person shall be required to apply for or accept a
refund.
Sec. 10. Minnesota Statutes 1990, section 352D.05,
subdivision 4, is amended to read:
Subd. 4. A participant in the unclassified program may
repay regular refunds taken pursuant to section 352.22, as
provided in section 352.23. A participant in the unclassified
program or an employee covered by the general plan who has
withdrawn the value of the total shares may repay the refund
taken and thereupon restore the service credit, rights and
benefits forfeited by paying into the fund the greater of (1)
the amount refunded plus interest at 6-1/2 an annual rate of 8.5
percent per annum compounded annually from the date that the
refund was taken until the date that the refund is repaid, or
(2) an amount equal to the total of the employee and employer
matching and additional contributions for the forfeited
employment period less the administrative fee provided in
section 352D.09, subdivision 7, plus interest at the an annual
rate of 6-1/2 8.5 percent per annum compounded annually from the
date of the start of the forfeited employment period until the
date that the refund is paid. If the participant had withdrawn
only the employee shares as permitted under prior laws,
repayment shall be pro rata. Payment shall be made in a lump
sum.
Sec. 11. Minnesota Statutes 1990, section 352D.11,
subdivision 2, is amended to read:
Subd. 2. [PAYMENTS BY EMPLOYEE.] An employee entitled to
purchase service credit may make the purchase by paying to the
state retirement system an amount equal to the current employee
contribution rate in effect for the state retirement system
applied to the current or final salary rate multiplied by the
months and days of prior temporary, intermittent, or contract
legislative service. Payment shall be made in one lump sum
unless the executive director of the state retirement system
agrees to accept payment in installments over a period of not
more than three years from the date of the agreement.
Installment payments shall be charged interest at a an annual
rate found appropriate by the executive director of 8.5 percent
compounded annually.
Sec. 12. Minnesota Statutes 1990, section 352D.12, is
amended to read:
352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.]
An employee who is a participant in the unclassified
program and who has prior service credit in a covered plan under
chapters 352, 353, 354, 354A, and 422A may, within the time
limits in this section, elect to transfer to the unclassified
program accumulated employee and equal employer contributions
with interest at six an annual rate of 8.5 percent a year
compounded annually, based on fiscal year balances.
If a participant has taken a refund from a fund listed in
this section, the participant may repay the refund to that fund,
notwithstanding any restrictions on repayment to that fund, plus
six 8.5 percent interest a year compounded annually and have the
accumulated employee and equal employer contributions
transferred to the unclassified program with interest at six an
annual rate of 8.5 percent a year compounded annually based on
fiscal year balances.
A participant electing to transfer prior service
contributions under this section must complete the application
for the transfer and repay any refund within one year of July 1,
1985 or the commencement of the employee's participation in the
unclassified program, whichever is later.
Sec. 13. Minnesota Statutes 1990, 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 an annual 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 an annual rate of 8.5 percent per annum,
compounded annually.
Sec. 14. [EFFECTIVE DATE.]
Sections 1 to 13 are effective May 1, 1994.
ARTICLE 2
PUBLIC EMPLOYEES RETIREMENT ASSOCIATION
Section 1. Minnesota Statutes 1991 Supplement, section
353.01, subdivision 16, is amended to read:
Subd. 16. [ALLOWABLE SERVICE.] (a) "Allowable service"
means service during years of actual membership in the course of
which employee contributions were made, periods covered by
payments in lieu of salary deductions under section 353.35, and
service in years during which the public employee was not a
member but for which the member later elected, while a member,
to obtain credit by making payments to the fund as permitted by
any law then in effect.
(b) "Allowable service" also means a period of authorized
leave of absence with pay from which deductions for employee
contributions are made, deposited, and credited to the fund.
(c) "Allowable service" also means a period of authorized
leave of absence without pay that does not exceed one year, and
during or for which a member obtained credit by payments to the
fund made in place of salary deductions, provided that the
payments are made in an amount or amounts based on the member's
average salary on which deductions were paid for the last six
months of public service, or for that portion of the last six
months while the member was in public service, to apply to the
period in either case immediately preceding commencement of the
leave of absence. If the employee elects to pay employee
contributions for the period of any leave of absence without
pay, or for any portion of the leave, the employee shall also,
as a condition to the exercise of the election, pay to the fund
an amount equivalent to both the required employer and
additional employer contributions for the employee. The payment
must be made within one year from the date the leave of absence
terminates. The employer by appropriate action of its governing
body, made a part of its official records, before the date of
the first payment of the employee contribution, may certify to
the association in writing that it will cause to be paid the
employer and additional employer contributions from the proceeds
of a tax levy made under section 353.28. Payments under this
paragraph must include interest at the an annual rate of six 8.5
percent a year compounded annually from the date of the
termination of the leave of absence to the date payment is made.
(d) "Allowable service" also means a period during which a
member is on an authorized sick leave of absence, without pay
limited to one year, an authorized temporary layoff, or a
maternity, paternity, or adoption leave. The association will
grant a maximum of two months service credit for a maternity,
paternity, or adoption leave upon documentation from the
member's governmental subdivision. A member on personal leave
of absence who provides the association with a birth certificate
or other evidence of birth or adoption during the personal leave
time period will be granted up to two months of service credit.
(e) "Allowable service" also means a period during which a
member is on an authorized leave of absence to enter military
service, provided that the member returns to public service upon
discharge from military service under section 192.262 and pays
into the fund employee contributions based upon the employee's
salary at the date of return from military service. Payment
must be made within five years of the date of discharge from the
military service. The amount of these contributions must be in
accord with the contribution rates and salary limitations, if
any, in effect during the leave, plus interest at six an annual
rate of 8.5 percent a year compounded annually from the date of
return to public service to the date payment is made. The
matching employer contribution and additional employer
contribution under section 353.27, subdivisions 3 and 3a, must
be paid by the department employing the member upon return to
public service if the member makes the employee contributions.
The governmental subdivision involved may appropriate money for
those payments. A member may not receive credit for a voluntary
extension of military service at the instance of the member
beyond the initial period of enlistment, induction, or call to
active duty.
(f) For calculating benefits under sections 353.30, 353.31,
353.32, and 353.33 for state officers and employees displaced by
the community corrections act, chapter 401, and transferred into
county service under section 401.04, "allowable service" means
combined years of allowable service as defined in paragraphs (a)
to (e) and section 352.01, subdivision 11.
(g) 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, "applicable service" is a period of service
credited by the local police or firefighters relief association
as of the effective date of the consolidation based on law and
on bylaw provisions governing the relief association on the date
of the initiation of the consolidation procedure.
Sec. 2. Minnesota Statutes 1991 Supplement, section
353.27, subdivision 12, is amended to read:
Subd. 12. [OMITTED SALARY DEDUCTIONS; OBLIGATIONS.] (a) In
the case of omission of required deductions from salary of an
employee, the department head shall immediately, upon discovery,
report the employee for membership and require employee
deductions under subdivision 4. Omitted employee deductions due
for the 60-day period preceding membership must be deducted upon
receipt of billing from the association from the employee's next
salary payment and remitted to the association. The employer
shall pay any remaining omitted employee deductions and any
omitted employer contributions, plus cumulative interest at the
an annual rate of six 8.5 percent a year, compounded annually,
from the date or dates each omitted employee contribution was
first payable.
(b) An employer shall not hold an employee liable for
omitted employee deductions beyond the pay period that covers
the 60th day preceding membership nor attempt to recover from
the employee those employee deductions paid by the employer.
Omitted deductions not paid by the employee constitute a
liability of the employer that failed to deduct the omitted
deductions from the employee's salary. The employer shall make
payment with interest at the an annual rate of six 8.5 percent
compounded annually. Omitted employee deductions are no longer
due if 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 an annual rate of six 8.5
percent compounded annually from the date the contributions were
first payable.
(c) 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 recovery commences on the date of the
mailing of any written correspondence from the association
requesting information from the governmental subdivision upon
which to determine whether or not omitted deductions occurred.
Sec. 3. Minnesota Statutes 1991 Supplement, section
353.27, subdivision 12a, is amended to read:
Subd. 12a. A terminated employee who has a period of
employment in which previously omitted employer contributions
were made under subdivision 12 but for whom no, or only partial,
omitted employee contributions have been made, or a member who
had prior coverage in the association for which previously
omitted employer contributions were made under subdivision 12
but who terminated service before required omitted employee
deductions could be withheld from salary, may pay the omitted
employee deductions for the period on which omitted employer
contributions were previously paid plus interest at the an
annual rate of six 8.5 percent compounded annually. A
terminated employee may pay the omitted employee deductions plus
interest within six months of an initial notification from the
association of eligibility to pay those omitted deductions. If
a terminated employee is reemployed in a position covered under
a public pension fund under section 356.30, subdivision 3, and
elects to pay omitted employee deductions, payment must be made
no later than six months after a subsequent termination of
public service.
Sec. 4. Minnesota Statutes 1991 Supplement, section
353.27, subdivision 12b, is amended to read:
Subd. 12b. If deductions were omitted from salary
adjustments or final salary of a terminated employee, the
employer shall pay the employer and employer additional
contributions, plus interest on both at an annual rate of 8.5
percent compounded annually, and the employee shall pay the
employee deductions.
Sec. 5. Minnesota Statutes 1990, section 353.28,
subdivision 5, is amended to read:
Subd. 5. Any amount which becomes due and payable pursuant
to under this section or section 353.27, subdivision 4, shall
bear compound is payable with interest at the an annual rate of
six 8.5 percent per year compounded annually 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 by the association, with a minimum interest
charge of $10. Interest for past due payments of excess police
state aid under section 69.031, subdivision 5, must be charged
at a an annual rate of six 8.5 percent compounded annually.
Sec. 6. Minnesota Statutes 1990, 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 the refund must
terminate and must not again be restored until the person
acquires at least 18 months allowable service credit 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 an annual rate of 8.5 percent per annum
compounded annually. If more than one refund has been taken,
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 an annual rate of 8.5 percent per annum
compounded annually. All refunds must be repaid within six
months of the last date of termination of public service.
Sec. 7. Minnesota Statutes 1990, section 353.36,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYEE CONTRIBUTIONS; INTEREST; MATCHING
PAYMENT.] A member who has at least one year of allowable
service with the association, whose public service terminated
before July 1, 1982, and who has prior public service on which
salary deductions were not taken for the retirement fund and who
does not have the required minimum number of years of allowable
service credit to qualify for an annuity, may apply for an
annuity if otherwise qualified, and within 90 days thereafter
purchase whatever period of the member's prior public service
which is necessary to bring the member's total allowable service
credit to the minimum, provided that the most recent period of
prior uncredited public service shall be is purchased first.
The member may gain allowable service credit by paying on the
salary covered under the law in effect at the time that the
prior public service was performed. The applicable member
contribution percentage, if the member is a basic member, is
eight percent, and if the member is a coordinated member, is
four percent percentages for a basic member and a coordinated
member are the current contribution percentages under section
353.27, subdivision 2. An amount equal to the employer and
employer additional contributions specified in section 353.27,
subdivisions 3 and 3a, plus interest on the total amount
representing employee, employer and employer additional
contributions at the an annual rate of six 8.5 percent per
annum compounded annually from the date first payable to the
date payment is made, shall must also be paid. The employer, at
its sole discretion, may agree to pay the amount representing
the employer and employer additional contributions pursuant to
under subdivision 2a. An annuity shall accrue as provided in
accrues under section 353.29, subdivision 7, but no annuity
shall be is not paid until the applicant's payment is made in
full for the prior public service. If payment is not made
within such 90 days, the application for retirement shall be is
void.
Sec. 8. [EFFECTIVE DATE.]
Sections 1 to 7 are effective May 1, 1994.
ARTICLE 3
TEACHERS RETIREMENT ASSOCIATION
Section 1. Minnesota Statutes 1991 Supplement, section
354.094, subdivision 1, is amended to read:
Subdivision 1. [SERVICE CREDIT CONTRIBUTIONS.] Before the
end of the fiscal year during which any extended leave of
absence is granted pursuant to section 125.60 or 136.88, the
employing unit granting the leave must certify the leave to the
association on a form specified by the executive director. A
member granted an extended leave of absence pursuant to section
125.60 or 136.88 may pay employee contributions and receive
allowable service credit toward annuities and other benefits
under this chapter, for each year of the leave provided the
member and the employing board make the required employer
contribution in any proportion they may agree upon, during the
period of the leave which shall not exceed five years. A member
may not receive more than five years of allowable service credit
under this section. The employee and employer contributions
must be based upon the rates of contribution prescribed by
section 354.42 for the salary received during the year
immediately preceding the extended leave. Payments for the
years for which a member is receiving service credit while on
extended leave must be made on or before the later of June 30 of
each fiscal year for which service credit is received or within
30 days after first notification of the amount due, if requested
by the member, is given by the association. No payment is
permitted after the following September 30. Payments received
after June 30 must include six interest at an annual rate of 8.5
percent interest from June 30 through the end of the month in
which payment is received. Notwithstanding the provisions of
any agreements to the contrary, employee and employer
contributions may not be made to receive allowable service
credit if the member does not have full reinstatement rights as
provided in section 125.60 or 136.88, both during and at the end
of the extended leave.
Sec. 2. Minnesota Statutes 1990, section 354.41,
subdivision 9, is amended to read:
Subd. 9. Any member who has been granted a leave of
absence to serve as an elected officer of a professional
teachers organization shall be entitled to acquire allowable
service credit for the period of leave. To acquire the
allowable service credit, the member shall make any required
employee contributions currently during the period of the leave,
which shall be based upon the contract salary for which the
member would have been eligible if the member had not been
granted the leave of absence and shall be consistent with the
contract in force for the year occurring immediately prior to
the commencement of the leave of absence. Any shortage which
occurs in the amount of required employee contributions for any
year may be paid directly to the fund with interest at the an
annual rate of six 8.5 percent per annum compounded annually on
or prior to the last day of the fiscal year next following the
occurrence of the shortage.
Sec. 3. Minnesota Statutes 1990, section 354.50,
subdivision 2, is amended to read:
Subd. 2. [INTEREST CHARGE.] If a member desires to repay
the refunds, payment shall include six interest at an annual
rate of 8.5 percent interest compounded annually from date of
withdrawal to the date payment is made and shall be credited to
the fund.
Sec. 4. Minnesota Statutes 1990, section 354.51,
subdivision 4, is amended to read:
Subd. 4. [OTHER STATE OR SCHOOL TEACHING SERVICE; PURCHASE
OF CREDIT.] Any teacher who has rendered teaching service prior
to June 30, 1953, in another state, or in a state public school
which is not an employing unit with employees for whom
retirement coverage is provided pursuant to this chapter, or for
the University of Minnesota, who was a member of the fund prior
to or after the uncredited teaching service, who is not entitled
to any benefits from any other retirement system based on the
uncredited teaching service, who has credit for at least 15
years of service as a member of the retirement fund with at
least five years of service occurring subsequent to the period
of uncredited teaching service, who became a member of the
retirement fund prior to June 30, 1957, and who has not accepted
a refund of accumulated member contributions or deductions and
resumed teaching service covered by the retirement fund after
July 1, 1957, shall be entitled to obtain service credit for the
period of uncredited teaching service. To obtain service
credit, a teacher shall make a payment equal to six percent of
the average annual salary of the teacher for the five year
period occurring immediately prior to the completion of the
minimum service requirement or July 1, 1951, whichever is later,
multiplied for the number of years of the period of uncredited
teaching service, but not to exceed $175 annually for any period
of uncredited teaching service occurring prior to July 1, 1953,
or $216 annually for any period of uncredited teaching service
occurring subsequent to June 30, 1953. The payment made by the
teacher shall be accompanied by a matching payment representing
the employer contribution. This matching employer contribution
payment is to be made by the agency which formerly employed the
teacher, except that, at its discretion, the payment may be made
by the current employer of the teacher. The payments shall
include interest at the an annual rate of six 8.5 percent per
annum compounded annually from the end of the year of uncredited
service to the date on which payment is first made. Payment
shall be made in a single payment unless the executive director
authorizes installment payments. If the payment made is less
than the full required payment, including interest, the formula
service credit granted shall be adjusted in accordance with
section 354.05, subdivision 25, clause (3). Any school district
or institution which employs a teacher who makes a payment
pursuant to this subdivision is authorized to make any required
payments representing employer contributions and interest and
the required amounts are hereby appropriated from any funds
available to the school district or institution. Any payments
made pursuant to this subdivision shall be considered
accumulations made after July 1, 1957 for purposes of computing
an annuity pursuant to section 354.44, subdivision 2. All
payments shall be made to the executive director prior to July
1, 1973 or within one year after the completion of the minimum
state teaching service requirements whichever is later.
Sec. 5. Minnesota Statutes 1990, section 354.51,
subdivision 5, is amended to read:
Subd. 5. In the event that full required member
contributions are not deducted from the salary of a teacher,
payment shall be made as follows:
(a) Payment of shortages in member deductions on salary
earned after June 30, 1957, and prior to July 1, 1981, may be
made any time prior to retirement. Payment shall include six
interest at an annual rate of 8.5 percent interest compounded
annually from the end of the fiscal year in which the shortage
occurred to the end of the month in which payment is made and
the interest shall be credited to the fund. If payment of a
shortage in deductions is not made, the formula service credit
of the member shall be prorated pursuant to section 354.05,
subdivision 25, clause (3).
(b) Payment of shortages in member deductions on salary
earned after June 30, 1981, shall be the sole obligation of the
employing unit and shall be payable by the employing unit upon
notification by the executive director of the shortage with
interest at the an annual rate of six 8.5 percent per annum,
compounded annually, from the end of the fiscal year in which
the shortage occurred to the end of the month in which payment
is made and the interest shall be credited to the fund.
Effective July 1, 1986, the employing unit shall also pay the
employer contributions as specified in section 354.42,
subdivisions 3 and 5 for such shortages. If the shortage
payment is not paid by the employing unit within 60 days of
notification, the executive director shall certify the amount of
the shortage payment to the applicable county auditor, who shall
spread a levy in the amount of the shortage payment over the
taxable property of the taxing district of the employing unit if
the employing unit is supported by property taxes, or to the
commissioner of finance, who shall deduct the amount from any
state aid or appropriation amount applicable to the employing
unit if the employing unit is not supported by property taxes.
(c) Payment may not be made for shortages in member
deductions on salary earned prior to July 1, 1957.
Sec. 6. Minnesota Statutes 1990, section 354.52,
subdivision 4, is amended to read:
Subd. 4. [REPORTING AND REMITTANCE REQUIREMENTS.] At least
once each month, the chief administrative officer of each
employing school district or managing body of schools and
institutions to which the provisions of this chapter apply shall
transmit all amounts due and furnish a signed statement
indicating the amount due and transmitted, and shall transmit a
statement containing such other information as the executive
director shall require. Signing the statement shall have the
force and effect of an oath as to the correctness of the amount
due and transmitted. Any amount thus due and not transmitted
shall accrue interest at the an annual rate of six 8.5 percent
compounded annually commencing 15 days after the date first due
until the amount is transmitted and shall be paid by the
employing school district or other managing body. The state
treasurer shall credit all money received or withheld pursuant
to the provisions of this chapter to the fund and the reports
and date received by the state treasurer from each reporting
agency shall be available for the board. Any person willfully
failing to perform any of the duties imposed by this section
shall be guilty of a misdemeanor.
Sec. 7. Minnesota Statutes 1990, section 354.53,
subdivision 1, is amended to read:
Subdivision 1. Any employee given a leave of absence to
enter military service and who returns to teaching service upon
discharge from military service as provided in section 192.262,
shall obtain credit for the period of military service but shall
not receive credit for any voluntary extension of military
service at the instance of the member beyond the initial period
of enlistment, induction or call to active duty. The member
shall obtain credit by paying into the fund an employee
contribution based upon the salary of the member at the date of
return from military service. The amount of this contribution
shall be as follows:
Period Basic Member Coordinated Member
July 1, 1973 8 percent 4 percent
thru
June 30, 1979
July 1, 1979
and 8.5 percent 4.5 percent
thereafter
The contributions specified in this subdivision shall be
multiplied by the number of years of military service together
with interest thereon at the an annual rate of six 8.5 percent
compounded annually from the time the military service was
rendered to the first date of payment. The employer
contribution and additional contribution provided in section
354.42 shall be paid by the unit in the manner provided in
section 354.43.
Sec. 8. [EFFECTIVE DATE.]
Sections 1 to 7 are effective May 1, 1994.
ARTICLE 4
PURCHASES OF PRIOR SERVICE AND OTHER
RETIREMENT LAW CHANGES
Section 1. [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION;
PURCHASES OF PRIOR SERVICE CREDIT.]
Subdivision 1. [ELIGIBILITY; MINNEAPOLIS CONSTRUCTION
EQUIPMENT OPERATOR.] (a) Notwithstanding any provision of
Minnesota Statutes, section 353.27, subdivision 12, to the
contrary, an eligible person described in paragraph (b) is
entitled to purchase allowable service credit in the coordinated
program of the public employees retirement association for the
period described in paragraph (c) by paying the amount specified
in subdivision 8.
(b) An eligible person is a person who:
(1) is currently a member of the coordinated program of the
public employees retirement association;
(2) was born on August 22, 1956;
(3) was employed on a temporary or seasonal basis by a city
of the first class on June 24, 1983;
(4) was first eligible for membership in the public
employees retirement association in 1985; and
(5) did not become a member of the public employees
retirement association until September 1986, because no timely
employee or employer contributions were made until that time.
(c) The period for service credit purchase is the period of
eligible service between January 1985 and September 1986, as
determined by the executive director of the public employees
retirement association based on satisfactory evidence of the
eligible person's employment status.
Subd. 2. [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit
for prior eligible service under subdivision 1, there must be
paid to the public employees retirement association an amount
equal to the present value on the date of payment, of the amount
of the additional retirement annuity obtained by purchase of the
additional service credit.
(b) Calculation of this amount must be made by the
executive director of the public employees retirement
association using the applicable preretirement interest rate
specified in Minnesota Statutes, section 356.215, subdivision
4d, and the mortality table adopted for the coordinated program
of the retirement association. The calculation must assume
continuous future service in the 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. The calculation must also assume a
future salary history that includes annual salary increases at
the salary increase rate specified in section 356.215,
subdivision 4d.
(c) The eligible person must establish in the records of
the 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 retirement association.
(d) The portion of the total cost of the purchase payable
by the eligible person is specified in subdivision 3. The
remaining portion of total cost is to be paid by the applicable
employing unit as specified in subdivision 4.
Subd. 3. [ELIGIBLE PERSON PAYMENT.] (a) To receive credit
for the period of service credit purchase specified in
subdivision 1, paragraph (c), the eligible person specified in
subdivision 1, paragraph (b), must pay a member contribution
equivalent amount.
(b) The member contribution equivalent amount is an amount
equal to four percent of the person's actual salary rate or
rates during the period for service credit purchase, plus six
percent annually compounded interest from the date on which a
member contribution should have been made if membership during
the period of service credit purchase had been properly
determined to the date on which payment is made. Payment must
be made in a lump sum. Authority to make the member
contribution equivalent amount expires on September 1, 1992. If
the member contribution equivalent amount was tendered by the
eligible person before the effective date of this section, no
additional contribution amount or interest is payable by the
eligible person.
Subd. 4. [MANDATORY EMPLOYING UNIT PAYMENT.] (a) Within 30
days of the effective date of this section or 60 days of the
receipt by the executive director of the public employees
retirement association of the payment from the eligible person
under subdivision 3, whichever is later, the governmental unit
employing the eligible person described in subdivision 1,
paragraph (b), during the period of service credit purchase
described in subdivision 1, paragraph (c), shall pay the
difference between the amounts specified in subdivisions 2 and 3.
(b) The mandatory employing unit payment amount is payable
by the governmental unit in a lump sum.
Subd. 5. [SERVICE CREDIT GRANT.] Service credit for the
purchase period must be granted to the account of the eligible
person upon receipt of the purchase payment amount specified in
subdivision 2.
Subd. 6. [ELIGIBILITY; EVELETH FIREFIGHTER.] (a)
Notwithstanding any provision of Minnesota Statutes, chapter
353, to the contrary, a person described in paragraph (b) is
entitled to purchase credit for the period of prior uncredited
service specified in paragraph (c) from the public employees
police and fire fund by paying the amount specified in
subdivision 4.
(b) A person eligible under paragraph (a) is a member of
the public employees police and fire plan who:
(1) was born on June 5, 1935;
(2) was initially employed as a firefighter by the city of
Eveleth on August 20, 1970; and
(3) is currently employed as a firefighter by the city of
Eveleth.
(c) The period of prior service available for purchase
under this section is a period equivalent to one year and eleven
months originally covered under the Eveleth fire relief
association, for which the individual did not receive service
credit in the public employees police and fire fund when the
Eveleth fire relief association terminated and coverage was
transferred to the public employees police and fire fund under
Laws 1977, chapter 61.
Subd. 7. [ELIGIBILITY; STILLWATER FIRE CHIEF.] (a)
Notwithstanding any provision of Minnesota Statutes, chapter
353, to the contrary, a person described in paragraph (b) is
entitled to purchase credit for the period of prior uncredited
service specified in paragraph (c) from the public employees
police and fire fund by paying the amount specified in
subdivision 8.
(b) A person eligible under paragraph (a) is a person who:
(1) was born on February 7, 1944;
(2) was initially employed as a firefighter by the city of
Stillwater on August 7, 1965; and
(3) is currently employed as fire chief by the city of
Stillwater.
(c) The period of prior service available for purchase
under this section is a period of five months in 1965 during
which no member or employer contributions to the public
employees police and fire fund were made.
Subd. 8. [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit
for prior service under this section, there must be paid to the
public employees retirement association or the public employees
police and fire fund, whichever applies, an amount equal to the
present value, on the date of payment, of the amount of the
additional retirement annuity obtained by the purchase of the
additional service credit. Calculation of this amount must be
made using the applicable preretirement interest rate for the
association specified in Minnesota Statutes, section 356.215,
subdivision 4d, and the mortality table adopted for the fund or
association. The calculation must assume continuous future
service in the fund or association until, and retirement at, the
age at which the minimum requirements of the fund 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. The calculation must also assume a future salary
history that includes annual salary increases at the applicable
salary increase rate for the fund or association specified in
Minnesota Statutes, section 356.215, subdivision 4d. The member
must establish in the records of the fund 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 public
employees retirement association.
(b) Payment must be made in one lump sum.
(c) Payment of the amount calculated under this subdivision
must be made by the member. However, the current or former
governmental subdivision employer of the member 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. [ELIGIBILITY FOR REFUND.]
Subdivision 1. [ELIGIBILITY.] Notwithstanding the
requirements of Minnesota Statutes, section 353.34, subdivision
7, or other law to the contrary, a member of the public
employees retirement association who was born on December 23,
1950, who is a Hennepin county employee on a sick leave of
absence first reported to the public employees retirement
association on June 19, 1991, may immediately elect to receive a
refund of employee contributions as provided in section 353.34,
subdivision 2.
Subd. 2. [SERVICE CREDIT LIMITATION.] Allowable service
under Minnesota Statutes section 353.01, subdivision 16, clause
(d), for the individual described in subdivision 1 ends one year
from the beginning of the sick leave or on the date of the
refund, whichever is earlier.
Sec. 3. [APPLICABILITY OF CERTAIN PRIOR LAW CHANGES.]
(a) A person with service under Minnesota Statutes, chapter
3A, after June 2, 1989, who did not receive credit for a period
of service between January 6, 1981, and June 2, 1989, by virtue
of the limitation previously contained in the final paragraph of
Minnesota Statutes, section 3A.02, subdivision 1, is entitled to
receive credit for any period of uncredited service as a result
of the limitation upon payment of the amount specified in
paragraph (b).
(b) The additional service credit payment amount is an
amount equal to nine percent of the salary of the person with
service uncredited under Minnesota Statutes, chapter 3A, during
the period of uncredited service, plus interest at an annual
rate of six percent, compounded annually, from the midpoint of
the period of uncredited service to the date of payment.
Payment must be made by January 1, 1994, or the date of
retirement, whichever is earlier.
Sec. 4. [SHOREWOOD COUNCIL MEMBERS; TERMINATION OF
PARTICIPATION; REFUND OF CONTRIBUTIONS.]
Notwithstanding the prohibition on revocation in Minnesota
Statutes, section 353D.02, any member of the Shorewood city
council on the effective date of this section who has elected
coverage under the public employees defined contribution plan
may elect to revoke participation in the plan. The revocation
election must be made on or before January 1, 1994. Revocation
is effective on receipt of notice by the public employees
retirement association, and employee contributions must be
returned to the council member. The remaining value of the
former participant's account, if any, become property of the
association.
Sec. 5. [EFFECTIVE DATE.]
Sections 1, 2, and 4 are effective the day following final
enactment. Section 3 is effective the day following final
enactment and applies to any person described in section 3,
paragraph (a), including persons on deferred retirement status.
ARTICLE 5
FIRST CLASS CITY TEACHER RETIREMENT
FUND ASSOCIATIONS
EMPLOYER CONTRIBUTION RATE INCREASE
Section 1. Minnesota Statutes 1990, section 354A.12,
subdivision 2, is amended to read:
Subd. 2. [EMPLOYER CONTRIBUTIONS RETIREMENT CONTRIBUTION
LEVY DISALLOWED.] Notwithstanding any law to the contrary,
levies for teachers retirement fund associations in cities of
the first class, including levies for any employer social
security taxes for teachers covered by the Duluth teachers
retirement fund association or the Minneapolis teachers
retirement fund association or the St. Paul teachers retirement
fund association, are disallowed.
Subd. 2a. [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION
RATES.] (a) The employing units shall make the following
employer contributions to teachers retirement fund associations:
(a) (1) for any coordinated member of a teachers retirement
fund association in a city of the first class, the employing
unit shall pay the employer social security taxes in accordance
with section 355.46, subdivision 3, clause (b);
(b) (2) for any coordinated member of one of the following
teachers retirement fund associations in a city of the first
class, the employing unit shall make a regular employer
contribution to the respective retirement fund association in an
amount equal to the designated percentage of the salary of the
coordinated member as provided below:
Duluth teachers retirement
fund association 5.79 4.50 percent
Minneapolis teachers retirement
fund association 4.50 percent
St. Paul teachers retirement
fund association 4.50 percent;
(c) (3) for any basic member of one of the following
teachers retirement fund associations in a city of the first
class, the employing unit shall make a regular employer
contribution to the respective retirement fund in an amount
equal to the designated percentage of the salary of the basic
member as provided below:
Minneapolis teachers retirement
fund association 13.35 8.50 percent
St. Paul teachers retirement
fund association 12.63 8.00 percent
(4) for a basic member of a teachers retirement fund
association in a city of the first class, the employing unit
shall make an additional employer contribution to the respective
fund in an amount equal to the designated percentage of the
salary of the basic member, as provided below:
Minneapolis teachers retirement
fund association 4.85 percent
St. Paul teachers retirement
fund association 4.63 percent
(5) for a coordinated member of a teachers retirement fund
association in a city of the first class, the employing unit
shall make an additional employer contribution to the respective
fund in an amount equal to the applicable percentage of the
coordinated member's salary, as provided below:
Duluth teachers retirement
fund association 1.29 percent
Minneapolis teachers retirement
fund association
July 1, 1992 - June 30, 1993 0.00 percent
July 1, 1993, and thereafter 1.00 percent
St. Paul teachers retirement
fund association
July 1, 1992 - June 30, 1993 0.00 percent
July 1, 1993, and thereafter 1.00 percent
(b) For basic members of the Minneapolis teachers
retirement fund association and the St. Paul teachers retirement
fund association who retire on or after July 1, 1993, the
employing unit shall continue to make an additional employer
contribution to the retirement fund in an amount equal to the
average salary of the employing unit's basic members multiplied
by the relevant percentages in paragraph (a), clause (4).
(c) The regular and additional employer contributions shall
must be remitted directly to each the respective teachers
retirement fund association each month.
(d) Payments of regular and additional employer
contributions for school district or technical college employees
who are paid from normal operating funds, shall must be made
from the appropriate fund of the district or technical college.
Subd. 2b. [REPORT ON CONTRIBUTION INSUFFICIENCIES.] By
January 1 of each year, the executive secretary or director of
each first class city teachers retirement fund association shall
report to the chair of the legislative commission on pensions
and retirement, the chair of the committee on appropriations of
the house of representatives, and the chair of the committee on
finance of the senate on the amount raised by the additional
employer contribution rates then in effect and the sufficiency
of the total statutory support when compared to the total
required contributions determined under Minnesota Statutes,
section 356.215.
Sec. 2. [FIRST CLASS CITY SCHOOL DISTRICTS; REPORT ON
ADDITIONAL STATE AID NEEDS.]
(a) By January 1, annually, until January 1, 1997, the
superintendents of special school district No. 1 and independent
school district No. 625 shall report on their districts'
additional educational revenue needs attributable to the
increased employer contribution rate requirements set forth in
section 1.
(b) The report required in paragraph (a) must be submitted
to the chairs of the following committees or divisions:
(1) education committee, house of representatives,
(2) education finance division of the education committee,
house of representatives;
(3) education committee, senate; and
(4) education funding division of the education committee,
senate.
(c) Following receipt of the report, the divisions and
committees specified in paragraph (b) shall review the indicated
additional educational revenue needs and shall indicate their
recommendations on increased educational revenue to the
applicable school districts in the form of appropriate
legislation.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective on July 1, 1992.
ARTICLE 6
FIRST CLASS CITY TEACHERS
ADMINISTRATIVE PROVISIONS
Section 1. Minnesota Statutes 1990, section 354A.011,
subdivision 4, is amended to read:
Subd. 4. [ALLOWABLE SERVICE.] "Allowable service" means
any service rendered by a member teacher during a period in
which the member teacher receives salary from which employee
contribution salary deductions are made to and credited by the
teachers retirement fund association or any service rendered by
a person during any period where assessments or payments in lieu
of salary deductions were made if authorized by any law or
provision of the association's articles of incorporation or
bylaws then in effect or pursuant to section 354A.091, 354A.092,
354A.093, or 354A.094.
Sec. 2. Minnesota Statutes 1990, section 354A.011,
subdivision 8, is amended to read:
Subd. 8. [BASIC MEMBER.] "Basic member" means any member
of the teachers retirement fund association who is covered by
the basic program of the association due to the fact that the
member is not covered by any agreement or modification made
between the state and the Secretary of Health, Education and
Welfare making the provisions of the federal old age, survivors
and disability insurance act applicable to certain teachers
covered by the association.
Sec. 3. Minnesota Statutes 1990, section 354A.011,
subdivision 11, is amended to read:
Subd. 11. [COORDINATED MEMBER.] "Coordinated member" means
any member of the teachers retirement fund association who
is covered by the coordinated program of the association due to
the fact that the member is covered by any agreement or
modification made between the state and the Secretary of Health,
Education and Welfare making the provisions of the federal old
age, survivors and disability insurance act applicable to
certain teachers covered by the association; except in the case
of a member of the Duluth teachers retirement fund association,
in which it means additionally that the member either first
became a member prior to July 1, 1981, and elected to be covered
by the new law coordinated program of the Duluth teachers
retirement fund association or first became a member on or
subsequent to July 1, 1981.
Sec. 4. Minnesota Statutes 1990, section 354A.011,
subdivision 12, is amended to read:
Subd. 12. [COORDINATED SERVICE.] "Coordinated service"
means the allowable service credited by the respective teachers
retirement fund association for which the member was covered by
the coordinated program of the association.
Sec. 5. Minnesota Statutes 1990, section 354A.011,
subdivision 13, is amended to read:
Subd. 13. [DESIGNATED BENEFICIARY.] "Designated
beneficiary" means the person designated by a member or retiree
of a teachers retirement fund association to be entitled to
receive the balance of the accumulated member contributions to
the credit of the member in the event of the member's death, or
if no person has been designated by the member or if the
designated beneficiary predeceases the member, the estate of the
deceased member benefits to which a beneficiary is entitled
under this chapter. A beneficiary designation is valid only if
it is made on an appropriate form provided by the executive
director and the properly completed form is received by the fund
postmarked on or before the date of death of the retiree or
member. If a retiree or member does not designate such a person
or if the person designated predeceases the retiree or member,
beneficiary in such cases means the estate of the deceased
retiree or member.
Sec. 6. Minnesota Statutes 1990, section 354A.011,
subdivision 15, is amended to read:
Subd. 15. [MEMBER.] "Member" for purposes of entitlement
to annuities or benefits pursuant to sections 354A.31 to 354A.41
and any other applicable provisions of this chapter means every
teacher who joins and is engaged in teaching service and who
under section 354A.05 contributes to the respective teachers
retirement fund association and who has not retired or
terminated teaching service. "Member" for purposes of
determining who may participate in the organization and
governance of the teachers retirement fund association,
including the eligibility to elect members of and to serve as a
member of the board of trustees, means every teacher who joins
and contributes to the respective teachers retirement fund
association and any other person designated as a member by the
articles of incorporation or the bylaws of the respective
teachers retirement fund association.
Sec. 7. Minnesota Statutes 1990, section 354A.011,
subdivision 21, is amended to read:
Subd. 21. [RETIREMENT.] "Retirement" means the time after
the date of cessation of active teaching service by a teacher
who is thereafter entitled to an accrued retirement annuity
commencing as designated by the board of trustees and payable
pursuant to an application for an annuity filed with the
board under. The applicable provisions of law, articles of
incorporation and bylaws in effect on that date, which shall the
date of cessation of active teaching service thereafter
determine the rights of the person.
Sec. 8. Minnesota Statutes 1990, section 354A.011,
subdivision 24, is amended to read:
Subd. 24. [SALARY.] "Salary" or "covered salary" means the
entire compensation paid to a member teacher excluding any lump
sum annual leave or sick leave payments and all forms of
severance payments, even if a portion of the compensation is
paid from other than public funds.
Sec. 9. Minnesota Statutes 1991 Supplement, section
354A.011, subdivision 26, is amended to read:
Subd. 26. [SPOUSE.] "Spouse" means the person who was
legally married to and living with the member immediately prior
to the member's death.
Sec. 10. Minnesota Statutes 1990, section 354A.011,
subdivision 27, is amended to read:
Subd. 27. [TEACHER.] "Teacher" means any person who
renders service in a public school district located in the
corporate limits of one of the cities of the first class which
was so classified on January 1, 1979, as any of the following:
(a) a full time employee in a position for which a valid
license from the state board of education is required;
(b) an employee of the teachers retirement fund association
located in the city of the first class unless the employee has
exercised the option pursuant to Laws 1955, chapter 10, section
1, to retain membership in the Minneapolis employees retirement
fund established pursuant to chapter 422A;
(c) a part time employee in a position for which a valid
license from the state board of education is required; or
(d) a part-time employee in a position for which a valid
license from the state board of education is required who also
renders other nonteaching services for the school district
unless the board of trustees of the teachers retirement fund
association determines that the combined employment is on the
whole so substantially dissimilar to teaching service that the
service shall not be covered by the association.
The term shall not mean any person who renders service in
the school district as any of the following:
(1) an independent contractor or the employee of an
independent contractor;
(2) for the Duluth and St. Paul teachers retirement fund
associations, and for the Minneapolis teachers retirement fund
association, unless the person is designated by the board of
education of special school district number 1 pursuant to
section 356.451 as a provisional member of the teachers
retirement fund association, a person employed in subsidized
on-the-job training, work experience or public service
employment as an enrollee under the federal Comprehensive
Employment and Training Act from and after March 30, 1978,
unless the person has as of the later of March 30, 1978, or the
date of employment, sufficient service credit in the teachers
retirement fund association to meet the minimum vesting
requirements for a deferred retirement annuity, or the employer
agrees in writing to make the required employer contributions,
including any employer additional contributions, on account of
that person from revenue sources other than funds provided under
the federal Comprehensive Employment and Training Act, or the
person agrees in writing to make the required employer
contributions, including any employer additional contributions,
in addition to the required employee or member contributions;
(3) an employee who is a full-time teacher covered by
another teachers retirement fund association established
pursuant to this chapter or chapter 354;
(4) (3) an employee holding a part-time adult supplementary
technical college license who renders part-time teaching service
in a technical college if (1) the service is incidental to the
regular nonteaching occupation of the person; and (2) the
applicable technical college stipulates annually in advance that
the part-time teaching service will not exceed 300 hours in a
fiscal year; and (3) the part-time teaching service actually
does not exceed 300 hours in a fiscal year; or
(5) (4) an employee exempt from licensure pursuant to
section 125.031.
Sec. 11. Minnesota Statutes 1990, section 354A.021,
subdivision 6, is amended to read:
Subd. 6. [TRUSTEES' FIDUCIARY OBLIGATION.] The trustees or
directors of each teachers retirement fund association shall
administer each fund in accordance with the applicable portions
of this chapter, of the articles of incorporation, of the
bylaws, and of chapter chapters 356 and 356A. 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. 12. Minnesota Statutes 1990, section 354A.05, is
amended to read:
354A.05 [MEMBERSHIP IN A TEACHERS RETIREMENT ASSOCIATION IN
A CITY OF THE FIRST CLASS.]
Only Teachers contributing to the respective teachers
retirement fund association, as provided in this chapter and the
articles of incorporation and the bylaws of the association,
shall be are entitled to the benefit of coverage by or
entitlement to annuities or benefits from the association. All
teachers in a city of the first class in which there exists a
teachers retirement fund association shall be entitled to be are
members of that teachers retirement fund association and to
participate in the benefits provided by the special retirement
fund.
Sec. 13. Minnesota Statutes 1990, section 354A.08, is
amended to read:
354A.08 [AUTHORIZED INVESTMENTS.]
Any A teachers retirement fund association may receive,
hold, and dispose of real estate or personal property acquired
by it, whether the acquisition was by gift, purchase, or any
other lawful means, as provided in this chapter or in the
association's articles of incorporation. In addition to other
authorized real estate investments, an association may also
invest funds in Minnesota situs nonfarm real estate ownership
interests or loans secured by mortgages or deeds of trust.
Sec. 14. Minnesota Statutes 1990, section 354A.096, is
amended to read:
354A.096 [MEDICAL LEAVE.]
Any teacher in the coordinated program of either the
Minneapolis teachers retirement fund association or the St. Paul
teachers retirement fund association or the new law coordinated
program of the Duluth teachers retirement fund association who
is on an authorized medical leave of absence and subsequently
returns to teaching service is entitled to receive allowable
service credit, not to exceed one year, for the period of leave,
upon making the prescribed payment to the fund. This payment
must include the required employee and employer contributions at
the rates specified in section 354A.12, subdivisions 1 and 2, as
applied to the member's average full-time monthly salary rate on
the date of return from the leave of absence commenced plus
annual interest at the rate of 8.5 percent per year from
the midpoint date of end of the fiscal year during which the
leave until the date of payment terminates to the end of the
month during which payment is made. The member must pay the
total amount required unless the employing unit, at its option,
pays the employer contributions. The total amount required must
be paid by the end of the fiscal year following the fiscal year
in which the leave of absence terminated or before the member
retires, whichever is earlier. Payment must be accompanied by a
copy of the resolution or action of the employing authority
granting the leave and the employing authority, upon granting
the leave, must certify the leave to the association in a manner
specified by the executive director. A member may not receive
more than one year of allowable service credit during any fiscal
year by making payment under this section. A member may not
receive disability benefits under section 354A.36 and receive
allowable service credit under this section for the same period
of time.
Sec. 15. Minnesota Statutes 1990, 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 is entitled to continue to receive retirement
annuity payments, except 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
one-third 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. 16. Minnesota Statutes 1990, section 354A.36,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF DISABILITY BENEFIT.] The
coordinated permanent disability benefit shall be is an amount
equal to the normal coordinated retirement annuity computed
pursuant to under 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 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 as provided in
subdivision 10.
Sec. 17. Minnesota Statutes 1990, section 354A.38,
subdivision 3, is amended to read:
Subd. 3. [COMPUTATION OF REFUND REPAYMENT AMOUNT.] If the
coordinated member elects to repay a refund pursuant to under
subdivision 2, the repayment to the fund shall must be in an
amount equal to refunds which the member has accepted plus
interest at the rate of six 8-1/2 percent compounded annually
from the date that the refund was accepted to the date that the
refund is repaid.
Sec. 18. [FIRST CLASS CITY TEACHERS PLANS; RETIREE
RESUMING SERVICE.]
In accordance with Minnesota Statutes, section 354A.12,
subdivision 4, the Minneapolis teachers retirement fund
association, the St. Paul teachers retirement fund association,
and the Duluth teachers retirement fund association may amend
the articles of incorporation or bylaws of the respective
association. This authorization is to provide that any person
who is retired and receiving a basic program formula retirement
annuity under the articles of incorporation or bylaws of the
Minneapolis teachers retirement fund association or the St. Paul
teachers retirement fund association, or any person who is
retired and receiving an old law coordinated program formula
retirement annuity under the articles of incorporation or bylaws
of the Duluth retirement fund association, and who has resumed
teaching service for the school district covered by that same
retirement fund association, is entitled to continue to receive
retirement annuity payments. However, the annuity payments must
be reduced in accordance with Minnesota Statutes, section
354A.31, subdivision 3, if the person's income from teaching
service is an amount greater than the 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 United States Code, title 42, section 403.
Sec. 19. [MINNEAPOLIS RESERVE TEACHERS; EXCLUSION OF PRIOR
SERVICE.]
A reserve teacher providing service to special school
district No. 1 prior to July 1, 1988, for whom contributions
were not made to the Minneapolis teachers retirement fund
association is not eligible to receive service credit for the
period or periods of omitted contributions, unless service
credit has previously been granted for the period or periods.
On or after July 1, 1992, reserve teachers meeting the
definition of a teacher as defined under Minnesota Statutes,
section 354A.011, subdivision 27, and providing service to
special school district No. 1 must become members and
contributions must be deducted as required by Minnesota
Statutes, section 354A.12.
Sec. 20. [OMITTED CONTRIBUTION REIMBURSEMENT; MINNEAPOLIS
TEACHERS RETIREMENT FUND ASSOCIATION AND SPECIAL SCHOOL DISTRICT
NO. 1.]
Subdivision 1. [REIMBURSEMENT AUTHORIZATION.] Special
school district No. 1 is authorized to be reimbursed for a
portion of contributions certified by the executive director of
the Minneapolis teachers retirement fund association to the
commissioner of finance under Laws 1991, chapter 317, sections 3
and 6, if the omitted contributions occurred during the period
of July 1, 1988, to July 1, 1991, and were certified to the
commissioner of finance before January 31, 1992.
Subd. 2. [TEACHER NOTIFICATION.] The executive director of
the Minneapolis teachers retirement fund association and the
school board must jointly notify in writing teachers with
omitted contributions, identified in subdivision 1, of their
option to make payment of omitted employee contributions without
interest.
Subd. 3. [PAYMENT PROCEDURE.] If an individual notified
under subdivision 2 elects to make payment, the full amount must
be remitted to the association in a lump sum within 60 days of
notification, or the individual may elect to make payment
through a payroll deduction. If the individual chooses to make
payment through a payroll deduction, that option must be
selected within 60 days of notification. The payroll deduction
period may not exceed one year. The employing unit must
transmit amounts withheld through payroll deductions to the
association along with normal payroll contributions.
Subd. 4. [SCHOOL DISTRICT REIMBURSEMENT.] On a quarterly
basis, the executive director of the association will determine
the amounts received by the association under subdivision 3
through direct lump-sum payments and payroll deductions. The
employing unit will be notified of these amounts received by the
association, and the employing unit may withhold an equivalent
amount from subsequent obligations under Minnesota Statutes,
section 354A.12, subdivision 2.
Subd. 5. [EFFECT OF TEACHER NONPAYMENT.] (a) If a teacher
notified under subdivision 2 does not elect to make payments
under subdivision 3, or if full payment is not received within
the required time limits, the teacher is not entitled to the
service credit for the period of omitted contributions
identified in subdivision 1, or for any earlier period, and the
teacher forfeits any option to purchase that service credit at a
later date.
(b) For individuals identified in paragraph (a), the
association must determine an amount equivalent to the omitted
employee contribution, without interest, for the period
specified in subdivision 1. This amount must be applied by the
employer against subsequent obligations under Minnesota
Statutes, section 354A.12, subdivision 2.
Sec. 21. [MINNEAPOLIS TEACHERS MODIFICATION OF DISABILITY
BENEFITS.]
(a) In accordance with Minnesota Statutes, section 354A.12,
subdivision 4, the Minneapolis teachers retirement fund
association may amend its articles of incorporation to clarify
certain provisions governing disability benefits for members of
the basic program and to conform certain administrative
provisions to the statutory provisions applicable to disability
benefits for coordinated program members, as provided in
paragraphs (b) to (g).
(b) Article 5, section 5.11, may be amended to change the
definition of "disability" from the "inability to render further
satisfactory service as a teacher" to the "inability to engage
in any substantial gainful activity" by reason of any medically
determinable physical or mental impairment that can be expected
to be of long continued and indefinite duration, which may not
be less than one year.
(c) Article 21, section 21.3, may be amended to clarify
that disability benefits accrue from the later of either 90 days
following commencement of the permanent disability or the first
day of the month following the date on which the written
application for the disability benefit has been filed with the
board.
(d) Article 21, section 21.4, may be amended to provide
that basic program disability recipients submit to regular
medical examinations at least once each year during the first
five years of disability and at least once in every subsequent
three-year period, in conformity with the requirements
applicable to the coordinated program contained in Minnesota
Statutes, section 354A.36, subdivision 6.
(e) Article 21, section 21.5, may be amended to provide
that if a basic member disability recipient resumes gainful
employment, and the earnings from that employment, together with
the disability benefit payments, exceed the monthly compensation
the member would have received if the member had remained in
active teaching service in the position held prior to becoming
disabled, the disability benefit must be reduced by the excess.
(f) Article 21 may be amended by adding a subsection to
provide that a basic program disability recipient who remains
disabled until normal retirement age must be transferred to
retirement status. The disability benefit terminates upon the
transfer, and the person is subsequently entitled to receive a
retirement annuity in accordance with the optional annuity
previously elected or, if the person had not elected an optional
annuity, then, at the person's option, either a straight life
retirement annuity in accordance with the articles of
incorporation or a straight life retirement annuity equal to the
disability benefit paid prior to the date on which the person
attained normal retirement age, whichever is greater, or an
optional annuity as provided in the articles of incorporation.
If an optional annuity is elected, the election must be made
prior to the person's attaining normal retirement age and takes
effect on the date of the election.
(g) Paragraphs (b) to (f) apply to a basic member who
applies for a disability benefit after the effective date of the
amendments. Paragraphs (c) to (f) also apply to basic program
members who made application for disability benefits before the
effective date of the amendments and who are currently receiving
disability benefits.
Sec. 22. [REPEALER.]
Minnesota Statutes 1990, sections 354A.011, subdivision 2;
and 354A.40, subdivisions 2 and 3, are repealed.
Sec. 23. [EFFECTIVE DATE.]
Section 17 is effective May 1, 1994. Sections 1 to 16 and
18 to 22 are effective the day following final enactment.
ARTICLE 7
CORRECTION OF PRIOR ENACTMENTS
Section 1. Minnesota Statutes 1990, section 353A.07,
subdivision 3, as amended by Laws 1992, chapter 432, article 2,
section 30, is amended to read:
Subd. 3. [TRANSFER OF ASSETS.] On the effective date of
consolidation, the chief administrative officer of the relief
association shall transfer the entire assets of the special fund
of the relief association to the public employees retirement
association. The transfer must include any investment
securities of the consolidation account which are not determined
to be ineligible or inappropriate by the executive director of
the state board under section 353A.05, subdivision 2, at the
market value of the investment security as of the effective date
of the consolidation. The transfer must include any accounts
receivable determined by the executive director of the state
board as capable of being collected. The transfer must also
include an amount, in cash, representing any remaining
investment security or other asset of the consolidation account
which was liquidated, after defraying any accounts payable.
As of the effective date of consolidation, subject to the
authority of the state board, the board of trustees of the
public employee retirement association has legal title to and
management responsibility for any transferred assets as trustees
for any person having a beneficial interest arising out of
benefit coverage provided by the relief association. The public
employees retirement association is the successor in interest
for all claims for and against the consolidation account or the
municipality with respect to the consolidation account of the
relief association. In, except a claim against the relief
association or the municipality or any person connected with the
relief association or the municipality in a fiduciary capacity,
based on any act or acts by that person which were not done in
good faith and which constituted a breach of the obligation of
the person as a fiduciary. As a successor in interest, the
public employees retirement association may assert any
applicable defense in any judicial proceeding which the board of
the relief association or the municipality would have otherwise
been entitled to assert.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day following final enactment.
Presented to the governor April 17, 1992
Signed by the governor April 29, 1992, 8:36 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes