Minnesota Session Laws - 1992, Regular Session

  

                         Laws of Minnesota 1992 

                        CHAPTER 480-S.F.No. 1935 
           An act relating to retirement; making changes in laws 
          governing the Minneapolis employees retirement fund; 
          amending Minnesota Statutes 1990, sections 422A.12, 
          subdivision 2; 422A.14, subdivision 1; and 422A.23, by 
          adding a subdivision; Minnesota Statutes 1991 
          Supplement, sections 422A.101, subdivision 1; and 
          422A.17; repealing Minnesota Statutes 1990, section 
          422A.14, subdivision 2. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1991 Supplement, section 
422A.101, subdivision 1, is amended to read: 
    Subdivision 1.  [FINANCIAL REQUIREMENTS OF FUND.] Prior to 
August 31 annually, the retirement board, in consultation with 
the commission-retained actuary, shall prepare an itemized 
statement of the financial requirements of the fund for the 
succeeding fiscal year.  A copy of the statement shall be 
submitted to the city council, the board of estimate and 
taxation of the city, the managing board or chief administrative 
officer of each city owned public utility, improvement project 
or municipal activity supported in whole or in part by revenues 
other than real estate taxes, public corporation, or unit of 
metropolitan government employing members of the fund, the board 
of special school district No. 1, and the state commissioner of 
finance prior to September 15 annually.  The statement shall be 
itemized and shall include the following:  
    (1) an estimate of the administrative expenses of the fund 
for the following year, which shall be determined by 
multiplying, by the factor of 1.035, the figure for 
administrative expenses as reported in the most recent actuarial 
valuation prepared by the commission-retained actuary, including 
any amounts related to the amount necessary to amortize through 
June 30, 2020, the annual costs that are determined by the 
retirement board to be related to investment activities of the 
deposit accumulation fund other than actual investment 
transaction amounts, by the factor of 1.035; 
    (2) an estimate of the normal cost of the fund expressed as 
a dollar amount, which shall be determined by applying the 
normal cost of the fund as reported in the most recent actuarial 
valuation prepared by the commission-retained actuary and 
expressed as a percentage of covered payroll to the estimated 
total covered payroll of all employees covered by the fund for 
the following year; 
    (3) an estimate of the contribution required to amortize on 
a level annual dollar basis the unfunded actuarial accrued 
liability of the fund by June 30, 2020, using an interest rate 
of six percent compounded annually as reported in the most 
recent actuarial valuation, prepared by the commission-retained 
actuary expressed as a dollar amount.  In determining the amount 
of the unfunded actuarial accrued liability of the fund, all 
assets other than the assets of the retirement benefit fund 
shall be valued as current assets as defined under section 
356.215, subdivision 1, clause (6), and the assets of the 
retirement benefit fund shall be valued equal to the actuarially 
determined required reserves for benefits payable from that 
fund; 
    (4) the amount of any deficiency in the actual amount of 
any employer contribution provided for in this section when 
compared to the required contribution amount certified for the 
previous year, plus interest on the amount at the rate of six 
percent per annum. 
    Sec. 2.  Minnesota Statutes 1990, section 422A.12, 
subdivision 2, is amended to read: 
    Subd. 2.  At the close of each fiscal year there shall be 
credited within the deposit accumulation fund to accounts 
representing contributions by the municipality and to accounts 
representing the accumulated amount of each contributing 
employee in proportion to the average quarterly balance in each 
such account during said fiscal year, and computed on the 
balance at the end of each quarter, the amount of income from 
investments earned on the accumulated funds in possession of the 
board, after having deducted from the total of such income (1) 
the amounts otherwise required as interest for various 
allowances or purposes specified in sections 422A.01 to 422A.25 
and (2) an amount to be set aside to liquidate actual or to 
amortize prospective losses on investments in the accumulation 
account.  The net balance of the investment earnings to be so 
distributed shall be distributed at the greatest multiple of 
one-tenth of one percent up to and including a maximum of the 
interest assumption rate provided for in section 422A.06, 
subdivision 5 of all such accounts.  Any excess then remaining 
from such investment earnings shall be credited to a reserve 
fund and be added to and distributed with the investment 
earnings of the next succeeding year.  Any undistributed excess 
earnings or losses determined to be earnings or losses 
attributable to the employers' contributions shall be 
distributed or charged to the employers' reserve accounts in 
proportion to the employers' average quarterly balances.  Any 
undistributed excess earnings or losses determined to be 
earnings or losses attributable to the employees' contributions 
shall be distributed or charged to the employers' reserve 
accounts in proportion to the number of covered employees 
employed by each employer.  If income from investments is 
insufficient to enable the crediting of the maximum interest 
amount to the employee and employer accounts, the maximum 
interest will first be credited to the employee accounts.  If 
income is insufficient to cover the amounts credited to the 
employee accounts, the insufficiency attributable to each 
employer group of employees' accounts will be made up by a 
charge against the reserve account of that employer.  The amount 
that shall be set aside annually to liquidate past losses on 
investments or to create a reserve from which to liquidate 
future losses shall be such amount as the board may deem 
necessary for such purpose but not in excess of one mill on the 
dollar of the gross amount received as income on the cash and 
investments in the fund. 
    Sec. 3.  Minnesota Statutes 1990, section 422A.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  No disability benefit or retirement 
allowance shall be granted to any employee who may become 
eligible for retirement as provided in sections 422A.01 to 
422A.25 until the employee, or one authorized to act in the 
employee's behalf, shall have filed with the retirement board, 
in such form as may be prescribed by the board, an application 
for such allowance.  No installment of any such allowance shall 
be paid for any period prior to the effective date of retirement 
or the date of application, whichever occurs later. 
    Sec. 4.  Minnesota Statutes 1991 Supplement, section 
422A.17, is amended to read: 
    422A.17 [RETIREMENT ALLOWANCE; OPTIONS.] 
    At retirement, any employee who is eligible to receive a 
service allowance may elect to receive benefits in a retirement 
allowance payable throughout life or may on retirement elect to 
receive the actuarial equivalent at that time of annuity, 
pension, or retirement allowance in a lesser annuity, or a 
lesser pension, or a lesser retirement allowance, payable 
throughout life, with the provisions that: 
    Option I.  If the benefit recipient dies before receiving 
in payments an amount equal to the present value of the benefit 
recipient's annuity, pension, or retirement allowance, as of the 
date of the benefit recipient's retirement, the balance shall be 
paid to the benefit recipient's legal representatives or to such 
person, having an insurable interest in the benefit recipient's 
life, as the benefit recipient shall nominate by written 
designation duly acknowledged and filed with the retirement 
board as of the date of retirement, or 
    Option II.  Upon the death of the benefit recipient, the 
benefit recipient's annuity, pension, or retirement allowance 
shall be continued throughout the life of and paid to the 
person, having an insurable interest in the benefit recipient's 
life, as the benefit recipient shall nominate by written 
designation duly acknowledged and filed with the retirement 
board as of the date of retirement, or 
    Option III.  Upon death of the benefit recipient, one-half 
of the benefit recipient's annuity, pension, or retirement 
allowance shall be continued throughout the life of and paid to 
the person, having an insurable interest in the benefit 
recipient's life, as the benefit recipient shall nominate by 
written designation duly acknowledged and filed with the 
retirement board as of the date of retirement, or 
    Option IV.  Other optional retirement allowance forms, 
including a joint and survivor option under which the benefit 
recipient receives a normal single-life annuity if the 
designated optional annuity beneficiary dies before the benefit 
recipient, shall be paid to the benefit recipient or other 
person or persons the benefit recipient nominates, provided that 
the optional annuity is of equivalent actuarial value to the 
applicable single life annuity calculated under section 422A.15 
and is approved by the retirement board.  
    Any optional retirement allowance shall be computed and 
determined under a procedure specified by the 
commission-retained actuary utilizing the appropriate mortality 
table established by the board of trustees based on the 
experience of the fund as recommended by the commission-retained 
actuary and using the applicable postretirement interest rate 
assumption specified in section 356.215, subdivision 4d. 
    In adopting optional annuity forms, the board of trustees 
shall obtain the written recommendation of the 
commission-retained actuary.  The recommendations shall be a 
part of the permanent records of the board of trustees. 
    Sec. 5.  Minnesota Statutes 1990, section 422A.23, is 
amended by adding a subdivision to read: 
    Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
survivor benefit is not suspended, terminated, or otherwise 
stopped due to a surviving spouse's remarriage. 
    Sec. 6.  [REPEALER.] 
    Minnesota Statutes 1990, section 422A.14, subdivision 2, is 
repealed. 
     Sec. 7.  [EFFECTIVE DATE.] 
    Sections 1 to 6 are effective the day following final 
enactment.  The recalculated administrative expenses under 
section 1 are effective for special school district No. 1 on 
July 1, 1992.  Section 2 applies retroactively to the fiscal 
year ending June 30, 1991.  Section 5 does not require payments 
for any period before the effective date of the section. 
    Presented to the governor April 15, 1992 
    Signed by the governor April 17, 1992, 5:12 p.m.