Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

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

  
    Laws of Minnesota 1993 

                        CHAPTER 239-S.F.No. 162 
           An act relating to retirement; retirement coverage for 
          state university and community college personnel; 
          providing coverage for unclassified managerial 
          employees in temporary, acting, or interim positions; 
          providing default plan for employee selection; adding 
          conforming language to clarify eligibility between 
          plans; relating to the individual retirement account 
          plan; increasing the employer contribution rate; 
          providing for repayment of missed contributions; 
          providing for administrative expenses; providing for 
          contributions during period of sabbatical leave; 
          permitting certain coverage transfers; relating to the 
          supplemental retirement plan; providing conforming 
          language for previous oversight of eligible members; 
          relating to marriage dissolutions; providing alternate 
          method of retirement asset distribution for individual 
          retirement account plan; providing alternative 
          coverage for certain state university and community 
          college personnel; amending Minnesota Statutes 1992, 
          sections 352D.02, subdivisions 1 and 1a; 354B.01, by 
          adding a subdivision; 354B.02, subdivisions 1, 3a, and 
          by adding a subdivision; 354B.04, subdivisions 1 and 
          2, and by adding a subdivision; 354B.05, by adding a 
          subdivision; 356.24, subdivision 1; and 518.58, 
          subdivision 4; and Laws 1990, chapter 570, articles 3, 
          section 11, and 10, section 7; proposing coding for 
          new law in Minnesota Statutes, chapter 354B; repealing 
          Minnesota Statutes 1992, section 354B.02, subdivision 
          3. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1 

                 UNCLASSIFIED EMPLOYEES RETIREMENT PLAN 
    Section 1.  Minnesota Statutes 1992, section 352D.02, 
subdivision 1, is amended to read: 
    Subdivision 1.  [COVERAGE.] (a) Employees enumerated in 
paragraph (b), if they are in the unclassified service of the 
state and are eligible for coverage under the general state 
employees retirement plan under chapter 352, are participants in 
the unclassified program under this chapter unless the employee 
gives notice to the executive director of the Minnesota state 
retirement system within one year following the commencement of 
employment in the unclassified service that the employee desires 
coverage under the general state employees retirement plan.  For 
the purposes of this chapter, an employee who does not file 
notice with the executive director is deemed to have exercised 
the option to participate in the unclassified plan. 
    (b) Enumerated employees are: 
    (1) an employee in the office of the governor, lieutenant 
governor, secretary of state, state auditor, state treasurer, 
attorney general, or an employee of the state board of 
investment; 
    (2) the head of a department, division, or agency created 
by statute in the unclassified service, an acting department 
head subsequently appointed to the position, or an employee 
enumerated in section 15A.081, subdivision 1 or 15A.083, 
subdivision 4; 
    (3) a permanent, full-time unclassified employee of the 
legislature or a commission or agency of the legislature or a 
temporary legislative employee having shares in the supplemental 
retirement fund as a result of former employment covered by this 
chapter, whether or not eligible for coverage under the 
Minnesota state retirement system; 
     (4) a person other than an employee of the state board of 
technical colleges who is employed in a position established 
under section 43A.08, subdivision 1, clause (3), or subdivision 
1a, or in a position authorized under a statute creating or 
establishing a department or agency of the state, which is at 
the deputy or assistant head of department or agency or director 
level; 
     (5) the chair, chief administrator, and not to exceed nine 
positions at the division director or administrative deputy 
level of the metropolitan waste control commission as designated 
by the commission; the chair, executive director, and not to 
exceed three positions at the division director or assistant to 
the chair level of the regional transit board; a chief 
administrator who is an employee of the metropolitan transit 
commission; and the chair, executive director, and not to exceed 
nine positions at the division director or administrative deputy 
level of the metropolitan council as designated by the council; 
provided that upon initial designation of all positions provided 
for in this clause, no further designations or redesignations 
may be made without approval of the board of directors of the 
Minnesota state retirement system; 
    (6) the executive director, associate executive director, 
and not to exceed nine positions of the higher education 
coordinating board in the unclassified service, as designated by 
the higher education coordinating board before January 1, 1992, 
or subsequently redesignated with the approval of the board of 
directors of the Minnesota state retirement system, unless the 
person has elected coverage by the individual retirement account 
plan under chapter 354B; 
    (7) the clerk of the appellate courts appointed under 
article VI, section 2, of the Constitution of the state of 
Minnesota; 
    (8) the chief executive officers of correctional facilities 
operated by the department of corrections and of hospitals and 
nursing homes operated by the department of human services; 
    (9) an employee whose principal employment is at the state 
ceremonial house; 
    (10) an employee of the Minnesota educational computing 
corporation; 
    (11) an employee of the world trade center board; 
    (12) an employee of the state lottery board who is covered 
by the managerial plan established under section 43A.18, 
subdivision 3; and 
    (13) an employee of the state board of technical colleges 
employed in a position established under section 43A.08, 
subdivision 1, clause (3), or 1a, unless the person has elected 
coverage by the individual retirement account plan under chapter 
354B; and 
    (14) an employee of the higher education board in a 
position established under section 136E.04, subdivision 2, 
unless the person has elected coverage by the individual 
retirement account plan under chapter 354B.  
    Sec. 2.  Minnesota Statutes 1992, section 352D.02, 
subdivision 1a, is amended to read: 
    Subd. 1a.  [STATE UNIVERSITY HIGHER EDUCATION PERSONNEL.] 
Unless the person has elected coverage by the individual 
retirement account plan under chapter 354B the retirement 
program governed by this chapter, the chancellor, university 
presidents, and unclassified managerial employees in the state 
university system, the higher education board, the higher 
education coordinating board, and the technical college system 
chancellor's office shall participate in the individual 
retirement account plan under chapter 354B, if they are eligible 
for coverage under the state employees retirement fund, or the 
teachers retirement association, or would have been eligible for 
coverage under those funds but for this subdivision, subject to 
the provisions of subdivision 5.  These employees also shall 
have social security coverage under the agreement between the 
state and the secretary of health and human services.  Acting, 
temporary, or interim employees who would otherwise be covered 
by this section shall retain coverage by the general state 
employees retirement plan of the Minnesota state retirement 
system, teachers retirement association, or other Minnesota 
public employee retirement plan governed by section 356.30, 
whichever applies, during the pendency of the acting, temporary, 
or interim appointment and shall be covered by the unclassified 
plan governed by this chapter or the individual retirement 
account plan provided in section 354B.02, subdivision 3a, only 
if their appointment becomes permanent. 
     Sec. 3.  Minnesota Statutes 1992, section 354B.01, is 
amended by adding a subdivision to read: 
    Subd. 6.  [COVERED EMPLOYMENT; HIGHER EDUCATION BOARD 
MANAGERIAL EMPLOYEES.] "Covered employment," with respect to 
employment by the higher education board, means employment in a 
position described in section 352D.02, subdivision 1, paragraph 
(b), clause (14). 
    Sec. 4.  Minnesota Statutes 1992, section 354B.02, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PLAN PARTICIPANTS.] (a) Except as provided 
in subdivision 2, or unless the person has elected retirement 
coverage under section 352D.02, subdivision 1a, a person who was 
first employed in covered employment under section 354B.01, 
subdivision 2 or 3, after June 30, 1989, shall participate in 
the plan. 
    (b) Except as provided in subdivision 2, or unless the 
person has elected retirement coverage under section 352D.02, 
subdivision 1, paragraph (b), clause (6) or (13), a person who 
was first employed in covered employment after July 1, 1992, 
shall participate in the plan. 
    (c) Participants or employees who would be participants in 
this plan but for prior participation in the teachers retirement 
association or other Minnesota public employee retirement plan 
governed by section 356.30, whichever applies, and who are 
subsequently appointed to a position with the community college 
system or the state university system designated as an acting, 
temporary, or interim position, shall remain in the teachers 
retirement association or the other Minnesota public employee 
plan during the term of the acting, temporary, or interim 
position.  If the participant's status becomes permanent, the 
participant has the option to make a new election appropriate to 
the plan in which the position should be located. 
    Sec. 5.  Minnesota Statutes 1992, section 354B.02, 
subdivision 3a, is amended to read: 
    Subd. 3a.  [UNCLASSIFIED STATE UNIVERSITY SYSTEM 
EMPLOYEES.] State university system employees who would 
otherwise be covered by section 352D.02, subdivision 1a, may 
elect coverage under the plan governed by this chapter shall be 
covered by the plan governed by this section unless they elect 
coverage under the plan governed by section 352D.02, subdivision 
1a.  Election to participate in the plan governed by the 
unclassified employees plan must be made within 120 days of July 
1, 1992, or the start of covered employment, whichever is 
later.  If the employee does not elect to participate in the 
unclassified employees plan upon the start of covered 
employment, the employee shall participate in the individual 
retirement account plan.  If no election is made within the 120 
days, this participation must be permanent.  Employees in 
covered employment on July 1, 1992, who would otherwise be 
covered by this section, but are already participating in the 
teachers retirement association governed by chapter 354 or the 
general state employees retirement plan governed by chapter 352, 
shall remain in the applicable plan unless an election is made 
to transfer to the plan governed by this chapter.  The election 
must be made within 120 days of eligibility under the state 
unclassified employees retirement program governed by chapter 
352D.  An election to participate in the unclassified program or 
this plan is irrevocable during any period of service that would 
have been covered under chapter 352D or this chapter.  This 
election must be made in the form prescribed in section 
352D.12.  Upon receipt of notice of transfer, the individual 
retirement account plan administrator shall transfer to the 
employee's account in this plan an amount equal to the employee 
and matching employer contributions to the credit of the person 
in the teachers retirement association, plus six percent 
compound annual interest thereon from the date that each 
contribution was made until the date that the transfer is made. 
    Sec. 6.  Minnesota Statutes 1992, section 354B.02, is 
amended by adding a subdivision to read: 
    Subd. 3c.  [HIGHER EDUCATION BOARD EMPLOYEES.] Employees in 
covered employment under section 354B.01, subdivision 6, may 
elect coverage under the plan.  Election to participate in the 
plan must be made by December 31, 1993, or within 120 days of 
the start of covered employment, whichever is later, and is 
irrevocable during any period of covered employment in a 
position listed in section 352D.02, subdivision 1, paragraph 
(b), clause (14), which is established by the higher education 
board or the higher education facilities authority.  These 
employees are not eligible for the supplemental retirement plan 
specified in sections 354B.07 to 354B.09.  
    Sec. 7.  [EFFECTIVE DATE.] 
    Sections 2, 4, and 5 are effective July 1, 1993.  

                               ARTICLE 2 

                   INDIVIDUAL RETIREMENT ACCOUNT PLAN 
    Section 1.  Minnesota Statutes 1992, section 354B.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MEMBER CONTRIBUTIONS.] (a) Persons in 
covered employment who would otherwise be eligible to 
participate in the teachers retirement association, but who 
participate in the plan, shall make a member contribution in an 
amount equal to the amount prescribed by section 354.42, 
subdivision 2 of 4-1/2 percent of salary.  
    (b) Persons in covered employment who would otherwise be 
eligible to participate in the state unclassified employees 
retirement program, but who participate in the plan, shall make 
a member contribution in an amount equal to the member 
contribution amount prescribed in section 352D.04, subdivision 
2, paragraph (a).  
    (c) The contribution must be made by payroll deduction each 
pay period.  
    Sec. 2.  Minnesota Statutes 1992, section 354B.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [EMPLOYER CONTRIBUTIONS.] (a) The employer of 
persons described in subdivision 1, paragraph (a), shall make an 
employer contribution to the plan in an amount equal to the 
amount prescribed by section 354.42, subdivision 3 of six 
percent of salary. 
    (b) The employer of persons described in subdivision 1, 
paragraph (b), shall make an employer contribution to the plan 
in an amount equal to the amount prescribed by section 352D.04, 
subdivision 2. 
    Sec. 3.  Minnesota Statutes 1992, section 354B.04, is 
amended by adding a subdivision to read: 
    Subd. 4.  [OMITTED CONTRIBUTIONS.] (a) Except as provided 
in paragraph (b), if the state university board or the community 
college board fails to make the deduction from an employee's 
salary required by section 354B.08 and this section in a timely 
fashion, the deduction must be made by subsequent payroll 
deductions. 
    (b) If a board fails to make required employee deductions 
within 60 days of the date on which the deductions should have 
been made, the board shall pay the employer contributions and an 
amount equivalent to 8.5 percent of the total amount due in lieu 
of interest.  If an employee deduction is not made within 60 
days of the date upon which it should have been made, the 
employer and employee may agree to an alternate deduction amount 
for the omitted employee contribution.  The omitted employee 
deduction must be made within one year of the date upon which 
the deduction should have been made. 
    Sec. 4.  [354B.045] [SABBATICAL LEAVE; CONTRIBUTIONS.] 
    Subdivision 1.  [DEFINITION.] A "sabbatical leave" for the 
purpose of this section means a sabbatical leave as defined in 
the applicable personnel policy of the state university and 
community college boards. 
    Subd. 2.  [REQUIRED EMPLOYEE AND EMPLOYER 
CONTRIBUTIONS.] Deductions for the employer contribution as 
specified in section 354B.04, subdivision 2, must be made by the 
employing unit from salary paid to the member for a sabbatical 
leave.  The employer must make a contribution based on the 
contribution rate in section 354B.04, subdivision 2, based on 
the salary paid to the member for a sabbatical leave. 
    Subd. 3.  [OPTIONAL CONTRIBUTION.] A plan participant who 
is on a sabbatical leave may make an optional employee 
contribution.  The maximum optional employee contribution 
permitted is determined by the difference between the salary 
received for the sabbatical leave and the salary received for a 
comparable period during the year immediately preceding the 
leave, multiplied by the employee contribution rate specified in 
section 354B.04, subdivision 1.  If an employee payment is made 
under this subdivision, the payment must be made by the end of 
the fiscal year following the fiscal year in which the leave 
terminates, and may not include interest.  If an employee makes 
a contribution under this subdivision, the employer must make 
the employer contribution, at the rate specified in section 
354B.04, subdivision 2, for the salary that was the basis for 
the employee payment under this subdivision.  The employer 
contribution must be made within 60 days of the date on which 
the employee contribution was made.  
    Subd. 4.  [REINSTATEMENT RIGHTS.] Notwithstanding the 
provisions of any agreements to the contrary, employee and 
employer contributions may not be made under this section if the 
member does not retain the right to full reinstatement both 
during and at the end of the sabbatical leave. 
    Sec. 5.  Minnesota Statutes 1992, section 354B.05, is 
amended by adding a subdivision to read: 
    Subd. 5.  [ADMINISTRATIVE EXPENSES.] (a) Plans covered by 
this chapter or administered by governing boards as provided in 
section 354B.05 may provide for administrative fees or charges 
to be paid by participants in the following manner: 
    (1) from participants whose contributions are invested with 
the state investment board the plan administrator may recover 
administrative expenses in the manner provided by section 
11A.17, subdivisions 10a and 14; or 
    (2) from participants whose contributions are invested 
through contracts purchased in the manner authorized by 
subdivision 2, the plan administrator may assess an amount of up 
to two percent of the employer and employee contributions.  
    (b) Any amounts not needed for administrative expenses of 
the plan must be refunded to member accounts. 
    Sec. 6.  [354B.085] [PAYMENT OF BENEFITS.] 
    Withdrawal of or a retirement benefit based on individual 
participant contributions and employer contributions plus 
accrued investment income is payable immediately upon the death 
or termination of a participant.  An application by or on behalf 
of the participant must be filed before any payment of benefits 
may be made. 
    Sec. 7.  Laws 1990, chapter 570, article 3, section 11, is 
amended to read: 
    Sec. 11.  [TRANSFERS IN CERTAIN CASES.] 
    Notwithstanding any provision of Minnesota Statutes, 
section 354B.03, to the contrary, a person in covered employment 
under Minnesota Statutes, chapter 354, who was first 
employed for at least 25 percent of a full academic year, 
exclusive of summer session, by the state university system 
board or the community college board after June 30, 1988, and 
before July 1, 1989, and who has no less than one year of prior 
allowable service under chapter 354, and who elected, or elects 
before January 1, 1991, to have their the person's employee 
contributions transferred under Minnesota Statutes, chapter 
354B, shall have an amount equal to the employer contributions 
made on behalf of the person under Minnesota Statutes, section 
354.42, subdivision 3, plus annual interest compounded annually 
at a rate of six percent, transferred by the executive director 
of the teachers retirement association from the teachers 
retirement fund to the individual retirement account plan under 
Minnesota Statutes, chapter 354B.  The election must be made on 
a form prescribed by the executive director and must be made by 
January 1, 1991 1994. 
    Sec. 8.  [REPEALER.] 
    Minnesota Statutes 1992, section 354B.02, subdivision 3, is 
repealed. 
    Sec. 9.  [EFFECTIVE DATE.] 
    (a) Sections 1, 2, 3, 4, 5, 6, and 8 are effective July 1, 
1993. 
    (b) Section 7 is effective on the day following final 
enactment, and applies retroactively to persons who elected a 
transfer under Laws 1990, chapter 570, article 3, section 11.  
The amount to be transferred is the employer contribution 
described in that section, plus annual interest compounded 
annually at a rate of six percent until the date of transfer. 

                               ARTICLE 3 

                      SUPPLEMENTAL RETIREMENT PLAN 
    Section 1.  Minnesota Statutes 1992, section 356.24, 
subdivision 1, is amended to read: 
    Subdivision 1.  [RESTRICTION; EXCEPTIONS.] (a) It is 
unlawful for a school district or other governmental subdivision 
or state agency to levy taxes for, or contribute public funds to 
a supplemental pension or deferred compensation plan that is 
established, maintained, and operated in addition to a primary 
pension program for the benefit of the governmental subdivision 
employees other than: 
    (1) to a supplemental pension plan that was established, 
maintained, and operated before May 6, 1971; 
    (2) to a plan that provides solely for group health, 
hospital, disability, or death benefits, to the individual 
retirement account plan established by sections 354B.01 to 
354B.04 354B.05; 
    (3) to a plan that provides solely for severance pay under 
section 465.72 to a retiring or terminating employee; 
    (4) for employees other than personnel employed by the 
state university board or the community college board and 
covered by section 354B.07, subdivision 1, to: 
    (i) the state of Minnesota deferred compensation plan under 
section 352.96; or 
    (ii) payment of the applicable portion of the premium on a 
tax sheltered annuity contract qualified under section 403(b) of 
the federal Internal Revenue Code, purchased from a qualified 
insurance company; if provided for in a personnel policy or in 
the collective bargaining agreement of the public employer with 
the exclusive representative of public employees in an 
appropriate unit, in an amount matching employee contributions 
on a dollar for dollar basis, but not to exceed an employer 
contribution of $2,000 a year per employee; or 
    (5) for personnel employed by the state university board or 
the community college board and covered by section sections 
352D.02, subdivision 1a and 354B.07, subdivision 1, to the 
supplemental retirement plan under sections 354B.07 to 354B.09, 
if provided for in a personnel policy or in the collective 
bargaining agreement of the public employer with the exclusive 
representative of the covered employees in an appropriate unit, 
in an amount matching employee contributions on a dollar for 
dollar basis, but not to exceed an employer contribution of 
$2,000 a year for each employee.  
    (b) A qualified insurance company is a company that: 
    (1) meets the definition in section 60A.02, subdivision 4; 
    (2) is licensed to engage in life insurance or annuity 
business in the state; 
    (3) is determined by the commissioner of commerce to have a 
rating within the top two rating categories by a recognized 
national rating agency or organization that regularly rates 
insurance companies; and 
    (4) is determined by the state board of investment to be 
among the ten applicant insurance companies with competitive 
options and investment returns on annuity products.  The state 
board of investment determination must be made on or before 
January 1, 1993, and must be reviewed periodically.  The state 
board of investment shall retain actuarial services to assist it 
in this determination.  The state board of investment shall 
establish a budget for its costs in the determination process 
and shall charge a proportional share of that budget to each 
insurance company selected by the state board of investment.  
All contracts must be approved before execution by the state 
board of investment.  The state board of investment shall 
establish policies and procedures under section 11A.04, clause 
(2), to carry out this paragraph. 
    (c) A personnel policy for unrepresented employees or a 
collective bargaining agreement may establish limits on the 
number of vendors under paragraph (b), clause (4), that it will 
utilize and conditions under which the vendors may contact 
employees both during working hours and after working hours. 
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective July 1, 1993. 

                               ARTICLE 4 

                         MARRIAGE DISSOLUTIONS 
    Section 1.  Minnesota Statutes 1992, section 518.58, 
subdivision 4, is amended to read: 
    Subd. 4.  [PENSION PLANS.] (a) The division of marital 
property that represents pension plan benefits or rights in the 
form of future pension plan payments:  
    (1) is payable only to the extent of the amount of the 
pension plan benefit payable under the terms of the plan; 
    (2) is not payable for a period that exceeds the time that 
pension plan benefits are payable to the pension plan benefit 
recipient; 
    (3) is not payable in a lump sum amount from pension plan 
assets attributable in any fashion to a spouse with the status 
of an active member, deferred retiree, or benefit recipient of a 
pension plan; 
    (4) if the former spouse to whom the payments are to be 
made dies prior to the end of the specified payment period with 
the right to any remaining payments accruing to an estate or to 
more than one survivor, is payable only to a trustee on behalf 
of the estate or the group of survivors for subsequent 
apportionment by the trustee; and 
    (5) in the case of public pension plan benefits or rights, 
may not commence until the public plan member submits a valid 
application for a public pension plan benefit and the benefit 
becomes payable. 
    (b) The individual retirement account plans established 
under chapter 354B may provide in its plan document, if 
published and made generally available, for an alternative 
marital property division or distribution of individual 
retirement account plan assets.  If an alternative division or 
distribution procedure is provided, it applies in place of 
paragraph (a), clause (5). 
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective July 1, 1993. 

                               ARTICLE 5 

                        MISCELLANEOUS PROVISIONS 
    Section 1.  Laws 1990, chapter 570, article 10, section 7, 
is amended to read: 
    Sec. 7.  [EFFECTIVE DATE.] 
    Sections 1 to, 3, 4, 5, and 6 are effective the day 
following final enactment.  Section 2 is effective June 30, 1989.
    Sec. 2.  [COVERAGE ELECTION.] 
    Individuals covered by Minnesota Statutes, section 354.05, 
subdivision 2a, and meeting the requirements of Minnesota 
Statutes, section 352.021, subdivision 5, who were employed by 
the state university or community college system after June 30, 
1989, and before May 9, 1990, may elect coverage in the general 
state employee retirement plan.  Election of coverage must be 
made before October 1, 1993, on a form approved by the director 
of the Minnesota state retirement system.  For an individual 
electing coverage in the general state employees retirement plan 
under this section, the value of the individual's account in the 
individual retirement account plan under Minnesota Statutes, 
chapter 354B, will be transferred to the retirement fund for the 
general state employees retirement plan within 30 days of the 
election, and the individual will receive allowable service 
credit in the general state employees plan for the period during 
which the individual was a member of the individual retirement 
account plan. 
    Sec. 3.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective July 1, 1993. 
    Presented to the governor May 14, 1993 
    Signed by the governor May 17, 1993, 3:08 p.m.