Minnesota Session Laws - 1993, Regular Session

  
    Laws of Minnesota 1993 

                        CHAPTER 352-H.F.No. 570 
           An act relating to retirement; the public employees 
          retirement association; changing employee and employer 
          contribution rates; changing benefits under certain 
          consolidations; increasing the pension benefit 
          multiplier for the public employees police and fire 
          fund; amending Minnesota Statutes 1992, sections 
          353.65, subdivisions 2, 3, and by adding a 
          subdivision; 353.651, subdivision 3; 353.656, 
          subdivision 1; and 356.215, subdivision 4g; proposing 
          coding for new law in Minnesota Statutes, chapter 353A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 353.65, 
subdivision 2, is amended to read: 
    Subd. 2.  The employee contribution is an amount equal to 
eight 7.6 percent of the total salary of the member.  This 
contribution must be made by deduction from salary in the manner 
provided in subdivision 4.  Where any portion of a member's 
salary is paid from other than public funds, the member's 
employee contribution is based on the total salary received from 
all sources.  
    Sec. 2.  Minnesota Statutes 1992, section 353.65, 
subdivision 3, is amended to read: 
    Subd. 3.  The employer contribution shall be an amount 
equal to 12 11.4 percent of the total salary of every member.  
This contribution shall be made from funds available to the 
employing subdivision by the means and in the manner provided in 
section 353.28. 
    Sec. 3.  Minnesota Statutes 1992, section 353.65, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [CHANGE IN EMPLOYEE AND EMPLOYER CONTRIBUTIONS 
IN CERTAIN INSTANCES.] (a) If, for three consecutive years, the 
regular actuarial valuation of the public employees police and 
fire fund under section 356.215 indicates that the fund has no 
unfunded actuarial accrued liability and that there is a 
sufficiency in excess of 0.5 percent of covered payroll when the 
total actuarial funding requirements of the fund are compared to 
the total support, the employee and employer contribution rates 
must be decreased as determined under paragraph (c) to a level 
such that the sufficiency equals 0.5 percent of covered payroll 
based on the most recent actuarial valuation. 
    (b) If, for three consecutive years, the regular actuarial 
valuation of the public employees police and fire fund under 
section 356.215 indicates that the fund has an unfunded 
actuarial accrued liability and that there is a deficiency in 
excess of 0.5 percent of covered payroll when the total 
actuarial funding requirements of the fund are compared to the 
total support, the employee and employer contribution rates must 
be increased as determined under paragraph (c) so that no 
deficiency exists based on the most recent actuarial valuation. 
    (c) The increase or decrease in employee and employer 
contribution rates required under paragraphs (a) and (b) must 
maintain the current ratio in employer and employee contribution 
rates of 40 percent employee contribution and 60 percent 
employer contribution. 
    (d) The contribution rate increase or decrease must be 
determined by the executive director of the public employees 
retirement association. 
    (e) The contribution rate increase or decrease is effective 
on the first full payroll period beginning after June 30 next 
following the third consecutive annual actuarial valuation 
disclosing the deficiency or sufficiency specified in paragraph 
(a) or (b). 
    Sec. 4.  Minnesota Statutes 1992, section 353.651, 
subdivision 3, is amended to read: 
    Subd. 3.  [RETIREMENT ANNUITY FORMULA.] The average salary 
as defined in subdivision 2, multiplied by 2-1/2 2.65 percent 
per year of allowable service shall determine determines the 
amount of the normal retirement annuity.  If the member has 
earned allowable service for performing services other than 
those of a police officer or firefighter, the annuity 
representing such service shall be is computed in accordance 
with under sections 353.29 and 353.30. 
    Sec. 5.  Minnesota Statutes 1992, section 353.656, 
subdivision 1, is amended to read: 
    Subdivision 1.  [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 
Any member of the police and fire fund less than 55 years of 
age, who becomes disabled and physically unfit to perform duties 
as a police officer or firefighter subsequent to June 30, 1973, 
as a direct result of an injury, sickness, or other disability 
incurred in or arising out of any act of duty, which has or is 
expected to render the member physically or mentally unable to 
perform duties as a police officer or firefighter for a period 
of at least one year, shall receive disability benefits during 
the period of such disability.  The benefits must be in an 
amount equal to 50 53 percent of the "average salary" pursuant 
to under subdivision 3, plus an additional 2-1/2 2.65 percent 
of said average salary for each year of service in excess of 20 
years.  Should disability under this subdivision occur before 
the member has at least five years of allowable service credit 
in the police and fire fund, the disability benefit must be 
computed on the "average salary" from which deductions were made 
for contribution to the police and fire fund. 
     Sec. 6.  [353A.083] [PERA-P&F BENEFIT PLAN APPLICABLE TO 
PRE-1993 CONSOLIDATIONS.] 
    For any consolidation account in effect on the date of 
final enactment of section 6, the public employee police and 
fire fund benefit plan applicable to consolidation account 
members who have elected or will elect that benefit plan 
coverage under section 353A.08 is the pre-July 1, 1993 public 
employees police and fire fund benefit plan unless the 
applicable municipality approves the extension of the post-June 
30, 1993 public employees police and fire fund benefit plan to 
the consolidation account. 
    Sec. 7.  Minnesota Statutes 1992, section 356.215, 
subdivision 4g, is amended to read: 
    Subd. 4g.  [AMORTIZATION CONTRIBUTIONS.] (a) In addition to 
the exhibit indicating the level normal cost, the actuarial 
valuation must contain an exhibit indicating the additional 
annual contribution sufficient to amortize the unfunded 
actuarial accrued liability.  For funds governed by chapters 3A, 
352, 352B, 352C, 353, 353C, 354, 354A, and 490, the additional 
contribution must be calculated on a level percentage of covered 
payroll basis by the established date for full funding in effect 
when the valuation is prepared.  The level percent additional 
contribution must be calculated assuming annual payroll growth 
of 6.5 percent.  For all other funds, the additional annual 
contribution must be calculated on a level annual dollar amount 
basis. 
    (b) For any fund other than the Minneapolis employees 
retirement fund, after the first actuarial valuation date 
occurring after June 1, 1989, if there has not been a change in 
the actuarial assumptions used for calculating the actuarial 
accrued liability of the fund, a change in the benefit plan 
governing annuities and benefits payable from the fund, a change 
in the actuarial cost method used in calculating the actuarial 
accrued liability of all or a portion of the fund, or a 
combination of the three, which change or changes by themselves 
without inclusion of any other items of increase or decrease 
produce a net increase in the unfunded actuarial accrued 
liability of the fund, the established date for full funding for 
the first actuarial valuation made after June 1, 1989, and each 
successive actuarial valuation is the first actuarial valuation 
date occurring after June 1, 2020.  
     (c) For any fund or plan other than the Minneapolis 
employees retirement fund, after the first actuarial valuation 
date occurring after June 1, 1989, if there has been a change in 
any or all of the actuarial assumptions used for calculating the 
actuarial accrued liability of the fund, a change in the benefit 
plan governing annuities and benefits payable from the fund, a 
change in the actuarial cost method used in calculating the 
actuarial accrued liability of all or a portion of the fund, or 
a combination of the three, and the change or changes, by 
themselves and without inclusion of any other items of increase 
or decrease, produce a net increase in the unfunded actuarial 
accrued liability in the fund, the established date for full 
funding must be determined using the following procedure:  
     (i) the unfunded actuarial accrued liability of the fund 
must be determined in accordance with the plan provisions 
governing annuities and retirement benefits and the actuarial 
assumptions in effect before an applicable change; 
     (ii) the level annual dollar contribution or level 
percentage, whichever is applicable, needed to amortize the 
unfunded actuarial accrued liability amount determined under 
item (i) by the established date for full funding in effect 
before the change must be calculated using the interest 
assumption specified in subdivision 4d in effect before the 
change; 
     (iii) the unfunded actuarial accrued liability of the fund 
must be determined in accordance with any new plan provisions 
governing annuities and benefits payable from the fund and any 
new actuarial assumptions and the remaining plan provisions 
governing annuities and benefits payable from the fund and 
actuarial assumptions in effect before the change; 
     (iv) the level annual dollar contribution or level 
percentage, whichever is applicable, needed to amortize the 
difference between the unfunded actuarial accrued liability 
amount calculated under item (i) and the unfunded actuarial 
accrued liability amount calculated under item (iii) over a 
period of 30 years from the end of the plan year in which the 
applicable change is effective must be calculated using the 
applicable interest assumption specified in subdivision 4d in 
effect after any applicable change; 
     (v) the level annual dollar or level percentage 
amortization contribution under item (iv) must be added to the 
level annual dollar amortization contribution or level 
percentage calculated under item (ii); 
     (vi) the period in which the unfunded actuarial accrued 
liability amount determined in item (iii) is amortized by the 
total level annual dollar or level percentage amortization 
contribution computed under item (v) must be calculated using 
the interest assumption specified in subdivision 4d in effect 
after any applicable change, rounded to the nearest integral 
number of years, but not to exceed 30 years from the end of the 
plan year in which the determination of the established date for 
full funding using the procedure set forth in this clause is 
made and not to be less than the period of years beginning in 
the plan year in which the determination of the established date 
for full funding using the procedure set forth in this clause is 
made and ending by the date for full funding in effect before 
the change; and 
    (vii) the period determined under item (vi) must be added 
to the date as of which the actuarial valuation was prepared and 
the date obtained is the new established date for full funding.  
    (d) For the Minneapolis employees retirement fund, the 
established date for full funding is June 30, 2020. 
    (e) For the public employees retirement association police 
and fire fund, an excess of valuation assets over actuarial 
accrued liability will be amortized in the same manner over the 
same period as an unfunded actuarial accrued liability but will 
serve to reduce the required contribution instead of increasing 
it. 
    Sec. 8.  [EFFECTIVE DATE.] 
    Sections 1 and 2 are effective the first full payroll 
period beginning after December 31, 1993.  Sections 3 to 7 are 
effective July 1, 1993. 
    Presented to the governor May 20, 1993 
    Signed by the governor May 24, 1993, 12:03 p.m.