Office of the Revisor of Statutes
Minnesota Session Laws - 1995, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 141-H.F.No. 617
An act relating to retirement; various public pension
plans; providing for the suspension or forfeiture of
certain survivor benefits in the event of certain
felonious deaths; making various individual and small
group pension accommodations; making various pension
plan administrative changes; recodifying the
individual retirement account plan and making various
other modifications; amending Minnesota Statutes 1994,
sections 11A.23, subdivision 4; 352.12, subdivisions
1, 2, 2a, and 6; 352B.105; 352D.02, subdivision 1;
354.05, subdivisions 2a, 5, 35, and 40; 354.06,
subdivision 4; 354.44, by adding a subdivision;
354.52, subdivision 4a; 354A.011, subdivision 27, and
by adding a subdivision; 354A.12, subdivision 3d;
354A.31, by adding a subdivision; 355.61; 356.215,
subdivisions 4d and 4g; 356.24, subdivision 1;
383B.48; and 383B.49; proposing coding for new law in
Minnesota Statutes, chapters 354B; 354C and 356;
repealing Minnesota Statutes 1994, sections 352D.02,
subdivision 1a; 354B.01; 354B.015; 354B.02; 354B.035;
354B.04; 354B.045; 354B.05; 354B.06; 354B.07; 354B.08;
354B.085; 354B.09; and 354B.15; Laws 1990, chapter
570, article 3, sections 10 and 11, as amended; Laws
1993, chapters 192, section 89, and 239, article 5,
section 2; and Laws 1994, chapters 508, article 1,
section 14; and 572, sections 11 and 12.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
SUSPENSION OR FORFEITURE OF CERTAIN
SURVIVOR BENEFITS IN THE EVENT OF
CERTAIN FELONIOUS DEATHS
Section 1. [356.305] [LOSS OF ENTITLEMENT TO BENEFITS FOR
SURVIVOR CAUSING DEATH OF PENSION PLAN MEMBER.]
Subdivision 1. [DEFINITIONS.] (a) Each of the words or
terms defined in this subdivision has the meaning indicated.
(b) "Public pension plan" means any retirement plan or fund
enumerated in section 356.20, subdivision 2, or 356.30,
subdivision 3, any relief association governed by section 69.77
or sections 69.771 through 69.775, any retirement plan governed
by chapter 354B or 354C, the Hennepin county supplemental
retirement plan governed by sections 383B.46 through 383B.52, or
any housing and redevelopment authority retirement plan.
(c) "Public pension plan member" means a person who is a
participant covered by a public pension plan, a former
participant of a public pension plan who has sufficient service
to be entitled to receive a future retirement annuity or service
pension, a recipient of a retirement annuity, service pension,
or disability benefit from a public pension plan, or a former
participant of a public pension plan who has member or employee
contributions to the person's credit in the public pension plan.
(d) "Survivor" means the surviving spouse, a former spouse,
a surviving child, a joint annuitant, a designated recipient of
a second or remainder portion of an optional annuity form, a
beneficiary, or the estate of a deceased public pension plan
member, as those terms are commonly understood or defined in the
benefit plan document of the public pension plan.
(e) "Survivor benefit" means a surviving spouse benefit,
surviving child benefit, second or remainder portion of an
optional annuity form, a death benefit, a funeral benefit, or a
refund of member or employee contributions payable on account of
the death of a public pension plan member as provided for in the
benefit plan document of the public pension plan.
Subd. 2. [SUSPENSION OF SURVIVOR BENEFITS UPON FELONY
CHARGE.] During the pendency of a charge of a survivor of a
felony that caused the death of a public pension plan member, of
criminal liability for a death by wrongful act felony, or of
conspiracy to commit a death by wrongful act felony, the
entitlement of that survivor to receive a survivor benefit is
suspended.
Subd. 3. [FORFEITURE OF SURVIVOR BENEFITS UPON FELONY
CONVICTION.] Upon final conviction of a survivor of a felony
that caused the death of a public pension plan member, of
criminal liability for a death by wrongful act felony, or of
conspiracy to commit a death by wrongful act felony, the
entitlement of that survivor to receive a survivor benefit is
forfeited, including entitlement for any previously suspended
survivor benefits under subdivision 2.
Subd. 4. [SUSPENSION OR FORFEITURE ACTIONS SEPARATE.] The
charge of one survivor under subdivision 2 or the conviction of
one survivor under subdivision 3 does not affect the entitlement
of another survivor to a survivor benefit.
Subd. 5. [RECOVERY OF CERTAIN BENEFITS.] If monthly
benefits or a refund or balance of a participant or former
participant's account have already been paid to an individual
who is later charged or convicted as described under this
section, the executive director or chief administrative officer
of the public pension plan shall attempt to recover the amounts
paid. Payment may be made to the next beneficiary or survivor
only in an amount equal to the amount recovered and in the
amount of any future payments that would legally accrue to
another survivor under the applicable laws of the retirement
plan.
Subd. 6. [DISPOSITION OF FORFEITED SURVIVOR BENEFITS.] If
the benefit plan document governing the public pension plan does
not provide for the disposition of forfeited benefits, survivor
benefits forfeited under this section must be deposited in the
general fund of the state.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day following final enactment
and applies to all applicable felony charges pending as of that
date.
ARTICLE 2
INDIVIDUAL AND SMALL GROUP PENSION ACCOMMODATIONS
Section 1. [PURCHASE OF FULL-SERVICE CREDIT FOR SABBATICAL
LEAVE.]
Subdivision 1. [ELIGIBILITY.] Notwithstanding Minnesota
Statutes, section 354.092, subdivision 3, a member of the
teachers retirement association described in subdivision 2 may
make a direct payment under subdivision 3 to the association to
receive service credit for a period of uncovered service due to
a sabbatical leave during the 1975-1976 fiscal year for which
the member failed to make employee payments on the difference
between salary during the leave and the salary for a comparable
period during the year immediately preceding the leave.
Subd. 2. [APPLICATION.] Subdivision 1 applies to a member
who was on a sabbatical leave of absence during the 1975-1976
fiscal year, whose additional payment permitted for that fiscal
year was $313.46, who was attending an institute of higher
education outside Minnesota during the period of the leave, and
whose original payment deadline was June 30, 1977.
Subd. 3. [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit
for prior service under this section, there must be paid to the
teachers retirement association 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 by the
executive director of the teachers retirement association using
the applicable preretirement interest rate of the association
specified in Minnesota Statutes, section 356.215, subdivision
4d, and the mortality table adopted for the association. The
calculation must assume continuous future service in the
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 the person's actual salary and 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. In order
to purchase the service credit, the individual must establish in
the records of the association proof of the sabbatical leave for
which the purchase of prior service applies. The manner of
proof must be in accordance with procedures prescribed by the
executive director of the association.
(b) Payment must be made in one lump sum prior to July 1,
1995.
(c) Payment of the amount calculated under this subdivision
must be made by the member. However, the current or former
employer of the member may, at its discretion, pay all or any
portion of the payment amount that exceeds $313.46 plus interest
at the rate of 8-1/2 percent a year compounded annually from
June 30, 1977, to the date on which the payment is made. If the
employer agrees to payments under this paragraph, the employee
must make the employee payments required under this paragraph
prior to July 1, 1995. If that employee payment is made, the
employing unit payment under this paragraph must be remitted to
the executive director of the teachers retirement association
within 30 days of receipt by the executive director of the
employee payments specified under this paragraph.
Subd. 4. [SERVICE CREDIT GRANT.] Service credit for the
purchase period or periods must be granted to the account of the
eligible person upon receipt of the purchase payment amount
specified in subdivision 3.
Sec. 2. [CERTAIN CITY ATTORNEY; ANNUITY COMPUTATION.]
A retired member of the public employees retirement
association who terminated a contract for employment as city
attorney for the city of West St. Paul on January 30, 1994, but
who continued to perform legal services for the city as an
independent contractor until the city retained a successor legal
counsel on May 9, 1994, may be deemed to have terminated public
service on January 30, 1994, and is eligible for the increased
accrual rate retirement incentive provided by Laws 1993, chapter
192, section 108, subdivision 3, notwithstanding the fact that
there was no interruption of legal service for 30 days after
January 30, 1994.
Sec. 3. [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF
PRIOR SERVICE CREDIT.]
Subdivision 1. [ELIGIBILITY; MANKATO STATE UNIVERSITY
PROFESSOR.] (a) Notwithstanding any provision of Minnesota
Statutes, section 354.094, to the contrary, an eligible person
described in paragraph (b) is entitled to purchase allowable
service credit in the teachers retirement association for the
period described in paragraph (c) by paying the amount specified
in subdivision 3.
(b) An eligible person is a person who was granted an
extended leave of absence from employment by Mankato State
University on June 19, 1991, for the period September 11, 1991,
through June of 1994, and which leave was erroneously
characterized as an educational leave.
(c) The period for service credit purchase is the period
from September 11, 1991, through June 1994.
Subd. 2. [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit
under subdivision 1, there must be paid to the teachers
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 teachers 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 Minnesota Statutes, section
356.215, subdivision 4d.
(c) The eligible person must establish in the records of
the association proof of the leave of absence for which the
purchase of service credit is requested. The manner of the
proof 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 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 the applicable employee contribution rate specified in
Minnesota Statutes, section 354.42, applied to the person's
actual salary rate in the year immediately preceding the
extended leave, plus 8.5 percent annually compounded interest
from June 30 of each year of the leave until payment is made.
Payment must be made in a lump sum. Authority to make the
member contribution equivalent amount expires 90 days after the
effective date of this section or at the time of retirement,
whichever is earlier.
Subd. 4. [MANDATORY EMPLOYING UNIT PAYMENT.] (a) Within 30
days of the receipt by the executive director of the teachers
retirement association of the payment from the eligible person
under subdivision 3, the employer employing the eligible person
described in subdivision 1, paragraph (b), immediately before
the leave described in subdivision 1, 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 employing unit by July 1, 1998. Payments
made after July 1, 1995, are payable with compound annual
interest at the rate of 8.5 percent from July 1, 1995, until the
date payment is made.
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.
Sec. 4. [PURCHASE OF PRIOR SERVICE CREDIT.]
Subdivision 1. [ELIGIBILITY.] (a) Notwithstanding
Minnesota law to the contrary, an employee of Swift county who
is a current coordinated member of the public employee
retirement association, who was born in 1948, who first had
sufficient salary to meet minimum statutory salary thresholds
for association membership on March 1, 1990, but who was not
reported for membership until January 1991, may purchase
allowable service credit in the public employees retirement
association for the periods of uncovered service during which
the employee had sufficient salary to meet minimum statutory
salary thresholds for public employee retirement association
membership.
(b) In order to purchase the service credit, the individual
must establish in the records of the association proof of the
service for which the purchase of prior service applies, and
proof that the individual had sufficient salary during all or
part of that period to meet minimum statutory salary thresholds
for public employee retirement association membership. Payments
cannot be made if the executive director determines that the
member was eligible for coverage during this period by another
Minnesota public pension plan other than a volunteer fire plan
to which Minnesota Statutes, section 69.771, subdivision 1,
applies. The manner of proof must be in accordance with
procedures prescribed by the executive director of the
association.
Subd. 2. [PURCHASE PAYMENT AMOUNT.] (a) To purchase credit
for prior service under this section, 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 the purchase of the
additional service credit. Calculation of this amount must be
made by the executive director of the public employees
retirement association using the applicable preretirement
interest rate of the association specified in Minnesota
Statutes, section 356.215, subdivision 4d, and the mortality
table adopted for the association. The calculation must assume
continuous future service in the 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 the person's
actual salary and 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.
(b) Payment must be made in one lump sum prior to July 1,
1996.
(c) Payment of the amount calculated under this subdivision
must be made by the member. However, the current or former
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 8-1/2 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. If the
employer agrees to payments under this paragraph, the employee
must make the employee payments required under this paragraph
prior to July 1, 1996. If that employee payment is made, the
employing unit payment under this paragraph must be remitted to
the executive director of the public employees retirement
association within 60 days of receipt by the executive director
of the employee payments specified under this paragraph.
Subd. 3. [SERVICE CREDIT GRANT.] Service credit for the
purchase period or periods must be granted to the account of the
eligible person upon receipt of the purchase payment amount
specified in subdivision 2.
Sec. 5. [EFFECTIVE DATE.]
(a) Section 1 is effective the day following final
enactment.
(b) Section 2 is effective the day following final
enactment and the annuity payable under section 2 must be
recalculated and paid retroactively to the date that the annuity
was first paid to the retiree.
(c) Section 3 is effective July 1, 1995.
(d) Section 4 is effective the day following final
enactment.
ARTICLE 3
PENSION PLAN ADMINISTRATIVE PROVISIONS
Section 1. Minnesota Statutes 1994, section 352.12,
subdivision 1, is amended to read:
Subdivision 1. [DEATH BEFORE TERMINATION OF SERVICE.] If
an employee dies before state service has terminated and neither
a survivor annuity nor a reversionary annuity is payable, or if
a former employee who has sufficient service credit to be
entitled to an annuity dies before the benefit has become
payable, the director shall make a refund to the last designated
beneficiary or, if there is none, to the surviving spouse or, if
none, to the employee's surviving children in equal shares or,
if none, to the employee's surviving parents in equal shares or,
if none, to the representative of the estate in an amount equal
to the accumulated employee contributions plus interest at the
rate of six percent per annum compounded annually. Interest
must be computed as provided in section 352.22, subdivision 2,
to the first day of the month in which the refund is
processed and based on fiscal year balances. Upon the death of
an employee who has received a refund that was later repaid in
full, interest must be paid on the repaid refund only from the
date of repayment. If the repayment was made in installments,
interest must be paid only from the date installment payments
began. The designated beneficiary, surviving spouse, or
representative of the estate of an employee who had received a
disability benefit is not entitled to interest upon any balance
remaining to the decedent's credit in the fund at the time of
death, unless death occurred before any payment could be
negotiated.
Sec. 2. Minnesota Statutes 1994, section 352.12,
subdivision 2, is amended to read:
Subd. 2. [SURVIVING SPOUSE BENEFIT.] (a) If an employee or
former employee has credit for at least three years allowable
service and dies before an annuity or disability benefit has
become payable, notwithstanding any designation of beneficiary
to the contrary, the surviving spouse of the employee may elect
to receive, in lieu of the refund with interest under
subdivision 1, an annuity equal to the joint and 100 percent
survivor annuity which the employee or former employee could
have qualified for had the employee terminated service on the
date of death.
(b) If the employee was under age 55 and has credit for at
least 30 years of allowable service on the date of death, the
surviving spouse may elect to receive a 100 percent joint and
survivor annuity based on the age of the employee and surviving
spouse on the date of death. The annuity is payable using the
full early retirement reduction under section 352.116,
subdivision 1, paragraph (a), to age 55 and one-half of the
early retirement reduction from age 55 to the age payment begins.
(c) If the employee was under age 55 and has credit for at
least three years of allowable service credit on the date of
death but did not yet qualify for retirement, the surviving
spouse may elect to receive a 100 percent joint and survivor
annuity based on the age of the employee and surviving spouse at
the time of death. The annuity is payable using the full early
retirement reduction under section 352.116, subdivision 1 or 1a,
to age 55 and one-half of the early retirement reduction from
age 55 to the age payment begins.
The surviving spouse eligible for surviving spouse benefits
under paragraph (a) may apply for the annuity at any time after
the date on which the deceased employee or former employee would
have attained the required age for retirement based on
the employee's allowable service earned. The surviving spouse
eligible for surviving spouse benefits under paragraph (b) or
(c) may apply for the annuity at any time after the employee's
death. The annuity must be computed under sections 352.115,
subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 1a, and
3. Sections 352.22, subdivision 3, and 352.72, subdivision 2,
apply to a deferred annuity or surviving spouse benefit payable
under this subdivision. The annuity must cease with the last
payment received by the surviving spouse in the lifetime of the
surviving spouse, or upon expiration of a term certain benefit
payment to a surviving spouse under subdivision 2a. An amount
equal to the excess, if any, of the accumulated contributions
credited to the account of the deceased employee in excess of
the total of the benefits paid and payable to the surviving
spouse must be paid to the deceased employee's or former
employee's last designated beneficiary or, if none, as specified
under subdivision 1.
Any employee or former employee may request in writing that
this subdivision not apply and that payment be made only to a
designated beneficiary as otherwise provided by this chapter.
Sec. 3. Minnesota Statutes 1994, section 352.12,
subdivision 2a, is amended to read:
Subd. 2a. [SURVIVING SPOUSE COVERAGE TERM CERTAIN.] In
lieu of the 100 percent optional annuity under subdivision 2, or
refund under subdivision 1, the surviving spouse of a deceased
employee or former employee may elect to receive survivor
coverage in a term certain of five, ten, 15, or 20 years, but
monthly payments must not exceed 75 percent of the average
high-five monthly salary of the deceased employee or former
employee. The monthly term certain annuity must be actuarially
equivalent to the 100 percent optional annuity under subdivision
2.
If a survivor elects a term certain annuity and dies before
the expiration of the specified term certain period, the
commuted value of the remaining annuity payments must be paid in
a lump sum to the survivor's estate.
Sec. 4. Minnesota Statutes 1994, section 352.12,
subdivision 6, is amended to read:
Subd. 6. [DEATH AFTER SERVICE TERMINATION.] Except as
provided in subdivision 1, if a former employee covered by the
system dies and has not received an annuity, a retirement
allowance, or a disability benefit, a refund must be made to the
last designated beneficiary or, if there is none, to the
surviving spouse or, if none, to the employee's surviving
children in equal shares or, if none, to the employee's
surviving parents in equal shares or, if none, to the
representative of the estate in an amount equal to accumulated
employee contributions. The refund must include interest at the
rate of six percent per year compounded annually. The interest
must be computed to the first day of the month in which the
refund is processed and be based on fiscal year balances as
provided in section 352.22, subdivision 2.
Sec. 5. Minnesota Statutes 1994, section 352B.105, is
amended to read:
352B.105 [TERMINATION OF DISABILITY BENEFITS.]
Disability benefits payable under section 352B.10 shall
terminate at the end of the month the beneficiary becomes 55 65
years old. If the beneficiary is still disabled when the
beneficiary becomes 55 65 years old, the beneficiary shall be
deemed to be a retired member and, if the beneficiary had chosen
an optional annuity under section 352B.10, subdivision 5, shall
receive an annuity in accordance with the terms of the optional
annuity previously chosen. If the beneficiary had not chosen an
optional annuity under section 352B.10, subdivision 5, the
beneficiary may choose to receive either a normal retirement
annuity computed under section 352B.08, subdivision 2, or an
optional annuity as provided in section 352B.08, subdivision 3.
An optional annuity must be chosen within 90 days of attaining
age 65 or reaching the five-year anniversary of the effective
date of the disability benefit, whichever is later. If an
optional annuity is chosen, the optional annuity shall begin to
accrue the first of the month following attainment of age 65 or
the five-year anniversary of the effective date of the
disability benefit, whichever is later.
Sec. 6. Minnesota Statutes 1994, section 354.05,
subdivision 5, is amended to read:
Subd. 5. [MEMBER OF FUND ASSOCIATION.] "Member of fund
association" means every teacher who joins and contributes to
the teachers retirement fund as provided in this chapter who has
not retired, except a teacher covered by section 354B.02,
subdivision 2 or 3, who elects to participate in the individual
retirement account plan under chapter 354B, or a teacher who
exercises an option to elect coverage under another public
pension plan enumerated in section 356.30, subdivision 3. Any
former member of the fund association who is retired and
subsequently resumes teaching service is a member of the
fund association only for purposes of social security coverage.
Sec. 7. Minnesota Statutes 1994, section 354.05,
subdivision 35, is amended to read:
Subd. 35. [SALARY.] (a) "Salary" means the compensation,
upon which member contributions are required and made, that is
paid to a teacher before employee-paid fringe benefits, tax
sheltered annuities, deferred compensation, or any combination
of these employee-paid items are deducted.
(b) "Salary" does not mean:
(1) lump sum annual leave payments;
(2) lump sum wellness and sick leave payments;
(3) payments in lieu of any employer-paid group insurance
coverage;
(4) payments for the difference between single and family
premium rates that may be paid to a member with single coverage;
(5) employer-paid fringe benefits including, but not
limited to, flexible spending accounts, cafeteria plans, health
care expense accounts, day care expenses, or automobile
allowances and expenses;
(6) any form of payment made in lieu of any other
employer-paid fringe benefit or expense;
(7) any form of severance payments;
(8) workers' compensation payments;
(9) disability insurance payments including self-insured
disability payments;
(10) payments to school principals and all other
administrators for services in addition to the normal work year
contract if these additional services are performed on an
extended duty day, Saturday, Sunday, holiday, annual leave day,
sick leave day, or any other nonduty day;
(11) payments under section 356.24, subdivision 1, clause
(4)(ii); and
(12) payments made under section 125.12, subdivision 7,
except for payments for sick leave accumulated under the
provisions of a uniform school district policy that applies
equally to all similarly situated persons in the district.
Sec. 8. Minnesota Statutes 1994, section 354.05,
subdivision 40, is amended to read:
Subd. 40. [TIMELY RECEIPT.] An application, payment,
return, claim, or other document that is not personally
delivered to the association on or before the applicable due
date is considered to be a timely receipt if officially
postmarked on or before the due date or delivered or filed under
section 645.151.
Sec. 9. Minnesota Statutes 1994, section 354.06,
subdivision 4, is amended to read:
Subd. 4. [TREASURER; DUTIES BOARD; EXPENSES.] All members
of the board shall serve without compensation. A member shall
receive necessary expenses to attend meetings of the board and
its committees, and association functions and presentations
authorized by the board. The necessary expenses must be paid
out of the fund. Members of the board shall suffer no loss of
compensation from their employing units by reason of service on
or for the association, the board, or any committee authorized
by the board. Necessary expenses may include the salary of any
substitute teacher which the employing unit is required to hire
in the absence of the board member. The board may reimburse the
employing unit for the cost of the substitute teacher.
Sec. 10. Minnesota Statutes 1994, section 354.44, is
amended by adding a subdivision to read:
Subd. 9. [DETERMINING APPLICABLE LAW.] An employee who
returns to covered service following a termination and who is
not receiving a retirement annuity under this section must have
earned at least 85 days of credited service following the return
to covered service to be eligible for improved benefits
resulting from any law change enacted subsequent to that
termination.
Sec. 11. Minnesota Statutes 1994, section 354.52,
subdivision 4a, is amended to read:
Subd. 4a. [MEMBER DATA REPORTING REQUIREMENTS.] (a) An
employing unit shall initially provide the following member data
or any of that data not previously provided to the association
for payroll warrants dated after June 30, 1995, in a format
prescribed by the executive director. Data changes and the
dates of those changes must be reported to the association on an
ongoing basis for the payroll cycle in which they occur with the
data under subdivision 4b. Data on the member includes:
(1) legal name, address, date of birth, association member
number, employer-assigned employee number, and social security
number;
(2) association status, including, but not limited to,
basic, coordinated, exempt annuitant, exempt technical college
teacher, and exempt independent contractor or consultant;
(3) employment status, including, but not limited to, full
time, part time, intermittent, substitute, or part-time
mobility;
(4) employment position, including, but not limited to,
teacher, superintendent, principal, administrator, or other;
(5) employment activity, including, but not limited to,
hire, termination, resumption of employment, disability, or
death;
(6) leaves of absence;
(7) county district number assigned by the association for
the employing unit;
(8) data center identification number, if applicable; and
(9) other information as may be required by the executive
director.
Sec. 12. Minnesota Statutes 1994, section 354A.12,
subdivision 3d, is amended to read:
Subd. 3d. [SUPPLEMENTAL ADMINISTRATIVE EXPENSE
ASSESSMENT.] (a) The active and retired membership of the
Minneapolis teachers retirement fund association and of the St.
Paul teachers retirement fund association is responsible for
defraying supplemental administrative expenses other than
investment expenses of the respective teacher retirement fund
association.
(b) Investment expenses of the teachers retirement fund
association are those expenses incurred by or on behalf of the
retirement fund in connection with the investment of the assets
of the retirement fund other than investment security
transaction costs. Other administrative expenses are all
expenses incurred by or on behalf of the retirement fund for all
other retirement fund functions other than the investment of
retirement fund assets. Investment and other administrative
expenses must be accounted for using generally accepted
accounting principles and in a manner consistent with the
comprehensive annual financial report of the teachers retirement
fund association for the immediately previous fiscal year under
section 356.20.
(c) Supplemental administrative expenses other than
investment expenses of a first class city teacher retirement
fund association are those expenses for the fiscal year that
exceed the amount computed by applying the most recent
percentage of pay administrative expense amount, other than
investment expenses, for the teachers retirement association
governed by chapter 354 to the covered payroll of the respective
teachers retirement fund association for the fiscal year.
(d) The board of trustees of each first class city teachers
retirement fund association shall allocate the total dollar
amount of supplemental administrative expenses other than
investment expenses among the various active and retired
membership groups of the teachers retirement fund association
and shall assess the various membership groups their respective
share of the supplemental administrative expenses other than
investment expenses, in amounts determined by the board of
trustees. The supplemental administrative expense assessments
must be paid by the membership group in a manner determined by
the board of trustees of the respective teachers retirement
association. Supplemental administrative expenses payable by
the active members of the pension plan must be picked up by the
employer in accordance with section 356.62.
(e) With respect to the St. Paul teachers retirement fund
association, the supplemental administrative expense assessment
must be fully disclosed to the various active and retired
membership groups of the teachers retirement fund association.
The chief administrative officer of the St. Paul teachers
retirement fund association shall prepare a supplemental
administrative expense assessment disclosure notice, which must
include the following:
(1) the total amount of administrative expenses of the St.
Paul teachers retirement fund association, the amount of the
investment expenses of the St. Paul teachers retirement fund
association, and the net remaining amount of administrative
expenses of the St. Paul teachers retirement fund association;
(2) the amount of administrative expenses for the St. Paul
teachers retirement fund association that would be equivalent to
the teachers retirement association noninvestment administrative
expense level described in paragraph (c);
(3) the total amount of supplemental administrative
expenses required for assessment calculated under paragraph (c);
(4) the portion of the total amount of the supplemental
administrative expense assessment allocated to each membership
group and the rationale for that allocation;
(5) the manner of collecting the supplemental
administrative expense assessment from each membership group,
the number of assessment payments required during the year, and
the amount of each payment or the procedure used to determine
each payment; and
(6) any other information that the chief administrative
officer determines is necessary to fairly portray the manner in
which the supplemental administrative expense assessment was
determined and allocated.
(f) The disclosure notice must be provided annually in the
annual report of the association.
(g) The supplemental administrative expense assessments
must be deposited in the applicable teachers retirement fund
upon receipt.
(f) (h) Any omitted active membership group assessments
that remain undeducted and unpaid to the teachers retirement
fund association for 90 days must be paid by the respective
school district. The school district may recover any omitted
active membership group assessment amounts that it has
previously paid. The teachers retirement fund association shall
deduct any omitted retired membership group assessment amounts
from the benefits next payable after the discovery of the
omitted amounts.
Sec. 13. Minnesota Statutes 1994, section 354A.31, is
amended by adding a subdivision to read:
Subd. 8. [DETERMINING APPLICABLE LAW.] An employee who
returns to covered service following a termination and who is
not receiving a retirement annuity under this section must have
earned at least 85 days of credited service following the return
to covered service to be eligible for improved benefits
resulting from any law change enacted subsequent to that
termination.
Sec. 14. Minnesota Statutes 1994, section 356.215,
subdivision 4d, is amended to read:
Subd. 4d. [INTEREST AND SALARY ASSUMPTIONS.] (a) For funds
governed by chapters 352, 352B, 353, 353C, and 354 by sections
352.90 through 352.951 and 353.63 through 353.68, the actuarial
valuation must use a preretirement interest assumption of 8.5
percent, a postretirement interest assumption of five percent,
and a future salary increase assumption of 6.5 percent.
(b) For funds governed by chapter 354A, the actuarial
valuation must use preretirement and postretirement assumptions
of 8.5 percent and a future salary increase assumption of 6.5
percent, but the actuarial valuation must reflect the payment of
postretirement adjustments to retirees, based on the methods
specified in the bylaws of the fund as approved by the
legislature. For a fund governed by chapter 422A, the actuarial
valuation shall use a preretirement interest assumption of six
percent, a postretirement interest assumption of five percent,
and an assumption that in each future year the salary on which a
retirement or other benefit is based is 1.04 multiplied by the
salary for the preceding year.
(c) For all other funds not specified in paragraph (a),
(b), or (d), or (e), the actuarial valuation must use a
preretirement interest assumption of five percent, a
postretirement interest assumption of five percent, and a future
salary increase assumption of 3.5 percent.
(d) For funds governed by chapters 3A, 352C, and 490, the
actuarial valuation must use a preretirement interest assumption
of 8.5 percent, a postretirement interest assumption of five
percent, and a future salary increase assumption of 6.5 percent
in each future year in which the salary amount payable is not
determinable from section 3.099, 15A.081, subdivision 6, or
15A.083, subdivision 1, whichever applies, or from applicable
compensation council recommendations under section 15A.082.
(e) For funds governed by sections 352.01 through 352.86,
353.01 through 353.46, and chapter 354, the actuarial valuation
must use a preretirement interest assumption of 8.5, a
postretirement interest assumption of five percent, and a graded
rate future salary increase assumption as follows:
General state General public
employees employees Teachers
retirement retirement retirement
age plan plan plan
16 7.2500% 8.71% 7.25%
17 7.2500 8.71 7.25
18 7.2500 8.70 7.25
19 7.2500 8.70 7.25
20 7.2500 7.70 7.25
21 7.1454 7.70 7.25
22 7.1094 7.70 7.25
23 7.0725 7.70 7.20
24 7.0363 7.70 7.15
25 7.0000 7.60 7.10
26 7.0000 7.51 7.05
27 7.0000 7.39 7.00
28 7.0000 7.30 7.00
29 7.0000 7.20 7.00
30 7.0000 7.20 7.00
31 7.0000 7.10 7.00
32 7.0000 7.10 7.00
33 7.0000 7.00 7.00
34 7.0000 7.00 7.00
35 7.0000 6.90 7.00
36 6.9019 6.80 7.00
37 6.8074 6.70 7.00
38 6.7125 6.60 6.90
39 6.6054 6.50 6.80
40 6.5000 6.40 6.70
41 6.3540 6.30 6.60
42 6.2087 6.30 6.50
43 6.0622 6.30 6.35
44 5.9048 6.20 6.20
45 5.7500 6.20 6.05
46 5.6940 6.09 5.90
47 5.6375 6.00 5.75
48 5.5822 5.90 5.70
49 5.5405 5.80 5.65
50 5.5000 5.70 5.60
51 5.4384 5.70 5.55
52 5.3776 5.70 5.50
53 5.3167 5.70 5.45
54 5.2826 5.70 5.40
55 5.2500 5.70 5.35
56 5.2500 5.70 5.30
57 5.2500 5.70 5.25
58 5.2500 5.70 5.25
59 5.2500 5.70 5.25
60 5.2500 5.00 5.25
61 5.2500 5.00 5.25
62 5.2500 5.00 5.25
63 5.2500 5.00 5.25
64 5.2500 5.00 5.25
65 5.2500 5.00 5.25
66 5.2500 5.00 5.25
67 5.2500 5.00 5.25
68 5.2500 5.00 5.25
69 5.2500 5.00 5.25
70 5.2500 5.00 5.25
Sec. 15. Minnesota Statutes 1994, 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. For funds governed by chapter
3a, sections 352.90 through 352.951, chapter 352B, chapter 352C,
sections 353.63 through 353.68, chapter 353C, chapter 354A, and
chapter 490, the level percent additional contribution must be
calculated assuming annual payroll growth of 6.5 percent. For
funds governed by sections 352.01 through 352.86 and chapter
354, the level percent additional contribution must be
calculated assuming an annual payroll growth of five percent.
For the fund governed by sections 353.01 through 353.46, the
level percent additional contribution must be calculated
assuming an annual payroll growth of six 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. 16. Minnesota Statutes 1994, 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,;
(3) to the individual retirement account plan established
by sections 354B.01 to 354B.05;
(3) (4) to a plan that provides solely for severance pay
under section 465.72 to a retiring or terminating employee;
(4) (5) 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 of the
public employer or in the collective bargaining agreement of
between the public employer with and 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;
(i) to the state of Minnesota deferred compensation plan
under section 352.96; or
(ii) in payment of the applicable portion of the premium on
a tax-sheltered annuity contract qualified under section 403(b)
of the Internal Revenue Code, if purchased from a qualified
insurance company, and if the employing unit has complied with
any applicable pension plan provisions of the Internal Revenue
Code with respect to the tax-sheltered annuity program during
the preceding calendar year; or
(5) (6) for personnel employed by the state university
board or the community college board and covered by 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 may retain actuarial services to assist it
in this determination and in its periodic review. The state
board of investment may annually establish a budget for its
costs in any determination and periodic review processes. The
state board of investment may charge a proportional share of all
costs related to the periodic review to those companies
currently under contract and may charge a proportional share of
all costs related to soliciting and evaluating bids in a
determination process to each 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) (5), that it
will utilize and conditions under which the vendors may contact
employees both during working hours and after working hours.
Sec. 17. Minnesota Statutes 1994, section 383B.48, is
amended to read:
383B.48 [PURCHASE OF SHARES IN MINNESOTA SUPPLEMENTAL
INVESTMENT FUND.]
At the time a person becomes eligible for coverage and
elects to obtain coverage by the Hennepin county supplemental
retirement program and prior to July before November 1 of each
subsequent year, a participant in the Hennepin county
supplemental retirement program shall indicate in writing on a
form provided by the county of Hennepin the account of the
Minnesota supplemental investment fund in which the participant
wishes salary deductions and county matching contributions
attributable to salary deductions to be invested for that fiscal
year the subsequent 12-month period. For that fiscal
year 12-month period the county of Hennepin shall purchase with
the salary deductions and county matching funds attributable to
the salary deductions shares in the appropriate account of the
Minnesota supplemental investment fund in accordance with the
indicated preferences of the participant. However, the county
of Hennepin has the authority to determine which accounts of the
Minnesota supplemental investment fund will be available for
participant investment. The shares purchased shall must stand
in the name of the county of Hennepin. A record shall must be
kept by the county of Hennepin indicating the number of shares
in each account of the Minnesota supplemental investment fund
purchased with the salary deductions and county matching funds
attributable to the salary deductions of each participant. The
record shall must be known as the "participant's share account
record." The participant's share account record shall must
show, in addition to the number of shares therein in the
account, any cash balance of salary deductions or county
matching funds attributable to those deductions which stand
uninvested in shares. At the option of the county of Hennepin,
and subject to any terms and conditions established and
communicated in writing by the county to a participant, the
participant may designate no more often than once each fiscal
year calendar quarter that prior salary deductions and county
matching contributions attributable to the salary
deductions from prior fiscal years, together with any interest
earned, be reinvested in another account of the Minnesota
supplemental investment fund made available by the county of
Hennepin.
Sec. 18. Minnesota Statutes 1994, section 383B.49, is
amended to read:
383B.49 [SUPPLEMENTAL RETIREMENT BENEFITS; REDEMPTION OF
SHARES.]
When requested to do so, in writing, on forms provided by
the county, by a participant, surviving spouse, a guardian of a
surviving child or an estate a personal representative,
whichever is applicable, the county of Hennepin shall redeem
shares in the accounts of the Minnesota supplemental investment
fund standing in a participant's share account record under the
following circumstances and in accordance with the laws and
regulations governing the Minnesota supplemental investment fund:
(1) A participant who is no longer employed by the county
of Hennepin shall be is entitled to receive the cash realized on
the redemption of the shares to the credit of the participant's
share account record of the person. The participant may request
the redemption of all or a portion of the shares in the
participant's share account record of the person, but may not
request more than one redemption in any one calendar year. If
only a portion of the shares in the participant's share account
record is requested to be redeemed the person may request to
redeem not less than 20 percent of the shares in any one
calendar year and the redemption must be completed in no more
than five years. An election is irrevocable except that a
participant may request an amendment of the election to redeem
all of the person's remaining shares. All requests under this
paragraph are subject to application to and approval of the
Hennepin county board, in its sole discretion.
(2) In the event of the death of a participant leaving a
surviving spouse, the surviving spouse shall be is entitled to
receive the cash realized on the redemption of all or a portion
of the shares in the participant's share account record of the
deceased spouse, but in no event may the spouse request more
than one redemption in each calendar year. If only a portion of
the shares in the participant's share account record is
requested to be redeemed, the surviving spouse may request the
redemption of not less than 20 percent of the shares in any one
calendar year. Redemption must be completed in no more than
five years. An election is irrevocable except that the
surviving spouse may request an amendment of the election to
redeem all of the participant's remaining shares. All requests
under this paragraph are subject to application to and approval
of the Hennepin county board, in their its sole discretion.
Upon the death of the surviving spouse, any shares remaining in
the participant's share account record shall must be redeemed by
the county of Hennepin and the cash realized therefrom from the
redemption distributed to the estate of the surviving spouse.
(3) In the event of the death of a participant leaving no
surviving spouse, but leaving a minor surviving child or minor
surviving children, the guardianship estate of the minor
child is, or the guardianship estates of the minor
children shall be are, entitled to receive the cash realized on
the redemption of all shares to the credit of the participant's
share account record of the deceased participant. In the event
of minor surviving children, the cash realized shall must be
paid in equal shares to the guardianship estates of the minor
surviving children.
(4) In the event of the death of a participant leaving no
surviving spouse and no minor surviving children, the estate of
the deceased participant shall be is entitled to receive the
cash realized on the redemption of all shares to the credit of
the participant's share account record of the deceased
participant.
Sec. 19. [FIRST CLASS CITY TEACHER PLANS; DETERMINING
APPLICABLE LAW.]
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 shall amend
the articles of incorporation or bylaws of the respective
association. This authorization is to provide that an employee
who has service credit in the basic plan of the Minneapolis
teachers retirement fund association, or the St. Paul teachers
retirement fund association, or an employee with service credit
in the Duluth teachers retirement fund association old law plan,
who returns to covered service following a termination and who
is not receiving a retirement annuity from the respective plan,
must have earned at least 85 days of credited service following
the return to covered service to be eligible for improved
benefits resulting from any law change enacted subsequent to the
termination.
Sec. 20. [INSTRUCTION TO REVISOR.]
In the next and subsequent issues of Minnesota Statutes,
the revisor of statutes shall substitute "association" for
"fund" in every instance where reference is to the teachers
retirement organization in chapters 354 and 356. For purposes
of this section, "organization" means the entity that
administers the plans under chapter 354. The revisor shall
substitute "fund" for "association" in every instance where
reference is to the fund which receives contributions and is
used to accumulate and invest assets to meet liabilities created
by benefits offered under terms of the plan.
Sec. 21. [EFFECTIVE DATE.]
(a) Sections 1 through 9, 11, 12, 14, 15, 20, and 21, are
effective on the day following final enactment.
(b) Sections 10, 13, and 19, are effective on July 1, 1995.
(c) Section 16 is effective the day following final
enactment and applies to tax-sheltered annuity programs
receiving employer matching contributions in operation at any
time during the 1995 calendar year.
ARTICLE 4
IRAP RECODIFICATION AND MODIFICATIONS
Section 1. Minnesota Statutes 1994, section 11A.23,
subdivision 4, is amended to read:
Subd. 4. [COVERED RETIREMENT FUNDS AND PLANS.] The
provisions of this section shall apply to the following
retirement funds and plans:
(1) State university and state community college higher
education board supplemental retirement plan established
pursuant to sections 354B.07 to 354B.09 under chapter 354C;
(2) state employees retirement fund established pursuant to
chapter 352;
(3) correctional employees retirement plan established
pursuant to chapter 352;
(4) state patrol retirement fund established pursuant to
chapter 352B;
(5) unclassified employees retirement plan established
pursuant to chapter 352D;
(6) public employees retirement fund established pursuant
to chapter 353;
(7) public employees police and fire fund established
pursuant to chapter 353;
(8) teachers' retirement fund established pursuant to
chapter 354;
(9) judges' retirement fund established pursuant to chapter
490; and
(10) any other funds required by law to be invested by the
board.
Sec. 2. Minnesota Statutes 1994, 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 or metropolitan council 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 regional administrator, or executive director of
the metropolitan council, general counsel, division directors,
operations managers, and other positions as designated by the
council, all of which may not exceed 27 positions at the
council; and the chair, 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; and
(12) an employee of the state lottery board who is covered
by the managerial plan established under section 43A.18,
subdivision 3;
(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. 3. Minnesota Statutes 1994, section 354.05,
subdivision 2a, is amended to read:
Subd. 2a. [EXCEPTIONS.] (a) Notwithstanding subdivision 2,
a person specified in paragraph (b) is not a member of the fund
except for purposes of social security coverage unless (1) the
person is covered by section 354B.02, subdivision 2, and remains
a member of the fund for all purposes or, (2) the person is
covered by section 354B.02, subdivision 1 or 5, or
354B.035 354B.21, and elects coverage by the teachers retirement
association.
(b) A teacher is excluded from fund membership other than
social security coverage under paragraph (a) if first employed
as:
(1) a teacher in the state university system after June 30,
1989;
(2) a teacher in the state community college system after
June 30, 1989; or
(3) a teacher in a technical college authorized under
chapter 136C or 136D after June 30, 1995 the person is covered
by the individual retirement account plan established under
chapter 354B.
Sec. 4. Minnesota Statutes 1994, section 354A.011, is
amended by adding a subdivision to read:
Subd. 14a. [DISTRICT.] "District" or "school district"
means the employing school district or the higher education
board.
Sec. 5. Minnesota Statutes 1994, 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 department 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 department of education is required; or
(d) a part-time employee in a position for which a valid
license from the state department 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) an employee who is a full-time teacher covered by
another teachers retirement fund association established
pursuant to this chapter or chapter 354;
(3) an employee exempt from licensure pursuant to section
125.031; or
(4) an employee who is a teacher in a technical college
located in a city of the first class unless the person elects
coverage by the applicable first class city teacher retirement
fund association under section 354B.02 354B.21, subdivision 1,
or 354B.035. 2; or
(5) an employee who is a part-time teacher in a technical
college in a city of the first class and who has elected
coverage by the applicable first class city teacher retirement
fund association under section 354B.21, subdivision 2, but (1)
the teaching service is incidental to the regular nonteaching
occupation of the person; (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 actually does not exceed 300 hours in the
fiscal year to which the certification applies.
Sec. 6. Minnesota Statutes 1994, section 355.61, is
amended to read:
355.61 [SOCIAL SECURITY COVERAGE FOR CERTAIN STATE
UNIVERSITY OR COMMUNITY COLLEGE FACULTY MEMBERS EMPLOYED BY THE
HIGHER EDUCATION BOARD.]
Plan participants under section 354B.02, subdivision 1, and
persons electing participation under section 354B.02,
subdivision 2 or 3, 354B.21 remain members of the teachers
retirement association for purposes of social security coverage
only, and remain covered by the applicable agreement entered
into under section 355.02, but are not members of the teachers
retirement association for any other purpose while employed in
covered employment.
Sec. 7. Minnesota Statutes 1994, 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.05 chapter 354B;
(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 the higher education
board supplemental retirement plan under chapter 354C, 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 not covered by sections 352D.02,
subdivision 1a, and 354B.07, subdivision 1 clause (4), to the
supplemental retirement plan under sections 354B.07 to 354B.09
chapter 354C, 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 may retain actuarial services to assist it
in this determination and in its periodic review. The state
board of investment may annually establish a budget for its
costs in any determination and periodic review processes. The
state board of investment may charge a proportional share of all
costs related to the periodic review to those companies
currently under contract and may charge a proportional share of
all costs related to soliciting and evaluating bids in a
determination process to each 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. 8. [354B.20] [DEFINITIONS.]
Subdivision 1. [IN GENERAL.] Unless the content or subject
matter indicates otherwise, as used in this chapter the terms in
this section have the meanings given them.
Subd. 2. [BOARD.] "Board" means the higher education board.
Subd. 3. [CHANCELLOR.] "Chancellor" means the chancellor
of the board.
Subd. 4. [COVERED EMPLOYMENT.] (a) "Covered employment"
means employment by a person eligible for coverage by this
retirement program under section 354B.21 in a faculty position
or in an eligible unclassified administrative position.
(b) "Covered employment" does not mean employment specified
in paragraph (a) by a faculty member employed in a state
university or a community college if the person's initial
appointment is specified as constituting less than 25 percent of
a full academic year, exclusive of summer session, for the
applicable institution.
Subd. 5. [COVERED SALARY.] (a) "Covered salary" means the
periodic compensation paid to the participant before deductions
for deferred compensation, supplemental retirement coverage, or
other voluntary salary reduction program.
(b) "Covered salary" does not mean lump sum sick leave
payments, severance payments, payments in lieu of employer-paid
group insurance coverage, payments based on differences between
single employer-paid group insurance coverage and insurance
coverage including dependents, or workers' compensation payment.
Subd. 6. [ELIGIBLE UNCLASSIFIED ADMINISTRATIVE POSITION.]
"Eligible unclassified administrative position" means the
following:
(1) the chancellor of the board;
(2) a president of a state college or university; or
(3) an excluded administrator employed in a state
university or college, by the board, or by the higher education
coordinating board.
Subd. 7. [EMPLOYING UNIT.] "Employing unit," if the agency
employs any persons covered by the individual retirement account
plan under section 354B.21, means:
(1) the board;
(2) the higher education coordinating board; and
(3) the higher education facilities authority.
Subd. 8. [FACULTY.] "Faculty" means an employment position
that meets the definition of either section 354.05, subdivision
2, or 354A.011, subdivision 27.
Subd. 9. [FIRST CLASS CITY TEACHER RETIREMENT FUND
ASSOCIATION.] "First class city teacher retirement fund
association" means a retirement plan, fund, and plan
administration established under chapter 354A.
Subd. 10. [GENERAL STATE EMPLOYEES RETIREMENT
PLAN.] "General state employees retirement plan" means the
retirement plan administered by the Minnesota state retirement
system and governed by sections 352.01 to 352.73.
Subd. 11. [HIGHER EDUCATION BOARD.] "Higher education
board" means the governing board for the state universities, the
community colleges, and the technical colleges established by
section 136E.01.
Subd. 12. [PARTICIPANT.] "Participant" means a person who
is employed in covered employment by the board and who elects
coverage by the plan under section 354B.21.
Subd. 13. [PLAN.] "Plan" means the individual retirement
account plan established by this chapter.
Subd. 14. [PLAN ADMINISTRATOR.] "Plan administrator" means
the board employee or an independent contract agent designated
by the board to perform the primary administrative functions
relating to the plan.
Subd. 15. [SABBATICAL LEAVE.] "Sabbatical leave" means a
sabbatical leave as specified in the applicable collective
bargaining agreement or personnel policy of the board for its
employees.
Subd. 16. [STATE UNCLASSIFIED EMPLOYEES RETIREMENT
PROGRAM.] "State unclassified employees retirement program"
means the retirement program established by chapter 352D.
Subd. 17. [SUPPLEMENTAL PLAN.] "Supplemental plan" means
the retirement program established by chapter 354C.
Subd. 18. [TEACHERS RETIREMENT PLAN.] "Teachers retirement
plan" means the retirement plan established by chapter 354.
Sec. 9. [354B.21] [COVERAGE.]
Subdivision 1. [ELIGIBILITY.] The following persons are
eligible to have coverage by the individual retirement account
plan and to be participants in the plan:
(1) employees of the board who are employed as faculty in
an employment classification included in the state university
instructional unit, the community college instructional unit, or
the technical college instructional unit under section 179A.10,
subdivision 2;
(2) the chancellor and employees of the board in eligible
unclassified administrative positions;
(3) the employees in eligible unclassified administrative
positions in the state universities;
(4) the employees in eligible unclassified administrative
positions in the technical colleges; and
(5) the employees in eligible unclassified administrative
positions of the higher education coordinating board or of the
community colleges.
Subd. 2. [COVERAGE; ELECTION.] (a) An eligible person is
entitled to elect coverage by the plan. If the eligible person
does not make a timely election of coverage by the plan, the
person has the coverage specified in subdivision 3.
(b) For eligible persons who were employed by the former
state university system or the former community college system
before May 1, 1995, the person has the retirement coverage that
the person had for employment immediately before May 1, 1995.
(c) For all other eligible persons, the election of
coverage must be made within 90 days of the date of enactment of
this act or 90 days of receiving notice from the employer of the
options available under this section, whichever occurs later.
Subd 3. [DEFAULT COVERAGE.] If an eligible person fails to
elect coverage by the plan under subdivision 2 or if the person
fails to make a timely election, the following retirement
coverage applies:
(1) for employees of the board who are employed in faculty
positions in the state universities or in the community
colleges, the retirement coverage is by the plan established by
this chapter;
(2) for employees of the board who are employed in faculty
positions in the technical colleges, the retirement coverage is
by the teachers retirement association established under chapter
354, unless the employee was a member of a first class city
teacher retirement fund established under chapter 354A on June
30, 1995, and then the retirement coverage is by the Duluth
teachers retirement fund association if the person was a member
of that plan on June 30, 1995, or the Minneapolis teachers
retirement fund association if the person was a member of that
plan on June 30, 1995, or the St. Paul teachers retirement fund
association if the person was a member of that plan on June 30,
1995; and
(3) for employees of the board who are employed in eligible
unclassified administrative positions, the retirement coverage
is by the plan established by this chapter.
Subd. 3a. [CONTINUATION OF PLAN COVERAGE IN CERTAIN
INSTANCES.] For a person with retirement coverage by a first
class city teacher retirement fund association instead of the
individual retirement account plan under subdivision 3, clause
(2), coverage by the applicable retirement fund association
continues for the duration of the person's employment by the
higher education board unless, within 90 days of a change in
employment within the Minnesota state colleges and universities
system, the person elects the individual retirement account plan
for all future employment by the higher education board.
Subd. 3b. [COVERAGE OF CERTAIN FORMER TECHNICAL COLLEGE
FACULTY MEMBERS.] A person who was employed as a teacher by a
technical college before July 1, 1995, and who subsequently is
reclassified into a different employment position while
continuing to perform the same or essentially the same
employment duties and consequently shifts from the technical
college instructional collective bargaining unit to another
state collective bargaining unit retains coverage by the
teachers retirement association or the applicable first class
city teachers retirement fund association, whichever applies.
Subd. 3c. [ELECTION OF TRA COVERAGE IN CERTAIN
INSTANCES.] (a) A person who was employed as a teacher by a
technical college before July 1, 1995, and who has retirement
coverage for that technical college teacher employment by a
first class city teacher retirement fund association under
chapter 354A may elect to have future higher education system
teacher employment retirement coverage by the teacher retirement
association governed by chapter 354.
(b) The election to transfer prospective retirement
coverage under paragraph (a) must be made by the technical
college teacher by October 1, 1995, or within 90 days of
initially being employed by the higher education system,
whichever is later. The election must be made in writing on a
form prescribed by the executive director of the teachers
retirement association. The election, once filed with the
executive director of the teachers retirement association, is
irrevocable.
(c) An election to transfer prospective retirement coverage
under paragraph (a) does not affect prior allowable service
credit under section 354A.011, subdivision 4. The transfer of
prospective retirement coverage does not make the person
eligible for a refund of member contributions during the course
of the person's employment by the higher education system.
Subd. 4. [COVERAGE IN THE EVENT OF ACTING, INTERIM, OR
TEMPORARY APPOINTMENTS.] (a) A person previously employed by the
board and subsequently appointed by the board to an acting,
interim, or temporary faculty or eligible unclassified
administrative position by the board retains the retirement
coverage that the person had in the prior board position. If
the participant's status becomes permanent, the participant has
the option to make an election of retirement coverage
appropriate to the retirement plan in which the employment
position should have retirement coverage consistent with
subdivision 2.
(b) A person who is appointed to an acting, interim, or
temporary faculty position by the board and who was not employed
in a faculty position by the board immediately before that
appointment must elect coverage as provided in subdivision 2.
Subd. 5. [PAYMENT FOR CERTAIN PRIOR UNCOVERED SERVICE.] (a)
A person employed in a faculty position by the board who was
initially excluded from participation in the individual
retirement account plan coverage, who was not covered by any
other Minnesota public pension plan for that service, and who is
subsequently eligible to participate in the individual
retirement account plan may make member contributions for that
period of prior uncovered teaching employment or eligible
unclassified administrative employment with the board.
(b) The member contributions for prior uncovered board
service are the amount that the person would have paid if the
prior service had been covered employment. The payment must be
made to the individual retirement account plan administrator and
may be made only by payroll deduction. The payment must be made
by the later of:
(1) 45 days of the start of covered employment; or
(2) the end of the fiscal year in which covered employment
began.
(c) The board must contribute an amount to match any
contribution made by a plan participant under this subdivision.
(d) Payments of contributions for prior uncovered board
service under this subdivision must be invested in the same
manner as the regular contributions made by or on behalf of the
plan participant.
Subd. 6. [CONTINUATION OF COVERAGE.] Once a person is
employed in a position that qualifies for participation in the
individual retirement account plan and elects to participate in
the plan, all subsequent service by the person as a faculty
member employed by the board or other employing unit is covered
by the individual retirement account plan.
Sec. 10. [354B.22] [IRAP COVERAGE IN ADDITION TO SOCIAL
SECURITY COVERAGE.]
Subdivision 1. [SOCIAL SECURITY COVERAGE.] (a) Any
employee of the board or other employing unit who elects
coverage by this chapter is a member of the teachers retirement
association solely for purposes of coverage by the federal old
age, survivors, disability and health insurance program, and are
covered by the agreement made under section 355.02.
(b) A person with federal social security coverage through
teachers retirement association membership under paragraph (a)
is not a member of the teachers retirement association for any
other purpose while employed as a teacher by the board, and
membership in the teachers retirement association for this
limited purpose conveys no rights or benefit entitlement under
chapter 354.
Subd. 2. [PUBLIC PENSION COVERAGE AS CONDITION OF
EMPLOYMENT.] Coverage by a public pension plan under section
354B.21 is a condition of initial employment or continued
employment as a faculty member or eligible unclassified
administrative position by the board or other employing unit.
Sec. 11. [354B.23] [CONTRIBUTIONS.]
Subdivision 1. [MEMBER CONTRIBUTION RATE.] (a) Except as
provided in paragraph (b), the member contribution rate for
participants in the individual retirement account plan is 4.5
percent of salary.
(b) For participants in the individual retirement account
plan who were otherwise eligible to elect retirement coverage in
the state unclassified employees retirement program, the member
contribution rate is the rate specified in section 352D.04,
subdivision 2, paragraph (a).
Subd. 2. [MEMBER CONTRIBUTION METHOD.] Member
contributions must be made by payroll deduction during each pay
period.
Subd. 3. [EMPLOYER CONTRIBUTION RATE.] The employer
contribution rate on behalf of participants in the individual
retirement account plan is six percent of salary.
Subd. 4. [EMPLOYER CONTRIBUTION METHOD.] The employer
contribution must be made by the employing unit of a plan
participant during each pay period. The employer contribution
must be made from the available revenue sources of the employing
unit.
Subd. 5. [OMITTED MEMBER DEDUCTIONS.] (a) If the employing
unit that employs a plan participant fails to deduct the member
contribution from the participant's salary and a period of less
than 60 days from the date on which the deduction should have
been made has elapsed, the employing unit must obtain the
omitted member deduction by an additional payroll deduction
during the pay period next following the discovery of the
omission.
(b) If the employing unit of a plan participant fails to
deduct the member contribution from the participant's salary and
that omission continues for at least 60 days from the date on
which the deduction should have been made, the employing unit
must pay the amount representing the omitted member
contribution, and the full required employer contribution, plus
compound interest at an annual rate of 8.5 percent. The
contributions and any interest must be made within one year of
the date on which the omission was discovered.
Subd. 6. [TRANSFER OF CERTAIN TRA MEMBER CONTRIBUTION
AMOUNTS TO IRAP.] (a) Notwithstanding any provisions of chapter
354 to the contrary, a former member of the teachers retirement
association who has less than three years of allowable service
credit under section 354.05, subdivision 13, and who is a member
of the individual retirement account plan may elect to transfer
to the plan an amount equal to the refund that the person could
have received under section 354.49, subdivision 2, if the person
had been eligible to receive a refund.
(b) The transfer must be made from the teachers retirement
association directly to the individual retirement account plan
and credited to the appropriate account.
(c) No amount under this subdivision may be paid directly
to the former teachers retirement association member.
(d) The election of this transfer must be made on a form
prescribed by the executive director of the teachers retirement
association, after consultation with the plan administrator.
Sec. 12. [354B.24] [SABBATICAL LEAVE.]
Subdivision 1. [CONTINUATION OF COVERAGE.] A person who is
a participant in the individual retirement plan, and who goes on
an approved sabbatical leave, must remain a participant in the
plan for any period during which the person receives a salary
from the board or during which the person makes an optional
contribution provided for in subdivision 3.
Subd. 2. [MANDATORY CONTRIBUTIONS.] (a) From the salary
paid to the person during the course of an approved sabbatical
leave, the employing unit must deduct a member contribution as
required under section 354B.23, subdivision 1.
(b) The employing unit must make the employer contribution
on behalf of the plan participant as provided in section
354B.23, subdivision 3.
Subd. 3. [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) A plan
participant on an approved sabbatical leave may make an optional
additional member contribution. The optional additional member
may not exceed the applicable member contribution rate specified
in section 354B.23, subdivision 1, applied to the difference
between the amount of salary actually received during the
sabbatical leave and the amount of salary actually received for
a comparable period of an identical length to the sabbatical
leave that occurred during the fiscal year immediately preceding
the sabbatical leave.
(b) Any optional additional member contribution must be
made before the last day of the fiscal year next following the
fiscal year in which the sabbatical leave terminates. The
optional additional member contribution may not include interest.
(c) When an optional additional member contribution is
made, the employing unit must make the employer contribution at
the rate set forth in section 354B.23, subdivision 3, on the
salary that was the basis for the optional additional member
contribution under paragraph (a).
(d) An employer contribution required under this section
must be made no later than 60 days after the date on which the
optional additional member contribution was made.
Subd. 4. [REINSTATEMENT RIGHTS.] Notwithstanding the
provisions of any sabbatical leave agreements, regular and
optional additional member contributions and employer
contributions under this section are permissible only if the
plan participant retains the right to full reinstatement to an
employment position with the applicable employing unit both
during and at the conclusion of the sabbatical leave.
Sec. 13. [354B.25] [INDIVIDUAL RETIREMENT ACCOUNT PLAN
ADMINISTRATION.]
Subdivision 1. [GENERAL GOVERNANCE.] The individual
retirement account plan is the administrative responsibility of
the higher education board. The higher education board may
administer the plan directly or may contract out for
administrative services with a qualified third-party plan
administrative entity.
Subd. 2. [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS.] (a)
The plan administrator shall arrange for the purchase of fixed
annuity contracts, variable annuity contracts, a combination of
fixed and variable annuity contracts, or custodial accounts from
financial institutions which have been selected by the state
board of investment under subdivision 3, as the investment
vehicle for the retirement coverage of plan participants and to
provide retirement benefits to plan participants. Custodial
accounts from financial institutions shall include open-end
investment companies registered under the federal Investment
Company Act of 1940, as amended.
(b) The annuity contracts or accounts must be purchased
with contributions under section 354B.23 or with money or assets
otherwise provided by law by authority of the board and deemed
acceptable by the applicable financial institution.
(c) In addition to contracts and accounts from financial
institutions, the Minnesota supplemental investment fund
established under section 11A.17 and administered by the state
board of investment is one of the investment options for the
individual retirement account plan.
Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] (a) The
financial institutions provided for under subdivision 2 must be
selected by the state board of investment. Financial
institutions include open-end investment companies registered
under the federal Investment Company Act of 1940, as amended.
(b) The state board of investment may select up to five
financial institutions to provide annuity contracts, custodial
accounts, or a combination, as investment options for the
individual retirement account plan in addition to the Minnesota
supplemental investment fund. In making its selection, at a
minimum, the state board of investment shall consider at least
the following:
(1) the experience and ability of the financial institution
to provide retirement and death benefits that are suited to meet
the needs of plan participants;
(2) the relationship of those retirement and death benefits
provided by the financial institution to their cost; and
(3) the financial strength and stability of the financial
institution.
(c) After selecting a financial institution, the state
board of investment must periodically review each financial
institution selected under paragraph (b). The periodic review
must occur at least every three years. In making its review,
the state board of investment may retain appropriate consulting
services to assist it in its periodic review, establish a budget
for the cost of the periodic review process, and charge a
proportional share of these costs to the reviewed financial
institution.
(d) Contracts with financial institutions under this
section must be executed by the board and must be approved by
the state board of investment before execution.
(e) The state board of investment shall also establish
policies and procedures under section 11A.04, clause (2), to
carry out the provisions of this subdivision.
Subd. 4. [BENEFIT OWNERSHIP.] The retirement benefits
provided by the annuity contracts and custodial accounts of the
individual retirement account plan are held for the benefit of
plan participants and must be paid according to this chapter and
of the plan document.
Subd. 5. [INDIVIDUAL RETIREMENT ACCOUNT PLAN
ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary
administrative expenses of the individual retirement account
plan must be paid by plan participants in the following manner:
(1) from plan participants with amounts invested in the
Minnesota supplemental investment fund, the plan administrator
may charge an administrative expense assessment as provided in
section 11A.17, subdivisions 10a and 14; and
(2) from plan participants with amounts through annuity
contracts and custodial accounts purchased under subdivision 2,
paragraph (a), the plan administrator may charge an
administrative expense assessment of a designated amount, not to
exceed two percent of member and employer contributions, as
those contributions are made.
(b) Any administrative expense charge that is not actually
needed for the administrative expenses of the individual
retirement account plan must be refunded to member accounts.
Sec. 14. [354B.26] [DEFERRED ANNUITY ENTITLEMENT FOR
CERTAIN FORMER TRA MEMBERS.]
Notwithstanding any provision of chapter 354 to the
contrary, a person covered by this chapter who had less than
three years of prior allowable service credit in the teachers
retirement association is entitled to a deferred annuity and
augmentation under section 354.55, subdivision 11.
Sec. 15. [354B.30] [PROHIBITION ON LOANS OR PRETERMINATION
DISTRIBUTIONS.]
(a) No participant may obtain a loan from the plan or
obtain any distribution from the plan at a time before the
participant terminates the employment that gave rise to plan
coverage.
(b) No amounts to the credit of the plan are assignable
either in law or in equity, are subject to state estate tax, or
are subject to execution, levy, attachment, garnishment, or
other legal process, except as provided in section 518.58,
518.581, or 518.611.
Sec. 16. [354C.10] [ESTABLISHMENT.]
A supplemental retirement plan is established for certain
employees of the higher education board. The supplemental
retirement plan is the continuation of the plan established by
Laws 1967, chapter 808, sections 1 to 6, as amended.
Sec. 17. [354C.11] [COVERAGE.]
Personnel employed by the higher education board who are in
the unclassified service of the state, and who have completed at
least two years of employment by the board or a predecessor
board with a full-time contract are participants in the
supplemental retirement plan, effective on the next following
July 1, if the person is employed in an eligible unclassified
administrative position as defined in section 354B.20,
subdivision 6, or is employed in an employment classification
included in one of the following collective bargaining units
under section 179A.10, subdivision 2:
(1) the state university instructional unit;
(2) the community college instructional unit;
(3) the technical college instructional unit; and
(4) the state university administrative unit.
Sec. 18. [354C.12] [SALARY DEDUCTIONS AND MATCHING
EMPLOYER CONTRIBUTIONS.]
Subdivision 1. [BASIC CONTRIBUTIONS AND DEDUCTIONS.] (a)
The employer of personnel covered by the supplemental retirement
plan as provided in section 354C.11 shall deduct a sum equal to
five percent of the annual salary of the person between $6,000
and $15,000.
(b) The basic contribution deduction must be made in the
same manner as other retirement deductions are made from the
salary of the person under section 352.04, subdivision 4;
352D.04, subdivision 2; 354.42, subdivision 2; or 354A.12,
whichever applies.
(c) The employer shall also make a contribution to the
supplemental retirement plan on behalf of covered personnel
equal to the salary deduction made under paragraph (a).
Subd. 2. [OMITTED DEDUCTIONS.] If the employer of
personnel covered by the supplemental retirement plan as
provided in section 354C.11 fails to deduct the member basic
contribution from the covered employee's salary and a period of
less than 60 days from the date on which the deduction should
have been made has elapsed, the employer must obtain the omitted
member deduction by an additional payroll deduction during the
pay period next following the discovery of the omission. If the
employer fails to deduct the member basic contribution from the
covered employee's salary and that omission continues for at
least 60 days from the date on which the member basic
contribution deduction should have been made, the employer must
pay the amount representing the omitted member basic
contribution, and the full required omitted employer basic
contribution, plus compound interest at an annual rate of 8.5
percent. The contributions must be made within one year of the
date on which the omission was discovered.
Subd. 3. [ADDITIONAL DEDUCTIONS AND CONTRIBUTIONS.] If an
agreement is made under section 356.24 for an additional
employee deduction and an additional matching employer
contribution, an amount equal to the additional employee
contribution must be deducted from the employee's salary above
$15,000. The employer must match the additional employee
contribution deduction.
Subd. 4. [ADMINISTRATIVE EXPENSES.] The higher education
board is authorized to pay the necessary and reasonable
administrative expenses of the supplemental retirement plan.
The administrative fees or charges must be paid by participants
in the following manner:
(1) from participants whose contributions are invested with
the state board of investment, the plan administrator may
recover administrative expenses in the manner provided by
section 11A.17, subdivisions 10a and 14; or
(2) from participants where contributions are invested
through contracts purchased from any other authorized source,
the plan administrator may assess an amount of up to two percent
of the employee and employer contributions.
Any recovered or assessed amounts that are not needed for
the necessary and reasonable administrative expenses of the plan
must be refunded to member accounts.
Sec. 19. [354C.13] [ADMINISTRATION.]
The higher education board shall administer the
supplemental retirement plan.
Sec. 20. [354C.14] [INVESTMENT OF DEDUCTIONS AND
CONTRIBUTIONS.]
(a) The higher education board shall invest the deductions
and contributions under section 354C.12, after deduction of
administrative expenses under section 354C.12, subdivision 4, in
annuity contracts or custodial accounts from financial
institutions selected by the state board of investment under
section 354B.25, subdivision 3.
(b) The retirement contributions and death benefits
provided by annuity contracts or custodial accounts purchased by
the higher education board are owned by the supplemental
retirement plan and must be paid in accordance with those
annuity contracts or custodial account agreements.
Sec. 21. [354C.15] [REDEMPTION OF SUPPLEMENTAL INVESTMENT
FUND SHARES.]
(a) The higher education board shall redeem all shares in
the accounts of the Minnesota supplemental investment fund held
on behalf of personnel covered by the supplemental retirement
plan upon the election by the person of an investment option
other than the supplemental investment fund, except as provided
in paragraph (b).
(b) The redemption of shares in the fixed interest account
attributable to a guaranteed investment contract as of July 1,
1994, may not occur until the expiration date of the applicable
guaranteed investment contract.
(c) The higher education board shall transfer the cash
realized from a redemption of Minnesota supplemental investment
fund shares to the financial institution or institutions
selected by the state board of investment under section 354B.25,
subdivision 3.
Sec. 22. [354C.16] [PAYMENT OF BENEFITS.]
(a) The withdrawal of member contributions, employer
contributions, and accrued investment income, or a retirement
benefit based on those amounts is payable immediately upon the
death or termination of employment of the employee.
(b) An application by the employee or made on behalf of the
employee by an appropriate third party must be filed before any
payment of benefits may occur.
Sec. 23. [354C.165] [PROHIBITION ON LOANS OR
PRETERMINATION DISTRIBUTIONS.]
(a) No participant may obtain a loan from the plan or
obtain any distribution from the plan at a time before the
participant terminates the employment that gave rise to plan
coverage.
(b) No amounts to the credit of the plan are assignable
either in law or in equity, are subject to state estate tax, or
are subject to execution, levy, attachment, garnishment, or
other legal process, except as provided in section 518.58,
518.581, or 518.611.
Sec. 24. [354C.17] [TAX SHELTER PROVISIONS.]
Subdivision 1. [AGREEMENTS; SALARY ADJUSTMENTS.] For the
purpose of permitting participation in a tax shelter for
employment income under the applicable pension provisions of the
Internal Revenue Code, the higher education board may enter into
agreements with its employees to reduce or to adjust downward
the salaries for persons covered by the supplemental retirement
plan under section 354C.11, and to pay as the employer an amount
equivalent to the salary reduction or the salary downward
adjustment in the same manner as deductions would have been paid
by the employee under section 354C.12, subdivision 1.
Subd. 2. [RULES.] The higher education board may adopt
rules and procedures consistent with this chapter to permit, if
possible, participation in a tax shelter under the applicable
provisions of the Internal Revenue Code.
Sec. 25. [354C.18] [RULES.]
(a) The higher education board may adopt rules to
administer this chapter.
(b) The higher education board may deposit member
contributions in a nontreasury account established under chapter
136, an account or accounts established under section 11A.17, or
other appropriate accounts operated by the state board of
investment for investment under procedures established by the
state board of investment.
Sec. 26. [NO EFFECT ON CURRENT COVERAGE AND PRIOR SERVICE
CREDIT AND CONTRIBUTIONS.]
(a) Nothing in sections 7 to 17 is intended to remove any
current participant in the individual retirement account plan
from future coverage by that plan for continued employment in
the same employment position or to add any person to individual
retirement account plan coverage or eligibility who was not
eligible for that coverage under the laws in effect before July
1, 1995.
(b) Nothing in sections 7 to 17 may be construed to
disqualify any period of employment covered by the individual
retirement account plan or to disqualify any contributions to
the credit of participants in the individual retirement account
plan as reflected in plan records as of June 30, 1995.
Sec. 27. [NO EFFECT ON CURRENT COVERAGE AND PRIOR SERVICE
CREDIT AND CONTRIBUTIONS.]
(a) Nothing in this recodification article is intended to
affect the eligibility for coverage or the coverage by the
supplemental retirement plan of any person covered by that plan
on June 30, 1995.
(b) Nothing in this recodification article may be construed
to disqualify any contributions to the credit of any person
covered by the supplemental retirement plan as reflected in plan
records as of June 30, 1995.
Sec. 28. [EFFECT OF UNCLASSIFIED PROGRAM COVERAGE CHANGE.]
The change in eligibility for retirement coverage by the
unclassified employees retirement program of the Minnesota state
retirement system provided for in sections 2; 9, subdivision 3;
and 31, paragraph (d) may not be interpreted to disqualify from
future retirement coverage by the unclassified employees
retirement program any person who is a member of the
unclassified employees retirement program on the date of
enactment and may not be interpreted to disqualify from
eligibility to elect future retirement coverage by the
unclassified employees retirement program any person who was
employed in state service any time before the date of enactment
and who subsequently is employed in an eligible unclassified
administrative position under section 8, subdivision 6.
Sec. 29. [INSTRUCTION TO REVISOR.]
In Minnesota Statutes 1995 Supplement and subsequent
editions, the revisor of statutes shall correct any references
to any provision of Minnesota Statutes, chapter 136E, in this
article, replacing the incorrect reference with the appropriate
reference.
Sec. 30. [INSTRUCTION TO REVISOR.]
In Minnesota Statutes 1995 Supplement and subsequent
editions, the revisor of statutes shall renumber as chapter 354D
the professional and supervisory employee individual retirement
account law that is currently coded as chapter 354C and shall
appropriately revise any statutory cross-references in light of
that recoding.
Sec. 31. [REPEALER.]
(a) Minnesota Statutes 1994, sections 354B.01; 354B.015;
354B.02; 354B.035; 354B.04; 354B.045; 354B.05; and 354B.15, are
repealed.
(b) Laws 1990, chapter 570, article 3, sections 10 and 11,
as amended by Laws 1992, chapter 420, section 1, and Laws 1993,
chapter 239, article 2, section 7; Laws 1993, chapters 192,
section 89, and 239, article 5, section 2; and Laws 1994,
chapters 508, article 1, section 14; and 572, sections 11 and
12, are repealed.
(c) Minnesota Statutes 1994, sections 354B.06; 354B.07;
354B.08; 354B.085; and 354B.09, are repealed.
(d) Minnesota Statutes 1994, section 352D.02, subdivision
1a, is repealed.
Sec. 32. [EFFECTIVE DATE.]
Sections 1 to 31 are effective on July 1, 1995.
Presented to the governor May 8, 1995
Signed by the governor May 10, 1995, 10:17 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes