Office of the Revisor of Statutes
Minnesota Session Laws - 1995, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 262-H.F.No. 1040
An act relating to retirement; providing various
benefit increases and related modifications; requiring
collateralization and investment authority statement;
amending Minnesota Statutes 1994, sections 3A.02,
subdivision 5; 352.01, subdivision 13; 352B.02,
subdivision 1a; 352B.08, subdivision 2; 352B.10,
subdivision 1; 353.65, subdivision 7; 353.651,
subdivision 4; 353A.083; 354.445; 354.66, subdivision
4; 354A.094, subdivision 4; 354A.12, subdivision 1;
354A.27, subdivision 1, and by adding subdivisions;
354A.31, subdivision 4, and by adding subdivisions;
354B.05, subdivisions 2 and 3; 354B.07, subdivisions 1
and 2; 354B.08, subdivision 2; 356.219, subdivision 2;
356.30, subdivision 1; 356.611; 356.865, subdivision
3; 356A.06, by adding subdivisions; 422A.05, by adding
a subdivision; and 422A.09, subdivision 2; Laws 1994,
chapter 499, section 2; proposing coding for new law
in Minnesota Statutes, chapters 125; 354A; and 356;
proposing coding for new law as Minnesota Statutes,
chapter 136F; repealing Minnesota Statutes 1994,
sections 3A.10, subdivision 2; 352.021, subdivision 5;
354A.27, subdivisions 2, 3, and 4; and 423B.02; Laws
1969, chapter 1088; Laws 1971, chapters 114 and 127,
section 1, as amended; Laws 1978, chapters 562,
section 32, and 753; Laws 1979, chapters 97 and 201,
section 27; and Laws 1981, chapter 224, sections 250
and 254.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
STATEWIDE GENERAL EMPLOYEE PENSION PLAN
BENEFIT AND RELATED MODIFICATIONS
Section 1. [125.615] [RETURN TO FULL-TIME WORK.]
A teacher with 20 or more years of allowable service credit
under chapter 354 or 354A who was assigned to a part-time
position under section 354.66 or 354A.094 after June 30, 1994,
must be given the option of returning to full-time employment if
the employer does not make the full employer contribution to the
applicable pension fund under section 354.66, subdivision 4, or
354A.094, subdivision 4, after July 1, 1995. If an employer
decides not to make the full employer contribution to the
pension fund after July 1, 1995, it must notify any affected
part-time teacher of this decision in writing within 30 days of
the employer's decision. A teacher receiving this notice who
wishes to return to work full time must notify the employer of
intent to return to full-time employment within 30 days of
receiving notice from the employer, and must return to full-time
employment by the beginning of the next school year.
Sec. 2. [136F.45] [EMPLOYER-PAID HEALTH INSURANCE.]
(a) This section applies to a person who:
(1) retires from the state university system, the technical
college system, or the community college system, or from a
successor system employing state university, technical college,
or community college faculty, with at least ten years of
combined service credit in a system under the jurisdiction of
the higher education board;
(2) was employed on a full-time basis immediately preceding
retirement as a state university, technical college, or
community college faculty member or as an unclassified
administrator in one of those systems;
(3) begins drawing an annuity from the teachers retirement
association or from a first class city teacher plan; and
(4) returns to work on not less than a one-third time basis
and not more than a two-thirds time basis in the system from
which the person retired under an agreement in which the person
may not earn a salary of more than $35,000 in a calendar year
from employment after retirement in the system from which the
person retired.
(b) Initial participation, the amount of time worked, and
the duration of participation under this section must be
mutually agreed upon by the employer and the employee. The
employer may require up to one-year notice of intent to
participate in the program as a condition of participation under
this section. The employer shall determine the time of year the
employee shall work.
(c) For a person eligible under paragraphs (a) and (b), the
employing board shall make the same employer contribution for
hospital, medical, and dental benefits as would be made if the
person were employed full time.
(d) For work under paragraph (a), a person must receive a
percentage of the person's salary at the time of retirement that
is equal to the percentage of time the person works compared to
full-time work.
(e) If a collective bargaining agreement covering a person
provides for an early retirement incentive that is based on age,
the incentive provided to the person must be based on the
person's age at the time employment under this section ends.
However, the salary used to determine the amount of the
incentive must be the salary that would have been paid if the
person had been employed full time for the year immediately
preceding the time employment under this section ends.
Sec. 3. Minnesota Statutes 1994, section 352.01,
subdivision 13, is amended to read:
Subd. 13. [SALARY.] "Salary" means the periodical wages,
or other periodic compensation, paid to any an employee before
deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs. It also
means wages and includes net income from fees. Lump sum sick
leave payments, severance payments, lump sum annual leave
payments and overtime payments made at the time of separation
from state service, payments in lieu of any employer-paid group
insurance coverage, including the difference between single and
family rates that may be paid to an employee with single
coverage, and payments made as an employer-paid fringe
benefit and, workers' compensation payments, employer
contributions to a deferred compensation or tax sheltered
annuity program, and amounts contributed under a benevolent
vacation and sick leave donation program are not salary.
Sec. 4. Minnesota Statutes 1994, section 354.445, is
amended to read:
354.445 [NO ANNUITY REDUCTION.]
(a) The annuity reduction provisions of section 354.44,
subdivision 5, do not apply to a person who:
(1) retires from the state university system, technical
college system, or the community college system, or from a
successor system employing state university, technical college,
or community college faculty, with at least ten years
of combined service credit in the system from which the person
retires a system under the jurisdiction of the higher education
board;
(2) was employed on a full-time basis immediately preceding
retirement as a state university, technical college, or
community college faculty member or as an unclassified
administrator in one of these systems;
(3) begins drawing an annuity from the teachers retirement
association; and
(4) returns to work on not less than a one-third time basis
and not more than a two-thirds time basis in the system from
which the person retired under an agreement in which the person
may not earn a salary of more than $35,000 in a calendar year
from employment after retirement in the system from which the
person retired.
(b) Initial participation, the amount of time worked, and
the duration of participation under this section must be
mutually agreed upon by the employer and the employee. The
employer may require up to one-year notice of intent to
participate in the program as a condition of participation under
this section. The employer shall determine the time of year the
employee shall work.
(c) Notwithstanding any law to the contrary, a person
eligible under paragraphs (a) and (b) may not earn further
service credit in the teachers retirement association and is not
eligible to participate in the individual retirement account
plan or the supplemental retirement plan established in chapter
354B as a result of service under this section. No employer or
employee contribution to any of these plans may be made on
behalf of such a person.
(d) For a person eligible under paragraphs (a) and (b) who
earns more than $35,000 in a calendar year from employment after
retirement in the system from which the person retired, the
annuity reduction provisions of section 354.44, subdivision 5,
apply only to income over $35,000.
Sec. 5. Minnesota Statutes 1994, section 354.66,
subdivision 4, is amended to read:
Subd. 4. [RETIREMENT CONTRIBUTIONS.] Notwithstanding any
provision to the contrary in this chapter relating to the salary
figure to be used for the determination of contributions or the
accrual of service credit, a teacher assigned to a part-time
position under this section shall continue to make employee
contributions to and to accrue allowable service credit in the
retirement fund during the period of part-time employment on the
same basis and in the same amounts as would have been paid and
accrued if the teacher had been employed on a full-time basis
provided that, prior to June 30 each year, or within 30 days
after notification by the association of the amount due,
whichever is later, the member and the employing board make that
portion of the required employer contribution to the retirement
fund, in any proportion which they may agree upon, that is based
on the difference between the amount of compensation that would
have been paid if the teacher had been employed on a full-time
basis and the amount of compensation actually received by the
teacher for the services rendered in the part-time assignment.
The employing unit shall make that portion of the required
employer contributions to the retirement fund on behalf of the
teacher that is based on the amount of compensation actually
received by the teacher for the services rendered in the
part-time assignment in the manner described in section 354.43,
subdivision 3. If the teacher has 20 years or more of allowable
service in the fund or 20 years or more of full-time teaching
service, the employer shall make the full employer contribution
to the fund based on the compensation that would have been paid
if the teacher had been employed on a full-time basis. The
employee and employer contributions shall be based upon the
rates of contribution prescribed by section 354.42. Full
accrual of allowable service credit and employee contributions
for part-time teaching service pursuant to this section and
section 354A.094 shall not continue for a period longer than ten
years.
Sec. 6. Minnesota Statutes 1994, section 354A.094,
subdivision 4, is amended to read:
Subd. 4. [RETIREMENT CONTRIBUTIONS.] Notwithstanding any
provision to the contrary in this chapter or the articles of
incorporation or bylaws of an association relating to the salary
figure to be used for the determination of contributions or the
accrual of service credit, a teacher assigned to a part-time
position under this section shall continue to make employee
contributions to and to accrue allowable service credit in the
applicable association during the period of part-time employment
on the same basis and in the same amounts as would have been
paid and accrued if the teacher had been employed on a full-time
basis provided that, prior to June 30 each year the member and
the employing board make that portion of the required employer
contribution to the applicable association in any proportion
which they may agree upon, that is based on the difference
between the amount of compensation that would have been paid if
the teacher had been employed on a full-time basis and the
amount of compensation actually received by the teacher for
services rendered in the part-time assignment. The employer
contributions to the applicable association on behalf of the
teacher shall be based on the amount of compensation actually
received by the teacher for the services rendered in the
part-time assignment in the manner described in section 354.43,
subdivision 3. If the teacher has 20 years or more of allowable
service in the association or 20 years or more of full-time
teaching service, the employer shall make the full employer
contribution to the fund, based on the compensation that would
have been paid if the teacher had been employed on a full-time
basis. The employee and employer contributions shall be based
upon the rates of contribution prescribed by section 354A.12.
Full membership, accrual of allowable service credit and
employee contributions for part-time teaching service by a
teacher pursuant to this section and section 354.66 shall not
continue for a period longer than ten years.
Sec. 7. Minnesota Statutes 1994, section 354A.31, is
amended by adding a subdivision to read:
Subd. 3a. [NO ANNUITY REDUCTION.] (a) The annuity
reduction provisions of subdivision 3 do not apply to a person
who:
(1) retires from the technical college system with at least
ten years of service credit in the system from which the person
retires;
(2) was employed on a full-time basis immediately preceding
retirement as a technical college faculty member;
(3) begins drawing an annuity from a first class city
teachers retirement association; and
(4) returns to work on not less than a one-third time basis
and not more than a two-thirds time basis in the technical
college system under an agreement in which the person may not
earn a salary of more than $35,000 in a calendar year from the
technical college system.
(b) Initial participation, the amount of time worked, and
the duration of participation under this section must be
mutually agreed upon by the employer and the employee. The
employer may require up to a one-year notice of intent to
participate in the program as a condition of participation under
this section. The employer shall determine the time of year the
employee shall work.
(c) Notwithstanding any law to the contrary, a person
eligible under paragraphs (a) and (b) may not earn further
service credit in a first class city teachers retirement
association and is not eligible to participate in the individual
retirement account plan or the supplemental retirement plan
established in chapter 354B as a result of service under this
section. No employer or employee contribution to any of these
plans may be made on behalf of such a person.
Sec. 8. Minnesota Statutes 1994, section 354B.05,
subdivision 2, is amended to read:
Subd. 2. [PURCHASE OF CONTRACTS.] The state university
board and the community college higher education board shall
arrange for the purchase of annuity contracts, fixed, variable,
or a combination of fixed and variable, or custodial accounts
from financial institutions selected by the state board of
investment under subdivision 3, to provide retirement benefits
to members of the plan. The contracts or accounts must be
purchased with contributions under section 354B.04 or money or
assets otherwise provided by law or by authority of the state
university board or community college higher education board and
acceptable by the financial institutions from which the
contracts or accounts are purchased.
Sec. 9. Minnesota Statutes 1994, section 354B.05,
subdivision 3, is amended to read:
Subd. 3. [SELECTION OF FINANCIAL INSTITUTIONS.] The
supplemental investment fund administered by the state board of
investment is one of the investment options for the plan. The
state board of investment may select up to five other financial
institutions to provide annuity products. In making their
selections, the board shall consider at least these criteria:
(1) the experience and ability of the financial institution
to provide retirement and death benefits suited to the needs of
the covered employees;
(2) the relationship of the benefits to their cost; and
(3) the financial strength and stability of the institution.
The state board of investment must periodically review at
least every three years each financial institution selected by
the state board of investment. The state board of investment
may retain consulting services to assist in the periodic review,
may establish a budget for its costs in the periodic review
process, and may charge a proportional share of those costs to
each financial institution selected by the state board of
investment. All contracts must be approved by the state board
of investment before execution by the state university board and
the community college higher education board. The state board
of investment shall also establish policies and procedures under
section 11A.04, clause (2), to carry out this subdivision.
The chancellor of the state university system and the
chancellor of the state community college higher education
system shall redeem all shares in the accounts of the Minnesota
supplemental investment fund held on behalf of personnel in the
supplemental plan who elect an investment option other than the
supplemental investment fund, except that shares in the fixed
interest account attributable to any guaranteed investment
contract as of July 1, 1994, must not be redeemed until the
expiration dates for the guaranteed investment contracts.
The chancellors chancellor shall transfer the cash realized to
the financial institutions selected by the state university
board and the community college board under this section 354B.05.
Sec. 10. Minnesota Statutes 1994, section 354B.07,
subdivision 1, is amended to read:
Subdivision 1. [ESTABLISHMENT AND ELIGIBILITY.] (a)
[REGULAR UNCLASSIFIED EMPLOYEES.] The supplemental retirement
plan for personnel employed by the state university board, the
state board for community colleges, the higher education board,
and effective July 1, 1995, the technical colleges, who are in
the unclassified service of the state commencing July 1
following the completion of the second year of their full-time
contract is governed by this section. Once a person qualifies
for participation in the supplemental plan, all subsequent
service by the person as an unclassified employee of the state
university board, the state board for community colleges, the
higher education board, or the technical colleges is covered by
the supplemental plan.
(b) [CETA UNCLASSIFIED EMPLOYEES.] An unclassified employee
employed by the state university board or the state board for
community colleges in subsidized on-the-job training, work
experience, or public service employment as an enrollee under
the federal Comprehensive Employment and Training Act is not
included in the supplemental retirement plan provided for in
this section after March 30, 1978, unless the unclassified
employee has as of the later of March 30, 1978, or the date of
employment sufficient service credit in the retirement fund
providing primary retirement coverage to meet the minimum
vesting requirements for a deferred retirement annuity, or the
board agrees in writing to make the employer contribution
required by this section on account of that unclassified
employee from revenue sources other than funds provided under
the federal Comprehensive Employment and Training Act, or the
unclassified employee agrees in writing to make the employer
contribution required by this section in addition to the member
contribution.
Sec. 11. Minnesota Statutes 1994, section 354B.07,
subdivision 2, is amended to read:
Subd. 2. [REDEMPTIONS.] The chancellor of the state
university system and the chancellor of the state community
college higher education system shall redeem all shares in the
accounts of the Minnesota supplemental investment fund held on
behalf of personnel in the supplemental plan who elect an
investment option other than the supplemental investment fund,
except that shares in the fixed interest account attributable to
any guaranteed investment contract as of July 1, 1994, may not
be redeemed until the expiration dates for the guaranteed
investment contracts. The chancellors chancellor shall transfer
the cash realized to the financial institutions selected by
the state university board and the community college board under
section 354B.05.
Sec. 12. Minnesota Statutes 1994, section 354B.08,
subdivision 2, is amended to read:
Subd. 2. [ADMINISTRATION.] (a) The chancellor of the state
university system and the chancellor of the state community
college higher education system shall administer the
supplemental retirement plan for their employees.
The chancellors chancellor shall invest contributions made under
this section, less amounts used for administrative expenses, as
authorized by law. The retirement contributions and death
benefits provided by annuity contracts or custodial accounts
purchased by the chancellors chancellor are owned by the plan
and must be paid in accordance with the annuity contracts or
custodial accounts.
(b) Effective July 1, 1995, administration of the plan must
transfer to the higher education board.
Sec. 13. Minnesota Statutes 1994, section 356.30,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1)
Notwithstanding any provisions to the contrary of the laws
governing the funds enumerated in subdivision 3, a person who
has met the qualifications of clause (2) may elect to receive a
retirement annuity from each fund in which the person has at
least six months allowable service, based on the allowable
service in each fund, subject to the provisions of clause (3).
(2) A person may receive upon retirement a retirement
annuity from each fund in which the person has at least six
months allowable service, and augmentation of a deferred annuity
calculated under the laws governing each public pension plan or
fund named in subdivision 3, from the date the person terminated
all public service if:
(a) the person has allowable service totaling an amount
that allows the person to receive an annuity in any two or more
of the enumerated funds; and
(b) the person has not begun to receive an annuity from any
enumerated fund or the person has made application for benefits
from all funds and the effective dates of the retirement annuity
with each fund under which the person chooses to receive an
annuity are within a one-year period.
(3) The retirement annuity from each fund must be based
upon the allowable service in each fund, except that:
(a) The laws governing annuities must be the law in effect
on the date of termination from the last period of public
service under a covered fund with which the person earned a
minimum of one-half year of allowable service credit during that
employment.
(b) The "average salary" on which the annuity from each
covered fund in which the employee has credit in a formula plan
shall be based on the employee's highest five successive years
of covered salary during the entire service in covered funds.
(c) The formula percentages to be used by each fund must be
those percentages prescribed by each fund's formula as continued
for the respective years of allowable service from one fund to
the next, recognizing all previous allowable service with the
other covered funds.
(d) Allowable service in all the funds must be combined in
determining eligibility for and the application of each fund's
provisions in respect to actuarial reduction in the annuity
amount for retirement prior to normal retirement.
(e) The annuity amount payable for any allowable service
under a nonformula plan of a covered fund must not be affected
but such service and covered salary must be used in the above
calculation.
(f) This section shall not apply to any person whose final
termination from the last public service under a covered fund is
prior to May 1, 1975.
(g) For the purpose of computing annuities under this
section the formula percentages used by any covered fund, except
the basic program of the teachers retirement association, the
public employees police and fire fund, must not exceed 2-1/2
percent per year of service for any year of service or fraction
thereof. The formula percentage used by the public employees
police and fire fund must not exceed 2.65 percent per year of
service for any year of service or fraction thereof. The
formula percentage used by the teachers retirement association
must not exceed 2.63 percent per year of basic program service
for any year of basic program service or fraction thereof.
(h) Any period of time for which a person has credit in
more than one of the covered funds must be used only once for
the purpose of determining total allowable service.
(i) If the period of duplicated service credit is more than
six months, or the person has credit for more than six months
with each of the funds, each fund shall apply its formula to a
prorated service credit for the period of duplicated service
based on a fraction of the salary on which deductions were paid
to that fund for the period divided by the total salary on which
deductions were paid to all funds for the period.
(j) If the period of duplicated service credit is less than
six months, or when added to other service credit with that fund
is less than six months, the service credit must be ignored and
a refund of contributions made to the person in accord with that
fund's refund provisions.
Sec. 14. [356.306] [PARTIAL PAYMENT OF PENSION PLAN
REFUND.]
(a) Notwithstanding any provision of law to the contrary, a
member of a pension plan listed in section 356.30, subdivision
3, with at least two years of forfeited service taken from a
single pension plan may repay a portion of all refunds. A
partial refund repayment must comply with this section.
(b) The minimum portion of a refund repayment is one-third
of the total service credit period of all refunds taken from a
single plan.
(c) The cost of the partial refund repayment is the product
of the cost of the total repayment multiplied by the ratio of
the restored service credit to the total forfeited service
credit. The total repayment amount includes interest at the
annual rate of 8.5 percent, compounded annually, from the refund
date to the date repayment is received.
(d) The restored service credit is allocated based on the
relationship the restored service bears to the total service
credit period for all refunds taken from a single pension plan.
(e) This section does not authorize a public pension plan
member to repay a refund if the law governing the plan does not
authorize the repayment of a refund of member contributions.
Sec. 15. Minnesota Statutes 1994, section 356.611, is
amended to read:
356.611 [LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION
PURPOSES.]
Subdivision 1. [STATE SALARY LIMITATIONS.] (a)
Notwithstanding any provision of law, bylaws, articles or of
incorporation, retirement and disability allowance plan
agreements, or retirement plan contracts to the contrary, the
covered salary for pension purposes for a plan participant of a
covered retirement fund under section 356.30, subdivision 3, may
not exceed 95 percent of the salary established for the governor
under section 15A.082 at the time the person received the salary.
(b) This section does not apply to a salary paid:
(1) to the governor;
(2) to an employee of a political subdivision in a position
that is excluded from the limit as specified under section
43A.17, subdivision 9; or
(3) to a state employee in a position for which the
commissioner of employee relations has approved a salary rate
that exceeds 95 percent of the governor's salary.
(c) The limited covered salary determined under this
section must be used in determining employee and employer
contributions and in determining retirement annuities and other
benefits under the respective covered retirement fund and under
this chapter.
Subd. 2. [FEDERAL COMPENSATION LIMITS.] For members first
contributing to a pension plan covered under section 356.30,
subdivision 3, on or after July 1, 1995, compensation in excess
of the limitation set forth in Internal Revenue Code 401(a)(17)
shall not be included for contribution and benefit computation
purposes. The compensation limit set forth in Internal Revenue
Code 401(a)(17) on June 30, 1993, shall apply to members first
contributing before July 1, 1995.
Sec. 16. [RETROACTIVE PROVISIONS.]
(a) A teacher who had at least three years of allowable
service credit under Minnesota Statutes, chapter 354 or 354A, on
July 1, 1994, and who worked part-time between July 1, 1994, and
June 30, 1995, may be allowed to make contributions to and
accrue allowable service credit in the applicable retirement
fund, as if the teacher had been working full time, as provided
in Minnesota Statutes, sections 354.66, subdivision 4, and
354A.094, subdivision 4, for service after July 1, 1994, and
before June 30, 1995. If a teacher described in this paragraph
wishes to obtain allowable service credit as if the teacher had
been working full time for the period from July 1, 1994, to June
30, 1995, the teacher must:
(1) make a lump sum payment to the applicable pension fund
within 60 days after the effective date of this section of the
difference between the amount of the employer and employee
contributions to the pension fund that would have been paid if
the teacher had been working full time, and that amount that was
actually paid for part-time service during that period; and
(2) submit to the association a letter or other document
from the board of the teacher's employing district stating that
the board would have agreed to the teacher's participation in
the part-time mobility program during the 1994-1995 school year
but for the requirement then in effect that the district make
the full employer contribution to the retirement fund for
teachers with 20 or more years of service, based on the
compensation that would have been paid if the teacher had been
employed on a full-time basis.
(b) An employer of a teacher covered by paragraph (a) must
notify the teacher of the option available under paragraph (a)
in writing within 30 days of the effective date of this section.
Sec. 17. [EARLY RETIREMENT INCENTIVE.]
The metropolitan council or the Minnesota historical
society may offer its eligible employees the early retirement
incentive provided in sections 17 to 25.
Sec. 18. [ELIGIBILITY.]
An employee of a public employer specified in section 17 is
eligible to receive the early retirement incentive if the
employee:
(1) has at least 25 years of combined service credit in any
covered fund or funds listed in Minnesota Statutes, section
356.30, subdivision 3, or for purposes of the incentive in
section 19, subdivision 2 only, is at least 65 years old and has
at least one year of combined service credit in these covered
funds;
(2) upon retirement is immediately eligible for a
retirement annuity from a defined benefit plan, if the person is
a member of a defined benefit plan;
(3) is at least 55 years of age; and
(4) retires on or after May 23, 1995, and before January
31, 1996.
Sec. 19. [EARLY RETIREMENT INCENTIVE.]
Subdivision 1. [CHOICE.] An eligible employee may not
choose both the incentive in subdivision 2 and the incentive in
subdivision 3. The public employers specified in section 17
that choose to offer the early retirement incentive must offer
included employees eligible for both incentives a choice between
the incentive in subdivision 2 or 3.
Subd. 2. [FORMULA INCREASE OPTION.] For an employee
covered by a retirement plan established in Minnesota Statutes,
section 352.115, 352.116, 353.29, or 353.30, or chapter 354 or
422A, who selects the incentive under this subdivision, the
multiplier percentage used to calculate the retirement annuity
must be increased for each year of service credit up to 30
years. The amount of the increase is:
(1) .25 for each year of service credit calculated under
Minnesota Statutes, section 352.115, 352.116, 353.29, or 353.30,
or chapter 422A; and
(2) .10 for each year of service credit calculated under
Minnesota Statutes, chapter 354 or 354A.
If an employee has more than 30 years of service credit,
the increased multiplier applies only to the first 30 years.
Subd. 3. [INSURANCE OPTION.] For an employee who selects
the incentive under this subdivision, the employer must pay for
hospital, medical, and dental insurance under the following
conditions and limitations. An employee is eligible for this
employer-paid insurance only if the person:
(1) is eligible for employer-paid insurance under a
collective bargaining agreement or personnel plan in effect on
the day before the effective date of sections 17 to 25;
(2) has at least as many months of service with the current
employer as the number of months younger than age 65 the person
is at the time of retirement; and
(3) is under age 65.
Sec. 20. [LIMIT ON REHIRING.]
A public employer may not rehire an employee who retires
under sections 17 to 25.
Sec. 21. [RETIREMENT.]
For purposes of sections 17 to 25, an employee retires when
the employee terminates active employment and applies for
retirement benefits.
Sec. 22. [CONDITIONS; INSURANCE COVERAGE.]
A retired employee is eligible for single and dependent
insurance coverages and employer payments to which the employee
was entitled immediately before retirement, subject to any
changes in coverage and employer and employee payments through
collective bargaining or personnel plans for employees in
positions equivalent to the position from which the employee
retired. The retired employee is not eligible for employer-paid
life insurance. Eligibility ceases when the retired employee
attains the age of 65, chooses not to receive the retirement
benefits for which the employee has applied, or becomes eligible
for employer-paid health insurance from a new employer.
Coverages must be coordinated with relevant health insurance
benefits provided through the federally sponsored Medicare
program.
Sec. 23. [INCLUSION.]
A public employer that offers incentives under sections 17
to 25 shall designate the positions or group of positions
affected by downsizing or restructuring that will qualify for
participation in its early retirement plan and may exclude
otherwise eligible employees.
Sec. 24. [PAYMENT OF COST OF EARLY RETIREMENT INCENTIVE.]
(a) A public employer referenced in section 17 which offers
an early retirement incentive under section 19 must make an
additional employer contribution to the applicable retirement
plan from which an employee retired under the incentive program.
(b) The additional employer contribution is an amount equal
to the difference in the amount of the reserve transfer under
Minnesota Statutes, section 11A.18, or 422A.06, subdivision 8,
with the early retirement incentive under section 19,
subdivision 2, and without the early retirement incentive. The
additional employer contribution must be paid prior to July 1,
1997. The public employer shall also pay compound interest on
the additional employer contribution at an annual rate of 8.5
percent from the effective date of the retirement to the date of
the payment of the additional employer contribution.
Sec. 25. [APPLICATION OF OTHER LAWS.]
Unilateral implementation of sections 17 to 25 by a public
employer is not an unfair labor practice for purposes of
Minnesota Statutes, chapter 179A. The requirement in sections
17 to 25 for an employer to pay health insurance coverage costs
for certain retired employees is not subject to the limits in
Minnesota Statutes, section 179A.20, subdivision 2a.
Sec. 26. [REPEALER.]
Minnesota Statutes 1994, sections 3A.10, subdivision 2; and
352.021, subdivision 5, are repealed.
Sec. 27. [EFFECTIVE DATE.]
(a) Sections 1, 10, and 15 are effective on July 1, 1995.
(b) Sections 3 and 16 are effective on the day following
final enactment.
(c) Sections 5, 6, and 7 are effective on July 1, 1995 and
apply to teaching service rendered after that date.
(d) Section 13 is effective retroactively to May 16, 1994.
(e) Sections 17 to 25 are effective on the day after final
enactment.
(f) Section 26 is effective on July 1, 1995 and is not
intended to reduce the service credit of a legislator for
service recorded by the Minnesota state retirement system before
July 1, 1995.
(g) Section 14 is effective on January 1, 1996.
ARTICLE 2
LOCAL GENERAL EMPLOYEE PENSION PLAN
BENEFIT AND RELATED MODIFICATIONS
Section 1. [354A.026] [DULUTH TEACHERS RETIREMENT FUND
ASSOCIATION; EXCEPTION TO CERTAIN ACTUARIAL VALUATION
PROVISIONS.]
Notwithstanding any provision of section 356.215,
subdivision 4g, to the contrary, the amortization target date
for use in determining the amortization contribution requirement
in any actuarial valuation of the Duluth teachers retirement
fund association after the date of enactment must be June 30,
2020.
Sec. 2. Minnesota Statutes 1994, section 354A.12,
subdivision 1, is amended to read:
Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] The contribution
required to be paid by each member of a teachers retirement fund
association shall not be less than the percentage of total
salary specified below for the applicable association and
program:
Association and Program Percentage of
Total Salary
Duluth teachers retirement
association
old law and new law
coordinated programs 4.5 5.5 percent
Minneapolis teachers retirement
association
basic program 8.5 percent
coordinated program 4.5 percent
St. Paul teachers retirement
association
basic program 8 percent
coordinated program 4.5 percent
Contributions shall be made by deduction from salary and
must be remitted directly to the respective teachers retirement
fund association at least once each month.
Sec. 3. Minnesota Statutes 1994, section 354A.27,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY POSTRETIREMENT ADJUSTMENT
MODIFICATION.] A person receiving a retirement annuity,
disability benefit, or surviving spouse benefit or annuity from
the Duluth teachers retirement fund association who has received
the annuity or benefit for at least one year may be entitled to
receive a lump sum postretirement adjustment under subdivision
2, in the discretion of the board of trustees under subdivision
3. Any postretirement adjustment payable from the Duluth
teachers retirement fund association must be computed and paid
according to this section.
Sec. 4. Minnesota Statutes 1994, section 354A.27, is
amended by adding a subdivision to read:
Subd. 5. [CALCULATION OF POSTRETIREMENT ADJUSTMENTS.] (a)
Annually, after June 30, the board of trustees determines the
amount of any postretirement adjustment using the procedures in
this subdivision and subdivision 6.
(b) Each person who has been receiving an annuity or
benefit under the articles of incorporation, bylaws, or under
this section for at least 12 months as of the date of the
postretirement adjustment shall be eligible for a postretirement
adjustment. The postretirement adjustment shall be payable each
January 1. The postretirement adjustment shall be equal to two
percent of the annuity or benefit to which the person is
entitled one month prior to the payment of the postretirement
adjustment.
Sec. 5. Minnesota Statutes 1994, section 354A.27, is
amended by adding a subdivision to read:
Subd. 6. [ADDITIONAL INCREASE.] (a) In addition to the
postretirement increases granted under subdivision 5, an
additional percentage increase must be computed and paid under
this subdivision.
(b) The board of trustees shall determine the number of
annuitants or benefit recipients who have been receiving an
annuity or benefit for at least 12 months as of the current June
30. These recipients are entitled to receive the surplus
investment earnings additional postretirement increase.
(c) Annually, as of each June 30, the board shall determine
the five-year annualized rate of return attributable to the
assets of the Duluth teachers retirement fund association under
the formula or formulas specified in section 11A.04, clause (11).
(d) The board shall determine the amount of excess
five-year annualized rate of return over the preretirement
interest assumption as specified in section 356.215.
(e) The additional percentage increase must be determined
by multiplying the quantity one minus the rate of contribution
deficiency, as specified in the most recent actuarial report of
the actuary retained by the legislative commission on pensions
and retirement, times the rate of return excess as determined in
paragraph (d).
(f) The additional increase is payable to all eligible
annuitants or benefit recipients on the following January 1.
Sec. 6. Minnesota Statutes 1994, section 354A.31,
subdivision 4, is amended to read:
Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT
ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision
applies to the coordinated programs of the Minneapolis teachers
retirement fund association and the St. Paul teachers retirement
fund association.
(b) The normal coordinated retirement annuity shall be an
amount equal to a retiring coordinated member's average salary
multiplied by the retirement annuity formula percentage.
Average salary for purposes of this section shall mean an amount
equal to the average salary upon which contributions were made
for the highest five successive years of service credit, but
which shall not in any event include any more than the
equivalent of 60 monthly salary payments. Average salary must
be based upon all years of service credit if this service credit
is less than five years.
(b) (c) This paragraph, in conjunction with subdivision 6,
applies to a person who first became a member or a member in a
pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, unless paragraph (c) (d), in conjunction with
subdivision 7, produces a higher annuity amount, in which case
paragraph (c) (d) will apply. The retirement annuity formula
percentage for purposes of this paragraph is one percent per
year for each year of coordinated service for the first ten
years and 1.5 percent for each year of coordinated service
thereafter.
(c) (d) This paragraph applies to a person who has become
at least 55 years old and who first becomes a member after June
30, 1989, and to any other member who has become at least 55
years old and whose annuity amount, when calculated under this
paragraph and in conjunction with subdivision 7 is higher than
it is when calculated under paragraph (b) (c), in conjunction
with the provisions of subdivision 6. The retirement annuity
formula percentage for purposes of this paragraph is 1.5 percent
for each year of coordinated service.
Sec. 7. Minnesota Statutes 1994, section 354A.31, is
amended by adding a subdivision to read:
Subd. 4a. [COMPUTATION OF THE NORMAL COORDINATED
RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies
to the new law coordinated program of the Duluth teachers
retirement fund association.
(b) The normal coordinated retirement annuity is an amount
equal to a retiring coordinated member's average salary
multiplied by the retirement annuity formula percentage.
Average salary for purposes of this section means an amount
equal to the average salary upon which contributions were made
for the highest five successive years of service credit, but may
not in any event include any more than the equivalent of 60
monthly salary payments. Average salary must be based upon all
years of service credit if this service credit is less than five
years.
(c) This paragraph, in conjunction with subdivision 6,
applies to a person who first became a member or a member in a
pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, unless paragraph (d), in conjunction with
subdivision 7, produces a higher annuity amount, in which case
paragraph (d) applies. The retirement annuity formula
percentage for purposes of this paragraph is 1.13 percent per
year for each year of coordinated service for the first ten
years and 1.63 percent for each subsequent year of coordinated
service.
(d) This paragraph applies to a person who is at least 55
years old and who first becomes a member after June 30, 1989,
and to any other member who is at least 55 years old and whose
annuity amount, when calculated under this paragraph and in
conjunction with subdivision 7, is higher than it is when
calculated under paragraph (c) in conjunction with subdivision
6. The retirement annuity formula percentage for purposes of
this paragraph is 1.63 percent for each year of coordinated
service.
Sec. 8. Minnesota Statutes 1994, section 356.865,
subdivision 3, is amended to read:
Subd. 3. [COST.] The cost of the payments made under this
section is the responsibility of the state. The annual
amortization amount must For state fiscal years 1992 to 2001
inclusive, there is appropriated annually $550,000 from the
general fund to the commissioner of finance to be added, in
quarterly installments, to the annual state contribution amount
determined under section 422A.101, subdivision 3, effective July
1, 1991.
Sec. 9. Minnesota Statutes 1994, section 422A.05, is
amended by adding a subdivision to read:
Subd. 8. [HEALTH INSURANCE.] The retirement board may
authorize the executive director or the executive director's
designee to:
(1) offer the beneficiaries of the fund the option of
having their health insurance premiums deducted automatically
from their monthly benefit amounts and paid to a designated
insurer; and
(2) provide beneficiaries information about available group
health insurance plan options.
Beneficiaries who elect to avail themselves of this service
are ultimately responsible for the timely payment of premiums
and the payment of premiums in the proper amount.
Sec. 10. Minnesota Statutes 1994, section 422A.09,
subdivision 2, is amended to read:
Subd. 2. The contributing class shall consist of all
employees not included in the exempt class, who become
prospective beneficiaries of the fund created by sections
422A.01 to 422A.25.
A member of the contributing class who is granted a leave
of absence without pay by the member's employer to serve as an
employee or agent of a labor union primarily representing
members of the contributing class may continue as a member of
the contributing class during the period of such leave of
absence by depositing each month with the fund the amount of the
contribution of the employee as required by sections 422A.01 to
422A.25 which amount shall be the normal employee contribution.
The contributions referred to in this subdivision shall be
based on the salary for the position or its equivalent held by
the member immediately prior to such leave of absence subject to
any adjustment thereof during the period of such leave.
Sec. 11. [INITIAL ADJUSTMENT.]
Subdivision 1. [LUMP-SUM POSTRETIREMENT ADJUSTMENT
TRANSITION.] For all annuitants and beneficiaries of the
association who previously received a lump-sum postretirement
adjustment, before calculation of the first postretirement
adjustment under sections 5 and 6, their annual retirement
annuity or benefit shall be permanently increased by the amount
of their previous lump-sum postretirement adjustment.
Subd. 2. [ANNUITIZED POSTRETIREMENT ADJUSTMENT
TRANSITION.] For all annuitants and beneficiaries of the
association who chose to annuitize previous lump-sum
postretirement adjustments, before calculation of the first
postretirement adjustment under sections 5 and 6, their annual
retirement annuity or benefit shall include the benefits
supported by the accumulated annuitized value due to annuitizing
their previous lump-sum postretirement adjustments.
Sec. 12. [DULUTH OLD PLAN BYLAWS; AUTHORITY GRANTED TO
INCREASE FORMULAS.]
In accordance with Minnesota Statutes, section 354A.12,
subdivision 4, approval is granted for the Duluth teachers
retirement fund association to amend its articles of
incorporation or bylaws by increasing the formula percentage
used in computing annuities for old law coordinated program
members in the Duluth teachers retirement fund association to
1.38 percent for each year of service.
Sec. 13. [DULUTH OLD PLAN BYLAWS.]
In accordance with Minnesota Statutes, section 354A.12,
subdivision 4, the Duluth teachers retirement fund association
shall amend its articles of incorporation or bylaws to conform
to sections 2, 3, 4, 5, and 11.
Sec. 14. [REPEALER.]
Minnesota Statutes 1994, section 354A.27, subdivisions 2,
3, and 4, are repealed.
Sec. 15. [EFFECTIVE DATE.]
(a) Section 2 is effective on the first day of the first
payroll period beginning after July 1, 1995.
(b) Sections 3, 4, 5, 11, 13, and 14 are effective November
1, 1995.
(c) Sections 1, 6, 7, and 12 are effective May 15, 1995.
(d) Sections 9 and 10 are effective on the day following
final enactment.
(e) Section 8 is effective on the day following final
enactment.
ARTICLE 3
PUBLIC SAFETY EMPLOYEE PENSION PLAN
BENEFIT AND RELATED MODIFICATIONS
Section 1. Minnesota Statutes 1994, section 352B.02,
subdivision 1a, is amended to read:
Subd. 1a. [MEMBER CONTRIBUTIONS.] Each member shall pay a
sum equal to 8.5 8.92 percent of the member's salary, which
shall constitute the member contribution to the fund.
Sec. 2. Minnesota Statutes 1994, section 352B.08,
subdivision 2, is amended to read:
Subd. 2. [NORMAL RETIREMENT ANNUITY.] The annuity must be
paid in monthly installments. The annuity shall be equal to the
amount determined by multiplying the average monthly salary of
the member by 2-1/2 2.65 percent for each year and pro rata for
completed months of service.
Sec. 3. Minnesota Statutes 1994, section 352B.10,
subdivision 1, is amended to read:
Subdivision 1. [INJURIES, PAYMENT AMOUNTS.] Any member who
becomes disabled and physically or mentally unfit to perform
duties as a direct result of an injury, sickness, or other
disability incurred in or arising out of any act of duty, shall
receive disability benefits while disabled. The benefits must
be paid in monthly installments equal to the member's average
monthly salary multiplied by 50 53 percent, plus an additional
2-1/2 2.65 percent for each year and pro rata for completed
months of service in excess of 20 years, if any.
Sec. 4. Minnesota Statutes 1994, section 353.651,
subdivision 4, is amended to read:
Subd. 4. [EARLY RETIREMENT.] Any police officer or
firefighter member who has become at least 50 years old and who
has at least three years of allowable service is entitled upon
application to a retirement annuity equal to the normal annuity
calculated under subdivision 3, reduced so that the reduced
annuity is the actuarial equivalent of the annuity that would be
payable to the member if the member deferred receipt of the
annuity from the day the annuity begins to accrue until the
member attains age 55 by two-tenths of one percent for each
month that the member is under age 55 at the time of retirement.
Sec. 5. Minnesota Statutes 1994, section 353A.083, is
amended to read:
353A.083 [PERA-P&F BENEFIT PLAN APPLICABLE TO PRE-1993
CONSOLIDATIONS.]
Subdivision 1. [PRE-1993 CONSOLIDATIONS.] For any
consolidation account in effect on May 24, 1993, the public
employee police and fire fund benefit plan applicable to
consolidation account members who have elected or will elect
that benefit plan coverage under section 353A.08 is the pre-July
1, 1993, public employees police and fire fund benefit plan
unless the applicable municipality approves the extension of the
post-June 30, 1993, public employees police and fire fund
benefit plan to the consolidation account.
Subd. 2. [PRE-1995 CONSOLIDATIONS.] For any consolidation
account in effect on July 1, 1995, the public employee police
and fire fund benefit plan applicable to consolidation account
members who have elected or will elect that benefit plan
coverage under section 353A.08 is the pre-July 1, 1995, public
employees police and fire fund benefit plan unless the
applicable municipality approves the extension of the post-June
30, 1995, public employees police and fire fund benefit plan to
the consolidation account.
Sec. 6. Minnesota Statutes 1994, section 356.30,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1)
Notwithstanding any provisions to the contrary of the laws
governing the funds enumerated in subdivision 3, a person who
has met the qualifications of clause (2) may elect to receive a
retirement annuity from each fund in which the person has at
least six months allowable service, based on the allowable
service in each fund, subject to the provisions of clause (3).
(2) A person may receive upon retirement a retirement
annuity from each fund in which the person has at least six
months allowable service, and augmentation of a deferred annuity
calculated under the laws governing each public pension plan or
fund named in subdivision 3, from the date the person terminated
all public service if:
(a) the person has allowable service totaling an amount
that allows the person to receive an annuity in any two or more
of the enumerated funds; and
(b) the person has not begun to receive an annuity from any
enumerated fund or the person has made application for benefits
from all funds and the effective dates of the retirement annuity
with each fund under which the person chooses to receive an
annuity are within a one-year period.
(3) The retirement annuity from each fund must be based
upon the allowable service in each fund, except that:
(a) The laws governing annuities must be the law in effect
on the date of termination from the last period of public
service under a covered fund with which the person earned a
minimum of one-half year of allowable service credit during that
employment.
(b) The "average salary" on which the annuity from each
covered fund in which the employee has credit in a formula plan
shall be based on the employee's highest five successive years
of covered salary during the entire service in covered funds.
(c) The formula percentages to be used by each fund must be
those percentages prescribed by each fund's formula as continued
for the respective years of allowable service from one fund to
the next, recognizing all previous allowable service with the
other covered funds.
(d) Allowable service in all the funds must be combined in
determining eligibility for and the application of each fund's
provisions in respect to actuarial reduction in the annuity
amount for retirement prior to normal retirement.
(e) The annuity amount payable for any allowable service
under a nonformula plan of a covered fund must not be affected
but such service and covered salary must be used in the above
calculation.
(f) This section shall not apply to any person whose final
termination from the last public service under a covered fund is
prior to May 1, 1975.
(g) For the purpose of computing annuities under this
section the formula percentages used by any covered fund, except
the public employees police and fire fund and the state patrol
retirement fund, must not exceed 2-1/2 percent per year of
service for any year of service or fraction thereof. The
formula percentage used by the public employees police and fire
fund and the state patrol retirement fund must not exceed 2.65
percent per year of service for any year of service or fraction
thereof.
(h) Any period of time for which a person has credit in
more than one of the covered funds must be used only once for
the purpose of determining total allowable service.
(i) If the period of duplicated service credit is more than
six months, or the person has credit for more than six months
with each of the funds, each fund shall apply its formula to a
prorated service credit for the period of duplicated service
based on a fraction of the salary on which deductions were paid
to that fund for the period divided by the total salary on which
deductions were paid to all funds for the period.
(j) If the period of duplicated service credit is less than
six months, or when added to other service credit with that fund
is less than six months, the service credit must be ignored and
a refund of contributions made to the person in accord with that
fund's refund provisions.
Sec. 7. Laws 1994, chapter 499, section 2, is amended to
read:
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the first of the month next
following:
(1) receipt of an affirmative written determination from
the Secretary of the federal Department of Health and Human
Services Social Security Administration of ineligibility for
coverage under the federal old age, survivors, and disability
insurance; and
(2) approval by the Hennepin county board and compliance
with Minnesota Statutes, section 645.021, subdivisions 2 and 3,
except that, for section 1 to be deemed approved, a certificate
of approval must be filed within the year following receipt of
the written affirmative determination from the Social Security
Administration, or before January 1, 1998, whichever is earlier.
Sec. 8. [REPEALER; WILLMAR VOLUNTEER FIRE DISABILITY
PROVISION.]
Laws 1971, chapter 127, section 1, as amended by Laws 1979,
chapter 201, section 28, is repealed.
Sec. 9. [EFFECTIVE DATE.]
(a) Section 1 is effective on the first day of the first
full pay period occurring after July 1, 1995.
(b) Sections 2, 3, and 6 are effective on July 1, 1995.
(c) Section 7 is effective on the day following final
enactment.
(d) Sections 4 and 5 are effective on July 1, 1996.
(e) Section 8 is effective on the day following approval by
the city council of the city of Willmar and compliance with
Minnesota Statutes, section 645.021.
ARTICLE 4
ADDITIONAL POLICE AND FIRE AMORTIZATION AID
Section 1. Minnesota Statutes 1994, section 353.65,
subdivision 7, is amended to read:
Subd. 7. [EXCESS CONTRIBUTIONS HOLDING ACCOUNT.] (a) The
excess contributions holding account is established in the
public employees retirement association. Excess contributions
established by section 69.031, subdivision 5, paragraphs (2),
clauses (b) and (c), and (3) must be deposited in the account.
These contributions and all investment earnings associated with
them must be regularly transferred as provided in paragraph (b).
(b) From the amount of the excess contributions and
associated investment earnings:
(1) $1,000,000 must be transferred annually to the
ambulance service personnel longevity award and incentive
suspense account established by section 144C.03, subdivision 2;
and
(2) any remaining balance, after deduction of the
additional amortization aid allocation, if any, under paragraph
(d), must be transferred to the general fund.
(c) If a law is enacted creating a police officer stress
reduction program, and money is appropriated for the program, an
amount equal to the appropriation must be transferred from the
excess contributions holding account to the stress reduction
program before money is transferred to the general fund
allocated under paragraph (b), clause (2).
(d) On October 1, 1997, and annually on each October 1
thereafter, one-half of the money in the excess contributions
holding account under paragraph (b), clause (2), collected
during the immediately preceding July 1 through June 30 period
must be allocated by the commissioner of revenue to all local
police or salaried firefighter relief associations governed by
and in full compliance with section 69.77 that had an unfunded
actuarial accrued liability in the actuarial valuation prepared
under sections 356.215 and 356.216 as of the preceding December
31, and to all local police or salaried firefighter
consolidation accounts governed by chapter 353A that are
certified by the executive director of the public employees
retirement association as having for the current fiscal year an
additional municipal contribution amount under section 353A.09,
subdivision 5, paragraph (b), and that have implemented
Minnesota Statutes 1994, section 353A.083, if the effective date
of the consolidation preceded May 24, 1993, and that have
implemented section 5, if the effective date of the
consolidation preceded the date of enactment, on the basis of
the relief association or consolidation account's proportional
share of the total unfunded actuarial accrued liability of all
recipient relief associations and consolidation accounts as of
December 31, 1993, or June 30, 1994, whichever applies.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day following enactment.
ARTICLE 5
HIGHER EDUCATION SYSTEM EARLY RETIREMENT
EMPLOYER-PAID HEALTH INSURANCE PREMIUM INCENTIVE
Section 1. [STATE COLLEGE AND UNIVERSITY EARLY RETIREMENT
INCENTIVES.]
Subdivision 1. [INTENT.] To avoid the disruptive effects
of employee layoffs due to campus consolidations, mergers, and
budget reductions resulting in downsizing within the Minnesota
state colleges and universities and the higher education
coordinating board, an employer-funded early retirement
incentive is made available in this section to employees of the
state universities, community colleges, technical colleges, the
existing system central offices, and the higher education
coordinating board.
Subd. 2. [EMPLOYER PARTICIPATION.] The early retirement
incentives provided in this section may be offered to eligible
employees in the state university, community college, technical
college systems, the higher education board, and the higher
education coordinating board. The incentives apply to personnel
in any state university, community college, or technical college
department being downsized or where a reduction in force has
been declared by the president of the institution. In the case
of personnel in the chancellor's office, a reduction in force
must be declared by the chancellor or the chancellor's designee
or the executive director of the higher education coordinating
board. Positions that are not assigned to a specific department
or support positions that are assigned campus-wide or to a
specific department are considered to be campus-wide in
jurisdiction and eligible for this incentive as part of the
reduction-in-force declaration.
Subd. 3. [ELIGIBILITY.] A person identified in subdivision
2 is eligible to receive the incentives if the person:
(1) has at least 15 years of combined service credit in any
Minnesota public pension plans governed by Minnesota Statutes,
section 356.30, subdivision 3, and the plan governed by
Minnesota Statutes, chapter 354B;
(2) upon retirement is immediately eligible for a
retirement annuity from a defined benefit plan if the person is
a member of a defined benefit plan;
(3) is at least 55 years of age; and
(4) either retires before January 31, 1996, or, for a
person who first becomes eligible for this incentive between
January 31, 1996, and December 31, 1996, retires before January
31, 1997.
Subd. 4. [INCENTIVE.] Persons who retire under this
section are eligible to receive employer-paid hospital, medical,
and dental insurance, subject to the conditions in subdivision 5
and at the level and under conditions existing at the time of
retirement.
Subd. 5. [LIMITS ON REHIRING.] Persons retiring under the
provisions of this section may not be reemployed by the state or
hired under a professional technical contract in any capacity
except:
(1) under conditions of a stated emergency, and then only
if the rehire or contract is approved by the higher education
board or the higher education coordinating board under
procedures adopted by the boards; and
(2) if rehired as adjunct faculty as defined in the
appropriate bargaining agreement, or, if rehired by another
executive branch agency of state government, if the retired
employee works only on a seasonal, temporary, or intermittent
basis as defined in Minnesota Statutes, section 43A.02,
subdivision 23, or 179A.03, subdivision 14, clause (f), for no
more than 1,044 hours in any consecutive 12-month period.
Subd. 6. [CONDITIONS; INSURANCE COVERAGE.] (a) A retired
employee is eligible for single and dependent insurance
coverages and employer payments to which the person was entitled
immediately before retirement, subject to any changes in
coverage and employer and employee payments through collective
bargaining or personnel plans for employees in positions
equivalent to the position from which the employee retired. The
retired employee is not eligible for employer-paid life
insurance. Eligibility ceases when the retired employee reaches
age 65, when the person chooses not to receive the retirement
benefits for which the person has applied, or when the person is
eligible for employer-paid health insurance from a new
employer. Coverages must be coordinated with relevant health
insurance benefits provided through the federally sponsored
Medicare program.
(b) If an employing unit referenced in subdivision 1 offers
the incentive under this section and is subsequently eliminated
or reorganized, the successor organization, if any, is obligated
to pay the insurance premium incentive.
Subd. 7. [APPLICATION OF OTHER LAWS.] Unilateral
implementation of this section by a public employer is not an
unfair labor practice for the purposes of Minnesota Statutes,
chapter 179A. The requirement in this section for an employer
to pay health insurance costs for certain retired employees is
not subject to the limits in Minnesota Statutes, section
179A.20, subdivision 2a.
Sec. 2. [NOTIFICATION OF SUBSEQUENT HEALTH COVERAGE:
PENALTY FOR NOTIFICATION FAILURE.]
(a) An employee who accepts the early retirement incentive
benefit under section 1 agrees as a condition of receipt of the
incentive to notify the higher education board or the higher
education coordinating board within 30 days of the event that
the person is eligible for employer-paid health insurance from
subsequent employment.
(b) Failure to make the notification required in paragraph
(a) obligates the person to reimburse the higher education board
or the higher education coordinating board for any insurance
premiums that it paid since the person became eligible for the
subsequent employment health insurance coverage.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective on the day following final
enactment.
ARTICLE 6
PUBLIC PENSION PLAN COLLATERALIZATION REQUIREMENT
AND INVESTMENT AUTHORITY STATEMENT
Section 1. Minnesota Statutes 1994, section 356A.06, is
amended by adding a subdivision to read:
Subd. 8a. [COLLATERALIZATION REQUIREMENT.] (a) The
governing board of a covered pension plan shall designate a
national bank, an insured state bank, an insured credit union,
or an insured thrift institution as the depository for the
pension plan for assets not held by the pension plan's custodian
bank.
(b) Unless collateralized as provided under paragraph (c),
a covered pension plan may not deposit in a designated
depository an amount in excess of the insurance held by the
depository in the federal deposit insurance corporation, the
federal savings and loan insurance corporation, or the national
credit union administration, whichever applies.
(c) For an amount greater than the insurance under
paragraph (b), the depository must provide collateral in
compliance with section 118.01 or with any comparable successor
enactment relating to the collateralization of municipal
deposits.
Sec. 2. Minnesota Statutes 1994, section 356A.06, is
amended by adding a subdivision to read:
Subd. 8b. [DISCLOSURE OF INVESTMENT AUTHORITY; RECEIPT OF
STATEMENT.] (a) For this subdivision, the term "broker" means a
broker, broker-dealer, investment advisor, investment manager,
or third party agent who transfers, purchases, sells, or obtains
investment securities for, or on behalf of, a covered pension
plan.
(b) Before a covered pension plan may complete an
investment transaction with or in accord with the advice of a
broker, the covered pension plan shall provide annually to the
broker a written statement of investment restrictions applicable
under state law to the covered pension plan or applicable under
the pension plan governing board investment policy.
(c) A broker must acknowledge in writing annually the
receipt of the statement of investment restrictions and must
agree to handle the covered pension plan's investments and
assets in accord with the provided investment restrictions. A
covered pension plan may not enter into or continue a business
arrangement with a broker until the broker has provided this
written acknowledgment to the chief administrative officer of
the covered pension plan.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective January 1, 1996.
ARTICLE 7
MEDICAL CENTER EMPLOYEES
Section 1. [EMPLOYEES.]
This section applies if the Itasca county medical center is
sold, leased, or transferred to a private entity.
Notwithstanding any provision of Minnesota Statutes, sections
356.24 and 356.25 to the contrary, to facilitate the orderly
transition of employees affected by the sale, lease, or
transfer, the county may, in its discretion, make, from assets
to be transferred to the private entity, payments to a qualified
pension plan established for the transferred employees by the
private entity, to provide benefits substantially similar to
those the employees would have been entitled to under the
provisions of the public employees retirement association,
Minnesota Statutes 1994, sections 353.01 to 353.46.
ARTICLE 8
LEGISLATORS' SURVIVOR BENEFITS
Section 1. Minnesota Statutes 1994, section 3A.02,
subdivision 5, is amended to read:
Subd. 5. [OPTIONAL ANNUITIES.] (a) The board of directors
shall establish an optional retirement annuity in the form of a
joint and survivor annuity and an optional retirement annuity in
the form of a period certain and life thereafter. Except as
provided in paragraph (b), these optional annuity forms must be
actuarially equivalent to the normal annuity computed under this
section, plus the actuarial value of any surviving spouse
benefit otherwise potentially payable at the time of retirement
under section 3A.04, subdivision 1. An individual selecting the
an optional annuity under this subdivision waives any rights to
surviving spouse benefits under section 3A.04, subdivision 1.
(b) If a retired legislator selects the joint and survivor
annuity option, the retired legislator must receive a normal
single-life annuity if the designated optional annuity
beneficiary dies before the retired legislator and no reduction
may be made in the annuity to provide for restoration of the
normal single-life annuity in the event of the death of the
designated optional annuity beneficiary.
(c) The surviving spouse of a legislator who has attained
at least age 60 and who dies while a member of the legislature
may elect an optional joint and survivor annuity under paragraph
(a), in lieu of surviving spouse benefits under section 3A.04,
subdivision 1.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
ARTICLE 9
VOLUNTEER FIREFIGHTER REPORTING
Section 1. Minnesota Statutes 1994, section 356.219,
subdivision 2, is amended to read:
Subd. 2. [CONTENT AND TIMING OF REPORTS.] (a) The
following information shall be included in the report required
by subdivision 1:
(1) the market value of all investments at the close of the
reporting period;
(2) regular payroll-based contributions to the fund;
(3) other contributions and revenue paid into the fund,
including, but not limited to, state or local non-payroll-based
contributions, repaid refunds, and buybacks;
(4) total benefits paid to members;
(5) fees paid for investment management services;
(6) salaries and other administrative expenses paid; and
(7) total return on investment.
The report must also include a written statement of the
investment policy in effect on June 30, 1988, and any investment
policy changes made subsequently and shall include the effective
date of each policy change. The information required under this
subdivision must be reported separately for each investment
account or investment portfolio included in the pension fund.
(b) For public pension plans other than volunteer
firefighters' relief associations governed by sections 69.77 or
69.771 to 69.775, the information specified in paragraph (a)
must be provided separately for each quarter for the fiscal
years of the pension fund ending during calendar years 1989
through 1991 and on a monthly basis thereafter. For volunteer
firefighters' relief associations governed by sections 69.77 or
69.771 to 69.775, the information specified in paragraph (a)
must be provided separately each quarter.
(c) Firefighters' relief associations that have assets with
a market value of less than $300,000 must begin collecting the
required information January 1, 1996, and must submit the
required information to the state auditor on or before October
1, 1995 1997, and subsequently within six months of the end of
each fiscal year. Other associations must submit the required
information through fiscal year 1993 to the state auditor on or
before October 1, 1994, and subsequently within six months of
the end of each fiscal year.
ARTICLE 10
LOCAL PENSION PLAN MODIFICATIONS
Section 1. [EVELETH POLICE AND FIREFIGHTERS; BENEFIT
INCREASE.]
Notwithstanding any general or special law to the contrary,
in addition to the current pensions and other retirement
benefits payable, the pensions and retirement benefits payable
to retired police officers and firefighters and their surviving
spouses by the Eveleth police and fire trust fund are increased
by $100 a month. Increases are retroactive to January 1, 1995.
If the city of Eveleth fails to contribute an amount required in
a given year sufficient to amortize the unfunded actuarial
accrued liability of the police and fire trust fund by December
31, 1998, the increases under this section in the following year
are not payable.
Sec. 2. [DULUTH TEACHERS RETIREMENT FUND ASSOCIATION;
SPECIAL SERVICE PURCHASE AUTHORIZATION FOR CERTAIN FORMER DULUTH
TECHNICAL COLLEGE TEACHERS.]
(a) A retired member of the Duluth teachers retirement fund
association who:
(1) was born on April 29, 1932;
(2) was initially employed by independent school district
No. 709 on September 8, 1970;
(3) terminated employment as a teacher at the Duluth
technical college on July 1, 1994;
(4) retired from the Duluth teachers retirement fund
association effective on July 15, 1994; and
(5) did not receive certification of eligibility for an
early separation incentive from the chancellor of the higher
education board in a timely fashion, but did eventually receive
the required certification on October 24, 1994;
may purchase two years of additional service credit from the
Duluth teachers retirement fund association as provided in Laws
1994, chapter 572, section 3, subdivision 3, paragraph (e),
clause (2), item (i), as though otherwise qualified, to have the
person's retirement annuity from the Duluth teachers retirement
fund association recomputed based on the additional service
credit, and to have any medical insurance premiums that the
person paid subsequent to retirement reimbursed by the Duluth
technical college on the basis of the provisions of Laws 1994,
chapter 572, section 3, subdivision 3, paragraph (e), clause (1).
(b) The purchase of additional service credit must be made
before July 1, 1995.
(c) The recomputed retirement annuity must be based on any
optional annuity form selected upon retirement and must be
subject to the early retirement reduction imposed upon
retirement. The recomputed annuity accrues as of the effective
date of retirement and any omitted retirement annuity amounts
from the date of retirement to the date of recomputation must be
paid in a lump sum as soon as practicable following the
recomputation and must include annual interest on the omitted
amounts at the rate of six percent, expressed as a monthly rate,
and compounded monthly.
(d) If the retired member seeks reimbursement for medical
insurance premiums, the retired member must furnish the
president of the Duluth technical college with reasonable
verification of medical insurance coverage and of prior medical
insurance premiums paid.
Sec. 3. [MINNEAPOLIS EMPLOYEES RETIREMENT FUND; TEMPORARY
OPTION.]
Notwithstanding any law to the contrary, a retired member
of the Minneapolis employees retirement fund who elected a joint
and survivor optional annuity form at the time of retirement and
who has a living designated optional annuity recipient may
select a substitute joint and survivor option under which the
retired member will receive a normal single-life annuity if the
previously designated recipient dies before the retired member.
This substitute optional annuity must be the actuarial
equivalent of the joint and survivor annuity option amount in
effect at the time this option substitution is selected, as
determined by an actuary selected by the legislative commission
on pensions and retirement. This option must be exercised
before July 1, 1996, according to procedures specified by the
board of the Minneapolis employees retirement fund.
Sec. 4. [WEST ST. PAUL POLICE CONSOLIDATION ACCOUNT;
CERTAIN SURVIVING SPOUSE BENEFITS.]
(a) Notwithstanding Minnesota Statutes, section 353A.08,
the surviving spouse of a person described in paragraph (b) is
entitled to receive survivor benefits provided under paragraph
(c).
(b) This section applies to the surviving spouse of a
person who was:
(1) employed as a police chief by the city of West St.
Paul;
(2) an active member of the West St. Paul police relief
association on February 8, 1993, when the governing body of West
St. Paul, in accordance with Minnesota Statutes, section
353A.04, subdivision 5, gave preliminary approval to the
consolidation of the association with the public employees
retirement association;
(3) whose intention, upon consolidation, to elect benefits
provided under the relevant provisions of the public employees
retirement association police and fire fund benefit plan was
recognized by the governing body of West St. Paul in a
resolution adopted March 16, 1994;
(4) who died in April 1993, before the governing body of
West St. Paul, on August 23, 1993, gave final approval to the
consolidation in accordance with Minnesota Statutes, section
353A.04, subdivision 8; and
(5) who was thus unable, before his death, to carry out his
intent to elect public employees retirement association benefits
under Minnesota Statutes, section 353A.08.
(c) As of the effective date of this section, benefits for
the surviving spouse identified in paragraph (b) computed under
provisions of the West St. Paul police relief association plan
terminate and survivor benefits computed under relevant
provisions of the public employees retirement association police
and fire plan commence. The relevant provisions of the public
employees retirement association police and fire plan are
survivor benefits computed under section 353.657, assuming the
deceased police officer was covered by that plan at the time of
death. The benefit will include adjustments, if any, under
section 353.271. Retroactive payment of benefits is not
authorized.
Sec. 5. [EDEN PRAIRIE VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION SERVICE PENSIONS.]
Subdivision 1. [SERVICE PENSION VESTING REQUIREMENT.] (a)
Notwithstanding any provision of Minnesota Statutes, section
424A.02, subdivision 2, to the contrary, if the bylaws of the
relief association so provide, the Eden Prairie volunteer
firefighters relief association may pay an unreduced service
pension to a member of the association who has terminated active
service as a firefighter in the Eden Prairie fire department,
who has at least ten years of service as an active firefighter
in good standing with the department and at least ten years of
membership in good standing in the association, and who meets
all other applicable eligibility requirements of the association
for entitlement to a service pension.
(b) Notwithstanding any provision of Minnesota Statutes,
section 424A.02, subdivision 2, to the contrary, if the bylaws
of the association so provide, the association may pay a reduced
service pension to a member of the association who has
terminated active service as a firefighter in the department,
who has at least five years of service but less than ten years
of service as an active firefighter in good standing with the
department and at least five years but less than ten years as a
member in good standing in the association, and who meets all
other applicable eligibility requirements of the association for
entitlement to a service pension. The amount of the reduced
service pension is the amount determined by multiplying the
total service pension amount as specified in the articles of
incorporation or bylaws of the association that is appropriate
for the number of completed years of service to the credit of
the retiring member by the applicable percentage, as follows:
Completed years of service Applicable percentage
5 40 percent
6 52 percent
7 64 percent
8 76 percent
9 88 percent
10 and thereafter 100 percent.
Subd. 2. [POSTRETIREMENT SERVICE PENSION ADJUSTMENTS FOR
DEFERRED RETIREES.] (a) A "deferred retiree" is a former Eden
Prairie volunteer firefighter who has completed at least five
years of service as a firefighter in good standing with the Eden
Prairie volunteer fire department and five years as a member in
good standing in the Eden Prairie volunteer firefighters relief
association and has separated from active service as a
firefighter before attaining the earliest age for immediate
receipt of service pension from the association as provided in
the articles of incorporation or the bylaws of the association.
(b) Notwithstanding any provision of Minnesota Statutes,
section 424A.02 to the contrary, if the articles of
incorporation or bylaws of the association so provide, and if
the Eden Prairie city council approves the deferred service
pension increase under Minnesota Statutes, sections 69.773,
subdivision 6, and 424A.02, subdivision 10, a deferred retiree
who has credit for at least 15 years of active service with the
department and who has not elected to receive a lump sum service
pension as an alternative to a monthly service pension, may
receive the same postretirement increase in the amount of that
deferred monthly service pension that is approved and is payable
to an association service pension recipient under Minnesota
Statutes, section 424A.02, subdivision 9a.
(c) A deferred retiree who has credit for less than 15
years of active service with the department is not eligible for
a postretirement increase.
Sec. 6. [RETURNING ANNUITANT.]
(a) Notwithstanding any provision of Minnesota Statutes,
section 353.37 to the contrary, an eligible person described in
paragraph (b) will be treated as specified in paragraph (c).
(b) An eligible person is a person who:
(1) was born on December 9, 1936;
(2) terminated from the Carlton county human services
department as a financial eligibility specialist and retired
from the public employees retirement association on April 1,
1992; and
(3) returned to Carlton county employment as a financial
worker.
(c) As of the effective date of this section, annuity
payments from the public employees retirement association
terminate for an eligible person described in paragraph (b). As
of that date the person is considered to have elected a deferred
annuity under Minnesota Statutes, section 353.34, subdivision 3,
with deferred annuity payments to commence upon the termination
of the person's present employment. During the person's present
employment, the person is entitled to participation in the
public employees unclassified plan, and the person and the
county shall make the contributions required under Minnesota
Statutes, section 353D.03, paragraph (a).
Sec. 7. [REPEALER.]
Minnesota Statutes 1994, section 423B.02, is repealed
effective March 1, 1995.
Sec. 8. [EFFECTIVE DATE.]
(a) Section 1 is effective on approval by the Eveleth city
council and compliance with Minnesota Statutes, section 645.021.
(b) Section 2 is effective on the day following approval by
the board of education of independent school district No. 709
and compliance with Minnesota Statutes, section 645.021.
(c) Section 3 is effective on approval by the Minneapolis
city council and compliance with Minnesota Statutes, section
645.021.
(d) Section 4 is effective on the day following approval by
the governing body of the city of West St. Paul and compliance
with Minnesota Statutes, section 645.021, subdivision 2.
(e) Section 5 is effective on the day following compliance
with Minnesota Statutes, section 69.773, subdivision 6, approval
by the Eden Prairie city council, and compliance with Minnesota
Statutes, section 645.021, subdivision 3.
(f) Section 6 is effective on the day following approval by
the Carlton county board and compliance with Minnesota Statutes,
section 645.021.
ARTICLE 11
CRYSTAL-NEW HOPE VOLUNTEER FIREFIGHTER
RELIEF ASSOCIATION CONSOLIDATION
Section 1. [CONSOLIDATED CRYSTAL-NEW HOPE VOLUNTEER
FIREFIGHTERS RELIEF ASSOCIATION; CREATION.]
Notwithstanding any provision of law to the contrary, if
the cities of Crystal and New Hope enter into a joint powers
agreement under Minnesota Statutes, section 471.59, to establish
and operate a joint powers fire department, the Crystal
volunteer firefighters relief association and the New Hope
volunteer firefighters relief association shall consolidate into
a single volunteer firefighters relief association. The
consolidated volunteer firefighters relief association must be
governed by sections 1 to 7 and the applicable provisions of
Minnesota Statutes, chapters 69, 356, 356A, and 424A.
Sec. 2. [CONSOLIDATED VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION.]
Subdivision 1. [ESTABLISHMENT.] The consolidated volunteer
firefighters relief association for the joint powers fire
department serving the cities of Crystal and New Hope must be
incorporated under Minnesota Statutes, chapter 317A. The
incorporators of the consolidated relief association must
include at least one board member of the Crystal volunteer
firefighters relief association and at least one board member of
the former New Hope volunteer firefighters relief association.
The consolidated relief association must be incorporated within
90 days of the establishment of the joint powers fire
department. The joint powers fire department is established on
the date specified in the joint powers agreement.
Subd. 2. [GOVERNANCE OF CONSOLIDATED VOLUNTEER
FIREFIGHTERS RELIEF ASSOCIATION.] (a) Notwithstanding Minnesota
Statutes, section 424A.04, subdivision 1, the consolidated
volunteer firefighters relief association is governed by a board
of trustees consisting of nine members, as provided in the
bylaws of the consolidated relief association, composed of:
(1) six firefighters in the joint fire department elected
by the membership of the consolidated relief association; and
(2) three appointed members, including the fire chief of
the joint fire department, one member appointed by the city
council of the city of New Hope, and one member appointed by the
city council of the city of Crystal.
(b) The board must have three officers, including a
president, a secretary, and a treasurer. The membership of the
consolidated volunteer firefighters relief association must
elect the three officers from the nine board members. A board
of trustees member may not hold more than one officer position
at the same time.
(c) The board of trustees must administer the affairs of
the relief association consistent with sections 1 to 7 and the
applicable provisions of Minnesota Statutes, chapters 69, 356A,
and 424A.
Subd. 3. [SPECIAL AND GENERAL FUNDS.] (a) The consolidated
volunteer firefighters relief association must establish and
maintain a special fund and may establish and maintain a general
fund.
(b) The special fund must be established and maintained as
provided in Minnesota Statutes, section 424A.05.
(c) The general fund must be established and maintained as
provided in Minnesota Statutes, section 424A.06.
Sec. 3. [CONSOLIDATION OF FORMER RELIEF ASSOCIATIONS.]
Subdivision 1. [EFFECTIVE DATE OF CONSOLIDATION.] On the
first business day occurring 30 days after the establishment of
the consolidated volunteer firefighters relief association under
section 2, which is the effective date of consolidation, the
administration, records, assets, and liabilities of the prior
Crystal volunteer firefighters relief association and of the
prior New Hope volunteer firefighters relief association
transfer to the consolidated volunteer firefighters relief
association and the Crystal volunteer firefighters relief
association and the New Hope volunteer firefighters relief
association cease to exist as legal entities.
Subd. 2. [TRANSFER OF ADMINISTRATION.] On the effective
date of consolidation, the administration of the prior relief
associations is transferred to the board of trustees of the
consolidated volunteer firefighters relief association.
Subd. 3. [TRANSFER OF RECORDS.] On the effective date of
consolidation, the secretary and the treasurer of the Crystal
volunteer firefighters relief association and the secretary and
the treasurer of the New Hope volunteer firefighters relief
association shall transfer all records and documents relating to
the prior relief associations to the secretary and the treasurer
of the consolidated volunteer firefighters relief association.
Subd. 4. [TRANSFER OF SPECIAL FUND ASSETS AND
LIABILITIES.] (a) On the effective date of consolidation, the
secretary and the treasurer of the Crystal volunteer
firefighters relief association and the secretary and the
treasurer of the New Hope volunteer firefighters relief
association shall cause to occur the transfer of the assets of
the special fund of the applicable relief association to the
special fund of the consolidated relief association. Unless the
applicable secretary and treasurer decide otherwise, the assets
may be transferred as investment securities rather than as
cash. The transfer must include any accounts receivable. The
applicable secretary shall settle any accounts payable from the
special fund of the relief association before the effective date
of consolidation.
(b) Upon the transfer of the assets of the special fund of
a prior relief association, the pension liabilities of that
special fund become the obligation of the special fund of the
consolidated volunteer firefighters relief association.
(c) Upon the transfer of the prior relief association
special fund assets, the board of trustees of the consolidated
volunteer firefighters relief association has legal title to and
management responsibility for the transferred assets as trustees
for persons having a beneficial interest in those assets arising
out of the benefit coverage provided by the prior relief
association.
(d) The consolidated volunteer firefighters relief
association is the successor in interest for all claims for and
against the special funds of the prior Crystal volunteer
firefighters relief association and the prior New Hope volunteer
firefighters relief association, or the cities of Crystal and
New Hope with respect to the special funds of the prior relief
associations. The status of successor in interest does not
apply to any claim against a prior relief association, the city
in which that relief association is located, or any person
connected with the prior relief association or the city, based
on any act or acts that were not done in good faith and that
constituted a breach of fiduciary responsibility under common
law or Minnesota Statutes, chapter 356A.
Subd. 5. [DISSOLUTION OF PRIOR GENERAL FUND
BALANCES.] Before the effective date of consolidation, the
secretary of the Crystal volunteer firefighters relief
association and the secretary of the New Hope volunteer
firefighters relief association shall settle any accounts
payable from the respective general fund or any other relief
association fund in addition to the relief association special
fund. Any investments held by a fund of the prior relief
associations in addition to the special fund must be liquidated
before the effective date of consolidation as the bylaws of the
relief association provide. Before consolidation, the
respective relief associations shall pay all applicable general
fund expenses from their respective general funds and any
balance remaining in the general fund or in a fund other than
the relief association special fund as of the effective date of
consolidation must be paid to the new general fund of the
consolidated volunteer relief association.
Subd. 6. [TERMINATION OF PRIOR RELIEF ASSOCIATIONS.]
Following the transfer of administration, records, special fund
assets, and special fund liabilities from the prior relief
associations to the consolidated volunteer firefighters relief
association, the Crystal volunteer firefighters relief
association and the New Hope volunteer firefighters relief
association cease to exist as legal entities. The city manager
of the city of Crystal and the city manager of the city of New
Hope must notify the following government officials of the
termination of the respective relief associations and of the
establishment of the consolidated volunteer firefighters relief
association:
(1) Minnesota secretary of state;
(2) Minnesota state auditor;
(3) Minnesota commissioner of revenue; and
(4) commissioner of the federal Internal Revenue Service.
Sec. 4. [EFFECT ON PREVIOUS BENEFIT PLAN COVERAGE.]
Subdivision 1. [BENEFIT COVERAGE FOR CURRENT RETIRED
MEMBERS.] (a) A person who is receiving a monthly service
pension, a monthly disability benefit, or a monthly survivorship
benefit from the Crystal volunteer firefighters relief
association or from the New Hope volunteer firefighters relief
association on the effective date of consolidation is entitled
to a continuation of that pension or benefit, including any
death benefit or monthly survivorship benefit provided for in
the benefit plan document of the applicable prior relief
association in effect on the day before the effective date of
the consolidation, from the consolidated volunteer firefighters
relief association. Unless paragraph (b) applies, the amount of
the pension or benefit payable after the effective date of
consolidation must be identical to the amount payable before the
effective date of consolidation. The pension or benefit payable
after the effective date of consolidation is subject to the same
terms, conditions, and qualifications as were in effect before
the effective date of consolidation.
(b) If the board of trustees of the consolidated volunteer
firefighters relief association establishes the option, a
pension or benefit recipient to whom paragraph (a) applies is
entitled to elect an alternative pension or benefit amount as
offered by the relief association board. To provide this
alternative pension or benefit, the relief association board may
arrange for a lump-sum payment or the purchase of an annuity
contract for the pension or benefit recipient in place of a
direct payment from the relief association to the person. The
annuity contract may be purchased only from an insurance company
that is licensed to do business in this state, regularly
undertakes life insurance and annuity business, and is rated by
a recognized national rating agency or organization as being
among the top 25 percent of all insurance companies undertaking
life insurance and annuity business. The alternative pension or
benefit payable monthly may be in an amount greater than the
pension or benefit payable before the effective date of
consolidation, but may not exceed the maximum service pension or
benefit payable under Minnesota Statutes, chapter 424A. In
electing the alternative pension or benefit payable under an
annuity contract from a qualified insurance company, the
affected person must waive in writing the person's eligibility
and entitlement to any direct future pension or benefit payments
from the consolidated volunteer firefighters relief association.
Subd. 2. [BENEFIT COVERAGE FOR CURRENT DEFERRED
MEMBERS.] (a) A person who is not an active member of the
Crystal volunteer firefighters relief association or an active
member of the New Hope volunteer firefighters relief association
but who has sufficient service credit with one of the relief
associations to be entitled to a future service pension from the
appropriate relief association remains entitled to the receipt
of that service pension, upon application, when the person
attains at least the minimum age for receipt of a service
pension unless the person elects an alternative service pension
under paragraph (b). A deferred member may transfer the
member's current service pension to a member's individual
account established under subdivision 3, paragraph (c), subject
to the same conditions of individual accounts for active
members, and remain entitled to receipt of a service pension
when the member reaches the normal retirement age.
(b) If the board of trustees of the consolidated volunteer
firefighters relief association establishes the option for
benefit recipients under subdivision 1, the deferred service
pensioner described in paragraph (a) may elect the same
alternative service pension as established under subdivision 1,
paragraph (b), except that the deferred service pensioner may
not receive the alternative service pension at an age younger
than the normal retirement age in effect for the prior
applicable relief association.
Subd. 3. [BENEFIT COVERAGE FOR NEW FIREFIGHTERS AND
CURRENT VESTED AND NONVESTED ACTIVE MEMBERS.] (a) The benefit
coverage for persons who become firefighters for the joint fire
department for the first time after the effective date of
consolidation and for persons who are active members of the
consolidated volunteer firefighters relief association as of the
effective date of consolidation is a defined contribution plan
governed under this subdivision and Minnesota Statutes, section
424A.02, subdivision 4.
(b) For an active member of the consolidated volunteer
firefighters relief association as of the effective date of
consolidation, that member's prior service as a firefighter in
the prior Crystal fire department or the prior New Hope fire
department must be converted into a dollar accumulation by
multiplying each full year of prior service as a firefighter in
the prior fire department of Crystal or the prior fire
department of New Hope by not less than $3,000. A member's
prior service of a partial year will be converted into a dollar
accumulation by prorating the full year of prior service yearly
amount by the number of months served in the partial year. The
total calculated dollar accumulation must be credited to the
member's individual account established under paragraph (c).
(c) For each active member of the consolidated volunteer
firefighters relief association covered by the defined
contribution plan, an individual account must be established, as
provided in Minnesota Statutes, section 424A.02, subdivision 4,
with an initial balance based on the conversion accumulation
determined under paragraph (b), if applicable. Notwithstanding
Minnesota Statutes, section 424A.02, subdivision 4, the amount
of fire state aid and the amount of regular municipal
contributions must be credited to individual active firefighter
accounts as specified in section 6, subdivision 4.
Sec. 5. [ACTUARIAL VALUATIONS REQUIRED.]
(a) Unless all benefit recipients and deferred service
pensioners elect alternative pensions or benefits under section
4, subdivisions 1, paragraph (b); and 2, paragraph (b), a
special actuarial valuation of the consolidated volunteer
firefighters relief association must be prepared as soon as
practicable following the benefit selection under section 4,
subdivision 1. The actuarial valuation must be prepared under
the applicable provisions of Minnesota Statutes, sections
356.215 and 356.216.
(b) Subsequent actuarial valuations must be prepared as
required under Minnesota Statutes, section 69.773, subdivisions
2 and 3, if any person is entitled or is reasonably anticipated
to be entitled to a direct future monthly benefit from the
consolidated relief association.
Sec. 6. [ANNUAL RELIEF ASSOCIATION FUNDING.]
Subdivision 1. [SOURCES.] In addition to investment income
earned by the special fund, the sources of the annual funding of
the consolidated volunteer firefighters relief association are
the fire state aid received by the city of Crystal, the fire
state aid received by the city of New Hope, the regular
municipal contribution from the city of Crystal, and the regular
municipal contribution from the city of New Hope.
Subd. 2. [FIRE STATE AID.] The fire state aid received by
the city of Crystal and the fire state aid received by the city
of New Hope must be deposited in the special fund of the
consolidated volunteer firefighters relief association, for
allocation as provided in subdivision 4.
Subd. 3. [REGULAR MUNICIPAL CONTRIBUTION.] (a) Annually,
as part of the municipal budget setting process, the city
council of the city of Crystal and the city council of the city
of New Hope must jointly establish the amount of the regular
municipal contribution by each city to the consolidated
volunteer firefighters relief association.
(b) The regular municipal contribution in total must be at
least equal to (1) the amount of the fire state aid received by
the city of Crystal and the fire state aid received by the city
of New Hope, plus (2) whatever additional amount is needed to
equal the sum determined by multiplying $1,811 by the total of
the number of active firefighters who are members of the
consolidated volunteer firefighters relief association.
(c) The established amount for each city must be included
in the budget of the respective city, and, if not payable from a
municipal revenue source other than the city's property tax levy
or fire state aid, must be included in the property tax levy of
the respective city. The regular municipal contribution must be
allocated in the manner specified in subdivision 4.
(d) If a direct service pension or entitlement is payable
under section 4, subdivision 1, paragraph (a); or subdivision 2,
paragraph (a), to a retiree or deferred retiree, the applicable
city remains responsible for any amount of service pension that
is payable beyond the relief association assets allocated for
the retiree or deferred retiree. Following any actuarial
valuation of the consolidated relief association, if there is a
net mortality loss attributable to the applicable city, the city
shall make a contribution in addition to the regular municipal
contribution under paragraphs (a) to (c) equal to the amount of
that net mortality loss. The municipal contribution under this
paragraph is payable on or before the last business day of the
month next following the completion of the actuarial valuation.
Subd. 4. [ALLOCATION OF FUNDING AMOUNTS.] (a) The annual
fire state aid and the regular municipal contribution, after
deduction for payment of administrative expenses as specified in
subdivision 5, must be allocated to individual active
firefighter accounts based on the level of firefighting services
rendered by the individual active firefighter as stated in the
bylaws of the consolidated volunteer firefighters relief
association.
(b) Investment income earned by the special fund of the
consolidated relief association must be allocated to each
individual account based on the proportion of the total assets
of the special fund represented by the account.
Subd. 5. [PAYMENT OF RELIEF ASSOCIATION ADMINISTRATIVE
EXPENSES.] (a) The payment of authorized administrative expenses
of the consolidated volunteer firefighters relief association
shall be from the special fund of the relief association
according to Minnesota Statutes, section 69.80, and as provided
for in the bylaws of the consolidated relief association and
approved by the board of trustees of the consolidated relief
association. The allocation of these administrative expenses to
the individual member accounts must occur as provided in the
bylaws of the consolidated relief association.
(b) The payment of any other expenses of the consolidated
relief association shall be from the general fund of the
consolidated relief association according to Minnesota Statutes,
section 69.80, and as provided for in the bylaws of the
consolidated relief association and approved by the board of
trustees of the consolidated relief association.
Sec. 7. [VALIDATION OF CURRENT BENEFIT PLANS AND PRIOR
ACTIONS.]
Notwithstanding any provisions of Laws 1969, chapter 1088,
as amended by Laws 1978, chapters 562, section 32, and 753; Laws
1979, chapter 201, section 44; or Laws 1981, chapter 224,
section 250; or Laws 1971, chapter 114, as amended by Laws 1979,
chapters 97, and 201, sections 27 and 44; and Laws 1981, chapter
224, section 254, the benefit plans of the Crystal volunteer
firefighters relief association and of the New Hope volunteer
firefighters relief association as reflected in each relief
association's articles of incorporation and bylaws as of
December 15, 1993, are hereby ratified and validated. Any acts
previously taken by the Crystal volunteer firefighters relief
association and by the New Hope volunteer firefighters relief
association with those ratified articles of incorporation and
bylaws are also ratified and validated.
Sec. 8. [REPEALER OF PRIOR SPECIAL LAWS.]
Laws 1969, chapter 1088; Laws 1971, chapter 114; Laws 1978,
chapters 562, section 32, and 753; Laws 1979, chapters 97, and
201, section 27; and Laws 1981, chapter 224, sections 250 and
254, are repealed.
Sec. 9. [EFFECTIVE DATE.]
Sections 1 to 7 are effective on the day following final
approval by the city council of the city of Crystal and by the
city council of the city of New Hope and compliance with
Minnesota Statutes, section 645.021, subdivision 3. Section 8
is effective on the effective date of consolidation of the
Crystal volunteer firefighters relief association and the New
Hope volunteer firefighters relief association.
Presented to the governor May 30, 1995
Signed by the governor June 1, 1995, 1:57 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes