Office of the Revisor of Statutes
Minnesota Session Laws - 2004, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 267-S.F.No. 676
An act relating to retirement; statewide and major
local public pension plans; making various changes of
an administrative nature; setting various limitations
and requirements for public employees police and fire
retirement plan disability benefit applications;
modifying permanent disability benefits provisions;
resolving one person and small group pension problems;
reducing the early retirement age for the judges
retirement plan; authorizing a shorter vesting
schedule for the Marine on St. Croix Volunteer
Firefighters Relief Association; revising the salary
maximum for the executive secretary of the Minneapolis
Firefighters Relief Association; permitting single
Teachers Retirement Association members to make
survivor benefit designations; authorizing retirement
coverage discontinuation by an elected county
official; continuing retirement coverage by the
general employees retirement plan of the Public
Employees Retirement Association for Anoka County
Achieve Program and the Government Training Services;
including in privatized public employee retirement
coverage employees of the Fair Oaks Lodge, Wadena, and
RenVilla Nursing Home; extending the expiration date
on certain prior military service credit purchases;
temporarily exempting Metropolitan Airports Commission
police from reemployed annuitant earnings limitation;
ratifying certain Bellingham volunteer firefighter
relief association annuity purchases; including the
Lake Johanna fire department employees in Public
Employees Retirement Association coverage; expanding
the health care savings plan; modifying the department
of transportation pilots retirement plan; authorizing
shorter vesting periods for defined contribution
volunteer firefighter relief associations; modifying
Minneapolis Police Relief Association provisions;
amending Minnesota Statutes 2002, sections 3A.03,
subdivision 2; 69.77, subdivision 4; 352.01,
subdivision 13; 352.113, subdivisions 4, 6, 8, by
adding a subdivision; 352.12, subdivisions 1, 6;
352.22, subdivisions 2, 3; 352.27; 352.275,
subdivision 1; 352.86, subdivision 1; 352.91,
subdivision 3g; 352.95, subdivisions 1, 2, 4; 352.98;
352B.01, subdivisions 3a, 11, by adding a subdivision;
352B.10, subdivisions 1, 2, 3, 4, 5; 352B.105;
352B.11, subdivisions 1, 2, by adding subdivisions;
352D.065, subdivision 2; 352D.075, subdivisions 2, 3,
by adding a subdivision; 353.01, subdivisions 2b, 10,
12a, 12b, 16, 16a; 353.33, subdivisions 4, 6, 6b, 7,
by adding a subdivision; 353.37, subdivision 3, by
adding a subdivision; 353.656, subdivision 5, by
adding subdivisions; 354.05, subdivisions 2, 22, 35;
354.07, subdivision 9; 354.091; 354.096, subdivision
1; 354.42, subdivision 7; 354.44, subdivisions 4, 5,
6; 354.46, subdivisions 2, 2b, 5, by adding a
subdivision; 354.48, subdivisions 2, 4, 6, 6a, 10;
354.51, subdivision 5; 354.52, subdivisions 4a, 6, by
adding a subdivision; 354.53; 354.533, subdivision 1;
354.66, subdivision 2; 354A.011, subdivision 24;
354A.093; 354A.094, subdivision 3; 354A.097,
subdivision 1; 354A.36, subdivisions 4, 6; 354B.20,
subdivisions 4, 6; 354B.23, subdivision 1; 354B.32;
354C.11, subdivision 2; 356.216; 356.302, subdivision
3; 356.441; 356.611, subdivisions 1, 2, by adding
subdivisions; 422A.18, subdivisions 1, 4; 423B.01,
subdivision 12; 423B.09, subdivisions 1, 4, by adding
a subdivision; 423B.10, subdivision 1; 423B.15,
subdivision 3; 423C.05, subdivisions 4, 5, 6, by
adding a subdivision; 424A.02, subdivisions 2, 7;
490.121, subdivision 10, by adding a subdivision;
490.124, subdivision 12; Minnesota Statutes 2003
Supplement, sections 353.01, subdivision 6; 353F.02,
subdivision 4; 423C.03, subdivision 3; Laws 1999,
chapter 222, article 16, section 16, as amended; Laws
2000, chapter 461, article 4, section 4, as amended;
proposing coding for new law in Minnesota Statutes,
chapters 352F; 353F; 356; 423B; repealing Minnesota
Statutes 2002, sections 352D.02, subdivision 5;
353.33, subdivision 5b; 354A.107; 490.11.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
MEMBERSHIP ISSUES
Section 1. Minnesota Statutes 2002, section 352.91,
subdivision 3g, is amended to read:
Subd. 3g. [ADDITIONAL CORRECTIONS DEPARTMENT PERSONNEL.]
(a) "Covered correctional service" means service by a state
employee in one of the employment positions at the designated
Minnesota correctional facility specified in paragraph (b),
provided that if at least 75 percent of the employee's working
time is spent in direct contact with inmates and the fact of
this direct contact is certified to the executive director by
the commissioner of corrections.
(b) The qualifying employment positions and the designated
correctional facilities are:
(1) corrections discipline unit supervisor, at the
Minnesota Correctional Facility-Faribault, the Minnesota
Correctional Facility-Lino Lakes, the Minnesota Correctional
Facility-Oak Park Heights, the Minnesota Correctional
Facility-Rush City, and the Minnesota Correctional Facility-St.
Cloud;
(2) dental assistant registered, at the Minnesota
Correctional Facility-Faribault, the Minnesota Correctional
Facility-Lino Lakes, the Minnesota Correctional Facility-Moose
Lake, the Minnesota Correctional Facility-Oak Park Heights, and
the Minnesota Correctional Facility-Red Wing;
(3) dental hygienist, at the Minnesota Correctional
Facility-Shakopee and the Minnesota Correctional Facility-Rush
City;
(4) psychologist 2, at the Minnesota Correctional
Facility-Faribault, the Minnesota Correctional Facility-Lino
Lakes, the Minnesota Correctional Facility-Moose Lake, the
Minnesota Correctional Facility-Oak Park Heights, the Minnesota
Correctional Facility-Red Wing, the Minnesota Correctional
Facility-Rush City, the Minnesota Correctional Facility-St.
Cloud, the Minnesota Correctional Facility-Shakopee, and the
Minnesota Correctional Facility-Stillwater; and or
(5) sentencing to service crew leader involved with the
inmate community work crew program, at the Minnesota
Correctional Facility-Faribault and the Minnesota Correctional
Facility-Lino Lakes.
Sec. 2. Minnesota Statutes 2002, section 353.01,
subdivision 2b, is amended to read:
Subd. 2b. [EXCLUDED EMPLOYEES.] The following public
employees are not eligible to participate as members of the
association with retirement coverage by the public employees
retirement plan, the local government correctional employees
retirement plan under chapter 353E, or the public employees
police and fire retirement plan:
(1) public officers, other than county sheriffs, who are
elected to a governing body, or persons who are appointed to
fill a vacancy in an elective office of a governing body, whose
term of office first commences on or after July 1, 2002, for the
service to be rendered in that elective position. Elected
governing body officials who were active members of the
association's coordinated or basic retirement plans as of June
30, 2002, continue participation throughout incumbency in office
until termination of public service occurs as defined in
subdivision 11a;
(2) election officers or election judges;
(3) patient and inmate personnel who perform services for a
governmental subdivision;
(4) except as otherwise specified in subdivision 12a,
employees who are hired for a temporary position as defined
under subdivision 12a, and employees who resign from a
nontemporary position and accept a temporary position within 30
days in the same governmental subdivision.; An employer must not
apply the definition of temporary position so as to exclude
employees who are hired to fill positions that are permanent or
that are for an unspecified period but who are serving a
probationary period at the start of the employment. If the
period of employment extends beyond six consecutive months and
the employee earns more than $425 from one governmental
subdivision in any calendar month, the department head shall
report the employee for membership and require employee
deductions be made on behalf of the employee under section
353.27, subdivision 4.
The membership eligibility of an employee who resigns or is
dismissed from a temporary position and within 30 days accepts
another temporary position in the same governmental subdivision
is determined on the total length of employment rather than on
each separate position. Membership eligibility of an employee
who holds concurrent temporary and nontemporary positions in one
governmental subdivision is determined by the length of
employment and salary of each separate position;
(5) employees who are employed by reason of work emergency
caused by fire, flood, storm, or similar disaster;
(6) employees who by virtue of their employment in one
governmental subdivision are required by law to be a member of
and to contribute to any of the plans or funds administered by
the Minnesota State Retirement System, the Teachers Retirement
Association, the Duluth Teachers Retirement Fund Association,
the Minneapolis Teachers Retirement Fund Association, the St.
Paul Teachers Retirement Fund Association, the Minneapolis
Employees Retirement Fund, or any police or firefighters relief
association governed by section 69.77 that has not consolidated
with the Public Employees Retirement Association, or any local
police or firefighters consolidation account but who have not
elected the type of benefit coverage provided by the public
employees police and fire fund under sections 353A.01 to
353A.10, or any persons covered by section 353.665, subdivision
4, 5, or 6, who have not elected public employees police and
fire plan benefit coverage. This clause must not be construed
to prevent a person from being a member of and contributing to
the Public Employees Retirement Association and also belonging
to and contributing to another public pension plan or fund for
other service occurring during the same period of time. A
person who meets the definition of "public employee" in
subdivision 2 by virtue of other service occurring during the
same period of time becomes a member of the association unless
contributions are made to another public retirement fund on the
salary based on the other service or to the Teachers Retirement
Association by a teacher as defined in section 354.05,
subdivision 2;
(7) persons who are members of a religious order and are
excluded from coverage under the federal Old Age, Survivors,
Disability, and Health Insurance Program for the performance of
service as specified in United States Code, title 42, section
410(a)(8)(A), as amended through January 1, 1987, if no
irrevocable election of coverage has been made under section
3121(r) of the Internal Revenue Code of 1954, as amended;
(8) employees of a governmental subdivision who have not
reached the age of 23 and are enrolled on a full-time basis to
attend or are attending classes on a full-time basis at an
accredited school, college, or university in an undergraduate,
graduate, or professional-technical program, or a public or
charter high school;
(9) resident physicians, medical interns, and pharmacist
residents and pharmacist interns who are serving in a degree or
residency program in public hospitals;
(10) students who are serving in an internship or residency
program sponsored by an accredited educational institution;
(11) persons who hold a part-time adult supplementary
technical college license who render part-time teaching service
in a technical college;
(12) except for employees of Hennepin County, foreign
citizens working for a governmental subdivision with a work
permit of less than three years, or an H-1b visa valid for less
than three years of employment. Upon notice to the association
that the work permit or visa extends beyond the three-year
period, the foreign citizens are to must be reported for
membership from the date of the extension;
(13) public hospital employees who elected not to
participate as members of the association before 1972 and who
did not elect to participate from July 1, 1988, to October 1,
1988;
(14) except as provided in section 353.86, volunteer
ambulance service personnel, as defined in subdivision 35, but
persons who serve as volunteer ambulance service personnel may
still qualify as public employees under subdivision 2 and may be
members of the Public Employees Retirement Association and
participants in the public employees retirement fund or the
public employees police and fire fund, whichever applies, on the
basis of compensation received from public employment service
other than service as volunteer ambulance service personnel;
(15) except as provided in section 353.87, volunteer
firefighters, as defined in subdivision 36, engaging in
activities undertaken as part of volunteer firefighter duties;
provided that a person who is a volunteer firefighter may still
qualify as a public employee under subdivision 2 and may be a
member of the Public Employees Retirement Association and a
participant in the public employees retirement fund or the
public employees police and fire fund, whichever applies, on the
basis of compensation received from public employment activities
other than those as a volunteer firefighter;
(16) pipefitters and associated trades personnel employed
by Independent School District No. 625, St. Paul, with coverage
under a collective bargaining agreement by the pipefitters local
455 pension plan who were either first employed after May 1,
1997, or, if first employed before May 2, 1997, elected to be
excluded under Laws 1997, chapter 241, article 2, section 12;
(17) electrical workers, plumbers, carpenters, and
associated trades personnel employed by Independent School
District No. 625, St. Paul, or the city of St. Paul, who have
retirement coverage under a collective bargaining agreement by
the Electrical Workers Local 110 pension plan, the United
Association Plumbers Local 34 pension plan, or the Carpenters
Local 87 pension plan who were either first employed after May
1, 2000, or, if first employed before May 2, 2000, elected to be
excluded under Laws 2000, chapter 461, article 7, section 5;
(18) bricklayers, allied craftworkers, cement masons,
glaziers, glassworkers, painters, allied tradesworkers, and
plasterers employed by the city of St. Paul or Independent
School District No. 625, St. Paul, with coverage under a
collective bargaining agreement by the Bricklayers and Allied
Craftworkers Local 1 pension plan, the Cement Masons Local 633
pension plan, the Glaziers and Glassworkers Local L-1324 pension
plan, the Painters and Allied Trades Local 61 pension plan, or
the Twin Cities Plasterers Local 265 pension plan who were
either first employed after May 1, 2001, or if first employed
before May 2, 2001, elected to be excluded under Laws 2001,
First Special Session chapter 10, article 10, section 6;
(19) plumbers employed by the metropolitan airports
commission, with coverage under a collective bargaining
agreement by the Plumbers Local 34 pension plan, who either were
first employed after May 1, 2001, or if first employed before
May 2, 2001, elected to be excluded under Laws 2001, First
Special Session chapter 10, article 10, section 6;
(20) employees who are hired after June 30, 2002, to fill
seasonal positions under subdivision 12b which are limited in
duration by the employer to 185 consecutive calendar days or
less in each year of employment with the governmental
subdivision;
(21) persons who are provided supported employment or
work-study positions by a governmental subdivision and who
participate in an employment or industries program maintained
for the benefit of these persons where the governmental
subdivision limits the position's duration to three years or
less, including persons participating in a federal or state
subsidized on-the-job training, work experience, senior citizen,
youth, or unemployment relief program where the training or work
experience is not provided as a part of, or for, future
permanent public employment;
(22) independent contractors and the employees of
independent contractors; and
(23) reemployed annuitants of the association during the
course of that reemployment.
Sec. 3. Minnesota Statutes 2002, section 353.01,
subdivision 12a, is amended to read:
Subd. 12a. [TEMPORARY POSITION.] (1) (a) "Temporary
position" means an employment position predetermined by the
employer at the time of hiring to be a period of six months or
less. Temporary position also means an employment position
occupied by a person hired by the employer as a temporary
replacement who is employed for a predetermined period of six
months or less.
(2) (b) "Temporary position" does not mean an employment
position for a specified or unspecified term in which a person
serves a probationary period as a requirement for subsequent
employment on a permanent or unlimited basis.
(c) If employment in a temporary position extends beyond
six consecutive months, the head of the department shall report
the employee for membership if salary in any month exceeds the
salary threshold specified in subdivision 2a. The membership
eligibility of an employee who resigns or is dismissed from a
temporary position and accepts another temporary position in the
same governmental subdivision within 30 days must be determined
on the total length of employment rather than on each separate
position.
Sec. 4. Minnesota Statutes 2002, section 353.01,
subdivision 12b, is amended to read:
Subd. 12b. [SEASONAL POSITION.] "Seasonal position" means
a position where the nature of the work or its duration are
related to a specific season or seasons of the year, regardless
of whether or not the employing agency anticipates that the same
employee will return to the position each season in which it
becomes available. The entire period of employment in a
business year must be used to determine whether or not a
position may be excluded as seasonal when there is less than a
30-day break between one seasonal position and a subsequent
seasonal position for employment with the same governmental
employer. Seasonal positions include, but are not limited to,
coaching athletic activities or employment to plow snow or to
maintain roads or parks, or to operate skating rinks, ski
lodges, golf courses, or swimming pools.
Sec. 5. Minnesota Statutes 2002, section 354.05,
subdivision 2, is amended to read:
Subd. 2. [TEACHER.] (a) "Teacher" means:
(1) a person who renders service as a teacher, supervisor,
principal, superintendent, librarian, nurse, counselor, social
worker, therapist, or psychologist in a public school of the
state located outside of the corporate limits of a city of the
first class, or in any charter school, irrespective of the
location of the school, or in any charitable, penal, or
correctional institutions of a governmental subdivision, or who
is engaged in educational administration in connection with the
state public school system, but excluding the University of
Minnesota, whether the position be a public office or an
employment, and not including the members or officers of any
general governing or managing board or body;
(2) an employee of the Teachers Retirement Association;
(3) a person who renders teaching service on a part-time
basis and who also renders other services for a single employing
unit. A person whose teaching service comprises at least 50
percent of the combined employment salary is a member of the
association for all services with the single employing unit. If
the person's teaching service comprises less than 50 percent of
the combined employment salary, the executive director must
determine whether all or none of the combined service is covered
by the association; or
(4) a person who is not covered by the plans established
under chapter 352D, 354A, or 354B and who is employed by the
Board of Trustees of the Minnesota State Colleges and
Universities system in an unclassified position as:
(i) a president, vice-president, or dean;
(ii) a manager or a professional in an academic or an
academic support program other than specified in item (i);
(iii) an administrative or a service support faculty
position; or
(iv) a teacher or a research assistant.
(b) "Teacher" does not mean:
(1) a person who works for a school or institution as an
independent contractor as defined by the Internal Revenue
Service;
(2) a person employed in subsidized on-the-job training,
work experience or public service employment as an enrollee
under the federal Comprehensive Employment and Training Act from
and after March 30, 1978, unless the person has, as of the later
of March 30, 1978, or the date of employment, sufficient service
credit in the retirement association to meet the minimum vesting
requirements for a deferred retirement annuity, or the employer
agrees in writing on forms prescribed by the executive director
to make the required employer contributions, including any
employer additional contributions, on account of that person
from revenue sources other than funds provided under the federal
Comprehensive Training and Employment Act, or the person agrees
in writing on forms prescribed by the executive director to make
the required employer contribution in addition to the required
employee contribution;
(3) a person holding a part-time adult supplementary
technical college license who renders part-time teaching service
or who is a customized trainer as defined by the Minnesota State
Colleges and Universities system in a technical college if (i)
the service is incidental to the regular nonteaching occupation
of the person; and (ii) the applicable technical college
employer stipulates annually in advance that the part-time
teaching service or customized training service will not exceed
300 hours in a fiscal year and retains the stipulation in its
records; and (iii) the part-time teaching service or customized
training service actually does not exceed 300 hours in a fiscal
year; or
(4) (3) a person exempt from licensure under section
122A.30.
Sec. 6. Minnesota Statutes 2002, section 354B.20,
subdivision 4, is amended to read:
Subd. 4. [COVERED EMPLOYMENT.] (a) "Covered employment"
means employment by a person eligible for coverage by this
retirement program under section 354B.21 in a faculty position
or in an eligible unclassified administrative position.
(b) "Covered employment" does not mean employment specified
in paragraph (a) by a faculty member employed in a state
university or a community college the Minnesota State Colleges
and Universities system if the person's initial appointment is
specified as constituting less than 25 percent of a full
academic year, exclusive of summer session, for the applicable
institution.
Sec. 7. Minnesota Statutes 2002, section 354B.20,
subdivision 6, is amended to read:
Subd. 6. [ELIGIBLE UNCLASSIFIED ADMINISTRATIVE POSITION.]
"Eligible unclassified administrative position" means the
following:
(1) the chancellor of the board;
(2) a president of a state college or university; or
(3) an excluded administrator employed in a state
university or college, by the board, or by the Higher Education
Services Office; or
(4) other managers and professionals in academic and
academic support programs in the unclassified service employed
in a state university or college, by the board, or by the Higher
Education Services Office.
Sec. 8. Minnesota Statutes 2002, section 354C.11,
subdivision 2, is amended to read:
Subd. 2. [ELIGIBILITY.] (a) An individual must participate
in the supplemental retirement plan if the individual is
employed by the Board of Trustees in the unclassified service of
the state and has completed at least two years with a full-time
contract of applicable unclassified employment with the board or
an applicable predecessor board in any of the positions
specified in paragraph (b).
(b) Eligible positions or employment classifications are:
(1) an unclassified administrative position as defined in
section 354B.20, subdivision 6;
(2) an employment classification included in one of the
following collective bargaining units under section 179A.10,
subdivision 2:
(i) the state university instructional unit;
(ii) the state college instructional unit; and
(iii) the state university administrative unit; or
(3) an unclassified employee of the board:
(i) included in the general professional unit or the
supervisory employees unit under section 179A.10, subdivision 2;
or
(ii) an employee who is excluded from one of those units
due to the employee's confidential status under section 179A.10,
subdivision 1, clause (8).
Sec. 9. [REPEALER.]
Minnesota Statutes 2002, section 352D.02, subdivision 5, is
repealed.
Sec. 10. [EFFECTIVE DATE.]
(a) Sections 2 to 6 and 9 are effective on July 1, 2004.
(b) Section 7 is effective on July 1, 2004, and applies
retroactively to the date of hire of the applicable person in
the affected position.
(c) Section 8 is effective retroactively to July 1, 2001.
ARTICLE 2
COVERED SALARY DEFINITION
Section 1. Minnesota Statutes 2002, section 352.01,
subdivision 13, is amended to read:
Subd. 13. [SALARY.] (a) "Salary" means wages, or other
periodic compensation, paid to an employee before deductions for
deferred compensation, supplemental retirement plans, or other
voluntary salary reduction programs.
(b) "Salary" does not include:
(1) lump sum sick leave payments,;
(2) severance payments,;
(3) lump sum annual leave payments and overtime payments
made at the time of separation from state service,;
(4) 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;
(5) payments made as an employer-paid fringe benefit,;
(6) workers' compensation payments,;
(7) employer contributions to a deferred compensation or
tax sheltered annuity program,; and
(8) amounts contributed under a benevolent vacation and
sick leave donation program are not salary.
(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.
Sec. 2. Minnesota Statutes 2002, section 352B.01,
subdivision 11, is amended to read:
Subd. 11. [AVERAGE MONTHLY SALARY.] (a) "Average monthly
salary" means the average of the highest monthly salaries for
five years of service as a member upon which contributions were
deducted from pay under section 352B.02, or upon which
appropriate contributions or payments were made to the fund to
receive allowable service and salary credit as specified under
the applicable law. Average monthly salary must be based upon
all allowable service if this service is less than five
years. It
(b) "Average monthly salary" means the salary of the member
as defined in section 352.01, subdivision 13. "Average monthly
salary" does not include any lump-sum annual leave payments and
overtime payments made at the time of separation from state
service, any amounts of severance pay, or any reduced salary
paid during the period the person is entitled to workers'
compensation benefit payments for temporary disability.
(c) A member on leave of absence receiving temporary
workers' compensation payments and a reduced salary or no salary
from the employer who is entitled to allowable service credit
for the period of absence may make payment to the fund for the
difference between salary received, if any, and the salary the
member would normally receive if not on leave of absence during
the period. The member shall pay an amount equal to the member
and employer contribution rate under section 352B.02,
subdivisions 1b and 1c, on the differential salary amount for
the period of the leave of absence. The employing department,
at its option, may pay the employer amount on behalf of the
member. Payment made under this subdivision must include
interest at the rate of 8.5 percent per year, and must be
completed within one year of the return from the leave of
absence.
Sec. 3. Minnesota Statutes 2002, section 353.01,
subdivision 10, is amended to read:
Subd. 10. [SALARY.] (a) "Salary" means:
(1) the periodic compensation of a public employee, before
deductions for deferred compensation, supplemental retirement
plans, or other voluntary salary reduction programs, and also
means "wages" and includes net income from fees; and
(2) for a public employee who has prior service covered by
a local police or firefighters relief association that has
consolidated with the Public Employees Retirement Association or
to which section 353.665 applies and who has elected coverage
either under the public employees police and fire fund benefit
plan under section 353A.08 following the consolidation or under
section 353.665, subdivision 4, "salary" means the rate of
salary upon which member contributions to the special fund of
the relief association were made prior to the effective date of
the consolidation as specified by law and by bylaw provisions
governing the relief association on the date of the initiation
of the consolidation procedure and the actual periodic
compensation of the public employee after the effective date of
consolidation.
(b) Salary does not mean:
(1) the fees paid to district court reporters, unused
annual vacation or sick leave payments, in lump-sum or periodic
payments, severance payments, reimbursement of expenses,
lump-sum settlements not attached to a specific earnings period,
or workers' compensation payments;
(2) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage and certain amounts determined by the
executive director to be ineligible;
(3) the amount equal to that which the employing
governmental subdivision would otherwise pay toward single or
family insurance coverage for a covered employee when, through a
contract or agreement with some but not all employees, the
employer:
(i) discontinues, or for new hires does not provide,
payment toward the cost of the employee's selected insurance
coverages under a group plan offered by the employer;
(ii) makes the employee solely responsible for all
contributions toward the cost of the employee's selected
insurance coverages under a group plan offered by the employer,
including any amount the employer makes toward other employees'
selected insurance coverages under a group plan offered by the
employer; and
(iii) provides increased salary rates for employees who do
not have any employer-paid group insurance coverages; and
(4) except as provided in section 353.86 or 353.87,
compensation of any kind paid to volunteer ambulance service
personnel or volunteer firefighters, as defined in subdivision
35 or 36; and
(5) the amount of compensation that exceeds the limitation
provided in section 356.611.
(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.
Sec. 4. Minnesota Statutes 2002, section 354.05,
subdivision 35, is amended to read:
Subd. 35. [SALARY.] (a) "Salary" means the periodic
compensation, upon which member contributions are required
before deductions for deferred compensation, supplemental
retirement plans, or other voluntary salary reduction programs.
(b) "Salary" does not mean:
(1) lump sum annual leave payments;
(2) lump sum wellness and sick leave payments;
(3) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage and certain amounts determined by the
executive director to be ineligible;
(4) any form of payment made in lieu of any other
employer-paid fringe benefit or expense;
(5) any form of severance payments;
(6) workers' compensation payments;
(7) disability insurance payments, including self-insured
disability payments;
(8) payments to school principals and all other
administrators for services that are in addition to the normal
work year contract if these additional services are performed on
an extended duty day, Saturday, Sunday, holiday, annual leave
day, sick leave day, or any other nonduty day;
(9) payments under section 356.24, subdivision 1, clause
(4); and
(10) payments made under section 122A.40, subdivision 12,
except for payments for sick leave that are accumulated under
the provisions of a uniform school district policy that applies
equally to all similarly situated persons in the district.
(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.
Sec. 5. Minnesota Statutes 2002, section 354A.011,
subdivision 24, is amended to read:
Subd. 24. [SALARY; COVERED SALARY.] (a) "Salary" or
"covered salary" means the entire compensation, upon which
member contributions are required and made, that is paid to a
teacher before deductions for deferred compensation,
supplemental retirement plans, or other voluntary salary
reduction programs.
(b) "Salary" does not mean:
(1) lump sum annual leave payments;
(2) lump sum wellness and sick leave payments;
(3) employer-paid amounts used by an employee toward the
cost of insurance coverage, employer-paid fringe benefits,
flexible spending accounts, cafeteria plans, health care expense
accounts, day care expenses, or any payments in lieu of any
employer-paid group insurance coverage, including the difference
between single and family rates that may be paid to a member
with single coverage, and certain amounts determined by the
executive secretary or director to be ineligible;
(4) any form of payment that is made in lieu of any other
employer-paid fringe benefit or expense;
(5) any form of severance payments;
(6) workers' compensation payments;
(7) disability insurance payments, including self-insured
disability payments;
(8) payments to school principals and all other
administrators for services that are in addition to the normal
work year contract if these additional services are performed on
an extended duty day, Saturday, Sunday, holiday, annual leave
day, sick leave day, or any other nonduty day;
(9) payments under section 356.24, subdivision 1, clause
(4)(ii); and
(10) payments made under section 122A.40, subdivision 12,
except for payments for sick leave that are accumulated under
the provisions of a uniform school district policy that applies
equally to all similarly situated persons in the district.
(c) Amounts provided to an employee by the employer through
a grievance proceeding or a legal settlement are salary only if
the settlement is reviewed by the executive director and the
amounts are determined by the executive director to be
consistent with paragraph (a) and prior determinations.
Sec. 6. Minnesota Statutes 2002, section 356.611,
subdivision 1, is amended to read:
Subdivision 1. [STATE SALARY LIMITATIONS.] (a)
Notwithstanding any provision of law, bylaws, articles 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 enumerated in 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 or to a judge;
(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 as defined
under section 43A.02, subdivision 21;
(4) to an employee of Gillette Hospital who is covered by
the general state employees retirement plan of the Minnesota
State Retirement System;
(5) to an employee of the Minnesota Crop Improvement
Council; or
(6) to an employee of the Minnesota Historical Society.
(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.
Sec. 7. Minnesota Statutes 2002, section 356.611,
subdivision 2, is amended to read:
Subd. 2. [FEDERAL COMPENSATION LIMITS.] (a) For members
first contributing to of a covered pension plan enumerated in
section 356.30, subdivision 3, on or after July 1, 1995,
compensation in excess of the limitation set forth specified in
section 401(a)(17) of the Internal Revenue Code, as amended, for
changes in the cost of living under section 401(a)(17)(B) of the
Internal Revenue Code, may not be included for contribution and
benefit computation purposes.
(b) Notwithstanding paragraph (a), for members specified in
paragraph (a) who first contributed to a covered plan before
July 1, 1995, the annual compensation limit set forth specified
in Internal Revenue Code 401(a)(17) on June 30, 1993, applies to
members first contributing before July 1, 1995 if that provides
a greater allowable annual compensation.
Sec. 8. Minnesota Statutes 2002, section 356.611, is
amended by adding a subdivision to read:
Subd. 3. [MAXIMUM BENEFIT LIMITATIONS.] A member's annual
benefit, if necessary, must be reduced to the extent required by
section 415(b) of the Internal Revenue Code, as adjusted by the
United States Secretary of the Treasury under section 415(d) of
the Internal Revenue Code. For purposes of section 415 of the
Internal Revenue Code, the limitation year of a pension plan
covered by this section must be the fiscal year or calendar year
of that plan, whichever is applicable. The accrued benefit
limitation described in section 415(e) of the Internal Revenue
Code must cease to be effective for limitation years beginning
after December 31, 1999.
Sec. 9. [EFFECTIVE DATE.]
(a) Sections 1, 2, 3, 7, and 8 are effective on July 1,
2004.
(b) Sections 4 and 5 are effective on the day following
final enactment.
(c) Section 6 applies retroactively to April 28, 1994, and
retirement annuities that were based on covered salary amounts
that were in excess of the limit in effect after April 28, 1994,
but conform with section 6, are ratified.
ARTICLE 3
ALLOWABLE SERVICE CREDIT
Section 1. Minnesota Statutes 2002, section 352.27, is
amended to read:
352.27 [CREDIT FOR MILITARY BREAK IN SERVICE TO PROVIDE
UNIFORMED SERVICE.]
Any (a) An employee given a leave of absence to enter
military service who is absent from employment by reason of
service in the uniformed services, as defined in United States
Code, title 38, section 4303(13), and who returns to state
service upon discharge from military service as provided in the
uniformed service within the time frames required in United
States Code, title 38, section 192.262 4312(e), may obtain
service credit for the period of military the uniformed service.
The employee is not entitled to credit for any voluntary
extension of military service at the instance of the employee
beyond the initial period of enlistment, induction, or call to
active duty, nor to credit for any period of service following a
voluntary return to military service as further specified in
this section, provided that the employee did not separate from
uniformed service with a dishonorable or bad conduct discharge
or under other than honorable conditions. An
(b) The employee may obtain credit by paying into the fund
an equivalent employee contribution based upon the contribution
rate or rates in effect at the time that the uniformed service
was performed multiplied by the full and fractional years being
purchased and applied to the annual salary received at the date
of return from military service. The amount of this contribution
must be the applicable amounts required in section 352.04,
subdivision 2, plus interest at an annual rate of 8.5 percent
compounded annually rate. The annual salary rate is the average
annual salary during the purchase period that the employee would
have received if the employee had continued to be employed in
covered employment rather than to provide uniformed service, or,
if the determination of that rate is not reasonably certain, the
annual salary rate is the employee's average salary rate during
the 12-month period of covered employment rendered immediately
preceding the period of the uniformed service.
(c) The matching equivalent employer contribution and, if
applicable, the equivalent additional employer contribution
provided in section 352.04 must be paid by the department
employing the employee upon return to state service from funds
available to the department at the time and in the manner
provided in section 352.04, using the employer and additional
employer contribution rate or rates in effect at the time that
the uniformed service was performed, applied to the same annual
salary rate or rates used to compute the equivalent employee
contribution.
(d) If the employee equivalent contributions provided in
this section are not paid in full, the employee's allowable
service credit must be prorated by multiplying the full and
fractional number of years of uniformed service eligible for
purchase by the ratio obtained by dividing the total employee
contribution received by the total employee contribution
otherwise required under this section.
(e) To receive service credit under this section, the
contributions specified in this section must be transmitted to
the Minnesota State Retirement System during the period which
begins with the date on which the individual returns to state
service and which has a duration of three times the length of
the uniformed service period, but not to exceed five years. If
the determined payment period is less than one year, the
contributions required under this section to receive service
credit may be made within one year of the discharge date.
(f) The amount of service credit obtainable under this
section may not exceed five years unless a longer purchase
period is required under United States Code, title 38, section
4312.
(g) The employing unit shall pay interest on all equivalent
employee and employer contribution amounts payable under this
section. Interest must be computed at a rate of 8.5 percent
compounded annually from the end of each fiscal year of the
leave or the break in service to the end of the month in which
the payment is received.
Sec. 2. Minnesota Statutes 2002, section 352B.01, is
amended by adding a subdivision to read:
Subd. 3b. [CREDIT FOR BREAK IN SERVICE TO PROVIDE
UNIFORMED SERVICE.] (a) A member who is absent from employment
by reason of service in the uniformed services, as defined in
United States Code, title 38, section 4303(13), and who returns
to state employment in a position covered by the plan upon
discharge from service in the uniformed service within the time
frame required in United States Code, title 38, section 4312(e),
may obtain service credit for the period of the uniformed
service, provided that the member did not separate from
uniformed service with a dishonorable or bad conduct discharge
or under other than honorable conditions.
(b) The member may obtain credit by paying into the fund an
equivalent member contribution based on the contribution rate or
rates in effect at the time that the uniformed service was
performed multiplied by the full and fractional years being
purchased and applied to the annual salary rate. The annual
salary rate is the average annual salary during the purchase
period that the member would have received if the member had
continued to provide employment services to the state rather
than to provide uniformed service, or if the determination of
that rate is not reasonably certain, the annual salary rate is
the member's average salary rate during the 12-month period of
covered employment rendered immediately preceding the purchase
period.
(c) The equivalent employer contribution and, if
applicable, the equivalent employer additional contribution,
must be paid by the employing unit, using the employer and
employer additional contribution rate or rates in effect at the
time that the uniformed service was performed, applied to the
same annual salary rate or rates used to compute the equivalent
member contribution.
(d) If the member equivalent contributions provided for in
this subdivision are not paid in full, the member's allowable
service credit must be prorated by multiplying the full and
fractional number of years of uniformed service eligible for
purchase by the ratio obtained by dividing the total member
contributions received by the total member contributions
otherwise required under this subdivision.
(e) To receive allowable service credit under this
subdivision, the contributions specified in this section must be
transmitted to the fund during the period which begins with the
date on which the individual returns to state employment covered
by the plan and which has a duration of three times the length
of the uniformed service period, but not to exceed five years.
If the determined payment period is calculated to be less than
one year, the contributions required under this subdivision to
receive service credit may be within one year from the discharge
date.
(f) The amount of allowable service credit obtainable under
this section may not exceed five years, unless a longer purchase
period is required under United States Code, title 38, section
4312.
(g) The employing unit shall pay interest on all equivalent
member and employer contribution amounts payable under this
subdivision. Interest must be computed at a rate of 8.5 percent
compounded annually from the end of each fiscal year of the
leave or break in service to the end of the month in which
payment is received.
Sec. 3. Minnesota Statutes 2002, section 353.01,
subdivision 16, is amended to read:
Subd. 16. [ALLOWABLE SERVICE; LIMITS AND COMPUTATION.] (a)
"Allowable service" means:
(1) service during years of actual membership in the course
of which employee contributions were made, periods covered by
payments in lieu of salary deductions under section 353.35;
(2) service in years during which the public employee was
not a member but for which the member later elected, while a
member, to obtain credit by making payments to the fund as
permitted by any law then in effect;
(3) a period of authorized leave of absence with pay from
which deductions for employee contributions are made, deposited,
and credited to the fund;
(4) a period of authorized personal, parental, or medical
leave of absence without pay, including a leave of absence
covered under the federal Family Medical Leave Act, that does
not exceed one year, and during or for which a member obtained
service credit for each month in the leave period by payments to
the fund made in place of salary deductions. The payments must
be made in an amount or amounts based on the member's average
salary on which deductions were paid for the last six months of
public service, or for that portion of the last six months while
the member was in public service, to apply to the period in
either case that immediately precedes the commencement of the
leave of absence. If the employee elects to pay the employee
contributions for the period of any authorized personal,
parental, or medical leave of absence without pay, or for any
portion of the leave, the employee shall also, as a condition to
the exercise of the election, pay to the fund an amount
equivalent to the required employer and the additional employer
contributions, if any, for the employee. The payment must be
made within one year from the expiration of the leave of absence
or within 20 days after termination of public service under
subdivision 11a, whichever is earlier. The employer, by
appropriate action of its governing body which is made a part of
its official records and which is adopted before the date of the
first payment of the employee contribution, may certify to the
association in writing its commitment to pay the employer and
additional employer contributions from the proceeds of a tax
levy made under section 353.28. Payments under this paragraph
must include interest at an annual rate of 8.5 percent
compounded annually from the date of the termination of the
leave of absence to the date payment is made. An employee shall
return to public service and render a minimum of three months of
allowable service in order to be eligible to pay employee and
employer contributions for a subsequent authorized leave of
absence without pay. Upon payment, the employee must be granted
allowable service credit for the purchased period;
(5) a periodic, repetitive leave that is offered to all
employees of a governmental subdivision. The leave program may
not exceed 208 hours per annual normal work cycle as certified
to the association by the employer. A participating member
obtains service credit by making employee contributions in an
amount or amounts based on the member's average salary that
would have been paid if the leave had not been taken. The
employer shall pay the employer and additional employer
contributions on behalf of the participating member. The
employee and the employer are responsible to pay interest on
their respective shares at the rate of 8.5 percent a year,
compounded annually, from the end of the normal cycle until full
payment is made. An employer shall also make the employer and
additional employer contributions, plus 8.5 percent interest,
compounded annually, on behalf of an employee who makes employee
contributions but terminates public service. The employee
contributions must be made within one year after the end of the
annual normal working cycle or within 20 days after termination
of public service, whichever is sooner. The association shall
prescribe the manner and forms to be used by a governmental
subdivision in administering a periodic, repetitive leave. Upon
payment, the member must be granted allowable service credit for
the purchased period;
(6) an authorized temporary layoff under subdivision 12,
limited to three months allowable service per authorized
temporary layoff in one calendar year. An employee who has
received the maximum service credit allowed for an authorized
temporary layoff must return to public service and must obtain a
minimum of three months of allowable service subsequent to the
layoff in order to receive allowable service for a subsequent
authorized temporary layoff; or
(7) a period during which a member is on an authorized
leave of absence to enter military absent from employment by a
governmental subdivision by reason of service in the armed
forces of the United States in the uniformed services, as
defined in United States Code, title 38, section 4303(13), if
the member returns to public service upon discharge
from military service in the uniformed service within the time
frames required under United States Code, title 38, section
192.262 and 4312(e), provided that the member did not separate
from uniformed service with a dishonorable or bad conduct
discharge or under other than honorable conditions. The service
is credited if the member pays into the fund equivalent employee
contributions based upon the employee's contribution rate or
rates in effect at the time that the uniformed service was
performed multiplied by the full and fractional years being
purchased and applied to the annual salary at the date of return
from military service rate. The annual salary rate is the
average annual salary during the purchase period that the member
would have received if the member had continued to be employed
in covered employment rather than to provide uniformed service,
or, if the determination of that rate is not reasonably certain,
the annual salary rate is the member's average salary rate
during the 12-month period of covered employment rendered
immediately preceding the period of the uniformed service.
Payment of the member equivalent contributions must be made
within during a period which begins with the date on which the
individual returns to public employment and that is three times
the length of the military leave period, or within five years of
the date of discharge from the military service, whichever is
less. If the determined payment period is less than one year,
the contributions required under this clause to receive service
credit may be made within one year of the discharge date.
Payment may not be accepted following 20 days after termination
of public service under subdivision 11a. The amount of these
contributions must be in accord with the contribution rates and
salary limitations, if any, in effect during the leave, plus
interest at an annual rate of 8.5 percent compounded annually
from the date of return to public service to the date payment is
made. If the member equivalent contributions provided for in
this clause are not paid in full, the member's allowable service
credit must be prorated by multiplying the full and fractional
number of years of uniformed service eligible for purchase by
the ratio obtained by dividing the total member contributions
received by the total member contributions otherwise required
under this clause. The corresponding equivalent employer
contribution, and, if applicable, the equivalent additional
employer contribution, if applicable, must be paid by the
governmental subdivision employing the member upon the person's
return to public service if the member makes the equivalent
employee contributions. The employer payments must be made from
funds available to the employing unit, using the employer and
additional employer contribution rate or rates in effect at the
time that the uniformed service was performed, applied to the
same annual salary rate or rates used to compute the equivalent
member contribution. The governmental subdivision involved may
appropriate money for those payments. A member may not receive
credit for a voluntary extension of military service at the
instance of the member beyond the initial period of enlistment,
induction, or call to active duty. The amount of service credit
obtainable under this section may not exceed five years unless a
longer purchase period is required under United States Code,
title 38, section 4312. The employing unit shall pay interest
on all equivalent member and employer contribution amounts
payable under this clause. Interest must be computed at a rate
of 8.5 percent compounded annually from the end of each fiscal
year of the leave or the break in service to the end of the
month in which the payment is received. Upon payment, the
employee must be granted allowable service credit for the
purchased period.
(b) For calculating benefits under sections 353.30, 353.31,
353.32, and 353.33 for state officers and employees displaced by
the Community Corrections Act, chapter 401, and transferred into
county service under section 401.04, "allowable service" means
the combined years of allowable service as defined in paragraph
(a), clauses (1) to (6), and section 352.01, subdivision 11.
(c) For a public employee who has prior service covered by
a local police or firefighters relief association that has
consolidated with the Public Employees Retirement Association or
to which section 353.665 applies, and who has elected the type
of benefit coverage provided by the public employees police and
fire fund either under section 353A.08 following the
consolidation or under section 353.665, subdivision 4,
"applicable service" is a period of service credited by the
local police or firefighters relief association as of the
effective date of the consolidation based on law and on bylaw
provisions governing the relief association on the date of the
initiation of the consolidation procedure.
(d) No member may receive more than 12 months of allowable
service credit in a year either for vesting purposes or for
benefit calculation purposes.
(e) "Allowable service" also means a period purchased under
section 356.555.
Sec. 4. Minnesota Statutes 2002, section 354.091, is
amended to read:
354.091 [SERVICE CREDIT.]
(a) In computing service credit, no teacher shall receive
credit for more than one year of teaching service for any fiscal
year. Commencing July 1, 1961:
(1) if a teacher teaches less than five hours in a day,
service credit must be given for the fractional part of the day
as the term of service performed bears to five hours;
(2) if a teacher teaches five or more hours in a day,
service credit must be given for only one day;
(3) if a teacher teaches at least 170 full days in any
fiscal year, service credit must be given for a full year of
teaching service; and
(4) if a teacher teaches for only a fractional part of the
year, service credit must be given for such fractional part of
the year as the period of service performed bears to 170 days.
(b) A teacher shall receive a full year of service credit
based on the number of days in the employer's full school year
if it is less than 170 days. Teaching service performed before
July 1, 1961, must be computed under the law in effect at the
time it was performed.
(c) A teacher does must not lose or gain retirement service
credit as a result of the employer converting to a flexible or
alternate work schedule. If the employer converts to a flexible
or alternate work schedule, the forms for reporting and the
procedures for determining service credit must be determined by
the executive director with the approval of the board of
trustees.
(d) For all services rendered on or after July 1, 2003,
service credit for all members employed by the Minnesota State
Colleges and Universities system must be determined:
(1) for full-time employees, by the definition of full time
employment contained in the collective bargaining agreement for
those units listed in section 179A.10, subdivision 2, or
contained in the applicable personnel or salary plan for those
positions designated in section 179A.10, subdivision 1;
(2) for part-time employees, by the appropriate proration
of full-time equivalency based on the provisions contained in
the collective bargaining agreement for those units listed in
section 179A.10, subdivision 2, or contained in the applicable
personnel or salary plan for those positions designated in
section 179A.10, subdivision 1, and the applicable procedures of
the Minnesota State Colleges and Universities system; and
(3) in no case may a member receive more than one year of
service credit for any fiscal year.
Sec. 5. Minnesota Statutes 2002, section 354.096,
subdivision 1, is amended to read:
Subdivision 1. [CERTIFICATION.] Upon granting a family
leave to a member, an employing unit must certify the leave to
the association on a form specified by the executive director
before the end of the fiscal year during which the leave was
granted.
Sec. 6. Minnesota Statutes 2002, section 354.53, is
amended to read:
354.53 [CREDIT FOR MILITARY BREAK IN SERVICE LEAVE OF
ABSENCE TO PROVIDE UNIFORMED SERVICE.]
Subdivision 1. [ELIGIBILITY; EMPLOYEE AND EMPLOYER
CONTRIBUTIONS.] (a) Any employee given a leave of absence to
enter military service teacher who is absent from employment by
reason of service in the uniformed services, as defined in
United States Code, title 38, section 4303(13), and who returns
to the employer providing teaching service upon discharge from
military service as provided in the uniformed service within the
time frames required in United States Code, title 38, section
192.262 4312(e), may obtain service credit for the period of
military the uniformed service but shall not receive credit for
any voluntary extension of military service at the instance of
the member beyond the initial period of enlistment, induction or
call to active duty as further specified in this section,
provided that the teacher did not separate from uniformed
service with a dishonorable or bad conduct discharge or under
other than honorable conditions.
(b) The member shall may obtain credit by paying into the
fund an equivalent employee contribution based upon the
contribution rate or rates in effect at the time that
the military uniformed service was performed multiplied by the
full and fractional years being purchased and applied to the
annual salary rate of the member for the year beginning with the
date of return from military service and the number of years of
military service together with interest thereon at an annual
rate of 8.5 percent compounded annually from the time the
military service was rendered to the first date of payment. The
annual salary rate is the average annual salary during the
purchase period that the teacher would have received if the
teacher had continued to provide teaching service to the
employer rather than provide uniformed service or if the
determination of that rate is not reasonably certain, the annual
salary rate is the teacher's average salary rate during the
12-month period immediately preceding the period, or, if the
preceding period is less than 12 months, the annualized rate
derived from the teacher's average salary rate during the period
of teacher employment rendered immediately preceding the period
of the uniformed service.
(c) The equivalent employer contribution and, if
applicable, the equivalent additional contribution provided in
section 354.42 must be paid by the employing unit at as provided
in section 354.52, subdivision 4, using the employer and
employer additional contribution rate or rates in effect at the
time that the military uniformed service was performed, applied
to the same annual salary rate of or rates used to compute the
member for the year beginning with the date of return from
military service, in the manner provided in section 354.52,
subdivision 4 equivalent employee contribution.
Subd. 2. [CALCULATION OF CREDIT.] (a) For purposes of
computing a money purchase annuity under section 354.44,
subdivision 2, all payments into the fund pursuant to under this
section shall must be considered accumulations after July 1,
1957 for the purpose of computing any annuity in accordance with
section 354.44, subdivision 2.
(b) For purposes of computing a formula annuity under
section 354.44, subdivision 6, if the employee equivalent
contributions and interest thereon provided in this section are
not paid in full, the member's formula service credit shall must
be calculated prorated by multiplying the full and fractional
number of years of military uniformed service eligible for
purchase by the ratio obtained by dividing the total amount paid
and employee contribution received by the maximum amount payable
provided herein total employee contribution otherwise required
under this section.
Subd. 3. [PAYMENTS ELIGIBLE PAYMENT PERIOD.] Payments
pursuant to this (a) To receive service credit under this
section, the contributions specified in this section shall must
be made within transmitted to the teachers retirement
association during the period which begins with the date on
which the individual returns to teaching service and which has a
duration of three times the length of the uniformed service
period, but not to exceed five years from the date of discharge.
(b) Notwithstanding paragraph (a), if the payment period
determined under paragraph (a) is less than one year, the
contributions required under this section to receive service
credit may be made within one year from the discharge date.
Subd. 4. [LIMITS ON SERVICE CREDIT.] The amount of service
credit obtainable under this section may not exceed five years,
unless a longer purchase period is required under United States
Code, title 38, section 4312.
Subd. 5. [INTEREST REQUIREMENTS.] The employer shall pay
interest on all equivalent employee and employer contribution
amounts payable under this section. Interest must be computed
at a rate of 8.5 percent compounded annually from the end of
each fiscal year of the leave or the break in service to the end
of the month in which the payment is received.
Sec. 7. Minnesota Statutes 2002, section 354A.093, is
amended to read:
354A.093 [MILITARY BREAK IN SERVICE CREDIT TO PROVIDE
UNIFORMED SERVICE.]
Subdivision 1. [ELIGIBILITY.] Any teacher in the
coordinated program of either the Minneapolis Teachers
Retirement Fund Association or the St. Paul Teachers Retirement
Fund Association or any teacher in the new law coordinated
program of the Duluth Teachers Retirement Fund Association who
is granted a leave absent from employment by reason of absence
to enter military service in the uniformed services as defined
in United States Code, title 38, section 4303(13) and who
returns to the employer providing active teaching service upon
discharge from military uniformed service as provided in within
the time frames required under United States Code, title 38,
section 192.262 4312(e), shall be entitled to may receive
allowable service credit in the applicable association for all
or a portion of the period of military uniformed service but,
provided that the teacher did not for any voluntary extension of
military separate from uniformed service beyond the initial
period of enlistment, induction with a dishonorable or call to
active duty which occurred at the instance of the teacher bad
conduct discharge or under other than honorable conditions.
Subd. 2. [CONTRIBUTIONS.] If the teacher granted the
military service leave of absence makes the equivalent employee
contribution for a period of military service leave of absence
pursuant to service provided to the uniformed services under
this section, the employing unit shall make an equivalent
employer contribution on behalf of the teacher to the applicable
association for the period of the military service leave of
absence being purchased in the manner described in section
354A.12, subdivision 2a. The equivalent employee and employer
contributions shall must be in an amount equal to the employee
and employer contribution rates in effect for other active
members of the association covered by the same program applied
to a salary figure equal to the teacher's average annual salary
rate at the date of return from military service that the
teacher would have received if the leave or break in service had
not occurred, or if the determination of that average salary
rate is not reasonably certain, on the basis of the teacher's
average salary rate during the 12-month period immediately
preceding the period, or, if the preceding period is less than
12 months, the annualized rate derived from the teacher's
average salary rate during the period of teacher employment
rendered immediately preceding the period of uniformed
service, with the result multiplied by the number of full and
fractional years constituting the period of service provided to
the military uniformed service leave of absence which the
teacher seeks is authorized to purchase under this
section. Payment shall include interest on the amount payable
pursuant to this section at the rate of six percent compounded
annually from the year the military service was rendered to the
date of payment.
Subd. 3. [PRORATING.] If the payments made by a
teacher pursuant to under this section are less than an the full
amount equal to the applicable contribution rate applied to a
salary figure equal to the teacher's annual salary rate at the
date of return from military service, multiplied by the number
of years constituting the period of the military service leave
of absence determined under subdivision 2, the service credit
shall must be prorated. The prorated service credit shall must
be determined by the ratio between the amount of the
actual equivalent employee payment which was made and the full
contribution amount payable pursuant to equivalent employee
payment required under this section. In order to be entitled to
receive service credit under this section, payment shall be made
within five years from the date of discharge from military
service.
Subd. 4. [ELIGIBLE PAYMENT PERIOD.] (a) To receive service
credit under this section, the contributions specified in this
section must be transmitted to the applicable first class city
teachers retirement fund association during the period which
begins with the date the individual returns to teaching service
and which has a duration of three times the length of the
uniformed service period, but not to exceed five years.
(b) Notwithstanding paragraph (a), if the payment period
determined under paragraph (a) is less than one year, the
contributions required under this section to receive service
credit may be made within one year from the discharge date.
Subd. 5. [LIMITS ON SERVICE CREDIT.] The amount of service
credit obtainable under this section may not exceed five years,
unless a longer purchase period is required under United States
Code, title 38, section 4312.
Subd. 6. [INTEREST REQUIREMENTS.] The employer shall pay
interest on all equivalent employee and employer contribution
amounts payable under this section. Interest must be computed
at a rate of 8.5 percent compounded annually from the end of
each fiscal year of the leave or break in service to the end of
the month in which payment is received.
Sec. 8. Minnesota Statutes 2002, section 490.121, is
amended by adding a subdivision to read:
Subd. 4b. [490.1211] [CREDIT FOR BREAK IN SERVICE TO PROVIDE
UNIFORMED SERVICE.] (a) A judge who is absent from employment by
reason of service in the uniformed services, as defined in
United States Code, title 38, section 4303(13), and who returns
to state employment as a judge upon discharge from service in
the uniformed service within the time frame required in United
States Code, title 38, section 4312(e) may obtain service credit
for the period of the uniformed service, provided that the judge
did not separate from uniformed service with a dishonorable or
bad conduct discharge or under other than honorable conditions.
(b) The judge may obtain credit by paying into the fund
equivalent member contribution based on the contribution rate
rates in effect at the time that the uniformed service was
performed multiplied by the full and fractional years being
purchased and applied to the annual salary rate. The annual
salary rate is the average annual salary during the purchase
period that the judge would have received if the judge had
continued to provide employment services to the state rather
than to provide uniformed service, or if the determination of
that rate is not reasonably certain, the annual salary rate is
the judge's average salary rate during the 12-month period of
judicial employment rendered immediately preceding the purchase
period.
(c) The equivalent employer contribution and, if
applicable, the equivalent employer additional contribution,
must be paid by the employing unit, using the employer and
employer additional contribution rate or rates in effect at the
time that the uniformed service was performed, applied to the
same annual salary rate or rates used to compute the equivalent
member contribution.
(d) If the member equivalent contributions provided for in
this subdivision are not paid in full, the judge's allowable
service credit must be prorated by multiplying the full and
fractional number of years of uniformed service eligible for
purchase by the ratio obtained by dividing the total member
contributions received by the total member contributions
otherwise required under this subdivision.
(e) To receive allowable service credit under this
subdivision, the contributions specified in this section must be
transmitted to the fund during the period which begins with the
date on which the individual returns to judicial employment and
which has a duration of three times the length of the uniformed
service period, but not to exceed five years. If the determined
payment period is calculated to be less than one year, the
contributions required under this subdivision to receive service
credit may be within one year from the discharge date.
(f) The amount of allowable service credit obtainable under
this section may not exceed five years, unless a longer purchase
period is required under United States Code, title 38, section
4312.
(g) The state court administrator shall pay interest on all
equivalent member and employer contribution amounts payable
under this subdivision. Interest must be computed at a rate of
8.5 percent compounded annually from the end of each fiscal year
of the leave or break in service to the end of the month in
which payment is received.
Sec. 9. [EFFECTIVE DATE.]
Sections 1 to 8 are effective on July 1, 2004.
ARTICLE 4
QUALIFIED PART-TIME TEACHER PROVISIONS
Section 1. Minnesota Statutes 2002, section 354.66,
subdivision 2, is amended to read:
Subd. 2. [QUALIFIED PART-TIME TEACHER PROGRAM
PARTICIPATION REQUIREMENTS.] (a) A teacher in a Minnesota public
elementary school, a Minnesota secondary school, or the
Minnesota State Colleges and Universities system who has three
years or more of allowable service in the association or three
years or more of full-time teaching service in Minnesota public
elementary schools, Minnesota secondary schools, or the
Minnesota State Colleges and Universities system, by agreement
with the board of the employing district or with the authorized
representative of the board, may be assigned to teaching service
in a part-time teaching position under subdivision 3. The
agreement must be executed before October 1 of the school year
for which the teacher requests to make retirement contributions
under subdivision 4. A copy of the executed agreement must be
filed with the executive director of the association. If the
copy of the executed agreement is filed with the association
after October 1 of the school year for which the teacher
requests to make retirement contributions under subdivision 4,
the employing unit shall pay the fine specified in section
354.52, subdivision 6, for each calendar day that elapsed since
the October 1 due date. The association may not accept an
executed agreement that is received by the association more than
15 months late. The association may not waive the fine required
by this section.
(b) Notwithstanding paragraph (a), if the teacher is also a
legislator:
(1) the agreement in paragraph (a) must be executed before
March 1 of the school year for which the teacher requests to
make retirement contributions under subdivision 4; and
(2) the fines specified in paragraph (a) apply if the
employing unit does not file the executed agreement with the
executive director of the association by March 1.
Sec. 2. Minnesota Statutes 2002, section 354A.094,
subdivision 3, is amended to read:
Subd. 3. [QUALIFIED PART-TIME TEACHER PROGRAM
PARTICIPATION REQUIREMENTS.] (a) A teacher in the public schools
of a city of the first class who has three years or more
allowable service in the applicable retirement fund association
or three years or more of full-time teaching service in
Minnesota public elementary schools, Minnesota secondary
schools, and Minnesota State Colleges and Universities system
may, by agreement with the board of the employing district, be
assigned to teaching service within the district in a part-time
teaching position. The agreement must be executed before
October 1 of the year for which the teacher requests to make
retirement contributions under subdivision 4. A copy of the
executed agreement must be filed with the executive director of
the retirement fund association. If the copy of the executed
agreement is filed with the association after October 1 of the
year for which the teacher requests to make retirement
contributions under subdivision 4, the employing school district
shall pay a fine of $5 for each calendar day that elapsed since
the October 1 due date. The association may not accept an
executed agreement that is received by the association more than
15 months late. The association may not waive the fine required
by this section.
(b) Notwithstanding paragraph (a), if the teacher is also a
legislator:
(1) the agreement in paragraph (a) must be executed before
March 1 of the school year for which the teacher requests to
make retirement contributions under subdivision 4; and
(2) the fines specified in paragraph (a) apply if the
employing unit does not file the executed agreement with the
executive director of the applicable Teachers Retirement Fund
Association by March 1.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective on July 1, 2004.
ARTICLE 5
RETIREMENT PLAN CONTRIBUTIONS AND TRANSFERS
Section 1. Minnesota Statutes 2002, section 354.42,
subdivision 7, is amended to read:
Subd. 7. [ERRONEOUS SALARY DEDUCTIONS OR DIRECT PAYMENTS.]
(a) Any deductions taken from the salary of an employee for the
retirement fund in error shall must be refunded to the employee
upon the discovery of the error and after the verification of
the error by the employing unit making the deduction, and. The
corresponding employer contribution and additional employer
contribution amounts attributable to the erroneous salary
deduction must be refunded to the employing unit.
(b) If salary deductions and employer contributions were
erroneously transmitted to the retirement fund and should have
been transmitted to another Minnesota public pension plan, the
retirement association executive director must transfer these
salary deductions and employer contributions to the appropriate
public pension fund without interest. For purposes of this
paragraph, a Minnesota public pension plan means a plan
specified in section 356.30, subdivision 3, or the plan governed
by chapter 354B.
(c) A potential transfer under paragraph (b) that would
cause the plan to fail to be a qualified plan under section
401(a) of the Internal Revenue Code, as amended, must not be
made by the executive director. Within 30 days after being
notified by the Teachers Retirement Association of an unmade
potential transfer under this paragraph, the employer of the
affected person must transmit an amount representing the
applicable salary deductions and employer contributions, without
interest, to the retirement fund of the appropriate Minnesota
public pension plan fund. The retirement association must
provide a credit for the amount of the erroneous salary
deductions and employer contributions against future
contributions from the employer.
(d) If a salary warrant or check from which a deduction for
the retirement fund was taken has been canceled or the amount of
the warrant or if a check has been returned to the funds of the
employing unit making the payment, a refund of the amount
deducted, or any portion of it that is required to adjust the
salary deductions, shall must be made to the employing unit.
(d) (e) Any erroneous direct payments of member-paid
contributions or erroneous salary deductions that were not
refunded in during the regular payroll cycle processing of an
employing unit's annual summary report shall must be refunded to
the member with , plus interest computed using the rate and
method specified in section 354.49, subdivision 2.
(f) Any refund under this subdivision that would cause the
plan to fail to be a qualified plan under section 401(a) of the
Internal Revenue Code, as amended, may not be refunded and
instead must be credited against future contributions payable by
the employer. The employer is responsible for refunding to the
applicable employee any amount that was erroneously deducted
from the salary of the employee, with interest as specified in
paragraph (e).
Sec. 2. Minnesota Statutes 2002, section 354.51,
subdivision 5, is amended to read:
Subd. 5. [PAYMENT OF SHORTAGES.] (a) Except as provided in
paragraph (b), in the event that full required member
contributions are not deducted from the salary of a teacher,
payment shall must be made as follows:
(a) (1) Payment of shortages in member deductions on salary
earned after June 30, 1957, and prior to before July 1, 1981,
may be made any time prior to before retirement. Payment shall
must include interest at an annual rate of 8.5 percent
compounded annually from the end of the fiscal year in which the
shortage occurred to the end of the month in which payment is
made and the interest shall must be credited to the fund. If
payment of a shortage in deductions is not made, the formula
service credit of the member shall must be prorated pursuant to
under section 354.05, subdivision 25, clause (3).
(b) (2) Payment of shortages in member deductions on salary
earned after June 30, 1981, shall be are the sole obligation of
the employing unit and shall be are payable by the employing
unit upon notification by the executive director of the shortage
with interest at an annual rate of 8.5 percent compounded
annually from the end of the fiscal year in which the shortage
occurred to the end of the month in which payment is made and
the interest shall must be credited to the fund. Effective July
1, 1986, the employing unit shall also pay the employer
contributions as specified in section 354.42, subdivisions 3 and
5 for such the shortages. If the shortage payment is not paid
by the employing unit within 60 days of notification, the
executive director shall certify the amount of the shortage
payment to the applicable county auditor, who shall spread a
levy in the amount of the shortage payment over the taxable
property of the taxing district of the employing unit if the
employing unit is supported by property taxes, or to the
commissioner of finance, who shall deduct the amount from any
state aid or appropriation amount applicable to the employing
unit if the employing unit is not supported by property taxes.
(c) (3) Payment may not be made for shortages in member
deductions on salary earned prior to before July 1, 1957, for
shortages in member deductions on salary paid or payable under
paragraph (b), or for shortages in member deductions for persons
employed by the Minnesota State Colleges and Universities system
in a faculty position or in an eligible unclassified
administrative position and whose employment was less than 25
percent of a full academic year, exclusive of the summer
session, for the applicable institution that exceeds the most
recent 36 months.
(b) For a person who is employed by the Minnesota State
Colleges and Universities system in a faculty position or in an
eligible unclassified administrative position and whose
employment was less than 25 percent of a full academic year,
exclusive of the summer session, for the applicable institution,
upon the person's election under section 354B.21 of retirement
coverage under this chapter, the shortage in member deductions
on the salary for employment by the Minnesota State Colleges and
Universities system institution of less than 25 percent of a
full academic year, exclusive of the summer session, for the
applicable institution for the most recent 36 months and the
associated employer contributions must be paid by the Minnesota
State Colleges and Universities system institution, plus annual
compound interest at the rate of 8.5 percent from the end of the
fiscal year in which the shortage occurred to the end of the
month in which the teachers retirement association coverage
election is made. If the shortage payment is not made by the
institution within 60 days of notification, the executive
director shall certify the amount of the shortage payment to the
commissioner of finance, who shall deduct the amount from any
state appropriation to the system. An individual electing
coverage under this paragraph shall repay the amount of the
shortage in member deductions, plus interest, through deduction
from salary or compensation payments within the first year of
employment after the election under section 354B.21, subject to
the limitations in section 16D.16. The Minnesota State Colleges
and Universities system may use any means available to recover
amounts which were not recovered through deductions from salary
or compensation payments. No payment of the shortage in member
deductions under this paragraph may be made for a period longer
than the most recent 36 months.
Sec. 3. Minnesota Statutes 2002, section 354B.23,
subdivision 1, is amended to read:
Subdivision 1. [MEMBER CONTRIBUTION RATE.] (a) Except as
provided in paragraph (b), The member contribution rate for
participants in the individual retirement account plan is 4.5
percent of salary.
(b) For participants in the individual retirement account
plan who were otherwise eligible to elect retirement coverage in
the state unclassified employees retirement program, the member
contribution rate is the rate specified in section 352D.04,
subdivision 2, paragraph (a).
Sec. 4. Minnesota Statutes 2002, section 354B.32, is
amended to read:
354B.32 [TRANSFER OF FUNDS TO IRAP.]
A participant in the individual retirement account plan
established in this chapter who has less than ten years of
allowable service under the Teachers Retirement Association or
the a teachers retirement fund association, whichever applies,
may elect to transfer an amount equal to the participant's
accumulated member contributions to the Teachers Retirement
Association or the applicable teachers retirement fund
association, plus compound interest at the rate of six percent
per annum, to the individual retirement account plan. The
transfers are irrevocable fund to fund fund-to-fund transfers,
and, in no event, may the participant receive direct payment of
the money transferred prior to retirement before the termination
of employment. If a participant elects the contribution
transfer, all of the participant's allowable and formula service
credit in the Teachers Retirement Association or the teachers
retirement fund association associated with the transferred
amount is forfeited.
The executive director of the Teachers Retirement
Association and the chief administrative officers of the
teachers retirement fund associations, in cooperation with the
chancellor of the Minnesota State Colleges and Universities
system, shall notify participants who are eligible to transfer
of their right to transfer and the amount that they are eligible
to transfer, and shall, upon request, provide forms to implement
the transfer. The chancellor of the Minnesota State Colleges
and Universities system shall assist the Teachers Retirement
Association and the teachers retirement fund associations in
developing transfer forms and in implementing the transfers.
Authority to elect a transfer under this section expires on
July 1, 2004.
Sec. 5. [EFFECTIVE DATE; RETROACTIVE APPLICATION.]
(a) Section 2 is effective on July 1, 2004.
(b) Section 2 applies to shortages in member deductions
that occurred before the effective date of the section.
(c) Sections 1, 3, and 4 are effective on July 1, 2004.
ARTICLE 6
REPORTING AND INFORMATION PROVISION
Section 1. Minnesota Statutes 2002, section 354.07,
subdivision 9, is amended to read:
Subd. 9. [INFORMATION DISTRIBUTION.] All school districts,
the Minnesota State Colleges and Universities, community
colleges and other employers of members of the association are
obligated to distribute to their employees ballots for the
election of members to the board of trustees, pamphlets,
brochures, documents or any other material containing
association information which are prepared by the executive
director or the board and are delivered to the employers for
distribution.
Sec. 2. Minnesota Statutes 2002, section 354.52,
subdivision 4a, is amended to read:
Subd. 4a. [MEMBER DATA REPORTING REQUIREMENTS.] (a) An
employing unit must initially provide the member data specified
in paragraph (b) or any of that data not previously provided to
the association for payroll warrants dated after June 30, 1995,
in a format prescribed by the executive director. An employing
unit must provide the member data specified in paragraph (b) in
a format prescribed by the executive director. Data changes and
the dates of those changes under this subdivision must be
reported to the association in a format prescribed by the
executive director on an ongoing basis within 14 calendar days
after the date of the end of the payroll cycle in which they
occur. These data changes must be reported with the payroll
cycle data under subdivision 4b.
(b) Data on the member includes:
(1) legal name, address, date of birth, association member
number, employer-assigned employee number, and Social Security
number;
(2) association status, including, but not limited to,
basic, coordinated, exempt annuitant, exempt technical college
teacher, and exempt independent contractor or consultant;
(3) employment status, including, but not limited to, full
time, part time, intermittent, substitute, or part-time
mobility;
(4) employment position, including, but not limited to,
teacher, superintendent, principal, administrator, or other;
(5) employment activity, including, but not limited to,
hire, termination, resumption of employment, disability, or
death;
(6) leaves of absence;
(7) county district number assigned by the association for
the employing unit;
(8) data center identification number, if applicable; and
(9) gender;
(10) position code; and
(11) other information as may be required by the executive
director.
Sec. 3. Minnesota Statutes 2002, section 354.52, is
amended by adding a subdivision to read:
Subd. 4c. [MNSCU SERVICE CREDIT REPORTING.] For all
part-time service rendered on or after July 1, 2004, the service
credit reporting requirement in subdivision 4b for all part-time
employees of the Minnesota State Colleges and Universities
system must be met by the Minnesota State Colleges and
Universities system reporting to the association on or before
July 31 of each year the final calculation of each part-time
member's service credit for the immediately preceding fiscal
year based on the employee's assignments for the fiscal year.
Sec. 4. Minnesota Statutes 2002, section 354.52,
subdivision 6, is amended to read:
Subd. 6. [NONCOMPLIANCE CONSEQUENCES.] An employing unit
that does not comply with the reporting requirements under this
section shall subdivision 2a, 4a, or 4b must pay a fine of $5
per calendar day until the association receives the required
data.
Sec. 5. [356.2165] [LEGISLATIVE COMMISSION ON PENSIONS AND
RETIREMENT; ACTUARIAL SERVICES BILLING TO THIRD PARTIES.]
Notwithstanding any provision of law to the contrary, the
Legislative Commission on Pensions and Retirement may bill third
parties for actuarial services performed for their benefit under
its contract with its consulting actuary under Minnesota
Statutes, section 3.85, and may deposit the actuarial services
reimbursements from those third parties to the credit of the
commission, and those deposited reimbursements are
reappropriated to the commission.
Sec. 6. [EFFECTIVE DATE.]
(a) Sections 1 to 4 are effective on July 1, 2004.
(b) Section 5 is effective retroactively to July 1, 2003,
and expires when the requirement that the Legislative Commission
on Pensions and Retirement retain a consulting actuary to
perform annual actuarial valuations of retirement plans
terminates.
ARTICLE 7
RETIREMENT ANNUITY PROVISIONS
Section 1. Minnesota Statutes 2002, section 352.86,
subdivision 1, is amended to read:
Subdivision 1. [ELIGIBILITY; RETIREMENT ANNUITY.] A person
who is employed by the Department of Transportation in the civil
service employment classification of aircraft pilot or chief
pilot who is covered by the general employee retirement plan of
the system under section 352.01, subdivision 23, who elects this
special retirement coverage under subdivision 3, who is
prohibited from performing the duties of aircraft pilot or chief
pilot after reaching age 62 65 by a rule policy adopted by the
commissioner of transportation, and who terminates employment as
a state employee on reaching that on or after age 62 but prior
to normal retirement age is entitled, upon application, to a
retirement annuity computed in accordance with under section
352.115, subdivisions 2 and 3, without any reduction for early
retirement under section 352.116, subdivision 1.
Sec. 2. Minnesota Statutes 2002, section 353.37, is
amended by adding a subdivision to read:
Subd. 1b. [RETIREMENT AGE.] For purposes of this section,
"retirement age" means retirement age as defined in United
States Code, title 42, section 416(l).
Sec. 3. Minnesota Statutes 2002, section 353.37,
subdivision 3, is amended to read:
Subd. 3. [REDUCTION OF ANNUITY.] The association shall
reduce the amount of the annuity as follows:
(a) for of a person who has not reached normal the
retirement age, by one-half of the amount in excess of the
applicable reemployment income maximum under subdivision 1;.
(b) for a person who has reached normal retirement age, but
has not reached age 70, one-third of the amount in excess of the
applicable reemployment income maximum under subdivision 1;
(c) for a person who has reached age 70, or for salary
earned through service in an elected office, there is no
reduction upon reemployment, regardless of income.
There is no reduction upon reemployment, regardless of income,
for a person who has reached the retirement age.
Sec. 4. Minnesota Statutes 2002, section 354.44,
subdivision 4, is amended to read:
Subd. 4. [RETIREMENT ANNUITY ACCRUAL DATE.] (a) An annuity
payment begins to accrue, providing provided that the age and
service requirements under subdivision 1 are satisfied, after
the termination of teaching service, or after the application
for retirement has been filed with the board, whichever is
later, as follows:
(1) on the 16th day of the month of termination or filing
if the termination or filing occurs on or before the 15th day of
the month;
(2) on the first day of the month following the month of
termination or filing if the termination or filing occurs on or
after the 16th day of the month;
(3) on July 1 for all school principals and other
administrators who receive a full annual contract salary during
the fiscal year for performance of a full year's contract
duties; or
(4) a later date to be either the first or the 16th day of
a month occurring within the six-month period immediately
following the termination of teaching service as specified under
paragraph (b) by the member.
(b) If an application for retirement is filed with the
board during the six-month period that occurs immediately
following the termination of teaching service, the annuity may
begin to accrue as if the application for retirement had been
filed with the board on the date teaching service terminated or
a later date under paragraph (a), clause (4). An annuity must
not begin to accrue more than one month before the date of final
salary receipt.
Sec. 5. Minnesota Statutes 2002, section 354.44,
subdivision 5, is amended to read:
Subd. 5. [RESUMPTION OF TEACHING SERVICE AFTER
RETIREMENT.] (a) Any person who retired under the provisions of
this chapter and has thereafter resumed teaching in any employer
unit to which this chapter applies is eligible to continue to
receive payments in accordance with the annuity except that
annuity payments must be reduced during the calendar year
immediately following any calendar year in which the person's
income from the teaching service is in an amount greater than
the annual maximum earnings allowable for that age for the
continued receipt of full benefit amounts monthly under the
federal old age, survivors and disability insurance program as
set by the secretary of health and human services under United
States Code, title 42, section 403. The amount of the reduction
must be one-half of the amount in excess of the applicable
reemployment income maximum specified in this subdivision and
must be deducted from the annuity payable for the calendar year
immediately following the calendar year in which the excess
amount was earned. If the person has not yet reached the
minimum age for the receipt of Social Security benefits, the
maximum earnings for the person must be equal to the annual
maximum earnings allowable for the minimum age for the receipt
of Social Security benefits.
(b) If the person is retired for only a fractional part of
the calendar year during the initial year of retirement, the
maximum reemployment income specified in this subdivision must
be prorated for that calendar year.
(c) After a person has reached the Social Security full
retirement age of 70, no reemployment income maximum is
applicable regardless of the amount of income.
(d) The amount of the retirement annuity reduction must be
handled or disposed of as provided in section 356.47.
(e) For the purpose of this subdivision, income from
teaching service includes, but is not limited to:
(1) all income for services performed as a consultant or an
independent contractor for an employer unit covered by the
provisions of this chapter; and
(2) the greater of either the income received or an amount
based on the rate paid with respect to an administrative
position, consultant, or independent contractor in an employer
unit with approximately the same number of pupils and at the
same level as the position occupied by the person who resumes
teaching service.
Sec. 6. Minnesota Statutes 2002, section 354.44,
subdivision 6, is amended to read:
Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT
ANNUITY.] (1) (a) The formula retirement annuity must be
computed in accordance with the applicable provisions of the
formulas stated in clause (2) or (4) paragraph (b) or (d) on the
basis of each member's average salary for the period of the
member's formula service credit.
For all years of formula service credit, "average salary,"
for the purpose of determining the member's retirement annuity,
means the average salary upon which contributions were made and
upon which payments were made to increase the salary limitation
provided in Minnesota Statutes 1971, section 354.511, for the
highest five successive years of formula service credit
provided, however, that such "average salary" shall not include
any more than the equivalent of 60 monthly salary payments.
Average salary must be based upon all years of formula service
credit if this service credit is less than five years.
(2) (b) This clause paragraph, in conjunction with clause
(3) paragraph (c), applies to a person who first became a member
of the association or a member of a pension fund listed in
section 356.30, subdivision 3, before July 1, 1989,
unless clause (4) paragraph (d), in conjunction with clause
(5) paragraph (e), produces a higher annuity amount, in which
case clause (4) paragraph (d) applies. The average salary as
defined in clause (1) paragraph (a), multiplied by the following
percentages per year of formula service credit shall determine
the amount of the annuity to which the member qualifying
therefor is entitled:
Coordinated Member Basic Member
Each year of service the percent the percent
during first ten specified in specified in
section 356.315, section 356.315,
subdivision 1, subdivision 3,
per year per year
Each year of service the percent the percent
thereafter specified in specified in
section 356.315, section 356.315,
subdivision 2, subdivision 4,
per year per year
(3) (c)(i) This clause paragraph applies only to a person
who first became a member of the association or a member of a
pension fund listed in section 356.30, subdivision 3, before
July 1, 1989, and whose annuity is higher when calculated
under clause (2) paragraph (b), in conjunction with this clause
paragraph than when calculated under clause (4) paragraph (d),
in conjunction with clause (5) paragraph (e).
(ii) Where any member retires prior to normal retirement
age under a formula annuity, the member shall be paid a
retirement annuity in an amount equal to the normal annuity
provided in clause (2) paragraph (b) reduced by one-quarter of
one percent for each month that the member is under normal
retirement age at the time of retirement except that for any
member who has 30 or more years of allowable service credit, the
reduction shall be applied only for each month that the member
is under age 62.
(iii) Any member whose attained age plus credited allowable
service totals 90 years is entitled, upon application, to a
retirement annuity in an amount equal to the normal annuity
provided in clause (2) paragraph (b), without any reduction by
reason of early retirement.
(4) (d) This clause paragraph applies to a member who has
become at least 55 years old and first became a member of the
association 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 clause paragraph and in conjunction with
clause (5) paragraph (e), is higher than it is when calculated
under clause (2) paragraph (b), in conjunction with clause
(3) paragraph (c). The average salary, as defined in clause (1)
paragraph (a) multiplied by the percent specified by section
356.315, subdivision 4, for each year of service for a basic
member and by the percent specified in section 356.315,
subdivision 2, for each year of service for a coordinated member
shall determine the amount of the retirement annuity to which
the member is entitled.
(5) (e) This clause paragraph applies to a person who has
become at least 55 years old and first becomes a member of the
association after June 30, 1989, and to any other member who has
become at least 55 years old and whose annuity is higher when
calculated under clause (4) paragraph (d) in conjunction with
this clause paragraph than when calculated under clause
(2) paragraph (b), in conjunction with clause (3) paragraph
(c). An employee who retires under the formula annuity before
the normal retirement age shall be paid the normal annuity
provided in clause (4) paragraph (d) reduced so that the reduced
annuity is the actuarial equivalent of the annuity that would be
payable to the employee if the employee deferred receipt of the
annuity and the annuity amount were augmented at an annual rate
of three percent compounded annually from the day the annuity
begins to accrue until the normal retirement age.
(f) No retirement annuity is payable to a former employee
with a salary that exceeds 95 percent of the governor's salary
unless and until the salary figures used in computing the
highest five successive years average salary under paragraph (a)
have been audited by the Teachers Retirement Association and
determined by the executive director to comply with the
requirements and limitations of section 354.05, subdivisions 35
and 35a.
Sec. 7. Minnesota Statutes 2002, section 490.121,
subdivision 10, is amended to read:
Subd. 10. [EARLY RETIREMENT DATE.] "Early retirement date"
means the last day of any month after a judge attains the age of
62 60 until the normal retirement date.
Sec. 8. [PERA-POLICE AND FIRE; TEMPORARY EXEMPTION FROM
REEMPLOYED ANNUITANT EARNINGS LIMITATIONS.]
Notwithstanding any provision of Minnesota Statutes,
section 353.37, to the contrary, a person who is receiving a
retirement annuity from the public employees police and fire
plan and who is employed as a sworn peace officer by the
Metropolitan Airports Commission is exempt from the limitation
on reemployed annuitant earnings for the period January 1, 2004,
until June 30, 2007.
Sec. 9. [TRA; REPORT ON CERTAIN SALARY AUDITS.]
(a) The executive director shall report to the chair of the
Legislative Commission on Pensions and Retirement, the chair of
the Committee on Governmental Operations and Veterans Affairs
Policy of the house of representatives, and the chair of the
State and Local Government Operations Committee of the senate on
the number of superintendents, assistant superintendents, and
principals who retired during the most recent calendar year, the
number of superintendents, assistant superintendents, and
principals where the preretirement salary audit under Minnesota
Statutes, section 354.44, subdivision 6, paragraph (f),
disclosed an impermissible salary inclusion amount, the school
district or districts in which impermissible salary inclusions
occurred, the average amount of the impermissible salary
inclusions where there were impermissible salary inclusions, and
the range of impermissible salary inclusions.
(b) When a report is due, the report must be filed on or
before February 15.
(c) Reports under this section must be made for calendar
years 2004 and 2005. A report under this section also must be
filed for calendar years 2006 and 2007 if the report for
calendar year 2005 indicates that there were impermissible
salary inclusions that occurred during the calendar year.
Sec. 10. [EFFECTIVE DATE.]
(a) Section 1 is effective on the day following final
enactment
(b) Sections 2, 3, 4, 5, 6, and 7 are effective on July 1,
2004.
(c) Section 8 is effective on the day following final
enactment and applies retroactively from January 1, 2004.
ARTICLE 8
DISABILITY BENEFIT PROVISIONS
Section 1. Minnesota Statutes 2002, section 352.113,
subdivision 4, is amended to read:
Subd. 4. [MEDICAL OR PSYCHOLOGICAL EXAMINATIONS;
AUTHORIZATION FOR PAYMENT OF BENEFIT.] (a) An applicant shall
provide medical, chiropractic, or psychological evidence to
support an application for total and permanent disability.
(b) The director shall have the employee examined by at
least one additional licensed chiropractor, physician, or
psychologist designated by the medical adviser. The
chiropractors, physicians, or psychologists shall make written
reports to the director concerning the employee's disability
including medical expert opinions as to whether the employee is
permanently and totally disabled within the meaning of section
352.01, subdivision 17.
(c) The director shall also obtain written certification
from the employer stating whether the employment has ceased or
whether the employee is on sick leave of absence because of a
disability that will prevent further service to the employer and
as a consequence the employee is not entitled to compensation
from the employer.
(d) The medical adviser shall consider the reports of the
physicians, psychologists, and chiropractors and any other
evidence supplied by the employee or other interested parties.
If the medical adviser finds the employee totally and
permanently disabled, the adviser shall make appropriate
recommendation to the director in writing together with the date
from which the employee has been totally disabled. The director
shall then determine if the disability occurred within 180 days
of filing the application, while still in the employment of the
state, and the propriety of authorizing payment of a disability
benefit as provided in this section.
(e) A terminated employee may apply for a disability
benefit within 180 days of termination as long as the disability
occurred while in the employment of the state. The fact that an
employee is placed on leave of absence without compensation
because of disability does not bar that employee from receiving
a disability benefit.
(f) Unless the payment of a disability benefit has
terminated because the employee is no longer totally disabled,
or because the employee has reached normal retirement age as
provided in this section, the disability benefit shall must
cease with the last payment received by the disabled employee or
which had accrued during the lifetime of the employee unless
there is a spouse surviving;. In that event, the surviving
spouse is entitled to the disability benefit for the calendar
month in which the disabled employee died.
Sec. 2. Minnesota Statutes 2002, section 352.113,
subdivision 6, is amended to read:
Subd. 6. [REGULAR MEDICAL OR PSYCHOLOGICAL EXAMINATIONS.]
At least once each year during the first five years following
the allowance of a disability benefit to any employee, and at
least once in every three-year period thereafter, the director
may require any disabled employee to undergo a medical,
chiropractic, or psychological examination. The examination
must be made at the place of residence of the employee, or at
any place mutually agreed upon, by a physician or physicians an
expert or experts designated by the medical adviser and engaged
by the director. If any examination indicates to the medical
adviser that the employee is no longer permanently and totally
disabled, or is engaged in or can engage in a gainful
occupation, payments of the disability benefit by the fund must
be discontinued. The payments shall discontinue must be
discontinued as soon as the employee is reinstated to the
payroll following sick leave, but in no case shall may payment
be made for more than 60 days after the medical adviser finds
that the employee is no longer permanently and totally disabled.
Sec. 3. Minnesota Statutes 2002, section 352.113, is
amended by adding a subdivision to read:
Subd. 7a. [TEMPORARY REEMPLOYMENT BENEFIT REDUCTION
WAIVER.] A reduction in benefits under subdivision 7, or a
termination of benefits due to the disabled employee resuming a
gainful occupation from which earnings are equal to or more than
the employee's salary at the date of disability or the salary
currently paid for similar positions does not apply until six
months after the individual returns to a gainful occupation.
Sec. 4. Minnesota Statutes 2002, section 352.113,
subdivision 8, is amended to read:
Subd. 8. [REFUSAL OF EXAMINATION.] If a disabled employee
refuses to submit to a medical an expert examination as
required, payments by the fund must be discontinued and the
director shall revoke all rights of the employee in any
disability benefit.
Sec. 5. Minnesota Statutes 2002, section 352.95,
subdivision 1, is amended to read:
Subdivision 1. [JOB-RELATED DISABILITY.] A covered
correctional employee who becomes disabled and who is expected
to be physically or mentally unfit to perform the duties of the
position for at least one year as a direct result of an injury,
sickness, or other disability that incurred in or arising arose
out of any act of duty that makes the employee physically or
mentally unable to perform the duties, is entitled to a
disability benefit. The disability benefit may be based on
covered correctional service only. The benefit amount must
equal is 50 percent of the average salary defined in section
352.93, plus an additional percent equal to that specified in
section 356.315, subdivision 5, for each year of covered
correctional service in excess of 20 years, ten months, prorated
for completed months.
Sec. 6. Minnesota Statutes 2002, section 352.95,
subdivision 2, is amended to read:
Subd. 2. [NON-JOB-RELATED DISABILITY.] Any A covered
correctional employee who, after rendering at least one year of
covered correctional service, becomes disabled and who is
expected to be physically or mentally unfit to perform the
duties of the position for at least one year because of sickness
or injury occurring that occurred while not engaged in covered
employment, is entitled to a disability benefit based on covered
correctional service only. The disability benefit must be
computed as provided in section 352.93, subdivisions 1 and 2,
and must be computed as though the employee had at least 15
years of covered correctional service.
Sec. 7. Minnesota Statutes 2002, section 352.95,
subdivision 4, is amended to read:
Subd. 4. [MEDICAL OR PSYCHOLOGICAL EVIDENCE.] (a) An
applicant shall provide medical, chiropractic, or psychological
evidence to support an application for disability benefits. The
director shall have the employee examined by at least one
additional licensed physician, chiropractor, or psychologist who
is designated by the medical adviser. The physicians,
chiropractors, or psychologists with respect to a mental
impairment, shall make written reports to the director
concerning the question of the employee's disability,
including medical their expert opinions as to whether the
employee is disabled within the meaning of this section. The
director shall also obtain written certification from the
employer stating whether or not the employee is on sick leave of
absence because of a disability that will prevent further
service to the employer, and as a consequence, the employee is
not entitled to compensation from the employer.
(b) If, on considering the physicians' reports by the
physicians, chiropractors, or psychologists and any other
evidence supplied by the employee or others, the medical adviser
finds the employee disabled within the meaning of this section,
the advisor shall make the appropriate recommendation to the
director, in writing, together with the date from which the
employee has been disabled. The director shall then determine
the propriety of authorizing payment of a disability benefit as
provided in this section.
(c) Unless the payment of a disability benefit has
terminated because the employee is no longer disabled, or
because the employee has reached either age 65 or the five-year
anniversary of the effective date of the disability benefit,
whichever is later, the disability benefit shall must cease with
the last payment which was received by the disabled employee or
which had accrued during the employee's lifetime. While
disability benefits are paid, the director has the right, at
reasonable times, to require the disabled employee to submit
proof of the continuance of the disability claimed. If any
examination indicates to the medical adviser that the employee
is no longer disabled, the disability payment must be
discontinued upon the person's reinstatement to state service or
within 60 days of the finding, whichever is sooner.
Sec. 8. Minnesota Statutes 2002, section 352B.10,
subdivision 1, is amended to read:
Subdivision 1. [INJURIES,; PAYMENT AMOUNTS.] Any A member
who becomes disabled and who is expected to be physically or
mentally unfit to perform duties for at least one year as a
direct result of an injury, sickness, or other disability that
incurred in or arising arose out of any act of duty, shall is
entitled to receive disability benefits while disabled. The
benefits must be paid in monthly installments. The benefit is
an amount equal to the member's average monthly salary
multiplied by 60 percent, plus an additional percent equal to
that specified in section 356.315, subdivision 6, for each year
and pro rata for completed months of service in excess of 20
years, if any.
Sec. 9. Minnesota Statutes 2002, section 352B.10,
subdivision 2, is amended to read:
Subd. 2. [DISABLED WHILE NOT ON DUTY.] If a member
terminates employment after with at least one year of service
because of sickness or injury occurring while not on duty and
not engaged in state work entitling the member to membership,
and the member becomes disabled and is expected to be physically
or mentally unfit to perform the duties of the position for at
least one year because of sickness or injury occurring that
occurred while not engaged in covered employment, the member
individual is entitled to disability benefits. The benefit must
be in the same amount and computed in the same way as if the
member individual were 55 years old at the date of disability
and the annuity were paid was payable under section 352B.08. If
a disability under this clause subdivision occurs after one year
of service but before 15 years of service, the disability
benefit must be computed as though the member individual had
credit for 15 years of service.
Sec. 10. Minnesota Statutes 2002, section 352B.10,
subdivision 3, is amended to read:
Subd. 3. [ANNUAL AND SICK LEAVE; WORK AT LOWER PAY.] No
member shall is entitled to receive any a disability benefit
payment when the member has unused annual leave or sick leave,
or under any other circumstances, when, during the period of
disability, there has been no impairment of salary. Should If
the member or former member resume disabilitant resumes gainful
work employment, the disability benefit must be continued in an
amount which, when added to current earnings, does not exceed
the salary rate received of by the person at the date of
disability as, which must be adjusted over time by the same
percentage increase in United States average wages used by the
Social Security Administration in calculating average indexed
monthly earnings for the old age, survivors, and disability
insurance programs for the same period.
Sec. 11. Minnesota Statutes 2002, section 352B.10,
subdivision 4, is amended to read:
Subd. 4. [PROOF OF DISABILITY.] (a) No disability benefit
payment shall benefits may be made except upon paid unless
adequate proof is furnished to the executive director of the
existence of the disability. While disability benefits are
being paid
(b) Adequate proof of a disability must include a written
expert report by a licensed physician, by a licensed
chiropractor, or with respect to a mental impairment, by a
licensed psychologist.
(c) Following the commencement of benefit payments,
the executive director has the right, at reasonable times, to
require the disabled former member disabilitant to submit proof
of the continuance of the disability claimed.
Sec. 12. Minnesota Statutes 2002, section 352B.10,
subdivision 5, is amended to read:
Subd. 5. [OPTIONAL ANNUITY.] A disabled member
disabilitant may, in lieu of survivorship coverage under section
352B.11, subdivision 2, choose the normal disability benefit or
an optional annuity as provided in section 352B.08, subdivision
3. The choice of an optional annuity must be made in writing,
on a form prescribed by the executive director, and must be made
before the commencement of the payment of the disability
benefit, or within 90 days of attaining before reaching age 65
or before reaching the five-year anniversary of the effective
date of the disability benefit, whichever is later. It The
optional annuity is effective on the date on which the
disability benefit begins to accrue, or the month following the
attainment of age 65 or following the five-year anniversary of
the effective date of the disability benefit, whichever is later.
Sec. 13. Minnesota Statutes 2002, section 352B.105, is
amended to read:
352B.105 [TERMINATION OF DISABILITY BENEFITS.]
Disability benefits payable under section 352B.10 shall
must terminate at on the transfer date, which is the end of the
month in which the beneficiary disabilitant becomes 65 years old
or the five-year anniversary of the effective date of the
disability benefit, whichever is later. If the beneficiary
disabilitant is still disabled when on the beneficiary becomes
65 years old transfer date, the beneficiary shall disabilitant
must be deemed to be a retired member and, if the beneficiary
disabilitant had chosen an optional annuity under section
352B.10, subdivision 5, shall must receive an annuity in
accordance with under the terms of the optional annuity
previously chosen. If the beneficiary disabilitant had not
chosen an optional annuity under section 352B.10, subdivision 5,
the beneficiary disabilitant may then choose to receive either a
normal retirement annuity computed under section 352B.08,
subdivision 2, or an optional annuity as provided in section
352B.08, subdivision 3. An optional annuity must be chosen
within 90 days of attaining age 65 or reaching the five-year
anniversary of the effective date of the disability benefit,
whichever is later transfer date. If an optional annuity is
chosen, the optional annuity shall begin to accrue accrues on
the first of the month next following attainment of age 65 or
the five-year anniversary of the effective transfer date of the
disability benefit, whichever is later.
Sec. 14. Minnesota Statutes 2002, section 352D.065,
subdivision 2, is amended to read:
Subd. 2. [DISABILITY BENEFIT AMOUNT.] A participant who
becomes totally and permanently disabled has the option, even if
on leave of absence without pay, to receive:
(1) the value of the participant's total shares;
(2) the value of one-half of a portion of the total shares
and an annuity based on the value of one-half remainder of the
total shares; or
(3) an annuity based on the value of the participant's
total shares.
Sec. 15. Minnesota Statutes 2002, section 353.33,
subdivision 4, is amended to read:
Subd. 4. [PROCEDURE TO DETERMINE ELIGIBILITY.] (a) The
applicant shall provide an expert report signed by a licensed
physician, psychologist, or chiropractor and the applicant must
authorize the release of medical and health care evidence,
including all medical records and relevant information from any
source, to support the application for total and permanent
disability benefits.
(b) The medical adviser shall verify the medical evidence
and, if necessary for disability determination, suggest the
referral of the applicant to specialized medical consultants.
(c) The association shall also obtain from the employer, a
certification of the member's past public service, the dates of
any paid sick leave and vacation beyond the last working day and
whether or not any sick leave or annual leave has been allowed.
(d) If, upon consideration of the medical evidence received
and the recommendations of the medical adviser, it is determined
by the executive director that the applicant is totally and
permanently disabled within the meaning of the law, the
association shall grant the person a disability benefit. The
fact that
(e) An employee who is placed on leave of absence without
compensation because of a disability does is not bar the person
barred from receiving a disability benefit.
Sec. 16. Minnesota Statutes 2002, section 353.33,
subdivision 6, is amended to read:
Subd. 6. [CONTINUING ELIGIBILITY FOR BENEFITS.] The
association shall determine eligibility for continuation of
disability benefits and require periodic examinations and
evaluations of disabled members as frequently as deemed
necessary. The association shall require the disabled member to
provide an expert report signed by a licensed physician,
psychologist, or chiropractor and the disabled member shall
authorize the release of medical and health care evidence,
including all medical and health care records and information
from any source, relating to an application for continuation of
disability benefits. Disability benefits are contingent upon a
disabled person's participation in a vocational
rehabilitation program evaluation if the executive director
determines that the disabled person may be able to return to a
gainful occupation. If a member is found to be no longer
totally and permanently disabled, payments must cease the first
of the month following the expiration of a 30-day period after
the member receives a certified letter notifying the member that
payments will cease.
Sec. 17. Minnesota Statutes 2002, section 353.33,
subdivision 6b, is amended to read:
Subd. 6b. [DUTIES OF THE MEDICAL ADVISER.] At the request
of the executive director, the medical adviser shall designate
licensed physicians, psychologists, or chiropractors to examine
applicants for disability benefits and review the medical expert
reports based upon these examinations to determine whether an
applicant is totally and permanently disabled as defined in
section 353.01, subdivision 19, disabled as defined in section
353.656, or eligible for continuation of disability benefits
under subdivision 6. The medical examiner shall also review, at
the request of the executive director, all medical and health
care statements on behalf of an applicant for disability
benefits, and shall report in writing to the executive
director the conclusions and recommendations of the examiner on
those matters referred for advice.
Sec. 18. Minnesota Statutes 2002, section 353.33,
subdivision 7, is amended to read:
Subd. 7. [PARTIAL REEMPLOYMENT.] If, following a work or
non-work-related injury or illness, a disabled person resumes a
gainful occupation from which who remains totally and
permanently disabled as defined in section 353.01, subdivision
19, has income from employment that is not substantial gainful
activity and the rate of earnings from that employment are less
than the salary rate at the date of disability or the
salary rate currently paid for similar positions similar to the
employment position held by the disabled person immediately
before becoming disabled, whichever is greater, the board
executive director shall continue the disability benefit in an
amount that, when added to the earnings and any workers'
compensation benefit, does not exceed the salary rate at the
date of disability or the salary currently paid for similar
positions similar to the employment position held by the
disabled person immediately before becoming disabled, whichever
is higher, provided. The disability benefit does under this
subdivision may not exceed the disability benefit originally
allowed, plus any postretirement adjustments payable after
December 31, 1988, in accordance with section 11A.18,
subdivision 10. No deductions for the retirement fund may be
taken from the salary of a disabled person who is receiving a
disability benefit as provided in this subdivision.
Sec. 19. Minnesota Statutes 2002, section 353.33, is
amended by adding a subdivision to read:
Subd. 7a. [TRIAL WORK PERIOD.] (a) If, following a work or
non-work related injury or illness, a disabled member attempts
to return to work for their previous public employer or attempts
to return to a similar position with another public employer, on
a full-time or less than full-time basis, the Public Employees
Retirement Association shall continue paying the disability
benefit for a period not to exceed six months. The disability
benefit must continue in an amount that, when added to the
subsequent employment earnings and workers' compensation
benefit, does not exceed the salary at the date of disability or
the salary currently paid for similar positions, whichever is
higher.
(b) No deductions for the retirement fund may be taken from
the salary of a disabled person who is attempting to return to
work under this provision unless the member waives further
disability benefits.
(c) A member only may return to employment and continue
disability benefit payments once while receiving disability
benefits from a plan administered by the Public Employees
Retirement Association.
Sec. 20. Minnesota Statutes 2002, section 353.656,
subdivision 5, is amended to read:
Subd. 5. [PROOF OF DISABILITY.] (a) A disability benefit
payment must not be made except upon adequate proof furnished to
the executive director of the association of the existence of
such a disability, and.
(b) During the time when disability benefits are being
paid, the executive director of the association has the right,
at reasonable times, to require the disabled member to submit
proof of the continuance of the disability claimed.
(c) Adequate proof of a disability must include a written
expert report by a licensed physician, by a licensed
chiropractor, or with respect to a mental impairment, by a
licensed psychologist.
(d) A person applying for or receiving a disability benefit
shall provide or authorize release of medical evidence,
including all medical records and information from any source,
relating to an application for disability benefits or the
continuation of those benefits.
Sec. 21. Minnesota Statutes 2002, section 353.656, is
amended by adding a subdivision to read:
Subd. 8. [APPLICATION PROCEDURE TO DETERMINE ELIGIBILITY
FOR POLICE AND FIRE PLAN DISABILITY BENEFITS.] (a) An
application for disability benefits must be made in writing on a
form or forms prescribed by the executive director.
(b) If an application for disability benefits is filed
within two years of the date of the injury or the onset of the
illness that gave rise to the disability application, the
application must be supported by evidence that the applicant is
unable to perform the duties of the position held by the
applicant on the date of the injury or the onset of the illness
causing the disability. The employer must provide evidence
indicating whether the applicant is able or unable to perform
the duties of the position held on the date of the injury or
onset of illness causing the disability and the specifications
of any duties that the individual can or cannot perform.
(c) If an application for disability benefits is filed more
than two years after the date of the injury or the onset of an
illness causing the disability, the application must be
supported by evidence that the applicant is unable to perform
the most recent duties that are expected to be performed by the
applicant during the 90 days before the filing of the
application. The employer must provide evidence of the duties
that are expected to be performed by the applicant during the 90
days before to the filing of the application, whether the applicant
can or cannot perform those duties overall, and the
specifications of any duties that the applicant can or cannot
perform.
(d) Unless otherwise permitted by law, no application for
disability benefits can be filed by a former member of the
police and fire plan more than three years after the former
member has terminated from Public Employees Retirement
Association police and fire plan covered employment. If an
application is filed within three years after the termination of
public employment, the former member must provide evidence that
the disability is the direct result of an injury or the
contracting of an illness that occurred while the person was
still actively employed and participating in the police and fire
plan.
(e) Any application for duty-related disability must be
supported by a first report of injury as defined in section
176.231.
(f) If a member who has applied for and been approved for
disability benefits before the termination of service does not
terminate service or is not placed on an authorized leave of
absence as certified by the governmental subdivision within 45
days following the date on which the application is approved,
the application shall be canceled. If an approved application
for disability benefits has been canceled, a subsequent
application for disability benefits may not be filed on the
basis of the same medical condition for a minimum of one year
from the date on which the previous application was canceled.
(g) An applicant may file a retirement application under
section 353.29, subdivision 4, at the same time as the
disability application is filed. If the disability application
is approved, the retirement application is canceled. If the
disability application is denied, the retirement application
must be initiated and processed upon the request of the
applicant. A police and fire fund member may not receive a
disability benefit and a retirement annuity from the police and
fire fund at the same time.
(h) A repayment of a refund must be made within six months
after the effective date of disability benefits or within six
months after the date of the filing of the disability
application, whichever is later. No purchase of prior service
or payment made in lieu of salary deductions otherwise
authorized under section 353.01 or 353.36, subdivision 2, may be
made after the occurrence of the disability for which an
application is filed under this section.
Sec. 22. Minnesota Statutes 2002, section 353.656, is
amended by adding a subdivision to read:
Subd. 9. [REFUSAL OF EXAMINATION OR MEDICAL EVIDENCE.] If
a person applying for or receiving a disability benefit refuses
to submit to a medical examination under subdivision 11, or
fails to provide or to authorize the release of medical evidence
under subdivisions 5 and 7, the association shall cease the
application process or shall discontinue the payment of a
disability benefit, whichever is applicable. Upon the receipt
of the requested medical evidence, the association shall resume
the application process or the payment of a disability benefit
upon approval for the continuation, whichever is applicable.
Sec. 23. Minnesota Statutes 2002, section 353.656, is
amended by adding a subdivision to read:
Subd. 10. [ACCRUAL OF BENEFITS.] (a) A disability benefit
begins to accrue the day following the commencement of
disability, 90 days preceding the filing of an application, or,
if annual or sick leave is paid for more than the 90-day period,
from the date on which the payment of salary ceased, whichever
is later.
(b) Payment of the disability benefit must not continue
beyond the end of the month in which entitlement has
terminated. If the disabilitant dies prior to negotiating the
check for the month in which death occurs, payment must be made
to the surviving spouse or, if none, to the designated
beneficiary or, if none, to the estate.
Sec. 24. Minnesota Statutes 2002, section 353.656, is
amended by adding a subdivision to read:
Subd. 11. [INDEPENDENT MEDICAL EXAMINATION; DUTIES OF THE
MEDICAL ADVISOR.] Any individual receiving disability benefits
or any applicant, if requested by the executive director, must
submit to an independent medical examination. The medical
examination must be paid for by the association. The medical
advisor shall review all medical reports submitted to the
association, including the findings of an independent medical
examination requested under this section, and shall advise the
executive director.
Sec. 25. Minnesota Statutes 2002, section 353.656, is
amended by adding a subdivision to read:
Subd. 12. [APPROVAL OF DISABILITY BENEFITS.] Review of
disability benefit applications and review of existing
disability cases must be made by the executive director based
upon all relevant evidence, including advice from the medical
advisor and the evidence provided by the member and employer. A
member whose application for disability benefits or whose
continuation of disability benefits is denied may appeal the
executive director's decision to the board of trustees within 45
days of the receipt of a certified letter notifying the member
of the decision to deny the application or the benefit
continuation.
Sec. 26. Minnesota Statutes 2002, section 354.48,
subdivision 2, is amended to read:
Subd. 2. [APPLICATIONS; ACCRUAL.] (a) A person described
in subdivision 1, or another person authorized to act on behalf
of the person, may make written application on a form prescribed
by the executive director for a total and permanent disability
benefit only within the 18-month period following the
termination of teaching service. This
(b) The benefit accrues from the day following the
commencement of the disability or the day following the last day
for which salary is paid, whichever is later, but does not begin
to accrue more than six months before the date on which the
written application is filed with the executive director. If
salary is being received for either annual or sick leave during
the disability period, payments accrue the disability benefit
accrues from the day following the last day for which this
salary is paid.
Sec. 27. Minnesota Statutes 2002, section 354.48,
subdivision 4, is amended to read:
Subd. 4. [DETERMINATION BY THE EXECUTIVE DIRECTOR.] (a)
The executive director shall have the member examined by at
least two licensed physicians, licensed chiropractors, or
licensed psychologists selected by the medical adviser.
(b) These physicians, chiropractors, or psychologists with
respect to a mental impairment, shall make written reports to
the executive director concerning the member's disability,
including medical expert opinions as to whether or not the
member is permanently and totally disabled within the meaning of
section 354.05, subdivision 14.
(c) The executive director shall also obtain written
certification from the last employer stating whether or not the
member was separated from service because of a disability which
would reasonably prevent further service to the employer and as
a consequence the member is not entitled to compensation from
the employer.
(d) If, upon the consideration of the reports of the
physicians, chiropractors, or psychologists and any other
evidence presented by the member or by others interested
therein, the executive director finds that the member is totally
and permanently disabled, the executive director shall grant the
member a disability benefit. The fact that
(e) An employee who is placed on leave of absence without
compensation because of disability shall is not bar the member
barred from receiving a disability benefit.
Sec. 28. Minnesota Statutes 2002, section 354.48,
subdivision 6, is amended to read:
Subd. 6. [REGULAR PHYSICAL EXAMINATIONS.] At least once
each year during the first five years following the allowance of
a disability benefit to any member, and at least once in every
three-year period thereafter, the executive director shall
require the disability beneficiary to undergo a medical an
expert examination by a physician or physicians, by a
chiropractor or chiropractors, or by one or more psychologists
with respect to a mental impairment, engaged by the executive
director. If any an examination indicates that the member is no
longer permanently and totally disabled or that the member is
engaged or is able to engage in a substantial gainful
occupation, payments of the disability benefit by the
association shall must be discontinued. The payments shall
discontinue must be discontinued as soon as the member is
reinstated to the payroll following sick leave, but payment may
not be made for more than 60 days after the physicians, the
chiropractors, or the psychologists engaged by the executive
director find that the person is no longer permanently and
totally disabled.
Sec. 29. Minnesota Statutes 2002, section 354.48,
subdivision 6a, is amended to read:
Subd. 6a. [MEDICAL ADVISER; DUTIES.] The state
commissioner of health or a licensed physician on the staff of
the department of health who is designated by the commissioner
shall be is the medical adviser of the executive director. The
medical adviser shall designate licensed physicians, licensed
chiropractors, or licensed psychologists with respect to a
mental impairment, who shall examine applicants for disability
benefits. The medical adviser shall pass upon all medical
expert reports based on any examinations performed in order to
determine whether a teacher is totally and permanently disabled
as defined in section 354.05, subdivision 14. The medical
adviser shall also investigate all health and medical statements
and certificates by or on behalf of a teacher in connection with
a disability benefit, and shall report in writing to the
director setting forth any conclusions and recommendations on
all matters referred to the medical adviser.
Sec. 30. Minnesota Statutes 2002, section 354.48,
subdivision 10, is amended to read:
Subd. 10. [RETIREMENT STATUS AT NORMAL RETIREMENT AGE.]
(a) No person shall be is entitled to receive both a disability
benefit and a retirement annuity provided by this chapter.
(b) The disability benefit paid to a person hereunder shall
must terminate at the end of the month in which the person
attains the normal retirement age. If the person is still
totally and permanently disabled at the beginning of the month
next following the month in which the person attains the normal
retirement age, the person shall must be deemed to be on
retirement status and, if the person had elected an optional
annuity pursuant to under subdivision 3a, shall must receive an
annuity in accordance with the terms of the optional annuity
previously elected, or, if the person had not elected an
optional annuity pursuant to under subdivision 3a, may elect to
receive a straight life retirement annuity equal to the
disability benefit paid prior to before the date on which the
person attains the normal retirement age 65 or reaches the
five-year anniversary of the effective date of the disability
benefit, whichever is later, or may elect to receive an optional
annuity as provided in section 354.45, subdivision 1.
(c) Election of an optional annuity must be made within 90
days of the normal retirement age 65 or the five-year
anniversary of the effective date of the disability benefit,
whichever is later.
(d) If an optional annuity is elected, the election shall
be is effective on the date on which the person attains the
normal retirement age 65 or reaches the five-year anniversary of
the effective date of the disability benefit, whichever is
later. The optional annuity shall begin begins to accrue on the
first day of the month next following the month in which the
person attains the normal retirement age 65 or reaches the
five-year anniversary of the effective date of the disability
benefit, whichever is later.
Sec. 31. Minnesota Statutes 2002, section 354A.36,
subdivision 4, is amended to read:
Subd. 4. [DETERMINATION OF DISABILITY.] The board of the
teachers retirement fund association shall make the final
determination of the existence of a permanent and total
disability. The board shall have the coordinated member
examined by at least two licensed physicians, licensed
chiropractors, or licensed psychologists who shall be are
selected by the board. After making any required examinations,
each physician, chiropractor, or psychologist with respect to a
mental impairment, shall make a written report to the board
concerning the coordinated member, which shall include a
statement of the physician's medical expert opinion of the
physician, chiropractor, or psychologist as to whether or not
the member is permanently and totally disabled within the
meaning of section 354A.011, subdivision 14. The board shall
also obtain a written statement from the school district
employer as to whether or not the coordinated member was
terminated or separated from active employment due to a
disability which is deemed by the district employer to
reasonably prevent further service by the member to the district
employer and which caused the coordinated member not to be
entitled to further compensation from the district employer for
services rendered by the member. If, after consideration of the
reports of the physicians, chiropractors, or psychologists with
respect to a mental impairment, and any evidence presented by
the member or by any other interested parties, the board
determines that the coordinated member is totally and
permanently disabled within the meaning of section 354A.011,
subdivision 14, it shall grant the coordinated member a
disability benefit. The fact that A member has been who is
placed on a leave of absence without compensation as a result of
the disability shall is not operate to bar barred a
coordinated member from receiving a disability benefit under
this section.
Sec. 32. Minnesota Statutes 2002, section 354A.36,
subdivision 6, is amended to read:
Subd. 6. [REQUIREMENT FOR REGULAR PHYSICAL EXAMINATIONS.]
At least once each year during the first five years following
the granting of a disability benefit to a coordinated member by
the board and at least once in every three year period
thereafter, the board shall require the disability benefit
recipient to undergo a medical an expert examination as a
condition for continued entitlement of the benefit recipient to
receive a disability benefit. The medical expert examination
shall must be made at the place of residence of the disability
benefit recipient or at any other place mutually agreeable to
the disability benefit recipient and the board. The medical
expert examination shall must be made by a physician or
physicians, by a chiropractor or chiropractors, or by one or
more psychologists engaged by the board. The physician or
physicians, the chiropractor or chiropractors, or the
psychologist or psychologists with respect to a mental
impairment, conducting the medical expert examination shall make
a written report to the board concerning the disability benefit
recipient and the recipient's disability, including a statement
of the physician's medical expert opinion of the physician,
chiropractor, or psychologist as to whether or not the member
remains permanently and totally disabled within the meaning of
section 354A.011, subdivision 14. If the board determines from
consideration of the physician's written medical expert
examination report of the physician, of the chiropractor, or of
the psychologist, with respect to a mental impairment, that the
disability benefit recipient is no longer permanently and
totally disabled or if the board determines that the benefit
recipient is engaged or is able to engage in a gainful
occupation, unless the disability benefit recipient is partially
employed pursuant to under subdivision 7, then further
disability benefit payments from the fund shall must be
discontinued. The discontinuation of disability benefits shall
must occur immediately if the disability recipient is reinstated
to the district payroll following sick leave and within 60 days
of the determination by the board following the medical expert
examination and report of the physician or physicians,
chiropractor or chiropractors, or psychologist or psychologists
engaged by the board that the disability benefit recipient is no
longer permanently and totally disabled within the meaning of
section 354A.011, subdivision 14.
Sec. 33. Minnesota Statutes 2002, section 356.302,
subdivision 3, is amended to read:
Subd. 3. [GENERAL EMPLOYEE PLAN ELIGIBILITY REQUIREMENTS.]
A disabled member of a covered retirement plan who has credit
for allowable service in a combination of general employee
retirement plans is entitled to a combined service disability
benefit if the member:
(1) is less than 65 years of the normal retirement age on
the date of the application for the disability benefit;
(2) has become totally and permanently disabled;
(3) has credit for allowable service in any combination of
general employee retirement plans totaling at least three years;
(4) has credit for at least one-half year of allowable
service with the current general employee retirement plan before
the commencement of the disability;
(5) has at least three continuous years of allowable
service credit by the general employee retirement plan or has at
least a total of three years of allowable service credit by a
combination of general employee retirement plans in a 72-month
period during which no interruption of allowable service credit
from a termination of employment exceeded 29 days; and
(6) was not receiving a retirement annuity or disability
benefit from any covered general employee retirement plan at the
time of the commencement of the disability.
Sec. 34. Minnesota Statutes 2002, section 422A.18,
subdivision 1, is amended to read:
Subdivision 1. [MEDICAL EXPERT EXAMINATION.] (a) Upon the
application of the head of the department in which a
contributing employee is employed, or upon the application of
the contributing employee or of one acting in the employee's
behalf, the retirement board shall place the contributor on
disability, provided and pay the person a disability allowance
under this section if the medical board, after a medical an
expert examination of the contributor made at the place of
residence of the contributor or at a place mutually agreed upon,
shall certify to the retirement board that the contributor is
physically or mentally incapacitated for the performance of
further service to the city and recommend that the contributor
be placed on disability.
(b) The medical board shall consist of the city physician,
a physician, chiropractor, or licensed psychologist to be
selected by the retirement board, and a physician, chiropractor,
or licensed psychologist to be selected by the employee.
(c) Disability of an employee resulting from injury or
illness received in the performance of the duties of the city
service shall be defined as duty disability.
(d) Disability incurred as a result of injury or illness
not connected with the performance of such service shall be
defined as nonduty disability. In order to be entitled to a
retirement allowance for a nonduty disability, an employee shall
have rendered five or more years of service to the city.
Sec. 35. Minnesota Statutes 2002, section 422A.18,
subdivision 4, is amended to read:
Subd. 4. [ADDITIONAL MEDICAL EXAMINATIONS.] (a) Once each
year, the retirement board may require any disability
beneficiary while still under the established age for retirement
to undergo medical an expert examination by a physician or one
or more physicians, one or more chiropractors, or one or more
licensed psychologists designated by the retirement board,. The
examination to must be made at the place of residence of the
beneficiary or other place mutually agreed upon. Should
(b) If the medical board report and certify certifies to
the retirement board that such the disability beneficiary is no
longer physically or mentally incapacitated for the performance
of duty, the beneficiary's allowance shall must be discontinued
and the head of the department in which the beneficiary was
employed at the time of retirement shall, upon notification by
the retirement board of the report of the medical board,
reemploy the beneficiary at a rate of salary not less than the
amount of the disability allowance, but.
(c) After the expiration of five years subsequent to the
retirement of such the beneficiary, the restoration to duty,
notwithstanding the recommendation of the medical board, shall
be is optional with the head of the department. Should If any
disability beneficiary, while under the established age for
retirement refuse, refuses to submit to at least one
medical expert examination in any year by a physician or one or
more physicians, one or more chiropractors, or one or more
licensed psychologists designated by the medical board, the
allowance shall must be discontinued until the withdrawal of
such refusal, and should such refusal continue for one year, all
the beneficiary's rights in and to any retirement or disability
allowance shall be are forfeited.
Sec. 36. Minnesota Statutes 2002, section 423B.09,
subdivision 4, is amended to read:
Subd. 4. [CERTIFICATE OF PHYSICIANS REQUIRED.] (a) No
member is entitled to a pension under subdivision 1, paragraph
(b) or (c), except upon the certificate of two or more
physicians or, surgeons, chiropractors, licensed psychologists,
or a combination of experts chosen by the governing board. This
certificate must set forth the cause, nature, and extent of the
disability, disease, or injury of the member.
(b) No active member may be awarded, granted, or paid a
disability pension under subdivision 1, paragraph (c), unless
the certificate states that the disability, disease, or injury
was incurred or sustained by the member while in the service of
the police department of the city. The certificate must be
filed with the secretary of the association.
Sec. 37. Minnesota Statutes 2002, section 423C.05,
subdivision 4, is amended to read:
Subd. 4. [TEMPORARY DISABILITY PENSION.] (a) An active
member who, by sickness or accident, becomes temporarily
disabled from performing firefighter duties for the fire
department shall be is entitled to a temporary disability
pension.
(b) No allowance for disability shall may be made unless
notice of the disability and an application for benefits is made
by or on behalf of the disabled member within 90 days after the
beginning of the disability. This application shall must
include a certificate from a qualified medical professional
expert setting forth the cause, nature, and extent of the
disability. This certificate must also conclude that the
disability was incurred or sustained while the member was in the
service of the fire department.
(c) The board shall utilize the board of examiners
established pursuant to under section 423C.03, subdivision 6, to
investigate and report on an application for benefits pursuant
to under this section and to make recommendations as to
eligibility and the benefit amount to be paid.
(d) A member entitled to a disability pension shall must
receive benefits in the amount and manner determined by the
board.
Sec. 38. Minnesota Statutes 2002, section 423C.05,
subdivision 5, is amended to read:
Subd. 5. [SERVICE-RELATED PERMANENT DISABILITY PENSION.]
An active member who becomes permanently disabled as the result
of a service-related disease or injury shall is, upon
application and approval of the board, be entitled to a pension
of 41 units or in the amount determined under subdivision 8.
The application for service-related permanent disability shall
must include a certificate from a qualified medical professional
expert setting forth the permanent nature of the disability or
disease and that it was service related.
Sec. 39. Minnesota Statutes 2002, section 423C.05,
subdivision 6, is amended to read:
Subd. 6. [NON-SERVICE-RELATED PERMANENT DISABILITY
PENSION.] An active member who, by reason of sickness or
accident, becomes permanently disabled and unable to perform
firefighter duties for the fire department due to
non-service-related disease or injury shall be is entitled to a
permanent disability pension. No allowance for disability shall
may be made unless notice of the disability and an application
for benefits is made by or on behalf of the disabled member
within 90 days after the beginning of the disability. This
application shall must include a certificate from a qualified
medical professional setting forth the cause, nature, and extent
of the disability. A member who is entitled to a disability
pension under this subdivision shall must receive benefits in
the amount and manner determined by the board, not to exceed 41
units.
Sec. 40. Minnesota Statutes 2002, section 423C.05, is
amended by adding a subdivision to read:
Subd. 6a. [QUALIFIED EXPERT.] A qualified expert includes
a licensed physician or chiropractor, or in the case of mental
impairment, includes a licensed psychologist.
Sec. 41. [REPEALER.]
(a) Minnesota Statutes 2002, sections 353.33, subdivision
5b; and 490.11, are repealed on July 1, 2004.
(b) Sections 3 and 19 are repealed on July 1, 2006.
Sec. 42. [EFFECTIVE DATE.]
Sections 1 to 41 are effective on July 1, 2004.
ARTICLE 9
DEATH AND SURVIVOR BENEFITS AND REFUNDS
Section 1. Minnesota Statutes 2002, section 3A.03,
subdivision 2, is amended to read:
Subd. 2. [REFUND.] (a) Any A former member who has made
contributions under subdivision 1 and who is no longer a member
of the legislature is entitled to receive, upon written
application to the executive director on a form prescribed by
the executive director, a refund of all contributions credited
to the member's account with interest at an annual rate of six
percent compounded annually computed as provided in section
352.22, subdivision 2.
(b) The refund of contributions as provided in paragraph (a)
terminates all rights of a former member of the legislature or
and the survivors of the former member under this chapter.
(c) If the former member of the legislature again becomes a
member of the legislature after having taken a refund as
provided in paragraph (a), the member must be considered a new
member of this plan. However, a new the member may reinstate
the rights and credit for service previously forfeited if the
new member repays all refunds taken plus interest at an annual
rate of 8.5 percent compounded annually from the date on which
the refund was taken to the date on which the refund is repaid.
(c) (d) No person may be required to apply for or to accept
a refund.
Sec. 2. Minnesota Statutes 2002, section 352.12,
subdivision 1, is amended to read:
Subdivision 1. [DEATH BEFORE TERMINATION OF SERVICE.] If
an employee dies before state service has terminated and neither
a survivor annuity nor a reversionary annuity is payable on
behalf of the employee, or if a former employee who has
sufficient service credit to be entitled to an annuity dies
before the benefit annuity has become payable, the director
shall make a refund with interest is payable upon filing a
written application on a form prescribed by the executive
director. The refund is payable to the last designated
beneficiary or, if there is none, to the surviving spouse or, if
none, to the employee's surviving children in equal shares or,
if none, to the employee's surviving parents in equal shares or,
if none, to the representative of the estate in an amount equal
to the accumulated employee contributions plus interest at the
rate of six percent per annum compounded annually. Interest
must be computed as provided in section 352.22, subdivision 2,
to the first day of the month in which the refund is processed.
Upon the death of an employee who has received a refund that was
later repaid in full, interest must be paid on the repaid refund
only from the date of the repayment. If the repayment was made
in installments, interest must be paid only from the date on
which the installment payments began. The designated
beneficiary, the surviving spouse, or the representative of the
estate of an employee who had received a disability benefit is
not entitled to the payment of interest upon any balance
remaining to the decedent's credit in the fund at the time of
death, unless the death occurred before any payment could be
negotiated.
Sec. 3. Minnesota Statutes 2002, section 352.12,
subdivision 6, is amended to read:
Subd. 6. [DEATH AFTER SERVICE TERMINATION.] Except as
provided in subdivision 1, if a former employee covered by the
system dies and who has not received an annuity, a retirement
allowance, or a disability benefit dies, a refund must be made
is payable to the last designated beneficiary or, if there is
none, to the surviving spouse or, if none, to the employee's
surviving children in equal shares or, if none, to the
employee's surviving parents in equal shares or, if none, to the
representative of the estate in an amount equal to accumulated
employee contributions plus interest. The refund must include
interest at the rate of six percent per year compounded
annually. The interest on the refund must be computed as
provided in section 352.22, subdivision 2.
Sec. 4. Minnesota Statutes 2002, section 352.22,
subdivision 2, is amended to read:
Subd. 2. [AMOUNT OF REFUND.] Except as provided in
subdivision 3, the refund payable to a person who ceased to be a
state employee by reason of a termination of state service is in
an amount equal to employee accumulated contributions plus
interest at the rate of six percent per year compounded annually
daily from the date that the contribution was made until the
date on which the refund is paid. Included with the refund is
any interest paid as part of repayment of a past refund, plus
interest thereon from the date of repayment. Interest must be
computed to the first day of the month in which the refund is
processed and must be based on fiscal year or monthly balances,
whichever applies.
Sec. 5. Minnesota Statutes 2002, section 352.22,
subdivision 3, is amended to read:
Subd. 3. [DEFERRED ANNUITY.] (a) An employee who has at
least three years of allowable service when termination occurs
may elect to leave the accumulated contributions in the fund and
thereby be entitled to a deferred retirement annuity. The
annuity must be computed under the law in effect when state
service terminated, on the basis of the allowable service
credited to the person before the termination of service.
(b) An employee on layoff or on leave of absence without
pay, except a leave of absence for health reasons, and who does
not return to state service shall must have an annuity, deferred
annuity, or other benefit to which the employee may become
entitled computed under the law in effect on the employee's last
working day.
(c) No application for a deferred annuity may be made more
than 60 days before the time the former employee reaches the
required age for entitlement to the payment of the annuity. The
deferred annuity begins to accrue no earlier than 60 days before
the date the application is filed in the office of the system,
but not (1) before the date on which the employee reaches the
required age for entitlement to the annuity nor (2) before the
day following the termination of state service in a
position which is not covered by the retirement system.
(d) Application for the accumulated contributions left on
deposit with the fund may be made at any time after 30 days
following the date of the termination of service.
Sec. 6. Minnesota Statutes 2002, section 352B.10,
subdivision 5, is amended to read:
Subd. 5. [OPTIONAL ANNUITY.] A disabled member
disabilitant may elect, in lieu of spousal survivorship coverage
under section 352B.11, subdivision 2 subdivisions 2b and
2c, choose the normal disability benefit or an optional annuity
as provided in section 352B.08, subdivision 3. The choice of an
optional annuity must be made before the commencement of the
payment of the disability benefit, or within 90 days of
attaining before reaching age 65 or reaching the five-year
anniversary of the effective date of the disability benefit,
whichever is later. It The optional annuity is effective on the
date on which the disability benefit begins to accrue, or the
month following attainment of age 65 or the five-year
anniversary of the effective date of the disability benefit,
whichever is later.
Sec. 7. Minnesota Statutes 2002, section 352B.11,
subdivision 1, is amended to read:
Subdivision 1. [REFUND OF PAYMENTS.] (a) A member who has
not received other benefits under this chapter is entitled to a
refund of payments made by salary deduction, plus interest, if
the member is separated, either voluntarily or involuntarily,
from the state service that entitled the member to membership.
(b) In the event of the member's death, if there are no
survivor benefits payable under this chapter, a refund plus
interest is payable to the last designated beneficiary on a form
filed with the director before death, or if no designation is
filed, the refund is payable to the member's estate. Interest
under this subdivision must be computed at the rate of six
percent a year, compounded annually calculated as provided in
section 352.22, subdivision 2. To receive a refund, the
application must be made on a form prescribed by the executive
director.
Sec. 8. Minnesota Statutes 2002, section 352B.11,
subdivision 2, is amended to read:
Subd. 2. [DEATH; PAYMENT TO SPOUSE AND DEPENDENT CHILDREN;
FAMILY MAXIMUMS.] If a member serving actively as a member, or a
member or former member receiving the disability benefit before
attaining age 65 or reaching the five-year anniversary of the
effective date of the disability benefit, whichever is later,
provided by section 352B.10, subdivisions 1 and 2, dies from any
cause before attaining age 65 or reaching the five-year
anniversary of the effective date of the disability benefit,
whichever is later, the surviving spouse and dependent children
are entitled to benefit payments as follows:
(a) A member with at least three years of allowable service
is deemed to have elected a 100 percent joint and survivor
annuity payable to a surviving spouse only on or after the date
the member or former member became or would have become 55.
(b) The surviving spouse of a member who had credit for
less than three years of service shall receive, for life, a
monthly annuity equal to 50 percent of that part of the average
monthly salary of the member from which deductions were made for
retirement.
(c) The surviving spouse of a member who had credit for at
least three years service and who died after becoming 55 years
old, may elect to receive a 100 percent joint and survivor
annuity, for life, notwithstanding a subsequent remarriage, in
lieu of the annuity prescribed in paragraph (b).
(d) The surviving spouse of any member who had credit for
three years or more and who was not 55 years old at death, shall
receive the benefit equal to 50 percent of the average monthly
salary as described in clause (b) until the deceased member
would have become 55 years old, and beginning the first of the
month following that date, may elect to receive the 100 percent
joint and survivor annuity.
(e) Each dependent child, as defined in section 352B.01,
subdivision 10, shall is entitled to receive a monthly annuity
equal to ten percent of that part of the average monthly salary
of the former deceased member from which deductions were made
for retirement. A dependent child over 18 and under 23 years of
age also may receive the monthly benefit provided in this
section, if the child is continuously attending an accredited
school as a full-time student during the normal school year as
determined by the director. If the child does not continuously
attend school, but separates from full-time attendance during
any part of a school year, the annuity shall must cease at the
end of the month of separation. In addition, a payment of $20
per month shall must be prorated equally to the surviving
dependent children when the former member is survived by more
than one or more dependent children child. Payments for the
benefit of any qualified dependent child must be made to the
surviving spouse, or if there is none, to the legal guardian of
the child. The maximum monthly benefit for any one family,
including a surviving spouse benefit, if applicable, must not be
less than 50 percent nor exceed 70 percent of the average
monthly salary for any number of children of the deceased member.
(f) If the member dies under circumstances that entitle the
surviving spouse and dependent children to receive benefits
under the workers' compensation law, the workers' compensation
benefits received by them must not be deducted from the benefits
payable under this section.
(g) The surviving spouse of a deceased former member who
had credit for three or more years of allowable service, but not
the spouse of a former member receiving a disability benefit
under section 352B.10, subdivision 2, is entitled to receive the
100 percent joint and survivor annuity at the time the deceased
member would have become 55 years old. If a former member dies
who does not qualify for other benefits under this chapter, the
surviving spouse or, if none, the children or heirs are entitled
to a refund of the accumulated deductions left in the fund plus
interest at the rate of six percent per year compounded annually.
Sec. 9. Minnesota Statutes 2002, section 352B.11, is
amended by adding a subdivision to read:
Subd. 2b. [SURVIVING SPOUSE BENEFIT ELIGIBILITY.] (a) If
an active member with three or more years of allowable service
dies before attaining age 55, the surviving spouse is entitled
to the benefit specified in subdivision 2c, paragraph (b).
(b) If an active member with less than three years of
allowable service dies at any age, the surviving spouse is
entitled to receive the benefit specified in subdivision 2c,
paragraph (c).
(c) If an active member with three or more years of
allowable service dies on or after attaining exact age 55, the
surviving spouse is entitled to receive the benefits specified
in subdivision 2c, paragraph (d).
(d) If a disabilitant dies while receiving a disability
benefit under section 352B.10 or before the benefit under that
section commenced, and an optional annuity was not elected under
section 352B.10, subdivision 5, the surviving spouse is entitled
to receive the benefit specified in subdivision 2c, paragraph
(b).
(e) If a former member with three or more years of
allowable service, who terminated from service and has not
received a refund or commenced receipt of any other benefit
provided by this chapter, dies, the surviving spouse is entitled
to receive the benefit specified in subdivision 2c, paragraph
(e).
(f) If a former member with less than three years of
allowable service, who terminated from service and has not
received a refund or commenced receipt of any other benefit, if
applicable, provided by this chapter, dies, the surviving spouse
is entitled to receive the refund specified in subdivision 2c,
paragraph (f).
Sec. 10. Minnesota Statutes 2002, section 352B.11, is
amended by adding a subdivision to read:
Subd. 2c. [SURVIVING SPOUSE BENEFIT ENTITLEMENTS.] (a) A
surviving spouse specified in subdivision 2b is eligible to
receive, following the filing of a valid application and
consistent with any other applicable requirements, a benefit as
specified in this subdivision. A 100 percent joint and survivor
annuity under paragraph (b) must be computed assuming the exact
age 55 for the deceased member and the age of the surviving
spouse on the date of death. A 100 percent joint and survivor
annuity under paragraph (d) or (e) must be computed using the
age of the deceased member on the date of death and the age of
the surviving spouse on that same date.
(b) For a surviving spouse specified in subdivision 2b,
paragraph (a) or (d), the surviving spouse benefit is a benefit
for life equal to 50 percent of the average monthly salary of
the deceased member. On the first of the month next following
the date on which the deceased member would have attained exact
age 55, in lieu of continued receipt of the prior benefit, the
surviving spouse is eligible to commence receipt of the second
half of a 100 percent joint and survivor annuity, if this
provides a larger benefit.
(c) For a surviving spouse specified in subdivision 2b,
paragraph (b), the surviving spouse benefit is a benefit for
life equal to 50 percent of the average monthly salary of the
deceased member.
(d) For a surviving spouse specified in subdivision 2b,
paragraph (c), the surviving spouse benefit is a benefit for
life equal to 50 percent of the average monthly salary of the
deceased member, or the second half of a 100 percent joint and
survivor annuity, whichever is larger.
(e) For a surviving spouse specified in subdivision 2b,
paragraph (e), the surviving spouse benefit is the second half
of a 100 percent joint and survivor annuity, commencing on the
first of the month next following the deceased member's date of
death, or the first of the month next following the date on
which the deceased member would have attained age 55, whichever
is later.
(f) For a surviving spouse specified in subdivision 2b,
paragraph (f), the surviving spouse or, if none, the children
or, if none, the deceased member's estate, is entitled to a
refund of the employee contributions plus interest computed as
specified in subdivision 1.
Sec. 11. Minnesota Statutes 2002, section 352B.11, is
amended by adding a subdivision to read:
Subd. 2d. [COORDINATION WITH WORKERS' COMPENSATION
BENEFITS.] If the deceased member died under circumstances that
entitle the surviving spouse and the dependent child or children
to receive benefits under workers' compensation law, the
workers' compensation benefits received by the deceased member's
survivor or survivors must not be deducted from the benefits
payable under this section.
Sec. 12. Minnesota Statutes 2002, section 352D.075,
subdivision 2, is amended to read:
Subd. 2. [SURVIVING SPOUSE BENEFIT.] (a) Notwithstanding
any designation of a beneficiary to the contrary, if a
participant or a former participant dies leaving a spouse and
there is no named beneficiary who survives to receive payment or
the spouse is named beneficiary before an annuity or a
disability benefit becomes payable, the surviving spouse may is
entitled to receive:
(1) a lump sum payment of the value of the participant's
total shares;
(2) The a lump sum payment of a portion of the value of
one-half of the total shares and beginning at age 55 or
thereafter, at any time after the participant's death, receive
an annuity based on the remaining value of one-half of the total
shares, provided that. If the spouse dies before receiving any
annuity payments, the remaining value of said the shares shall
be paid is payable to the spouse's children in equal shares, but
and if no such children survive, then to the parents of the
spouse in equal shares, but and if no such children or parents
survive, then to the estate of the spouse; or
(3) Beginning at age 55 or thereafter at any time after the
participant's death, receive an annuity based on the value of
the total shares, provided that. If the spouse dies before
receiving any annuity payments, the value of said the shares
shall be paid is payable to the spouse's children in equal
shares, but and if no such children survive, then to the parents
of the spouse in equal shares, but and if no such children or
parents survive, then to the estate of the spouse; and further
provided, if said the spouse dies after receiving annuity
payments but before receiving payments equal to the value of the
employee shares, the value of the employee shares
remaining shall be paid is payable to the spouse's children in
equal shares, but and if no such children survive, then to the
parents of the spouse in equal shares, but and if no such
children or parents survive, then to the estate of the spouse.
(b) A participant or a former participant and the person's
spouse may make a joint specification, in writing, on a form
prescribed by the executive director, that the benefits provided
in this section must be paid only to the designated beneficiary.
Sec. 13. Minnesota Statutes 2002, section 352D.075, is
amended by adding a subdivision to read:
Subd. 2a. [SURVIVING SPOUSE COVERAGE TERM CERTAIN.] In
lieu of the annuity under subdivision 2, clause (2) or (3), or
in lieu of a distribution under subdivision 2, clause (1), the
surviving spouse of a deceased participant may elect to receive
survivor coverage in the form of a term certain annuity of five,
six, 15, or 20 years, based on the value of the remaining
shares. The monthly term certain annuity must be calculated
under section 352D.06, subdivision 1.
Sec. 14. Minnesota Statutes 2002, section 352D.075,
subdivision 3, is amended to read:
Subd. 3. [REFUND TO BENEFICIARY.] If a participant dies
and has named a beneficiary no surviving spouse, the value of
the total shares shall be paid is payable to such a designated
beneficiary, but if such the beneficiary dies before receiving
payment, or if no beneficiary has been named and there is no
spouse, the value of said the shares shall be paid is payable
to the children of the participant in equal shares, but or if no
such children survive, then in equal shares to the parents of
the participant, but or if no such children or parents survive,
then to the estate of the participant.
Sec. 15. [352F.052] [APPLICATION OF SURVIVING SPOUSE,
DEPENDENT CHILD PROVISION.]
Notwithstanding any provisions of law to the contrary,
subdivisions within section 352.12 of the edition of Minnesota
Statutes published in the year before the year in which a
privatization occurred, applicable to the surviving spouse or
dependent children of a former member, apply to the survivors of
a terminated hospital employee of Fairview, University of
Minnesota Physicians, or University Affiliated Family Physicians.
Sec. 16. [353F.052] [APPLICATION OF SURVIVING SPOUSE,
DEPENDENT CHILD PROVISION.]
Notwithstanding any provisions of law to the contrary,
subdivisions within section 353.32 of the edition of Minnesota
Statutes published in the year before the year in which a
privatization occurred, applicable to the surviving spouse or
dependent children of a former member as defined in section
353.01, subdivision 7a, apply to the survivors of a terminated
medical facility or other public employing unit employee.
Sec. 17. Minnesota Statutes 2002, section 354.05,
subdivision 22, is amended to read:
Subd. 22. [DESIGNATED BENEFICIARY.] "Designated
beneficiary" means the person, trust, or organization designated
by a retiree or member to receive the benefits to which a
beneficiary is entitled under this chapter. A beneficiary
designation is valid only if it is made on an appropriate form
provided by the executive director that is signed by the member
and two witnesses to the member's signature. The properly
completed form must be received by the association on or before
the date of death of the retiree or member. If a retiree or a
member does not designate a person, trust, or organization, or
if the person who was designated predeceases the retiree or the
member, or if the trust or organization ceases to exist before
the death of the retiree or the member, the designated
beneficiary means is the estate of the deceased retiree or
member.
Sec. 18. Minnesota Statutes 2002, section 354.46,
subdivision 2, is amended to read:
Subd. 2. [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY
BENEFIT SURVIVING SPOUSE SURVIVOR COVERAGE.] (a) The surviving
spouse of any member or former member who has If the active or
deferred member was at least age 55 and had credit for at least
three years of allowable service on the date of death, the
surviving spouse is entitled to the second portion of a 100
percent joint and survivor annuity coverage in the event of
death of the member prior to retirement. If the surviving
spouse does not elect to receive a surviving spouse benefit
under subdivision 1, if applicable, or does not elect to receive
a refund of accumulated member contributions under section
354.47, subdivision 1, the surviving spouse is entitled to
receive, upon written application on a form prescribed by the
executive director, a benefit equal to the second portion of a
100 percent joint and survivor annuity specified under section
354.45, based on the age of the active or deferred member and
surviving spouse at the time of death of the member, and
computed under section 354.44, subdivision 2 or 6, whichever is
applicable the age of the surviving spouse at the time the
benefit accrues.
(b) If the active or deferred member was under age 55 and
has had credit for at least 30 years of allowable service on the
date of death, the surviving spouse may elect to receive the
second portion of a 100 percent joint and survivor annuity based
on the age of the active or deferred member and surviving spouse
on the date of death and the age of the surviving spouse at the
time the benefit accrues. If section 354.44, subdivision 6,
applies, the annuity is payable using the full early retirement
reduction under section 354.44, subdivision 6, paragraph
clause (3)(ii), to age 55 and one-half of the early retirement
reduction from age 55 to the age payment begins.
(c) If the active or deferred member was under age 55 and
has had credit for at least three years of allowable service on
the date of death, but did not yet qualify for retirement, the
surviving spouse may elect to receive the second portion of a
100 percent joint and survivor annuity based on the age of
the active or deferred member and the surviving spouse at the
time of death and the age of the surviving spouse at the time
the benefit accrues. If section 354.44, subdivision 6, applies,
the annuity is calculated using the full early retirement
reduction under section 354.44, subdivision 6, to age 55 and
one-half of the early retirement reduction from age 55 to the
age the annuity begins. The surviving spouse eligible for a
surviving spouse benefit under paragraph (a) may apply for the
annuity at any time after the date on which the deceased
employee would have attained the required age for retirement
based on the employee's allowable service.
(d) The surviving spouse eligible for surviving spouse
benefits under paragraph (b) or (c) this subdivision may apply
for the annuity any time after the member's death. This The
benefit accrues from the day following the date of the member's
death but may not begin to accrue more than six months before
the date the application is filed with the executive
director and may not accrue before the member's death. Sections
354.55, subdivision 11, and 354.60 apply to a deferred annuity
payable under this section. The benefit is payable for life.
Any benefit under this subdivision is in lieu of benefits under
subdivision 1, if applicable, and in lieu of a refund of
accumulated member contributions under section 354.47,
subdivision 1.
(e) For purposes of this subdivision, a designated
beneficiary must be a former spouse or a biological or adopted
child of the member.
Sec. 19. Minnesota Statutes 2002, section 354.46,
subdivision 2b, is amended to read:
Subd. 2b. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is
no surviving spouse eligible for benefits under subdivision 2, a
each dependent child or children as defined in section 354.05,
subdivision 8a, is eligible for monthly payments surviving child
benefits. Payments Surviving child benefits to a dependent
child must be paid from the date of the member's death to the
date the dependent child attains age 20 if the child is under
age 15 on the date of the member's death. If the child is 15
years or older on the date of the member's death, payment must
be made the surviving child benefit is payable for five years.
The payment to a dependent surviving child benefit is an amount
that is actuarially equivalent to the value of a 100 percent
optional annuity under subdivision 2 calculated using the age of
the member and age of the dependent child at as of the date of
death in lieu of the age of the member and the spouse. If there
is more than one dependent child, each dependent child shall is
entitled to receive a proportionate share of the actuarial value
of the member's account.
Sec. 20. Minnesota Statutes 2002, section 354.46,
subdivision 5, is amended to read:
Subd. 5. [PAYMENT TO DESIGNATED BENEFICIARY.] A member and
who is single or, if the member is married, a member and the
spouse of the member jointly, may make a joint specification in
writing on a form prescribed by the executive director that the
benefits provided in subdivision 2, or in section 354.47,
subdivision 1, must be paid only to a designated beneficiary or
to designated beneficiaries. For purposes of subdivision 2, a
designated beneficiary may only be either a former spouse or a
biological or an adopted child of the member.
Sec. 21. Minnesota Statutes 2002, section 354.46, is
amended by adding a subdivision to read:
Subd. 6. [APPLICATION.] (a) A beneficiary designation and
an application for benefits under this section must be in
writing on a form prescribed by the executive director.
(b) Sections 354.55, subdivision 11, and 354.60 apply to a
deferred annuity payable under this section.
(c) Unless otherwise specified, the annuity must be
computed under section 354.44, subdivision 2 or 6, whichever is
applicable.
Sec. 22. Minnesota Statutes 2002, section 356.441, is
amended to read:
356.441 [REPAYMENT OF REFUNDS PAYMENT ACCEPTANCE ALLOWED.]
Subdivision 1. [PAYMENT AUTHORIZATION.] The repayment of a
refund and interest on that refund or the payment of equivalent
contributions and interest for an eligible leave of absence, as
permitted under laws governing any public pension plan in
Minnesota, may be made:
(1) with funds distributed or transferred from a plan
qualified under the federal Internal Revenue Code of 1986,
section 401, subsection (a) or (k); 403; 408; or 457, subsection
(b), as amended through December 31, 1988, or an annuity
qualified under the federal Internal Revenue Code of 1986,
section 403(a). Repayment may also be made from time to time;
or
(2) with funds distributed from an individual retirement
account used solely to receive a or individual retirement
annuity, if done solely in a manner that is eligible for
treatment as a nontaxable rollover from that type of a plan or
annuity or transfer under the applicable federal law. The
repaid refund
Subd. 2. [SEPARATE ACCOUNTING REQUIREMENT.] Nontaxable
rollovers or transfer amounts under subdivision 1 received by a
public pension fund must be separately accounted for as member
contributions not previously taxed. Before accepting
any rollovers or transfers to which this section applies, the
executive director must shall require the member to provide
written documentation to demonstrate that the amounts to
be rolled over or transferred are eligible for a tax-free
rollover or transfer and qualify for that treatment under the
federal Internal Revenue Code of 1986, as amended.
Sec. 23. Minnesota Statutes 2002, section 490.124,
subdivision 12, is amended to read:
Subd. 12. [REFUND.] (a) Any A person who ceases to be a
judge but who does not qualify for a retirement annuity or other
benefit under section 490.121 shall be is entitled to a refund
in an amount equal to all the person's member's employee
contributions to the judges' retirement fund plus interest
computed to the first day of the month in which the refund is
processed based on fiscal year balances at an annual rate of
five percent compounded annually under section 352.22,
subdivision 2.
(b) A refund of contributions under paragraph (a)
terminates all service credits and all rights and benefits of
the judge and the judge's survivors. A person who becomes a
judge again after taking a refund under paragraph (a) may
reinstate the previously terminated service credits, rights, and
benefits by repaying all refunds the total amount of the
previously received refund. A The refund repayment must include
interest on the total amount previously received at an annual
rate of 8.5 percent compounded annually from the date on which
the refund was received until the date on which the refund is
repaid.
Sec. 24. [TEACHERS RETIREMENT ASSOCIATION; BENEFICIARY
DESIGNATION.]
(a) An eligible person described in paragraph (b) is
entitled to make a specification that the benefits provided in
Minnesota Statutes, section 354.46, subdivision 2, or in
Minnesota Statutes, section 354.47, subdivision 1, may be paid
only to a designated beneficiary or beneficiaries.
(b) An eligible person is a person who:
(1) was born on July 9, 1956;
(2) is employed as a teacher by Independent School District
No. 535, Rochester;
(3) is a member of the Teachers Retirement Association;
(4) has more than 19 years of allowable service credit in
the Teachers Retirement Association;
(5) has two minor children;
(6) has no potential surviving spouse by virtue of a prior
marriage dissolution; and
(7) has been diagnosed with a serious medical condition
that is life threatening.
(c) The designated beneficiary or beneficiaries may only be
a biological or adopted child, the biological or adopted
children of the eligible person, or a trust established for the
child or children if the trust is required to provide for the
proper health, support, maintenance, and education of the
dependent child or children. If two or more children are
designated or if a trust established for more than one child is
designated, the benefit payable to or on behalf of each child is
an equal share of the total benefit.
(d) The specification must be made in writing on a form
prescribed by the executive director of the Teachers Retirement
Association.
Sec. 25. [REPEALER.]
Minnesota Statutes 2002, section 354A.107, is repealed.
Sec. 26. [EFFECTIVE DATE.]
(a) Sections 1 to 25 are effective on July 1, 2004.
(b) Sections 8 to 11 are not intended to increase, modify,
impair, or diminish the benefit entitlements specified in
Minnesota Statutes, chapter 352B. If the Minnesota State
Retirement System executive director determines that any
provision of those sections does increase, modify, impair, or
diminish the benefit entitlements as reflected in applicable law
just prior to the effective date of this section, the executive
director shall certify that determination and a recommendation
as to the required legislative correction to the chairs of the
Legislative Commission on Pensions and Retirement, the house
Governmental Operations Committee, the senate Governmental
Operations Committee, and the executive director of the
Legislative Commission on Pensions and Retirement.
(c) Consistent with Minnesota Statutes, section 645.21, and
public pension policy in general, the increased interest rate
provided on a refund under section 23 applies only to judges
whose termination of service occurs on or after July 1, 2004.
ARTICLE 10
FEDERAL INTERNAL REVENUE
CODE COMPLIANCE
Section 1. Minnesota Statutes 2002, section 356.611, is
amended by adding a subdivision to read:
Subd. 4. [COMPENSATION.] (a) For purposes of this section,
compensation means a member's compensation actually paid or made
available for any limitation year determined as provided by
Treasury Regulation Section 1.415-2(d)(10).
(b) Compensation for any period includes:
(1) any elective deferral as defined in section 402(g)(3)
of the Internal Revenue Code;
(2) any elective amounts that are not includable in a
member's gross income by reason of sections 125 or 457 of the
Internal Revenue Code; and
(3) any elective amounts that are not includable in a
member's gross income by reason of section 132(f)(4) of the
Internal Revenue Code.
Sec. 2. [356.635] [INTERNAL REVENUE CODE COMPLIANCE.]
Subdivision 1. [RETIREMENT BENEFIT COMMENCEMENT.] The
retirement benefit of a member who has terminated employment
must begin no later than the later of April 1 of the calendar
year following the calendar year that the member attains the
federal minimum distribution age under section 401(a)(9) of the
Internal Revenue Code or April 1 of the calendar year following
the calendar year in which the member terminated employment.
Subd. 2. [DISTRIBUTIONS.] Distributions shall be made as
required under section 401(a)(9) of the Internal Revenue Code
and the treasury regulations adopted under that section,
including, but not limited to, the incidental death benefit
provisions of section 401(a)(9)(G) of the Internal Revenue Code.
Subd. 3. [DIRECT ROLLOVERS.] A distributee may elect, at
the time and in the manner prescribed by the plan administrator,
to have all or any portion of an eligible rollover distribution
paid directly to an eligible retirement plan as specified by the
distributee.
Subd. 4. [ELIGIBLE ROLLOVER DISTRIBUTION.] An "eligible
rollover distribution" is any distribution of all or any portion
of the balance to the credit of the distributee.
Subd. 5. [INELIGIBLE AMOUNTS.] An eligible rollover
distribution does not include:
(1) a distribution that is one of a series of substantially
equal periodic payments, receivable annually or more frequently,
that is made for the life or life expectancy of the distributee,
the joint lives or joint life expectancies of the distributee
and the distributee's designated beneficiary, or for a specified
period of ten years or more;
(2) a distribution that is required under section 401(a)(9)
of the Internal Revenue Code; or
(3) any other exception required by law or the Internal
Revenue Code.
Subd. 6. [ELIGIBLE RETIREMENT PLAN.] (a) An "eligible
retirement plan" is:
(1) an individual retirement account under section 408(a)
of the Internal Revenue Code;
(2) an individual retirement annuity plan under section
408(b) of the Internal Revenue Code;
(3) an annuity plan under section 403(a) of the Internal
Revenue Code;
(4) a qualified trust plan under section 401(a) of the
Internal Revenue Code that accepts the distributee's eligible
rollover distribution;
(5) an annuity contract under section 403(b) of the
Internal Revenue Code; or
(6) an eligible deferred compensation plan under section
457(b) of the Internal Revenue Code, which is maintained by a
state or local government and which agrees to separately account
for the amounts transferred into the plan.
(b) For distributions of after-tax contributions which are
not includable in gross income, the after-tax portion may be
transferred only to an individual retirement account or annuity
described in section 408(a) or (b) of the Internal Revenue Code,
or to a qualified defined contribution plan described in either
section 401(a), or section 403(a), of the Internal Revenue Code, that
agrees to separately account for the amounts transferred,
including separately accounting for the portion of the
distribution which is includable in gross income and the portion
of the distribution which is not includable.
Subd. 7. [DISTRIBUTEE.] A "distributee" is:
(1) an employee or a former employee;
(2) the surviving spouse of an employee or former employee;
or
(3) the former spouse of the employee or former employee
who is the alternate payee under a qualified domestic relations
order as defined in section 414(p) of the Internal Revenue Code,
or who is a recipient of a court-ordered equitable distribution
of marital property, as provided in section 518.58.
Subd. 8. [FORFEITURES.] For defined benefit plans, unless
otherwise permitted by section 401(a)(8) of the Internal Revenue
Code, forfeitures may not be applied to increase the benefits
that any employee would otherwise receive under the plan.
Subd. 9. [MILITARY SERVICE.] Contributions, benefits, and
service credit with respect to qualified military service must
be provided according to section 414(u) of the Internal Revenue
Code.
Sec. 3. [TRANSITIONAL PROVISION.]
(a) An eligible rollover distribution under Minnesota
Statutes, section 356.635, does not include the portion of a
distribution that is not included in gross income.
(b) For eligible rollover distributions to a surviving
spouse, an eligible retirement plan under Minnesota Statutes,
section 356.635, is limited to an individual retirement account
under section 408(a) of the Internal Revenue Code or an
individual retirement annuity plan under section 408(b) of the
Internal Revenue Code.
Sec. 4. [EFFECTIVE DATE.]
(a) Section 1, paragraph (a), is effective on July 1, 2004.
Section 1, paragraph (b), is effective retroactively as
follows: clauses (1) and (2) are effective for limitation years
beginning on and after January 1, 1998; and clause (3) is
effective for limitation years beginning on and after January 1,
2001.
(b) Sections 2 and 3 are effective on the day following
final enactment.
(c) Section 2 is effective retroactively as follows:
subdivision 1 is effective on and after January 1, 1989;
subdivision 2 is effective for distributions on and after
December 31, 1989; subdivision 3 is effective for distributions
on and after January 1, 1993; subdivision 6, paragraph (a),
clauses (5) and (6), are effective for distributions made after
December 31, 2001; subdivision 6, paragraph (b), is effective
for distributions after December 31, 2001; and subdivision 9 is
effective December 12, 1994.
(d) Section 3 is effective only for distributions made
before January 1, 2002.
ARTICLE 11
HEALTH CARE SAVINGS
PLAN MODIFICATIONS
Section 1. Minnesota Statutes 2002, section 352.98, is
amended to read:
352.98 [POSTRETIREMENT HEALTH CARE SAVINGS PLAN.]
Subdivision 1. [PLAN CREATED.] The Minnesota State
Retirement System shall establish a plan or plans, known as
postretirement health care savings plans, through which public
employers and employees may save to cover postretirement health
care costs. The Minnesota State Retirement System shall make
available one or more trusts, including a governmental trust or
governmental trusts, authorized under the Internal Revenue Code
to be eligible for tax-preferred or tax-free treatment through
which employers and employees can save to cover postretirement
health care costs.
Subd. 2. [CONTRACTING AUTHORIZED.] The Minnesota State
Retirement System is authorized to administer the plan and to
contract with public and private entities to provide investment
services, record keeping, benefit payments, and other functions
necessary for the administration of the plan. If allowed by the
Minnesota State Board of Investment, the Minnesota State Board
of Investment supplemental investment funds may be offered as
investment options under the postretirement health care savings
plan or plans.
Subd. 3. [CONTRIBUTIONS.] (a) Contributions to the plan
shall must be determined through a personnel policy or in a
collective bargaining agreement of a public employer with the
exclusive representative of the covered employees in an
appropriate unit. The Minnesota State Retirement System may
offer different types of trusts permitted under the Internal
Revenue Code to best meet the needs of different employee units.
(b) Contributions to the plan by or on behalf of the
employee shall must be held in trust for reimbursement of
employee and dependent health-related expenses following
retirement from public employment or during active employment.
The Minnesota State Retirement System shall maintain a separate
account of the contributions made by or on behalf of each
participant and the earnings thereon. The Minnesota State
Retirement System shall make available a limited range of
investment options, and each employee may direct the investment
of the accumulations in the employee's account among the
investment options made available by the Minnesota State
Retirement System. At the request of a participating employer
and employee group, the Minnesota State Retirement System may
determine how the assets of the affected employer and employee
group should be invested.
(c) This section does not obligate a public employer to
meet and negotiate in good faith with the exclusive bargaining
representative of any public employee group regarding an
employer contribution to a postretirement or active employee
health care savings plan authorized by this section and section
356.24, subdivision 1, clause (7). It is not the intent of the
legislature to authorize the state to incur new funding
obligations for the costs of retiree health care or the costs of
administering retiree health care plans or accounts.
Subd. 4. [REIMBURSEMENT FOR HEALTH-RELATED EXPENSES.]
Following termination of public service, The Minnesota State
Retirement System shall reimburse employees at least quarterly
for submitted health-related expenses, as required by federal
and state law, until the employee exhausts the accumulation in
the employee's account. If an employee dies prior to exhausting
the employee's account balance, the employee's spouse or
dependents shall be are eligible to be reimbursed for health
care expenses from the account until the account balance is
exhausted. If an account balance remains after the death of a
participant and all of the participant's legal dependents, the
remainder of the account shall must be paid to the employee's
beneficiaries or, if none, to the employee's estate.
Subd. 5. [FEES.] The Minnesota state retirement plan is
authorized to charge uniform fees to participants to cover the
ongoing cost of operating the plan. Any fees not needed shall
must revert to participant accounts or be used to reduce plan
fees the following year. The Minnesota State Retirement System
is authorized to charge participating employers a fee, not to
exceed one-sixth of the Federal Insurance Contribution Act
savings realized by the employer as a result of participating in
the plan, until the initial costs of establishing the plan or
plans authorized by this section are recovered, or $75,000,
whichever is less.
Subd. 6. [ADVISORY COMMITTEE.] (a) The Minnesota State
Retirement System shall establish a participant advisory
committee for the health care savings plan, made up of one
representative appointed by each employee unit participating in
the plan. Each participating unit shall be responsible for the
expenses of its own representative.
(b) The advisory committee shall meet at least twice per
year and shall be consulted on plan offerings and vendor
selection. By October 1 of each year, the Minnesota State
Retirement System shall give the advisory committee a statement
of fees collected and the use of the fees.
Subd. 7. [CONTRACTING WITH PRIVATE ENTITIES.] Nothing in
this section shall prohibit prohibits employers from contracting
with private entities to provide for postretirement health care
reimbursement plans.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day following final enactment.
ARTICLE 12
RETIREMENT COVERAGE FOLLOWING
A PRIVATIZATION
Section 1. Minnesota Statutes 2003 Supplement, section
353F.02, subdivision 4, is amended to read:
Subd. 4. [MEDICAL FACILITY.] "Medical facility" means:
(1) the Fair Oaks Lodge, Wadena;
(2) the Glencoe Area Health Center;
(2) (3) the Kanabec Hospital;
(4) the Luverne Public Hospital;
(5) the RenVilla Nursing Home;
(3) (6) the St. Peter Community Healthcare Center; and
(7) the Waconia-Ridgeview Medical Center; and
(4) the Kanabec Hospital.
Sec. 2. [PERA-GENERAL RETENTION OF PUBLIC EMPLOYEE STATUS
FOR ANOKA ACHIEVE PROGRAM EMPLOYEES.]
Subdivision 1. [APPLICATION.] This section applies to a
person who was:
(1) employed by Anoka County in connection with the Achieve
Program for adults with developmental disabilities on the day
before operation of the program is transferred to Achieve
Services, Inc; and
(2) a member of the Public Employees Retirement Association
on December 31, 2003.
Subd. 2. [CONTINUATION OF COVERAGE.] For purposes of
participation in the coordinated plan of the Public Employees
Retirement Association, a person to whom this section applies is
a "public employee" under chapter 353, while employed by Achieve
Services, Inc., which is a governmental subdivision under
section 353.01, subdivision 6(a) for the purposes of reporting
contributions for those persons to whom this section applies
only.
Sec. 3. [PERA-GENERAL; RETENTION OF PUBLIC EMPLOYEE
COVERAGE FOR GOVERNMENT TRAINING SERVICES EMPLOYEES.]
Subdivision 1. [APPLICATION.] Notwithstanding any
provision of Minnesota Statutes, chapter 353, this section
applies to a person who:
(1) was employed by the state and local government joint
powers organization, the Government Training Service, on the day
before the operation was transferred to a nonprofit
organization, Government Training Services;
(2) was a member of the general employees retirement plan
of the Public Employees Retirement Association; and
(3) is employed by Government Training Services.
Subd. 2. [COVERAGE CONTINUATION.] (a) A person described
in subdivision 1 is a public employee for purposes of Minnesota
Statutes, section 353.01, subdivision 2, and is eligible to
continue participation in the coordinated program of the general
employees retirement plan of the Public Employees Retirement
Association.
(b) While employing a person described in subdivision 1,
Government Training Services is a governmental subdivision for
purposes of Minnesota Statutes, section 353.01, subdivision 6,
paragraph (a).
Sec. 4. [EFFECTIVE DATE.]
(a) Section 1, relating to the Fair Oaks Lodge, Wadena, is
effective upon the latter of:
(1) the day after the governing body of Todd County and its
chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3; and
(2) the day after the governing body of Wadena County and
its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
(b) Section 1, relating to the RenVilla Nursing Home, is
effective upon the latter of:
(1) the day after the governing body of the city of
Renville and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
(2) the first day of the month next following certification
to the governing body of the city of Renville by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized RenVilla Nursing Home
employees under section 1 does not exceed the actuarial gain
otherwise to be accrued by the Public Employees Retirement
Association, as calculated by the consulting actuary retained by
the Legislative Commission on Pensions and Retirement.
(c) The cost of the actuarial calculations must be borne by
the city of Renville or the purchaser of the RenVilla Nursing
Home.
(d) Section 1, relating to the St. Peter Community
Healthcare Center, is effective upon the latter of:
(1) the day after the governing body of the city of St.
Peter and its chief clerical officer timely complete their
compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
(2) the first day of the month next following certification
to the governing body of the city of St. Peter by the executive
director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage
proposed for extension to the privatized St. Peter Community
Healthcare Center employees under section 1 does not exceed the
actuarial gain otherwise to be accrued by the Public Employees
Retirement Association, as calculated by the consulting actuary
retained by the Legislative Commission on Pensions and
Retirement.
(e) The cost of the actuarial calculations must be borne by
the city of St. Peter or the purchaser of the St. Peter
Community Healthcare Center.
(f) If the required actions under paragraphs (b) and (c)
occur, section 1 applies retroactively to the RenVilla Nursing
Home as of the date of privatization.
(g) If the required actions under paragraph (a) occur,
section 1 applies retroactively to Fair Oaks Lodge, Wadena, as
of January 1, 2004.
(h) Sections 2 and 3 are effective on the day following
final enactment.
ARTICLE 13
MINNEAPOLIS FIREFIGHTERS RELIEF ASSOCIATION
Section 1. Minnesota Statutes 2003 Supplement, section
423C.03, subdivision 3, is amended to read:
Subd. 3. [COMPENSATION OF OFFICERS AND BOARD MEMBERS.] (a)
Notwithstanding any other law to the contrary, the association
may provide for payment of the following salaries to its
officers and board members: as specified in this subdivision.
(1) (b) If the executive secretary is not an active member,
the executive secretary may receive a salary to be set by the
board, subject to the limitations stated in paragraph (d). If
the executive secretary is an active member, the executive
secretary may receive a salary not exceeding 50 percent of the
maximum salary of a first grade firefighter;.
(2) (c) The president may receive a salary not exceeding
ten percent of the maximum salary of a first grade firefighter;,
and
(3) all other elected members of the board, other than the
executive secretary, may receive a salary not exceeding 2.5
percent of the maximum salary of a first grade firefighter.
(d) If the executive secretary is not an active member, the
executive secretary's salary may not exceed the highest salary
currently received by the executive director of the Minnesota
State Retirement System, the Public Employees Retirement
Association, or the Teachers Retirement Association.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day on which the Minneapolis
City Council and the chief clerical officer of the city of
Minneapolis complete in a timely manner the requirements of
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
ARTICLE 14
VOLUNTEER FIREFIGHTER RELIEF
ASSOCIATION CHANGES
Section 1. Minnesota Statutes 2002, section 424A.02,
subdivision 2, is amended to read:
Subd. 2. [NONFORFEITABLE PORTION OF SERVICE PENSION.] If
the articles of incorporation or bylaws of a relief association
so provide, a relief association may pay a reduced service
pension to a retiring member who has completed fewer than 20
years of service. The reduced service pension may be paid when
the retiring member meets the minimum age and service
requirements of subdivision 1.
The amount of the reduced service pension may not exceed
the amount calculated by multiplying the service pension
appropriate for the completed years of service as specified in
the bylaws times the applicable nonforfeitable percentage of
pension.
For a volunteer firefighter relief association that pays a
lump sum service pension, a monthly benefit service pension, or
a lump sum service pension or a monthly benefit service pension
as alternative benefit forms, the nonforfeitable percentage of
pension amounts are as follows:
Completed Years of Service Nonforfeitable Percentage
of Pension Amount
5 40 percent
6 44 percent
7 48 percent
8 52 percent
9 56 percent
10 60 percent
11 64 percent
12 68 percent
13 72 percent
14 76 percent
15 80 percent
16 84 percent
17 88 percent
18 92 percent
19 96 percent
20 and thereafter 100 percent
For a volunteer firefighter relief association that pays a
defined contribution service pension, the nonforfeitable
percentage of pension amounts are as follows:
Completed Years of Service Nonforfeitable Percentage
of Pension Amount
5 40 percent
6 52 percent
7 64 percent
8 76 percent
9 88 percent
10 and thereafter 100 percent
Sec. 2. Minnesota Statutes 2002, section 424A.02,
subdivision 7, is amended to read:
Subd. 7. [DEFERRED SERVICE PENSIONS.] (a) A member of a
relief association to which this section applies is entitled to
a deferred service pension if the member:
(1) has completed the lesser of the minimum period of
active service with the fire department specified in the bylaws
or 20 years of active service with the fire department;
(2) has completed at least five years of active membership
in the relief association; and
(3) separates from active service and membership before
reaching age 50 or the minimum age for retirement and
commencement of a service pension specified in the bylaws
governing the relief association if that age is greater than age
50.
(b) The deferred service pension starts when the former
member reaches age 50 or the minimum age specified in the bylaws
governing the relief association if that age is greater than age
50 and when the former member makes a valid written application.
(c) A relief association that provides a lump sum service
pension may, when its governing bylaws so provide, pay interest
on the deferred lump sum service pension during the period of
deferral. If provided for in the bylaws, interest must be paid
in one of the following manners:
(1) at the investment performance rate actually earned on
that portion of the assets if the deferred benefit amount is
invested by the relief association in a separate account
established and maintained by the relief association or if the
deferred benefit amount is invested in a separate investment
vehicle held by the relief association or, if not,;
(2) at the interest rate of five percent, compounded
annually; or
(3) at a rate equal to the actual time weighted total rate
of return investment performance of the special fund as reported
by the office of the state auditor under section 356.219, up to
five percent, compounded annually, and applied consistently for
all deferred service pensioners.
(d) A relief association may not use the method provided
for in paragraph (c), clause (3), until it has modified its
bylaws to be consistent with that clause.
(e) For a deferred service pension that is transferred to a
separate account established and maintained by the relief
association or separate investment vehicle held by the relief
association, the deferred member bears the full investment risk
subsequent to transfer and in calculating the accrued liability
of the volunteer firefighters relief association that pays a
lump sum service pension, the accrued liability for deferred
service pensions is equal to the separate relief association
account balance or the fair market value of the separate
investment vehicle held by the relief association.
(e) (f) The deferred service pension is governed by and
must be calculated under the general statute, special law,
relief association articles of incorporation, and relief
association bylaw provisions applicable on the date on which the
member separated from active service with the fire department
and active membership in the relief association.
Sec. 3. [MARINE ON ST. CROIX VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION; EARLY VESTING.]
(a) Notwithstanding Minnesota Statutes, section 424A.02,
subdivision 2, to the contrary, the Marine on St. Croix
Volunteer Firefighters Relief Association may utilize an early
vesting schedule as provided in paragraphs (b) and (c).
(b) If the articles of incorporation or bylaws of the
Marine on St. Croix Volunteer Firefighters Relief Association so
provide, the relief association may pay a reduced service
pension to a retiring member who has completed fewer than ten
years of service. The reduced service pension may be paid when
the retiring member meets the minimum age and service
requirements of Minnesota Statutes, section 424A.02, subdivision
1.
(c) The amount of the reduced service pension may not
exceed the amount calculated by multiplying the service pension
appropriate for the completed years of service as specified in
the articles of incorporation or bylaws by the applicable
nonforfeitable percentage of the service pension amount. The
nonforfeitable percentage of service pension amounts are as
follows:
Completed years Nonforfeitable percentage
of service of service pension amount
5 40 percent
6 52 percent
7 64 percent
8 76 percent
9 88 percent
10 and 100 percent
thereafter
Sec. 4. [BELLINGHAM FIREFIGHTER RELIEF ASSOCIATION;
RATIFICATION OF PRIOR ANNUITY INVESTMENTS.]
Notwithstanding Minnesota Statutes, section 356A.06,
subdivision 7, any annuity purchases by the Bellingham
Firefighters Relief Association prior to the effective date of
this section are ratified as permissible investments.
Sec. 5. [EFFECTIVE DATE.]
(a) Sections 1 and 2 are effective on July 1, 2004.
(b) Section 3 is effective on the day after the date on
which the city council of the city of Marine on St. Croix and
the chief clerical officer of the city of Marine on St. Croix
comply with Minnesota Statutes, section 645.02, subdivisions 2
and 3.
(c) Section 4 is effective on the day following final
enactment.
(d) The deferred service pension interest crediting
procedure of Minnesota Statutes, section 424A.02, subdivision 7,
paragraph (c), clause (3), expires on December 31, 2008.
ARTICLE 15
PERA POLICE AND FIRE PLAN
MEMBERSHIP INCLUSIONS
Section 1. Minnesota Statutes 2003 Supplement, section
353.01, subdivision 6, is amended to read:
Subd. 6. [GOVERNMENTAL SUBDIVISION.] (a) "Governmental
subdivision" means a county, city, town, school district within
this state, or a department or unit of state government, or any
public body whose revenues are derived from taxation, fees,
assessments or from other sources.
(b) Governmental subdivision also means the Public
Employees Retirement Association, the League of Minnesota
Cities, the Association of Metropolitan Municipalities, public
hospitals owned or operated by, or an integral part of, a
governmental subdivision or governmental subdivisions, the
Association of Minnesota Counties, the Metropolitan Intercounty
Association, the Minnesota Municipal Utilities Association, the
Metropolitan Airports Commission, the Minneapolis Employees
Retirement Fund for employment initially commenced after June
30, 1979, the Range Association of Municipalities and Schools,
soil and water conservation districts, economic development
authorities created or operating under sections 469.090 to
469.108, the Port Authority of the city of St. Paul, the Spring
Lake Park Fire Department, incorporated, the Lake Johanna
Volunteer Fire Department, incorporated, the Red Wing
Environmental Learning Center, and the Dakota County
Agricultural Society.
(c) Governmental subdivision does not mean any municipal
housing and redevelopment authority organized under the
provisions of sections 469.001 to 469.047; or any port authority
organized under sections 469.048 to 469.089 other than the Port
Authority of the city of St. Paul; or any hospital district
organized or reorganized prior to July 1, 1975, under sections
447.31 to 447.37 or the successor of the district, nor the
Minneapolis Community Development Agency.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective on the day following final enactment.
ARTICLE 16
ONE PERSON AND SMALL GROUP
PENSION CHANGES
Section 1. [PERA-GENERAL; PURCHASE OF PRIOR SERVICE
CREDIT.]
(a) An eligible person described in paragraph (b) is
entitled to purchase up to 33 months of allowable service credit
from the general employees retirement plan of the Public
Employees Retirement Association. The service credit purchase
under this section must be made in accordance with Minnesota
Statutes, section 356.55 or 356.551, whichever applies.
(b) An eligible person is a person who:
(1) is currently a member of the Teachers Retirement
Association;
(2) was employed by Independent School District No. 621,
Mounds View, from May 1968 to December 1971, but was not covered
by the general employees retirement plan of the Public Employees
Retirement Association;
(3) was employed by Independent School District No. 31,
Bemidji, but was not covered by the general employees retirement
plan of the Public Employees Retirement Association;
(4) was employed as a special education teacher by
Independent School District No. 12, Centennial, for the
1974-1975 school year and for the 1977-1978, 1978-1979, and
1979-1980 school years;
(5) was employed as a special education teacher by
Independent School District No. 16, Spring Lake Park, for the
1975-1976 school year;
(6) was employed as a special education teacher by
Independent School District No. 138, North Branch, for the
1980-1981, 1981-1982, 1982-1983, 1983-1984, 1984-1985, and
1985-1986 school years; and
(7) has been employed by Independent School District No.
11, Anoka-Hennepin, since the 1986-1987 school year.
(c) An eligible person described in paragraph (b) must
apply with the executive director of the Public Employees
Retirement Association to make the service credit purchase under
this section. The application must be in writing and must
include all necessary documentation of the applicability of this
section, documentation of the eligible person's eligibility for
retirement coverage by the general employees retirement plan of
the Public Employees Retirement Association if the employment
had been properly reported to the association at the time the
employment was rendered, and any other relevant information that
the executive director may require.
Sec. 2. [PERA-GENERAL EMPLOYEES RETIREMENT PLAN COVERAGE
TERMINATION AUTHORIZATION.]
Subdivision 1. [ELIGIBILITY.] (a) An eligible person
specified in paragraph (b) is authorized to apply for a
retirement annuity from the public employees police and fire
retirement plan, provided that the necessary age and service
requirements are met, under Minnesota Statutes, section 353.651,
as further specified under subdivision 2.
(b) An eligible person is a person who:
(1) was born on October 10, 1956;
(2) was employed as a police officer by the city of Red
Wing;
(3) was elected to the Goodhue County Board of
Commissioners in November 1998; and
(4) elected under the law then applicable to have
retirement coverage by the general employees retirement plan of
the Public Employees Retirement Association for the county board
service.
Subd. 2. [RETIREMENT ANNUITY.] (a) Notwithstanding an
irrevocable election to participate in the general employees
retirement plan of the Public Employees Retirement Association
as an elected official and the person's continuation of elected
service, an eligible person under subdivision 1, paragraph (b),
is deemed to have terminated retirement plan membership under
Minnesota Statutes, section 353.01, subdivision 11b, on the
first day of the first pay period next following the date of
enactment.
(b) Upon the change in retirement coverage status under
paragraph (a), the eligible person may apply for a retirement
annuity under Minnesota Statutes, section 353.651. In computing
that annuity, the Public Employees Retirement Association must
exclude the salary that was attributable to the Goodhue County
board service. The deferred annuity augmentation under
Minnesota Statutes, section 353.71, applies to the annuity under
this subdivision.
Subd. 3. [TREATMENT OF GOODHUE COUNTY BOARD CONTRIBUTIONS
TO PERA.] (a) All member contributions by the eligible person to
the coordinated program of the general employee retirement plan
of the Public Employees Retirement Association attributable to
the Goodhue County board elected service, and all corresponding
employer contributions, must be determined.
(b) An eligible person described in subdivision 1,
paragraph (b), must elect, within 90 days of the change in
retirement coverage status under paragraph (a), between
receiving a refund under Minnesota Statutes, section 353.34,
subdivision 2, of the member contributions determined under
paragraph (a) or having coverage by the public employees defined
contribution plan under Minnesota Statutes, chapter 353D, as
further specified in paragraph (c).
(c) If coverage by the public employees defined
contribution plan is elected under paragraph (b), contributions
to that plan commence as of the first day of the first pay
period following the election, and the accumulated member and
employer contributions determined under paragraph (a) must be
transferred with annual compound interest at the rate of six
percent to an account established for the eligible person in its
public employees defined contribution plan.
(d) If no election is made by an eligible person by the
required date in paragraph (b), the individual is assumed to
have elected the refund indicated in paragraph (b).
(e) Upon an election under paragraph (b), or upon a
mandatory refund under paragraph (d), all rights in the Public
Employees Retirement Association coordinated plan due to elected
Goodhue County board service are forfeited and may not be
reestablished.
Sec. 3. [MSRS-UNCLASSIFIED PROGRAM; ELECTION BY SURVIVOR.]
(a) Notwithstanding any provision of Minnesota Statutes,
chapter 352 or 352D, to the contrary, a person described in
paragraph (b) may make the posthumous coverage election
specified in paragraph (c) and be eligible for the survivor
benefit specified in paragraph (d).
(b) An eligible person is the personal representative of
the estate of a person who:
(1) was born on March 26, 1942;
(2) was employed by the house of representatives for
several years prior to being laid off;
(3) was covered by the unclassified state employees
retirement program of the Minnesota State Retirement System as a
house employee until electing alternative coverage by the
general employee retirement plan at or prior to the termination
of house employment;
(4) was employed by the senate prior to death, but did not
make the election to transfer prior service contributions to the
unclassified state employees retirement program under Minnesota
Statutes, section 352D.12; and
(5) died on February 19, 2004.
(c) The posthumous coverage election is the transfer
election under Minnesota Statutes, section 352D.12, and the
personal representative of the estate of a person described in
paragraph (b) may make the election as if the representative was
a participant in the unclassified program.
(d) If the posthumous coverage election is made under
paragraph (c), the estate is entitled to a death benefit under
Minnesota Statutes, section 352D.075.
(e) The posthumous coverage election under this section
expires July 1, 2005.
Sec. 4. [EFFECTIVE DATE.]
Sections 1 to 3 are effective on the day following final
enactment.
ARTICLE 17
PRIOR SERVICE CREDIT PURCHASES
Section 1. Minnesota Statutes 2002, section 352.275,
subdivision 1, is amended to read:
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
state employee who has at least three years of allowable service
with the Minnesota State Retirement System and who performed
service in the United States armed forces before becoming a
state employee, or who failed to obtain service credit for a
military leave of absence under section 352.27, is entitled to
purchase allowable service credit for the initial period of
enlistment, induction, or call to active duty without any
voluntary extension by making payment under section 356.55 if
the employee is not entitled to receive a current or deferred
retirement annuity from a United States armed forces pension
plan and has not purchased service credit from any other
Minnesota defined benefit public employee pension plan for the
same period of service.
Sec. 2. Minnesota Statutes 2002, section 352B.01,
subdivision 3a, is amended to read:
Subd. 3a. [UNCREDITED MILITARY SERVICE CREDIT PURCHASE.]
(a) A member who has at least three years of allowable service
with the State Patrol retirement plan under subdivision 3 and
who performed service in the United States armed forces before
becoming a member is entitled to purchase allowable service
credit for the initial period of enlistment, induction, or call
to active duty without any voluntary extension by making payment
under section 356.55, if the employee is not entitled to receive
a current or deferred retirement annuity from a United States
armed forces pension plan and has not purchased service credit
from any other Minnesota defined benefit public employee pension
plan for the same period of service.
(b) A member who desires to purchase service credit under
paragraph (a) must apply with the executive director to make the
purchase. The application must include all necessary
documentation of the member's qualifications to make the
purchase, signed written permission to allow the executive
director to request and receive necessary verification of
applicable facts and eligibility requirements, and any other
relevant information that the executive director may require.
(c) Allowable service credit for the purchase period must
be granted by the State Patrol retirement plan to the purchasing
employee upon receipt of the purchase payment amount. Payment
must be made before the effective date of retirement of the
member.
Sec. 3. Minnesota Statutes 2002, section 353.01,
subdivision 16a, is amended to read:
Subd. 16a. [UNCREDITED MILITARY SERVICE CREDIT PURCHASE.]
(a) A public employee who has at least three years of allowable
service with the Public Employees Retirement Association or the
public employees police and fire plan and who performed service
in the United States armed forces before becoming a public
employee, or who failed to obtain service credit for a military
leave of absence under subdivision 16, paragraph (h), is
entitled to purchase allowable service credit for the initial
period of enlistment, induction, or call to active duty without
any voluntary extension by making payment under section 356.55
if the public employee is not entitled to receive a current or
deferred retirement annuity from a United States armed forces
pension plan and has not purchased service credit from any other
Minnesota defined benefit public employee pension plan for the
same period of service.
(b) A public employee who desires to purchase service
credit under paragraph (a) must apply with the executive
director to make the purchase. The application must include all
necessary documentation of the public employee's qualifications
to make the purchase, signed written permission to allow the
executive director to request and receive necessary verification
of applicable facts and eligibility requirements, and any other
relevant information that the executive director may require.
(c) Allowable service credit for the purchase period must
be granted by the public employees association or the public
employees police and fire plan, whichever applies, to the
purchasing public employee upon receipt of the purchase payment
amount. Payment must be made before the effective date of
retirement of the public employee.
Sec. 4. Minnesota Statutes 2002, section 354.533,
subdivision 1, is amended to read:
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the Teachers Retirement Association and who performed
service in the United States armed forces before becoming a
teacher as defined in section 354.05, subdivision 2, or who
failed to obtain service credit for a military leave of absence
under the provisions of section 354.53, is entitled to purchase
allowable and formula service credit for the initial period of
enlistment, induction, or call to active duty without any
voluntary extension by making payment under section 356.55
provided the teacher is not entitled to receive a current or
deferred retirement annuity from a United States armed forces
pension plan and has not purchased service credit from any other
Minnesota defined benefit public employee pension plan for the
same period of service.
Sec. 5. Minnesota Statutes 2002, section 354A.097,
subdivision 1, is amended to read:
Subdivision 1. [SERVICE CREDIT PURCHASE AUTHORIZED.] A
teacher who has at least three years of allowable service credit
with the teachers retirement fund association and who performed
service in the United States armed forces before becoming a
teacher as defined in section 354A.011, subdivision 27, or who
failed to obtain service credit for a military leave of absence
period under section 354A.093, is entitled to purchase allowable
service credit for the initial period of enlistment, induction,
or call to active duty without any voluntary extension by making
payment under section 356.55, provided the teacher is not
entitled to receive a current or deferred retirement annuity
from a United States armed forces pension plan and has not
purchased service credit from another Minnesota defined benefit
public employee pension plan for the same period of service.
Sec. 6. Laws 1999, chapter 222, article 16, section 16, as
amended by Laws 2002, chapter 392, article 7, section 1, and
Laws 2003, First Special Session chapter 12, article 6, section
2, is amended to read:
Sec. 16. [REPEALER.]
(a) Sections 1 2 to 6 and 8 to 13 are repealed on May 16,
2004.
(b) Sections 1 and 7 are repealed on May 16, 2006.
Sec. 7. Laws 2000, chapter 461, article 4, section 4, as
amended by Laws 2003, First Special Session chapter 12, article
6, section 3, is amended to read:
Sec. 4. [EFFECTIVE DATE; SUNSET REPEALER.]
(a) Sections 1, 2, and 3 are effective on the day following
final enactment.
(b) Sections 1, 2, and 3, are repealed on May 16, 2004 2006.
Sec. 8. [EFFECTIVE DATE.]
Sections 1 to 7 are effective on the day following final
enactment.
ARTICLE 18
MINNEAPOLIS POLICE RELIEF ASSOCIATION
Section 1. Minnesota Statutes 2002, section 69.77,
subdivision 4, is amended to read:
Subd. 4. [RELIEF ASSOCIATION FINANCIAL REQUIREMENTS;
MINIMUM MUNICIPAL OBLIGATION.] (a) The officers of the relief
association shall determine the financial requirements of the
relief association and minimum obligation of the municipality
for the following calendar year in accordance with the
requirements of this subdivision. The financial requirements of
the relief association and the minimum obligation of the
municipality must be determined on or before the submission date
established by the municipality under subdivision 5.
(b) The financial requirements of the relief association
for the following calendar year must be based on the most recent
actuarial valuation or survey of the special fund of the
association if more than one fund is maintained by the
association, or of the association, if only one fund is
maintained, prepared in accordance with sections 356.215,
subdivisions 4 to 15, and 356.216, as required under subdivision
10. If an actuarial estimate is prepared by the actuary of the
relief association as part of obtaining a modification of the
benefit plan of the relief association and the modification is
implemented, the actuarial estimate must be used in calculating
the subsequent financial requirements of the relief association.
(c) If the relief association has an unfunded actuarial
accrued liability as reported in the most recent actuarial
valuation or survey, the total of the amounts calculated under
clauses (1), (2), and (3), constitute the financial requirements
of the relief association for the following year. If the relief
association does not have an unfunded actuarial accrued
liability as reported in the most recent actuarial valuation or
survey, the amount calculated under clauses (1) and (2)
constitute the financial requirements of the relief association
for the following year. The financial requirement elements are:
(1) the normal level cost requirement for the following
year, expressed as a dollar amount, which must be determined by
applying the normal level cost of the relief association as
reported in the actuarial valuation or survey and expressed as a
percentage of covered payroll to the estimated covered payroll
of the active membership of the relief association, including
any projected change in the active membership, for the following
year;
(2) for the Bloomington Fire Department Relief Association,
the Fairmont Police Relief Association, and the Virginia Fire
Department Relief Association, to the dollar amount of normal
cost determined under clause (1) must be added an amount equal
to the dollar amount of the administrative expenses of the
special fund of the association if more than one fund is
maintained by the association, or of the association if only one
fund is maintained, for the most recent year, multiplied by the
factor of 1.035. The administrative expenses are those
authorized under section 69.80. No amount of administrative
expenses under this clause are to be included in the financial
requirements of the Minneapolis Firefighters Relief Association
or the Minneapolis Police Relief Association; and
(3) to the dollar amount of normal cost and expenses
determined under clauses (1) and (2) must be added an amount
equal to the level annual dollar amount which is sufficient to
amortize the unfunded actuarial accrued liability by December
31, 2010, for the Bloomington Fire Department Relief
Association, the Fairmont Police Relief Association, the
Minneapolis Firefighters Relief Association, and the Virginia
Fire Department Relief Association, and by December 31, 2020,
for the Minneapolis Police Relief Association, as determined
from the actuarial valuation or survey of the fund, using an
interest assumption set at the applicable rate specified in
section 356.215, subdivision 8. The amortization date specified
in this clause applies to all local police or salaried
firefighters' relief associations and that date supersedes any
amortization date specified in any applicable special law.
(d) The minimum obligation of the municipality is an amount
equal to the financial requirements of the relief association
reduced by the estimated amount of member contributions from
covered salary anticipated for the following calendar year and
the estimated amounts anticipated for the following calendar
year from the applicable state aid program established under
sections 69.011 to 69.051 receivable by the relief association
after any allocation made under section 69.031, subdivision 5,
paragraph (b), clause (2), or 423A.01, subdivision 2, clause
(6), from the local police and salaried firefighters' relief
association amortization aid program established under section
423A.02, subdivision 1, from the supplementary amortization
state-aid program established under section 423A.02, subdivision
1a, and from the additional amortization state aid under section
423A.02, subdivision 1b.
Sec. 2. Minnesota Statutes 2002, section 356.216, is
amended to read:
356.216 [CONTENTS OF ACTUARIAL VALUATIONS FOR LOCAL POLICE
AND FIRE FUNDS.]
(a) The provisions of section 356.215 that govern the
contents of actuarial valuations must apply to any local police
or fire pension fund or relief association required to make an
actuarial report under this section, except as follows:
(1) in calculating normal cost and other requirements, if
required to be expressed as a level percentage of covered
payroll, the salaries used in computing covered payroll must be
the maximum rate of salary on which retirement and survivorship
credits and amounts of benefits are determined and from which
any member contributions are calculated and deducted;
(2) in lieu of the amortization date specified in section
356.215, subdivision 11, the appropriate amortization target
date specified in section 69.77, subdivision 4, or 69.773,
subdivision 4, clause (c), must be used in calculating any
required amortization contribution except that the amortization
date for the Minneapolis Police Relief Association is December
31, 2020;
(3) in addition to the tabulation of active members and
annuitants provided for in section 356.215, subdivision 13, the
member contributions for active members for the calendar year
and the prospective annual retirement annuities under the
benefit plan for active members must be reported;
(4) actuarial valuations required under section 69.773,
subdivision 2, must be made at least every four years and
actuarial valuations required under section 69.77 shall be made
annually;
(5) the actuarial balance sheet showing accrued assets
valued at market value if the actuarial valuation is required to
be prepared at least every four years or valued as current
assets under section 356.215, subdivision 1, clause (6), or
paragraph (b), whichever applies, if the actuarial valuation is
required to be prepared annually, actuarial accrued liabilities,
and the unfunded actuarial accrued liability must include the
following required reserves:
(i) For active members
1. Retirement benefits
2. Disability benefits
3. Refund liability due to death or withdrawal
4. Survivors' benefits
(ii) For deferred annuitants' benefits
(iii) For former members without vested rights
(iv) For annuitants
1. Retirement annuities
2. Disability annuities
3. Surviving spouses' annuities
4. Surviving children's annuities
In addition to those required reserves, separate items must
be shown for additional benefits, if any, which may not be
appropriately included in the reserves listed above; and
(6) actuarial valuations are due by the first day of the
seventh month after the end of the fiscal year which the
actuarial valuation covers.
(b) For the Minneapolis Firefighters Relief Association or
the Minneapolis Police Relief Association, the following
provisions additionally apply:
(1) in calculating the actuarial balance sheet, unfunded
actuarial accrued liability, and amortization contribution of
the relief association, "current assets" means the value of all
assets at cost, including realized capital gains and losses,
plus or minus, whichever applies, the average value of total
unrealized capital gains or losses for the most recent
three-year period ending with the end of the plan year
immediately preceding the actuarial valuation report
transmission date; and
(2) in calculating the applicable portions of the actuarial
valuation, an annual preretirement interest assumption of six
percent, an annual postretirement interest assumption of six
percent, and an annual salary increase assumption of four
percent must be used.
Sec. 3. Minnesota Statutes 2002, section 423B.01,
subdivision 12, is amended to read:
Subd. 12. [EXCESS INVESTMENT INCOME.] "Excess investment
income" means the amount, if any, by which the average time
weighted total rate of return earned by the fund in the most
recent prior five two fiscal years has exceeded the actual
average percentage increase in the current monthly salary of a
first grade patrol officer in the most recent prior five two
fiscal years plus two percent, and must be expressed as a dollar
amount. The amount may not exceed one percent of the total
assets of the fund, except when the actuarial value of assets of
the fund according to the most recent annual actuarial valuation
prepared in accordance with sections 356.215 and 356.216 is
greater than 102 percent of its actuarial accrued liabilities,
in which case the amount must not exceed 1-1/2 percent of the
total assets of the fund, and does not exist unless the yearly
average percentage increase of the time weighted total rate of
return of the fund for the previous five two years exceeds by
two percent the yearly average percentage increase in monthly
salary of a first grade patrol officer during the previous five
two calendar years.
Sec. 4. Minnesota Statutes 2002, section 423B.09,
subdivision 1, is amended to read:
Subdivision 1. [MINNEAPOLIS POLICE; PERSONS ENTITLED TO
RECEIVE PENSIONS.] The association shall grant pensions payable
from the police pension fund in monthly installments to persons
entitled to pensions in the manner and for the following
purposes.
(a) When the actuarial value of assets of the fund
according to the most recent annual actuarial valuation
performed in accordance with sections 356.215 and 356.216 is
less than 90 percent of the actuarial accrued liabilities, an
active member or a deferred pensioner who has performed duty as
a member of the police department of the city for five years or
more, upon written application after retiring from duty and
reaching at least age 50, is entitled to be paid monthly for
life a service pension equal to eight units. For full years of
service beyond five years, the service pension increases by 1.6
units for each full year, to a maximum of 40 units. When the
actuarial value of assets of the fund according to the most
recent annual actuarial valuation prepared in accordance with
sections 356.215 and 356.216 is greater than 90 percent of
actuarial accrued liabilities, Active members, deferred members,
and service pensioners are entitled to a service pension
according to the following schedule:
5 years 8.0 units
6 years 9.6 units
7 years 11.2 units
8 years 12.8 units
9 years 14.4 units
10 years 16.0 units
11 years 17.6 units
12 years 19.2 units
13 years 20.8 units
14 years 22.4 units
15 years 24.0 units
16 years 25.6 units
17 years 27.2 units
18 years 28.8 units
19 years 30.4 units
20 years 34.0 35.0 units
21 years 35.6 36.6 units
22 years 37.2 38.2 units
23 years 38.8 39.8 units
24 years 40.4 41.4 units
25 years 42.0 43.0 units
Fractional years of service may not be used in computing
pensions.
(b) An active member who after five years' service but less
than 20 years' service with the police department of the city,
becomes superannuated so as to be permanently unable to perform
the person's assigned duties, is entitled to be paid monthly for
life a superannuation pension equal to four units for five years
of service and an additional two units for each full year of
service over five years and less than 20 years.
(c) An active member who is not eligible for a service
pension and who, while a member of the police department of the
city, becomes diseased or sustains an injury while in the
service that permanently unfits the member for the performance
of police duties is entitled to be paid monthly for life a
pension equal to 34 units while so disabled.
Sec. 5. Minnesota Statutes 2002, section 423B.09, is
amended by adding a subdivision to read:
Subd. 7. [ADDITIONAL UNIT.] The additional unit provided
to members by subdivision 1 must also be provided to members who
selected a joint annuity option under subdivision 6 and must be
in an amount that is actuarially equivalent to the service
pension and the automatic survivor coverage for that additional
unit.
Sec. 6. Minnesota Statutes 2002, section 423B.10,
subdivision 1, is amended to read:
Subdivision 1. [ENTITLEMENT; BENEFIT AMOUNT.] (a) The
surviving spouse of a deceased service pensioner, disability
pensioner, deferred pensioner, superannuation pensioner, or
active member, who was the legally married spouse of the
decedent, residing with the decedent, and who was married while
or before the time the decedent was on the payroll of the police
department, and who, if the deceased member was a service or
deferred pensioner, was legally married to the member for a
period of at least one year before retirement from the police
department, is entitled to a surviving spouse benefit. The
surviving spouse benefit is equal to 22 23 units per month if
the person is the surviving spouse of a deceased active member
or disabilitant. The surviving spouse benefit is equal to six
units per month, plus an additional one unit for each year of
service to the credit of the decedent in excess of five years,
to a maximum of 22 23 units per month, if the person is the
surviving spouse of a deceased service pensioner, deferred
pensioner, or superannuation pensioner. The surviving spouse
benefit is payable for the life of the surviving spouse.
(b) A surviving child of a deceased service pensioner,
disability pensioner, deferred pensioner, superannuation
pensioner, or active member, who was living while the decedent
was an active member of the police department or was born within
nine months after the decedent terminated active service in the
police department, is entitled to a surviving child benefit.
The surviving child benefit is equal to eight units per month if
the person is the surviving child of a deceased active member or
disabilitant. The surviving child benefit is equal to two units
per month, plus an additional four-tenths of one unit per month
for each year of service to the credit of the decedent in excess
of five years, to a maximum of eight units, if the person is the
surviving child of a deceased service pensioner, deferred
pensioner, or superannuation pensioner. The surviving child
benefit is payable until the person attains age 18, or, if in
full-time attendance during the normal school year, in a school
approved by the board of directors, until the person receives a
bachelor's degree or attains the age of 22 years, whichever
occurs first. In the event of the death of both parents leaving
a surviving child or children entitled to a surviving child
benefit as determined in this paragraph, the surviving child is,
or the surviving children are, entitled to a surviving child
benefit in such sums as determined by the board of directors to
be necessary for the care and education of such surviving child
or children, but not to exceed the family maximum benefit per
month, to the children of any one family.
(c) The surviving spouse and surviving child benefits are
subject to a family maximum benefit. The family maximum benefit
is 41 units per month.
(d) A surviving spouse who is otherwise not qualified may
receive a benefit if the surviving spouse was married to the
decedent for a period of five years and was residing with the
decedent at the time of death. The surviving spouse benefit is
the same as that provided in paragraph (a), except that if the
surviving spouse is younger than the decedent, the surviving
spouse benefit must be actuarially equivalent to a surviving
spouse benefit that would have been paid to the member's spouse
had the member been married to a person of the same age or a
greater age than the member's age before retirement.
Sec. 7. Minnesota Statutes 2002, section 423B.15,
subdivision 3, is amended to read:
Subd. 3. [AMOUNT OF ANNUAL POSTRETIREMENT PAYMENT.] The
amount determined under subdivision 2 must be applied in
accordance with this subdivision. When the actuarial value of
assets of the fund according to the most recent annual actuarial
valuation prepared in accordance with sections 356.215 and
356.216 is less than 102 percent of its total actuarial
liabilities, the relief association shall apply the first
one-half of excess investment income to the payment of an annual
postretirement payment as specified in this subdivision and the
second one-half of excess investment income up to one-half of
one percent of the assets of the fund must be applied to reduce
the state amortization state aid or supplementary amortization
state aid payments otherwise due to the relief association under
section 423A.02 for the current calendar year. When the
actuarial value of assets of the fund according to the most
recent annual actuarial valuation prepared in accordance with
sections 356.215 and 356.216 is less than 102 percent funded and
other conditions are met, the relief association shall pay an
annual postretirement payment to all eligible members in an
amount not to exceed one-half of one percent of the assets of
the fund. When the actuarial value of assets of the fund
according to the most recent annual actuarial valuation prepared
in accordance with sections 356.215 and 356.216 is greater than
102 percent of its actuarial accrued liabilities, the relief
association shall pay an annual postretirement payment to all
eligible members in an amount not to exceed 1-1/2 percent of the
assets of the fund. Payment of the annual postretirement
payment must be in a lump sum amount on June 1 following the
determination date in any year. Payment of the annual
postretirement payment may be made only if the average time
weighted total rate of return for the most recent prior five two
years exceeds by two percent the actual average percentage
increase in the current monthly salary of a top grade patrol
officer in the most recent prior five two fiscal years. The
total amount of all payments to members may not exceed the
amount determined under this subdivision. Payment to each
eligible member must be calculated by dividing the total number
of pension units to which eligible members are entitled into the
excess investment income available for distribution to members,
and then multiplying that result by the number of units to which
each eligible member is entitled to determine each eligible
member's annual postretirement payment. When the actuarial
value of assets of the fund according to the most recent annual
actuarial valuation prepared in accordance with sections 356.215
and 356.216 is less than 102 percent of its actuarial accrued
liabilities, payment to each eligible member may not exceed an
amount equal to the total monthly benefit that the eligible
member was entitled to in the prior year under the terms of the
benefit plan of the relief association or each eligible member's
proportionate share of the excess investment income, whichever
is less. When the actuarial value of assets of the fund
according to the most recent annual actuarial valuation prepared
in accordance with sections 356.215 and 356.216 is greater than
102 percent of its actuarial accrued liabilities, payment to
each eligible member must not exceed the member's proportionate
share of 1-1/2 percent of the assets of the fund.
A person who received a pension or benefit for the entire
12 months before the determination date is eligible for a full
annual postretirement payment. A person who received a pension
or benefit for less than 12 months before the determination date
is eligible for a prorated annual postretirement payment.
Sec. 8. [423B.22] [GUARANTEED PENSION PROVISION.]
Once a pension benefit is properly paid in accordance with
this law to any member, the dollar amount of that pension
benefit shall not be reduced.
Sec. 9. [LOCAL APPROVAL; NONSEVERABILITY.]
Sections 1 to 8 are not severable and are effective on the
day after the date of the approval by the city council of the
city of Minneapolis and the timely completion by the chief
clerical officer of the city of Minneapolis of compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
Presented to the governor May 18, 2004
Signed by the governor May 29, 2004, 3:55 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes