1.1                          A bill for an act
  1.2             relating to education; permitting school districts to 
  1.3             offer certain early retirement incentives; permitting 
  1.4             teachers to purchase service credit for teaching 
  1.5             service in other states; permitting purchase of 
  1.6             service credit for other specified periods; proposing 
  1.7             coding for new law in Minnesota Statutes, chapters 
  1.8             125; 354; and 354A. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10                             ARTICLE 1
  1.11                       RETIREMENT INCENTIVES
  1.12     Section 1.  [125.612] [RETIREMENT INCENTIVES.] 
  1.13     (a) A school board may offer early retirement incentives to 
  1.14  licensed and nonlicensed staff under the age of 65.  The early 
  1.15  retirement incentives that the board may offer are: 
  1.16     (1) the payment of employer pension plan contributions for 
  1.17  a specified period of allowable service credit for district 
  1.18  employees who have at least ten years of allowable service 
  1.19  credit in the applicable pension plan under paragraph (b); and 
  1.20     (2) the employer payment of the premiums for continued 
  1.21  health insurance coverage under paragraph (c). 
  1.22     These incentives may only be offered to employees who agree 
  1.23  to terminate active employment with the school district.  The 
  1.24  board may determine the staff to whom the incentives are offered.
  1.25  Unilateral implementation of this section by a school board is 
  1.26  not an unfair labor practice under chapter 179A. 
  1.27     (b) An employee under age 65 with at least ten years of 
  2.1   allowable service credit in the applicable pension plan who is 
  2.2   offered an early retirement incentive under paragraph (a), 
  2.3   clause (1), may purchase up to five additional years of 
  2.4   allowable service credit from the applicable pension plan.  To 
  2.5   do so, the former employee must pay the member contributions, 
  2.6   and whatever portion of the employer contribution that is not 
  2.7   made by the school board, to the pension plan annually in a 
  2.8   manner and in accord with a schedule specified by the executive 
  2.9   director of the applicable fund.  If the former employee makes 
  2.10  the member contribution, the board may make all or some of the 
  2.11  employer contribution.  The salary used to determine these 
  2.12  contributions is the salary of the person in the last year that 
  2.13  the former employee was employed by the district.  During the 
  2.14  period of continuing member and employer contributions, the 
  2.15  person is considered to be an active member of the applicable 
  2.16  pension plan, is eligible for any active member disability or 
  2.17  survivorship benefit coverage, and is included in any 
  2.18  postemployment termination benefit plan changes unless the 
  2.19  benefit legislation provides otherwise.  Continued eligibility 
  2.20  to purchase service credit under this paragraph expires if the 
  2.21  person is subsequently employed during the service purchase 
  2.22  period by a public employer with retirement coverage under a 
  2.23  pension plan specified in section 356.30, subdivision 3. 
  2.24     (c) The board may offer a former employee who is at least 
  2.25  age 50 continued employer-paid health insurance coverage.  To be 
  2.26  eligible for employer-paid health insurance under this section, 
  2.27  the former employee must agree not to return to work in any 
  2.28  capacity for the district that will provide the insurance 
  2.29  coverage.  Coverage may not extend beyond age 65 or the end of 
  2.30  the first month in which the employee is eligible for 
  2.31  employer-paid health insurance coverage from a new employer.  
  2.32  For purposes of this subdivision, "employer-paid health 
  2.33  insurance coverage" means medical, hospitalization, or health 
  2.34  insurance coverage provided through an insurance company that is 
  2.35  licensed to do business in the state and for which the employing 
  2.36  unit pays more than one-half of the cost of the insurance 
  3.1   premiums. 
  3.2                              ARTICLE 2
  3.3                  TEACHING SERVICE OUTSIDE MINNESOTA
  3.4      Section 1.  [354.097] [PURCHASE OF ALLOWABLE SERVICE CREDIT 
  3.5   FOR TEACHING SERVICE OUTSIDE MINNESOTA.] 
  3.6      (a) An active member who has engaged in other elementary or 
  3.7   secondary public school teaching employment either outside the 
  3.8   state of Minnesota, but rendered in the United States, or for 
  3.9   the federal government before first becoming a member of the 
  3.10  association and who has met the qualifications of paragraph (b), 
  3.11  may elect to purchase and receive allowable service credit in 
  3.12  the applicable program of the association for qualified prior 
  3.13  service in other elementary or secondary public school teaching 
  3.14  employment that satisfies the requirements of paragraph (c) by 
  3.15  making the required payment under paragraph (d). 
  3.16     (b) A member may elect to purchase allowable service credit 
  3.17  for other elementary or secondary public school teaching 
  3.18  employment under this section if: 
  3.19     (1) the member has at least ten years of allowable service 
  3.20  credit in the applicable program of the association; and 
  3.21     (2) the member did not and could not receive accrued 
  3.22  benefits by leaving the person's accumulated member 
  3.23  contributions with any other retirement system under the 
  3.24  applicable law in effect at the termination of the other public 
  3.25  employment. 
  3.26     (c) Service in other elementary or secondary public school 
  3.27  teaching employment rendered in the United States qualifies for 
  3.28  purchase under this section, if the service to be credited: 
  3.29     (1) does not exceed the lesser of ten years or one-half the 
  3.30  member's total years of allowable teaching service in the 
  3.31  applicable association at the time of the purchase; 
  3.32     (2) is equivalent to full-time allowable service as 
  3.33  determined in accordance with the statutes and rules applicable 
  3.34  to the association at the time of the purchase; 
  3.35     (3) is purchased in full-year increments; 
  3.36     (4) is not for a period of service that has been used by 
  4.1   the member to qualify for an annuity from any other public 
  4.2   school retirement fund or system, as certified by the executive 
  4.3   director; and 
  4.4      (5) is not available to be used for the purpose of 
  4.5   qualifying the member for a disability benefit from the 
  4.6   association. 
  4.7      (d) For a person eligible to purchase credit for qualifying 
  4.8   service under this section, there must be paid to the 
  4.9   association an amount equal to the present value, on the date of 
  4.10  payment, of the amount of the additional retirement annuity that 
  4.11  would be obtained by virtue of the purchase of the additional 
  4.12  service credit.  This amount shall be computed using the 
  4.13  applicable preretirement interest rate specified in section 
  4.14  356.215, subdivision 4d, and the mortality table adopted for the 
  4.15  retirement fund association.  The computation shall assume 
  4.16  continuous future service in the retirement fund association 
  4.17  until the age at which the minimum requirements are met for 
  4.18  normal retirement with an annuity unreduced for retirement 
  4.19  before the normal retirement age, including the provisions of 
  4.20  section 356.30, and also shall assume a future salary history 
  4.21  that includes increases at the applicable rate assumed under 
  4.22  section 356.215, subdivision 4d.  The present value computation 
  4.23  must be made either by the actuary retained by the legislative 
  4.24  commission on pensions and retirement or by the association 
  4.25  executive director using a calculation procedure specified by 
  4.26  the commission-retained actuary.  The payment must be made in a 
  4.27  lump sum.  The prospective purchaser must pay the administrative 
  4.28  expense of performing the present value calculation.  The 
  4.29  purchase payment must be made by the member, but the employing 
  4.30  school district at its discretion and if done according to a 
  4.31  policy that treats all comparably situated teachers equitably, 
  4.32  may pay all or any portion of the purchase payment amount that 
  4.33  exceeds an amount equal to the member contribution rates in 
  4.34  effect during the period or periods of prior service applied to 
  4.35  the actual salary rates in effect during the period or periods 
  4.36  of prior service, plus interest at the rate of 8.5 percent a 
  5.1   year compounded annually from the date on which the member 
  5.2   contributions would otherwise have been made to the date on 
  5.3   which the payment is made. 
  5.4      Sec. 2.  [354A.105] [PURCHASE OF ALLOWABLE SERVICE CREDIT 
  5.5   FOR TEACHING SERVICE OUTSIDE MINNESOTA.] 
  5.6      (a) Notwithstanding any law, article of incorporation, or 
  5.7   bylaw provision of a teachers retirement fund association to the 
  5.8   contrary, an active member who has engaged in other elementary 
  5.9   or secondary public school teaching employment either outside 
  5.10  the state of Minnesota, but rendered in the United States, or 
  5.11  for the federal government before first becoming a member of the 
  5.12  association and who has met the qualifications of paragraph (b), 
  5.13  may elect to purchase and receive allowable service credit in 
  5.14  the applicable program of the association for qualified prior 
  5.15  service in other elementary or secondary public school teaching 
  5.16  employment that satisfies the requirements of paragraph (c) by 
  5.17  making the required payment under paragraph (d). 
  5.18     (b) A member may elect to purchase allowable service credit 
  5.19  for other elementary or secondary public school teaching 
  5.20  employment under this section if: 
  5.21     (1) the member has at least ten years of allowable service 
  5.22  credit in the applicable program of the association; and 
  5.23     (2) the member did not and could not receive accrued 
  5.24  benefits by leaving the person's accumulated member 
  5.25  contributions with any other retirement system under the 
  5.26  applicable law in effect at the termination of the other public 
  5.27  employment. 
  5.28     (c) Service in other elementary or secondary public school 
  5.29  teaching employment rendered in the United States qualifies for 
  5.30  purchase under this section, if the service to be credited: 
  5.31     (1) does not exceed the lesser of ten years or one-half the 
  5.32  member's total years of allowable teaching service in the 
  5.33  applicable association at the time of the purchase; 
  5.34     (2) is equivalent to full-time allowable service as 
  5.35  determined in accordance with the statutes and rules applicable 
  5.36  to the association at the time of the purchase; 
  6.1      (3) is purchased in full-year increments; 
  6.2      (4) is not for a period of service that has been used by 
  6.3   the member to qualify for an annuity from any other public 
  6.4   school retirement fund or system, as certified by the chief 
  6.5   administrative officer of the applicable retirement system; and 
  6.6      (5) is not available to be used for the purpose of 
  6.7   qualifying the member for a disability benefit from the 
  6.8   association. 
  6.9      (d) For a person eligible to purchase credit for qualifying 
  6.10  service under this section, there must be paid to the 
  6.11  association an amount equal to the present value, on the date of 
  6.12  payment, of the amount of the additional retirement annuity that 
  6.13  would be obtained by virtue of the purchase of the additional 
  6.14  service credit.  This amount shall be computed using the 
  6.15  applicable preretirement interest rate specified in section 
  6.16  356.215, subdivision 4d, and the mortality table adopted for the 
  6.17  retirement fund association.  The computation shall assume 
  6.18  continuous future service in the retirement fund association 
  6.19  until the age at which the minimum requirements are met for 
  6.20  normal retirement with an annuity unreduced for retirement 
  6.21  before the normal retirement age, including the provisions of 
  6.22  section 356.30, and also shall assume a future salary history 
  6.23  that includes increases at the applicable rate assumed under 
  6.24  section 356.215, subdivision 4d.  The present value computation 
  6.25  must be made either by the actuary retained by the legislative 
  6.26  commission on pensions and retirement or by the association 
  6.27  executive director using a calculation procedure specified by 
  6.28  the commission-retained actuary.  The payment must be made in a 
  6.29  lump sum.  The prospective purchaser must pay the administrative 
  6.30  expense of performing the present value calculation.  The 
  6.31  purchase payment must be made by the member, but the employing 
  6.32  school district, at its discretion and if done according to a 
  6.33  policy that treats all comparably situated teachers equitably, 
  6.34  may pay all or any portion of the purchase payment amount that 
  6.35  exceeds an amount equal to the member contribution rates in 
  6.36  effect during the period or periods of prior service applied to 
  7.1   the actual salary rates in effect during the period or periods 
  7.2   of prior service, plus interest at the rate of 8.5 percent a 
  7.3   year compounded annually from the date on which the member 
  7.4   contributions would otherwise have been made to the date on 
  7.5   which the payment is made. 
  7.6      Sec. 3.  [EFFECTIVE DATE.] 
  7.7      Sections 1 and 2 are effective the day after final 
  7.8   enactment. 
  7.9                              ARTICLE 3
  7.10              OTHER PURCHASES OF PRIOR SERVICE CREDIT
  7.11     Section 1.  [PURCHASE OF PRIOR SERVICE CREDIT.] 
  7.12     Subdivision 1.  [ELIGIBILITY.] Notwithstanding any law, 
  7.13  article of incorporation, or bylaw provision to the contrary, an 
  7.14  active member of the teachers retirement association or a first 
  7.15  class city teacher retirement association may elect to purchase 
  7.16  and receive allowable service credit for the following periods 
  7.17  of time, to the extent that the member does not already have 
  7.18  service credit for this time: 
  7.19     (1) a period of military service of up to four years, 
  7.20  provided that this service occurred after the person graduated 
  7.21  from a post-secondary institution with course credits and 
  7.22  experience sufficient to qualify for a teacher's license under 
  7.23  laws and rules in effect at the time of graduation; 
  7.24     (2) any period of parental or maternity leave or family 
  7.25  leave, any of which occurred after the member first accrued 
  7.26  teaching service; 
  7.27     (3) any period of teaching service; and 
  7.28     (4) any period of unrequested leave from teaching service. 
  7.29     Subd. 2.  [PAYMENT.] For a person eligible to purchase 
  7.30  credit for qualifying service under this subdivision, there must 
  7.31  be paid to the applicable association an amount equal to the 
  7.32  present value, on the date of payment, of the amount of the 
  7.33  additional retirement annuity that would be obtained by virtue 
  7.34  of the purchase of the additional service credit.  This amount 
  7.35  shall be computed using the applicable preretirement interest 
  7.36  rate specified in section 356.215, subdivision 4d, and the 
  8.1   mortality table adopted for the retirement fund association.  
  8.2   The computation shall assume continuous future service in the 
  8.3   retirement fund association until the age at which the minimum 
  8.4   requirements are met for normal retirement with an annuity 
  8.5   unreduced for retirement before the normal retirement age, 
  8.6   including the provisions of section 356.30, and also assuming a 
  8.7   future salary history that includes increases at the applicable 
  8.8   rate assumed under section 356.215, subdivision 4d.  The present 
  8.9   value computation must be made either by the actuary retained by 
  8.10  the legislative commission on pensions and retirement or by the 
  8.11  association executive director using a calculation procedure 
  8.12  specified by the commission-retained actuary.  The payment must 
  8.13  be made in a lump sum by July 1, 1996.  The prospective 
  8.14  purchaser must pay the administrative expense of performing the 
  8.15  present value calculation.  The purchase payment must be made by 
  8.16  the member, but the employing school district, at its discretion 
  8.17  and if done according to a policy that treats all comparably 
  8.18  situated teachers equitably, may pay all or any portion of the 
  8.19  purchase payment amount that exceeds an amount equal to the 
  8.20  member contribution rates in effect during the period or periods 
  8.21  of prior service applied to the actual salary rates in effect 
  8.22  during the period or periods of prior service, plus interest at 
  8.23  the rate of 8.5 percent a year compounded annually from the date 
  8.24  on which the member contributions would otherwise have been made 
  8.25  to the date on which the payment is made. 
  8.26     Sec. 2.  [EFFECTIVE DATE.] 
  8.27     Section 1 is effective the day after final enactment.