1.1                          A bill for an act 
  1.2             relating to retirement; supplemental, deferred 
  1.3             compensation, and local pension plans; clarifying the 
  1.4             restrictions on supplemental and local pension plans 
  1.5             for plans funded from accumulated sick and vacation 
  1.6             leave; amending Minnesota Statutes 2000, section 
  1.7             356.25; Minnesota Statutes 2001 Supplement, section 
  1.8             356.24, subdivision 1. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 2001 Supplement, section 
  1.11  356.24, subdivision 1, is amended to read: 
  1.12     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] It is unlawful 
  1.13  for a school district or other governmental subdivision or state 
  1.14  agency to levy taxes for, or contribute public funds to a 
  1.15  supplemental pension or deferred compensation plan that is 
  1.16  established, maintained, and operated in addition to a primary 
  1.17  pension program for the benefit of the governmental subdivision 
  1.18  employees other than: 
  1.19     (1) to a supplemental pension plan that was established, 
  1.20  maintained, and operated before May 6, 1971; 
  1.21     (2) to a plan that provides solely for group health, 
  1.22  hospital, disability, or death benefits; 
  1.23     (3) to the individual retirement account plan established 
  1.24  by chapter 354B; 
  1.25     (4) to a plan that provides solely for severance pay under 
  1.26  section 465.72 to a retiring or terminating employee; 
  1.27     (5) for employees other than personnel employed by the 
  2.1   board of trustees of the Minnesota state colleges and 
  2.2   universities and covered under the higher education supplemental 
  2.3   retirement plan under chapter 354C, if provided for in a 
  2.4   personnel policy of the public employer or in the collective 
  2.5   bargaining agreement between the public employer and the 
  2.6   exclusive representative of public employees in an appropriate 
  2.7   unit, in an amount matching employee contributions on a dollar 
  2.8   for dollar basis, but not to exceed an employer contribution of 
  2.9   $2,000 a year per employee; 
  2.10     (i) to the state of Minnesota deferred compensation plan 
  2.11  under section 352.96; or 
  2.12     (ii) in payment of the applicable portion of the 
  2.13  contribution made to any investment eligible under section 
  2.14  403(b) of the Internal Revenue Code, if the employing unit has 
  2.15  complied with any applicable pension plan provisions of the 
  2.16  Internal Revenue Code with respect to the tax-sheltered annuity 
  2.17  program during the preceding calendar year; 
  2.18     (6) for personnel employed by the board of trustees of the 
  2.19  Minnesota state colleges and universities and not covered by 
  2.20  clause (5), to the supplemental retirement plan under chapter 
  2.21  354C, if provided for in a personnel policy or in the collective 
  2.22  bargaining agreement of the public employer with the exclusive 
  2.23  representative of the covered employees in an appropriate unit, 
  2.24  in an amount matching employee contributions on a dollar for 
  2.25  dollar basis, but not to exceed an employer contribution of 
  2.26  $2,700 a year for each employee; 
  2.27     (7) to a supplemental plan or to a governmental trust to 
  2.28  save for postretirement health care expenses qualified for 
  2.29  tax-preferred treatment under the Internal Revenue Code, if 
  2.30  provided for in a personnel policy or in the collective 
  2.31  bargaining agreement of a public employer with the exclusive 
  2.32  representative of the covered employees in an appropriate unit; 
  2.33  or 
  2.34     (8) to the laborer's national industrial pension fund for 
  2.35  the employees of a governmental subdivision who are covered by a 
  2.36  collective bargaining agreement that provides for coverage by 
  3.1   that fund and that sets forth a fund contribution rate, but not 
  3.2   to exceed an employer contribution of $2,000 per year per 
  3.3   employee; or 
  3.4      (9) to a supplemental plan organized and operated under 
  3.5   section 401(a) of the federal Internal Revenue Code, as amended, 
  3.6   that is wholly and solely funded by an employee's accrued 
  3.7   benefits. 
  3.8      Sec. 2.  Minnesota Statutes 2000, section 356.25, is 
  3.9   amended to read: 
  3.10     356.25 [LOCAL GOVERNMENTAL PENSION FUND PROHIBITIONS; 
  3.11  EXCLUSIONS.] 
  3.12     Notwithstanding any other provision of law or charter, no 
  3.13  city, county, public agency or instrumentality, or other 
  3.14  political subdivision shall, after August 1, 1975, is required 
  3.15  or permitted to establish for any of its employees any local 
  3.16  pension plan or fund financed in whole or in part from public 
  3.17  funds, other than: 
  3.18     (1) a supplemental pension or deferred compensation plan 
  3.19  authorized under section 356.24; or 
  3.20     (2) a volunteer firefighter's relief association 
  3.21  established pursuant under to chapter 424A and governed by 
  3.22  sections 69.771 to 69.776. 
  3.23     Sec. 3.  [RATIFICATION AND VALIDATION OF CERTAIN PAST 
  3.24  ACTIONS.] 
  3.25     Any supplemental pension plan that is organized and 
  3.26  operated under section 401(a) of the federal Internal Revenue 
  3.27  Code, as amended, that is wholly and solely funded by an 
  3.28  employee's accrued benefits, and that was established before the 
  3.29  effective date of this act and any contributions to the plan 
  3.30  that may be characterized as public funds within the meaning of 
  3.31  Minnesota Statutes, section 356.24, are hereby ratified and 
  3.32  validated. 
  3.33     Sec. 4.  [EFFECTIVE DATE.] 
  3.34     Sections 1 to 3 are effective on the day following final 
  3.35  enactment.