1.1                          A bill for an act 
  1.2             relating to retirement; volunteer firefighter relief 
  1.3             associations; modifying the options for crediting 
  1.4             interest on deferred service pensions; amending 
  1.5             Minnesota Statutes 2002, section 424A.02, subdivision 
  1.6             7. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 424A.02, 
  1.9   subdivision 7, is amended to read: 
  1.10     Subd. 7.  [DEFERRED SERVICE PENSIONS.] (a) A member of a 
  1.11  relief association to which this section applies is entitled to 
  1.12  a deferred service pension if the member: 
  1.13     (1) has completed the lesser of the minimum period of 
  1.14  active service with the fire department specified in the bylaws 
  1.15  or 20 years of active service with the fire department; 
  1.16     (2) has completed at least five years of active membership 
  1.17  in the relief association; and 
  1.18     (3) separates from active service and membership before 
  1.19  reaching age 50 or the minimum age for retirement and 
  1.20  commencement of a service pension specified in the bylaws 
  1.21  governing the relief association if that age is greater than age 
  1.22  50.  
  1.23     (b) The deferred service pension starts when the former 
  1.24  member reaches age 50 or the minimum age specified in the bylaws 
  1.25  governing the relief association if that age is greater than age 
  1.26  50 and when the former member makes a valid written application. 
  2.1      (c) A relief association that provides a lump sum service 
  2.2   pension may, when its governing bylaws so provide, pay interest 
  2.3   on the deferred lump sum service pension during the period of 
  2.4   deferral.  If interest on a deferred service pension is provided 
  2.5   for in the bylaws, interest must be paid accordingly, either: 
  2.6      (1) at the rate actually earned on that portion of the 
  2.7   assets if the deferred benefit amount is invested by the relief 
  2.8   association in a separate account established and maintained by 
  2.9   the relief association or in a separate investment vehicle held 
  2.10  by the relief association; 
  2.11     (2) at a rate determined annually by the board of trustees 
  2.12  based on the actual investment performance of the special fund, 
  2.13  up to five percent, and applied consistently for all deferred 
  2.14  service pensioners; or~~, if not,~~ 
  2.15     (3) at the interest rate of five percent, compounded 
  2.16  annually.  
  2.17     (d) For a deferred service pension that is transferred to a 
  2.18  separate account established and maintained by the relief 
  2.19  association or separate investment vehicle held by the relief 
  2.20  association under paragraph (c), clause (1), the deferred member 
  2.21  bears the full investment risk subsequent to transfer and in 
  2.22  calculating the accrued liability of the volunteer firefighters 
  2.23  relief association that pays a lump sum service pension, the 
  2.24  accrued liability for deferred service pensions is equal to the 
  2.25  separate relief association account balance or the fair market 
  2.26  value of the separate investment vehicle held by the relief 
  2.27  association. 
  2.28     (e) The deferred service pension is governed by and must be 
  2.29  calculated under the general statute, special law, relief 
  2.30  association articles of incorporation, and relief association 
  2.31  bylaw provisions applicable on the date on which the member 
  2.32  separated from active service with the fire department and 
  2.33  active membership in the relief association. 
  2.34     Sec. 2.  [EFFECTIVE DATE.] 
  2.35     Section 1 is effective July 1, 2003.