1999 Minnesota Statutes

CHAPTER 353D. Public employees defined contribution plan

     353D.01 Public employees defined contribution plan. 

    Subdivision 1.    Establishment.  The public employees 
 defined contribution plan is administered by the public 
 employees retirement association under supervision of the 
 association board of trustees.  To assist it in governing the 
 operations of the plan, the board may appoint an advisory 
 committee of not more than nine members who are representative 
 of the employers and employees who participate in the plan.  

    Subd. 2.    Eligibility.  (a) Eligibility to participate 
 in the defined contribution plan is available to: 

    (1) elected local government officials of a governmental 
 subdivision who elect to participate in the plan under section 
 353D.02, subdivision 1, and who, for the elected service 
 rendered to a governmental subdivision, are not members of the 
 public employees retirement association within the meaning of 
 section 353.01, subdivision 7; 

    (2) physicians who, if they did not elect to participate in 
 the plan under section 353D.02, subdivision 2, would meet the 
 definition of member under section 353.01, subdivision 7; 

    (3) basic and advanced life support emergency medical 
 service personnel employed by or providing services for any 
 public ambulance service or privately operated ambulance service 
 that receives an operating subsidy from a governmental entity 
 that elects to participate under section 353D.02, subdivision 3; 
 and 

    (4) members of a municipal rescue squad associated with 
 Litchfield in Meeker county, or of a county rescue squad 
 associated with Kandiyohi county, if an independent nonprofit 
 rescue squad corporation, incorporated under chapter 317A, 
 performing emergency management services, and if not affiliated 
 with a fire department or ambulance service and if its members 
 are not eligible for membership in that fire department's or 
 ambulance service's relief association or comparable pension 
 plan. 

    (b) For purposes of this chapter, an elected local 
 government official includes a person appointed to fill a 
 vacancy in an elective office.  Service as an elected local 
 government official only includes service for the governmental 
 subdivision for which the official was elected by the 
 public-at-large.  Service as an elected local government 
 official ceases and eligibility to participate terminates when 
 the person ceases to be an elected official.  An elected local 
 government official does not include an elected county sheriff.  

    (c) Elected local government officials, physicians, first 
 response personnel and emergency medical service personnel, and 
 rescue squad personnel who are currently covered by a public or 
 private pension plan because of their employment or provision of 
 services are not eligible to participate in the public employees 
 defined contribution plan.  

    (d) A former participant is a person who has terminated 
 eligible employment or service and has not withdrawn the value 
 of the person's individual account. 

    HIST: 1987 c 372 art 5 s 1; 1990 c 570 art 8 s 2; 1991 c 291 
 art 19 s 2,11; 1991 c 341 s 35; 1992 c 432 art 2 s 36; 1996 c 
 438 art 6 s 1; 1999 c 222 art 21 s 1 

     353D.02 Election of coverage. 

    Subdivision 1.    Elected local government officials.  
 Eligible elected local government officials may elect to 
 participate in the defined contribution plan after being elected 
 or appointed to elective public office by filing a membership 
 application on a form prescribed by the executive director of 
 the association authorizing contributions to be deducted from 
 the elected official's salary.  Participation begins on the 
 first day of the pay period for which the contributions were 
 deducted or, if pay period coverage dates are not provided, the 
 date on which the membership application or contributions are 
 received in the office of the association, whichever is received 
 first, provided further that the membership application is 
 received by the association within 60 days of the receipt of the 
 contributions.  An election to participate in the plan is 
 revocable during incumbency.  

    Subd. 2.    Eligible physician.  Eligible physicians may 
 elect to participate in the defined contribution plan within 90 
 days of commencing employment with a government subdivision 
 under section 353.01, subdivision 6, by filing a membership 
 application on a form prescribed by the executive director of 
 the association authorizing contributions to be deducted from 
 the physician's salary.  Participation begins on the first day 
 of the pay period for which the contributions were deducted.  An 
 election to participate in the defined contribution plan is 
 irrevocable. 

    Subd. 3.    Eligible ambulance service personnel.  Each 
 public ambulance service or privately operated ambulance service 
 with eligible personnel that receives an operating subsidy from 
 a governmental entity may elect to participate in the plan.  If 
 a service elects to participate, its eligible personnel may 
 elect to participate or to decline to participate.  An 
 individual's election must be made within 30 days of the 
 service's election to participate or 30 days of the date on 
 which the individual was employed by the service or began to 
 provide service for it, whichever date is later.  An election by 
 a service or an individual is revocable. 

    Subd. 4.    Eligible rescue squad personnel.  The 
 municipality or county, as applicable, associated with a rescue 
 squad under section 353D.01, subdivision 2, paragraph (a), 
 clause (4), may elect to participate in the plan.  If the 
 municipality or county, as applicable, elects to participate, 
 the eligible personnel may elect to participate or decline to 
 participate.  An eligible individual's election must be made 
 within 30 days of the service's election to participate or 30 
 days of the date on which the individual begins to provide 
 service to the rescue squad, whichever is later.  Elections 
 under this subdivision by a government unit or individual are 
 irrevocable.  The municipality or county, as applicable, must 
 specify by resolution eligibility requirements for rescue squad 
 personnel which must be satisfied if the individual is to be 
 authorized to make the election under this subdivision. 

    HIST: 1987 c 372 art 5 s 2; 1990 c 570 art 8 s 3; 1991 c 291 
 art 19 s 3,11; 1991 c 341 s 36; 1992 c 432 art 2 s 37; 1993 c 
 307 art 4 s 47; 1996 c 438 art 6 s 2; 1999 c 222 art 21 s 2 

  353D.021 Never effective 

     353D.03 Funding of plan. 

    Subdivision 1.    Local government official contribution. 
  An eligible elected local government official who elects to 
 participate in the public employees defined contribution plan 
 shall contribute an amount equal to five percent of salary as 
 defined in section 353.01, subdivision 10.  A participating 
 elected local government official's governmental subdivision 
 shall contribute a matching amount. 

    Subd. 2.    Physician contribution.  An eligible 
 physician who elects to participate in the plan shall contribute 
 an amount equal to five percent of salary as defined in section 
 353.01, subdivision 10.  The employer shall contribute a 
 matching amount. 

    Subd. 3.    Ambulance service, rescue squad personnel 
 contribution.  A public ambulance service or privately 
 operated ambulance service that receives an operating subsidy 
 from a governmental entity that elects to participate in the 
 plan shall fund benefits for its qualified personnel who 
 individually elect to participate.  Personnel who are paid for 
 their services may elect to make member contributions in an 
 amount not to exceed the service's contribution on their 
 behalf.  Ambulance service contributions on behalf of salaried 
 employees must be a fixed percentage of salary.  An ambulance 
 service making contributions for volunteer or largely 
 uncompensated personnel, or a municipality or county making 
 contributions on behalf of rescue squad members who are 
 volunteers or largely uncompensated personnel, may assign a unit 
 value for each call or each period of alert duty for the purpose 
 of calculating ambulance service or rescue squad service 
 contributions, as applicable. 

    Subd. 4.    Payments by former eligible elected officials. 
  Former eligible elected local government officials in the 
 defined contribution plan under this chapter shall not 
 contribute to the plan except under section 353D.12. 

    HIST: 1987 c 372 art 5 s 3; 1990 c 570 art 8 s 4; 1991 c 291 
 art 19 s 5,11; 1992 c 432 art 2 s 38; 1996 c 438 art 6 s 3; 1999 
 c 222 art 21 s 3 

  353D.031 Never effective 

     353D.04 Contributions and deductions in error. 

    Subdivision 1.    Crediting of account.  Contributions 
 made by or on behalf of a participating elected local government 
 official or physician must be remitted to the public employees 
 retirement association and credited to the individual account 
 established for the participant.  Ambulance service 
 contributions must be remitted on a regular basis to the 
 association together with any member contributions paid or 
 withheld.  Those contributions must be credited to the 
 individual account of each participating member. 

    Subd. 2.    Authority to adopt policies.  The executive 
 director may adopt policies and procedures regarding deductions 
 taken totally or partially in error by the employer from the 
 salary of an elected official. 

    HIST: 1987 c 372 art 5 s 4; 1990 c 570 art 8 s 5; 1991 c 341 s 
 37; 1992 c 432 art 2 s 39; 1993 c 307 art 4 s 48; 1996 c 438 art 
 6 s 4 

     353D.05 Investment of funds. 

    Subdivision 1.    Investment.  Employing unit 
 contributions, after the deduction of an amount for 
 administrative expenses, and individual participant 
 contributions must be remitted to the state board of investment 
 for investment in the Minnesota supplemental investment fund 
 established by section 11A.17. 

    Subd. 2.    Investment options.  (a) A participant may 
 elect to purchase shares in the income share account, the growth 
 share account, the international share account, the money market 
 account, the bond market account, the fixed interest account, or 
 the common stock index account established by section 11A.17, or 
 a combination of those accounts.  The participant may elect to 
 purchase shares in a combination of those accounts by specifying 
 the percentage of the total contributions to be used to purchase 
 shares in each of the accounts. 

    (b) A participant or a former participant may indicate in 
 writing a choice of options for subsequent purchases of shares.  
 After a choice is made, until the participant or former 
 participant makes a different written indication, the executive 
 director of the association shall purchase shares in the 
 supplemental investment account or accounts specified by the 
 participant.  If no initial option is indicated by a participant 
 or the specifications made by the participant exceeds 100 
 percent to be invested in more than one account, the executive 
 director shall invest all contributions made by or on behalf of 
 a participant in the income share account.  If the 
 specifications are less than 100 percent, the executive director 
 shall invest the remaining percentage in the income share 
 account.  A choice of investment options is effective the first 
 of the month following the date of receipt of the signed written 
 choice of options. 

    (c) Shares in the fixed interest account attributable to 
 any guaranteed investment contract as of July 1, 1994, may not 
 be withdrawn from the fund or transferred to another account 
 until the guaranteed investment contract has expired, unless the 
 participant qualifies for a benefit payment under section 
 353D.07. 

    (d) A participant or former participant may also change the 
 investment options selected for all or a portion of the 
 individual's previously purchased shares in accounts, subject to 
 the provisions of paragraph (c) concerning the fixed interest 
 account.  A change under this paragraph is effective the first 
 of the month following the date of receipt of a signed written 
 choice of options. 

    (e) The change or selection of an investment option or the 
 transfer of all or a portion of the deceased or former 
 participant's shares in the income share, growth share, common 
 stock index, bond market, international share, money market, or 
 fixed interest accounts must not be made following death of the 
 participant or former participant. 

    Subd. 3.    Administrative expenses.  The executive 
 director of the association with the advice and consent of the 
 board shall annually set an amount to recover the costs of the 
 association in administering the public employees defined 
 contribution plan. 

    HIST: 1987 c 372 art 5 s 5; 1988 c 453 s 11; 1988 c 709 art 5 
 s 34; 1990 c 570 art 8 s 6,7; 1991 c 291 art 19 s 7,11; 1991 c 
 341 s 38; 1992 c 432 art 2 s 40,41; 1992 c 539 s 13,14; 1993 c 
 307 art 4 s 49; 1994 c 465 art 3 s 57; 1994 c 604 art 1 s 14; 
 1998 c 390 art 2 s 8 

*   NOTE:  The amendment to subdivision 3 by Laws 1998, chapter 
*390, article 2, section 8, is effective July 1, 1999.  Laws 
*1998, chapter 390, article 2, section 22.

  353D.051 Never effective 

     353D.06 Reporting. 

    The executive director of the public employees retirement 
 association shall prescribe the reporting forms required from 
 employing units and the election forms required from 
 participants.  Reporting forms must contain names, 
 identification numbers, amount of contribution by and on behalf 
 of each participant, and such other data as is required to keep 
 an accurate record of the account value of each participant. 

    HIST: 1987 c 372 art 5 s 6; 1990 c 570 art 8 s 8; 1991 c 291 
 art 19 s 9,11 

     353D.07 Benefits. 

    Subdivision 1.    Type of plan; uniformity.  (a) The 
 plan is a defined contribution plan the benefits from which are 
 payable upon termination of service, retirement, disability, or 
 death.  The amount of benefits is determined by the value of 
 accumulated contributions plus a proportionate share of 
 investment income of the fund credited to each individual 
 account.  

    (b) In the case of ambulance service personnel, eligibility 
 standards must be uniform among all ambulance service personnel 
 of an ambulance service electing to participate.  

    Subd. 2.    Payment of benefits.  Withdrawal of a 
 benefit based on individual participant contributions and 
 employer contributions plus accrued investment income is payable 
 upon the death or termination of a participant but not at the 
 time an individual revokes membership in the defined 
 contribution plan under section 353D.02.  An application by or 
 on behalf of the participant must be filed before any payment of 
 benefits may be made. 

    Subd. 3.    Form of benefit.  A retirement benefit is 
 payable in a lump sum equal to the value of a participant's 
 account at the date of withdrawal.  As an alternative to a 
 lump-sum distribution, the participant may choose to have the 
 association transfer the total account value for the purchase of 
 an annuity payable at a designated age to an insurance company 
 of the participant's choice that is licensed to do business in 
 the state.  

    Subd. 4.    Disability of participant.  If an active 
 participant becomes permanently and totally disabled as defined 
 in section 353.01, subdivision 19, that participant may withdraw 
 from the account in equal monthly installments an amount, 
 designated by the participant in increments of $100 but not to 
 exceed ten times the joint employer and employee contribution 
 for the month preceding disability.  The option must be 
 exercised by filing an application on a form prescribed by the 
 executive director.  Payments begin on the first day of the 
 month following the month in which the disability occurred.  
 Payments end when the participant's disabled status ends or the 
 account balance is exhausted, whichever occurs first. 

    Subd. 5. MS 1987 Supp Repealed, 1988 c 709 art 5 s 42 

    Subd. 5.    Death of a participant.  If an active 
 participant dies, the total value of the account must be paid in 
 a lump sum to the designated beneficiary or, if none, the heirs 
 at law of the decedent.  

    HIST: 1987 c 372 art 5 s 7; 1988 c 709 art 5 s 35-37; 1990 c 
 570 art 8 s 9; 1991 c 341 s 39,40; 1992 c 432 art 2 s 42,43; 
 1993 c 307 art 4 s 50 

     353D.08 Portability. 

    Participating ambulance service personnel who change 
 employment or membership among participating ambulance services 
 shall continue participation in the plan if termination from one 
 participating ambulance service and commencement in another 
 participating ambulance service occurs within 30 days. 

    HIST: 1987 c 372 art 5 s 8; 1988 c 709 art 5 s 38; 1990 c 570 
 art 8 s 10 

     353D.09 Tax qualification. 

    The public employees retirement association shall adopt 
 rules necessary for administration of the plan.  The proposed 
 plan shall be formulated and adopted in accordance with 
 applicable restrictions and standards of the Internal Revenue 
 Code and rulings and regulations of the Internal Revenue Service 
 in order to assure the tax exempt status of the plan as a 
 qualified pension plan.  Contributions may be accepted only 
 after approval by the Internal Revenue Service. 

    HIST: 1987 c 372 art 5 s 9; 1990 c 570 art 8 s 11 

  353D.091 Never effective 

     353D.10 Not considered a local plan. 

    The plan is not a local governmental pension plan or fund 
 for purposes of section 356.25.  

    HIST: 1987 c 372 art 5 s 10 

  353D.11 Repealed, 1996 c 438 art 6 s 7 

     353D.12 Contributions for prior elected service. 

    Subdivision 1.    Eligibility; contributions.  An 
 elected local government official who participates in the 
 defined contribution plan under this chapter may make 
 contributions to the plan for the service as an elected public 
 officer rendered before June 30, 1991, that was not covered by a 
 public or private employer contributory pension plan, including 
 a plan administered by the public employees retirement 
 association under chapter 353.  An elected local government 
 official may make contributions for prior elected service to the 
 defined contribution plan even if eligibility criteria for the 
 defined benefit plan under chapter 353 were not met at the time 
 service was rendered.  The association shall not accept 
 contributions for prior elected service from a former elected 
 official after the end of the tax year in which the elected 
 official ceases to hold office.  Employer contributions on 
 behalf of the former elected official must be made to the 
 association no later than 30 days after April 15 following the 
 end of the tax year under section 415 of the federal Internal 
 Revenue Code, as amended.  Employee contributions must be made 
 to the association no later than 30 days after the close of the 
 limitation year under section 415 of the federal Internal 
 Revenue Code, as amended. 

    Subd. 2.    Amount of prior service contributions.  (a) 
 The employee purchase amount is that amount that the 
 participating elected local government official specifies, but 
 combined with subdivision 6 may not exceed in total the amount 
 of the employee and employer contributions that would have been 
 payable under section 353.27, subdivisions 2, 3, and 3a, based 
 on the actual salary or compensation of the elected local 
 government official from public sources during the prior service 
 and based on the rates in effect during the prior service, plus 
 interest at an annual compound rate of six percent. 

    (b) In any year, the purchase amount to be paid in is 
 subject to the limitation for defined contribution plans under 
 section 415(c) of the federal Internal Revenue Code, as amended, 
 or comparable contribution limitation set forth in the federal 
 Internal Revenue Code, and applicable regulations and revenue 
 rulings, remaining after subtracting the funding amounts under 
 section 353D.03, paragraph (a), for that year. 

    Subd. 3.    Installment payments.  The purchase amount 
 may be made in annual installments but may not exceed, combined 
 with subdivision 6, in any installment the limitation set forth 
 in subdivision 2, paragraph (a), or in total the limitation set 
 forth in subdivision 2, paragraph (a). 

    Subd. 4.    Authorized rollovers.  To the extent allowed 
 by federal law, the employee purchase amount may be made with 
 funds distributed from:  (1) a plan qualified under section 
 401(a) of the federal Internal Revenue Code, as amended; (2) an 
 annuity qualified under section 403(a) of the federal Internal 
 Revenue Code, as amended; (3) an individual retirement account 
 used solely to receive a nontaxable rollover from that type of 
 plan or annuity; (4) the state deferred compensation plan 
 authorized under section 352.96 and qualified under section 457 
 of the federal Internal Revenue Code, as amended; or (5) another 
 tax qualified plan or annuity that authorizes rollovers.  The 
 participating elected local government official shall supply 
 sufficient written documentation that the transfer amounts are 
 eligible for tax-free rollover treatment.  An authorized 
 tax-free rollover, plus any other purchase amount payments under 
 this section, including subdivision 6, may not exceed the 
 limitation in subdivision 2, paragraph (a).  Notwithstanding any 
 provision of state law or rule to the contrary, to the extent 
 permitted under federal law, the employee purchase amount may be 
 transferred from the state deferred compensation plan before the 
 employee terminates public employment. 

    Subd. 5.    Prior service and compensation documentation. 
  The participating elected local government official shall 
 supply sufficient documentation of the person's prior uncredited 
 service and compensation for which the purchase payment is made. 

    Subd. 6.    Employing unit payment.  The employing unit 
 of the participating elected local government official shall pay 
 the amount of the employer contributions that could have been 
 payable under section 353.27, subdivisions 3 and 3a, based on 
 the actual salary or compensation of the elected local 
 government official from public sources during the prior 
 service, plus interest at an annual compound rate of six 
 percent.  This amount combined with any employee purchase amount 
 and any contributions under section 353D.03, paragraph (a), must 
 in any year comply with the limitation set forth in subdivision 
 2, paragraph (a). 

    HIST: 1990 c 570 art 8 s 13; 1991 c 341 s 41; 1992 c 432 art 2 
 s 44