2004 Minnesota Statutes

     356.611 Limitation on public employee salaries for 
  pension purposes. 

    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; 

    (3) to a state employee 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. 

    Subd. 2.    Federal compensation limits.  (a) For 
 members of a covered pension plan enumerated in section 356.30, 
 subdivision 3, compensation in excess of the limitation 
 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 specified in 
 Internal Revenue Code 401(a)(17) on June 30, 1993, applies if 
 that provides a greater allowable annual compensation. 

    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. 

    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.  

    HIST: 1994 c 528 art 4 s 11; 1995 c 262 art 1 s 15; 2002 c 392 
 art 11 s 43; 2004 c 267 art 2 s 6-8; art 10 s 1