2001 Minnesota Statutes

     356.551 Post-July 1, 2001, prior service credit purchase 
  payment amount determination procedure. 

    (a) Unless the prior service credit purchase authorization 
 special law or general statute provision explicitly specifies a 
 different purchase payment amount determination procedure, and 
 if section 356.55 has expired, this section governs the 
 determination of the prior service credit purchase payment 
 amount of any prior service credit purchase. 

    (b) The prior service credit purchase amount is an amount 
 equal to the actuarial present value, on the date of payment, as 
 calculated by the chief administrative officer of the pension 
 plan and reviewed by the actuary retained by the legislative 
 commission on pensions and retirement, of the amount of the 
 additional retirement annuity obtained by the acquisition of the 
 additional service credit in this section.  Calculation of this 
 amount must be made using the preretirement interest rate 
 applicable to the public pension plan specified in section 
 356.215, subdivision 4d, and the mortality table adopted for the 
 public pension plan.  The calculation must assume continuous 
 future service in the public pension plan until, and retirement 
 at, the age at which the minimum requirements of the fund for 
 normal retirement or retirement with an annuity unreduced for 
 retirement at an early age, including section 356.30, are met 
 with the additional service credit purchased.  The calculation 
 must also assume a full-time equivalent salary, or actual 
 salary, whichever is greater, and a future salary history that 
 includes annual salary increases at the applicable salary 
 increase rate for the plan specified in section 356.215, 
 subdivision 4d.  Payment must be made in one lump sum within one 
 year of the prior service credit authorization.  Payment of the 
 amount calculated under this section must be made by the 
 applicable eligible person.  However, the current employer or 
 the prior employer may, at its discretion, pay all or any 
 portion of the payment amount that exceeds an amount equal to 
 the employee contribution rates in effect during the period or 
 periods of prior service applied to the actual salary rates in 
 effect during the period or periods of prior service, plus 
 interest at the rate of 8.5 percent a year compounded annually 
 from the date on which the contributions would otherwise have 
 been made to the date on which the payment is made.  If the 
 employer agrees to payments under this paragraph, the purchaser 
 must make the employee payments required under this paragraph 
 within 290 days of the prior service credit authorization.  If 
 that employee payment is made, the employer payment under this 
 paragraph must be remitted to the chief administrative officer 
 of the public pension plan within 60 days of receipt by the 
 chief administrative officer of the employee payments specified 
 under this paragraph. 

    (c) The prospective purchaser must provide any relevant 
 documentation required by the chief administrative officer of 
 the public pension plan to determine eligibility for the prior 
 service credit under this section. 

    (d) Service credit for the purchase period must be granted 
 by the public pension plan to the purchaser upon receipt of the 
 purchase payment amount specified in paragraph (b). 

    HIST: 1998 c 390 art 4 s 2