1998 Minnesota Statutes

     356.61 Limitation on public employee retirement 
  annuities. 

    Notwithstanding any provision of law, bylaws, articles of 
 incorporation, retirement and disability allowance plan 
 agreements or retirement plan contracts to the contrary, no 
 person who has pension or retirement coverage by a public 
 pension plan is entitled to receive a monthly retirement annuity 
 or disability benefit which, at the time of commencement of the 
 retirement annuity or disability benefit, exceeds 1/12 of the 
 amount of the annual benefit permitted by the terms of section 
 415 of the Internal Revenue Code with respect to a participant 
 in a plan qualified under section 401(a) of the Internal Revenue 
 Code, as amended through December 31, 1982.  

    The benefit limitation is to be determined on the date the 
 benefit is initially payable or on the date the employee 
 terminated employment, if earlier.  The benefit limitation on 
 any date is the benefit limitation for the limitation year in 
 which the date occurs.  The limitations apply only to the annual 
 benefit which is derived from employer contributions.  Mandatory 
 and voluntary employee contributions, if any, are treated as a 
 separate defined contribution plan maintained by the employer 
 which is subject to the limitations placed on annual additions 
 to defined contribution plans.  

    The maximum annual benefit for any limitation year is the 
 lesser of (1) or (2) below:  

    (1) A dollar limitation of $90,000, adjusted as of January 
 1 of each calendar year to the dollar limitation as determined 
 for that year by the commissioner of Internal Revenue.  The 
 amount determined for any year will apply to limitation years 
 ending with or within that calendar year.  

    (2) A compensation limitation of 100 percent of the average 
 of compensation paid or made available to the participant by the 
 employer during those three consecutive calendar years of 
 employment, or actual number of consecutive calendar years of 
 employment if employed less than three consecutive years, which 
 give the highest average.  Compensation means any compensation 
 which is includable in the employee's gross income.  

    A benefit is deemed not to exceed the maximum benefit 
 limitation if: 

    (1) the retirement benefits payable under the plan and 
 under any other defined benefit plans of the employer do not 
 exceed the $10,000 limit set in section 415(b)(4) of the 
 Internal Revenue Code for the plan year, or for any prior plan 
 year, and 

    (2) the employer has not at any time maintained a defined 
 contribution plan in which the employee participated.  

    A public pension plan is any Minnesota public pension plan 
 or fund which provides pension or retirement coverage for public 
 employees other than volunteer firefighters, including any plan 
 or fund enumerated in sections 356.20, subdivision 2, or 356.30, 
 subdivision 3, any local police or firefighter's relief 
 association to which section 69.77 applies, or any retirement or 
 pension plan or fund, including a supplemental retirement plan 
 or fund, established, maintained or supported by any 
 governmental subdivision or public body whose revenues are 
 derived from taxation, fees, assessments or from other public 
 sources.  

    The figure for the monthly retirement annuity or disability 
 benefit to be used for the calculation of this limitation must 
 not include any reduction or adjustment required for retirement 
 prior to the normal retirement age or required for the election 
 of an optional annuity.  

    If the figure for the monthly retirement annuity or 
 disability benefit exceeds the limit contained in this section, 
 the annuity or benefit payable must be reduced appropriately.  

    The managing board of each public pension plan from which a 
 retirement annuity or disability benefit is payable shall, at 
 the time that the retirement annuity or disability benefit 
 commences, contact all other public pension plans to determine 
 whether or not the recipient of the retirement annuity or 
 disability benefit is also receiving or is entitled to receive a 
 retirement annuity or disability benefit from any other public 
 pension plan.  If a person is entitled to receive or is 
 receiving a retirement annuity or disability benefit from more 
 than one public pension plan, all retirement annuities or 
 disability benefits from all public pension plans must be 
 totaled in determining whether or not the limitation applies.  A 
 reduction in the amount of the retirement annuity or disability 
 benefit required under this section is made by the public 
 pension plan which provided retirement coverage for the most 
 recent period of service. 

    HIST: 1982 c 578 art 1 s 10; 1983 c 286 s 16; 1984 c 574 s 12; 
 1993 c 307 art 4 s 53