STATE OF MINNESOTA
EIGHTY-FIFTH SESSION - 2008
_____________________
ONE HUNDRED TENTH DAY
Saint Paul, Minnesota, Thursday, May 1, 2008
The House of Representatives convened at 9:30 a.m. and was
called to order by Dennis Ozment, Speaker pro tempore.
Prayer was offered by the Reverend Richard D. Buller, House
Chaplain.
The members of the House gave the pledge of allegiance to the
flag of the United States of America.
The roll was called and the following members were present:
Abeler
Anderson, B.
Anderson, S.
Anzelc
Atkins
Benson
Berns
Bigham
Bly
Brod
Brown
Brynaert
Buesgens
Bunn
Carlson
Clark
Cornish
Davnie
Dean
Demmer
Dill
Dittrich
Dominguez
Doty
Drazkowski
Eastlund
Eken
Emmer
Erickson
Faust
Finstad
Fritz
Gardner
Garofalo
Gottwalt
Greiling
Gunther
Hackbarth
Hamilton
Hansen
Hausman
Haws
Heidgerken
Hilstrom
Hilty
Holberg
Hoppe
Hortman
Hosch
Howes
Huntley
Jaros
Johnson
Juhnke
Kahn
Kalin
Knuth
Koenen
Kohls
Laine
Lanning
Lenczewski
Lesch
Liebling
Lieder
Lillie
Loeffler
Madore
Magnus
Mahoney
Marquart
Masin
McFarlane
McNamara
Morgan
Morrow
Mullery
Murphy, E.
Murphy, M.
Nelson
Nornes
Norton
Olin
Olson
Otremba
Ozment
Paulsen
Paymar
Pelowski
Peppin
Peterson, A.
Peterson, N.
Peterson, S.
Poppe
Rukavina
Ruth
Ruud
Sailer
Scalze
Seifert
Sertich
Severson
Shimanski
Simon
Simpson
Slocum
Smith
Solberg
Swails
Thao
Thissen
Tillberry
Tingelstad
Tschumper
Urdahl
Wagenius
Walker
Ward
Wardlow
Welti
Westrom
Winkler
Wollschlager
Zellers
Spk. Kelliher
A quorum was present.
Beard and Moe were excused.
Slawik was excused until 10:10 a.m. Mariani was excused until 10:30 a.m. Kranz was excused until 10:40 a.m. DeLaForest was excused until
11:20 a.m. Erhardt was excused until
2:10 p.m. Hornstein was excused until
2:45 p.m. Dettmer was excused
until 2:50 p.m.
The Chief Clerk proceeded to read the Journal of the preceding
day. Berns moved that further reading
of the Journal be suspended and that the Journal be approved as corrected by
the Chief Clerk. The motion prevailed.
REPORTS OF STANDING COMMITTEES AND DIVISIONS
Solberg
from the Committee on Ways and Means to which was referred:
H. F.
No. 1724, A bill for an act relating to occupations and professions; providing
for registration of naturopathic doctors; appropriating money; proposing coding
for new law as Minnesota Statutes, chapter 147E.
Reported
the same back with the following amendments:
Page
12, line 13, delete "$13,000" and insert "$8,000"
and delete everything after "2009"
Page
12, line 14, delete "2011 are" and insert "is"
With
the recommendation that when so amended the bill pass.
The report was adopted.
Solberg
from the Committee on Ways and Means to which was referred:
H. F.
No. 2291, A bill for an act relating to education; modifying provisions
governing appeals of graduation test scores; amending Minnesota Statutes 2006,
section 120B.36, as amended.
Reported
the same back with the recommendation that the bill pass.
The report was adopted.
Solberg
from the Committee on Ways and Means to which was referred:
H. F.
No. 3032, A bill for an act relating to state lands; modifying Minnesota
critical habitat private sector matching account; modifying certain enforcement
authority; modifying timber permit provisions; modifying outdoor recreation
system; adding to and deleting from state parks, recreation areas, and forests;
modifying authority to convey private easements on tax-forfeited land;
providing for public and private sales, conveyances, and exchanges of certain
state land; authorizing 30-year leases of tax-forfeited and other state lands
for wind energy projects; amending Minnesota Statutes 2006, sections 84.943,
subdivision 5; 86A.04; 86A.08, subdivision 1; 90.151, subdivision 1; 282.04,
subdivision 4a; Laws 2006, chapter 236, article 1, section 43; proposing coding
for new law in Minnesota Statutes, chapter 84B.
Reported
the same back with the recommendation that the bill pass.
The report was adopted.
Pelowski
from the Committee on Governmental Operations, Reform, Technology and Elections
to which was referred:
H. F.
No. 3082, A bill for an act relating to retirement; amending the correctional
state employees retirement plan; adding two employment positions to retirement
plan coverage; amending Minnesota Statutes 2007 Supplement, section 352.91,
subdivision 3d.
Reported
the same back with the following amendments:
Delete
everything after the enacting clause and insert:
"ARTICLE
1
POSTRETIREMENT
PROVISIONS
Section
1. Minnesota Statutes 2006, section
11A.18, is amended by adding a subdivision to read:
Subd.
2a. Composite
funded ratio. (a) Annually,
following June 30, the executive director of the State Board of Investment
shall determine the composite funded ratio of the postretirement investment
fund. The composite funded ratio must
be stated as a percentage and must be calculated using:
(1)
the total fair market value of the postretirement investment fund as of June
30, calculated in accordance with generally accepted accounting principles;
divided by
(2)
the total reserves required as of June 30 for the annuities or benefits payable
from the postretirement investment fund on that June 30 to all recipients of
participating public pension plans or funds, as determined by the actuary
retained under section 356.214 using the applicable assumptions in section
356.215.
(b)
The executive director of the State Board of Investment shall certify the
composite funded ratio to the executive directors of the plans participating in
the Minnesota postretirement investment fund and to the executive director of
the Legislative Commission on Pensions and Retirement by November 30 annually.
EFFECTIVE DATE. This section is effective June 30, 2008.
Sec.
2. Minnesota Statutes 2006, section
11A.18, subdivision 9, is amended to read:
Subd.
9. Calculation
of postretirement adjustment. (a) Annually,
following June 30, the state board shall use the procedures in paragraphs (b),
(c), and (d) to determine whether a postretirement adjustment under this
subdivision is payable and to determine the amount of any postretirement
adjustment under this subdivision.
(b)(1)
If the Consumer Price Index for urban wage earners and clerical workers all
items index published by the Bureau of Labor Statistics of the United States
Department of Labor increases from June 30 of the preceding year to June 30 of
the current year, the state board shall certify the percentage increase.
(2) The amount certified must
not exceed the lesser of the difference between the preretirement interest
assumption and postretirement interest assumption in section 356.215, subdivision
8, paragraph (a), or 2.5 percent for the Minneapolis Employees
Retirement Fund, the amount certified must not exceed 3.5 percent.
(c)
If the amount calculated under paragraph (b), clause (1), is greater than the
maximum amount allowable under paragraph (b), clause (2), in addition to
any percentage increase certified under paragraph (b), the board shall use the
following procedures to determine if a postretirement adjustment is payable
under this paragraph:
(1)
the state board shall determine the total fair market value of the fund
on June 30 of that year;
(2)
the amount of reserves required as of the current June 30 for the annuity or
benefit payable to an annuitant and benefit recipient of the participating
public pension plans or funds must be determined by the actuary retained under
section 356.214. An annuitant or
benefit recipient who has been receiving an annuity or benefit for at least 12
full months as of the current June 30 is eligible to receive a full
postretirement adjustment. An annuitant
or benefit recipient who has been receiving an annuity or benefit for at least
one full month, but less than 12 full months as of the current June 30, is
eligible to receive a partial postretirement adjustment. Each fund shall report separately the amount
of the reserves for those annuitants and benefit recipients who are eligible to
receive a full postretirement benefit adjustment. This amount is known as "eligible reserves." Each fund
shall also report separately the amount of the reserves for those annuitants
and benefit recipients who are not eligible to receive a postretirement
adjustment. This amount is known as
"noneligible reserves." For an annuitant or benefit recipient who is
eligible to receive a partial postretirement adjustment, each fund shall report
separately as additional "eligible reserves" an amount that bears the
same ratio to the total reserves required for the annuitant or benefit
recipient as the number of full months of annuity or benefit receipt as of the
current June 30 bears to 12 full months.
The remainder of the annuitant's or benefit recipient's reserves must be
separately reported as additional "noneligible reserves." The amount
of "eligible" and "noneligible" required reserves must be
certified to the board by the actuary retained under section 356.214 as soon as
is practical following the current June 30;
(3)
the state board shall determine the percentage increase certified under
paragraph (b) multiplied by the eligible required reserves, as adjusted for
mortality gains and losses under subdivision 11, determined under clause (2);
(4)
the state board shall add the amount of reserves required for the annuities or
benefits payable to annuitants and benefit recipients of the participating
public pension plans or funds as of the current June 30 to the amount
determined under clause (3);
(5)
the state board shall subtract the amount determined under clause (4) from the total
fair market value of the fund determined under clause (1);
(6)
the state board shall adjust the amount determined under clause (5) by the
cumulative current balance determined under clause (8) and any negative balance
carried forward under clause (9);
(7) a
positive amount resulting from the calculations in clauses (1) to (6) is the
excess market value. A negative amount
is the negative balance;
(8)
the state board shall allocate one-fifth of the excess market value or
one-fifth of the negative balance to each of five consecutive years, beginning
with the fiscal year ending the current June 30; and
(9) to
calculate the postretirement adjustment under this paragraph based on
investment performance for a fiscal year, the state board shall add
together all excess market value allocated to that year and subtract from the
sum all negative balances allocated to that year. If this calculation results in a negative number, the entire
negative balance must be carried forward and allocated to the next year. If the resulting amount is positive, a
postretirement adjustment is payable under this paragraph. The board shall express a positive amount as
a percentage of the total eligible required reserves certified to the board
under clause (2). The percentage
determined under this paragraph is not payable unless the amount calculated
under paragraph (b), clause (1), is greater than 2.5 percent and must not
exceed the difference by which the amount calculated under paragraph (b),
clause (1), exceeds 2.5 percent.
(d)
The state board shall determine the amount of any postretirement adjustment
which is payable using the following procedure:
(1)
The total "eligible" required reserves as of the first of January
next following the end of the fiscal year for the annuitants and benefit
recipients eligible to receive a full or partial postretirement adjustment as
determined by clause (2) must be certified to the state board by the actuary
retained under section 356.214. The
total "eligible" required reserves must be determined by the actuary
retained under section 356.214 on the assumption that all annuitants and
benefit recipients eligible to receive a full or partial postretirement
adjustment will be alive on the January 1 in question; and
(2)
The state board shall add the percentage certified under paragraph (b) to any
positive percentage calculated under paragraph (c). The board shall not subtract from the percentage certified under
paragraph (b) any negative amount calculated under paragraph (c). The sum of these percentages must be
carried to five decimal places and must be certified to each participating
public pension fund or plan as the full postretirement adjustment
percentage. The full postretirement
adjustment percentage certified to each participating public pension plan or
fund must not exceed five percent. For
the Minneapolis Employees Retirement Fund, no maximum percentage
adjustment is applicable.
(e) A
retirement annuity payable in the event of retirement before becoming eligible
for Social Security benefits as provided in section 352.116, subdivision 3;
353.29, subdivision 6; or 354.35 must be treated as the sum of a period certain
retirement annuity and a life retirement annuity for the purposes of any
postretirement adjustment. The period
certain retirement annuity plus the life retirement annuity must be the annuity
amount payable until age 62 or 65, whichever applies. A postretirement adjustment granted on the period certain
retirement annuity must terminate when the period certain retirement annuity
terminates.
EFFECTIVE DATE. This section is effective June 30, 2008.
Sec.
3. Minnesota Statutes 2006, section
11A.18, is amended by adding a subdivision to read:
Subd.
9a. Lost
purchasing power increase. (a)
This subdivision applies for fiscal years ending June 30 in which all of the
following conditions exist:
(1)
the composite funded ratio for the postretirement investment fund as of June 30
as certified by the executive director of the State Board of Investment under
subdivision 2a is more than 90 percent;
(2)
the State Board of Investment determines that the time-weighted total rate of
return on investment of assets in the postretirement investment fund for the
fiscal year ending June 30 exceeds 8.5 percent; and
(3)
the postretirement adjustment percentage certified under subdivision 9,
paragraph (b), is less than 2.5 percent.
(b)
The lost purchasing power postretirement increase is payable the following
January 1.
(c)
Each participating public pension plan must annually calculate:
(1)
the cumulative postretirement adjustment percentage applied to the annuity or
benefit paid to each eligible annuitant and benefit recipient since the person
first received a postretirement adjustment; and
(2)
the increase in the Consumer Price Index for urban wage earners and clerical
workers all items index published by the Bureau of Labor Statistics of the United
States Department of Labor from June 30 of the year before the person first
received a postretirement adjustment to June 30 of the current year. If a person received a prorated increase
under subdivision 9, paragraph (c), clause (2), the same ratio of the number of
months receiving a monthly benefit to 12 months must be applied to the
inflation calculation for the fiscal year used to calculate the prorated amount
of lost purchasing power for that period.
(d)
If the percentage in paragraph (c), clause (2), is greater than the percentage
in paragraph (c), clause (1), with respect to an eligible annuitant or benefit
recipient, and the conditions in paragraph (a) exist, that person is eligible
to receive an increase under this subdivision.
(e)
The percentage increase payable to an eligible annuitant or benefit recipient
under this subdivision may not exceed the difference between 2.5 percent and
the amount certified under subdivision 9 or the amount calculated under
paragraph (c), whichever is lower. The
percentage increase otherwise payable under this subdivision must be reduced as
provided in paragraph (f).
(f)
The actuary retained under section 356.214 must determine:
(1)
the reserves that would be required to pay in full the adjustments determined
under paragraph (c); and
(2)
the excess market value necessary to maintain the accrued liability composite
funding ratio determined under subdivision 2a is at least 90 percent. If the calculated result under clause (1) is
greater than the calculated result under this clause, the increase payable to
each eligible annuitant or benefit recipient under this subdivision must be
reduced to that portion of the full potential increase amount that equals the
ratio that the calculated result under this clause bears to the calculated
result under clause (1).
(g)
A percentage increase certified under this subdivision must be added to the
percentage certified under subdivision 9 and the total resulting percentage
must be certified to each participating public pension plan as the full
postretirement adjustment percentage.
EFFECTIVE DATE. This section is effective June 30, 2008.
Sec.
4. Minnesota Statutes 2006, section
11A.18, is amended by adding a subdivision to read:
Subd.
9b. Excess
assets trigger. If the
composite funded ratio of the postretirement investment fund determined under
subdivision 2a is 115 percent or greater as of June 30 of any year, the
governing bodies of the retirement plans participating in the postretirement
investment fund must jointly report to the Legislative Commission on Pensions
and Retirement by the next January 15.
The report must evaluate and make recommendations with respect to the
overall benefits and funding of the retirement funds for both active employees
and benefit recipients.
EFFECTIVE DATE. This section is effective June 30, 2008.
Sec.
5. Minnesota Statutes 2006, section
356.41, is amended to read:
356.41 BENEFIT ADJUSTMENTS FOR CERTAIN
DISABILITY AND SURVIVOR BENEFITS.
(a)
Disability
benefits payable to a disabilitant, if not otherwise included in the
participation in the Minnesota postretirement investment fund, and survivor
benefits payable to a survivor from any public pension plan which participates
in the Minnesota postretirement investment fund must be adjusted in the same
manner, at the same times and in the same amounts as are benefits payable from
the Minnesota postretirement investment fund to comparable eligible
benefit recipients of that public pension plan.
(b) If a disability benefit is
not included in the participation in the Minnesota postretirement investment
fund, the disability benefit is recomputed as a retirement annuity and the
recipient would have been eligible for an adjustment under this section if the
disability benefit was not recomputed, the recipient remains eligible for the
adjustment under this section after the recomputation.
(c) For the survivor of a
deceased annuitant who receives a survivor benefit calculated under a prior law
rather than the second portion of a joint and survivor annuity, any period of
receipt of a retirement annuity by the annuitant must be utilized in
determining the period of receipt for eligibility to receive an adjustment
under this section.
(d) No recipient, however, is
entitled to more than one adjustment under this section or section 11A.18
applicable to one benefit at one time during a year by reason of
this section.
EFFECTIVE DATE. This section is effective June 30, 2008.
Sec.
6. Minnesota Statutes 2007 Supplement,
section 422A.06, subdivision 8, is amended to read:
Subd.
8. Retirement
benefit fund. (a) The retirement
benefit fund consists of amounts held for payment of retirement allowances for
members retired under this chapter, including any transfer amount payable under
subdivision 3, paragraph (c).
(b)
Unless subdivision 3, paragraph (c), applies, assets equal to the required
reserves for retirement allowances under this chapter determined in accordance
with the appropriate mortality table adopted by the board of trustees based on
the experience of the fund as recommended by the actuary retained under section
356.214 must be transferred from the deposit accumulation fund to the
retirement benefit fund as of the last business day of the month in which the
retirement allowance begins. The income
from investments of these assets must be allocated to this fund and any
interest charge under subdivision 3, paragraph (c), must be credited to the
fund. There must be paid from this fund
the retirement annuities authorized by law.
A required reserve calculation for the retirement benefit fund must be
made by the actuary retained under section 356.214 and must be certified to the
retirement board by the actuary retained under section 356.214.
(c)
The retirement benefit fund must be governed by the applicable laws governing
the accounting and audit procedures, investment, actuarial requirements,
calculation and payment of postretirement benefit adjustments, discharge of any
deficiency in the assets of the fund when compared to the actuarially
determined required reserves, and other applicable operations and procedures
regarding the Minnesota postretirement investment fund in effect on June 30,
1997, established under Minnesota Statutes 1996, section 11A.18, and any legal
or administrative interpretations of those laws of the State Board of
Investment, the legal advisor to the Board of Investment and the executive
director of the State Board of Investment in effect on June 30, 1997. If a deferred yield adjustment account is established
for the Minnesota postretirement investment fund before June 30, 1997, under
Minnesota Statutes 1996, section 11A.18, subdivision 5, the retirement board
shall also establish and maintain a deferred yield adjustment account within
this fund.
(c)
There is established a deferred yield adjustment account which must be
increased by the sale or disposition of any debt securities at less than book
value and must be decreased by the sale or disposition of debt securities at
more than book value. At the end of
each fiscal year, a portion of the balance of this account must be offset
against the investment income for that year.
The annual portion of the balance to be offset must be proportional to
the reciprocal of the average remaining life of the bonds sold, unless the
amounts are offset by gains on the future sales of these securities. The amount of this account must be included
in the recognized value of assets other than corporate stocks and all other
equity investments. In any fiscal year
in which the gains on the sales of debt securities exceed the discounts
realized on the sales of such securities, the excess must be used to reduce the
balance of the account. If the realized
capital gains are sufficient to reduce the balance of the account to zero, any
excess gains must be available for the calculation of postretirement
adjustments.
(d)(1)
Annually, following June 30, the board shall use the procedures in clauses (2),
(3), and (4), to determine whether a postretirement adjustment is payable and
to determine the amount of any postretirement adjustment.
(2)
If the Consumer Price Index for urban wage earners and clerical workers all
items index published by the Bureau of Labor Statistics of the United States
Department of Labor increases from June 30 of the preceding year to June 30 of the
current year, the board shall certify the percentage increase. The amount certified must not exceed the
lesser of the difference between the preretirement interest assumption and
postretirement interest assumption in section 356.215, subdivision 8, paragraph
(a), or 3.5 percent.
(3)
In addition to any percentage increase certified under paragraph (b), the board
shall use the following procedures to determine if a postretirement adjustment
is payable under this paragraph:
(i)
the board shall determine the market value of the fund on June 30 of that year;
(ii)
the amount of reserves required as of the current June 30 for the annuity or
benefit payable to an annuitant and benefit recipient must be determined by the
actuary retained under section 356.214.
An annuitant or benefit recipient who has been receiving an annuity or
benefit for at least 12 full months as of the current June 30 is eligible to
receive a full postretirement adjustment.
An annuitant or benefit recipient who has been receiving an annuity or
benefit for at least one full month, but less than 12 full months as of the
current June 30, is eligible to receive a partial postretirement
adjustment. The amount of the reserves
for those annuitants and benefit recipients who are eligible to receive a full
postretirement benefit adjustment is known as "eligible reserves."
The amount of the reserves for those annuitants and benefit recipients who are
not eligible to receive a postretirement adjustment is known as
"noneligible reserves." For an annuitant or benefit recipient who is
eligible to receive a partial postretirement adjustment, additional
"eligible reserves" is an amount that bears the same ratio to the
total reserves required for the annuitant or benefit recipient as the number of
full months of annuity or benefit receipt as of the current June 30 bears to 12
full months. The remainder of the
annuitant's or benefit recipient's reserves are "noneligible
reserves";
(iii)
the board shall determine the percentage increase certified under clause (2)
multiplied by the eligible required reserves, as adjusted for mortality gains
and losses, determined under item (ii);
(iv)
the board shall add the amount of reserves required for the annuities or
benefits payable to annuitants and benefit recipients of the participating
public pension plans or funds as of the current June 30 to the amount
determined under item (iii);
(v)
the board shall subtract the amount determined under item (iv) from the market
value of the fund determined under item (i);
(vi)
the board shall adjust the amount determined under item (v) by the cumulative
current balance determined under item (viii) and any negative balance carried
forward under item (ix);
(vii)
a positive amount resulting from the calculations in items (i) to (vi) is the
excess market value. A negative amount
is the negative balance;
(viii)
the board shall allocate one-fifth of the excess market value or one-fifth of
the negative balance to each of five consecutive years, beginning with the
fiscal year ending the current June 30; and
(ix)
to calculate the postretirement adjustment under this paragraph based on
investment performance for a fiscal year, the board shall add together all
excess market value allocated to that year and subtract from the sum all negative
balances allocated to that year. If
this calculation results in a negative number, the entire negative balance must
be carried forward and allocated to the next year. If the resulting amount is positive, a postretirement adjustment
is payable under this paragraph. The
board shall express a positive amount as a percentage of the total eligible
required reserves certified to the board under item (ii).
(4)
The board shall determine the amount of any postretirement adjustment which is
payable using the following procedure:
(i)
the total "eligible" required reserves as of the first of January
next following the end of the fiscal year for the annuitants and benefit
recipients eligible to receive a full or partial postretirement adjustment as
determined by item (ii) must be certified to the board by the actuary retained
under section 356.214. The total
"eligible" required reserves must be determined by the actuary
retained under section 356.214 on the assumption that all annuitants and
benefit recipients eligible to receive a full or partial postretirement
adjustment will be alive on the January 1 in question; and
(ii)
the board shall add the percentage certified under clause (2) to any positive
percentage calculated under clause (3).
The board shall not subtract from the percentage certified under
paragraph (b) any negative amount calculated under clause (3). The sum of these percentages must be carried
to five decimal places and must be certified as the full postretirement
adjustment percentage.
(e)
The board shall determine the amount of the postretirement adjustment payable
to each eligible annuitant and benefit recipient. The dollar amount of the postretirement adjustment must be
calculated by applying the certified postretirement adjustment percentage to
the amount of the monthly annuity or benefit payable to each eligible annuitant
or benefit recipient eligible for a full adjustment.
The
dollar amount of the partial postretirement adjustment payable to each
annuitant or benefit recipient eligible for a partial adjustment must be
calculated by first determining a partial percentage amount that bears the same
ratio to the certified full adjustment percentage amount as the number of full
months of annuity or benefit receipt as of the current June 30 bears to 12 full
months. The partial percentage amount
determined must then be applied to the amount of the monthly annuity or benefit
payable to each annuitant or benefit recipient eligible to receive a partial postretirement
adjustment. The postretirement
adjustments are payable on January 1 following the calculations required under
this section and must thereafter be included in the monthly annuity or benefit
paid to the recipient. Any adjustments
under this section must be paid automatically unless the intended recipient
files a written notice with the applicable participating public pension fund or
plan requesting that the adjustment not be paid.
(f)
As of June 30 annually, the actuary retained under section 356.214 shall
calculate the amount of required reserves representing any mortality gains and
any mortality losses incurred during the fiscal year and report the results of
those calculations to the plan. The
actuary shall report separately the amount of the reserves for annuitants and
benefit recipients who are eligible for a postretirement benefit adjustment and
the amount of reserves for annuitants and benefit recipients who are not
eligible for a postretirement benefit adjustment. If the net amount of required reserves represents a mortality
gain, the board shall sell sufficient securities or transfer sufficient
available cash to equal the amount. If
the amount of required reserves represents a mortality loss, the plan shall
transfer an amount equal to the amount of the net mortality loss. The amount of the transfers must be
determined before any postretirement benefit adjustments have been made. All transfers resulting from mortality
adjustments must be completed annually by December 31 for the preceding June
30. Interest is payable on any
transfers after December 31 based upon the preretirement interest assumption
for the participating plan or fund as specified in section 356.215, subdivision
8, stated as a monthly rate. Book
values of the assets of the fund must be determined only after all adjustments
for mortality gains and losses for the fiscal year have been made.
(g)
All money necessary to meet the requirements of the certification of
withdrawals and all money necessary to pay postretirement adjustments under
this section are hereby and from time to time appropriated from the
postretirement investment fund to the board.
(d) (h) Annually,
following the calculation of any postretirement adjustment payable from the
retirement benefit fund, the board of trustees shall submit a report to the
executive director of the Legislative Commission on Pensions and Retirement and
to the commissioner of finance indicating the amount of any postretirement
adjustment and the underlying calculations on which that postretirement
adjustment amount is based, including the amount of dividends, the amount of
interest, and the amount of net realized capital gains or losses utilized in
the calculations.
(e) (i) With respect to
a former contributing member who began receiving a retirement annuity or
disability benefit under section 422A.151, paragraph (a), clause (2), after
June 30, 1997, or with respect to a survivor of a former contributing member
who began receiving a survivor benefit under section 422A.151, paragraph (a),
clause (2), after June 30, 1997, the reserves attributable to the one percent
lower amount of the cost-of-living adjustment payable to those annuity or
benefit recipients annually must be transferred back to the deposit
accumulation fund to the credit of the Metropolitan Airports Commission. The calculation of this annual reduced
cost-of-living adjustment reserve transfer must be reviewed by the actuary
retained under section 356.214.
EFFECTIVE DATE. This section is effective June 30, 2008.
ARTICLE
2
MINNESOTA
POSTRETIREMENT INVESTMENT FUND DISSOLUTION
Section
1. [11A.181]
DISSOLUTION OF MINNESOTA POSTRETIREMENT INVESTMENT FUND.
Subdivision
1. Conditions
for dissolution. The
postretirement investment fund established in section 11A.18 must be dissolved
according to the schedule in subdivision 2 if the composite funded ratio
calculated as of June 30 of that year under section 11A.18, subdivision 2a, is:
(1)
less than 85 percent and was less than 85 percent as of June 30 of the
immediately preceding year; or
(2)
less than 80 percent.
Subd.
2. Transition. If conditions for dissolution of the
postretirement investment fund under subdivision 1 apply:
(1)
the retirement plans shall not transfer reserves as required under sections
11A.18, subdivision 6; 352.119, subdivision 2; 352B.26, subdivision 3; 353.271,
subdivision 2; 354.63, subdivision 2; and 490.123, subdivision 1e, to the
postretirement investment fund after December 31 of the calendar year in which
conditions for dissolution under subdivision 1 occur;
(2)
the retirement plans shall not transfer additional funds to the Minnesota
postretirement investment fund as a result of the calculation by the actuary
retained under section 356.214 of net mortality losses under section 11A.18,
subdivision 11;
(3)
the assets of the postretirement investment fund must be transferred back to
each participating public retirement plan on June 30 of the year following the
year in which conditions for dissolution under subdivision 1 occur. The assets to be transferred to each public
retirement plan must be based on each plan's participation in the
postretirement fund as determined under section 11A.18, subdivision 7, on the
June 30 when the transfer back to the plan occurs; and
(4)
the postretirement investment fund ceases to exist upon the transfer of all
assets as required in clause (3).
Subd.
3. Postretirement
adjustments. (a)
Notwithstanding section 11A.18 or any other law to the contrary, if the
postretirement investment fund is dissolved, postretirement adjustments are
payable only as follows:
(1)
a postretirement increase of 2.5 percent must be applied each year, effective
January 1, to the monthly annuity or benefit of each annuitant and benefit
recipient who has been receiving an annuity or a benefit for at least 12 full
months as of the prior January 1; and
(2)
for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least one full month, an annual postretirement increase of 1/12
of 2.5 percent for each month the person has been receiving an annuity or
benefit must be applied, effective January 1 of the year in which the person
has been retired for less than 12 months.
(b)
The increases provided by this subdivision commence on the first January 1
occurring after the postretirement fund is dissolved under subdivision 2.
EFFECTIVE DATE. This section is effective June 30, 2008.
Sec.
2. PROPOSED
STATUTORY CHANGES.
By
November 30 of the year in which conditions for dissolution of the
postretirement investment fund first occur, the executive directors of the
retirement systems that participate in the postretirement investment fund must
report to the Legislative Commission on Pensions and Retirement a draft of
proposed legislation that would make changes in statute necessary to conform
with dissolution of the postretirement investment fund.
EFFECTIVE DATE. This section is effective June 30, 2008.
ARTICLE
3
PHASED
RETIREMENT OR
RETURN
TO EMPLOYMENT PROVISIONS
Section
1. Minnesota Statutes 2007 Supplement,
section 43A.346, subdivision 1, is amended to read:
Subdivision
1. Definition. For purposes of this section, "terminated
state employee" means a person currently occupying who
occupied a civil service position in the executive or legislative branch of
state government, the Minnesota State Retirement System, the Public Employees
Retirement Association, or the Office of the Legislative Auditor, or a
person who was employed by the Metropolitan Council.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
2. Minnesota Statutes 2007 Supplement,
section 43A.346, subdivision 2, is amended to read:
Subd.
2. Eligibility. (a) This section applies to a terminated state
or Metropolitan Council employee who:
(1)
for at least the five years immediately preceding separation under clause (2), has
been was regularly scheduled to work 1,044 or more hours per year in
a position covered by a pension plan administered by the Minnesota State
Retirement System or the Public Employees Retirement Association;
(2) terminates
terminated state or Metropolitan Council employment;
(3) at
the time of termination under clause (2), meets met the age and
service requirements necessary to receive an unreduced retirement annuity from
the plan and satisfies satisfied requirements for the
commencement of the retirement annuity or, for an a terminated employee
under the unclassified employees retirement plan, meets met the
age and service requirements necessary to receive an unreduced retirement
annuity from the plan and satisfies satisfied requirements for
the commencement of the retirement annuity or elects elected a
lump-sum payment; and
(4)
agrees to accept a postretirement option position with the same or a different
appointing authority, working a reduced schedule that is both (i) a reduction
of at least 25 percent from the employee's number of previously regularly
scheduled work hours; and (ii) 1,044 hours or less in state or Metropolitan
Council service.
(b)
For purposes of this section, an unreduced retirement annuity includes a
retirement annuity computed under a provision of law which permits retirement,
without application of an earlier retirement reduction factor, whenever age
plus years of allowable service total at least 90.
(c)
For purposes of this section, as it applies to staff of the Public Employees
Retirement Association who are at least age 62, the length of separation
requirement and termination of service requirement prohibiting return to work
agreements under section 353.01, subdivisions 11a and 28, are not applicable.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
3. Minnesota Statutes 2006, section
43A.346, subdivision 4, is amended to read:
Subd.
4. Annuity
reduction not applicable.
Notwithstanding any law to the contrary, when an eligible state
employee in a postretirement option position under this section commences
receipt of the annuity, the provisions of section 352.115, subdivision 10,
or 353.37 governing annuities of reemployed annuitants, shall not apply for the
duration of a terminated state employee's employment in the a
postretirement option position.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
4. Minnesota Statutes 2006, section
43A.346, subdivision 5, is amended to read:
Subd.
5. Appointing
authority discretion. The
appointing authority has sole discretion to determine if and the extent to
which a postretirement option position under this section is available to a terminated
state employee. Any offer of such a
position must be made in writing to the employee person by the
appointing authority on a form prescribed by the Department of Employee
Relations and the Minnesota State Retirement System or the Public Employees
Retirement Association. If the
person is under age 62, an offer of a postretirement option position and any
related verbal offer or agreement must not be made until at least 30 days after
the person terminated employment. The
appointing authority may not require a person to waive any rights under a
collective bargaining agreement or unrepresented employee compensation plan as
a condition of participation.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
5. Minnesota Statutes 2006, section
43A.346, subdivision 6, is amended to read:
Subd.
6. Duration. Postretirement option employment shall be
for an initial period not to exceed one year.
During that period, the appointing authority may not modify the
conditions specified in the written offer without the employee's agreement
person's consent, except as required by law or by the collective bargaining
agreement or compensation plan applicable to the employee person. At the end of the initial period, the
appointing authority has sole discretion to determine if the offer of a
postretirement option position will be renewed, renewed with modifications, or
terminated. If the person is under
age 62, an offer of renewal and any related verbal offer or agreement must not
be made until at least 30 days after termination of the person's previous
postretirement option
employment. Postretirement option employment may be renewed for
periods of up to one year, not to exceed a total duration of five years. No person shall be employed in one or a
combination of postretirement option positions under this section for a total
of more than five years.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
6. Minnesota Statutes 2006, section
43A.346, subdivision 7, is amended to read:
Subd.
7. Copy
to fund. The appointing authority
shall provide the Minnesota State Retirement System or the Public Employees
Retirement Association with a copy of the offer, the terminated state employee's
acceptance of the terms, and any subsequent renewal agreement.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
7. Minnesota Statutes 2006, section
354.05, subdivision 37, is amended to read:
Subd.
37. Termination of teaching service.
"Termination of teaching service" means the withdrawal of a
member from active teaching service by resignation or the termination of the
member's teaching contract by the employer.
A member is not considered to have terminated teaching service, if before
the age of 62, and before the effective date of the termination or
retirement, the member has entered into a contract to resume teaching service
with an employing unit covered by the provisions of this chapter. A contract to return to work after
retirement for an active member who has attained age 62 must comply with the
provisions of section 354.444.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
8. Minnesota Statutes 2006, section
354.44, subdivision 5, is amended to read:
Subd.
5. Resumption
of teaching service after retirement.
(a) Any person who retired under the provisions of this chapter and has
thereafter resumed teaching in any employer unit to which this chapter applies
is eligible to continue to receive payments in accordance with the annuity
except that all or a portion of the annuity payments must be reduced
deferred during the calendar year immediately following any calendar
year in which the person's income salary from the teaching
service is in an amount greater than the annual maximum earnings allowable
for that age for the continued receipt of full benefit amounts monthly under
the federal old age, survivors and disability insurance program as set by the secretary
of health and human services under United States Code, title 42, section 403
$46,000. The amount of the reduction
must be annuity deferral is one-half of the salary amount in
excess of the applicable reemployment income maximum specified in this subdivision
$46,000 and must be deducted from the annuity payable for the calendar
year immediately following the calendar year in which the excess amount was
earned. If the person has not yet
reached the minimum age for the receipt of Social Security benefits, the
maximum earnings for the person must be equal to the annual maximum earnings
allowable for the minimum age for the receipt of Social Security benefits.
(b) If
the person is retired for only a fractional part of the calendar year during
the initial year of retirement, the maximum reemployment income salary
exempt from triggering a deferral as specified in this subdivision must be
prorated for that calendar year.
(c)
After a person has reached the Social Security full normal retirement
age, no reemployment income maximum deferral requirement is
applicable regardless of the amount of income salary.
(d)
The amount of the retirement annuity reduction deferral must be
handled or disposed of as provided in section 356.47.
(e)
For the purpose of this subdivision, income salary from teaching
service includes, but is not limited to:
(1)
all income for services performed as a consultant or an independent contractor
for an employer unit covered by the provisions of this chapter; and
(2)
the greater of either the income received or an amount based on the rate paid
with respect to an administrative position, consultant, or independent
contractor in an employer unit with approximately the same number of pupils and
at the same level as the position occupied by the person who resumes teaching
service.
EFFECTIVE DATE. This section is effective January 1, 2008.
Sec.
9. [354.444]
RETURN TO WORK AGREEMENT.
Subdivision
1. Authorization. Notwithstanding any other provisions in
this chapter, an eligible person as specified in subdivision 2 is authorized to
commence receipt of a retirement annuity from the association and enter into an
agreement to return to work. This
provision must be administered in accordance with the federal Internal Revenue
Code and applicable rulings.
Subd.
2. Eligibility. An eligible person is a person who:
(1)
is a teacher as defined by section 354.05, subdivision 2, who is at least age
62;
(2)
enters into a written agreement with the employing unit to return to work; and
(3)
retires under the provisions of section 354.44 and begins to draw an annuity
from the Teachers Retirement Association.
Subd.
3. Work
agreement. Participation,
the amount of time worked, and the duration of participation under this section
must be mutually agreed upon by the employing unit and the employee. The employing unit may require up to a
one-year notice of intent to participate in the program as a condition of
participation. The employing unit shall
determine the time of year the employee shall work. Unless otherwise specified in this section, the employing unit
may not require a person to waive any rights under a collective bargaining
agreement as a condition of participation under this section.
Subd.
4. Exclusion. For purposes of this section,
"employing unit" does not include the Minnesota State Colleges and
Universities system.
Subd.
5. No
service credit or contribution.
Notwithstanding any law to the contrary, an eligible person under
this section may not, based on employment to which this section applies,
contribute to or earn further service credit in the Teachers Retirement
Association.
Subd.
6. Annuity
application procedure. A
participant in the program specified in this section must apply for a
retirement annuity under the application procedure specified in section 354.44,
subdivisions 3 and 4. A copy of the
written agreement with the employing unit must be included with the person's
retirement annuity application. This
written agreement must include the termination date and reemployment date. The filing of the initial executed agreement
must occur before reemployment under the agreement commences. The reemployment date must be after the
member's accrual date.
Subd.
7. Annuity
treatment. For purposes of
the annuity deferral under section 354.44, subdivision 5, an eligible person
under this section is a reemployed annuitant.
Subd.
8. Continuing
rights. A person who returns
to work under this section is a member of the appropriate bargaining unit and
is covered by the appropriate collective bargaining contract. Except as provided in this section, the
person's coverage is subject to any part of the contract limiting rights of
part-time employees.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
10. Minnesota Statutes 2006, section
354A.31, subdivision 3, is amended to read:
Subd.
3. Resumption
of teaching after commencement of a retirement annuity. (a) Any person who retired and is receiving
a coordinated program retirement annuity under the provisions of sections
354A.31 to 354A.41 or any person receiving a basic program retirement annuity
under the governing sections in the articles of incorporation or bylaws and who
has resumed teaching service for the school district in which the teachers
retirement fund association exists is entitled to continue to receive
retirement annuity payments, except that all or a portion of the annuity
payments must be reduced deferred during the calendar year
immediately following the calendar year in which the person's income salary
from the teaching service is in an amount greater than the annual
maximum earnings allowable for that age for the continued receipt of full
benefit amounts monthly under the federal old age, survivors, and disability
insurance program as set by the secretary of health and human services under
United States Code, title 42, section 403 $46,000. The amount of the reduction must be annuity
deferral is one-third the salary amount in excess of the
applicable reemployment income maximum specified in this subdivision $46,000
and must be deducted from the annuity payable for the calendar year
immediately following the calendar year in which the excess amount was
earned. If the person has not yet
reached the minimum age for the receipt of Social Security benefits, the
maximum earnings for the person must be equal to the annual maximum earnings
allowable for the minimum age for the receipt of Social Security benefits.
(b) If
the person is retired for only a fractional part of the calendar year during
the initial year of retirement, the maximum reemployment income salary
exempt from triggering a deferral as specified in this subdivision must be
prorated for that calendar year.
(c)
After a person has reached the Social Security normal retirement age of
70, no reemployment income maximum deferral requirement is
applicable regardless of the amount of any compensation received for teaching
service for the school district in which the teachers retirement fund
association exists.
(d)
The amount of the retirement annuity reduction deferral must be
handled or disposed of as provided in section 356.47.
(e)
For the purpose of this subdivision, income salary from teaching
service includes: (i) all income for
services performed as a consultant or independent contractor; or income
resulting from working with the school district in any capacity; and (ii) the
greater of either the income received or an amount based on the rate paid with
respect to an administrative position, consultant, or independent contractor in
the school district in which the teachers retirement fund association exists
and at the same level as the position occupied by the person who resumes
teaching service.
(f) On
or before February 15 of each year, each applicable employing unit shall report
to the teachers retirement fund association the amount of postretirement income
salary as defined in this subdivision, earned as a teacher, consultant,
or independent contractor during the previous calendar year by each retiree of
the teachers retirement fund association for teaching service performed after
retirement. The report must be in a
format approved by the executive secretary or director.
EFFECTIVE DATE. This section is effective January 1, 2008.
Sec.
11. PERA POLICE AND FIRE; TEMPORARY EXEMPTION FROM REEMPLOYED ANNUITANT
EARNINGS LIMITATIONS.
Notwithstanding
any provision of Minnesota Statutes, section 353.37, to the contrary, a person
who is receiving a retirement annuity from the public employees police and fire
plan and who is employed as a sworn peace officer by the Metropolitan Airports
Commission is exempt from the limitation on reemployed annuitant exempt
earnings under Minnesota Statutes, section 353.37, for the period January 1,
2008, until December 31, 2009.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
12. BYLAW REVISION AUTHORIZATION.
Consistent
with Minnesota Statutes, sections 354A.12, subdivisions 3 and 4, and 354A.31,
subdivision 3, the St. Paul Teachers Retirement Fund Association and the
Duluth Teachers Retirement Fund Association are authorized to revise their
bylaws or articles of incorporation to specify that a person receiving a basic
program retirement annuity or an old law coordinated program annuity under the
governing sections in the articles of incorporation or bylaws who has resumed
teaching service for the school district is entitled to continue receiving
retirement annuity payments, except that all or a portion of the annuity
payments must be deferred during the calendar year immediately following the
calendar year in which the person's salary from the reemployment exceeds
$46,000. The amount of the annuity
deferral is one-third of the salary amount in excess of $46,000. After a person has reached Social Security
normal retirement age, the deferral requirement no longer applies. Any deferral amounts must be treated as
specified in Minnesota Statutes, section 356.47.
EFFECTIVE DATE. This section is effective July 1, 2008.
ARTICLE
4
MANDATORY
JOINT AND SURVIVOR BENEFIT FORM
Section
1. Minnesota Statutes 2006, section
352.12, subdivision 2, is amended to read:
Subd.
2. Surviving
spouse benefit. (a) If an employee
or former employee has credit for at least three years allowable service and
dies before an annuity or disability benefit has become payable,
notwithstanding any designation of beneficiary to the contrary, the surviving
spouse of the employee may elect to receive, in lieu of the refund with
interest under subdivision 1, an annuity equal to the joint and 100 percent
survivor annuity which the employee or former employee could have qualified for
on the date of death.
(b) If
the employee was under age 55 and has credit for at least 30 years of allowable
service on the date of death, the surviving spouse may elect to receive a 100
percent joint and survivor annuity based on the age of the employee and
surviving spouse on the date of death.
The annuity is payable using the full early retirement reduction under
section 352.116, subdivision 1, paragraph (a), to age 55 and one-half of the
early retirement reduction from age 55 to the age payment begins.
(c) If
the employee was under age 55 and has credit for at least three years of
allowable service credit on the date of death but did not yet qualify for
retirement, the surviving spouse may elect to receive a 100 percent joint and
survivor annuity based on the age of the employee and surviving spouse at the
time of death. The annuity is payable
using the full early retirement reduction under section 352.116, subdivision 1
or 1a, to age 55 and one-half of the early retirement reduction from age 55 to
the age payment begins.
(d)
The
surviving spouse eligible for benefits under paragraph (a) may apply for the
annuity at any time after the date on which the employee or former employee
would have attained the required age for retirement based on the allowable
service earned. The surviving spouse
eligible for surviving spouse benefits under paragraph (b) or (c) may apply for
the annuity at any time after the employee's death. The annuity must be computed under sections 352.115, subdivisions
1, 2, and 3, and 352.116, subdivisions 1, 1a, and 3. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply
to a deferred annuity or surviving spouse benefit payable under this subdivision. The annuity must cease with the last payment
received by the surviving spouse in the lifetime of the surviving spouse, or
upon expiration of a term certain benefit payment to a surviving spouse under
subdivision 2a. An amount equal to the
excess, if any, of the accumulated contributions credited to the account of the
deceased employee in excess of the total of the benefits paid and payable to
the surviving spouse must be paid to the deceased employee's or former
employee's last designated beneficiary or, if none, as specified under
subdivision 1.
(e)
Any
employee or former employee may request in writing, with the signed consent
of the spouse, that this subdivision not apply and that payment be made
only to a designated beneficiary as otherwise provided by this chapter.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
2. Minnesota Statutes 2006, section
352.931, subdivision 1, is amended to read:
Subdivision
1. Surviving
spouse benefit. (a) If the
correctional employee was at least age 50, has credit for at least three years
of allowable service, and dies before an annuity or disability benefit has
become payable, notwithstanding any designation of beneficiary to the contrary,
the surviving spouse of the employee may elect to receive, in lieu of the
refund under section 352.12, subdivision 1, an annuity for life equal to the
joint and 100 percent survivor annuity which the employee could have qualified
for had the employee terminated service on the date of death. The election may be made at any time after
the date of death of the employee. The
surviving spouse benefit begins to accrue as of the first of the month next
following the date on which the application for the benefit was filed.
(b) If
the employee was under age 50, dies, and had credit for at least three years of
allowable service credit on the date of death but did not yet qualify for
retirement, the surviving spouse may elect to receive a 100 percent joint and
survivor annuity based on the age of the employee and surviving spouse at the
time of death. The annuity is payable
using the early retirement reduction under section 352.93, subdivision 2a, to
age 50, and one-half of the early retirement reduction from age 50 to the age
payment begins. The surviving spouse
eligible for surviving spouse benefits under this paragraph may apply for the
annuity at any time after the employee's death. Sections 352.22, subdivision 3, and 352.72, subdivision 2, apply
to a deferred annuity or surviving spouse benefit payable under this
subdivision.
(c)
The annuity must cease with the last payment received by the surviving spouse
in the lifetime of the surviving spouse.
Any employee may request in writing, with the signed consent of the
spouse, that this subdivision not apply and that payment be made only to a
designated beneficiary as otherwise provided by this chapter.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
3. Minnesota Statutes 2006, section
353.30, subdivision 3, is amended to read:
Subd.
3. Optional
retirement annuity forms. The board
of trustees shall establish optional annuities which shall take the form of a
joint and survivor annuity. Except as
provided in subdivision 3a, the optional annuity forms shall be actuarially
equivalent to the forms provided in section 353.29 and subdivisions 1, 1a, 1b,
1c, and 5. In establishing those
optional forms, the board shall obtain the written recommendation of the
actuary retained under
section
356.214. The recommendations shall be a
part of the permanent records of the board.
A member or former member may select an optional form of annuity,
subject to the provisions of section 356.46, in lieu of accepting any other
form of annuity which might otherwise be available.
EFFECTIVE DATE. This section is effective January 1, 2009.
Sec.
4. Minnesota Statutes 2007 Supplement,
section 353.32, subdivision 1a, is amended to read:
Subd.
1a. Surviving spouse optional annuity.
(a) If a member or former member who has credit for not less than three
years of allowable service and dies before the annuity or disability benefit
begins to accrue under section 353.29, subdivision 7, or 353.33, subdivision 2,
notwithstanding any designation of beneficiary to the contrary, the surviving spouse
may elect to receive, instead of a refund with interest under subdivision 1, or
surviving spouse benefits otherwise payable under section 353.31, an annuity
equal to a 100 percent joint and survivor annuity computed consistent with
section 353.30, subdivision 1a, 1c, or 5, whichever is applicable.
(b) If
a member first became a public employee or a member of a pension fund listed in
section 356.30, subdivision 3, before July 1, 1989, and has credit for at least
30 years of allowable service on the date of death, the surviving spouse may
elect to receive a 100 percent joint and survivor annuity computed using
section 353.30, subdivision 1b, except that the early retirement reduction
under that provision will be applied from age 62 back to age 55 and one-half of
the early retirement reduction from age 55 back to the age payment begins.
(c) If
a member who was under age 55 and has credit for at least three years of
allowable service dies, but did not qualify for retirement on the date of
death, the surviving spouse may elect to receive a 100 percent joint and
survivor annuity computed using section 353.30, subdivision 1c or 5, as
applicable, except that the early retirement reduction specified in the
applicable subdivision will be applied to age 55 and one-half of the early
retirement reduction from age 55 back to the age payment begins.
(d)
Notwithstanding the definition of surviving spouse in section 353.01,
subdivision 20, a former spouse of the member, if any, is entitled to a portion
of the monthly surviving spouse optional annuity if stipulated under the terms
of a marriage dissolution decree filed with the association. If there is no surviving spouse or child or
children, a former spouse may be entitled to a lump-sum refund payment under
subdivision 1, if provided for in a marriage dissolution decree, but not a
monthly surviving spouse optional annuity, despite the terms of a marriage
dissolution decree filed with the association.
(e)
The surviving spouse eligible for surviving spouse benefits under paragraph (a)
may apply for the annuity at any time after the date on which the deceased
employee would have attained the required age for retirement based on the
employee's allowable service. The
surviving spouse eligible for surviving spouse benefits under paragraph (b) or
(c) may apply for an annuity any time after the member's death.
(f)
Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
annuity or surviving spouse benefit payable under this subdivision.
(g) An
amount equal to any excess of the accumulated contributions that were credited
to the account of the deceased employee over and above the total of the
annuities paid and payable to the surviving spouse must be paid to the
surviving spouse's estate.
(h) A
member may specify in writing, with the signed consent of the spouse,
that this subdivision does not apply and that payment may be made only to the
designated beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse annuity
under this section does not make a dependent child eligible for benefits under
subdivision 1c.
(i) If
the deceased member or former member first became a public employee or a member
of a public pension plan listed in section 356.30, subdivision 3, on or after July
1, 1989, a survivor annuity computed under paragraph (a) or (c) must be
computed as specified in section 353.30, subdivision 5, except for the revised
early retirement reduction specified in paragraph (c), if paragraph (c) is the
applicable provision.
(j)
For any survivor annuity determined under this subdivision, the payment is to
be based on the total allowable service that the member had accrued as of the
date of death and the age of the member and surviving spouse on that date.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
5. Minnesota Statutes 2007 Supplement,
section 353.657, subdivision 2a, is amended to read:
Subd.
2a. Death while eligible survivor benefit. (a) If a member or former member who has attained the age of at
least 50 years and has credit for not less than three years allowable service
or who has credit for at least 30 years of allowable service, regardless of age
attained, dies before the annuity or disability benefit becomes payable, notwithstanding
any designation of beneficiary to the contrary, the surviving spouse may elect
to receive a death while eligible survivor benefit.
(b)
Notwithstanding the definition of surviving spouse in section 353.01,
subdivision 20, a former spouse of the member, if any, is entitled to a portion
of the death while eligible survivor benefit if stipulated under the terms of a
marriage dissolution decree filed with the association. If there is no surviving spouse or child or
children, a former spouse may be entitled to a lump-sum refund payment under
section 353.32, subdivision 1, if provided for in a marriage dissolution decree
but not a death while eligible survivor benefit despite the terms of a marriage
dissolution decree filed with the association.
(c) The
benefit may be elected instead of a refund with interest under section 353.32,
subdivision 1, or surviving spouse benefits otherwise payable under
subdivisions 1 and 2. The benefit must
be an annuity equal to the 100 percent joint and survivor annuity which the
member could have qualified for on the date of death, computed as provided in
sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3.
(d)
The surviving spouse may apply for the annuity at any time after the date on
which the deceased employee would have attained the required age for retirement
based on the employee's allowable service.
Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a
deferred annuity payable under this subdivision.
(e) No
payment accrues beyond the end of the month in which entitlement to such
annuity has terminated. An amount equal
to the excess, if any, of the accumulated contributions which were credited to
the account of the deceased employee over and above the total of the annuities
paid and payable to the surviving spouse must be paid to the deceased member's
last designated beneficiary or, if none, to the legal representative of the
estate of such deceased member.
(f)
Any member may request in writing, with the signed consent of the spouse,
that this subdivision not apply and that payment be made only to the designated
beneficiary, as otherwise provided by this chapter.
(g)
For a member who is employed as a full-time firefighter by the Department of
Military Affairs of the state of Minnesota, allowable service as a full-time
state Military Affairs Department firefighter credited by the Minnesota State
Retirement System may be used in meeting the minimum allowable service
requirement of this subdivision.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
6. Minnesota Statutes 2006, section
353E.07, subdivision 7, is amended to read:
Subd.
7. Election
that section does not apply. A
member may specify in writing, with the signed consent of the spouse,
that this section does not apply and that payment must be made only to the
designated beneficiary, as otherwise provided by this chapter.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
7. Minnesota Statutes 2006, section 356.46,
as amended by Laws 2007, chapter 134, article 2, section 44, is amended to
read:
356.46 APPLICATION FOR RETIREMENT ANNUITY;
PROCEDURE FOR ELECTING ANNUITY FORM; MANDATORY JOINT AND SURVIVOR OPTIONAL
ANNUITY FORM.
Subdivision
1. Definitions. As used in this section, each of the
following terms shall have the meaning given.
(a)
"Annuity form" means the payment procedure and duration of a
retirement annuity or disability benefit available to a member of a public
pension fund plan, based on the period over which a retirement
annuity or disability benefit is payable, determined by the number of persons
to whom the retirement annuity or disability benefit is payable, and the amount
of the retirement annuity or disability benefit which is payable to each
person.
(b)
"Joint and survivor optional annuity" means an optional annuity form
which provides a retirement annuity or disability benefit to a retired member
or disabilitant and the spouse of the member or disabilitant on a
joint basis during the lifetime of the retired member or disabilitant
and all or a portion of the original retirement annuity or disability benefit
amount to the surviving spouse in the event of the death of the retired member
or disabilitant.
(c)
"Optional annuity form" means an annuity form which is elected by a
member and is not provided automatically as the standard annuity form of the
public pension plan.
(d)
"Public pension plan" means a public pension plan as defined under
section 356.63, paragraph (b).
(e)
"Retirement annuity" means a series of monthly payments to which a
former or retired member of a public pension fund plan is
entitled due to attaining a specified age and acquiring credit for a specified
period of service, which includes a retirement annuity, retirement allowance,
or service pension.
(f)
"Disability benefit" means a series of monthly payments to which a
former or disabled member of a public pension fund plan is
entitled due to a physical or mental inability to engage in specified
employment.
Subd.
2. Provision
of information on annuity forms. (a)
Every public pension plan which provides for an annuity form other than a
single life retirement annuity as an option which can be elected by an
active, disabled, or retiring member shall provide as a part of, or
accompanying the annuity application form, a written statement summarizing the optional
annuity forms which are available, a general indication of the consequences of
selecting one annuity form over another, a calculation of the actuarial
reduction in the amount of the retirement annuity which would be required for
each optional annuity form, and the procedure to be followed to obtain more
information from the public pension fund plan administration
concerning the optional all annuity forms provided by the
plan. If the public pension plan
offers joint and survivor optional annuity forms, the annuity application and
accompanying information must include a statement informing the member and the
member's spouse that, notwithstanding any law to the contrary, unless the
spouse waives any rights to an optional annuity by a notarized statement on the
annuity application or other form provided by the pension plan administration,
the public pension plan administration shall assume that the member selected
the 50 percent joint and survivor optional annuity form.
(b)
In lieu of the notarized statement requirement referred to in paragraph (a),
the pension plan administration may accept a statement which has been verified,
including electronic verification, by administrators of the pension plan.
Subd.
3. Requirement
of notice to member's spouse. (a) Except
as specified in paragraph (c), if a Every public pension plan administration
that provides optional retirement annuity forms which include for
a joint and survivor optional retirement or disability annuity form
potentially applicable to the surviving spouse of a member, the executive
director of the public pension plan shall send a copy of the written
statement required by subdivision 2 to the spouse of the member before the
member's election selection of a retirement annuity the
form of retirement or disability benefit.
(b)
Following the election selection of a retirement or disability
annuity by the member, a copy of the completed retirement annuity
application and retirement annuity beneficiary form, if applicable, must
be sent by the executive director of the public pension plan to the spouse of
the retiring or disabled member.
A signed acknowledgment must be required from the spouse confirming
receipt of a copy of the completed retirement annuity application and retirement
annuity beneficiary form, unless the spouse's signature confirming
acknowledging the receipt annuity form selected is on the
annuity application or other form as designated by the plan. If the required signed acknowledgment is
public pension plan administration has not received from the spouse within
30 days, a signed acknowledgment, because the annuity application or
other form as designated by the public pension plan administration did not include
the spouse's signature, the executive director of the public pension plan
must send another copy of the completed retirement annuity application notify
the member and retirement annuity beneficiary form, if applicable, to
the member's spouse that the 50 percent joint and survivor annuity
form, or a higher joint and survivor form if selected, shall be paid if the
spouse does not acknowledge the annuity form selected by the member by
responding to the second notice sent to the spouse within 30 days. The second notice must be sent by
certified mail with restricted delivery.
(c) If
a public pension plan administration receives notice that the provisions of
this section have not been complied with, or if a member selects a benefit form
without the valid consent of the member's spouse, the executive director of the
public pension plan shall suspend the payment of monthly benefits and shall
take all actions necessary to comply with this subdivision.
(d)
For the
Teachers Retirement Association, the statement to the spouse that is required
under paragraph (a) must be sent before or upon the member's election of an
annuity.
Subd.
4. Plan
exclusions. This section
does not apply to:
(1)
any volunteer fire relief association to which sections 69.771 to 69.776 apply;
and
(2)
any plan under which the applicable surviving spouse would receive automatic
surviving spouse coverage if a joint and survivor annuity were not elected.
Subd.
5. Disabilitant
survivor treatment. This
section should not be interpreted as prohibiting payment of a survivor annuity
to the spouse of a deceased disabilitant, in lieu of any other annuity, if laws
specific to the plan provide for a higher surviving spouse annuity.
Subd.
6. Limitations
due to marriage dissolution. The
requirement to pay a 50 percent joint and survivor annuity is void if there is
a court order to the contrary.
Subd.
7. Liability
waiver. The pension fund and
plan, its employees, and any agent working on behalf of the plan administration
are not liable for harm caused by any act of fraud committed by the retiring
member or current or previous spouse, or any information withheld from, or
incorrect information supplied to the plan administration.
EFFECTIVE DATE. This section is effective January 1, 2009, and applies to
annuities that are elected and commence on or after that date.
ARTICLE
5
ADMINISTRATIVE
PROVISIONS
Section
1. Minnesota Statutes 2007 Supplement,
section 352.01, subdivision 2a, is amended to read:
Subd.
2a. Included employees. (a)
"State employee" includes:
(1)
employees of the Minnesota Historical Society;
(2)
employees of the State Horticultural Society;
(3)
employees of the Minnesota Crop Improvement Association;
(4)
employees of the adjutant general who are paid from federal funds and who are
not covered by any federal civilian employees retirement system;
(5)
employees of the Minnesota State Colleges and Universities employed under the
university or college activities program;
(6)
currently contributing employees covered by the system who are temporarily
employed by the legislature during a legislative session or any currently
contributing employee employed for any special service as defined in
subdivision 2b, clause (8);
(7)
employees of the legislature appointed without a limit on the duration of their
employment and persons employed or designated by the legislature or by a
legislative committee or commission or other competent authority to conduct a
special inquiry, investigation, examination, or installation;
(8)
trainees who are employed on a full-time established training program
performing the duties of the classified position for which they will be
eligible to receive immediate appointment at the completion of the training
period;
(9)
employees of the Minnesota Safety Council;
(10)
any employees on authorized leave of absence from the Transit Operating
Division of the former Metropolitan Transit Commission who are employed by the
labor organization which is the exclusive bargaining agent representing
employees of the Transit Operating Division;
(11)
employees of the Metropolitan Council, Metropolitan Parks and Open Space
Commission, Metropolitan Sports Facilities Commission, Metropolitan Mosquito
Control Commission, or Metropolitan Radio Board unless excluded or covered by another
public pension fund or plan under section 473.415, subdivision 3;
(12)
judges of the Tax Court;
(13)
personnel employed on June 30, 1992, by the University of Minnesota in the
management, operation, or maintenance of its heating plant facilities, whose
employment transfers to an employer assuming operation of the heating plant
facilities, so long as the person is employed at the University of Minnesota
heating plant by that employer or by its successor organization;
(14)
seasonal help in the classified service employed by the Department of Revenue;
(15)
persons employed by the Department of Commerce as a peace officer in the
Insurance Fraud Prevention Division under section 45.0135 who have attained the
mandatory retirement age specified in section 43A.34, subdivision 4;
(16)
employees of the University of Minnesota unless excluded under subdivision 2b,
clause (3); and
(17)
employees of the Middle Management Association whose employment began after
July 1, 2007, and to whom section 352.029 does not apply.; and
(18)
employees of the Minnesota Government Engineers Council to whom section 352.029
does not apply.
(b)
Employees specified in paragraph (a), clause (13), are included employees under
paragraph (a) if employer and employee contributions are made in a timely
manner in the amounts required by section 352.04. Employee contributions must be deducted from salary. Employer contributions are the sole
obligation of the employer assuming operation of the University of Minnesota
heating plant facilities or any successor organizations to that employer.
Sec.
2. Minnesota Statutes 2007 Supplement,
section 352.017, subdivision 2, is amended to read:
Subd.
2. Purchase
procedure. (a) An employee covered
by a plan specified in this chapter may purchase credit for allowable service
in that plan for a period specified in subdivision 1 if the employee makes a
payment as specified in paragraph (b) or (c), whichever applies. The employing unit, at its option, may pay
the employer portion of the amount specified in paragraph (b) on behalf of its
employees.
(b) If
payment is received by the executive director within one year from the end
of date the employee returned to work following the authorized
leave, the payment amount is equal to the employee and employer contribution
rates specified in law for the applicable plan at the end of the leave period
multiplied by the employee's hourly rate of salary on the date of return from
the leave of absence and by the days and months of the leave of absence for which
the employee wants is eligible for allowable service credit. Payments made under this paragraph The
payment must include compound interest at a monthly rate of 0.71 percent
from the last day of the leave period until the last day of the month in which
payment is received. If payment is
received by the executive director after one year, the payment amount is the
amount determined under section 356.551.
Payment under this paragraph must be made before the date of termination
from public employment covered under this chapter.
(c) If
payment is received by the executive director after one year, the payment
amount is the amount determined under section 356.551. If the employee
terminates employment covered by this chapter during the leave or following the
leave rather than returning to covered employment, payment must be received by
the executive director within 30 days after the termination date. The payment amount is equal to the employee
and employer contribution rates specified in law for the applicable plan on the
day prior to the termination date, multiplied by the employee's hourly rate of
salary on that date and by the days and months of the leave of absence prior to
termination.
EFFECTIVE DATE. This section is effective retroactively from July 1, 2007.
Sec.
3. Minnesota Statutes 2006, section
352.03, subdivision 4, is amended to read:
Subd.
4. Duties
and powers of board of directors. (a)
The board shall:
(1)
elect a chair;
(2)
appoint an executive director;
(3)
establish rules to administer this chapter and chapters 3A, 352B, 352C, 352D,
and 490 and transact the business of the system, subject to the limitations of
law;
(4)
consider and dispose of, or take any other action the board of directors deems
appropriate concerning denials of applications for annuities or disability
benefits under this chapter, and complaints of employees and others pertaining
to the retirement of employees and the operation of the system;
(5)
advise the director on any matters relating to the system and carrying out
functions and purposes of this chapter.
The board's advice shall control; and
(6) (5) oversee the
administration of the state deferred compensation plan established in section
352.96; and
(6)
oversee the administration of the health care savings plan established in
section 352.98.
The
director and assistant director must be in the unclassified service but
appointees may be selected from civil service lists if desired. The salary of the executive director must be
as provided by section 15A.0815. The
salary of the assistant director must be set in accordance with section 43A.18,
subdivision 3.
(b)
The board shall advise the director on any matters relating to the system and
carrying out functions and purposes of this chapter. The board's advice shall control.
EFFECTIVE DATE. This section is effective the day after final enactment.
Sec.
4. Minnesota Statutes 2006, section
352.03, subdivision 5, is amended to read:
Subd.
5. Executive
director; assistant director.
(a) The executive director, in this chapter called the director,
of the system must be appointed by the board on the basis of fitness,
experience in the retirement field, and leadership ability. The director must have had at least five
years' experience on the administrative staff of a major retirement system.
(b)
The executive director and assistant director must be in the unclassified
service but appointees may be selected from civil service lists if
desired. The salary of the executive
director must be as provided by section 15A.0815. The salary of the assistant director must be set in accordance
with section 43A.18, subdivision 3.
EFFECTIVE DATE. This section is effective the day after final enactment.
Sec.
5. Minnesota Statutes 2006, section
352.22, subdivision 10, is amended to read:
Subd.
10. Other refunds. Former
employees covered by the system are entitled to apply for refunds if they are
or become members of the State Patrol retirement fund, the state Teachers
Retirement Association, or employees of the University of Minnesota excluded
from coverage under the system by action of the Board of Regents; or employees
of the adjutant general who under federal law effectually elect membership in a
federal retirement system; or officers or employees of the senate or house of representatives,
excluded from coverage under section 352.01, subdivision 2b, clause (7). The refunds must include accumulated
contributions plus interest as provided in subdivision 2. These employees may apply for a refund
once 30 days or more have elapsed after their coverage ceases, even if they
continue in state service but in positions not covered by this chapter.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
6. Minnesota Statutes 2007 Supplement,
section 352.955, subdivision 3, is amended to read:
Subd.
3. Payment
of additional equivalent contributions; post-June 30, 2007, coverage transfers. (a) An eligible employee who was is
transferred to plan coverage after June 30, 2007, and who elects to
transfer past service credit under this section must pay an additional member
contribution for that prior service period.
The additional member contribution is (1) the difference between the
member contribution rate or rates for the general state employees retirement plan
of the Minnesota State Retirement System for the period of employment covered
by the service credit to be transferred and the member contribution rate or
rates for the correctional state employees retirement plan for the most recent
12 month period of employment covered by the service credit to be transferred,
plus annual compound interest at the rate of 8.5 percent, and (2) the
amount computed under paragraph (b), plus the greater of the amount computed
under paragraph (c), or 40 percent of the unfunded actuarial accrued
liability attributable to the past service credit transfer. The unfunded actuarial accrued liability
attributable to the past service credit transfer is the present value of the
benefit obtained by the transfer of the service credit to the correctional
state employees retirement plan reduced by the amount of the asset transfer
under subdivision 4, by the amount of the member contribution equivalent
payment under clause (1), and by the amount of the employer contribution
equivalent payment under paragraph (c), clause (1).
(b) The
executive director shall compute, for the most recent 12 months of service
credit eligible for transfer, or for the entire period eligible for transfer if
less than 12 months, the difference between the employee contribution rate or
rates for the general state employees retirement plan and the employee
contribution rate or rates for the correctional state employees retirement plan
applied to the eligible employee's salary during that transfer period, plus
compound interest at a monthly rate of 0.71 percent.
(c)
The executive director shall compute, for any service credit being transferred
on behalf of the eligible employee and not included under paragraph (b), the
difference between the employee contribution rate or rates for the general
state employees retirement plan and the employee contribution rate or rates for
the correctional state employees retirement plan applied to the eligible
employee's salary during that transfer period, plus compound interest at a monthly
rate of 0.71 percent.
(d)
The executive director shall compute an amount using the process specified in
paragraph (b), but based on differences in employer contribution rates between
the general state employees retirement plan and the correctional state
employees retirement plan rather than employee contribution rates.
(e)
The executive director shall compute an amount using the process specified in
paragraph (c), but based on differences in employer contribution rates between
the general state employees retirement plan and the correctional state
employees retirement plan rather than employee contribution rates.
(f)
The
additional equivalent member contribution under this subdivision must be paid
in a lump sum. Payment must accompany
the election to transfer the prior service credit. No transfer election or additional equivalent member contribution
payment may be made by a person or accepted by the executive director after the
one year anniversary date of the effective date of the retirement coverage
transfer, or the date on which the eligible employee terminates state
employment, whichever is earlier.
(c) (g) If an eligible
employee elects to transfer past service credit under this section and pays the
additional equivalent member contribution amount under subdivision 2
paragraph (a), the applicable department shall pay an additional equivalent
employer contribution amount. The
additional employer contribution is (1) the difference between the employer
contribution rate or rates for the general state employees retirement plan for
the period of employment covered by the service credit to be transferred and
the employer contribution rate or rates for the correctional state employees
retirement plan for the period of employment covered by the service credit to
be
transferred,
plus annual compound interest at the rate of 8.5 percent, and (2) the amount computed
under paragraph (d), plus the greater of the amount computed under paragraph
(e), or 60 percent of the unfunded actuarial accrued liability attributable
to the past service credit transfer calculated as provided in paragraph (a),
clause (2).
(h)
The unfunded actuarial accrued liability attributable to the past service
credit transfer is the present value of the benefit obtained by the transfer of
the service credit to the correctional state employees retirement plan reduced
by the amount of the asset transfer under subdivision 4, by the amount of the
member contribution equivalent payment computed under paragraph (b), and by the
amount of the employer contribution equivalent payment computed under paragraph
(d).
(d) (i) The additional
equivalent employer contribution under this subdivision must be paid in a lump
sum and must be paid within 30 days of the date on which the executive director
of the Minnesota State Retirement System certifies to the applicable department
that the employee paid the additional equivalent member contribution.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
7. Minnesota Statutes 2007 Supplement,
section 352.955, subdivision 5, is amended to read:
Subd.
5. Effect
of the asset transfer. Upon the
transfer of assets under subdivision 4, the service credit in the general state
employees retirement plan of the Minnesota State Retirement System related
to the period being transferred is forfeited and may not be
reinstated. The transferred service
credit and the transferred assets must be credited to the correctional state
employees retirement plan and fund, respectively.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
8. Minnesota Statutes 2006, section
352.98, subdivision 1, is amended to read:
Subdivision
1. Plan
created. This section must be
administered by the executive director of the system with the advice and
consent of the board of directors. The
Minnesota State Retirement System executive director shall
establish a plan or plans, known as health care savings plans, through which public
employers and employees an officer or employee of the state or of a
political subdivision, including officers or employees covered by a plan or
fund specified in chapter 353D, 354B, 354D, 424A, or section 356.20,
subdivision 2, may save to cover health care costs. For purposes of this section, a volunteer
firefighter is an employee. The Minnesota
State Retirement System executive director shall make available one
or more trusts, including a governmental trust or governmental trusts,
authorized under the Internal Revenue Code to be eligible for tax-preferred or
tax-free treatment through which employers and employees can save to cover
health care costs.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
9. Minnesota Statutes 2006, section
352.98, subdivision 2, is amended to read:
Subd.
2. Contracting
authorized. The Minnesota State
Retirement System is authorized to executive director shall administer
the plan and to contract with public and private entities to provide
investment services, record keeping, benefit payments, and other functions
necessary for the administration of the plan.
If allowed by the Minnesota State Board of Investment, the Minnesota
State Board of Investment supplemental investment funds may be offered as
investment options under the health care savings plan or plans.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
10. Minnesota Statutes 2006, section
352.98, subdivision 3, is amended to read:
Subd.
3. Contributions. (a) Contributions to the plan must be determined
through defined in a personnel policy or in a collective bargaining
agreement of a public employer with the exclusive representative of the
covered employees in an appropriate unit or political subdivision. The Minnesota State Retirement System
executive director may offer different types of trusts permitted under
the Internal Revenue Code to best meet the needs of different employee employer
units.
(b)
Contributions to the plan by or on behalf of the employee participant
must be held in trust for reimbursement of employee and dependent eligible
health-related expenses for participants and their dependents following
retirement termination from public employment or during active
employment. The Minnesota State
Retirement System executive director shall maintain a separate
account of the contributions made by or on behalf of each participant and the
earnings thereon. The Minnesota
State Retirement System executive director shall make available a
limited range of investment options, and each employee participant may
direct the investment of the accumulations in the employee's participant's
account among the investment options made available by the Minnesota
State Retirement System executive director. At the request of a participating
employer and employee group, the Minnesota State Retirement System may
determine how the assets of the affected employer and employee group should be
invested.
(c)
This section does not obligate a public employer to meet and negotiate in good
faith with the exclusive bargaining representative of any public employee group
regarding an employer contribution to a postretirement or active employee
health care savings plan authorized by this section and section 356.24,
subdivision 1, clause (7). It is not
the intent of the legislature to authorize the state to incur new funding
obligations for the costs of retiree health care or the costs of administering
retiree health care plans or accounts.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
11. Minnesota Statutes 2006, section
352.98, subdivision 4, is amended to read:
Subd.
4. Reimbursement
for health-related expenses. The Minnesota
State Retirement System executive director shall reimburse employees
participants at least quarterly for submitted eligible health-related
expenses, as required allowable by federal and state law, until
the employee participant exhausts the accumulation in the employee's
participant's account. If an
employee a participant dies prior to exhausting the employee's
participant's account balance, the employee's participant's spouse
or dependents are eligible to be reimbursed for health care expenses from the
account until the account balance is exhausted. If an account balance remains after the death of a participant and
all of the participant's legal dependents, the remainder of the account must be
paid to the employee's participant's beneficiaries or, if none,
to the employee's participant's estate.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
12. Minnesota Statutes 2006, section
352.98, subdivision 5, is amended to read:
Subd.
5. Fees. The Minnesota state retirement plan executive
director is authorized to charge uniform fees to participants to cover the
ongoing cost of operating the plan. Any
fees not needed must revert to participant accounts or be used to reduce plan
fees the following year.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
13. Minnesota Statutes 2006, section
352D.075, subdivision 2a, is amended to read:
Subd.
2a. Surviving spouse coverage term certain. In lieu of the annuity under subdivision 2, clause (2) or (3), or
in lieu of a distribution under subdivision 2, clause (1), the surviving spouse
of a deceased participant may elect to receive survivor coverage in the form of
a term certain annuity of five, six ten, 15, or 20 years, based
on the value of the remaining shares.
The monthly term certain annuity must be calculated under section
352D.06, subdivision 1.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
14. Minnesota Statutes 2007 Supplement,
section 353.01, subdivision 2b, is amended to read:
Subd.
2b. Excluded employees. The
following public employees are not eligible to participate as members of the
association with retirement coverage by the public employees retirement plan,
the local government correctional employees retirement plan under chapter 353E,
or the public employees police and fire retirement plan:
(1) public
officers, other than county sheriffs, who are elected to a governing body, or
persons who are appointed to fill a vacancy in an elective office of a
governing body, whose term of office commences on or after July 1, 2002, for
the service to be rendered in that elective position;
(2)
election officers or election judges;
(3)
patient and inmate personnel who perform services for a governmental
subdivision;
(4)
except as otherwise specified in subdivision 12a, employees who are hired for a
temporary position as defined under subdivision 12a, and employees who resign
from a nontemporary position and accept a temporary position within 30 days in
the same governmental subdivision;
(5)
employees who are employed by reason of work emergency caused by fire, flood,
storm, or similar disaster;
(6)
employees who by virtue of their employment in one governmental subdivision are
required by law to be a member of and to contribute to any of the plans or
funds administered by the Minnesota State Retirement System, the Teachers
Retirement Association, the Duluth Teachers Retirement Fund Association, the
St. Paul Teachers Retirement Fund Association, the Minneapolis Employees
Retirement Fund, or any police or firefighters relief association governed by
section 69.77 that has not consolidated with the Public Employees Retirement
Association, or any local police or firefighters consolidation account who have
not elected the type of benefit coverage provided by the public employees
police and fire fund under sections 353A.01 to 353A.10, or any persons covered
by section 353.665, subdivision 4, 5, or 6, who have not elected public
employees police and fire plan benefit coverage. This clause must not be construed to prevent a person from being
a member of and contributing to the Public Employees Retirement Association and
also belonging to and contributing to another public pension plan or fund for
other service occurring during the same period of time. A person who meets the definition of
"public employee" in subdivision 2 by virtue of other service
occurring during the same period of time becomes a member of the association
unless contributions are made to another public retirement fund on the salary
based on the other service or to the Teachers Retirement Association by a
teacher as defined in section 354.05, subdivision 2;
(7)
persons who are members of a religious order and are excluded from coverage
under the federal Old Age, Survivors, Disability, and Health Insurance Program
for the performance of service as specified in United States Code, title 42,
section 410(a)(8)(A), as amended through January 1, 1987, if no irrevocable
election of coverage has been made under section 3121(r) of the Internal
Revenue Code of 1954, as amended;
(8)
employees of a governmental subdivision who have not reached the age of 23 and
are enrolled on a full-time basis to attend or are attending classes on a
full-time basis at an accredited school, college, or university in an
undergraduate, graduate, or professional-technical program, or a public or
charter high school;
(9)
resident physicians, medical interns, and pharmacist residents and pharmacist
interns who are serving in a degree or residency program in public hospitals
or clinics;
(10)
students who are serving in an internship or residency program sponsored by an
accredited educational institution;
(11)
persons who hold a part-time adult supplementary technical college license who
render part-time teaching service in a technical college;
(12)
except for employees of Hennepin County or Hennepin Healthcare System, Inc.,
foreign citizens working for a governmental subdivision with a work permit of
less than three years, or an H-1b visa valid for less than three years of
employment. Upon notice to the
association that the work permit or visa extends beyond the three-year period,
the foreign citizens must be reported for membership from the date of the
extension;
(13)
public hospital employees who elected not to participate as members of the
association before 1972 and who did not elect to participate from July 1, 1988,
to October 1, 1988;
(14)
except as provided in section 353.86, volunteer ambulance service personnel, as
defined in subdivision 35, but persons who serve as volunteer ambulance service
personnel may still qualify as public employees under subdivision 2 and may be
members of the Public Employees Retirement Association and participants in the
public employees retirement fund or the public employees police and fire fund,
whichever applies, on the basis of compensation received from public employment
service other than service as volunteer ambulance service personnel;
(15)
except as provided in section 353.87, volunteer firefighters, as defined in
subdivision 36, engaging in activities undertaken as part of volunteer
firefighter duties; provided that a person who is a volunteer firefighter may
still qualify as a public employee under subdivision 2 and may be a member of
the Public Employees Retirement Association and a participant in the public
employees retirement fund or the public employees police and fire fund,
whichever applies, on the basis of compensation received from public employment
activities other than those as a volunteer firefighter;
(16)
pipefitters and associated trades personnel employed by Independent School District
No. 625, St. Paul, with coverage under a collective bargaining agreement by the
pipefitters local 455 pension plan who were either first employed after May 1,
1997, or, if first employed before May 2, 1997, elected to be excluded under
Laws 1997, chapter 241, article 2, section 12;
(17)
electrical workers, plumbers, carpenters, and associated trades personnel
employed by Independent School District No. 625, St. Paul, or the city of St.
Paul, who have retirement coverage under a collective bargaining agreement by
the Electrical Workers Local 110 pension plan, the United Association Plumbers
Local 34 pension plan, or the Carpenters Local 87 pension plan who were either
first employed after May 1, 2000, or, if first employed before May 2, 2000,
elected to be excluded under Laws 2000, chapter 461, article 7, section 5;
(18)
bricklayers, allied craftworkers, cement masons, glaziers, glassworkers,
painters, allied tradesworkers, and plasterers employed by the city of St. Paul
or Independent School District No. 625, St. Paul, with coverage under a
collective bargaining agreement by the Bricklayers and Allied Craftworkers
Local 1 pension plan, the Cement Masons Local 633 pension plan, the Glaziers
and Glassworkers Local L-1324 pension plan, the Painters and Allied Trades
Local 61 pension plan, or the Twin Cities Plasterers Local 265 pension plan who
were either first employed after May 1, 2001, or if first employed before May
2, 2001, elected to be excluded under Laws 2001, First Special Session chapter
10, article 10, section 6;
(19)
plumbers employed by the Metropolitan Airports Commission, with coverage under
a collective bargaining agreement by the Plumbers Local 34 pension plan, who
either were first employed after May 1, 2001, or if first employed before May
2, 2001, elected to be excluded under Laws 2001, First Special Session chapter
10, article 10, section 6;
(20)
employees who are hired after June 30, 2002, to fill seasonal positions under
subdivision 12b which are limited in duration by the employer to 185
consecutive calendar days or less in each year of employment with the
governmental subdivision;
(21)
persons who are provided supported employment or work-study positions by a
governmental subdivision and who participate in an employment or industries
program maintained for the benefit of these persons where the governmental
subdivision limits the position's duration to three years or less, including
persons participating in a federal or state subsidized on-the-job training,
work experience, senior citizen, youth, or unemployment relief program where
the training or work experience is not provided as a part of, or for, future
permanent public employment;
(22)
independent contractors and the employees of independent contractors; and
(23)
reemployed annuitants of the association during the course of that
reemployment.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
15. Minnesota Statutes 2006, section
353.01, subdivision 10, is amended to read:
Subd.
10. Salary. (a) Subject to the
limitations of section 356.611, "salary" means:
(1)
the periodic compensation of a public employee, before deductions for deferred
compensation, supplemental retirement plans, or other voluntary salary
reduction programs, and also means "wages" and includes net income
from fees;
(2)
for a public employee who is covered by a supplemental retirement plan under
section 356.24, subdivision 1, clause (8), (9), or (10), which require all plan
contributions be made by the employer, the contribution to the applicable
supplemental retirement plan when an agreement between the parties
establishes that the contribution is from will either result in a
mandatory withholdings from reduction of employees' wages
through payroll withholdings, or be made in lieu of an amount that would
otherwise be paid as wages; and
(3)
for a public employee who has prior service covered by a local police or
firefighters relief association that has consolidated with the Public Employees
Retirement Association or to which section 353.665 applies and who has elected
coverage either under the public employees police and fire fund benefit plan
under section 353A.08 following the consolidation or under section 353.665,
subdivision 4, the rate of salary upon which member contributions to the
special fund of the relief association were made prior to the effective date of
the consolidation as specified by law and by bylaw provisions governing the
relief association on the date of the initiation of the consolidation procedure
and the actual periodic compensation of the public employee after the effective
date of consolidation.
(b)
Salary does not mean:
(1)
the fees paid to district court reporters, unused annual vacation or sick leave
payments, in lump-sum or periodic payments, severance payments, reimbursement
of expenses, lump-sum settlements not attached to a specific earnings period,
or workers' compensation payments;
(2)
employer-paid amounts used by an employee toward the cost of insurance
coverage, employer-paid fringe benefits, flexible spending accounts, cafeteria
plans, health care expense accounts, day care expenses, or any payments in lieu
of any employer-paid group insurance coverage, including the difference between
single and family rates that may be paid to a member with single coverage and
certain amounts determined by the executive director to be ineligible;
(3)
the amount equal to that which the employing governmental subdivision would
otherwise pay toward single or family insurance coverage for a covered employee
when, through a contract or agreement with some but not all employees, the
employer:
(i)
discontinues, or for new hires does not provide, payment toward the cost of the
employee's selected insurance coverages under a group plan offered by the
employer;
(ii)
makes the employee solely responsible for all contributions toward the cost of
the employee's selected insurance coverages under a group plan offered by the
employer, including any amount the employer makes toward other employees'
selected insurance coverages under a group plan offered by the employer; and
(iii)
provides increased salary rates for employees who do not have any employer-paid
group insurance coverages;
(4)
except as provided in section 353.86 or 353.87, compensation of any kind paid
to volunteer ambulance service personnel or volunteer firefighters, as defined
in subdivision 35 or 36; and
(5)
the amount of compensation that exceeds the limitation provided in section
356.611; and
(6)
amounts paid by a federal or state grant for which the grant specifically
prohibits grant proceeds from being used to make pension plan contributions,
unless the contributions to the plan are made from sources other than the
federal or state grant.
(c)
Amounts provided to an employee by the employer through a grievance proceeding
or a legal settlement are salary only if the settlement is reviewed by the
executive director and the amounts are determined by the executive director to
be consistent with paragraph (a) and prior determinations.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
16. Minnesota Statutes 2006, section
353.01, subdivision 11a, is amended to read:
Subd.
11a. Termination of public service.
(a) "Termination of public service" occurs (1) when a member
resigns or is dismissed from public service by the employing governmental
subdivision and the employee does not, within 30 days of the date the
employment relationship ended, return to an employment position in the same
governmental subdivision; or (2) when the employer-employee relationship is
severed due to the expiration of a layoff under subdivision 12 or 12c.
(b)
The termination of public service must be recorded in the association records
upon receipt of an appropriate notice from the governmental subdivision.
(c)
A termination of public service does not occur if, prior to termination of
service, the member has an agreement, verbal or written, to return to a
governmental subdivision as an employee, independent contractor, or employee of
an independent contractor.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
17. Minnesota Statutes 2006, section
353.01, is amended by adding a subdivision to read:
Subd.
16b. Uncredited
military service credit purchase.
(a) A public employee who has at least three years of allowable
service with the Public Employees Retirement Association or the public
employees police and fire plan and who performed service in the United States
armed forces before becoming a public employee, or who failed to obtain service
credit for a military leave of absence under subdivision 16, paragraph (h), is
entitled to purchase allowable service credit for the initial period of
enlistment, induction, or call to active duty without any voluntary extension
by making payment under section 356.551 if the public employee has not
purchased service credit from any other Minnesota defined benefit public
employee pension plan for the same period of service.
(b)
A public employee who desires to purchase service credit under paragraph (a)
must apply with the executive director to make the purchase. The application must include all necessary
documentation of the public employee's qualifications to make the purchase,
signed written permission to allow the executive director to request and
receive necessary verification of applicable facts and eligibility
requirements, and any other relevant information that the executive director
may require.
(c)
Allowable service credit for the purchase period must be granted by the Public
Employees Retirement Association or the public employees police and fire plan,
whichever applies, to the purchasing public employee upon receipt of the
purchase payment amount. Payment must
be made before the effective date of retirement of the public employee.
(d)
This subdivision is repealed July 1, 2013.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
18. Minnesota Statutes 2007 Supplement,
section 353.0161, subdivision 2, is amended to read:
Subd.
2. Purchase
procedure. (a) An employee covered
by a plan specified in subdivision 1 may purchase credit for allowable service
in that plan for a period specified in subdivision 1 if the employee makes a
payment as specified in paragraph (b) or (c), whichever applies. The employing unit, at its option, may pay
the employer portion of the amount specified in paragraph (b) on behalf of its
employees.
(b) If
payment is received by the executive director within one year from the end
of date the member returned to work following the authorized leave, or
within 30 days after the date of termination of public service if the member
did not return to work, the payment amount is equal to the employee and
employer contribution rates specified in law for the applicable plan at the end
of the leave period, or at termination of public service, whichever is
earlier, multiplied by the employee's hourly rate of average
monthly salary on the date upon which deductions were paid during
the six months, or portion thereof, before the commencement of return
from the leave of absence and by the days and number of months
of the leave of absence for which the employee wants allowable service
credit. Payments made under this
paragraph must include compound interest at a monthly rate of 0.71 percent from
the last day of the leave period until the last day of the month in which
payment is received.
(c) If
payment is received by the executive director after one year, the payment
amount is the amount determined under section 356.551. Payment under this paragraph must be made
before the date the person terminates public service under section 353.01,
subdivision 11a.
EFFECTIVE DATE. This section is effective retroactively from July 1, 2007.
Sec.
19. Minnesota Statutes 2006, section
353.27, is amended by adding a subdivision to read:
Subd.
7c. Limitation
on additional plan coverage. No
deductions for any plan under this chapter or chapter 353E may be taken from
the salary of a person who is employed by a governmental subdivision under section
353.01, subdivision 6, and who is receiving disability benefit payments from
any plan under this chapter or chapter 353E unless the person waives the right
to further disability benefit payments.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
20. Minnesota Statutes 2007 Supplement,
section 353.27, subdivision 14, is amended to read:
Subd.
14. Treatment of periods before initial coverage date. (a) If an entity is determined to be a
governmental subdivision due to receipt of a written notice of eligibility from
the association, that employer and its employees are subject to the
requirements of subdivision 12, effective retroactively to the date that the
executive director of the association determines that the entity first met the
definition of a governmental subdivision, if that date predates the notice of
eligibility.
(b) If
the retroactive time period under paragraph (a) exceeds three years, an
employee is authorized to purchase service credit in the applicable Public
Employees Retirement Association plan for the portion of the period in excess
of three years, by making payment under section 356.551. Notwithstanding section 356.551,
subdivision 2, regarding time limits on purchases, payment may be made anytime
before termination of public service.
(c)
This subdivision does not apply if the applicable employment under paragraph
(a) included coverage by any public or private defined benefit or defined
contribution retirement plan, other than a volunteer firefighters relief
association. If this paragraph applies,
an individual is prohibited from purchasing service credit for any period or
periods specified in paragraph (a).
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
21. Minnesota Statutes 2006, section
353.33, subdivision 5, is amended to read:
Subd.
5. Benefits
paid under workers' compensation law.
(a) Disability benefits paid shall be coordinated with any
amounts, other than those amounts excluded under paragraph (b), received
or receivable under workers' compensation law, such as temporary total,
permanent total, temporary partial, permanent partial, or economic recovery
compensation benefits, in either periodic or lump sum payments from the
employer under applicable workers' compensation laws, after deduction of amount
of attorney fees, authorized under applicable workers' compensation laws, paid
by a disabilitant. If the total of the
single life annuity actuarial equivalent disability benefit and the workers'
compensation benefit exceeds: (1) the
salary the disabled member received as of the date of the disability or (2) the
salary currently payable for the same employment position or an employment
position substantially similar to the one the person held as of the date of the
disability, whichever is greater, the disability benefit must be reduced to
that amount which, when added to the workers' compensation benefits, does not
exceed the greater of the salaries described in clauses (1) and (2).
(b)
Permanent partial disability payments provided for in section 176.101,
subdivision 2a, and retraining payments provided for in section 176.102,
subdivision 11, must not be offset from disability payments due under paragraph
(a) if the amounts of the permanent partial or retraining payments are reported
to the executive director in a manner specified by the executive director.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
22. Minnesota Statutes 2006, section
353.656, subdivision 2, is amended to read:
Subd.
2. Benefits
paid under workers' compensation law.
(a) If a member, as described in subdivision 1, is injured under
circumstances which entitle the member to receive benefits under the workers'
compensation law, the member shall receive the same benefits as provided in
subdivision 1, with disability benefits paid reimbursed and future benefits
reduced by all periodic or lump sum amounts, other than those amounts
excluded under paragraph (b), paid to the member under the workers' compensation
law, after deduction of amount of attorney fees, authorized under applicable
workers' compensation laws, paid by a disabilitant if the total of the single
life annuity actuarial equivalent disability benefit and the workers'
compensation benefit exceeds: (1) the
salary the disabled member received as of the date of the disability or (2) the
salary currently payable for the same employment position or an employment
position substantially similar to the one the person held as of the date of the
disability, whichever is greater. The
disability benefit must be reduced to that amount which, when added to the
workers' compensation benefits, does not exceed the greater of the salaries
described in clauses (1) and (2).
(b)
Permanent partial disability payments provided for in section 176.101,
subdivision 2a, and retraining payments provided for in section 176.102,
subdivision 11, must not be offset from disability payments due under paragraph
(a) if the amounts of the permanent partial or retraining payments are reported
to the executive director in a manner specified by the executive director.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
23. Minnesota Statutes 2006, section
353D.05, subdivision 2, is amended to read:
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.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
24. [353D.071] FEDERAL COMPLIANCE.
Subdivision
1. Definitions. (a) For purposes of this section, the
following terms have the meanings given them.
(b)
"Designated beneficiary" means the person designated as the
beneficiary under section 353D.07, subdivision 5, and who is the designated
beneficiary under section 401(a)(9) of the Internal Revenue Code and section
1.401(a)(9)-1, Q&A-4 of the Treasury regulations.
(c)
"Distribution calendar year" means a calendar year for which a
minimum distribution is required. For
distributions beginning before the member's death, the first distribution
calendar year is the calendar year immediately preceding the calendar year which
contains the member's required beginning date.
For distributions beginning after the member's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin under subdivision 2, paragraph (c). The required minimum distribution for the member's first
distribution calendar year shall be made on or before the member's required
beginning date.
(d)
"Member's account balance" means the account balance as of the last
valuation date in the valuation calendar year increased by the amount of any
contributions made and allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation date. The account balance for the valuation
calendar year includes any amounts rolled over or transferred to the plan
either in the valuation calendar year or in the distribution calendar year if
distributed or transferred in the valuation calendar year.
(e)
"Required beginning date" means the later of April 1 of the calendar
year following the calendar year that the member attains age 70 years, six
months, or April 1 of the calendar year following the calendar year in which
the member terminates employment.
(f)
"Valuation calendar year" means the calendar year immediately
preceding the distribution calendar year.
Subd.
2. Required
minimum distributions. (a)
The provisions of this subdivision shall apply for purposes of determining
required minimum distributions for calendar years beginning with the 2003
calendar year and will take precedence over any inconsistent provisions of the
plan. All distributions required under
this section will be determined and made in accordance with the treasury
regulations under section 401(a)(9) of the Internal Revenue Code, including
regulations providing special rules for governmental plans, as defined under
section 414(d) of the Internal Revenue Code, that comply with a reasonable good
faith interpretation of the minimum distribution requirements.
(b)
The member's entire interest will be distributed to the member in a lump sum no
later than the member's required beginning date.
(c)
If the member dies before the required minimum distribution is made, the
member's entire interest will be distributed in a lump sum no later than as
follows:
(1)
if the member's surviving spouse is the member's sole designated beneficiary,
the distribution must be made by December 31 of the calendar year immediately
following the calendar year in which the member died, or by December 31 of the
calendar year in which the member would have attained age 70 years, six months,
whichever is later;
(2)
if the member's surviving spouse is not the member's sole beneficiary, or if
there is no designated beneficiary as of September 30 of the year following the
year of the member's death, the member's entire interest shall be distributed
by December 31 of the calendar year containing the fifth anniversary of the
member's death as directed under section 353D.07, subdivision 5; or
(3)
if the member's surviving spouse is the member's sole designated beneficiary
and the surviving spouse dies after the member, but before the account balance
is distributed to the surviving spouse, paragraph (c), clause (2), shall apply
as if the surviving spouse were the member.
(d)
For purposes of paragraph (c), unless clause (3) applies, distributions are
considered to be made on the member's required beginning date. If paragraph (c), clause (3), applies,
distributions are considered to begin on the date distributions are required to
be made to the surviving spouse under paragraph (c), clause (1).
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
25. Minnesota Statutes 2007 Supplement,
section 353F.02, subdivision 4, is amended to read:
Subd.
4. Medical
facility. "Medical
facility" means:
(1)
Bridges Medical Services;
(2)
the City of Cannon Falls Hospital;
(3)
Clearwater County Memorial Hospital doing business as Clearwater Health
Services in Bagley;
(4)
the Dassel Lakeside Community Home;
(5)
the Fair Oaks Lodge, Wadena;
(6)
the Glencoe Area Health Center;
(7)
the Hutchinson Area Health Care;
(8) the
Kanabec Hospital;
(9) the Lakefield Nursing Home;
(10) (9) the Lakeview
Nursing Home in Gaylord;
(11) (10) the Luverne
Public Hospital;
(12)
the Northfield Hospital;
(13) (11) the Oakland
Park Nursing Home;
(14) (12) the RenVilla
Nursing Home;
(15)
the Renville County Hospital in Olivia;
(16) (13) the St. Peter
Community Healthcare Center; and
(17) (14) the
Waconia-Ridgeview Medical Center.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
26. [353F.025] CERTIFICATION AND DECERTIFICATION OF MEDICAL FACILITIES
AND OTHER PUBLIC EMPLOYING UNITS.
Subdivision
1. Eligibility
determination. (a) The chief
clerical officer of a governmental subdivision may submit a resolution from the
governing body to the executive director of the Public Employees Retirement
Association which supports providing coverage under this chapter for employees
of that governmental subdivision who are privatized, and which states that the
governing body will pay for actuarial calculations, as further specified in
paragraph (c).
(b)
The governing body must also provide a copy of any applicable purchase or lease
agreement and any other information requested by the executive director to
allow the executive director to verify that under the proposed employer change,
the new employer does not qualify as a governmental subdivision under section
353.01, subdivision 6, making the employees ineligible for continued coverage
as active members of the general employees retirement plan of the Public
Employees Retirement Association.
(c)
Following receipt of a resolution and a determination by the executive director
that the new employer is not a governmental subdivision, the executive director
shall direct the consulting actuary retained under section 356.214 to determine
whether the general employees retirement plan of the Public Employees
Retirement Association is expected to receive a net gain if privatization
occurs, by determining whether the actuarial liability of the special benefit
coverage provided under this chapter, if extended to the applicable employees
under the privatization, is less than the actuarial gain otherwise to accrue to
the plan. The date of the actuarial
calculations used to make this determination must be within one year of the
effective date, as defined in section 353F.02, subdivision 3.
Subd.
2. Recommendation
to legislature. (a) If the
actuarial calculations under subdivision 1, paragraph (c), indicate that a net
gain to the general employees retirement plan of the Public Employees
Retirement Association is expected due to the privatization, the executive
director shall forward a recommendation and supporting documentation to the
chair of the Legislative Commission on Pensions and Retirement, the chair of
the Governmental Operations, Reform, Technology and Elections Committee of the
house of representatives, the chair of the State and Local Government Operations
and Oversight Committee of the senate, and the executive director of the
Legislative Commission on Pensions and Retirement. The recommendation must be in the form of an addition to the
definition of "medical facility" under section 353F.02, subdivision
4, or to "other public employing unit" under section 353F.02,
subdivision 5, whichever is applicable.
The recommendation must be forwarded to the legislature before January
15 for the recommendation to be considered in that year's legislative session.
(b)
If a medical facility or other public employing unit listed under section
353F.02, subdivision 4 or 5, fails to privatize within one year of the final
enactment date of the legislation adding the entity to the applicable
definition, its inclusion under this chapter is voided, and the executive
director shall include in the proposed legislation under paragraph (a) a
recommendation that the applicable entity be stricken from the definition.
Subd.
3. Date
of application. For any
privatization added to this chapter after the effective date of this section,
the first date of coverage is the effective date as defined in section 353F.02,
subdivision 3.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
27. Minnesota Statutes 2007 Supplement,
section 354.096, subdivision 2, is amended to read:
Subd.
2. Payment. (a) Notwithstanding any laws to the
contrary, a member who is granted a family leave under United States Code,
title 42, section 12631, may receive allowable service credit for the leave by
making payment of the employee, employer, and additional employer
contributions at the rates under section 354.42, during the leave period as
applied to the member's average full-time monthly salary rate on the date the
leave commenced under section 354.72.
(b)
If payment is made after the leave terminates, section 354.72 applies.
EFFECTIVE DATE. This section is effective July 1, 2008.
Sec.
28. Minnesota Statutes 2006, section
354.33, subdivision 5, is amended to read:
Subd.
5. Retirees
not eligible for federal benefits. Notwithstanding
the provisions of section 354.55, subdivision 3, When any person retires
after July 1, 1973, who (1) has ten or more years of allowable service, and (2)
does not have any retroactive Social Security coverage by reason of the
person's position in the retirement system, and (3) does not qualify for
federal old age and survivor primary benefits at the time of retirement, the
annuity must be computed under section 354.44, subdivision 2, of the law in
effect on June 30, 1969, except that accumulations after June 30, 1957, must be
calculated using the same mortality table and interest assumption as are used
to transfer the required reserves to the Minnesota postretirement investment
fund.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
29. Minnesota Statutes 2007 Supplement,
section 354.72, subdivision 2, is amended to read:
Subd.
2. Purchase
procedure. (a) A teacher may
purchase credit for allowable and formula service in the plan for a period
specified in subdivision 1 if the teacher makes a payment as specified in
paragraph (b) or, (c), or (d), whichever applies. The employing unit, at its option, may pay
the employer portion of the amount specified in paragraph (b) on behalf
of its employees.
(b) If
payment is received by the executive director within one year from the end
by June 30 of the fiscal year of the strike period or authorized leave included
under section 354.093, 354.095, or 354.096, or payment must equal
the total employee and employer contribution rates, including amortization
contribution rates if applicable, multiplied by the member's average monthly
salary rate on the date the leave or strike period commenced, or for an
extended leave under section 354.094, on the salary received during the year
immediately preceding the initial year of the leave, multiplied by the months
and portions of a month of the leave or strike period for which the teacher
seeks allowable service credit.
(c)
If payment is made after June 30 and before the following June 30 for a strike period
or for leaves of absence under section 354.093, 354.095, or 354.096, or for an
extended leave of absence under section 354.094, the payment must equal the
total employee and employer contributions, including amortization contributions
if applicable, given the contribution rates in section 354.42, multiplied by
the member's average monthly salary rate on the commencement of the leave or
period of strike, multiplied by the months and portions of a month of the leave
of absence or period of strike for which the teacher seeks allowable service
credit. Payments made under this
paragraph must include the amount determined in paragraph (b) plus compound
interest at a monthly rate of 0.71 percent from the last day of the leave
period or strike period, or from June 30 for an extended leave of
absence under section 354.094, until the last day of the month in which
payment is received.
(c) (d) If payment is
received by the executive director after the applicable last permitted date
under paragraph (b) (c), the payment amount is the amount
determined under section 356.551. Notwithstanding
payment deadlines specified in section 356.551, payment under this section may
be made anytime before the effective date of retirement.
EFFECTIVE DATE. This section is effective retroactively from July 1, 2007.
Sec.
30. Minnesota Statutes 2006, section
356.47, subdivision 3, is amended to read:
Subd.
3. Payment. (a) Upon the retired member attaining the
age of 65 years or upon the first day of the month next following the month
occurring Beginning one year after the termination of the
reemployment withholding period ends relating to the reemployment that
gave rise to the limitation, whichever is later, and the filing of a
written application, the retired member is entitled to the payment, in a lump
sum, of the value of the person's amount under subdivision 2, plus interest at
the compound annual rate of six percent from the date that the amount was deducted
from the retirement annuity to the date of payment.
(b)
The written application must be on a form prescribed by the chief
administrative officer of the applicable retirement plan.
(c) If
the retired member dies before the payment provided for in paragraph (a) is
made, the amount is payable, upon written application, to the deceased person's
surviving spouse, or if none, to the deceased person's designated beneficiary,
or if none, to the deceased person's estate.
(d) In
lieu of the direct payment of the person's amount under subdivision 2, on or
after the payment date under paragraph (a), if the federal Internal Revenue
Code so permits, the retired member may elect to have all or any portion of the
payment amount under this section paid in the form of a direct rollover to an
eligible retirement plan as defined in section 402(c) of the federal Internal
Revenue Code that is specified by the retired member. If the retired member dies with a balance remaining payable under
this section, the surviving spouse of the retired member, or if none, the
deceased person's designated beneficiary, or if none, the administrator of the
deceased person's estate may elect a direct rollover under this paragraph.
EFFECTIVE DATE. This section is effective retroactively from January 1, 2008.
Sec.
31. Minnesota Statutes 2006, section
356.551, subdivision 2, is amended to read:
Subd.
2. Determination. (a) Unless the minimum purchase amount set
forth in paragraph (c) applies, 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 under section 356.214, of the amount of the additional
retirement annuity obtained by the acquisition of the additional service credit
in this section.
(b)
Calculation of this amount must be made using the preretirement interest rate
applicable to the public pension plan specified in section 356.215, subdivision
8, 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.
(c)
The prior service credit purchase amount may not be less than the amount
determined by applying the current employee or member contribution rate, the
employer contribution rate, and the additional employer contribution rate, if
any, to the person's current annual salary and multiplying that result by the
number of whole and fraction years of service to be purchased.
(c)
The prior service credit purchase amount may not be less than the amount
determined by applying, for each year or fraction of a year being purchased,
the sum of the employee contribution rate, the employer contribution rate, and
the additional employer contribution rate, if any, applicable during that
period, to the person's annual salary
during
that period, or fractional portion of a year's salary, if applicable, plus
interest at the annual rate of 8.5 percent compounded annually from the end of
the year in which contributions would otherwise have been made to the date on
which the payment is received.
(d) Unless
otherwise provided by statutes governing a specific plan, payment must be
made in one lump sum within one year of the prior service credit authorization
or prior to the member's effective date of retirement, whichever is earlier. Payment of the amount calculated under this
section must be made by the applicable eligible person.
(e)
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 subdivision, the purchaser must make the employee payments required under
this subdivision within 90 days of the prior service credit authorization. If that employee payment is made, the
employer payment under this subdivision 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
subdivision.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
32. Minnesota Statutes 2006, section
356.611, subdivision 2, is amended to read:
Subd.
2. Federal
compensation limits. (a) For
members of a covered pension plan enumerated in section 356.30, subdivision 3, and
of the plan established under chapter 353D, 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 specified in that paragraph 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.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
33. Minnesota Statutes 2006, section
356.611, is amended by adding a subdivision to read:
Subd.
3a. Maximum
annual addition limitation. The
annual additions on behalf of a member to the plan established under chapter
352D or 353D for any limitation year beginning after December 31, 2001, shall
not exceed the lesser of one hundred percent of the member's compensation, as
defined for purposes of section 415(c) of the Internal Revenue Code; or
$40,000, as adjusted by the United States secretary of the treasury under
section 415(d) of the Internal Revenue Code.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
34. Laws 2002, chapter 392, article 2,
section 4, is amended to read:
Sec.
4. EFFECTIVE
DATE.
(a)
Sections 1, 2, and 3 are effective retroactive to July 1, 2001.
(b)
The authority to obtain credit for allowable service under section 1, clause
(11); and section 2, paragraph (a), clause (8); and section 3, clause
(9), expires 12 months after the date of enactment.
EFFECTIVE DATE. This section is effective retroactively without interruption
from July 1, 2002.
Sec.
35. Laws 2006, chapter 271, article 5,
section 5, is amended to read:
Sec.
5. EFFECTIVE
DATE.
(a)
Sections 1, 3, and 4 are effective the day following final enactment and
section 3 has effect retroactively from July 25, 2005.
(b) Section
2 with respect to the Cannon Falls Hospital District is effective upon the
latter of:
(1)
the day after the governing body of the Cannon Falls Hospital District and its
chief clerical officer meet the requirements under Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
(2)
the first day of the month following certification to the Cannon Falls Hospital
District by the executive director of the Public Employees Retirement
Association that the actuarial accrued liability of the special benefit
coverage proposed for extension to the privatized City of Cannon Falls Hospital
employees under section 1 does not exceed the actuarial gain otherwise to be
accrued by the Public Employees Retirement Association, as calculated by the
consulting actuary retained under Minnesota Statutes, section 356.214. The cost of the actuarial calculations must
be borne by the current employer or by the entity which is the employer
following the privatization.
(c)
Section 2, with respect to Clearwater County Memorial Hospital, is effective
upon the latter of:
(1)
the day after the governing body of Clearwater County and its chief clerical
officer meet the requirements under Minnesota Statutes, section 645.021,
subdivisions 2 and 3, except that the certificate of approval must be filed
before January 1, 2009; and
(2)
the first day of the month following certification to Clearwater County by the
executive director of the Public Employees Retirement Association that the
actuarial accrued liability of the special benefit coverage proposed for
extension to the privatized Clearwater Health Services employees under section
2 does not exceed the actuarial gain otherwise to be accrued by the Public
Employees Retirement Association, as calculated by the consulting actuary
retained under Minnesota Statutes, section 356.214. The cost of the actuarial calculations must be borne by the
current employer or by the entity which is the employer following the
privatization.
(d)
Section 2 with respect to the Dassel Lakeside Community Home is effective upon
the latter of:
(1)
the day after the governing body of the city of Dassel and its chief clerical
officer timely complete compliance with Minnesota Statutes, section 645.021,
subdivisions 2 and 3; and
(2)
the first day of the month next following certification to the Dassel City
Council by the executive director of the Public Employees Retirement
Association that the actuarial accrued liability of the special benefit
coverage proposed for extension to the privatized Dassel Lakeside Community
Home employees under section 2 does not exceed the actuarial gain otherwise to
be accrued by the Public Employees Retirement Association, as calculated by the
consulting actuary retained under Minnesota Statutes, section 356.214. The cost of the actuarial calculations must
be borne by the city of Dassel or by the entity which is the employer following
the privatization.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
36. REPEALER.
(a)
Minnesota Statutes 2006, sections 354.44, subdivision 6a; 354.465; 354.51,
subdivision 4; and 354.55, subdivisions 2, 3, 6, 12, and 15, are repealed
effective July 1, 2008.
(b)
Minnesota Statutes 2006, sections 354A.091, subdivisions 1a and 1b; and
355.629, are repealed effective July 1, 2008.
(c)
Laws 2005, First Special Session chapter 8, article 1, section 23, is repealed
retroactively from July 26, 2005.
ARTICLE
6
MSRS-CORRECTIONAL
PLAN COVERAGE EXPANSION
Section
1. Minnesota Statutes 2007 Supplement,
section 352.91, subdivision 3d, is amended to read:
Subd.
3d. Other correctional personnel.
(a) "Covered correctional service" means service by a state
employee in one of the employment positions at a correctional facility or at
the Minnesota Security Hospital specified in paragraph (b) if at least 75
percent of the employee's working time is spent in direct contact with inmates
or patients and the fact of this direct contact is certified to the executive
director by the appropriate commissioner.
(b)
The employment positions are as follows:
(1) baker;
(2) central services
administrative specialist, intermediate;
(3) central services
administrative specialist, principal;
(4) chaplain;
(5) chief cook;
(6) cook;
(7) cook coordinator;
(8) corrections program therapist
1;
(9) corrections program
therapist 2;
(10) corrections program
therapist 3;
(11) corrections program
therapist 4;
(12) corrections inmate program
coordinator;
(13) corrections transitions
program coordinator;
(14) corrections security caseworker;
(15) corrections security
caseworker career;
(16) corrections teaching
assistant;
(17) delivery van driver;
(18) dentist;
(19) electrician supervisor;
(20)
general maintenance worker lead;
(21) general repair worker;
(22) library/information
research services specialist;
(23) library/information
research services specialist senior;
(24) library technician;
(25)
painter lead;
(26) plant maintenance engineer
lead;
(27) plumber supervisor;
(28) psychologist 1;
(29) psychologist 3;
(30) recreation therapist;
(31) recreation therapist
coordinator;
(32) recreation program
assistant;
(33) recreation therapist
senior;
(34) sports medicine specialist;
(35) work therapy assistant;
(36) work therapy program
coordinator; and
(37) work therapy technician.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec.
2. COVERAGE
TRANSFER DATES.
(a)
The coverage transfer under Minnesota Statutes, section 352.91, subdivision 3d,
paragraph (b), clause (20), also covers employment in that position after
December 11, 2007, for purposes of Minnesota Statutes, section 352.955,
subdivisions 1, 3, 4, 5, and 6.
(b)
The coverage change under Minnesota Statutes, section 352.91, subdivision 3d,
paragraph (b), clause (25), is prospective only.
EFFECTIVE DATE. This section is effective the day following final enactment.
ARTICLE
7
MSRS-UNCLASSIFIED
RETIREMENT PROGRAM CHANGES
Section
1. Minnesota Statutes 2007 Supplement,
section 352D.02, subdivision 1, is amended to read:
Subdivision
1. Coverage. (a) Except as specified in paragraph (b),
employees enumerated in paragraph (c), clauses (2), (3), (4), (6) to
(14), and (16) to (18), if they are an elected official or in the
unclassified service of the state or Metropolitan Council and are eligible for
coverage under the general state employees retirement plan under chapter 352,
are participants in the unclassified program under this chapter unless the
employee gives notice to the executive director of the Minnesota State Retirement
System within one year following the commencement of employment in the
unclassified service that the employee desires coverage under the general state
employees retirement plan. For the
purposes of this chapter, an employee who does not file notice with the
executive director is deemed to have exercised the option to participate in the
unclassified program.
(b) Persons
referenced in paragraph (c), clause (5), are participants in the unclassified
program under this chapter unless the person was eligible to elect different
coverage under section 3A.07 and elected retirement coverage by the applicable
alternative retirement plan. Persons
referenced in paragraph (c), clause (15), are participants in the unclassified
program under this chapter for judicial employment in excess of the service
credit limit in section 490.121, subdivision 22, and are not eligible for
the choice of coverage specified in paragraph (a).
(c)
Enumerated employees and referenced persons are:
(1)
the governor, the lieutenant governor, the secretary of state, the state
auditor, and the attorney general;
(2) an
employee in the Office of the Governor, Lieutenant Governor, Secretary of
State, State Auditor, Attorney General;
(3) an
employee of the State Board of Investment;
(4)
the head of a department, division, or agency created by statute in the
unclassified service, an acting department head subsequently appointed to the
position, or an employee enumerated in section 15A.0815 or 15A.083, subdivision
4;
(5) a
member of the legislature;
(6) a
full-time unclassified employee of the legislature or a commission or agency of
the legislature who is appointed without a limit on the duration of the
employment or a temporary legislative employee having shares in the
supplemental retirement fund as a result of former employment covered by this
chapter, whether or not eligible for coverage under the Minnesota State
Retirement System;
(7) a
person who is employed in a position established under section 43A.08,
subdivision 1, clause (3), or in a position authorized under a statute creating
or establishing a department or agency of the state, which is at the deputy or
assistant head of department or agency or director level;
(8)
the regional administrator, or executive director of the Metropolitan Council,
general counsel, division directors, operations managers, and other positions
as designated by the council, all of which may not exceed 27 positions at the
council and the chair;
(9)
the executive director, associate executive director, and not to exceed nine
positions of the Minnesota Office of Higher Education in the unclassified
service, as designated by the Minnesota Office of Higher Education before
January 1, 1992, or subsequently redesignated with the approval of the board of
directors of the Minnesota State Retirement System, unless the person has
elected coverage by the individual retirement account plan under chapter 354B;
(10)
the clerk of the appellate courts appointed under article VI, section 2, of the
Constitution of the state of Minnesota, the state court administrator and
judicial district administrators;
(11)
the chief executive officers of correctional facilities operated by the
Department of Corrections and of hospitals and nursing homes operated by the
Department of Human Services;
(12)
an employee whose principal employment is at the state ceremonial house;
(13)
an employee of the Agricultural Utilization Research Institute;
(14)
an employee of the State Lottery who is covered by the managerial plan
established under section 43A.18, subdivision 3;
(15) a
judge who has exceeded the service credit limit in section 490.121, subdivision
22;
(16)
an employee of Minnesota Technology Incorporated;
(17) a
person employed by the Minnesota State Colleges and Universities as faculty or
in an eligible unclassified administrative position as defined in section
354B.20, subdivision 6, who was employed by the former state university or the
former community college system before May 1, 1995, and elected unclassified
program coverage prior to May 1, 1995; and
(18) a
person employed by the Minnesota State Colleges and Universities who was
employed in state service before July 1, 1995, who subsequently is employed in
an eligible unclassified administrative position as defined in section 354B.20,
subdivision 6, and who elects coverage by the unclassified program.
EFFECTIVE DATE. This section is effective January 6, 2009.
Sec.
2. Minnesota Statutes 2007 Supplement,
section 352D.02, subdivision 3, is amended to read:
Subd.
3. Transfer
to general plan. (a) An employee,
other than a judge as specified in subdivision 1, paragraph (c), clause (15),
credited with employee shares in the unclassified program, after
acquiring credit for ten years of allowable service and not later than one
month following the termination of covered employment, may elect to terminate
participation in the unclassified program and be covered by the general plan by
filing a written election with the executive director. The executive director shall then redeem the
employee's total shares and shall credit to the employee's account in the
general plan the amount of contributions that would have been so credited had
the employee been covered by the general plan during the employee's entire
covered employment or elective state
service. The balance of money so redeemed and not credited to the
employee's account shall be transferred to the general plan retirement fund,
except that (1) the employee contribution paid to the unclassified program must
be compared to (2) the employee contributions that would have been paid to the
general plan for the comparable period, if the individual had been covered by
that plan. If clause (1) is greater
than clause (2), the difference must be refunded to the employee as provided in
section 352.22. If clause (2) is
greater than clause (1), the difference must be paid by the employee within six
months of electing general plan coverage or before the effective date of the
annuity, whichever is sooner.
(b) An
election under paragraph (a) to transfer coverage to the general plan is
irrevocable during any period of covered employment.
EFFECTIVE DATE. This section is effective January 6, 2009.
ARTICLE
8
PERA
BENEFITS FOLLOWING PRIVATIZATIONS
Section
1. Minnesota Statutes 2007 Supplement,
section 353F.02, subdivision 4, is amended to read:
Subd.
4. Medical
facility. "Medical
facility" means:
(1)
Bridges Medical Services;
(2)
the City of Cannon Falls Hospital;
(3)
Clearwater County Memorial Hospital doing business as Clearwater Health Services
in Bagley;
(4)
the Dassel Lakeside Community Home;
(5)
the Fair Oaks Lodge, Wadena;
(6)
the Glencoe Area Health Center;
(7)
the Hutchinson Area Health Care;
(8)
the Kanabec Hospital;
(9)
the Lakefield Nursing Home;
(10)
the Lakeview Nursing Home in Gaylord;
(11)
the Luverne Public Hospital;
(12)
the Northfield Hospital;
(13)
the Oakland Park Nursing Home;
(14)
the RenVilla Nursing Home;
(15)
the Renville County Hospital in Olivia;
(16) the
Rice Memorial Hospital in Willmar, with respect to the Department of Radiology
and the Department of Radiation/Oncology;
(17)
the St.
Peter Community Healthcare Center; and
(17) (18) the
Waconia-Ridgeview Medical Center; and
(19)
the Worthington Regional Hospital.
Sec.
2. EFFECTIVE
DATE.
(a)
Minnesota Statutes, section 353F.02, subdivision 4, clause (16), is effective
the day after the governing body of the city of Willmar and its chief clerical
officer timely comply with Minnesota Statutes, section 645.021, subdivisions 2
and 3.
(b)
Minnesota Statutes, section 353F.02, subdivision 4, clause (19), is effective
the day after the governing body of the city of Worthington and its chief
clerical officer timely comply with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
ARTICLE
9
RETIREMENT
RELATED STATE AID PROGRAMS
Section
1. Minnesota Statutes 2006, section
354A.12, subdivision 3a, is amended to read:
Subd.
3a. Special direct state aid to first class city teachers retirement fund
associations. (a) In fiscal year
1998, The state shall pay $4,827,000 to the St. Paul Teachers Retirement
Fund Association, $17,954,000 to the Minneapolis Teachers Retirement Fund
Association, and $486,000 $346,000 to the Duluth Teachers Retirement
Fund Association. In each fiscal
year after fiscal year 2006, these payments to the first class city teachers
retirement fund associations must be, $2,827,000 for to
the St. Paul, $12,954,000 to the Teachers Retirement Fund Association
and, for the former Minneapolis Teachers Retirement Fund Association, and
$486,000 for Duluth $12,954,000 to the Teachers Retirement Association.
(b)
The direct state aids under this subdivision are payable October 1
annually. The commissioner of finance
shall pay the direct state aid. The
amount required under this subdivision is appropriated annually from the
general fund to the commissioner of finance.
EFFECTIVE DATE. (a) This section is effective July 1, 2009.
(b)
The aid paid to the Teachers Retirement Association under Minnesota Statutes
2006, section 354A.12, subdivision 3a, in fiscal year 2007 is ratified.
$346,000 that was payable under Minnesota Statutes 2006, section 354A.12,
subdivision 3a, in fiscal year 2008, but remains unpaid as of the date of
enactment, is payable to the Teachers Retirement Association.
Sec.
2. Minnesota Statutes 2007 Supplement,
section 354A.12, subdivision 3c, is amended to read:
Subd.
3c. Termination of supplemental contributions and direct matching and state
aid. (a) The supplemental
contributions payable to the Minneapolis Teachers Retirement Fund Association
by Special School District No. 1 and the city of Minneapolis under section
423A.02, subdivision 3, must continue to be paid to the Teachers
Retirement Association and must continue until the current assets of
the fund equal or exceed the actuarial accrued liability of the fund as
determined in the most recent actuarial report for the fund by the actuary
retained
under
section 356.214, or 2037, whichever occurs earlier.
The supplemental contributions payable to the St. Paul Teachers Retirement
Fund Association by Independent School District No. 625 under section 423A.02,
subdivision 3, or the direct state aids aid under subdivision 3a
to the St. Paul Teachers Retirement Fund Association terminate at the end of
the fiscal year in which the accrued liability funding ratio for that fund, as
determined in the most recent actuarial report for that fund by the actuary
retained under section 356.214, equals or exceeds the accrued liability funding
ratio for the Teachers Retirement Association, as determined in the most recent
actuarial report for the Teachers Retirement Association by the actuary
retained under section 356.214.
(b) If
the state direct matching, state supplemental, or state aid is terminated for a
first class city teachers retirement fund association under paragraph (a), it
may not again be received by that fund.
(c) If the St. Paul Teachers
Retirement Fund Association is funded at an amount equal to or greater than the
funding ratio applicable to the Teachers Retirement Association when the
provisions of paragraph (b) become effective, then any future state
aid previously distributed to that association must be immediately
transferred under subdivision 3a is payable to the Teachers
Retirement Association.
EFFECTIVE DATE. This section is effective the day following final enactment
and applies retroactively to direct state aid paid or payable during fiscal
years 2007 and 2008.
Sec.
3. Minnesota Statutes 2006, section
423A.02, subdivision 1b, is amended to read:
Subd.
1b. Additional amortization state aid.
(a) Annually, on October 1, the commissioner of revenue shall allocate
the additional amortization state aid transferred under section 69.021,
subdivision 11, to:
(1)
all police or salaried firefighters relief associations governed by and in full
compliance with the requirements of section 69.77, that had an unfunded
actuarial accrued liability in the actuarial valuation prepared under sections
356.215 and 356.216 as of the preceding December 31;
(2)
all local police or salaried firefighter consolidation accounts governed by
chapter 353A that are certified by the executive director of the public
employees retirement association as having for the current fiscal year an
additional municipal contribution amount under section 353A.09, subdivision 5,
paragraph (b), and that have implemented section 353A.083, subdivision 1, if
the effective date of the consolidation preceded May 24, 1993, and that have
implemented section 353A.083, subdivision 2, if the effective date of the consolidation
preceded June 1, 1995; and
(3)
the municipalities that are required to make an additional municipal
contribution under section 353.665, subdivision 8, for the duration of the
required additional contribution.
(b)
The commissioner shall allocate the state aid on the basis of the proportional
share of the relief association or consolidation account of the total unfunded
actuarial accrued liability of all recipient relief associations and
consolidation accounts as of December 31, 1993, for relief associations, and as
of June 30, 1994, for consolidation accounts.
(c)
Beginning October 1, 2000, and annually thereafter, the commissioner shall
allocate the state aid, including any state aid in excess of the limitation in
subdivision 4, on the following basis:
(1)
64.5 percent to the municipalities to which section 353.665, subdivision 8,
paragraph (b), or 353A.09, subdivision 5, paragraph (b), apply for distribution
in accordance with paragraph (b) and subject to the limitation in subdivision
4;
(2)
34.2 percent to the city of Minneapolis to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and
356.216 as of the preceding December 31 for the Minneapolis Police Relief
Association or the Minneapolis Fire Department Relief Association; and
(3)
1.3 percent to the city of Virginia to fund any unfunded actuarial accrued
liability in the actuarial valuation prepared under sections 356.215 and
356.216 as of the preceding December 31 for the Virginia Fire Department Relief
Association.
If
there is no unfunded actuarial accrued liability in both the Minneapolis Police
Relief Association and the Minneapolis Fire Department Relief Association as
disclosed in the most recent actuarial valuations for the relief associations
prepared under sections 356.215 and 356.216, the commissioner shall allocate
that 34.2 percent of the aid as follows:
49 percent to the Teachers Retirement Association, 21 percent to the St.
Paul Teachers Retirement Fund Association, and 30 percent as additional funding
to support minimum fire state aid for volunteer firefighters relief
associations. If there is no unfunded
actuarial accrued liability in the Virginia Fire Department Relief Association
as disclosed in the most recent actuarial valuation for the relief association
prepared under sections 356.215 and 356.216, the commissioner shall allocate
that 1.3 percent of the aid as follows:
49 percent to the Teachers Retirement Association, 21 percent to the St.
Paul Teachers Retirement Fund Association, and 30 percent as additional funding
to support minimum fire state aid for volunteer firefighters relief
associations. Upon the final payment
to municipalities required by section 353.665, subdivision 8, paragraph (b), or
353A.09, subdivision 5, paragraph (b), the commissioner shall allocate that
64.5 percent of the aid as follows: 20
percent to the St. Paul Teachers Retirement Fund Association, 20 percent to the
city of Minneapolis to fund any unfunded actuarial accrued liability in the
actuarial valuation proposed under sections 356.215 and 356.216 as of the
preceding December 31 for the Minneapolis Police Relief Association or the
Minneapolis Firefighters Relief Association, 20 percent for the city of Duluth
to pay for any costs associated with the police and firefighters pensions, and
40 percent as additional funding to support minimum fire state aid for
volunteer firefighters relief associations.
The allocation must be made by the commissioner at the same time and
under the same procedures as specified in subdivision 3. With respect to the St. Paul Teachers
Retirement Fund Association, annually, beginning on July 1, 2005, if the
applicable teacher's association five-year average time-weighted rate of
investment return does not equal or exceed the performance of a composite
portfolio assumed passively managed (indexed) invested ten percent in cash
equivalents, 60 percent in bonds and similar debt securities, and 30 percent in
domestic stock calculated using the formula under section 11A.04, clause (11),
the aid allocation to that retirement fund under this section ceases until the
five-year annual rate of investment return equals or exceeds the performance of
that composite portfolio.
(d)
The amounts required under this subdivision are annually appropriated to the
commissioner of revenue.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec.
4. REPEALER.
(a)
Minnesota Statutes 2006, section 354A.12, subdivision 3a, is repealed effective
the first day of the fiscal year next following the fiscal year in which
neither the Teachers Retirement Association nor the St. Paul Teachers
Retirement Fund Association has an unfunded actuarial accrued liability as
determined in the actuarial valuation prepared under Minnesota Statutes,
section 356.215, by the actuary retained under Minnesota Statutes, section
356.214.
(b)
Minnesota Statutes 2007 Supplement, section 354A.12, subdivisions 3b and 3c,
are repealed effective the first day of the fiscal year next following the
fiscal year in which neither the Teachers Retirement Association nor the St.
Paul Teachers Retirement Fund Association has an unfunded actuarial accrued
liability as determined in the actuarial valuation prepared under Minnesota
Statutes, section 356.215, by the actuary retained under Minnesota Statutes,
section 356.214.
ARTICLE
10
MNSCU-IRAP
AND RELATED CHANGES
Section
1. Minnesota Statutes 2006, section
354B.20, is amended by adding a subdivision to read:
Subd.
19. Unclaimed
plan account amounts. "Unclaimed
plan account amounts" means the accounts of any plan participant who has
terminated employment by the Minnesota State Colleges and Universities System
or who has died, or of the surviving spouse, beneficiary, or estate of the
participant if the plan administrator is unable to locate the applicable
recipient in accordance with Internal Revenue Service due diligence
requirements.
Sec.
2. Minnesota Statutes 2006, section
354B.25, subdivision 5, is amended to read:
Subd.
5. Individual
retirement account plan administrative expenses. (a) The reasonable and necessary administrative expenses of the
individual retirement account plan may be charged to plan participants by the
plan sponsor in the form of an annual fee, an asset-based fee, a percentage of
the contributions to the plan, or a combination thereof. This amount shall be offset by interest
earned on both the plan reserves and unclaimed funds account.
(b)
Any administrative expense charge that is not actually needed for the
administrative expenses of the individual retirement account plan must be
refunded to member accounts.
(c)
The Board of Trustees shall report annually, before October 1, to the advisory
committee created in subdivision 1a on administrative expenses of the
plan. The report must include a
detailed accounting of charges for administrative expenses collected from plan
participants and expenditure of the administrative expense charges. The administrative expense charges collected
from plan participants must be kept in a separate account from any other funds
under control of the Board of Trustees and may be used only for the necessary
and reasonable administrative expenses of the plan.
Sec.
3. Minnesota Statutes 2006, section
354B.25, is amended by adding a subdivision to read:
Subd.
6. Disposition
of abandoned public pension amounts.
(a) Any unclaimed plan account amounts are presumed to be abandoned,
but are not subject to the provisions of sections 345.31 to 345.60. If the account remains unclaimed after five
years following the date that the plan administrator first attempts to locate
the former member, surviving spouse, or other beneficiary, the unclaimed plan
account amount cancels and must be credited to the reserve account specified in
paragraph (b).
(b)
The board must establish a separate account to receive unclaimed plan account
amounts. A portion of this reserve
account and any investment earnings attributable to this reserve account are to
be used to offset the reasonable and necessary expenses of the individual
retirement account plan, including costs incurred in efforts to locate lost
participants, surviving spouses, or other beneficiaries.
(c)
If the unclaimed plan account amount exceeded $25 and the inactive member,
surviving spouse, or beneficiary, whichever is applicable, establishes a valid
claim to the forfeited account, the forfeited account is to be reestablished in
an amount equal to the amount originally forfeited. The board must ensure that the reserve account has sufficient
assets to cover any transfers needed to reestablish accounts.
Sec.
4. Minnesota Statutes 2007 Supplement,
section 354C.12, subdivision 4, is amended to read:
Subd.
4. Administrative
expenses. (a) The Board of Trustees
of the Minnesota State Colleges and Universities is authorized to pay the
necessary and reasonable administrative expenses of the supplemental retirement
plan and may bill participants to recover these expenses. The administrative fees or charges may be
charged to participants as an annual fee, an asset-based fee, a percentage of
contributions to the plan, or a contribution thereof. This amount shall be offset by interest earned on both the
plan reserves and unclaimed funds account.
(b)
Any recovered or assessed amounts that are not needed for the necessary and
reasonable administrative expenses of the plan must be refunded to member
accounts.
(c)
The Board of Trustees shall report annually, before October 1, to the
legislature on administrative expenses of the plan. The report must include a detailed accounting of charges for
administrative expenses collected from plan participants and expenditure of the
administrative expense charges. The
administrative expense charges collected from plan participants must be kept in
a separate account from any other funds under control of the Board of Trustees
and may be used only for the necessary and reasonable administrative expenses
of the plan.
Sec.
5. [354C.155]
UNCLAIMED PLAN ACCOUNT AMOUNTS.
Section
354B.25, subdivision 6, applies to the supplemental retirement plan.
Sec.
6. Minnesota Statutes 2006, section
354C.165, is amended to read:
354C.165 PROHIBITION ON LOANS OR
PRETERMINATION DISTRIBUTIONS.
(a) Except
as provided in paragraph (c), No participant may obtain a loan or any
distribution from the plan before the participant terminates the employment
that gave rise to plan coverage.
(b) No
amounts to the credit of the plan are assignable either in law or in equity, or
are subject to execution, levy, attachment, garnishment, or other legal
process, except as provided in section 518.58, 518.581, or 518A.53.
(c) MS
2002 [Expired]
(d)
Except for a participant in a phased retirement program that is part of an
approved collective bargaining agreement, no participant may obtain a
distribution from the plan at a time before the participant terminates the
employment that gave rise to the plan coverage.
Sec.
7. ACTUARIAL
IMPACT STUDY; MNSCU-TENURED FACULTY RETIREMENT PLAN COVERAGE CHANGE.
(a)
The Teachers Retirement Association shall have the actuary retained under Minnesota
Statutes, section 356.214, conduct a study of the likely actuarial impact on
the Teachers Retirement Association of potentially permitting current
tenure-track faculty members employed by the Minnesota State Colleges and
Universities System who have not yet attained tenure or its equivalent to elect
retroactive and prospective retirement coverage by the Teachers Retirement
Association within one year of attaining tenure or its equivalent, with the
retroactive coverage effected by a service credit purchase under Minnesota
Statutes, section 356.551.
(b)
The actuarial study must include an assessment of the likelihood that
tenure-track Minnesota State Colleges and Universities System faculty members
would elect retirement coverage by the Teachers Retirement Association that
underlies any election assumption used in the study based on the experience of
Minnesota State Colleges and Universities System faculty members employed
during the most recent ten years. The
Minnesota State Colleges and Universities System shall provide the Teachers
Retirement Association with the data on its faculty members necessary to
conduct the study.
(c)
The actuarial study must assess the actuarial accrued liability that could be
assumed by the Teachers Retirement Association from potential service credit
purchases by Minnesota State Colleges and Universities System faculty members
attaining tenure or its equivalent, the likely purchase payments related to
those potential Minnesota State Colleges and Universities System faculty member
service credit purchases, and the effect on the Teachers Retirement Association
normal cost rate of the potential prospective inclusion of Minnesota State
Colleges and Universities System faculty members upon attaining tenure.
(d)
The report required under this section must be filed with the executive
director of the Legislative Commission on Pensions and Retirement on or before
January 15, 2009.
EFFECTIVE DATE. This section is effective July 1, 2008.
ARTICLE
11
FINANCIAL
AND ACTUARIAL REPORTING
Section
1. Minnesota Statutes 2006, section
16A.055, subdivision 5, is amended to read:
Subd.
5. Retirement
fund reporting. (a) The
commissioner may not require a public retirement fund to use financial or
actuarial reporting practices or procedures different from those required by
section 356.20 or 356.215.
(b)
The commissioner may contract with the consulting actuary retained under
section 356.214 for the preparation of quadrennial projection valuations as
required under section 356.215, subdivisions 2 and 2a. The initial projection valuation under this
paragraph, if any, is due on May 1, 2003, and subsequent projection valuations
are due on May 1 each fourth year thereafter.
The commissioner of finance shall assess the applicable statewide and major
local retirement plan or plans the cost of the quadrennial projection
valuation.
Sec.
2. Minnesota Statutes 2006, section
356.20, subdivision 1, is amended to read:
Subdivision
1. Report
required. (a) The governing or
managing board or the chief administrative officials officer of
the each public pension and retirement funds plan enumerated
in subdivision 2 shall annually prepare and file a financial report following
the close of each fiscal year.
(b)
This requirement also applies to any plan or fund which may be a successor to
any organization so enumerated or to any newly formed retirement plan, fund or
association operating under the control or supervision of any public employee
group, governmental unit, or institution receiving a portion of its support
through legislative appropriations.
(c)
The report must be prepared under the supervision and at the direction of the
management of each fund plan and must be signed by the presiding
officer of the managing board of the fund plan and the chief administrative
official of the fund plan.
Sec.
3. Minnesota Statutes 2006, section
356.20, subdivision 2, is amended to read:
Subd.
2. Covered
public pension plans and funds.
This section applies to the following public pension plans:
(1)
the general state employees retirement plan of the Minnesota State Retirement
System;
(2)
the general employees retirement plan of the Public Employees Retirement
Association;
(3)
the Teachers Retirement Association;
(4)
the State Patrol retirement plan;
(5)
the St. Paul Teachers Retirement Fund Association;
(6)
the Duluth Teachers Retirement Fund Association;
(7)
the Minneapolis Employees Retirement Fund;
(8)
the University of Minnesota faculty retirement plan;
(9)
the University of Minnesota faculty supplemental retirement plan;
(10)
the judges retirement fund;
(11) a
police or firefighter's relief association specified or described in section
69.77, subdivision 1a, or;
(12)
a volunteer firefighter relief association governed by section 69.771, subdivision 1;
(12) (13) the public
employees police and fire plan of the Public Employees Retirement Association;
(13) (14) the
correctional state employees retirement plan of the Minnesota State Retirement
System; and
(14) (15) the local
government correctional service retirement plan of the Public Employees
Retirement Association.
Sec.
4. Minnesota Statutes 2006, section
356.20, subdivision 3, is amended to read:
Subd.
3. Filing
requirement. The financial report
is a public record. A copy of the
report or a synopsis of the report containing the information required by this
section must be distributed made available annually to each
member of the fund and to the governing body of each governmental subdivision
of the state which makes employers contributions thereto or in whose behalf
taxes are levied for the employers' contribution. A signed copy of the report must be delivered to the executive
director of the Legislative Commission on Pensions and Retirement and to the
Legislative Reference Library not later than six months after the close of each
fiscal year or one month following the completion and delivery to the
retirement fund of the actuarial valuation report of the fund by the actuary
retained under section 356.214, if applicable, whichever is later.
Sec.
5. Minnesota Statutes 2006, section
356.20, subdivision 4, is amended to read:
Subd.
4. Contents
of financial report. (a) The
financial report required by this section must contain financial statements and
disclosures that indicate the financial operations and position of the
retirement plan and fund. The report
must conform with generally accepted governmental accounting principles,
applied on a consistent basis. The
report must be audited.
(b)
The report
must include, as part of its exhibits or its footnotes, an actuarial disclosure
item based on the actuarial valuation calculations prepared by the actuary
retained under section 356.214 or by the actuary retained by the retirement
fund or plan, whichever applies, according to applicable actuarial requirements
enumerated in section 356.215, and specified in the most recent standards for
actuarial work adopted by the Legislative Commission on Pensions and
Retirement. The accrued actuarial
value of assets, the actuarial accrued liabilities, including
accrued reserves, and the unfunded actuarial accrued liability of the fund or
plan must be disclosed. The disclosure
item must contain a declaration by the actuary retained under section 356.214
or the actuary retained by the fund or plan,
whichever
applies, specifying that the required reserves for any retirement, disability,
or survivor benefits provided under a benefit formula are computed in
accordance with the entry age actuarial cost method and in accordance with the
most recent applicable standards for actuarial work adopted by the Legislative
Commission on Pensions and Retirement.
(b)
Assets of the fund or plan contained in the disclosure item must include the
following statement of the actuarial value of current assets as defined in
section 356.215, subdivision 1:
Value
at cost Value
at market
Cash, cash equivalents, and short-term securities ........... ...........
Accounts receivable ........... ...........
Accrued investment income ........... ...........
Fixed income investments ........... ...........
Equity investments other than real estate ........... ...........
Real estate investments ........... ...........
Equipment ........... ...........
Participation in the Minnesota postretirement investment ........... ...........
fund or the retirement benefit fund
Other ........... ...........
Total assets
Value at cost ...........
Value at market ...........
Actuarial value of
current assets ...........
(c) The unfunded actuarial accrued liability of the
fund or plan contained in the disclosure item must include the following
measures of unfunded actuarial accrued liability, using the actuarial value of
current assets:
(1) the unfunded actuarial accrued liability,
determined by subtracting the current assets and the present value of future
normal costs from the total current and expected future benefit obligations;
and
(2) the unfunded pension benefit obligation,
determined by subtracting the current assets from the actuarial present value
of credited projected benefits.
If the current assets of the fund or plan exceed the
actuarial accrued liabilities, the excess must be disclosed and indicated as a surplus.
(d) The pension benefit obligations schedule
included in the disclosure must contain the following information on the
benefit obligations:
(1) the pension benefit obligation, determined as
the actuarial present value of credited projected benefits on account of
service rendered to date, separately identified as follows:
(i) for annuitants,
retirement
annuities,
disability
benefits,
surviving
spouse and child benefits;
(ii) for former members without vested
rights;
(iii) for deferred annuitants' benefits,
including any augmentation;
(iv) for active employees,
accumulated
employee contributions, including allocated investment income,
employer-financed
benefits vested,
employer-financed
benefits nonvested,
total
pension benefit obligation; and
(2) if there are additional benefits not appropriately covered by the
foregoing items of benefit obligations, a separate identification of the
obligation.
(e)
(c) The report must contain an itemized exhibit describing the
administrative expenses of the plan, including, but not limited to, the
following items, classified on a consistent basis from year to year, and with
any further meaningful detail:
(1) personnel expenses;
(2) communication-related expenses;
(3) office building and maintenance expenses;
(4) professional services fees; and
(5) other expenses.
(f)
(d) The report must contain an itemized exhibit describing the
investment expenses of the plan, including, but not limited to, the following
items, classified on a consistent basis from year to year, and with any further
meaningful detail:
(1) internal investment-related expenses; and
(2) external investment-related expenses.
(g)
(e) Any additional statements or exhibits or more detailed or subdivided
itemization of a disclosure item that will enable the management of the fund
plan to portray a true interpretation of the fund's plan's financial
condition must be included in the additional statements or exhibits.
Sec. 6. Minnesota Statutes
2006, section 356.20, subdivision 4a, is amended to read:
Subd. 4a. Financial report for police or firefighters relief association. For any police or firefighter's relief
association referred to in subdivision 2, clause (11) or (12), a
financial report that is duly filed and meeting that meets the
requirements of section 69.051 must be is deemed to have met the
requirements of subdivision 4.
Sec. 7. Minnesota Statutes
2006, section 356.214, subdivision 1, is amended to read:
Subdivision 1. Joint Actuary retention. (a) The chief administrative officers of
the Minnesota State Retirement System, the Public Employees Retirement
Association, the Teachers Retirement Association, the Duluth Teachers
Retirement Fund Association, the Minneapolis Employees Retirement Fund, and the
St. Paul Teachers Retirement Fund Association, jointly, on behalf of the state,
its employees, its taxpayers, and its various public pension plans, governing
board or managing or administrative official of each public pension plan and
retirement fund or plan enumerated in paragraph (b) shall contract with an
established actuarial consulting firm to conduct annual actuarial valuations
and related services for the retirement plans named in paragraph (b). The principal from the actuarial consulting
firm on the contract must be an approved actuary under section 356.215,
subdivision 1, paragraph (c). Prior
to becoming effective, the contract under this section is subject to a review
and approval by the Legislative Commission on Pensions and Retirement.
(b) The contract for Actuarial services must include the
preparation of actuarial valuations and related actuarial work for the
following retirement plans:
(1) the teachers retirement plan, Teachers Retirement Association;
(2) the general state employees retirement plan, Minnesota State
Retirement System;
(3) the correctional employees retirement plan, Minnesota State
Retirement System;
(4) the State Patrol retirement plan, Minnesota State Retirement
System;
(5) the judges retirement plan, Minnesota State Retirement System;
(6) the Minneapolis employees retirement plan, Minneapolis Employees
Retirement Fund;
(7) the public employees retirement plan, Public Employees Retirement
Association;
(8) the public employees police and fire plan, Public Employees
Retirement Association;
(9) the Duluth teachers retirement plan, Duluth Teachers Retirement
Fund Association;
(10) the St. Paul teachers retirement plan, St. Paul Teachers
Retirement Fund Association;
(11) the legislators retirement plan, Minnesota State Retirement System;
(12) the elective state officers retirement plan, Minnesota State
Retirement System; and
(13) local government correctional service retirement plan, Public
Employees Retirement Association.
(c) The contract contracts must require completion of the
annual actuarial valuation calculations on a fiscal year basis, with the
contents of the actuarial valuation calculations as specified in section
356.215, and in conformity with the standards for actuarial work adopted by the
Legislative Commission on Pensions and Retirement.
The contract contracts must require completion of annual
experience data collection and processing and a quadrennial published
experience study for the plans listed in paragraph (b), clauses (1), (2), and
(7), as provided for in the standards for actuarial work adopted by the
commission. The experience data
collection, processing, and analysis must evaluate the following:
(1) individual salary progression;
(2) the rate of return on investments based on the current asset value;
(3) payroll growth;
(4) mortality;
(5) retirement age;
(6) withdrawal; and
(7) disablement.
The contract must include provisions for the preparation of cost
analyses by the jointly retained actuary for proposed legislation that include
changes in benefit provisions or funding policies prior to their consideration
by the Legislative Commission on Pensions and Retirement.
(d) The actuary retained by the joint retirement systems shall
annually prepare a report to the governing or managing board or
administrative official and the legislature, including a commentary on
the actuarial valuation calculations for the plans named in paragraph (b) and
summarizing the results of the actuarial valuation calculations. The actuary shall include with the report the
actuary's any recommendations to the legislature concerning
the appropriateness of the support rates to achieve proper funding of the
retirement plans by the required funding dates. The actuary shall, as part of the quadrennial experience study,
include recommendations to the legislature on the appropriateness of the
actuarial valuation assumptions required for evaluation in the study.
(e) If the actuarial gain and loss analysis in the actuarial valuation
calculations indicates a persistent pattern of sizable gains or losses, as
directed by the joint retirement systems or as requested by the chair of the
Legislative Commission on Pensions and Retirement, the governing or
managing board or administrative official shall direct the actuary shall
to prepare a special experience study for a plan listed in paragraph (b),
clause (3), (4), (5), (6), (8), (9), (10), (11), (12), or (13), in the manner
provided for in the standards for actuarial work adopted by the commission.
(f) The term of the contract between the joint retirement systems and
the actuary retained may not exceed five years. The joint retirement system administrative officers shall
establish procedures for the consideration and selection of contract bidders
and the requirements for the contents of an actuarial services contract under
this section. The procedures and
requirements must be submitted to the Legislative Commission on Pensions and
Retirement for review and comment prior to final approval by the joint administrators. The contract is subject to the procurement
procedures under chapter 16C. The
consideration of bids and the selection of a consulting actuarial firm by the
chief administrative officers must occur at a meeting that is open to the
public and reasonable timely public notice of the date and the time of the
meeting and its subject matter must be given.
(g) The actuarial services contract may not limit the ability of the
Minnesota legislature and its standing committees and commissions to rely on
the actuarial results of the work prepared under the contract.
(h) The joint retirement systems shall designate one of the retirement
system executive directors as the actuarial services contract manager.
Sec. 8. Minnesota Statutes
2006, section 356.214, subdivision 3, is amended to read:
Subd. 3. Reporting to commission. A
copy of the actuarial valuations, and experience studies, and
actuarial cost analyses prepared by the actuary retained by the joint
retirement systems under the a contract provided for in this
section must be filed with the executive director of the Legislative Commission
on Pensions and Retirement at the same time that the document is transmitted
to the actuarial services contract manager or to any other document recipient.
Sec. 9. Minnesota Statutes
2006, section 356.214, is amended by adding a subdivision to read:
Subd. 4. Commission to contract with auditing actuary. (a) The Legislative Commission on
Pensions and Retirement may contract with an established actuarial consulting
firm to audit or review the actuarial valuations, experience studies, and
actuarial cost analyses prepared by the actuary retained by the governing or
managing boards, or administrative officials of each of the plans or funds
listed in subdivision 1, paragraph (b).
The principal representative from the actuarial consulting firm so
engaged must be an approved actuary under section 356.215, subdivision 1,
paragraph (c).
(b) Any actuarial consulting firm retained under paragraph (a) will,
according to a schedule determined under an agreement with the Legislative
Commission on Pensions and Retirement, audit the valuation reports submitted by
the actuary retained by each governing or managing board or administrative
official, and provide an assessment of the reasonableness, reliability, and
areas of concern or potential improvement in the specific reports reviewed, the
procedures utilized by any particular reporting actuary, or general
modifications to standards, procedures, or assumptions that the commission may
wish to consider. Actuarial firms retained
by the retirement funds must cooperate fully and make available any data or
other materials necessary for the commission-retained actuary to conduct an
adequate review and to render advice to the commission.
Sec. 10. Minnesota Statutes
2006, section 356.215, subdivision 1, is amended to read:
Subdivision 1. Definitions. (a) For the purposes of sections 3.85 and 356.20 to 356.23, each
of the terms in the following paragraphs has the meaning given.
(b) "Actuarial valuation" means a set of calculations
prepared by the an actuary retained under section 356.214 if so
required under section 3.85, or otherwise, by an approved actuary, to determine
the normal cost and the accrued actuarial liabilities of a benefit plan,
according to the entry age actuarial cost method and based upon stated
assumptions including, but not limited to rates of interest, mortality, salary
increase, disability, withdrawal, and retirement and to determine the payment
necessary to amortize over a stated period any unfunded accrued actuarial
liability disclosed as a result of the actuarial valuation of the benefit plan.
(c) "Approved actuary" means a person who is regularly
engaged in the business of providing actuarial services and who has at least
15 years of service to major public employee pension or retirement funds or who
is a fellow in the Society of Actuaries.
(d) "Entry age actuarial cost method" means an actuarial cost
method under which the actuarial present value of the projected benefits of
each individual currently covered by the benefit plan and included in the
actuarial valuation is allocated on a level basis over the service of the
individual, if the benefit plan is governed by section 69.773, or over the
earnings of the individual, if the benefit plan is governed by any other law,
between the entry age and the assumed exit age, with the portion of the
actuarial present value which is allocated to the valuation year to be the
normal cost and the portion of the actuarial present value not provided for at
the valuation date by the actuarial present value of future normal costs to be
the actuarial accrued liability, with aggregation in the calculation process to
be the sum of the calculated result for each covered individual and with
recognition given to any different benefit formulas which may apply to various
periods of service.
(e) "Experience study" means a report providing experience
data and an actuarial analysis of the adequacy of the actuarial assumptions on
which actuarial valuations are based.
(f) "Current "Actuarial value of assets"
means:
(1) for the July 1, 2001, actuarial valuation, the market value of all
assets as of June 30, 2001, reduced by:
(i) 30 percent of the difference between the market value of all assets
as of June 30, 1999, and the actuarial value of assets used in the July 1,
1999, actuarial valuation;
(ii) 60 percent of the difference between the actual net change in the
market value of assets between June 30, 1999, and June 30, 2000, and the
computed increase in the market value of assets between June 30, 1999, and June
30, 2000, if the assets had increased at the percentage preretirement interest
rate assumption used in the July 1, 1999, actuarial valuation; and
(iii) 80 percent of the difference between the actual net change in the
market value of assets between June 30, 2000, and June 30, 2001, and the
computed increase in the market value of assets between June 30, 2000, and June
30, 2001, if the assets had increased at the percentage preretirement interest
rate assumption used in the July 1, 2000, actuarial valuation;
(2) for the July 1, 2002, actuarial valuation, the market value of all
assets as of June 30, 2002, reduced by:
(i) ten percent of the difference between the market value of all
assets as of June 30, 1999, and the actuarial value of assets used in the July
1, 1999, actuarial valuation;
(ii) 40 percent of the difference between the actual net change in the
market value of assets between June 30, 1999, and June 30, 2000, and the
computed increase in the market value of assets between June 30, 1999, and June
30, 2000, if the assets had increased at the percentage preretirement interest
rate assumption used in the July 1, 1999, actuarial valuation;
(iii) 60 percent of the difference between the actual net change in the
market value of assets between June 30, 2000, and June 30, 2001, and the
computed increase in the market value of assets between June 30, 2000, and June
30, 2001, if the assets had increased at the percentage preretirement interest
rate assumption used in the July 1, 2000, actuarial valuation; and
(iv) 80 percent of the difference between the actual net change in the
market value of assets between June 30, 2001, and June 30, 2002, and the
computed increase in the market value of assets between June 30, 2001, and June
30, 2002, if the assets had increased at the percentage preretirement interest
rate assumption used in the July 1, 2001, actuarial valuation; or
(3) for any actuarial valuation after July 1, 2002, the market value of all
assets as of the preceding June 30, reduced by:
(i)
(1) 20 percent of the difference between the actual net change in the
market value of assets between the June 30 that occurred three years earlier
and the June 30 that occurred four years earlier and the computed increase in
the market value of assets over that fiscal year period if the assets had
increased at the percentage preretirement interest rate assumption used in the
actuarial valuation for the July 1 that occurred four years earlier;
(ii)
(2) 40 percent of the difference between the actual net change in the
market value of assets between the June 30 that occurred two years earlier and
the June 30 that occurred three years earlier and the computed increase in the
market value of assets over that fiscal year period if the assets had increased
at the percentage preretirement interest rate assumption used in the actuarial
valuation for the July 1 that occurred three years earlier;
(iii)
(3) 60 percent of the difference between the actual net change in the
market value of assets between the June 30 that occurred one year earlier and
the June 30 that occurred two years earlier and the computed increase in the
market value of assets over that fiscal year period if the assets had increased
at the percentage preretirement interest rate assumption used in the actuarial
valuation for the July 1 that occurred two years earlier; and
(iv)
(4) 80 percent of the difference between the actual net change in the
market value of assets between the immediately prior June 30 and the June 30
that occurred one year earlier and the computed increase in the market value of
assets over that fiscal year period if the assets had increased at the
percentage preretirement interest rate assumption used in the actuarial
valuation for the July 1 that occurred one year earlier.
(g) "Unfunded actuarial accrued liability" means the total
current and expected future benefit obligations, reduced by the sum of current
the actuarial value of assets and the present value of future normal
costs.
(h) "Pension benefit obligation" means the actuarial present
value of credited projected benefits, determined as the actuarial present value
of benefits estimated to be payable in the future as a result of employee
service attributing an equal benefit amount, including the effect of projected
salary increases and any step rate benefit accrual rate differences, to each
year of credited and expected future employee service.
Sec. 11. Minnesota Statutes
2006, section 356.215, subdivision 2, is amended to read:
Subd. 2. Requirements. (a) It is the
policy of the legislature that it is necessary and appropriate to determine
annually the financial status of tax supported retirement and pension plans for
public employees. To achieve this goal:,
(1)
the actuary retained under section 356.214 shall prepare annual actuarial
valuations of the retirement plans enumerated in section 356.214, subdivision
1, paragraph (b), and quadrennial experience studies of the retirement plans
enumerated in section 356.214, subdivision 1, paragraph (b), clauses (1), (2),
and (7); and.
(2) the commissioner of finance may have prepared by the actuary
retained by the commission, two years after each set of quadrennial experience
studies, quadrennial projection valuations of at least one of the retirement plans
enumerated in section 6, subdivision 1, paragraph (b), for which the
commissioner determines that the analysis may be beneficial.
(b) The governing or managing board or administrative officials of each
public pension and retirement fund or plan enumerated in section 356.20,
subdivision 2, clauses (9), (10) (11), and (12), shall have
prepared by an approved actuary annual actuarial valuations of their respective
funds as provided in this section. This
requirement also applies to any fund or plan that is the successor to
any organization enumerated in section 356.20, subdivision 2, or to the
governing or managing board or administrative officials of any newly formed
retirement fund, plan, or association operating under the control or
supervision of any public employee group, governmental unit, or institution
receiving a portion of its support through legislative appropriations, and any
local police or fire fund relief association to which section
356.216 applies.
Sec. 12. Minnesota Statutes
2006, section 356.215, subdivision 3, is amended to read:
Subd. 3. Reports. (a) The actuarial
valuations required annually must be made as of the beginning of each fiscal
year.
(b) Two copies of the completed valuation must be delivered to
the executive director of the Legislative Commission on Pensions and
Retirement, to the commissioner of finance, and to the Legislative
Reference Library, not later than the first day of the sixth month occurring
after the end of the previous fiscal year.
(c) Two copies of a quadrennial experience study must be filed with the
executive director of the Legislative Commission on Pensions and Retirement,
with the commissioner of finance, and with the Legislative Reference Library,
not later than the first day of the 11th month occurring after the end of the
last fiscal year of the four-year period which the experience study covers.
(d) For actuarial valuations and experience studies prepared at the
direction of the Legislative Commission on Pensions and Retirement, two copies
of the document must be delivered to the governing or managing board or
administrative officials of the applicable public pension and retirement fund
or plan.
Sec. 13. Minnesota Statutes
2006, section 356.215, subdivision 8, is amended to read:
Subd. 8. Interest and salary assumptions.
(a) The actuarial valuation must use the applicable following
preretirement interest assumption and the applicable following postretirement
interest assumption:
preretirement postretirement
interest
rate interest
rate
plan assumption assumption
general state employees retirement plan 8.5% 6.0%
correctional state employees retirement plan 8.5 6.0
State Patrol retirement plan 8.5 6.0
legislators retirement plan 8.5 6.0
elective state officers retirement plan 8.5 6.0
judges retirement plan 8.5 6.0
general public employees retirement plan 8.5 6.0
public employees police and fire retirement plan 8.5 6.0
local government correctional service retirement plan 8.5 6.0
teachers retirement plan 8.5 6.0
Minneapolis employees retirement plan 6.0 5.0
Duluth teachers retirement plan 8.5 8.5
St. Paul teachers retirement plan 8.5 8.5
Minneapolis Police Relief Association 6.0 6.0
Fairmont Police Relief Association 5.0 5.0
Minneapolis Fire Department Relief Association 6.0 6.0
Virginia Fire Department Relief Association 5.0 5.0
Bloomington Fire Department Relief Association 6.0 6.0
local monthly benefit volunteer firefighters relief associations 5.0 5.0
(b) Before July 1, 2010, the actuarial valuation must use the
applicable following single rate future salary increase assumption, the
applicable following modified single rate future salary increase assumption, or
the applicable following graded rate future salary increase assumption:
(1) single rate future
salary increase assumption
future
salary
plan increase
assumption
legislators
retirement plan 5.0%
elective
state officers retirement plan 5.0
judges
retirement plan 5.0
4.0
Minneapolis
Police Relief Association 4.0
Fairmont
Police Relief Association 3.5
Minneapolis
Fire Department Relief Association 4.0
Virginia
Fire Department Relief Association 3.5
Bloomington
Fire Department Relief Association 4.0
(2) modified single rate future salary
increase assumption
future
salary
plan increase
assumption
Minneapolis employees retirement plan the prior
calendar year amount increased first by 1.0198 percent to prior fiscal year
date and then increased by 4.0 percent annually for each future year
(3) select and ultimate future salary
increase assumption or graded rate future salary increase assumption
future
salary
plan increase
assumption
general
state employees retirement plan select
calculation and assumption A
correctional
state employees retirement plan assumption
G H
State
Patrol retirement plan assumption
G
general
public employees retirement plan select
calculation and assumption B
public
employees police and fire fund retirement plan assumption
C
local
government correctional service retirement plan assumption
G
teachers
retirement plan assumption
D
Duluth
teachers retirement plan assumption
E
St.
Paul teachers retirement plan assumption
F
The select calculation is: during the ten-year designated select period, a
designated percent percentage rate is multiplied by the result of
ten the designated integer minus T, where T is the number of
completed years of service, and is added to the applicable future salary
increase assumption. The designated
select period is five years and the designated integer is five for the general
state employees retirement plan and the general public employees retirement
plan. The designated select period is
ten years and the designated integer is ten for all other retirement plans
covered by this clause. The
designated percent percentage rate is: (1) 0.2 percent for the correctional
state employees retirement plan, the State Patrol retirement plan, the public
employees police and fire plan, and the local government correctional service
plan; and 0.3 (2) 0.6 percent for the general state employees
retirement plan, and the general public employees retirement plan,;
and (3) 0.3 percent for the teachers retirement plan, the Duluth Teachers
Retirement Fund Association, and the St. Paul Teachers Retirement Fund
Association. The select calculation
for the Duluth Teachers Retirement Fund Association is 8.00 percent per year
for service years one through seven, 7.25 percent per year for service years
seven and eight, and 6.50 percent per year for service years eight and nine.
The ultimate future salary increase assumption is:
age A B C D E F G
16 6.95% 6.95% 11.50% 8.20% 8.00% 6.90% 7.7500%
17 6.90 6.90 11.50 8.15 8.00 6.90 7.7500
18 6.85 6.85 11.50 8.10 8.00 6.90 7.7500
19 6.80 6.80 11.50 8.05 8.00 6.90 7.7500
20 6.75 6.40 11.50 6.00 6.90 6.90 7.7500
21 6.75 6.40 11.50 6.00 6.90 6.90 7.1454
22 6.75 6.40 11.00 6.00 6.90 6.90 7.0725
23 6.75 6.40 10.50 6.00 6.85 6.85 7.0544
24 6.75 6.40 10.00 6.00 6.80 6.80 7.0363
25 6.75 6.40 9.50 6.00 6.75 6.75 7.0000
26 6.75 6.36 9.20 6.00 6.70 6.70 7.0000
27 6.75 6.32 8.90 6.00 6.65 6.65 7.0000
28 6.75 6.28 8.60 6.00 6.60 6.60 7.0000
29 6.75 6.24 8.30 6.00 6.55 6.55 7.0000
30 6.75 6.20 8.00 6.00 6.50 6.50 7.0000
31 6.75 6.16 7.80 6.00 6.45 6.45 7.0000
32 6.75 6.12 7.60 6.00 6.40 6.40 7.0000
33 6.75 6.08 7.40 6.00 6.35 6.35 7.0000
34 6.75 6.04 7.20 6.00 6.30 6.30 7.0000
35 6.75 6.00 7.00 6.00 6.25 6.25 7.0000
36 6.75 5.96 6.80 6.00 6.20 6.20 6.9019
37 6.75 5.92 6.60 6.00 6.15 6.15 6.8074
38 6.75 5.88 6.40 5.90 6.10 6.10 6.7125
39 6.75 5.84 6.20 5.80 6.05 6.05 6.6054
40 6.75 5.80 6.00 5.70 6.00 6.00 6.5000
41 6.75 5.76 5.90 5.60 5.90 5.95 6.3540
42 6.75 5.72 5.80 5.50 5.80 5.90 6.2087
43 6.65 5.68 5.70 5.40 5.70 5.85 6.0622
44 6.55 5.64 5.60 5.30 5.60 5.80 5.9048
45 6.45 5.60 5.50 5.20 5.50 5.75 5.7500
46 6.35 5.56 5.45 5.10 5.40 5.70 5.6940
47 6.25 5.52 5.40 5.00 5.30 5.65 5.6375
48 6.15 5.48 5.35 5.00 5.20 5.60 5.5822
49 6.05 5.44 5.30 5.00 5.10 5.55 5.5404
50 5.95 5.40 5.25 5.00 5.00 5.50 5.5000
51 5.85 5.36 5.25 5.00 5.00 5.45 5.4384
52 5.75 5.32 5.25 5.00 5.00 5.40 5.3776
53 5.65 5.28 5.25 5.00 5.00 5.35 5.3167
54 5.55 5.24 5.25 5.00 5.00 5.30 5.2826
55 5.45 5.20 5.25 5.00 5.00 5.25 5.2500
56 5.35 5.16 5.25 5.00 5.00 5.20 5.2500
57 5.25 5.12 5.25 5.00 5.00 5.15 5.2500
58 5.25 5.08 5.25 5.10 5.00 5.10 5.2500
59 5.25 5.04 5.25 5.20 5.00 5.05 5.2500
60 5.25 5.00 5.25 5.30 5.00 5.00 5.2500
61 5.25 5.00 5.25 5.40 5.00 5.00 5.2500
62 5.25 5.00 5.25 5.50 5.00 5.00 5.2500
63 5.25 5.00 5.25 5.60 5.00 5.00 5.2500
64 5.25 5.00 5.25 5.70 5.00 5.00 5.2500
65 5.25 5.00 5.25 5.70 5.00 5.00 5.2500
66 5.25 5.00 5.25 5.70 5.00 5.00 5.2500
67 5.25 5.00 5.25 5.70 5.00 5.00 5.2500
68 5.25 5.00 5.25 5.70 5.00 5.00 5.2500
69 5.25 5.00 5.25 5.70 5.00 5.00 5.2500
70 5.25 5.00 5.25 5.70 5.00 5.00 5.2500
71 5.25 5.00 5.70
age A B C D E F G H
16 5.95% 5.95% 11.00% 7.70% 8.00% 6.90% 7.7500% 7.2500%
17 5.90 5.90 11.00 7.65 8.00 6.90 7.7500 7.2500
18 5.85 5.85 11.00 7.60 8.00 6.90 7.7500 7.2500
19 5.80 5.80 11.00 7.55 8.00 6.90 7.7500 7.2500
20 5.75 5.40 11.00 5.50 6.90 6.90 7.7500 7.2500
21 5.75 5.40 11.00 5.50 6.90 6.90 7.1454 6.6454
22 5.75 5.40 10.50 5.50 6.90 6.90 7.0725 6.5725
23 5.75 5.40 10.00 5.50 6.85 6.85 7.0544 6.5544
24 5.75 5.40 9.50 5.50 6.80 6.80 7.0363 6.5363
25 5.75 5.40 9.00 5.50 6.75 6.75 7.0000 6.5000
26 5.75 5.36 8.70 5.50 6.70 6.70 7.0000 6.5000
27 5.75 5.32 8.40 5.50 6.65 6.65 7.0000 6.5000
28 5.75 5.28 8.10 5.50 6.60 6.60 7.0000 6.5000
29 5.75 5.24 7.80 5.50 6.55 6.55 7.0000 6.5000
30 5.75 5.20 7.50 5.50 6.50 6.50 7.0000 6.5000
31 5.75 5.16 7.30 5.50 6.45 6.45 7.0000 6.5000
32 5.75 5.12 7.10 5.50 6.40 6.40 7.0000 6.5000
33 5.75 5.08 6.90 5.50 6.35 6.35 7.0000 6.5000
34 5.75 5.04 6.70 5.50 6.30 6.30 7.0000 6.5000
35 5.75 5.00 6.50 5.50 6.25 6.25 7.0000 6.5000
36 5.75 4.96 6.30 5.50 6.20 6.20 6.9019 6.4019
37 5.75 4.92 6.10 5.50 6.15 6.15 6.8074 6.3074
38 5.75 4.88 5.90 5.40 6.10 6.10 6.7125 6.2125
39 5.75 4.84 5.70 5.30 6.05 6.05 6.6054 6.1054
40 5.75 4.80 5.50 5.20 6.00 6.00 6.5000 6.0000
41 5.75 4.76 5.40 5.10 5.90 5.95 6.3540 5.8540
42 5.75 4.72 5.30 5.00 5.80 5.90 6.2087 5.7087
43 5.65 4.68 5.20 4.90 5.70 5.85 6.0622 5.5622
44 5.55 4.64 5.10 4.80 5.60 5.80 5.9048 5.4078
45 5.45 4.60 5.00 4.70 5.50 5.75 5.7500 5.2500
46 5.35 4.56 4.95 4.60 5.40 5.70 5.6940 5.1940
47 5.25 4.52 4.90 4.50 5.30 5.65 5.6375 5.1375
48 5.15 4.48 4.85 4.50 5.20 5.60 5.5822 5.0822
49 5.05 4.44 4.80 4.50 5.10 5.55 5.5404 5.0404
50 4.95 4.40 4.75 4.50 5.00 5.50 5.5000 5.0000
51 4.85 4.36 4.75 4.50 4.90 5.45 5.4384 4.9384
52 4.75 4.32 4.75 4.50 4.80 5.40 5.3776 4.8776
53 4.65 4.28 4.75 4.50 4.70 5.35 5.3167 4.8167
54 4.55 4.24 4.75 4.50 4.60 5.30 5.2826 4.7826
55 4.45 4.20 4.75 4.50 4.50 5.25 5.2500 4.7500
56 4.35 4.16 4.75 4.50 4.40 5.20 5.2500 4.7500
57 4.25 4.12 4.75 4.50 4.30 5.15 5.2500 4.7500
58 4.25 4.08 4.75 4.60 4.20 5.10 5.2500 4.7500
59 4.25 4.04 4.75 4.70 4.10 5.05 5.2500 4.7500
60 4.25 4.00 4.75 4.80 4.00 5.00 5.2500 4.7500
61 4.25 4.00 4.75 4.90 3.90 5.00 5.2500 4.7500
62 4.25 4.00 4.75 5.00 3.80 5.00 5.2500 4.7500
63 4.25 4.00 4.75 5.10 3.70 5.00 5.2500 4.7500
64 4.25 4.00 4.75 5.20 3.60 5.00 5.2500 4.7500
65 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500
66 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500
67 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500
68 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500
69 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500
70 4.25 4.00 4.75 5.20 3.50 5.00 5.2500 4.7500
71 4.25 4.00 5.20
(c) Before July 2, 2010, the
actuarial valuation must use the applicable following payroll growth assumption
for calculating the amortization requirement for the unfunded actuarial accrued
liability where the amortization retirement is calculated as a level percentage
of an increasing payroll:
payroll
growth
plan assumption
general
state employees retirement plan 5.00
4.50%
correctional
state employees retirement plan 5.00
4.50
State
Patrol retirement plan 5.00
4.50
legislators
retirement plan 5.00
4.50
elective
state officers retirement plan 5.00
judges
retirement plan 5.00
4.00
general
public employees retirement plan 6.00
4.50
public
employees police and fire retirement plan 6.00
4.50
local
government correctional service retirement plan 6.00
4.50
teachers
retirement plan 5.00
4.50
Duluth
teachers retirement plan 5.00
4.50
St.
Paul teachers retirement plan 5.00
(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and
(c) continue to apply, unless a different salary assumption or a different
payroll increase assumption:
(1) has been proposed by the governing board of the applicable
retirement plan;
(2) is accompanied by the concurring recommendation of the actuary
retained under section 356.214, subdivision 1, if applicable, or by the
approved actuary preparing the most recent actuarial valuation report if
section 356.214 does not apply; and
(3) has been approved or deemed approved under subdivision 18.
Sec. 14. Minnesota Statutes
2006, section 356.215, subdivision 11, is amended to read:
Subd. 11. Amortization contributions.
(a) In addition to the exhibit indicating the level normal cost, the
actuarial valuation of the retirement plan must contain an exhibit for
financial reporting purposes indicating the additional annual contribution
sufficient to amortize the unfunded actuarial accrued liability and must
contain an exhibit for contribution determination purposes indicating the
additional contribution sufficient to amortize the unfunded actuarial accrued
liability. For funds governed by
chapters 3A, 352, 352B, 352C, 353, 354, 354A, and 490 the retirement
plans listed in subdivision 8, paragraph (c), the additional contribution
must be calculated on a
level percentage of covered payroll basis by the established date for
full funding in effect when the valuation is prepared. For funds governed by chapter 3A, sections
352.90 through 352.951, chapters 352B, 352C, sections 353.63 through 353.68,
and chapters 353C, 354A, and 490, the level percent additional contribution
must be calculated, assuming annual payroll growth of 6.5
percent. For funds governed by sections
352.01 through 352.86 and chapter 354, the level percent additional
contribution must be calculated assuming an annual payroll growth of five
percent. For the fund governed by
sections 353.01 through 353.46, the level percent additional contribution must
be calculated assuming an annual payroll growth of six percent at the
applicable percentage rate set forth in subdivision 8, paragraph (c). For all other funds retirement
plans, the additional annual contribution must be calculated on a level
annual dollar amount basis.
(b) For any fund retirement plan other than the
Minneapolis Employees Retirement Fund and, the general
employees retirement plan of the Public Employees Retirement Association general
plan, and the St. Paul Teachers Retirement Fund Association, if
there has not been a change in the actuarial assumptions used for calculating
the actuarial accrued liability of the fund, a change in the benefit plan
governing annuities and benefits payable from the fund, a change in the
actuarial cost method used in calculating the actuarial accrued liability of
all or a portion of the fund, or a combination of the three, which change or
changes by itself or by themselves without inclusion of any other items of
increase or decrease produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding is the first
actuarial valuation date occurring after June 1, 2020.
(c) For any fund or retirement plan other than the
Minneapolis Employees Retirement Fund and the general employees retirement
plan of the Public Employees Retirement Association general plan, if
there has been a change in any or all of the actuarial assumptions used for
calculating the actuarial accrued liability of the fund, a change in the
benefit plan governing annuities and benefits payable from the fund, a change
in the actuarial cost method used in calculating the actuarial accrued
liability of all or a portion of the fund, or a combination of the three, and
the change or changes, by itself or by themselves and without inclusion of any
other items of increase or decrease, produce a net increase in the unfunded
actuarial accrued liability in the fund, the established date for full funding
must be determined using the following procedure:
(i) the unfunded actuarial accrued liability of the fund must be
determined in accordance with the plan provisions governing annuities and
retirement benefits and the actuarial assumptions in effect before an
applicable change;
(ii) the level annual dollar contribution or level percentage,
whichever is applicable, needed to amortize the unfunded actuarial accrued
liability amount determined under item (i) by the established date for full
funding in effect before the change must be calculated using the interest
assumption specified in subdivision 8 in effect before the change;
(iii) the unfunded actuarial accrued liability of the fund must be
determined in accordance with any new plan provisions governing annuities and
benefits payable from the fund and any new actuarial assumptions and the
remaining plan provisions governing annuities and benefits payable from the
fund and actuarial assumptions in effect before the change;
(iv) the level annual dollar contribution or level percentage,
whichever is applicable, needed to amortize the difference between the unfunded
actuarial accrued liability amount calculated under item (i) and the unfunded
actuarial accrued liability amount calculated under item (iii) over a period of
30 years from the end of the plan year in which the applicable change is
effective must be calculated using the applicable interest assumption specified
in subdivision 8 in effect after any applicable change;
(v) the level annual dollar or level percentage amortization
contribution under item (iv) must be added to the level annual dollar
amortization contribution or level percentage calculated under item (ii);
(vi) the period in which the unfunded actuarial accrued liability
amount determined in item (iii) is amortized by the total level annual dollar
or level percentage amortization contribution computed under item (v) must be
calculated using the interest assumption specified in subdivision 8 in effect
after any applicable change, rounded to the nearest integral number of years,
but not to exceed 30 years from the end of the plan year in which the determination
of the established date for full funding using the procedure set forth in this
clause is made and not to be less than the period of years beginning in the
plan year in which the determination of the established date for full funding
using the procedure set forth in this clause is made and ending by the date for
full funding in effect before the change; and
(vii) the period determined under item (vi) must be added to the date
as of which the actuarial valuation was prepared and the date obtained is the
new established date for full funding.
(d) For the Minneapolis Employees Retirement Fund, the established date
for full funding is June 30, 2020.
(e) For the general employees retirement plan of the Public Employees
Retirement Association, the established date for full funding is June 30, 2031.
(f) For the Teachers Retirement Association, the established date for
full funding is June 30, 2037.
(g) For the correctional state employees retirement plan of the
Minnesota State Retirement System, the established date for full funding is
June 30, 2038.
(h) For the judges retirement plan, the established date for full
funding is June 30, 2038.
(i) For the public employees police and fire retirement plan, the
established date for full funding is June 30, 2038.
(j) For the St. Paul Teachers Retirement Fund Association, the
established date for full funding is June 30 of the 25th year from the
valuation date. In addition to other
requirements of this chapter, the annual actuarial valuation shall contain an
exhibit indicating the funded ratio and the deficiency or sufficiency in annual
contributions when comparing liabilities to the market value of the assets of
the fund as of the close of the most recent fiscal year.
(g)
(k) For the retirement plans for which the annual actuarial valuation
indicates an excess of valuation assets over the actuarial accrued liability,
the valuation assets in excess of the actuarial accrued liability must be
recognized as a reduction in the current contribution requirements by an amount
equal to the amortization of the excess expressed as a level percentage of pay
over a 30-year period beginning anew with each annual actuarial valuation of
the plan.
(l) In addition to calculating the unfunded actuarial accrued liability
of the retirement plan for financial reporting purposes under paragraphs (a) to
(j), the actuarial valuation of the retirement plan must also include a
calculation of the unfunded actuarial accrued liability of the retirement plan
for purposes of determining the amortization contribution sufficient to
amortize the unfunded actuarial liability of the Minnesota Post Retirement
Investment Fund. For this exhibit, the
calculation must be the unfunded actuarial accrued liability net of the
postretirement adjustment liability funded from the investment performance of
the Minnesota Post Retirement Investment Fund or the retirement benefit fund.
Sec. 15. Minnesota Statutes
2006, section 356.215, subdivision 18, is amended to read:
Subd. 18. Establishment of actuarial assumptions. (a) Before July 2, 2010, the actuarial assumptions used
for the preparation of actuarial valuations under this section that are other
than those set forth in this section preretirement interest,
postretirement interest, salary increase, and payroll increase may be
changed only with the
approval of the Legislative Commission on Pensions and Retirement or
after a period of one year has elapsed since the date on which the proposed
assumption change or changes were received by the Legislative Commission on
Pensions and Retirement without commission action.
(b) After July 1, 2010, the actuarial assumptions used for the
preparation of actuarial valuations under this section that are other than
postretirement interest and preretirement interest may be changed only with the
approval of the Legislative Commission on Pensions and Retirement or after a
period of one year has elapsed since the date on which the proposed assumption
change or changes were received by the Legislative Commission on Pensions and
Retirement without commission action.
(b)
(c) A change in the applicable actuarial assumptions may be proposed by
the governing board of the applicable pension fund or relief association, by
the actuary retained by the joint retirement systems under section 356.214,
by the actuarial advisor to a pension fund governed by chapter 352, 353, 354,
or 354A, or by the actuary retained by a local police or firefighters
relief association governed by sections 69.77 or 69.771 to 69.776, if one is
retained.
Sec. 16. Minnesota Statutes
2007 Supplement, section 356.96, subdivision 1, is amended to read:
Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that a
different meaning is intended, for the purpose of this section, the terms in
paragraphs (b) to (e) have the meanings given them.
(b) "Chief administrative officer" means the executive
director of a covered pension plan or the executive director's designee or
representative.
(c) "Covered pension plan" means a plan enumerated in section
356.20, subdivision 2, clauses (1) to (4), (10), and (12) to (14)
(13) to (15), but does not mean the deferred compensation plan administered
under sections 352.96 and 352.97 or to the postretirement health care savings
plan administered under section 352.98.
(d) "Governing board" means the Board of Trustees of the
Public Employees Retirement Association, the Board of Trustees of the Teachers
Retirement Association, or the Board of Directors of the Minnesota State
Retirement System.
(e) "Person" includes an active, retired, deferred, or
nonvested inactive participant in a covered pension plan or a beneficiary of a
participant, or an individual who has applied to be a participant or who is or
may be a survivor of a participant, or a state agency or other governmental
unit that employs active participants in a covered pension plan.
Sec. 17. APPROPRIATION; LEGISLATIVE COMMISSION ON PENSIONS AND RETIREMENT.
$140,000 is appropriated from the general fund to the Legislative
Commission on Pensions and Retirement in fiscal year 2009 in order to cover the
costs of any contract authorized under Minnesota Statutes, section 356.214,
subdivision 4. The commissioner of
finance must include these funds in the base level funding for the commission
when preparing forecasts of general fund spending and revenue and initial
budget estimates each biennium, as long as an actuary remains under contract to
the commission under Minnesota Statutes, section 356.214, subdivision 4.
Sec. 18. REPEALER.
Minnesota Statutes 2006, sections 356.214, subdivision 2; and 356.215,
subdivision 2a, are repealed.
Sec. 19. EFFECTIVE DATE.
Sections 1 to 18 are effective June 30, 2008, and apply to annual
financial reports and actuarial valuations prepared after June 1, 2008.
ARTICLE 12
RETIREMENT SAVINGS PROGRAMS
Section 1. Minnesota Statutes
2006, section 123B.02, subdivision 15, is amended to read:
Subd. 15. Annuity contract; payroll allocation. At the request of an employee and as part of the employee's
compensation arrangement, the board may purchase an individual annuity contract
for an employee for retirement or other purposes and may make payroll
allocations in accordance with such arrangement for the purpose of paying the
entire premium due and to become due under such contract. The allocation must be made in a manner
which will qualify the annuity premiums, or a portion thereof, for the benefit
afforded under section 403(b) of the current Federal Internal Revenue Code or any
equivalent provision of subsequent federal income tax law. The employee shall own such contract and the
employee's rights under the contract shall be nonforfeitable except for failure
to pay premiums. Section 122A.40 shall
not be applicable hereto and the board shall have no liability thereunder
because of its purchase of any individual annuity contracts. This statute shall be applied in a
nondiscriminatory manner to employees of the school district. The identity and number of the available
vendors under section 403(b) of the Internal Revenue Code is a term and
condition of employment under section 179A.03.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 2. Minnesota Statutes
2006, section 352.03, subdivision 4, is amended to read:
Subd. 4. Duties and powers of board of directors. The board shall:
(1) elect a chair;
(2) appoint an executive director;
(3) establish rules to administer this chapter and chapters 3A, 352B,
352C, 352D, and 490 and transact the business of the system, subject to the
limitations of law;
(4) consider and dispose of, or take any other action the board of
directors deems appropriate concerning denials of applications for annuities or
disability benefits under this chapter, and complaints of employees and others
pertaining to the retirement of employees and the operation of the system;
(5) advise the director on any matters relating to the system and
carrying out functions and purposes of this chapter. The board's advice shall control; and
(6) oversee the administration of the state deferred compensation plan
established in section 352.96 352.965.
The director and assistant director must be in the unclassified service
but appointees may be selected from civil service lists if desired. The salary of the executive director must be
as provided by section 15A.0815. The
salary of the assistant director must be set in accordance with section 43A.18,
subdivision 3.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 3. [352.965] MINNESOTA STATE DEFERRED COMPENSATION PLAN.
Subdivision 1. Establishment. (a)
The Minnesota state deferred compensation plan is established. For purposes of this section,
"plan" means the Minnesota state deferred compensation plan, unless
the context clearly indicates otherwise.
The Minnesota State Retirement System shall administer the plan.
(b) The purpose of the plan is to provide a means for a public employee
to contribute a portion of the employee's compensation to a tax-deferred
investment account. The plan is an
eligible tax-deferred compensation plan under section 457(b) of the Internal
Revenue Code, United States Code, title 26, section 457(b), and the applicable
regulations under Code of Federal Regulations, title 26, parts 1.457-3 to
1.457-10.
(c) The board of directors of the Minnesota State Retirement System is
the plan trustee and the board's executive director is the plan
administrator. Fiduciary activities of
the plan must be undertaken in a manner consistent with chapter 356A.
(d) The executive director, with the approval of the board of
directors, shall adopt and amend, as required to maintain tax-qualified status,
a written plan document specifying the material terms and conditions for
eligibility, benefits, applicable limitations, and the time and form under
which benefit distributions can be made.
With the approval of the board of directors, the executive director may
also establish policies and procedures necessary for the administration of the
deferred compensation plan.
(e) The plan document shall include provisions that are necessary to
cause the plan to be an eligible deferred compensation plan within the meaning
of section 457(b) of the Internal Revenue Code. The plan document may provide additional administrative and
substantive provisions consistent with state law, provided those provisions
will not cause the plan to fail to be an eligible deferred compensation plan
within the meaning of section 457(b) of the Internal Revenue Code and may
include provisions for certain optional features and services.
(f) The board of directors may authorize the executive director to
establish and administer a Roth 457 plan if authorized by the Internal Revenue
Code or a Roth individual retirement account as defined under section 408A of
the Internal Revenue Code.
(g) All amounts contributed to the deferred compensation plan and all
earnings on those amounts must be held in trust, in custodial accounts, or in
qualifying annuity contracts for the exclusive benefit of the plan participants
and beneficiaries, as required by section 457(g) of the Internal Revenue Code
and in accordance with sections 356.001 and 356A.06, subdivision 1.
(h) The information and data maintained in the accounts of the
participants and beneficiaries are private data and shall not be disclosed to
anyone other than the participant or beneficiary pursuant to a court order or
pursuant to section 356.49.
(i) The plan document is not subject to the rule adoption process under
the Administrative Procedures Act, including section 14.386, but must conform
with applicable federal and state laws.
Subd. 2. Right to participate in the deferred compensation plan. At the request of an officer or employee
of the state, an officer or employee of a political subdivision, or an employee
covered by a retirement fund in section 356.20, subdivision 2, the appointing
authority shall defer the payment of part of the compensation of the public
officer or employee through payroll deduction.
The amount to be deferred must be as provided in a written agreement
between the officer or employee and the public employer. The agreement must be in a form specified by
the executive director of the Minnesota State Retirement System and must be
consistent with the requirements for an eligible plan under federal and state
tax laws, regulations, and rulings.
Subd. 3. Failure to implement plan.
The public employer must complete implementation of the deferred
compensation plan within 45 days of the request as provided in subdivision
2. If the public employer fails to
implement the deferred compensation plan, the public employer may not defer
compensation under any existing or new deferred compensation plan from the date
of the request until the date on which the deferred compensation plan provided
for in this section is implemented.
Upon the petition of a public officer or employee, the executive
director of the Minnesota State Retirement System may order the public
officer's or employee's public employer to implement the deferred compensation
plan provided for in this section and may enforce that order in appropriate
legal proceedings.
Subd. 4. Plan investments. (a)
Investments under the plan may include:
(1) shares in the Minnesota supplemental investment fund established in
section 11A.17 that are selected to be offered under the plan by the State Board
of Investment;
(2) saving accounts in federally insured financial institutions;
(3) life insurance contracts, fixed annuity, and variable annuity
contracts from companies that are subject to regulation by the commissioner of
commerce;
(4) investment options from open-end investment companies registered
under the federal Investment Company Act of 1940, United States Code, title 15,
sections 80a-1 to 80a-64;
(5) investment options from a firm that is a registered investment
advisor under the Investment Advisers Act of 1940, United States Code, title
15, sections 80b-1 to 80b-21;
(6) investment options of a bank as defined in United States Code,
title 15, section 80b-2, subsection (a), paragraph (2), or a bank holding
company as defined in the Bank Holding Company Act of 1956, United States Code,
title 12, section 1841, subsection (a), paragraph (1); or
(7) a combination of clause (1), (2), (3), (4), (5), or (6), as
provided by the plan as specified by the participant.
(b) All amounts contributed to the deferred compensation plan and all
earnings on those amounts must be held for the exclusive benefit of the plan
participants and beneficiaries. These
amounts must be held in trust, in custodial accounts, or in qualifying annuity
contracts as required by federal law in accordance with section 356A.06,
subdivision 1. This subdivision does
not authorize an employer contribution, except as authorized in section 356.24,
subdivision 1, paragraph (a), clause (5).
The state, political subdivision, or other employing unit is not
responsible for any loss that may result from investment of the deferred
compensation.
Subd. 5. State Board of Investment to determine investments. (a) The State Board of Investment shall
determine the investment products to be made available under the plan and may
retain appropriate consulting services to assist in making the selections. At a minimum, the State Board of Investment
shall consider the following:
(1) the experience and ability of the financial institution to provide benefits
and products that are suited to meet the needs of plan participants;
(2) the relationship of those benefits and products provided by the
financial institution to their cost;
(3) the financial strength and stability of the financial institution; and
(4) the fees and expenses associated with the investment products in
comparison to other products of similar risk and rates of return.
(b) If the State Board of Investment so elects, it may solicit bids for
options under subdivision 4, clauses (2), (3), (4), (5), and (6). The State Board of Investment may retain
consulting services to assist in soliciting and evaluating bids and in the
periodic review of companies offering options under subdivision 4, clauses (3),
(4), (5), and (6). The periodic review
must occur at least every two years.
The State Board of Investment may annually establish a budget for its
costs in soliciting, evaluation, and periodic review processes. All options in subdivision 4 must be
presented in an unbiased manner and in a manner that conforms to rules adopted
by the executive director, be reported on a periodic basis to all participants
in the deferred compensation plan, and not be the subject of unreasonable
solicitation of participants in the plan.
The State Board of Investment may charge a proportional share of all
costs related to the periodic review to each company currently under contract
and may charge a proportional share of all costs related to soliciting and
evaluating bids to each company selected by the State Board of Investment.
(c) Under the procedures set forth in the plan document, participants
may select the funds or combination of funds within which to invest and may
reallocate those investments as provided in the plan document and procedures
established by the executive director.
(d) This section does not authorize an employer contribution, except as
authorized in section 356.24, subdivision 1, paragraph (a), clause (5).
(e) The state, the Minnesota State Retirement System, the executive
director and board of directors of the system, the State Board of Investment,
and participating public employers are not liable and not responsible for any
loss that may result from investment of the deferred compensation or the
investment choices made by the participants.
Subd. 6. Plan administrative expenses. (a) The reasonable and necessary administrative expenses of
the deferred compensation plan may be charged to plan participants in the form
of an annual fee, an asset-based fee, a percentage of the contributions to the
plan, or a combination thereof, as set forth in the plan document. The executive director of the system at the
direction of the board of directors shall establish procedures to carry out
this section including allocation of administrative costs of the plan to
participants. Processes and procedures
shall be set forth in the plan document.
Fees cannot be charged on contributions and investment returns
attributable to contributions made to the Minnesota supplemental investment
funds before July 1, 1992.
(b) The plan document must conform to federal and state tax laws,
regulations, and rulings, and is not subject to the Administrative Procedure
Act.
(c) The executive director may contract with a third party to perform
administrative and record keeping functions.
The executive director may solicit bids and negotiate such contracts.
(d) The board of directors may authorize a third-party investment
consultant to provide investment information and advice, provided that the
offering of such information and advice is consistent with the investment
advice requirements applicable to private plans under Title VI, subtitle A, of
the Pension Protection Act of 2006, Public Law 109-280, section 601.
Subd. 7. Other laws not applicable.
Except as provided in this section, no provisions of this chapter or
other law specifically referring to this chapter applies to this section unless
the Minnesota deferred compensation plan is specifically referenced.
Subd. 8. Exemption from process.
No amount of deferred compensation is assignable or subject to
execution, levy, attachment, garnishment, or other legal process, except as
provided in section 518.58, 518.581, or 518A.53.
Subd. 9. Missing participants.
The plan document shall establish procedures to assist in locating
participants. If a participant cannot
be located the participant's benefits shall be deemed abandoned and the
provisions of section 356.65 shall apply to their disposition.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 4. Minnesota Statutes
2006, section 352.97, is amended to read:
352.97 PRIOR DEFERRED
COMPENSATION PLANS; CONSTRUCTION.
Sections 352.96 352.965 and 352.97 do not preempt,
prohibit, ratify, or approve any other deferred compensation plan established
before or after June 3, 1975.
Sec. 5. Minnesota Statutes
2006, section 353D.12, subdivision 4, is amended to read:
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 352.96 352.965
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.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 6. Minnesota Statutes
2006, section 356.24, subdivision 1, is amended to read:
Subdivision 1. Restriction; exceptions. (a) It is unlawful for a school district or
other governmental subdivision or state agency to levy taxes for, or to
contribute public funds to a supplemental pension or deferred compensation plan
that is established, maintained, and operated in addition to a primary pension
program for the benefit of the governmental subdivision employees other than:
(1) to a supplemental pension plan that was established, maintained,
and operated before May 6, 1971;
(2) to a plan that provides solely for group health, hospital,
disability, or death benefits;
(3) to the individual retirement account plan established by chapter
354B;
(4) to a plan that provides solely for severance pay under section
465.72 to a retiring or terminating employee;
(5) for employees other than personnel employed by the Board of
Trustees of the Minnesota State Colleges and Universities and covered under the
Higher Education Supplemental Retirement Plan under chapter 354C, but including
city managers covered by an alternative retirement arrangement under section
353.028, subdivision 3, paragraph (a), or by the defined contribution plan of
the Public Employees Retirement Association under section 353.028, subdivision
3, paragraph (b), if the supplemental plan coverage is provided for in a
personnel policy of the public employer or in the collective bargaining
agreement between the public employer and the exclusive
representative of public employees in an appropriate unit or in the
individual employment contract between a city and a city manager, and if for
each available investment all fees and historic rates of return for the prior
one-, three-, five-, and ten-year periods, or since inception, are disclosed in
an easily comprehended document not to exceed two pages, in an amount
matching employee contributions on a dollar for dollar basis, but not to exceed
an employer contribution of $2,000 a one-half of the available
elective deferral permitted per year per employee, under the Internal
Revenue Code:
(i) to the state of Minnesota deferred compensation plan under section 352.96
352.965; or
(ii) in payment of the applicable portion of the contribution made to
any investment eligible under section 403(b) of the Internal Revenue Code, if
the employing unit has complied with any applicable pension plan provisions of
the Internal Revenue Code with respect to the tax-sheltered annuity program
during the preceding calendar year; or
(iii) any other deferred compensation plan offered by the employer
under section 457 of the Internal Revenue Code;
(6) for personnel employed by the Board of Trustees of the Minnesota
State Colleges and Universities and not covered by clause (5), to the
supplemental retirement plan under chapter 354C, if the supplemental plan coverage
is provided for in a personnel policy or in the collective bargaining agreement
of the public employer with the exclusive representative of the covered
employees in an appropriate unit, in an amount matching employee contributions
on a dollar for dollar basis, but not to exceed an employer contribution of
$2,700 a year for each employee;
(7) to a supplemental plan or to a governmental trust to save for
postretirement health care expenses qualified for tax-preferred treatment under
the Internal Revenue Code, if the supplemental plan coverage is provided for in
a personnel policy or in the collective bargaining agreement of a public
employer with the exclusive representative of the covered employees in an
appropriate unit;
(8) to the laborers national industrial pension fund or to a laborers
local pension fund for the employees of a governmental subdivision who are
covered by a collective bargaining agreement that provides for coverage by that
fund and that sets forth a fund contribution rate, but not to exceed an
employer contribution of $5,000 per year per employee;
(9) to the plumbers and pipefitters national pension fund or to a
plumbers and pipefitters local pension fund for the employees of a governmental
subdivision who are covered by a collective bargaining agreement that provides
for coverage by that fund and that sets forth a fund contribution rate, but not
to exceed an employer contribution of $5,000 per year per employee;
(10) to the international union of operating engineers pension fund for
the employees of a governmental subdivision who are covered by a collective
bargaining agreement that provides for coverage by that fund and that sets
forth a fund contribution rate, but not to exceed an employer contribution of
$5,000 per year per employee;
(11) to a supplemental plan organized and operated under the federal
Internal Revenue Code, as amended, that is wholly and solely funded by the
employee's accumulated sick leave, accumulated vacation leave, and accumulated
severance pay; or
(12) to the International Association of Machinists national pension
fund for the employees of a governmental subdivision who are covered by a
collective bargaining agreement that provides for coverage by that fund and
that sets forth a fund contribution rate, but not to exceed an employer
contribution of $5,000 per year per employee.; or
(13) for employees of United Hospital District, Blue Earth, to the
state of Minnesota deferred compensation program, if the employee makes a
contribution, in an amount that does not exceed the total percentage of covered
salary under section 353.27, subdivisions 3 and 3a.
(b) No governmental subdivision may make a contribution to a deferred
compensation plan operating under section 457 of the Internal Revenue Code for
volunteer or emergency on-call firefighters in lieu of providing retirement
coverage under the federal old age, survivors, and disability insurance
program.
EFFECTIVE DATE. Paragraph (a), clause (13), is effective July 1, 2008. The balance of this section is effective
August 1, 2008.
Sec. 7. Minnesota Statutes 2007
Supplement, section 356.96, subdivision 1, is amended to read:
Subdivision 1. Definitions. (a) Unless the language or context clearly indicates that a
different meaning is intended, for the purpose of this section, the terms in
paragraphs (b) to (e) have the meanings given them.
(b) "Chief administrative officer" means the executive
director of a covered pension plan or the executive director's designee or
representative.
(c) "Covered pension plan" means a plan enumerated in section
356.20, subdivision 2, clauses (1) to (4), (10), and (12) to (14), but does not
mean the deferred compensation plan administered under sections 352.96
352.965 and 352.97 or to the postretirement health care savings plan administered
under section 352.98.
(d) "Governing board" means the Board of Trustees of the
Public Employees Retirement Association, the Board of Trustees of the Teachers
Retirement Association, or the Board of Directors of the Minnesota State
Retirement System.
(e) "Person" includes an active, retired, deferred, or
nonvested inactive participant in a covered pension plan or a beneficiary of a
participant, or an individual who has applied to be a participant or who is or
may be a survivor of a participant, or a state agency or other governmental
unit that employs active participants in a covered pension plan.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 8. Minnesota Statutes
2006, section 356B.10, subdivision 3, is amended to read:
Subd. 3. Contracting procedures. (a)
The commissioner may enter into a contract for facilities with a contractor to
furnish the architectural, engineering, and related services as well as the
labor, materials, supplies, equipment, and related construction services on the
basis of a request for qualifications and competitive responses received
through a request for proposals process that must include the items listed in
paragraphs (b) to (i).
(b) Before issuing a request for qualifications and a request for
proposals, the commissioner, with the assistance of the boards, shall prepare
performance criteria and specifications that include:
(1) a general floor plan or layout indicating the general dimensions of
the public building and space requirements;
(2) design criteria for the exterior and site area;
(3) performance specifications for all building systems and components
to ensure quality and cost efficiencies;
(4) conceptual floor plans for systems space;
(5) preferred types of interior finishes, styles of windows, lighting
and outlets, doors, and features such as built-in counters and telephone
wiring;
(6) mechanical and electrical requirements;
(7) special interior features required; and
(8) a completion schedule.
(c) The commissioner shall first solicit statements of qualifications
from eligible contractors and select more than one qualified contractor based
upon experience, technical competence, past performance, capability to perform,
and other appropriate facts.
Contractors selected under this process must be, employ, or have as a
partner, member, coventurer, or subcontractor, persons licensed and registered
under chapter 326 to provide the services required to design and complete the
project. The commissioner does not have
to select any of the respondents if none reasonably fulfill the criteria set
forth in this paragraph.
(d) The contractors selected shall be asked to respond to a request for
proposals. Responses must include site
plans, design concept, elevation, statement of material to be used, floor
layouts, a detailed development budget, and a total cost to complete the
project. The proposal must indicate
that the contractor obtained at least two proposals from subcontractors for
each item of work and must set forth how the subcontractors were selected. The commissioner, with the assistance of the
boards, shall evaluate the proposals based upon design, cost, quality,
aesthetics, and the best overall value to the state pension funds. The commissioner need not select any of the
proposals submitted and reserves the right to reject any and all proposals, and
may terminate the process or revise the request for proposals and solicit new
proposals if the commissioner determines that the best interests of the pension
funds would be better served by doing so.
Proposals submitted are nonpublic data until the contract is awarded.
(e) The contractor selected must comply with sections 574.26 to
574.261. Before executing a final
contract, the contractor selected shall certify a firm construction price and
completion date.
(f) The commissioner may consider building sites in the city of St.
Paul and surrounding suburbs.
(g) Any land, building, or facility leased, constructed, or acquired
and any leasehold interest acquired under this section must be held by the
state in trust for the three retirement systems as tenants in common. Each retirement system fund must consider
its interest as a fixed asset of its pension fund in accordance with
governmental accounting standards.
(h) The commissioner may lease to another governmental subdivision, to
a private company under contract with the State Board of Investment, or with
the Board of Directors of the Minnesota State Retirement System, whichever
applies, to provide deferred compensation services under section 352.96
352.965, any portion of the funds' building and lands that is not required
for their direct use upon terms and conditions they deem to be in the best
interest of the pension funds. Any
income accruing from the rentals must be separately accounted for and utilized
to offset ongoing administrative expenses and any excess must be carried
forward for future administrative expenses.
The commissioner may also enter into lease agreements for the
establishment of satellite offices should the boards find them to be necessary
in order to assure their members reasonable access to their services. The commissioner may lease under section
16B.24 any portion of the facilities not required for the direct use of the boards.
(i) The boards shall
formulate and adopt a written working agreement that sets forth the nature of
each retirement system's ownership interest, the duties and obligations of each
system toward the construction, operation, and maintenance costs of its
facilities, and identifies one retirement fund to serve as manager for
operating and maintenance purposes. The
boards may contract with independent third parties for maintenance-related
activities,
services, and supplies, and
may use the services of the Department of Administration where economically
feasible to do so. If the boards cannot
agree or resolve a dispute about operations or maintenance of the facilities,
they may request the commissioner of administration to appoint a representative
from the department's real estate management division to serve as arbitrator of
the dispute with authority to issue a written resolution of the dispute.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 9. Minnesota Statutes
2006, section 363A.36, subdivision 1, is amended to read:
Subdivision 1. Scope of application. (a) For all contracts for goods and services
in excess of $100,000, no department or agency of the state shall accept any
bid or proposal for a contract or agreement from any business having more than
40 full-time employees within this state on a single working day during the
previous 12 months, unless the commissioner is in receipt of the business'
affirmative action plan for the employment of minority persons, women, and
qualified disabled individuals. No
department or agency of the state shall execute any such contract or agreement
until the affirmative action plan has been approved by the commissioner. Receipt of a certificate of compliance
issued by the commissioner shall signify that a firm or business has an affirmative
action plan that has been approved by the commissioner. A certificate shall be valid for a period of
two years. A municipality as defined in
section 466.01, subdivision 1, that receives state money for any reason is
encouraged to prepare and implement an affirmative action plan for the
employment of minority persons, women, and the qualified disabled and submit
the plan to the commissioner.
(b) This paragraph applies to a contract for goods or services in
excess of $100,000 to be entered into between a department or agency of the
state and a business that is not subject to paragraph (a), but that has more
than 40 full-time employees on a single working day during the previous 12
months in the state where the business has its primary place of business. A department or agency of the state may not
execute a contract or agreement with a business covered by this paragraph
unless the business has a certificate of compliance issued by the commissioner
under paragraph (a) or the business certifies that it is in compliance with
federal affirmative action requirements.
(c) This section does not apply to contracts entered into by the State
Board of Investment for investment options under section 352.96
352.965, subdivision 4.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 10. Minnesota Statutes
2006, section 383B.914, subdivision 7, is amended to read:
Subd. 7. Participation in state deferred compensation plan. (a) Existing employees of the corporation,
at the election of the corporation, if otherwise qualified, are eligible to
participate in the Hennepin County supplemental retirement plan under sections
383B.46 and 383B.52.
(b) Existing and future employees of the corporation, at the election
of the corporation, are eligible to participate in the Minnesota state deferred
compensation plan under section 352.96 352.965, the
postretirement health care savings plan under section 352.98, and all other
deferred compensation arrangements for which all persons employed by the county
whose employment is accounted for in the county enterprise fund for HCMC were
eligible.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 11. Minnesota Statutes
2006, section 518.003, subdivision 8, is amended to read:
Subd. 8. Public pension plan.
"Public pension plan" means a pension plan or fund specified
in section 356.20, subdivision 2, or 356.30, subdivision 3, the deferred
compensation plan specified in section 352.96 352.965, or any
retirement or pension plan or fund, including a supplemental retirement plan or
fund, established, maintained, or supported by a governmental subdivision or
public body whose revenues are derived from taxation, fees, assessments, or
from other public sources.
EFFECTIVE DATE. This section is effective August 1, 2008.
Sec. 12. REPEALER.
Minnesota Statutes 2006, section 352.96; and Minnesota Rules, parts
7905.0100; 7905.0200; 7905.0300; 7905.0400; 7905.0500; 7905.0600; 7905.0700;
7905.0800; 7905.0900; 7905.1000; 7905.1100; 7905.1200; 7905.1300; 7905.1400; 7905.1500;
7905.1600; 7905.1700; 7905.1800; 7905.1900; 7905.2000; 7905.2100; 7905.2200;
7905.2300; 7905.2400; 7905.2450; 7905.2500; 7905.2560; 7905.2600; 7905.2700;
7905.2800; and 7905.2900, are repealed.
EFFECTIVE DATE. This section is effective August 1, 2008.
ARTICLE 13
PERA POLICE AND FIRE PLAN
DUTY DISABILITY BENEFIT INCREASE
Section 1. Minnesota Statutes
2007 Supplement, section 353.656, subdivision 1, is amended to read:
Subdivision 1. Duty disability; computation of benefits. (a) A member of the police and fire plan who
is determined to qualify for duty disability as defined in section 353.01,
subdivision 41, shall receive disability benefits during the period of such
disability in an amount equal to 60 percent of the average salary as defined in
section 353.01, subdivision 17a, plus an additional percentage specified
under section 356.315, subdivision 6, of that average salary for each year of
service in excess of 20 years.
(b) To be eligible for a benefit under paragraph (a), the member must
have:
(1) not met the requirements for a retirement annuity under section
353.651, subdivision 1; or
(2) met the requirements under that subdivision, but does not have at
least 20 years of allowable service credit.
(c) If paragraph (b), clause (2), applies, the disability benefit must
be paid for a period of 60 months from the disability benefit accrual date and
at the end of that period is subject to provisions of subdivision 5a.
(d) If the disability under this subdivision occurs before the member has
at least five years of allowable service credit in the police and fire plan,
the disability benefit must be computed on the average salary from which
deductions were made for contribution to the police and fire fund.
EFFECTIVE DATE. This section is effective retroactively from July 1, 2007.
ARTICLE 14
LOCAL POLICE AND PAID FIRE
RELIEF ASSOCIATION CHANGES
Section 1. [423A.021] DEFINED POSTRETIREMENT BENEFITS.
Subdivision 1. Pension unit increase.
For a salaried firefighters relief association in a city of the first
class with a population greater than 300,000, when the actuarial value of
assets of the special fund first exceeds 110 percent of the actuarial accrued
liabilities, according to an annual actuarial valuation occurring after the effective
date of this section and performed in accordance with sections 356.215 and
356.216, each service pensioner, joint survivor annuitant, and surviving spouse
member is entitled to a permanent benefit increase. The revised benefit is an increase of one unit for a service
pensioner, not to exceed 43 units, an increase from 22 to 23 units for a
surviving
spouse benefit, and an increase from 42.3 to 43.2 units for unmarried
service pensioners. The association
shall pay the increased benefit beginning January 1 of the year following the
year for which the valuation was prepared.
If adding an additional unit results in raising total units past the
maximum, a partial unit may be added to reach the maximum. For joint survivor annuities, this
subdivision authorizes a benefit increase actuarially equivalent to one unit.
Subd. 2. Unit precedence. The
additional benefit provided for in subdivision 1 shall take precedence over any
other benefit provided when the fund reaches 110 percent funding. In preparing the actuarial valuation under
sections 356.215 and 356.216, the actuary for the fund shall first account for
the benefit provided in subdivision 1 in determining the plan's funded
ratio. No other benefit payments may be
made by the association until the actuarial impact of the benefit provided for
in subdivision 1 has been determined and factored into the funding ratio.
Subd. 3. Excess investment income.
For a salaried firefighters relief association in a city of the first
class with a population greater than 300,000 that no longer is entitled to
state general fund aid pursuant to section 423A.02, the association shall apply
any assets that constitute excess investment income to the payment of a
supplemental postretirement benefit to an eligible member notwithstanding any
other limitation of law. Any amount of
excess investment income not otherwise used for the payment of a supplemental
postretirement benefit to an eligible member shall be applied to reduce the
municipality's property tax levy to the association in the year following the
payment of the postretirement benefit.
A supplemental postretirement benefit is a lump sum payment equal to the
monthly benefit provided to the benefit recipient in the month prior to payment
of the supplemental postretirement benefit.
A supplemental postretirement benefit payable under this section is in
lieu of any benefit payable under section 423C.06, subdivision 2. No supplemental postretirement benefit is
payable under this section if a benefit is payable under section 423C.06,
subdivision 3.
ARTICLE 15
VOLUNTEER FIREFIGHTER RELIEF ASSOCIATION CHANGES
Section 1. Minnesota Statutes
2006, section 6.67, is amended to read:
6.67 PUBLIC ACCOUNTANTS;
REPORT OF EVIDENCE POINTING TO MISCONDUCT.
Whenever a public accountant in the course of auditing the books and
affairs of a county, city, town, school district, or other public corporations,
shall discover corporation, or local public pension plan governed by
section 69.77, sections 69.771 to 69.775, or chapter 354A, 422A, 423B, 423C, or
424A, discovers evidence pointing to nonfeasance, misfeasance, or
malfeasance, on the part of an officer or employee in the conduct of duties and
affairs, the public accountant shall promptly make a report of such discovery
to the state auditor and the county attorney of the county in which the
governmental unit is situated and the public accountant shall also furnish a
copy of the report of audit upon completion to said officers. The county attorney shall act on such report
in the same manner as required by law for reports made to the county attorney
by the state auditor.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec. 2. Minnesota Statutes
2006, section 69.011, subdivision 1, is amended to read:
Subdivision 1. Definitions. Unless the language or context clearly indicates that a different
meaning is intended, the following words and terms shall for the purposes of
this chapter and chapters 423, 423A, 424 and 424A have the meanings ascribed to
them:
(a) "Commissioner" means the commissioner of revenue.
(b) "Municipality" means:
(1) a home rule charter or statutory city;
(2) an organized town;
(3) a park district subject to chapter 398;
(4) the University of Minnesota;
(5) for purposes of the fire state aid program only, an American Indian
tribal government entity located within a federally recognized American Indian
reservation;
(6) for purposes of the police state aid program only, an American
Indian tribal government with a tribal police department which exercises state
arrest powers under section 626.90, 626.91, 626.92, or 626.93;
(7) for purposes of the police state aid program only, the Metropolitan
Airports Commission with respect to peace officers covered under chapter 422A;
and
(8) for purposes of the police state aid program only, the Department
of Natural Resources and the Department of Public Safety with respect to peace
officers covered under chapter 352B.
(c) "Minnesota Firetown Premium Report" means a form
prescribed by the commissioner containing space for reporting by insurers of
fire, lightning, sprinkler leakage and extended coverage premiums received upon
risks located or to be performed in this state less return premiums and
dividends.
(d) "Firetown" means the area serviced by any municipality
having a qualified fire department or a qualified incorporated fire department
having a subsidiary volunteer firefighters' relief association.
(e) "Market value" means latest available market value of all
property in a taxing jurisdiction, whether the property is subject to taxation,
or exempt from ad valorem taxation obtained from information which appears on
abstracts filed with the commissioner of revenue or equalized by the State
Board of Equalization.
(f) "Minnesota Aid to Police Premium Report" means a form
prescribed by the commissioner for reporting by each fire and casualty insurer
of all premiums received upon direct business received by it in this state, or
by its agents for it, in cash or otherwise, during the preceding calendar year,
with reference to insurance written for insuring against the perils contained
in auto insurance coverages as reported in the Minnesota business schedule of
the annual financial statement which each insurer is required to file with the
commissioner in accordance with the governing laws or rules less return
premiums and dividends.
(g) "Peace officer" means any person:
(1) whose primary source of income derived from wages is from direct
employment by a municipality or county as a law enforcement officer on a
full-time basis of not less than 30 hours per week;
(2) who has been employed for a minimum of six months prior to December
31 preceding the date of the current year's certification under subdivision 2,
clause (b);
(3) who is sworn to enforce the general criminal laws of the state and
local ordinances;
(4) who is licensed by the Peace Officers Standards and Training Board
and is authorized to arrest with a warrant; and
(5) who is a member of a local police relief association to which
section 69.77 applies, the State Patrol retirement plan, the public employees
police and fire fund, or the Minneapolis Employees Retirement Fund.
(h) "Full-time equivalent number of peace officers providing
contract service" means the integral or fractional number of peace
officers which would be necessary to provide the contract service if all peace
officers providing service were employed on a full-time basis as defined by the
employing unit and the municipality receiving the contract service.
(i) "Retirement benefits other than a service pension" means
any disbursement authorized under section 424A.05, subdivision 3, clauses (2),
and (3), and (4).
(j) "Municipal clerk, municipal clerk-treasurer, or county
auditor" means the person who was elected or appointed to the specified
position or, in the absence of the person, another person who is designated by
the applicable governing body. In a
park district, the clerk is the secretary of the board of park district commissioners. In the case of the University of Minnesota,
the clerk is that official designated by the Board of Regents. For the Metropolitan Airports Commission,
the clerk is the person designated by the commission. For the Department of Natural Resources or the Department of
Public Safety, the clerk is the respective commissioner. For a tribal police department which
exercises state arrest powers under section 626.90, 626.91, 626.92, or 626.93,
the clerk is the person designated by the applicable American Indian tribal
government.
EFFECTIVE DATE. This section is effective January 1, 2009.
Sec. 3. Minnesota Statutes
2006, section 356A.06, subdivision 1, is amended to read:
Subdivision 1. Authorized holder of assets; title
to assets. (a) Assets of a
covered pension plan may be held only by:
(1)
the plan treasurer,;
(2)
the State Board of Investment,;
(3)
the depository agent of the plan,;
(4) a security broker or the broker's agent with, in either case,
insurance equal to or greater than the plan assets held from the Securities
Investor Protection Corporation or from excess insurance coverage; or
(5) the depository agent of the State Board of Investment.
(b) Legal
title to plan assets must be vested in the plan, the State Board of Investment,
the governmental entity that sponsors the plan, the nominee of the plan, or the
depository agent. The holder of legal
title shall function as a trustee for a person or entity with a beneficial
interest in the assets of the plan.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec. 4. Minnesota Statutes
2006, section 356A.06, subdivision 7, is amended to read:
Subd. 7. Expanded list of authorized investment securities. (a) Authority.
Except to the extent otherwise
authorized by law, a covered pension plan not described by subdivision 6,
paragraph (a), shall invest its assets only in accordance with this
subdivision.
(b) Securities generally. The covered pension plan has the
authority to purchase, sell, lend, or exchange the securities specified in
paragraphs (c) to (i), including puts and call options and future contracts
traded on a contract market regulated by a governmental agency or by a
financial institution regulated by a governmental agency. These securities may be owned as units in
commingled trusts that own the securities described in paragraphs (c) to (i),
including real estate investment trusts and insurance company commingled
accounts, including separate accounts.
(c) Government obligations. The covered pension plan may invest
funds in governmental bonds, notes, bills, mortgages, and other evidences of
indebtedness if the issue is backed by the full faith and credit of the issuer
or the issue is rated among the top four quality rating categories by a
nationally recognized rating agency.
The obligations in which funds may be invested under this paragraph
include guaranteed or insured issues of (1) the United States, its agencies,
its instrumentalities, or organizations created and regulated by an act of
Congress; (2) Canada and its provinces, provided the principal and interest is
payable in United States dollars; (3) the states and their municipalities,
political subdivisions, agencies, or instrumentalities; (4) the International
Bank for Reconstruction and Development, the Inter-American Development Bank,
the Asian Development Bank, the African Development Bank, or any other United
States government sponsored organization of which the United States is a
member, provided the principal and interest is payable in United States
dollars.
(d) Corporate obligations. The covered pension plan may invest
funds in bonds, notes, debentures, transportation equipment obligations, or any
other longer term evidences of indebtedness issued or guaranteed by a
corporation organized under the laws of the United States or any state thereof,
or the Dominion of Canada or any province thereof if they conform to the
following provisions:
(1) the principal and interest of obligations of corporations
incorporated or organized under the laws of the Dominion of Canada or any province
thereof must be payable in United States dollars; and
(2) obligations must be rated among the top four quality categories by
a nationally recognized rating agency.
(e) Other obligations. (1)
The covered pension plan may invest funds in bankers acceptances, certificates
of deposit, deposit notes, commercial paper, mortgage participation
certificates and pools, asset backed securities, repurchase agreements and
reverse repurchase agreements, guaranteed investment contracts, savings
accounts, and guaranty fund certificates, surplus notes, or debentures of
domestic mutual insurance companies if they conform to the following
provisions:
(i) bankers acceptances and deposit notes of United States banks are
limited to those issued by banks rated in the highest four quality categories
by a nationally recognized rating agency;
(ii) certificates of deposit are limited to those issued by (A) United
States banks and savings institutions that are rated in the highest four
quality categories by a nationally recognized rating agency or whose
certificates of deposit are fully insured by federal agencies; or (B) credit
unions in amounts up to the limit of insurance coverage provided by the
National Credit Union Administration;
(iii) commercial paper is limited to those issued by United States
corporations or their Canadian subsidiaries and rated in the highest two
quality categories by a nationally recognized rating agency;
(iv) mortgage participation or pass through certificates evidencing
interests in pools of first mortgages or trust deeds on improved real estate
located in the United States where the loan to value ratio for each loan as
calculated in accordance with section 61A.28, subdivision 3, does not exceed 80
percent for fully amortizable residential properties and in all other respects
meets the requirements of section 61A.28, subdivision 3;
(v) collateral for repurchase agreements and reverse repurchase
agreements is limited to letters of credit and securities authorized in this
section;
(vi) guaranteed investment contracts are limited to those issued by
insurance companies or banks rated in the top four quality categories by a
nationally recognized rating agency or to alternative guaranteed investment
contracts where the underlying assets comply with the requirements of this
subdivision;
(vii) savings accounts are limited to those fully insured by federal
agencies; and
(viii) asset backed securities must be rated in the top four quality
categories by a nationally recognized rating agency.
(2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do not apply to
certificates of deposit and collateralization agreements executed by the
covered pension plan under clause (1), item (ii).
(3) In addition to investments authorized by clause (1), item (iv), the
covered pension plan may purchase from the Minnesota Housing Finance Agency all
or any part of a pool of residential mortgages, not in default, that has
previously been financed by the issuance of bonds or notes of the agency. The covered pension plan may also enter into
a commitment with the agency, at the time of any issue of bonds or notes, to
purchase at a specified future date, not exceeding 12 years from the date of
the issue, the amount of mortgage loans then outstanding and not in default
that have been made or purchased from the proceeds of the bonds or notes. The covered pension plan may charge
reasonable fees for any such commitment and may agree to purchase the mortgage
loans at a price sufficient to produce a yield to the covered pension plan
comparable, in its judgment, to the yield available on similar mortgage loans
at the date of the bonds or notes. The
covered pension plan may also enter into agreements with the agency for the
investment of any portion of the funds of the agency. The agreement must cover the period of the investment, withdrawal
privileges, and any guaranteed rate of return.
(f) Corporate stocks. The covered pension plan may invest
funds in stocks or convertible issues of any corporation organized under the
laws of the United States or the states thereof, any corporation organized
under the laws of the Dominion of Canada or its provinces, or any corporation
listed on an exchange regulated by an agency of the United States or of the
Canadian national government, if they conform to the following provisions:
(1) the aggregate value of investments under this paragraph, plus
paragraphs (g) and (k), plus equity investments under paragraphs (h), (i), and
(j), as adjusted for realized gains and losses, must not exceed 85 percent of
the market or book value, whichever is less, of a fund; and
(2) investments must not exceed five percent of the total outstanding
shares of any one corporation.
(g) Developed market foreign
stocks investments. In addition to
investments authorized under paragraph (f), the covered pension fund may invest
in foreign stock sold on an exchange in any developed market country that is
included in the Europe, Australia, and Far East Index.
(h) Commingled or mutual
investments. The covered pension
plan may invest in index funds or mutual funds, including index mutual funds,
through bank-sponsored collective funds and shares of open-end investment
companies registered under the Federal Investment Company Act of 1940, if
the investments of the index or of the mutual fund to the extent that
these funds comply with paragraphs (c) to (j).
(i) Real estate investment
trust; related investments. The
covered pension plan may invest in real estate investment trusts secured by
mortgages or deeds of trust and sold on an exchange, and insurance company
commingled accounts, including separate accounts, of a debt or equity nature.
(j) Exchange traded funds. The covered pension plan may invest
funds in exchange traded funds, subject to the maximums, the requirements, and
the limitations set forth in paragraphs (c) to (i), as applicable.
(k) Other investments. (1)
In addition to the investments authorized in paragraphs (b) to (j), and subject
to the provisions in clause (2), the covered pension plan may invest funds in:
(i) venture capital investment businesses through participation in
limited partnerships and corporations;
(ii) real estate ownership interests or loans secured by mortgages or
deeds of trust through investment in limited partnerships or bank sponsored
collective funds;
(iii) regional and mutual funds through bank sponsored collective funds
and open-end investment companies registered under the Federal Investment
Company Act of 1940 which do to the extent that a fund or a portion
of a fund does not qualify under paragraph (h);
(iv) resource investments through limited partnerships, private
placements, and corporations; and
(v) international debt securities and emerging market equity
securities.
(2) The investments authorized in clause (1) must conform to the following
provisions:
(i) the aggregate value of all investments made according to clause (1),
including allocated amounts of index and mutual funds, may not exceed 20
percent of the market value of the fund for which the covered pension plan is
investing;
(ii) there must be at least four unrelated owners of the investment
other than the covered pension plan for investments made under clause (1), item
(i), (ii), (iii), or (iv);
(iii) covered pension plan participation in an investment vehicle is
limited to 20 percent thereof for investments made under clause (1), item (i),
(ii), (iii), or (iv); and
(iv) covered pension plan participation in a limited partnership does
not include a general partnership interest or other interest involving general
liability. The covered pension plan may
not engage in any activity as a limited partner which creates general
liability.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec. 5. Minnesota Statutes
2006, section 356A.06, subdivision 8b, is amended to read:
Subd. 8b. Disclosure of investment authority; receipt of statement. (a) For this subdivision, the term
"broker" means a broker, broker-dealer, investment advisor,
investment manager, or third party agent who transfers, purchases, sells, or
obtains investment securities for, or on behalf of, a covered pension plan.
(b) Before a covered pension plan may complete an investment
transaction with or in accord with the advice of a broker, the covered pension
plan shall provide annually to the broker a written statement of investment
restrictions applicable under state law to the covered pension plan or
applicable under the pension plan governing board investment policy.
(c) A broker must acknowledge in writing annually the receipt of the statement
of investment restrictions and must agree to handle the covered pension plan's
investments and assets in accord with the provided investment
restrictions. A covered pension plan
may not enter into or continue a business arrangement with a broker until the
broker has provided this written acknowledgment to the chief administrative
officer of the covered pension plan.
(d) If any portion of the plan's assets are held by a security broker
or its agent, the security broker or its agent must acknowledge in writing
annually that sufficient insurance has been obtained from the Securities
Investor Protection Corporation, supplemented by additional insurance, if
necessary, to cover the full amount of covered pension plan assets held by the
security broker or its agent. Uniform
acknowledgment forms prepared by the state auditor shall be used by covered
pension plans and brokers to meet the requirements of this subdivision.
EFFECTIVE DATE. This section is effective the day following final enactment.
Sec. 6. Minnesota Statutes
2006, section 424A.001, is amended by adding a subdivision to read:
Subd. 1a. Ancillary benefit. "Ancillary
benefit" means a benefit other than a service pension that is permitted by
law and that is provided for in the relief association bylaws.
EFFECTIVE DATE. This section is effective January 1, 2009.
Sec. 7. Minnesota Statutes
2006, section 424A.001, subdivision 6, is amended to read:
Subd. 6. Surviving spouse. For
purposes of this chapter, and the governing bylaws of any relief association to
which this chapter applies, the term "surviving spouse" means any
person who was the dependent spouse of a deceased active member or retired
former member living with the member at the time of the death of the active
member or retired former member for at least one year prior to the date on
which the member terminated active service and membership the spouse of
a deceased member who was legally married to the member at the time of death.
EFFECTIVE DATE. This section is effective January 1, 2009.
Sec. 8. Minnesota Statutes
2006, section 424A.02, subdivision 3, is amended to read:
Subd. 3. Flexible service pension maximums.
(a) Annually on or before August 1 as part of the certification of the
financial requirements and minimum municipal obligation determined under
section 69.772, subdivision 4, or 69.773, subdivision 5, as applicable, the
secretary or some other official of the relief association designated in the
bylaws of each relief association shall calculate and certify to the governing
body of the applicable qualified municipality the average amount of available
financing per active covered firefighter for the most recent three-year
period. The amount of available
financing shall include any amounts of fire state aid received or receivable by
the relief association, any amounts of municipal contributions to the relief
association raised from levies on real estate or from other available revenue
sources exclusive of fire state aid, and one-tenth of the amount of assets in
excess of the accrued liabilities of the relief association calculated under
section 69.772, subdivision 2; 69.773, subdivisions 2 and 4; or 69.774,
subdivision 2, if any.
(b) The maximum service pension which the relief association has
authority to provide for in its bylaws for payment to a member retiring after
the calculation date when the minimum age and service requirements specified in
subdivision 1 are met must be determined using the table in paragraph (c) or
(d), whichever applies.
(c) For a relief association where the governing bylaws provide for a
monthly service pension to a retiring member, the maximum monthly service
pension amount per month for each year of service credited that may be provided
for in the bylaws is the greater of the service pension amount provided for in
the bylaws on the date of the calculation of the average amount of the
available financing per active covered firefighter or the maximum service
pension figure corresponding to the average amount of available financing per
active covered firefighter:
Minimum
Average Amount Maximum
Service Pension
of
Available Financing Amount
Payable per Month for
per
Firefighter Each
Year of Service
$
... $.25
41 .50
81 1.00
122 1.50
162 2.00
203 2.50
243 3.00
284 3.50
324 4.00
365 4.50
405 5.00
486 6.00
567 7.00
648 8.00
729 9.00
810 10.00
891 11.00
972 12.00
1053 13.00
1134 14.00
1215 15.00
1296 16.00
1377 17.00
1458 18.00
1539 19.00
1620 20.00
1701 21.00
1782 22.00
1823 22.50
1863 23.00
1944 24.00
2025 25.00
2106 26.00
2187 27.00
2268 28.00
2349 29.00
2430 30.00
2511 31.00
2592 32.00
2673 33.00
2754 34.00
2834 35.00