Minnesota Legislature
HF 79
as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am
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A bill for an act
relating to retirement; Teachers Retirement Association; containing provisions of
an administrative nature; amending Minnesota Statutes 2006, sections 354.094,
subdivision 1; 354.35; 354.45, subdivision 1a; 354.48, subdivision 3; 356.46,
subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 354;
repealing Minnesota Statutes 2006, section 354.49, subdivision 5.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2006, section 354.094, subdivision 1, is amended to read:
Subdivision 1.
Service credit contributions.
(a) Upon granting any extended leave
of absence under section 122A.46 or 136F.43, the employing unit granting the leave
must certify the leave to the association on a form specified by the executive director. A
member granted an extended leave of absence under section 122A.46 or 136F.43 may pay
employee contributions and receive allowable service credit toward annuities and other
benefits under this chapter, for each year of the leave, provided that the member and the
employing board make the required employer contribution in any proportion they may
agree upon, during the period of the leave. The employer may enter into an agreement
with the exclusive bargaining representative of the teachers in the district under which,
for an individual teacher, all or a portion of the employee's contribution is paid by the
employer. Any such agreement must include a sunset of eligibility to qualify for the
payment and must not be a part of the collective bargaining agreement. The leave period
must not exceed five years. A member may not receive more than five years of allowable
service credit under this section. The employee and employer contributions must be based
upon the rates of contribution prescribed by section 354.42 for the salary received during
the year immediately preceding the extended leave.
(b) Employee contribution payments for the years for which a member is receiving
service credit while on extended leave must be made on or before June 30 of each fiscal
year for which service credit is to be receivednew text begin , or in instances of late reporting by the
employer, within 30 days after the association gives notification to the member of the
amount duenew text end . deleted text begin If payment is to be made by a transfer of pretax assets authorized under
section 356.441, payment isdeleted text end new text begin These late payments, new text end authorized after June 30 of the fiscal
year deleted text begin providing that authorization for the asset transfer has been received by the applicable
third party administrator by June 30, and the paymentdeleted text end new text begin ,new text end must include interest at a rate of
.708 percent per month from June 30 through the end of the month in which payment is
received. No payment is permitted after the following September 30new text begin of the year of the
leavenew text end .
(c) Notwithstanding the provisions of any agreements to the contrary, employee and
employer contributions may not be made to receive allowable service credit if the member
does not have full reinstatement rights as provided in section 122A.46 or 136F.43, both
during and at the end of the extended leave.
(d) Any school district paying the employee's retirement contributions under this
section deleted text begin shalldeleted text end new text begin must new text end forward to the deleted text begin applicabledeleted text end new text begin Teachers new text end Retirement Association deleted text begin or retirement
funddeleted text end a copy of the agreement executed by the school district and the employee.
Sec. 2.
new text begin
[354.105] PAYMENTS USING PRETAX TRANSFERS.
new text end
new text begin
If a current or past member is making a payment to the Teachers Retirement
Association to receive service credit under a provision of this chapter, chapter 356,
or applicable special law, and this payment is to be made by a transfer of pretax assets
authorized under section 356.441, payment is authorized after the due date, but not to
exceed 90 days, providing the authorization for the asset transfer has been received by
the applicable third party administrator by the due date, and the payment must include
interest at a rate of .708 percent per month from the due date through the end of the month
in which the Teachers Retirement Association receives the payment.
new text end
Sec. 3.
Minnesota Statutes 2006, section 354.35, is amended to read:
354.35 OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE
NORMAL RETIREMENT AGE.
new text begin Subdivision 1. new text end
new text begin Normal retirement age definition. new text end
new text begin
For purposes of this section,
"normal retirement age" means normal retirement age as defined in United States Code,
title 42, section 416(1), as amended.
new text end
new text begin Subd. 2. new text end
new text begin Election of accelerated annuity. new text end
new text begin (a) new text end Any coordinated member who retires
before new text begin normal retirement new text end age deleted text begin 65deleted text end may elect to receive an optional accelerated retirement
annuity from the association which provides for different annuity amounts over different
periods of retirement. The optional accelerated retirement annuity must take the form of
an annuity payable for the period before the member attains age 65new text begin , or normal retirement
age,new text end in a greater amount than the amount of the annuity calculated under section 354.44 on
the basis of the age of the member at retirement, but the optional accelerated retirement
annuity must be the actuarial equivalent of the member's annuity computed on the basis of
the member's age at retirement. The greater amount must be paid until the retiree reaches
age 65new text begin , or normal retirement age,new text end and at that time the payment from the association must
be reduced. For each year the retiree is under age 65new text begin , or normal retirement agenew text end , up to five
percent of the total life annuity required reserves may be used to accelerate the optional
retirement annuity under this section. deleted text begin At retirement,
deleted text end
new text begin (b)new text end Members who retire before age 62 may elect to have the deleted text begin age specified indeleted text end new text begin annuity
under new text end this deleted text begin section bedeleted text end new text begin subdivision accelerated to age new text end 62 deleted text begin instead of 65deleted text end new text begin rather than normal
retirement age or age 65new text end .
new text begin (c)new text end The method of computing the optional accelerated retirement annuity provided in
this deleted text begin sectiondeleted text end new text begin subdivision new text end is established by the board of trustees. In establishing the method
of computing the optional accelerated retirement annuitynew text begin or any modification of that
procedurenew text end , the board of trustees must obtain the written approval of the actuary retained
under section 356.214. The written approval must be a part of the permanent records
of the board of trustees. The election of an optional accelerated retirement annuity is
exercised by making an application on a form provided by the executive director.
Sec. 4.
Minnesota Statutes 2006, section 354.45, subdivision 1a, is amended to read:
Subd. 1a.
Bounce-back annuity.
(a) If a former member or disabilitant selects a
joint and survivor annuity option under subdivision 1 deleted text begin after June 30, 1989deleted text end , the former
member or disabilitant must receive a normal single life annuity if the designated optional
annuity beneficiary dies before the former member or disabilitant. Under this option, no
reduction may be made in the person's annuity to provide for restoration of the normal
single life annuity in the event of the death of the designated optional annuity beneficiary.
(b) deleted text begin The annuity adjustment specified in paragraph (a) also applies to joint and
survivor annuity options under subdivision 1 elected before July 1, 1989. The annuity
adjustment under this paragraph occurs on July 1, 1989, or on the first day of the first
month following the death of the designated optional annuity beneficiary, whichever is
later. This paragraph may not be interpreted as authorizing retroactive payments.deleted text end new text begin The
restoration of the normal single life annuity under this subdivision will take effect on July
1, 1989, or the first of the month following the date of death of the designated optional
annuity beneficiary, or on the first of the month following one year before the date on
which a certified copy of the death record of the designated optional annuity beneficiary is
received in the office of the Teachers Retirement Association, whichever date is later.
new text end
new text begin
(c) Except as stated in paragraph (b), this subdivision should not be interpreted as
authorizing retroactive benefit payments.
new text end
Sec. 5.
Minnesota Statutes 2006, section 354.48, subdivision 3, is amended to read:
Subd. 3.
Computation of benefits.
deleted text begin (1)deleted text end new text begin (a) new text end The amount of the disability benefit
granted to members covered under section 354.44, subdivision 2, deleted text begin clauses (1) and (2)deleted text end new text begin
paragraphs (b) and (c)new text end , is an amount equal to double the annuity which could be purchased
by the member's accumulated deductions plus interest on the amount computed as though
the teacher were at normal retirement age at the time the benefit begins to accrue and in
accordance with the law in effect deleted text begin when the disability application is receiveddeleted text end new text begin on the last day
for which salary is receivednew text end . Any member who applies for a disability benefit after June
30, 1974, and who failed to make an election deleted text begin pursuant todeleted text end new text begin under new text end Minnesota Statutes 1971,
section 354.145, shall have the disability benefit computed under this deleted text begin clausedeleted text end new text begin paragraph, as
further specified in paragraphs (b) and (c), new text end or deleted text begin clause (2)deleted text end new text begin paragraph (d)new text end , whichever is larger.
new text begin (b) new text end The benefit granted shall be determined by the following:
deleted text begin (a)deleted text end new text begin (1) new text end the amount of the accumulated deductions;
deleted text begin (b)deleted text end new text begin (2) new text end interest actually earned on these accumulated deductions to the date the
benefit begins to accrue;
deleted text begin (c)deleted text end new text begin (3) new text end interest for the years from the date the benefit begins to accrue to the date the
member attains normal retirement age at the rate of three percent;
deleted text begin (d)deleted text end new text begin (4)new text end annuity purchase rates based on an appropriate annuity table of mortality
established by the board as provided in section 354.07, subdivision 1, and using
the applicable postretirement interest rate assumption specified in section 356.215,
subdivision 8.
new text begin (c) new text end In addition, a supplementary monthly benefit of $25 to age 65 or the five-year
anniversary of the effective date of the disability benefit, whichever is later, must be
paid to basic members.
deleted text begin (2)deleted text end new text begin (d)new text end The disability benefit granted to members covered under section 354.44,
subdivision 6, shall be computed in the same manner as the annuity provided in section
354.44, subdivision 6. The disability benefit shall be the formula annuity without the
reduction for each month the member is under normal retirement age when the benefit
begins to accruenew text begin as defined by the law in effect on the last day for which salary is paidnew text end .
deleted text begin (3)deleted text end new text begin (e) new text end For the purposes of computing a retirement annuity when the member
becomes eligible, the amounts paid for disability benefits shall not be deducted from the
individual member's accumulated deductions. If the disability benefits provided in this
subdivision exceed the monthly average salary of the disabled member, the disability
benefits shall be reduced to an amount equal to the disabled member's average salary.
Sec. 6.
new text begin
[354.471] ACCOUNT TERMINATION; RESTORATION.
new text end
new text begin Subdivision 1. new text end
new text begin Account termination. new text end
new text begin
If an active or deferred member dies and
there is no surviving spouse or other beneficiaries, or the spouse or beneficiaries cannot be
located within five years of the date of death of the member, the accumulated employee
and employer contributions and any other payments made to the Teachers Retirement
Association fund by the individual or on behalf of the individual, and all investment
earnings on these amounts, shall be credited to and become part of the retirement fund.
new text end
new text begin Subd. 2. new text end
new text begin Restoration. new text end
new text begin
Following a forfeiture under subdivision 1, if a surviving
spouse or other beneficiary of the deceased contacts the Teachers Retirement Association
and, based on documentation determined by the executive director to be valid and
adequate, establishes a right to a survivor annuity, death refund, or other benefit provided
by this chapter, the account forfeited under subdivision 1 shall be fully or partially
restored, as necessary.
new text end
Sec. 7.
Minnesota Statutes 2006, section 356.46, subdivision 3, is amended to read:
Subd. 3.
Requirement of notice to member's spouse.
(a) new text begin Except as specified in
paragraph (c), new text end if a public pension plan provides optional retirement annuity forms which
include a joint and survivor optional retirement 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 of an optional retirement annuity.
(b) Following the election of a retirement annuity by the member, a copy of the
completed retirement annuity application and retirement annuity beneficiary form, if
applicable, must be sent by the new text begin executive director of the new text end public pension plan to the
spouse of the retiring 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 the receipt is
on the annuity application form. If the required signed acknowledgment is not received
from the spouse within 30 days, the new text begin executive director of the new text end public pension plan must
send another copy of the completed retirement annuity application and retirement annuity
beneficiary form, if applicable, to the spouse by certified mail with restricted delivery.
new text begin
(c) For the Teachers Retirement Association, the statement to the spouse that is
required under paragraph (a) shall be sent before or upon the member's election of an
optional annuity.
new text end
Sec. 8. new text begin REPEALER.
new text end
new text begin
Minnesota Statutes 2006, section 354.49, subdivision 5,
new text end
new text begin
is repealed.
new text end
Sec. 9. new text begin EFFECTIVE DATE.
new text end
new text begin
(a) Sections 1, 2, and 4 to 8 are effective July 1, 2007.
new text end
new text begin
(b) Section 3 is effective July 1, 2008.
new text end