Bill Text: MN HF1330 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Duluth Teachers Retirement Fund Association member and employer contribution rates increased, post-July 1, 2013, benefit accrual rate increased, and 2010 postretirement adjustment reductions modified.
Sponsorship: Partisan Bill (Democrat 5)
Status: (Introduced - Dead) 2013-03-06 - Introduction and first reading, referred to Government Operations [HF1330 Detail]
Download: Minnesota-2013-HF1330-Introduced.html
1.2relating to retirement; Duluth Teachers Retirement Fund Association; increasing
1.3member and employer contribution rates; increasing the post-July 1, 2013,
1.4benefit accrual rate; modifying 2010 postretirement adjustment reductions;
1.5amending Minnesota Statutes 2012, sections 354A.12, subdivisions 1, 2a;
1.6354A.27, subdivision 7, by adding a subdivision; 354A.31, subdivision 4a;
1.7repealing Minnesota Statutes 2012, section 354A.27, subdivision 6.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2012, section 354A.12, subdivision 1, is amended to read:
1.10 Subdivision 1. Employee contributions. (a) The contribution required to be paid
1.11by each member of a teachers retirement fund association is the percentage of total salary
1.12specified below for the applicable association and program:
2.3(b) Contributions shall be made by deduction from salary and must be remitted
2.4directly to the respective teachers retirement fund association at least once each month.
2.5(c) When an employee contribution rate changes for a fiscal year, the new
2.6contribution rate is effective for the entire salary paid by the employer with the first
2.7payroll cycle reported.
2.8 Sec. 2. Minnesota Statutes 2012, section 354A.12, subdivision 2a, is amended to read:
2.9 Subd. 2a. Employer regular and additional contributions. (a) The employing
2.10units shall make the following employer contributions to teachers retirement fund
2.11associations:
2.12(1) for any coordinated member of one of the following teachers retirement fund
2.13associations in a city of the first class, the employing unit shall make a regular employer
2.14contribution to the respective retirement fund association in an amount equal to the
2.15designated percentage of the salary of the coordinated member as provided below:
2.26(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
2.27employing unit shall make a regular employer contribution to the respective retirement
2.28fund in an amount according to the schedule below:
2.34(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
2.35employing unit shall make an additional employer contribution to the respective fund in
2.36an amount equal to 3.64 percent of the salary of the basic member;
3.1(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association,
3.2the employing unit shall make an additional employer contribution to the respective fund
3.3in an amount equal to the applicable percentage of the coordinated member's salary,
3.4as provided below:
3.6(b) The regular and additional employer contributions must be remitted directly to
3.7the respective teachers retirement fund association at least once each month. Delinquent
3.8amounts are payable with interest under the procedure in subdivision 1a.
3.9(c) Payments of regular and additional employer contributions for school district
3.10or technical college employees who are paid from normal operating funds must be made
3.11from the appropriate fund of the district or technical college.
3.12(d) When an employer contribution rate changes for a fiscal year, the new
3.13contribution rate is effective for the entire salary paid by the employer with the first
3.14payroll cycle reported.
3.15 Sec. 3. Minnesota Statutes 2012, section 354A.27, is amended by adding a subdivision
3.16to read:
3.17 Subd. 6a. Postretirement adjustment transition. (a) If the funded ratio of the
3.18retirement plan based on the actuarial value of assets is at least 90 percent as reported
3.19in the most recent actuarial valuation prepared under sections 356.214 and 356.215,
3.20this subdivision expires and subsequent postretirement adjustments are governed by
3.21subdivision 7.
3.22(b) Each annuity or benefit recipient of the retirement plan who has been receiving
3.23that annuity or benefit for at least 12 months as of the applicable January 1 is eligible to
3.24receive a postretirement adjustment of two percent, payable on January 1.
3.25 Sec. 4. Minnesota Statutes 2012, section 354A.27, subdivision 7, is amended to read:
3.26 Subd. 7. Calculation of postretirement adjustments. (a) This subdivision applies
3.27if subdivision6 6a has expired.
3.28(b) A percentage adjustment must be computed and paid under this subdivision to
3.29eligible persons under subdivision 5. This adjustment is determined by reference to the
3.30Consumer Price Index for urban wage earners and clerical workers all items index as
3.31reported by the Bureau of Labor Statistics within the United States Department of Labor
3.32each year as part of the determination of annual cost-of-living adjustments to recipients
3.33of federal old-age, survivors, and disability insurance. For calculations of cost-of-living
3.34adjustments under paragraph (c), the term "average third quarter Consumer Price Index
4.1value" means the sum of the monthly index values as initially reported by the Bureau of
4.2Labor Statistics for the months of July, August, and September, divided by 3.
4.3(c) Before January 1 of each year, the executive director must calculate the amount
4.4of the cost-of-living adjustment by dividing the most recent average third quarter index
4.5value by the same average third quarter index value from the previous year, subtract one
4.6from the resulting quotient, and express the result as a percentage amount, which must be
4.7rounded to the nearest one-tenth of one percent.
4.8(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment
4.9to be applied as a permanent increase to the regular payment of each eligible member
4.10on January 1 of the next calendar year. For any eligible member whose effective date
4.11of benefit commencement occurred during the calendar year before the cost-of-living
4.12adjustment is applied, the full increase amount must be prorated on the basis of whole
4.13calendar quarters in benefit payment status in the calendar year prior to the January 1 on
4.14which the cost-of-living adjustment is applied, calculated to the third decimal place.
4.15(e) The adjustment must not be less than zero nor greater than five percent.
4.16(f) If the funding ratio of the plan as determined in the most recent actuarial
4.17valuation using the actuarial value of assets is less than 80 percent there will be no
4.18postretirement adjustment the following January 1.
4.19 Sec. 5. Minnesota Statutes 2012, section 354A.31, subdivision 4a, is amended to read:
4.20 Subd. 4a. Computation of normal coordinated retirement annuity; Duluth
4.21fund. (a) This subdivision applies to the new law coordinated program of the Duluth
4.22Teachers Retirement Fund Association.
4.23(b) The normal coordinated retirement annuity is an amount equal to a retiring
4.24coordinated member's average salary under section354A.011, subdivision 7a , multiplied
4.25by the retirement annuity formula percentage.
4.26(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
4.27became a member or a member in a pension fund listed in section356.30, subdivision 3 ,
4.28before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a
4.29higher annuity amount, in which case paragraph (d) applies. The retirement annuity
4.30formula percentage for purposes of this paragraph is the percent specified in section
4.31356.315, subdivision 1
, per year for each year of coordinated program service for the first
4.32ten years rendered through June 30, 2013, and the percent specified in section 356.315,
4.33subdivision 1a, per year for each year of coordinated program service rendered after June
4.3430, 2013, and the percent specified in section356.315, subdivision 2 , for each subsequent
4.35year of coordinated program service through June 30, 2013, and the percent specified in
5.1section 356.315, subdivision 2b, per year for each year of coordinated program service
5.2rendered after June 30, 2013.
5.3(d) This paragraph applies to a person who is at least 55 years old and who first
5.4becomes a member after June 30, 1989, and to any other member who is at least 55 years
5.5old and whose annuity amount, when calculated under this paragraph and in conjunction
5.6with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction
5.7with subdivision 6. The retirement annuity formula percentage for purposes of this
5.8paragraph is the percent specified in section356.315, subdivision 2 , for each year of
5.9coordinated program service through June 30, 2013, and the percent specified in section
5.10356.315, subdivision 2b, per year for each year of coordinated program service rendered
5.11after June 30, 2013.
5.12 Sec. 6. REPEALER.
5.13Minnesota Statutes 2012, section 354A.27, subdivision 6, is repealed.
5.14 Sec. 7. EFFECTIVE DATE.
5.15(a) Sections 1 to 6 are effective July 1, 2013.
5.16(b) Section 3 applies to the postretirement adjustment payable on January 1, 2014.
1.3member and employer contribution rates; increasing the post-July 1, 2013,
1.4benefit accrual rate; modifying 2010 postretirement adjustment reductions;
1.5amending Minnesota Statutes 2012, sections 354A.12, subdivisions 1, 2a;
1.6354A.27, subdivision 7, by adding a subdivision; 354A.31, subdivision 4a;
1.7repealing Minnesota Statutes 2012, section 354A.27, subdivision 6.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2012, section 354A.12, subdivision 1, is amended to read:
1.10 Subdivision 1. Employee contributions. (a) The contribution required to be paid
1.11by each member of a teachers retirement fund association is the percentage of total salary
1.12specified below for the applicable association and program:
2.3(b) Contributions shall be made by deduction from salary and must be remitted
2.4directly to the respective teachers retirement fund association at least once each month.
2.5(c) When an employee contribution rate changes for a fiscal year, the new
2.6contribution rate is effective for the entire salary paid by the employer with the first
2.7payroll cycle reported.
2.8 Sec. 2. Minnesota Statutes 2012, section 354A.12, subdivision 2a, is amended to read:
2.9 Subd. 2a. Employer regular and additional contributions. (a) The employing
2.10units shall make the following employer contributions to teachers retirement fund
2.11associations:
2.12(1) for any coordinated member of one of the following teachers retirement fund
2.13associations in a city of the first class, the employing unit shall make a regular employer
2.14contribution to the respective retirement fund association in an amount equal to the
2.15designated percentage of the salary of the coordinated member as provided below:
2.26(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
2.27employing unit shall make a regular employer contribution to the respective retirement
2.28fund in an amount according to the schedule below:
2.34(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
2.35employing unit shall make an additional employer contribution to the respective fund in
2.36an amount equal to 3.64 percent of the salary of the basic member;
3.1(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association,
3.2the employing unit shall make an additional employer contribution to the respective fund
3.3in an amount equal to the applicable percentage of the coordinated member's salary,
3.4as provided below:
| 3.5 |
St. Paul Teachers Retirement Fund Association |
3.84 percent |
3.7the respective teachers retirement fund association at least once each month. Delinquent
3.8amounts are payable with interest under the procedure in subdivision 1a.
3.9(c) Payments of regular and additional employer contributions for school district
3.10or technical college employees who are paid from normal operating funds must be made
3.11from the appropriate fund of the district or technical college.
3.12(d) When an employer contribution rate changes for a fiscal year, the new
3.13contribution rate is effective for the entire salary paid by the employer with the first
3.14payroll cycle reported.
3.15 Sec. 3. Minnesota Statutes 2012, section 354A.27, is amended by adding a subdivision
3.16to read:
3.17 Subd. 6a. Postretirement adjustment transition. (a) If the funded ratio of the
3.18retirement plan based on the actuarial value of assets is at least 90 percent as reported
3.19in the most recent actuarial valuation prepared under sections 356.214 and 356.215,
3.20this subdivision expires and subsequent postretirement adjustments are governed by
3.21subdivision 7.
3.22(b) Each annuity or benefit recipient of the retirement plan who has been receiving
3.23that annuity or benefit for at least 12 months as of the applicable January 1 is eligible to
3.24receive a postretirement adjustment of two percent, payable on January 1.
3.25 Sec. 4. Minnesota Statutes 2012, section 354A.27, subdivision 7, is amended to read:
3.26 Subd. 7. Calculation of postretirement adjustments. (a) This subdivision applies
3.27if subdivision
3.28(b) A percentage adjustment must be computed and paid under this subdivision to
3.29eligible persons under subdivision 5. This adjustment is determined by reference to the
3.30Consumer Price Index for urban wage earners and clerical workers all items index as
3.31reported by the Bureau of Labor Statistics within the United States Department of Labor
3.32each year as part of the determination of annual cost-of-living adjustments to recipients
3.33of federal old-age, survivors, and disability insurance. For calculations of cost-of-living
3.34adjustments under paragraph (c), the term "average third quarter Consumer Price Index
4.1value" means the sum of the monthly index values as initially reported by the Bureau of
4.2Labor Statistics for the months of July, August, and September, divided by 3.
4.3(c) Before January 1 of each year, the executive director must calculate the amount
4.4of the cost-of-living adjustment by dividing the most recent average third quarter index
4.5value by the same average third quarter index value from the previous year, subtract one
4.6from the resulting quotient, and express the result as a percentage amount, which must be
4.7rounded to the nearest one-tenth of one percent.
4.8(d) The amount calculated under paragraph (c) is the full cost-of-living adjustment
4.9to be applied as a permanent increase to the regular payment of each eligible member
4.10on January 1 of the next calendar year. For any eligible member whose effective date
4.11of benefit commencement occurred during the calendar year before the cost-of-living
4.12adjustment is applied, the full increase amount must be prorated on the basis of whole
4.13calendar quarters in benefit payment status in the calendar year prior to the January 1 on
4.14which the cost-of-living adjustment is applied, calculated to the third decimal place.
4.15(e) The adjustment must not be less than zero nor greater than five percent.
4.16(f) If the funding ratio of the plan as determined in the most recent actuarial
4.17valuation using the actuarial value of assets is less than 80 percent there will be no
4.18postretirement adjustment the following January 1.
4.19 Sec. 5. Minnesota Statutes 2012, section 354A.31, subdivision 4a, is amended to read:
4.20 Subd. 4a. Computation of normal coordinated retirement annuity; Duluth
4.21fund. (a) This subdivision applies to the new law coordinated program of the Duluth
4.22Teachers Retirement Fund Association.
4.23(b) The normal coordinated retirement annuity is an amount equal to a retiring
4.24coordinated member's average salary under section
4.25by the retirement annuity formula percentage.
4.26(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
4.27became a member or a member in a pension fund listed in section
4.28before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces a
4.29higher annuity amount, in which case paragraph (d) applies. The retirement annuity
4.30formula percentage for purposes of this paragraph is the percent specified in section
4.32ten years rendered through June 30, 2013, and the percent specified in section 356.315,
4.33subdivision 1a, per year for each year of coordinated program service rendered after June
4.3430, 2013, and the percent specified in section
4.35year of coordinated program service through June 30, 2013, and the percent specified in
5.1section 356.315, subdivision 2b, per year for each year of coordinated program service
5.2rendered after June 30, 2013.
5.3(d) This paragraph applies to a person who is at least 55 years old and who first
5.4becomes a member after June 30, 1989, and to any other member who is at least 55 years
5.5old and whose annuity amount, when calculated under this paragraph and in conjunction
5.6with subdivision 7, is higher than it is when calculated under paragraph (c) in conjunction
5.7with subdivision 6. The retirement annuity formula percentage for purposes of this
5.8paragraph is the percent specified in section
5.9coordinated program service through June 30, 2013, and the percent specified in section
5.10356.315, subdivision 2b, per year for each year of coordinated program service rendered
5.11after June 30, 2013.
5.12 Sec. 6. REPEALER.
5.13Minnesota Statutes 2012, section 354A.27, subdivision 6, is repealed.
5.14 Sec. 7. EFFECTIVE DATE.
5.15(a) Sections 1 to 6 are effective July 1, 2013.
5.16(b) Section 3 applies to the postretirement adjustment payable on January 1, 2014.
