Bill Text: MN HF1433 | 2013-2014 | 88th Legislature | Introduced
Bill Title: St. Paul Teachers Retirement Association; state aid increased by up to $10 million annually, employee and employer contributions increased, employer contributions required for reemployed annuitants, 180-day separation required to qualify for retirement annuity, other reemployed annuitant provisions modified, early retirement factors revised, funding provided, and money appropriated.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2013-03-11 - Introduction and first reading, referred to Government Operations [HF1433 Detail]
Download: Minnesota-2013-HF1433-Introduced.html
1.2relating to retirement; St. Paul Teachers Retirement Fund Association; increasing
1.3state aid by up to $10,000,000 annually; increasing employee and employer
1.4contributions; requiring employer contributions for reemployed annuitants;
1.5requiring a 180-day separation to qualify for a retirement annuity; requiring
1.6forfeiture of reemployed annuitant accounts by post-June 30, 2013, retirees;
1.7increasing accrual rates on post-June 30, 2014, service; revising early retirement
1.8factors; moving the Teachers Retirement Association aid authorization to
1.9a new section; appropriating money; amending Minnesota Statutes 2012,
1.10sections 354A.011, subdivision 21; 354A.12, subdivisions 1, 2a, 3a, 3c, 7, by
1.11adding a subdivision; 354A.31, subdivisions 3, 4, 7; 354A.35, subdivision 2;
1.12356.47, subdivision 1; 423A.02, subdivision 5; proposing coding for new law in
1.13Minnesota Statutes, chapter 354.
1.14BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. [354.436] DIRECT STATE AID ON BEHALF OF THE FORMER
1.16MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.
1.17 Subdivision 1. Aid authorization. The state shall pay $12,954,000 to the Teachers
1.18Retirement Association on behalf of the former Minneapolis Teachers Retirement Fund
1.19Association.
1.20 Subd. 2. Aid appropriation. The commissioner of management and budget shall
1.21pay the aid. The amount required is appropriated annually from the general fund to the
1.22commissioner of management and budget.
1.23 Subd. 3. Aid expiration. The aid specified in this section terminates and this
1.24section expires when the current assets of the Teachers Retirement Association fund equal
1.25or exceed the actuarial accrued liabilities of the fund as determined in the most recent
1.26actuarial valuation report for the Teachers Retirement Association fund by the actuary
1.27retained under section 356.214, or on the established date for full funding under section
1.28356.215, subdivision 11, whichever occurs earlier.
2.1EFFECTIVE DATE.This section is effective the day following final enactment.
2.2 Sec. 2. Minnesota Statutes 2012, section 354A.011, subdivision 21, is amended to read:
2.3 Subd. 21. Retirement. (a) "Retirement" means the time after the date of cessation
2.4of active teaching service by a teacher who isthereafter then entitled to an accrued
2.5retirement annuitycommencing beginning as designated by the board of trustees and
2.6payablepursuant to an upon filing a valid application for an annuity filed with the board.
2.7The applicable provisions of law, articles of incorporation and bylaws in effect on the date
2.8of cessation of active teaching service thereafter determine the rights of the person.
2.9(b) For members of the St. Paul Teachers Retirement Fund Association, a right to a
2.10retirement annuity requires a complete and continuous separation for 180 days from
2.11employment in any form with Independent School District No. 625, including service as
2.12an independent contractor or as an employee of an independent contractor.
2.13EFFECTIVE DATE.This section is effective the day following final enactment.
2.14 Sec. 3. Minnesota Statutes 2012, section 354A.12, subdivision 1, is amended to read:
2.15 Subdivision 1. Employee contributions. (a) The contribution required to be paid
2.16by each member of a teachers retirement fund association is the percentage of total salary
2.17specified below for the applicable association and program:
3.3(b) Contributions shall be made by deduction from salary and must be remitted
3.4directly to the respective teachers retirement fund association at least once each month.
3.5(c) When an employee contribution rate changes for a fiscal year, the new
3.6contribution rate is effective for the entire salary paid by the employer with the first
3.7payroll cycle reported.
3.8EFFECTIVE DATE.This section is effective the day following final enactment.
3.9 Sec. 4. Minnesota Statutes 2012, section 354A.12, subdivision 2a, is amended to read:
3.10 Subd. 2a. Employer regular and additional contributions. (a) The employing
3.11units shall make the following employer contributions to teachers retirement fund
3.12associations:
3.13(1) for any coordinated member of one of the following teachers retirement fund
3.14associations in a city of the first class, the employing unit shall make a regular employer
3.15contribution to the respective retirement fund association in an amount equal to the
3.16designated percentage of the salary of the coordinated member as provided below:
3.29(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
3.30employing unit shall make a regular employer contribution to the respective retirement
3.31fund in an amount according to the schedule below:
4.3(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
4.4employing unit shall make an additional employer contribution to the respective fund in
4.5an amount equal to 3.64 percent of the salary of the basic member;
4.6(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association,
4.7the employing unit shall make an additional employer contribution to the respective fund
4.8in an amount equal to the applicable percentage of the coordinated member's salary,
4.9as provided below:
4.11(b) The regular and additional employer contributions must be remitted directly to
4.12the respective teachers retirement fund association at least once each month. Delinquent
4.13amounts are payable with interest under the procedure in subdivision 1a.
4.14(c) Payments of regular and additional employer contributions for school district
4.15or technical college employees who are paid from normal operating funds must be made
4.16from the appropriate fund of the district or technical college.
4.17(d) When an employer contribution rate changes for a fiscal year, the new
4.18contribution rate is effective for the entire salary paid by the employer with the first
4.19payroll cycle reported.
4.20EFFECTIVE DATE.This section is effective the day following final enactment.
4.21 Sec. 5. Minnesota Statutes 2012, section 354A.12, is amended by adding a subdivision
4.22to read:
4.23 Subd. 2c. St. Paul Teachers Retirement Fund Association; employer
4.24contributions for reemployed annuitants. The school district shall make the regular
4.25employer contributions and additional employer contributions specified in subdivision 2a
4.26on behalf of any retired member of the St. Paul Teachers Retirement Fund Association
4.27who is reemployed by Independent School District No. 625, including providing service
4.28as an independent contractor or as an employee of an independent contractor.
4.29EFFECTIVE DATE.This section is effective the day following final enactment.
4.30 Sec. 6. Minnesota Statutes 2012, section 354A.12, subdivision 3a, is amended to read:
4.31 Subd. 3a. Specialdirect state aid to first class city teachers retirement
4.32fund associations. (a) The state shall pay as special direct state aid $346,000 to the
4.33Duluth Teachers Retirement Fund Association, and $2,827,000 to the St. Paul Teachers
5.1Retirement Fund Associationand, for the former Minneapolis Teachers Retirement Fund
5.2Association, $12,954,000 to the Teachers Retirement Association.
5.3(b) The direct state aids under this subdivision are payable October 1 annually. The
5.4commissioner of management and budget shall pay the direct state aid. The amount
5.5required under this subdivision is appropriated annually from the general fund to the
5.6commissioner of management and budget.
5.7 (b) In addition to the aid specified in paragraph (a), the state shall pay to the St. Paul
5.8Teachers Retirement Fund Association additional aid which varies depending upon the
5.9relationship of the net annual calendar time-weighted total portfolio rate of return of
5.10the St. Paul Teachers Retirement Fund Association, as computed by the Office of the
5.11State Auditor and included in the most recent investment disclosure report under section
5.12356.219, subdivision 6, and the preretirement interest rate assumption for the same year
5.13for the St. Paul Teachers Retirement Fund Association under section 356.215, subdivision
5.148. The aid provided under this paragraph is $10,000,000 annually before adjustments. If
5.15the applicable St. Paul Teachers Retirement Fund Association rate of return exceeds the
5.16preretirement interest rate assumption, the aid under this paragraph is reduced by $500,000
5.17for every one percent of return in excess of the preretirement interest rate assumption. The
5.18net aid payable under this paragraph must not be less than $3,000,000 annually.
5.19(c) The aids under this subdivision are payable annually October 1. The
5.20commissioner of management and budget shall pay the aids specified in this subdivision.
5.21The amounts required are appropriated annually from the general fund to the commissioner
5.22of management and budget.
5.23EFFECTIVE DATE.This section is effective the day following final enactment.
5.24The first aid payment under paragraph (b) is payable on October 1, 2013, based on results
5.25in the Office of the State Auditor report referred to in that paragraph for the calendar
5.26year ending December 31, 2011.
5.27 Sec. 7. Minnesota Statutes 2012, section 354A.12, subdivision 3c, is amended to read:
5.28 Subd. 3c. Termination of supplemental contributions and direct matching
5.29and state aid. (a) The supplemental contributions payable to the St. Paul Teachers
5.30Retirement Fund Association by Independent School District No. 625 under section
5.31423A.02, subdivision 3
, or the direct and all forms of state aid under subdivision 3a to the
5.32St. Paul Teachers Retirement Fund Association must continue until the current assets of
5.33the fund equal or exceed the actuarial accrued liability of the fund as determined in the
5.34most recent actuarial report for the fund by the actuary retained under section356.214 or
5.35until June 30, 2037, whichever occurs earlier.
6.1(b) The aid to the Duluth Teachers Retirement Fund Association under section
6.2423A.02, subdivision 3, and all forms of state aid under subdivision 3a to the Duluth
6.3Teachers Retirement Fund Association must continue until the current assets of the fund
6.4equal or exceed the actuarial accrued liability of the fund as determined in the most
6.5recent actuarial report for the fund by the actuary retained under section356.214 or until
6.6the established date for full funding under section 356.215, subdivision 11, whichever
6.7occurs earlier.
6.8EFFECTIVE DATE.This section is effective the day following final enactment.
6.9 Sec. 8. Minnesota Statutes 2012, section 354A.12, subdivision 7, is amended to read:
6.10 Subd. 7. Recovery of benefit overpayments. (a) If the executive director discovers,
6.11within the time period specified in subdivision 8 following the payment of a refund or
6.12the accrual date of any retirement annuity, survivor benefit, or disability benefit, that
6.13benefit overpayment has occurred due to using invalid service or salary, or due to any
6.14erroneous calculation procedure, the executive director must recalculate the annuity or
6.15benefit payable and recover any overpayment. The executive director shall recover the
6.16overpayment by requiring direct repayment or by suspending or reducing the payment of a
6.17retirement annuity or other benefit payable under this chapter to the applicable person or
6.18the person's estate, whichever applies, until all outstanding amounts have been recovered.
6.19 If a benefit overpayment or improper payment of benefits occurred caused by a failure
6.20of the person to satisfy length of separation requirements for retirement under section
6.21354A.011, subdivision 21, the executive director shall recover the improper payments by
6.22requiring direct repayment.
6.23(b) In the event the executive director determines that an overpaid annuity or benefit
6.24that is the result of invalid salary included in the average salary used to calculate the
6.25payment amount must be recovered, the executive director must determine the amount of
6.26the employee deductions taken in error on the invalid salary, with interest as determined
6.27under354A.37, subdivision 3 , and must subtract that amount from the total annuity or
6.28benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if
6.29any, must be recovered.
6.30(c) If the invalid employee deductions plus interest exceed the amount of the
6.31overpaid benefits, the balance must be refunded to the person to whom the benefit or
6.32annuity is being paid.
6.33(d) Any invalid employer contributions reported on the invalid salary must be
6.34credited against future contributions payable by the employer.
7.1(e) If a member or former member, who is receiving a retirement annuity or
7.2disability benefit for which an overpayment is being recovered, dies before recovery of the
7.3overpayment is completed and an optional annuity or refund is payable, the remaining
7.4balance of the overpaid annuity or benefit must continue to be recovered from the payment
7.5to the optional annuity beneficiary or refund recipient.
7.6(f) The board of trustees shall adopt policies directing the period of time and manner
7.7for the collection of any overpaid retirement or optional annuity, and survivor or disability
7.8benefit, or a refund that the executive director determines must be recovered as provided
7.9under this section.
7.10EFFECTIVE DATE.This section is effective the day following final enactment.
7.11 Sec. 9. Minnesota Statutes 2012, section 354A.31, subdivision 3, is amended to read:
7.12 Subd. 3. Resumption of teaching after commencement of a retirement annuity.
7.13 (a) Any person who retired and is receiving a coordinated program retirement annuity
7.14under the provisions of sections354A.31 to
354A.41 or any person receiving a basic
7.15program retirement annuity under the governing sections in the articles of incorporation
7.16or bylaws and who has resumed teaching service for the school district in which the
7.17teachers retirement fund association exists is entitled to continue to receive retirement
7.18annuity payments, except that all or a portion of the annuity payments must be deferred
7.19during the calendar year immediately following the calendar year in which the person's
7.20salary from the teaching service is in an amount greater than $46,000. The amount of the
7.21annuity deferral is one-third the salary amount in excess of $46,000 and must be deducted
7.22from the annuity payable for the calendar year immediately following the calendar year
7.23in which the excess amount was earned.
7.24 (b) If the person is retired for only a fractional part of the calendar year during the
7.25initial year of retirement, the maximum reemployment salary exempt from triggering a
7.26deferral as specified in this subdivision must be prorated for that calendar year.
7.27 (c) After a person has reached the Social Security normal retirement age, no deferral
7.28requirement is applicable regardless of the amount of any compensation received for
7.29teaching service for the school district in which the teachers retirement fund association
7.30exists.
7.31 (d) The amount of the retirement annuity deferral must be handled or disposed
7.32of as provided in section356.47 .
7.33(e) Notwithstanding other paragraphs of this subdivision, for any retired St. Paul
7.34Teachers Retirement Fund Association basic or coordinated program member whose
7.35effective date of retirement is after June 30, 2013, amounts specified as deferred under
8.1this subdivision must instead be forfeited to the St. Paul Teachers Retirement Fund
8.2Association fund.
8.3(e) (f) For the purpose of this subdivision, salary from teaching service includes: (i)
8.4all income for services performed as a consultant or independent contractor; or income
8.5resulting from working with the school district in any capacity; and (ii) the greater of either
8.6the income received or an amount based on the rate paid with respect to an administrative
8.7position, consultant, or independent contractor in the school district in which the teachers
8.8retirement fund association exists and at the same level as the position occupied by the
8.9person who resumes teaching service.
8.10(f) (g) On or before February 15 of each year, each applicable employing unit
8.11shall report to the teachers retirement fund association the amount of postretirement
8.12salary as defined in this subdivision, earned as a teacher, consultant, or independent
8.13contractor during the previous calendar year by each retiree of the teachers retirement
8.14fund association for teaching service performed after retirement. The report must be in
8.15a format approved by the executive secretary or director.
8.16EFFECTIVE DATE.This section is effective the day following final enactment.
8.17 Sec. 10. Minnesota Statutes 2012, section 354A.31, subdivision 4, is amended to read:
8.18 Subd. 4. Computation of normal coordinated retirement annuity; St. Paul
8.19fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers
8.20Retirement Fund Association.
8.21(b) The normal coordinated retirement annuity is an amount equal to a retiring
8.22coordinated member's average salary under section354A.011, subdivision 7a , multiplied
8.23by the retirement annuity formula percentage.
8.24(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
8.25became a member or a member in a pension fund listed in section356.30, subdivision 3 ,
8.26before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces
8.27a higher annuity amount, in which case paragraph (d) will apply. For service rendered
8.28before July 1, 2014, the retirement annuity formula percentage for purposes of this
8.29paragraph is the percent specified in section356.315, subdivision 1 , per year for each year
8.30of coordinated service for the first ten years and the percent specified in section356.315,
8.31subdivision 2 , for each year of coordinated service thereafter. For service rendered after
8.32June 30, 2014, the retirement annuity formula percentage for purposes of this paragraph
8.33is the percent specified in section356.315, subdivision 1a , per year for each year of
8.34coordinated service for the first ten years and the percent specified in section356.315,
8.35subdivision 2b , for each year of coordinated service thereafter.
9.1(d) This paragraph applies to a person who has become at least 55 years old and who
9.2first becomes a member after June 30, 1989, and to any other member who has become
9.3at least 55 years old and whose annuity amount, when calculated under this paragraph
9.4and in conjunction with subdivision 7 is higher than it is when calculated under paragraph
9.5(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula
9.6percentage for purposes of this paragraph is the percent specified in section356.315,
9.7subdivision 2 , for each year of coordinated service rendered before July 1, 2014, and
9.8the percent specified in section 356.215, subdivision 2b, for each year of coordinated
9.9service thereafter.
9.10EFFECTIVE DATE.This section is effective July 1, 2014.
9.11 Sec. 11. Minnesota Statutes 2012, section 354A.31, subdivision 7, is amended to read:
9.12 Subd. 7. Actuarial reduction for early retirement. (a) This subdivision applies to
9.13a person who has become at least 55 years old and first becomes a coordinated member
9.14after June 30, 1989, and to any other coordinated member who has become at least 55
9.15years old and whose annuity is higher when calculated using the retirement annuity
9.16formula percentage in subdivision 4, paragraph (d),and or subdivision 4a, paragraph (d),
9.17as applicable, in conjunction with this subdivision than when calculated under subdivision
9.184, paragraph (c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6.
9.19(b) A coordinated member who retires before thefull benefit normal retirement
9.20age shall be paid the retirement annuity calculated using the retirement annuity formula
9.21percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph (d),reduced so
9.22that the reduced annuity is the actuarial equivalent of the annuity that would be payable
9.23to the member if the member deferred receipt of the annuity and the annuity amount
9.24were augmented at an annual rate of three percent compounded annually from the day
9.25the annuity begins to accrue until the normal retirement age if the employee became an
9.26employee before July 1, 2006, and at 2.5 percent compounded annually from the day the
9.27annuity begins to accrue until the normal retirement age if the person initially becomes a
9.28teacher after June 30, 2006. whichever is applicable, multiplied by the applicable early
9.29retirement factor specified below:
10.11EFFECTIVE DATE.This section is effective July 1, 2013.
10.12 Sec. 12. Minnesota Statutes 2012, section 354A.35, subdivision 2, is amended to read:
10.13 Subd. 2. Death while eligible to retire; surviving spouse optional annuity. (a)
10.14The surviving spouse of a vested coordinated member who dies prior to retirement may
10.15elect to receive, instead of a refund with interest under subdivision 1, an annuity equal
10.16to the 100 percent joint and survivor annuity the member could have qualified for had
10.17the member terminated service on the date of death. The surviving spouse eligible for
10.18a surviving spouse benefit under this paragraph may apply for the annuity at any time
10.19after the date on which the deceased employee would have attained the required age for
10.20retirement based on the employee's allowable service. A surviving spouse eligible for
10.21surviving spouse benefits under paragraph (b) or (c) may apply for an annuity at any time
10.22after the member's death. The member's surviving spouse shall be paid a joint and survivor
10.23annuity under section354A.32 and computed under section
354A.31 .
10.24(b) If the member was under age 55 and has credit for at least 30 years of allowable
10.25service on the date of death, the surviving spouse may elect to receive a 100 percent joint
10.26and survivor annuity based on the age of the member and surviving spouse on the date
10.27of death. The annuity is payable using the full early retirement reduction under section
10.28354A.31, subdivision 6
, paragraph (a), to age 55 and one-half of the early retirement
10.29reduction from age 55 to the age payment begins.
10.30(c) If a vested member of the Duluth Teachers Retirement Fund Association was
10.31under age 55 on the date of death but did not yet qualify for retirement, the surviving
10.32spouse may elect to receive the 100 percent joint and survivor annuity based on the age
10.33of the member and the survivor at the time of death. The annuity is payable using the
10.34full early retirement reduction under section354A.31, subdivision 6 or 7, to age 55 and
10.35one-half of the early retirement reduction from age 55 to the date payment begins.
11.1(d) If a vested member of the St. Paul Teachers Retirement Fund Association was
11.2under age 55 on the date of death but did not yet qualify for retirement, the surviving
11.3spouse may elect to receive the 100 percent joint and survivor annuity based on the age
11.4of the member and the survivor at the time of death. The annuity is payable using the
11.5full early retirement reduction under section354A.31, subdivision 6 or 7, to age 55 and
11.6one-half of the actuarial equivalent reduction from age 55 to the date payment begins.
11.7The actuarial equivalent reduction is calculated so that the reduced annuity is the actuarial
11.8equivalent of the annuity that would be payable to the member if the member deferred
11.9receipt of the annuity and the annuity amount were augmented at an annual rate of three
11.10percent compounded annually from the day the annuity begins to accrue until the normal
11.11retirement age.
11.12(d) (e) Sections
354A.37, subdivision 2 , and
354A.39 apply to a deferred annuity
11.13or surviving spouse benefit payable under this section. The benefits are payable for the
11.14life of the surviving spouse, or upon expiration of the term certain benefit payment under
11.15subdivision 2b.
11.16EFFECTIVE DATE.This section is effective the day following final enactment.
11.17 Sec. 13. Minnesota Statutes 2012, section 356.47, subdivision 1, is amended to read:
11.18 Subdivision 1. Application. This section applies to the balance of annual retirement
11.19annuities on the amount of retirement annuity reductions after reemployed annuitant
11.20earnings limitations for retirement plans governed by section352.115, subdivision 10 ;
11.21353.37
;
354.44, subdivision 5 ; or
354A.31, subdivision 3 , for the Duluth Teachers
11.22Retirement Fund Association. This section also applies to the balance of annual retirement
11.23annuities on the amount of retirement annuity reductions under section 354A.31,
11.24subdivision 3, for members of the St. Paul Teachers Retirement Fund Association whose
11.25effective date of retirement is before July 1, 2013.
11.26EFFECTIVE DATE.This section is effective the day following final enactment.
11.27 Sec. 14. Minnesota Statutes 2012, section 423A.02, subdivision 5, is amended to read:
11.28 Subd. 5. Termination of state aid programs. The amortization state aid,
11.29supplemental amortization state aid, and additional amortization state aid programs
11.30terminate as of the December 31, next following the date of the actuarial valuation when
11.31the assets of the St. Paul Teachers Retirement Fund Association equal the actuarial accrued
11.32liability of that plan orDecember 31, 2009 June 30, 2037, whichever is later earlier.
11.33EFFECTIVE DATE.This section is effective the day following final enactment.
12.1 Sec. 15. ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BYLAW
12.2AMENDMENT AUTHORIZATION.
12.3Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the St. Paul
12.4Teachers Retirement Fund Association is authorized to amend its articles of incorporation
12.5or its bylaws to apply the reduction factors stated in section 11 rather than the actuarial
12.6reduction factors previously authorized.
12.7EFFECTIVE DATE.This section is effective the day following final enactment.
1.3state aid by up to $10,000,000 annually; increasing employee and employer
1.4contributions; requiring employer contributions for reemployed annuitants;
1.5requiring a 180-day separation to qualify for a retirement annuity; requiring
1.6forfeiture of reemployed annuitant accounts by post-June 30, 2013, retirees;
1.7increasing accrual rates on post-June 30, 2014, service; revising early retirement
1.8factors; moving the Teachers Retirement Association aid authorization to
1.9a new section; appropriating money; amending Minnesota Statutes 2012,
1.10sections 354A.011, subdivision 21; 354A.12, subdivisions 1, 2a, 3a, 3c, 7, by
1.11adding a subdivision; 354A.31, subdivisions 3, 4, 7; 354A.35, subdivision 2;
1.12356.47, subdivision 1; 423A.02, subdivision 5; proposing coding for new law in
1.13Minnesota Statutes, chapter 354.
1.14BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.15 Section 1. [354.436] DIRECT STATE AID ON BEHALF OF THE FORMER
1.16MINNEAPOLIS TEACHERS RETIREMENT FUND ASSOCIATION.
1.17 Subdivision 1. Aid authorization. The state shall pay $12,954,000 to the Teachers
1.18Retirement Association on behalf of the former Minneapolis Teachers Retirement Fund
1.19Association.
1.20 Subd. 2. Aid appropriation. The commissioner of management and budget shall
1.21pay the aid. The amount required is appropriated annually from the general fund to the
1.22commissioner of management and budget.
1.23 Subd. 3. Aid expiration. The aid specified in this section terminates and this
1.24section expires when the current assets of the Teachers Retirement Association fund equal
1.25or exceed the actuarial accrued liabilities of the fund as determined in the most recent
1.26actuarial valuation report for the Teachers Retirement Association fund by the actuary
1.27retained under section 356.214, or on the established date for full funding under section
1.28356.215, subdivision 11, whichever occurs earlier.
2.1EFFECTIVE DATE.This section is effective the day following final enactment.
2.2 Sec. 2. Minnesota Statutes 2012, section 354A.011, subdivision 21, is amended to read:
2.3 Subd. 21. Retirement. (a) "Retirement" means the time after the date of cessation
2.4of active teaching service by a teacher who is
2.5retirement annuity
2.6payable
2.7The applicable provisions of law, articles of incorporation and bylaws in effect on the date
2.8of cessation of active teaching service thereafter determine the rights of the person.
2.9(b) For members of the St. Paul Teachers Retirement Fund Association, a right to a
2.10retirement annuity requires a complete and continuous separation for 180 days from
2.11employment in any form with Independent School District No. 625, including service as
2.12an independent contractor or as an employee of an independent contractor.
2.13EFFECTIVE DATE.This section is effective the day following final enactment.
2.14 Sec. 3. Minnesota Statutes 2012, section 354A.12, subdivision 1, is amended to read:
2.15 Subdivision 1. Employee contributions. (a) The contribution required to be paid
2.16by each member of a teachers retirement fund association is the percentage of total salary
2.17specified below for the applicable association and program:
3.3(b) Contributions shall be made by deduction from salary and must be remitted
3.4directly to the respective teachers retirement fund association at least once each month.
3.5(c) When an employee contribution rate changes for a fiscal year, the new
3.6contribution rate is effective for the entire salary paid by the employer with the first
3.7payroll cycle reported.
3.8EFFECTIVE DATE.This section is effective the day following final enactment.
3.9 Sec. 4. Minnesota Statutes 2012, section 354A.12, subdivision 2a, is amended to read:
3.10 Subd. 2a. Employer regular and additional contributions. (a) The employing
3.11units shall make the following employer contributions to teachers retirement fund
3.12associations:
3.13(1) for any coordinated member of one of the following teachers retirement fund
3.14associations in a city of the first class, the employing unit shall make a regular employer
3.15contribution to the respective retirement fund association in an amount equal to the
3.16designated percentage of the salary of the coordinated member as provided below:
3.29(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
3.30employing unit shall make a regular employer contribution to the respective retirement
3.31fund in an amount according to the schedule below:
4.3(3) for a basic member of the St. Paul Teachers Retirement Fund Association, the
4.4employing unit shall make an additional employer contribution to the respective fund in
4.5an amount equal to 3.64 percent of the salary of the basic member;
4.6(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association,
4.7the employing unit shall make an additional employer contribution to the respective fund
4.8in an amount equal to the applicable percentage of the coordinated member's salary,
4.9as provided below:
| 4.10 |
St. Paul Teachers Retirement Fund Association |
3.84 percent |
4.12the respective teachers retirement fund association at least once each month. Delinquent
4.13amounts are payable with interest under the procedure in subdivision 1a.
4.14(c) Payments of regular and additional employer contributions for school district
4.15or technical college employees who are paid from normal operating funds must be made
4.16from the appropriate fund of the district or technical college.
4.17(d) When an employer contribution rate changes for a fiscal year, the new
4.18contribution rate is effective for the entire salary paid by the employer with the first
4.19payroll cycle reported.
4.20EFFECTIVE DATE.This section is effective the day following final enactment.
4.21 Sec. 5. Minnesota Statutes 2012, section 354A.12, is amended by adding a subdivision
4.22to read:
4.23 Subd. 2c. St. Paul Teachers Retirement Fund Association; employer
4.24contributions for reemployed annuitants. The school district shall make the regular
4.25employer contributions and additional employer contributions specified in subdivision 2a
4.26on behalf of any retired member of the St. Paul Teachers Retirement Fund Association
4.27who is reemployed by Independent School District No. 625, including providing service
4.28as an independent contractor or as an employee of an independent contractor.
4.29EFFECTIVE DATE.This section is effective the day following final enactment.
4.30 Sec. 6. Minnesota Statutes 2012, section 354A.12, subdivision 3a, is amended to read:
4.31 Subd. 3a. Special
4.32fund associations. (a) The state shall pay as special direct state aid $346,000 to the
4.33Duluth Teachers Retirement Fund Association
5.1Retirement Fund Association
5.2
5.3
5.4
5.5
5.6
5.7 (b) In addition to the aid specified in paragraph (a), the state shall pay to the St. Paul
5.8Teachers Retirement Fund Association additional aid which varies depending upon the
5.9relationship of the net annual calendar time-weighted total portfolio rate of return of
5.10the St. Paul Teachers Retirement Fund Association, as computed by the Office of the
5.11State Auditor and included in the most recent investment disclosure report under section
5.12356.219, subdivision 6, and the preretirement interest rate assumption for the same year
5.13for the St. Paul Teachers Retirement Fund Association under section 356.215, subdivision
5.148. The aid provided under this paragraph is $10,000,000 annually before adjustments. If
5.15the applicable St. Paul Teachers Retirement Fund Association rate of return exceeds the
5.16preretirement interest rate assumption, the aid under this paragraph is reduced by $500,000
5.17for every one percent of return in excess of the preretirement interest rate assumption. The
5.18net aid payable under this paragraph must not be less than $3,000,000 annually.
5.19(c) The aids under this subdivision are payable annually October 1. The
5.20commissioner of management and budget shall pay the aids specified in this subdivision.
5.21The amounts required are appropriated annually from the general fund to the commissioner
5.22of management and budget.
5.23EFFECTIVE DATE.This section is effective the day following final enactment.
5.24The first aid payment under paragraph (b) is payable on October 1, 2013, based on results
5.25in the Office of the State Auditor report referred to in that paragraph for the calendar
5.26year ending December 31, 2011.
5.27 Sec. 7. Minnesota Statutes 2012, section 354A.12, subdivision 3c, is amended to read:
5.28 Subd. 3c. Termination of supplemental contributions and direct matching
5.29and state aid. (a) The supplemental contributions payable to the St. Paul Teachers
5.30Retirement Fund Association by Independent School District No. 625 under section
5.32St. Paul Teachers Retirement Fund Association must continue until the current assets of
5.33the fund equal or exceed the actuarial accrued liability of the fund as determined in the
5.34most recent actuarial report for the fund by the actuary retained under section
5.35until June 30, 2037, whichever occurs earlier.
6.1(b) The aid to the Duluth Teachers Retirement Fund Association under section
6.2423A.02, subdivision 3, and all forms of state aid under subdivision 3a to the Duluth
6.3Teachers Retirement Fund Association must continue until the current assets of the fund
6.4equal or exceed the actuarial accrued liability of the fund as determined in the most
6.5recent actuarial report for the fund by the actuary retained under section
6.6the established date for full funding under section 356.215, subdivision 11, whichever
6.7occurs earlier.
6.8EFFECTIVE DATE.This section is effective the day following final enactment.
6.9 Sec. 8. Minnesota Statutes 2012, section 354A.12, subdivision 7, is amended to read:
6.10 Subd. 7. Recovery of benefit overpayments. (a) If the executive director discovers,
6.11within the time period specified in subdivision 8 following the payment of a refund or
6.12the accrual date of any retirement annuity, survivor benefit, or disability benefit, that
6.13benefit overpayment has occurred due to using invalid service or salary, or due to any
6.14erroneous calculation procedure, the executive director must recalculate the annuity or
6.15benefit payable and recover any overpayment. The executive director shall recover the
6.16overpayment by requiring direct repayment or by suspending or reducing the payment of a
6.17retirement annuity or other benefit payable under this chapter to the applicable person or
6.18the person's estate, whichever applies, until all outstanding amounts have been recovered.
6.19 If a benefit overpayment or improper payment of benefits occurred caused by a failure
6.20of the person to satisfy length of separation requirements for retirement under section
6.21354A.011, subdivision 21, the executive director shall recover the improper payments by
6.22requiring direct repayment.
6.23(b) In the event the executive director determines that an overpaid annuity or benefit
6.24that is the result of invalid salary included in the average salary used to calculate the
6.25payment amount must be recovered, the executive director must determine the amount of
6.26the employee deductions taken in error on the invalid salary, with interest as determined
6.27under
6.28benefit overpayment, and the remaining balance of the overpaid annuity or benefit, if
6.29any, must be recovered.
6.30(c) If the invalid employee deductions plus interest exceed the amount of the
6.31overpaid benefits, the balance must be refunded to the person to whom the benefit or
6.32annuity is being paid.
6.33(d) Any invalid employer contributions reported on the invalid salary must be
6.34credited against future contributions payable by the employer.
7.1(e) If a member or former member, who is receiving a retirement annuity or
7.2disability benefit for which an overpayment is being recovered, dies before recovery of the
7.3overpayment is completed and an optional annuity or refund is payable, the remaining
7.4balance of the overpaid annuity or benefit must continue to be recovered from the payment
7.5to the optional annuity beneficiary or refund recipient.
7.6(f) The board of trustees shall adopt policies directing the period of time and manner
7.7for the collection of any overpaid retirement or optional annuity, and survivor or disability
7.8benefit, or a refund that the executive director determines must be recovered as provided
7.9under this section.
7.10EFFECTIVE DATE.This section is effective the day following final enactment.
7.11 Sec. 9. Minnesota Statutes 2012, section 354A.31, subdivision 3, is amended to read:
7.12 Subd. 3. Resumption of teaching after commencement of a retirement annuity.
7.13 (a) Any person who retired and is receiving a coordinated program retirement annuity
7.14under the provisions of sections
7.15program retirement annuity under the governing sections in the articles of incorporation
7.16or bylaws and who has resumed teaching service for the school district in which the
7.17teachers retirement fund association exists is entitled to continue to receive retirement
7.18annuity payments, except that all or a portion of the annuity payments must be deferred
7.19during the calendar year immediately following the calendar year in which the person's
7.20salary from the teaching service is in an amount greater than $46,000. The amount of the
7.21annuity deferral is one-third the salary amount in excess of $46,000 and must be deducted
7.22from the annuity payable for the calendar year immediately following the calendar year
7.23in which the excess amount was earned.
7.24 (b) If the person is retired for only a fractional part of the calendar year during the
7.25initial year of retirement, the maximum reemployment salary exempt from triggering a
7.26deferral as specified in this subdivision must be prorated for that calendar year.
7.27 (c) After a person has reached the Social Security normal retirement age, no deferral
7.28requirement is applicable regardless of the amount of any compensation received for
7.29teaching service for the school district in which the teachers retirement fund association
7.30exists.
7.31 (d) The amount of the retirement annuity deferral must be handled or disposed
7.32of as provided in section
7.33(e) Notwithstanding other paragraphs of this subdivision, for any retired St. Paul
7.34Teachers Retirement Fund Association basic or coordinated program member whose
7.35effective date of retirement is after June 30, 2013, amounts specified as deferred under
8.1this subdivision must instead be forfeited to the St. Paul Teachers Retirement Fund
8.2Association fund.
8.3
8.4all income for services performed as a consultant or independent contractor; or income
8.5resulting from working with the school district in any capacity; and (ii) the greater of either
8.6the income received or an amount based on the rate paid with respect to an administrative
8.7position, consultant, or independent contractor in the school district in which the teachers
8.8retirement fund association exists and at the same level as the position occupied by the
8.9person who resumes teaching service.
8.10
8.11shall report to the teachers retirement fund association the amount of postretirement
8.12salary as defined in this subdivision, earned as a teacher, consultant, or independent
8.13contractor during the previous calendar year by each retiree of the teachers retirement
8.14fund association for teaching service performed after retirement. The report must be in
8.15a format approved by the executive secretary or director.
8.16EFFECTIVE DATE.This section is effective the day following final enactment.
8.17 Sec. 10. Minnesota Statutes 2012, section 354A.31, subdivision 4, is amended to read:
8.18 Subd. 4. Computation of normal coordinated retirement annuity; St. Paul
8.19fund. (a) This subdivision applies to the coordinated program of the St. Paul Teachers
8.20Retirement Fund Association.
8.21(b) The normal coordinated retirement annuity is an amount equal to a retiring
8.22coordinated member's average salary under section
8.23by the retirement annuity formula percentage.
8.24(c) This paragraph, in conjunction with subdivision 6, applies to a person who first
8.25became a member or a member in a pension fund listed in section
8.26before July 1, 1989, unless paragraph (d), in conjunction with subdivision 7, produces
8.27a higher annuity amount, in which case paragraph (d) will apply. For service rendered
8.28before July 1, 2014, the retirement annuity formula percentage for purposes of this
8.29paragraph is the percent specified in section
8.30of coordinated service for the first ten years and the percent specified in section
8.31subdivision 2
8.32June 30, 2014, the retirement annuity formula percentage for purposes of this paragraph
8.33is the percent specified in section
8.34coordinated service for the first ten years and the percent specified in section
8.35subdivision 2b
9.1(d) This paragraph applies to a person who has become at least 55 years old and who
9.2first becomes a member after June 30, 1989, and to any other member who has become
9.3at least 55 years old and whose annuity amount, when calculated under this paragraph
9.4and in conjunction with subdivision 7 is higher than it is when calculated under paragraph
9.5(c), in conjunction with the provisions of subdivision 6. The retirement annuity formula
9.6percentage for purposes of this paragraph is the percent specified in section
9.7subdivision 2
9.8the percent specified in section 356.215, subdivision 2b, for each year of coordinated
9.9service thereafter.
9.10EFFECTIVE DATE.This section is effective July 1, 2014.
9.11 Sec. 11. Minnesota Statutes 2012, section 354A.31, subdivision 7, is amended to read:
9.12 Subd. 7. Actuarial reduction for early retirement. (a) This subdivision applies to
9.13a person who has become at least 55 years old and first becomes a coordinated member
9.14after June 30, 1989, and to any other coordinated member who has become at least 55
9.15years old and whose annuity is higher when calculated using the retirement annuity
9.16formula percentage in subdivision 4, paragraph (d),
9.17as applicable, in conjunction with this subdivision than when calculated under subdivision
9.184, paragraph (c), or subdivision 4a, paragraph (c), in conjunction with subdivision 6.
9.19(b) A coordinated member who retires before the
9.20age shall be paid the retirement annuity calculated using the retirement annuity formula
9.21percentage in subdivision 4, paragraph (d), or subdivision 4a, paragraph (d),
9.22
9.23
9.24
9.25
9.26
9.27
9.28
9.29retirement factor specified below:
10.11EFFECTIVE DATE.This section is effective July 1, 2013.
10.12 Sec. 12. Minnesota Statutes 2012, section 354A.35, subdivision 2, is amended to read:
10.13 Subd. 2. Death while eligible to retire; surviving spouse optional annuity. (a)
10.14The surviving spouse of a vested coordinated member who dies prior to retirement may
10.15elect to receive, instead of a refund with interest under subdivision 1, an annuity equal
10.16to the 100 percent joint and survivor annuity the member could have qualified for had
10.17the member terminated service on the date of death. The surviving spouse eligible for
10.18a surviving spouse benefit under this paragraph may apply for the annuity at any time
10.19after the date on which the deceased employee would have attained the required age for
10.20retirement based on the employee's allowable service. A surviving spouse eligible for
10.21surviving spouse benefits under paragraph (b) or (c) may apply for an annuity at any time
10.22after the member's death. The member's surviving spouse shall be paid a joint and survivor
10.23annuity under section
10.24(b) If the member was under age 55 and has credit for at least 30 years of allowable
10.25service on the date of death, the surviving spouse may elect to receive a 100 percent joint
10.26and survivor annuity based on the age of the member and surviving spouse on the date
10.27of death. The annuity is payable using the full early retirement reduction under section
10.29reduction from age 55 to the age payment begins.
10.30(c) If a vested member of the Duluth Teachers Retirement Fund Association was
10.31under age 55 on the date of death but did not yet qualify for retirement, the surviving
10.32spouse may elect to receive the 100 percent joint and survivor annuity based on the age
10.33of the member and the survivor at the time of death. The annuity is payable using the
10.34full early retirement reduction under section
10.35one-half of the early retirement reduction from age 55 to the date payment begins.
11.1(d) If a vested member of the St. Paul Teachers Retirement Fund Association was
11.2under age 55 on the date of death but did not yet qualify for retirement, the surviving
11.3spouse may elect to receive the 100 percent joint and survivor annuity based on the age
11.4of the member and the survivor at the time of death. The annuity is payable using the
11.5full early retirement reduction under section
11.6one-half of the actuarial equivalent reduction from age 55 to the date payment begins.
11.7The actuarial equivalent reduction is calculated so that the reduced annuity is the actuarial
11.8equivalent of the annuity that would be payable to the member if the member deferred
11.9receipt of the annuity and the annuity amount were augmented at an annual rate of three
11.10percent compounded annually from the day the annuity begins to accrue until the normal
11.11retirement age.
11.12
11.13or surviving spouse benefit payable under this section. The benefits are payable for the
11.14life of the surviving spouse, or upon expiration of the term certain benefit payment under
11.15subdivision 2b.
11.16EFFECTIVE DATE.This section is effective the day following final enactment.
11.17 Sec. 13. Minnesota Statutes 2012, section 356.47, subdivision 1, is amended to read:
11.18 Subdivision 1. Application. This section applies to the balance of annual retirement
11.19annuities on the amount of retirement annuity reductions after reemployed annuitant
11.20earnings limitations for retirement plans governed by section
11.22Retirement Fund Association. This section also applies to the balance of annual retirement
11.23annuities on the amount of retirement annuity reductions under section 354A.31,
11.24subdivision 3, for members of the St. Paul Teachers Retirement Fund Association whose
11.25effective date of retirement is before July 1, 2013.
11.26EFFECTIVE DATE.This section is effective the day following final enactment.
11.27 Sec. 14. Minnesota Statutes 2012, section 423A.02, subdivision 5, is amended to read:
11.28 Subd. 5. Termination of state aid programs. The amortization state aid,
11.29supplemental amortization state aid, and additional amortization state aid programs
11.30terminate as of the December 31, next following the date of the actuarial valuation when
11.31the assets of the St. Paul Teachers Retirement Fund Association equal the actuarial accrued
11.32liability of that plan or
11.33EFFECTIVE DATE.This section is effective the day following final enactment.
12.1 Sec. 15. ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION BYLAW
12.2AMENDMENT AUTHORIZATION.
12.3Consistent with Minnesota Statutes, section 354A.12, subdivision 4, the St. Paul
12.4Teachers Retirement Fund Association is authorized to amend its articles of incorporation
12.5or its bylaws to apply the reduction factors stated in section 11 rather than the actuarial
12.6reduction factors previously authorized.
12.7EFFECTIVE DATE.This section is effective the day following final enactment.
