Bill Text: MN SF2263 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Public employees retirement association (PERA) coordinated program employee and employer contribution rates modifications
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2014-03-04 - Referred to State and Local Government [SF2263 Detail]
Download: Minnesota-2013-SF2263-Introduced.html
1.2relating to retirement; general employees retirement plan of the Public
1.3Employees Retirement Association; modifying coordinated program employee
1.4and employer contribution rates;amending Minnesota Statutes 2012, section
1.5353.27, subdivisions 2, 3, 3b.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 353.27, subdivision 2, is amended to read:
1.8 Subd. 2. General employees retirement plan; employee contribution. (a) For
1.9a basic member of the general employees retirement plan of the Public Employees
1.10Retirement Association, the employee contribution is 9.10 percent of salary. For a
1.11coordinated member of the general employees retirement plan of the Public Employees
1.12Retirement Association, the employee contribution is the following percentage of salary
1.13plus any contribution rate adjustment under subdivision 3b:
1.17(b) These contributions must be made by deduction from salary as defined in section
1.18353.01, subdivision 10
, in the manner provided in subdivision 4. If any portion of a
1.19member's salary is paid from other than public funds, the member's employee contribution
1.20must be based on the total salary received by the member from all sources.
1.21EFFECTIVE DATE.This section is effective the day following final enactment.
1.22 Sec. 2. Minnesota Statutes 2012, section 353.27, subdivision 3, is amended to read:
2.1 Subd. 3. General employees retirement plan; employer contribution. (a) For
2.2a basic member of the general employees retirement plan of the Public Employees
2.3Retirement Association, the employer contribution is 9.10 percent of salary. For a
2.4coordinated member of the general employees retirement plan of the Public Employees
2.5Retirement Association, the employer contribution is the following percentage of salary
2.6plus any contribution rate adjustment under subdivision 3b:
2.10(b) This contribution must be made from funds available to the employing
2.11subdivision by the means and in the manner provided in section353.28 .
2.12EFFECTIVE DATE.This section is effective the day following final enactment.
2.13 Sec. 3. Minnesota Statutes 2012, section 353.27, subdivision 3b, is amended to read:
2.14 Subd. 3b. Change in employee and employer contributions in certain instances.
2.15(a) For purposes of this section:
2.16(1) a contribution sufficiency exists if the total of the employee contribution under
2.17subdivision 2, the employer contribution under subdivision 3, the additional employer
2.18contribution under subdivision 3a, and any additional contribution previously imposed
2.19under this subdivision exceeds the total of the normal cost, the administrative expenses,
2.20and the amortization contribution of the general employees retirement plan as reported in
2.21the most recent actuarial valuation of the retirement plan prepared by the actuary retained
2.22under section356.214 and prepared under section
356.215 and the standards for actuarial
2.23work of the Legislative Commission on Pensions and Retirement; and
2.24(2) a contribution deficiency exists if the total of the employee contributions under
2.25subdivision 2, the employer contributions under subdivision 3, the additional employer
2.26contribution under subdivision 3a, and any additional contribution previously imposed
2.27under this subdivision is less than the total of the normal cost, the administrative expenses,
2.28and the amortization contribution of the general employees retirement plan as reported in
2.29the most recent actuarial valuation of the retirement plan prepared by the actuary retained
2.30under section356.214 and prepared under section
356.215 and the standards for actuarial
2.31work of the Legislative Commission on Pensions and Retirement.
2.32(b) Employee and employer contributions to the general employees retirement plan
2.33under subdivisions 2 and 3 must be adjusted:
2.34(1) if, on or after July 1, 2010, the regular actuarial valuation of the general employees
2.35retirement plan of the Public Employees Retirement Association under section356.215
3.1indicates that there is a contribution sufficiency under paragraph (a) greater than one
3.2percent of covered payroll and that the sufficiency has existed for at least two consecutive
3.3years, the coordinated program employee and employer contribution rates must be
3.4decreased as determined under paragraph (c) to a level such that the sufficiency is no
3.5greater than one percent of covered payroll based on the most recent actuarial valuation; or
3.6(2) if, on or after July 1, 2010, the regular actuarial valuation of the general
3.7employees retirement plan of the Public Employees Retirement Association under section
3.8356.215
indicates that there is a contribution deficiency equal to or greater than 0.5 percent
3.9of covered payroll and that the deficiency has existed for at least two consecutive years,
3.10the coordinated program employee and employer contribution rates must be increased
3.11as determined under paragraph (d) to a level such that no deficiency exists based on the
3.12most recent actuarial valuation.
3.13(c) If the actuarially required contribution of the general employees retirement plan is
3.14less than the total support provided by the combined employee and employer contribution
3.15rates under subdivisions 2, 3, and 3a, by more than one percent of covered payroll,
3.16the general employees retirement plan coordinated program employee and employer
3.17contribution rates under subdivisions 2 and 3 must be decreased incrementally over one or
3.18more years by no more than 0.25 percent of pay each for employee and employer matching
3.19contribution rates to a level such that there remains a contribution sufficiency of at least one
3.20percent of covered payroll. No contribution rate decrease may be made until at least two
3.21years have elapsed since any adjustment under this subdivision has been fully implemented.
3.22(d) If the actuarially required contribution exceeds the total support provided by the
3.23combined employee and employer contribution rates under subdivisions 2, 3, and 3a,
3.24the employee and matching employer contribution rates must be increased equally to
3.25eliminate that contribution deficiency. If the contribution deficiency is:
3.26(1) less than two percent, the incremental increase may be up to 0.25 percent for the
3.27general employees retirement plan employee and matching employer contribution rates;
3.28(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
3.29may be up to 0.5 percent for the employee and matching employer contribution rates; or
3.30(3) greater than four percent, the incremental increase may be up to 0.75 percent for
3.31the employee and matching employer contribution.
3.32(e) The general employees retirement plan contribution sufficiency or deficiency
3.33determination under paragraphs (a) to (d) must be made without the inclusion of the
3.34contributions to, the funded condition of, or the actuarial funding requirements of the
3.35MERF division.
4.1(f) Any recommended adjustment to the contribution rates must be reported to the
4.2chair and the executive director of the Legislative Commission on Pensions and Retirement
4.3by January 15 following the receipt of the most recent annual actuarial valuation prepared
4.4under section356.215 . If the Legislative Commission on Pensions and Retirement does
4.5not recommend against the rate change or does not recommend a modification in the rate
4.6change, the recommended adjustment becomes effectiveon the first day of the first full
4.7payroll period in the fiscal year for any salary paid on or after the January 1 next following
4.8receipt of the most recent actuarial valuation that gave rise to the adjustment the legislative
4.9session in which the Legislative Commission on Pensions and Retirement did not take any
4.10action to disapprove or modify the Public Employees Retirement Association Board of
4.11Trustees' recommendation to adjust the employee and employer rates.
4.12(g) A contribution sufficiency of up to one percent of covered payroll must be held in
4.13reserve to be used to offset any future actuarially required contributions that are more than
4.14the total combined employee and employer contributions under subdivisions 2, 3, and 3a.
4.15(h) Before any reduction in contributions to eliminate a sufficiency in excess of one
4.16percent of covered pay may be recommended, the executive director must review any
4.17need for a change in actuarial assumptions, as recommended by the actuary retained under
4.18section356.214 in the most recent experience study of the general employees retirement
4.19plan prepared under section356.215 and the standards for actuarial work promulgated by
4.20the Legislative Commission on Pensions and Retirement that may result in an increase
4.21in the actuarially required contribution and must report to the Legislative Commission
4.22on Pensions and Retirement any recommendation by the board to use the sufficiency
4.23exceeding one percent of covered payroll to offset the impact of an actuarial assumption
4.24change recommended by the actuary retained under section356.214, subdivision 1 , and
4.25reviewed by the actuary retained by the commission under section356.214, subdivision 4 .
4.26(i) No contribution sufficiency in excess of one percent of covered pay may be
4.27proposed to be used to increase benefits, and no benefit increase may be proposed that
4.28would initiate an automatic adjustment to increase contributions under this subdivision.
4.29Any proposed benefit improvement must include a recommendation, prepared by the
4.30actuary retained under section356.214, subdivision 1 , and reviewed by the actuary
4.31retained by the Legislative Commission on Pensions and Retirement as provided under
4.32section356.214, subdivision 4 , on how the benefit modification will be funded.
4.33EFFECTIVE DATE.This section is effective the day following final enactment.
1.3Employees Retirement Association; modifying coordinated program employee
1.4and employer contribution rates;amending Minnesota Statutes 2012, section
1.5353.27, subdivisions 2, 3, 3b.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 353.27, subdivision 2, is amended to read:
1.8 Subd. 2. General employees retirement plan; employee contribution. (a) For
1.9a basic member of the general employees retirement plan of the Public Employees
1.10Retirement Association, the employee contribution is 9.10 percent of salary. For a
1.11coordinated member of the general employees retirement plan of the Public Employees
1.12Retirement Association, the employee contribution is the following percentage of salary
1.13plus any contribution rate adjustment under subdivision 3b:
| 1.14 |
|||
| 1.15 |
Effective after December 31, 2010 |
6.25 |
|
| 1.16 |
Effective January 1, 2015 |
6.50 |
1.19member's salary is paid from other than public funds, the member's employee contribution
1.20must be based on the total salary received by the member from all sources.
1.21EFFECTIVE DATE.This section is effective the day following final enactment.
1.22 Sec. 2. Minnesota Statutes 2012, section 353.27, subdivision 3, is amended to read:
2.1 Subd. 3. General employees retirement plan; employer contribution. (a) For
2.2a basic member of the general employees retirement plan of the Public Employees
2.3Retirement Association, the employer contribution is 9.10 percent of salary. For a
2.4coordinated member of the general employees retirement plan of the Public Employees
2.5Retirement Association, the employer contribution is the following percentage of salary
2.6plus any contribution rate adjustment under subdivision 3b:
| 2.7 |
|||
| 2.8 |
Effective after December 31, 2010 |
6.25 |
|
| 2.9 |
Effective January 1, 2015 |
6.5 |
2.11subdivision by the means and in the manner provided in section
2.12EFFECTIVE DATE.This section is effective the day following final enactment.
2.13 Sec. 3. Minnesota Statutes 2012, section 353.27, subdivision 3b, is amended to read:
2.14 Subd. 3b. Change in employee and employer contributions in certain instances.
2.15(a) For purposes of this section:
2.16(1) a contribution sufficiency exists if the total of the employee contribution under
2.17subdivision 2, the employer contribution under subdivision 3, the additional employer
2.18contribution under subdivision 3a, and any additional contribution previously imposed
2.19under this subdivision exceeds the total of the normal cost, the administrative expenses,
2.20and the amortization contribution of the general employees retirement plan as reported in
2.21the most recent actuarial valuation of the retirement plan prepared by the actuary retained
2.22under section
2.23work of the Legislative Commission on Pensions and Retirement; and
2.24(2) a contribution deficiency exists if the total of the employee contributions under
2.25subdivision 2, the employer contributions under subdivision 3, the additional employer
2.26contribution under subdivision 3a, and any additional contribution previously imposed
2.27under this subdivision is less than the total of the normal cost, the administrative expenses,
2.28and the amortization contribution of the general employees retirement plan as reported in
2.29the most recent actuarial valuation of the retirement plan prepared by the actuary retained
2.30under section
2.31work of the Legislative Commission on Pensions and Retirement.
2.32(b) Employee and employer contributions to the general employees retirement plan
2.33under subdivisions 2 and 3 must be adjusted:
2.34(1) if
2.35retirement plan of the Public Employees Retirement Association under section
3.1indicates that there is a contribution sufficiency under paragraph (a) greater than one
3.2percent of covered payroll and that the sufficiency has existed for at least two consecutive
3.3years, the coordinated program employee and employer contribution rates must be
3.4decreased as determined under paragraph (c) to a level such that the sufficiency is no
3.5greater than one percent of covered payroll based on the most recent actuarial valuation; or
3.6(2) if
3.7employees retirement plan of the Public Employees Retirement Association under section
3.9of covered payroll and that the deficiency has existed for at least two consecutive years,
3.10the coordinated program employee and employer contribution rates must be increased
3.11as determined under paragraph (d) to a level such that no deficiency exists based on the
3.12most recent actuarial valuation.
3.13(c) If the actuarially required contribution of the general employees retirement plan is
3.14less than the total support provided by the combined employee and employer contribution
3.15rates under subdivisions 2, 3, and 3a, by more than one percent of covered payroll,
3.16the general employees retirement plan coordinated program employee and employer
3.17contribution rates under subdivisions 2 and 3 must be decreased incrementally over one or
3.18more years by no more than 0.25 percent of pay each for employee and employer matching
3.19contribution rates to a level such that there remains a contribution sufficiency of at least one
3.20percent of covered payroll. No contribution rate decrease may be made until at least two
3.21years have elapsed since any adjustment under this subdivision has been fully implemented.
3.22(d) If the actuarially required contribution exceeds the total support provided by the
3.23combined employee and employer contribution rates under subdivisions 2, 3, and 3a,
3.24the employee and matching employer contribution rates must be increased equally to
3.25eliminate that contribution deficiency. If the contribution deficiency is:
3.26(1) less than two percent, the incremental increase may be up to 0.25 percent for the
3.27general employees retirement plan employee and matching employer contribution rates;
3.28(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
3.29may be up to 0.5 percent for the employee and matching employer contribution rates; or
3.30(3) greater than four percent, the incremental increase may be up to 0.75 percent for
3.31the employee and matching employer contribution.
3.32(e) The general employees retirement plan contribution sufficiency or deficiency
3.33determination under paragraphs (a) to (d) must be made without the inclusion of the
3.34contributions to, the funded condition of, or the actuarial funding requirements of the
3.35MERF division.
4.1(f) Any recommended adjustment to the contribution rates must be reported to the
4.2chair and the executive director of the Legislative Commission on Pensions and Retirement
4.3by January 15 following the receipt of the most recent annual actuarial valuation prepared
4.4under section
4.5not recommend against the rate change or does not recommend a modification in the rate
4.6change, the recommended adjustment becomes effective
4.7
4.8
4.9session in which the Legislative Commission on Pensions and Retirement did not take any
4.10action to disapprove or modify the Public Employees Retirement Association Board of
4.11Trustees' recommendation to adjust the employee and employer rates.
4.12(g) A contribution sufficiency of up to one percent of covered payroll must be held in
4.13reserve to be used to offset any future actuarially required contributions that are more than
4.14the total combined employee and employer contributions under subdivisions 2, 3, and 3a.
4.15(h) Before any reduction in contributions to eliminate a sufficiency in excess of one
4.16percent of covered pay may be recommended, the executive director must review any
4.17need for a change in actuarial assumptions, as recommended by the actuary retained under
4.18section
4.19plan prepared under section
4.20the Legislative Commission on Pensions and Retirement that may result in an increase
4.21in the actuarially required contribution and must report to the Legislative Commission
4.22on Pensions and Retirement any recommendation by the board to use the sufficiency
4.23exceeding one percent of covered payroll to offset the impact of an actuarial assumption
4.24change recommended by the actuary retained under section
4.25reviewed by the actuary retained by the commission under section
4.26(i) No contribution sufficiency in excess of one percent of covered pay may be
4.27proposed to be used to increase benefits, and no benefit increase may be proposed that
4.28would initiate an automatic adjustment to increase contributions under this subdivision.
4.29Any proposed benefit improvement must include a recommendation, prepared by the
4.30actuary retained under section
4.31retained by the Legislative Commission on Pensions and Retirement as provided under
4.32section
4.33EFFECTIVE DATE.This section is effective the day following final enactment.
