Bill Text: MN SF81 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Early retirement program and workforce reduction for state employees
Sponsorship: Partisan Bill (Republican 4)
Status: (Introduced - Dead) 2011-03-14 - Comm report: To pass as amended and re-refer to Finance [SF81 Detail]
Download: Minnesota-2011-SF81-Engrossed.html
1.2relating to state government; requiring a reduction in the state workforce;
1.3creating an early retirement program;proposing coding for new law in Minnesota
1.4Statutes, chapter 43A.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [43A.347] REDUCTION IN STATE WORK FORCE; EARLY
1.7RETIREMENT PROGRAM.
1.8 Subdivision 1. Required reduction. (a) The number of full-time equivalent
1.9employees employed in the executive branch, and the costs directly associated with
1.10employing those persons, must be reduced by at least 15 percent by June 30, 2015, and
1.11thereafter, compared to the number of full-time equivalent positions and the costs directly
1.12associated with those positions on July 1, 2011.
1.13(b) An appointing authority may use any or all of the following to achieve this
1.14requirement: attrition, a hard hiring freeze, early retirement incentives authorized in this
1.15section, restructuring of benefit or pension programs as authorized by other law, furloughs,
1.16and layoffs. The early retirement program in this section is enacted as a tool to assist in
1.17complying with the required 15 percent reduction.
1.18(c) For purposes of this section:
1.19(1) "costs directly associated" with employing people means the cost of salaries and
1.20benefits, including the costs of employer contributions to public pension plans; and
1.21(2) "executive branch" does not include the Minnesota State Colleges and
1.22Universities, and the State Patrol.
1.23 Subd. 2. Analysis. Before authorizing an early retirement under subdivision 3 or
1.244, the commissioner must perform analysis, including actuarial analysis, as necessary to
2.1determine the maximum number of employees to whom incentives will be offered, and the
2.2percentage of resulting savings estimated to be needed to pay pension funds to cover costs
2.3to the funds of the incentive in this section. The commissioner must use this analysis in
2.4determining how to best implement this section. The commissioner may contract with
2.5the director of the Minnesota State Retirement System for assistance in preparing the
2.6analysis required by this subdivision.
2.7 Subd. 3. Pension early retirement incentive. (a) The commissioner of management
2.8and budget may authorize an executive branch appointing authority to offer an early
2.9retirement incentive under this subdivision to an employee who upon retirement would be
2.10immediately eligible to receive an annuity from the public pension plan under which the
2.11employee is covered immediately before separation from state service. The commissioner
2.12may establish time periods during which the incentive may be offered and during which
2.13the incentive must be accepted, may establish limits on the number of employees to whom
2.14an appointing authority, or all appointing authorities collectively, may offer the incentive,
2.15and may establish other conditions for the incentive.
2.16(b) For an employee offered an incentive under this subdivision, for each full
2.17year of service credit that the employee has in a plan administered by the Minnesota
2.18State Retirement System, the Public Employees Retirement Association, or the Teachers
2.19Retirement Association, the employee must be granted an additional month of service
2.20credit in the plan under which the employee is covered immediately before separation
2.21from state service under this subdivision.
2.22(c) Upon request of an appointing authority considering offering an incentive under
2.23this subdivision, the executive director of the public pension plan in which an employee
2.24would be granted additional service credit under this subdivision must prepare an estimate
2.25of the present value of the additional service credit that would be granted to an employee
2.26under this subdivision. For each employee accepting an incentive under this subdivision,
2.27the appointing authority offering the incentive must pay the applicable public pension
2.28plan, from the first dollars of savings achieved through offering the incentive, the present
2.29value of the additional service credit granted to the employee, taking into account the date
2.30payment will be received from the appointing authority. The appointing authority must
2.31make this payment to the pension plan within one year of the date the employee accepting
2.32the incentive leaves state service.
2.33 Subd. 4. Insurance early retirement incentive. The commissioner of management
2.34and budget may authorize an executive appointing authority to offer the incentive
2.35originally offered under Laws 2010, chapter 337, to employees who retire from state
2.36service during periods that the commissioner specifies before June 30, 2015. The terms and
3.1conditions specified in Laws 2010, chapter 337, apply to an incentive offered under this
3.2subdivision, except for the dates specified in that law for accepting the incentive and for
3.3retiring, and except that the prohibition on reemployment or contracting is for the period
3.4specified in this section, instead of the shorter period specified in Laws 2010, chapter 337.
3.5 Subd. 5. Best practices. In implementing this section, the commissioner of
3.6management and budget and affected agencies shall utilize best practices as identified by
3.7other states that have implemented early retirement programs.
3.8 Subd. 6. Hiring freeze. To promote streamlined government and reduced costs,
3.9no state appointing authority may fill by outside hire a position vacated through state
3.10employee participation in an early retirement incentive under this section.
3.11 Subd. 7. Reemployment prohibition. An employee who receives an early
3.12retirement incentive under this section may not be reemployed with the state or enter into
3.13a contract with the state as a consultant for five years after termination.
3.14 Subd. 8. Savings. Savings resulting from implementation of this section, after
3.15any payments made under subdivisions 3 and 4, must cancel back to the fund in which
3.16the savings occurred.
3.17 Subd. 9. Not applicable to elected officials. A state elected official is not a state
3.18employee for purposes of this section.
3.19 Subd. 10. Application of Public Employment Labor Relations Act. Unilateral
3.20implementation of this section, including, but not limited to, the provision of an early
3.21retirement incentive by the appointing authority is not an unfair labor practice under
3.22chapter 179A.
1.3creating an early retirement program;proposing coding for new law in Minnesota
1.4Statutes, chapter 43A.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [43A.347] REDUCTION IN STATE WORK FORCE; EARLY
1.7RETIREMENT PROGRAM.
1.8 Subdivision 1. Required reduction. (a) The number of full-time equivalent
1.9employees employed in the executive branch, and the costs directly associated with
1.10employing those persons, must be reduced by at least 15 percent by June 30, 2015, and
1.11thereafter, compared to the number of full-time equivalent positions and the costs directly
1.12associated with those positions on July 1, 2011.
1.13(b) An appointing authority may use any or all of the following to achieve this
1.14requirement: attrition, a hard hiring freeze, early retirement incentives authorized in this
1.15section, restructuring of benefit or pension programs as authorized by other law, furloughs,
1.16and layoffs. The early retirement program in this section is enacted as a tool to assist in
1.17complying with the required 15 percent reduction.
1.18(c) For purposes of this section:
1.19(1) "costs directly associated" with employing people means the cost of salaries and
1.20benefits, including the costs of employer contributions to public pension plans; and
1.21(2) "executive branch" does not include the Minnesota State Colleges and
1.22Universities, and the State Patrol.
1.23 Subd. 2. Analysis. Before authorizing an early retirement under subdivision 3 or
1.244, the commissioner must perform analysis, including actuarial analysis, as necessary to
2.1determine the maximum number of employees to whom incentives will be offered, and the
2.2percentage of resulting savings estimated to be needed to pay pension funds to cover costs
2.3to the funds of the incentive in this section. The commissioner must use this analysis in
2.4determining how to best implement this section. The commissioner may contract with
2.5the director of the Minnesota State Retirement System for assistance in preparing the
2.6analysis required by this subdivision.
2.7 Subd. 3. Pension early retirement incentive. (a) The commissioner of management
2.8and budget may authorize an executive branch appointing authority to offer an early
2.9retirement incentive under this subdivision to an employee who upon retirement would be
2.10immediately eligible to receive an annuity from the public pension plan under which the
2.11employee is covered immediately before separation from state service. The commissioner
2.12may establish time periods during which the incentive may be offered and during which
2.13the incentive must be accepted, may establish limits on the number of employees to whom
2.14an appointing authority, or all appointing authorities collectively, may offer the incentive,
2.15and may establish other conditions for the incentive.
2.16(b) For an employee offered an incentive under this subdivision, for each full
2.17year of service credit that the employee has in a plan administered by the Minnesota
2.18State Retirement System, the Public Employees Retirement Association, or the Teachers
2.19Retirement Association, the employee must be granted an additional month of service
2.20credit in the plan under which the employee is covered immediately before separation
2.21from state service under this subdivision.
2.22(c) Upon request of an appointing authority considering offering an incentive under
2.23this subdivision, the executive director of the public pension plan in which an employee
2.24would be granted additional service credit under this subdivision must prepare an estimate
2.25of the present value of the additional service credit that would be granted to an employee
2.26under this subdivision. For each employee accepting an incentive under this subdivision,
2.27the appointing authority offering the incentive must pay the applicable public pension
2.28plan, from the first dollars of savings achieved through offering the incentive, the present
2.29value of the additional service credit granted to the employee, taking into account the date
2.30payment will be received from the appointing authority. The appointing authority must
2.31make this payment to the pension plan within one year of the date the employee accepting
2.32the incentive leaves state service.
2.33 Subd. 4. Insurance early retirement incentive. The commissioner of management
2.34and budget may authorize an executive appointing authority to offer the incentive
2.35originally offered under Laws 2010, chapter 337, to employees who retire from state
2.36service during periods that the commissioner specifies before June 30, 2015. The terms and
3.1conditions specified in Laws 2010, chapter 337, apply to an incentive offered under this
3.2subdivision, except for the dates specified in that law for accepting the incentive and for
3.3retiring, and except that the prohibition on reemployment or contracting is for the period
3.4specified in this section, instead of the shorter period specified in Laws 2010, chapter 337.
3.5 Subd. 5. Best practices. In implementing this section, the commissioner of
3.6management and budget and affected agencies shall utilize best practices as identified by
3.7other states that have implemented early retirement programs.
3.8 Subd. 6. Hiring freeze. To promote streamlined government and reduced costs,
3.9no state appointing authority may fill by outside hire a position vacated through state
3.10employee participation in an early retirement incentive under this section.
3.11 Subd. 7. Reemployment prohibition. An employee who receives an early
3.12retirement incentive under this section may not be reemployed with the state or enter into
3.13a contract with the state as a consultant for five years after termination.
3.14 Subd. 8. Savings. Savings resulting from implementation of this section, after
3.15any payments made under subdivisions 3 and 4, must cancel back to the fund in which
3.16the savings occurred.
3.17 Subd. 9. Not applicable to elected officials. A state elected official is not a state
3.18employee for purposes of this section.
3.19 Subd. 10. Application of Public Employment Labor Relations Act. Unilateral
3.20implementation of this section, including, but not limited to, the provision of an early
3.21retirement incentive by the appointing authority is not an unfair labor practice under
3.22chapter 179A.
