A general summary of the 2004 Omnibus Retirement Bill, as approved by the House of Representatives on its final passage of SF 676 (Betzold) on May 15, 2004, appears below.

The 2004 Omnibus Retirement Bill, after the House of Representatives Amendments of May 15, 2004, amends various provisions of Minnesota Statutes, Chapters 3A, 352, 352B, 352D, 352F, 353, 353F, 354, 354A, 354B, 354C, 356, 422A, 423B, 423C, and 490, including the following revisions which have policy substance:

1. Inclusion of Three MCF-Rush City Occupational Classifications in MSRS-Correctional Plan Coverage (H.F. 1086 (Smith), Third Engrossment, Article 1, Section 1). The Corrections Discipline Unit Supervisor, the Dental Hygienist, and the Psychologist 2 employment positions at the Minnesota Correctional Facility-Rush City are included in the Correctional State Employees Retirement Plan of the Minnesota State Retirement System (MSRS-Correctional).

2. Exclusion of Grievance Awards from the Salary Definition (H.F. 1086 (Smith), Third Engrossment, Article 2, Sections 1, 2, 3, 4, and 5). Amounts received as grievance awards or legal settlements are excluded from salary covered by the General State Employees Retirement Plan of the Minnesota State Retirement System (MSRS-General), by the MSRS Correctional State Employees Retirement Plan (MSRS-Correctional), by the State Patrol Retirement Plan, by the General Employee Retirement Plan of the Public Employees Retirement Association (PERA-General), by the Public Employees Police and Fire Retirement Plan (PERA-P&F), the Teachers Retirement Association (TRA), and the first class city teacher retirement fund associations unless reviewed by the applicable executive director and determined to be consistent with the statutory definition.

3. Clarification of the Definition of Average Salary for the State Patrol Retirement Plan (H.F. 1086 (Smith), Third Engrossment, Article 2, Section 2). The State Patrol Retirement Plan "average salary" definition is clarified by adding a cross-reference to the MSRS-General definition.

4. Special TRA Final Average Salary Audits (H.F. 1086 (Smith), Third Engrossment, Article 7, Sections 6 and 9).  For any TRA annuity computed using a salary that is excess of 95 percent of the Governor’s salary, TRA must conduct a special audit of the covered salary for compliance with the TRA law governing salary for pension purposes.

5. Federal Tax Code Compliance Changes (H.F. 1086 (Smith), Third Engrossment, Article 2, Sections 3, 4, and 5; Article 5, Section 2; and Article 10). The General Employee Retirement Plan of the Public Employees Retirement Association (PERA-General) definition of salary is amended to exclude compensation amounts in excess of federal tax law limits, the general law compensation limit is updated for federal tax law changes, a generally applicable maximum benefit limit based on the federal tax laws is added, the Teachers Retirement Association (TRA) erroneous payment provision is amended to accommodate federal tax law transfer limitation, and various current and expired federal tax law requirements that were previously not specifically implemented are adopted or enacted.

6. Various Employee Groups Added to Exemption from Salary Limitation for Pension Purposes (H.F. 1086 (Smith), Third Engrossment, Article 2, Section 6 with Amendment hda-737). Judges, all state employees (including MnSCU employees, legislative branch employees and judicial branch employees), Gillette Hospital employees with Minnesota State Retirement System (MSRS) General Plan coverage, employees of the Minnesota Historical Society, and employees of the Crop Improvement Council, are added to the list of individuals who are not subject to the general limit on the salary level available for making contributions or used for calculating retirement annuities, set at 95 percent of the salary of the Governor.

7. On Leave Military Service Credit Provision Conformity with USERRA (H.F. 1086 (Smith), Third Engrossment, Article 3, Sections 1, 2, 3, 6, 7, and 8). The provisions governing the crediting of allowable service for military service during a leave of absence for the General State Employees Retirement Plan of the Minnesota State Retirement System (MSRS-General), the MSRS Correctional State Employees Retirement Plan (MSRS-Correctional), the State Patrol Retirement Plan, the General Employee Retirement Plan of the Public Employees Retirement Association (PERA-General), Public Employees Police and Fire Retirement Plan (PERA-P&F), the Teachers Retirement Association (TRA), the first class city teacher retirement fund associations, and the Judges Retirement Plan are modified to conform with the federal Uniformed Service Employment and Reemployment Rights Act of 1994, 38 U.S.C. §§ 4301-4333, with the TRA provision newly excluding credit for less than honorable armed services discharges, with the MSRS-General and MSRS-Correctional provision newly limited as to the period of time during which equivalent contribution payments may be made, and with interest on member service credit contribution-equivalent payments for all retirement plans newly made payable by the applicable employing unit.

8. Special TRA Service Credit Rules for MnSCU Faculty (H.F. 1086 (Smith), Third Engrossment, Article 3, Section 4; and Article 6, Section 3). For Minnesota State Colleges and Universities System (MnSCU) faculty members covered by the Teachers Retirement Association (TRA), years and days of service will be credited based on the relationship to full-time employment contained in the applicable collective bargaining agreement or personnel plans.

9. Revised Deadline for TRA and First Class City Teacher Retirement Fund Association Part-Time Teaching Program Participation by Teacher-Legislators (H.F. 1086 (Smith), Third Engrossment, Article 4, Sections 1 and 2). The normal October 1 annual deadline for filing part-time teaching/full-time service credit program agreements for the Teachers Retirement Association (TRA) and the first class city teacher retirement fund associations is postponed to March 1 for teachers who are legislators.

10. TRA Omitted Deduction Provision Adjusted for Certain Part-Time MnSCU Faculty Members (H.F. 1086 (Smith), Third Engrossment, Article 5, Section 3). The employer payment of omitted Teachers Retirement Association (TRA) member contributions provision is amended to exclude minimal service part-time Minnesota State Colleges and Universities System (MnSCU) faculty members who elect TRA coverage upon beginning to teach at least 25 percent of a full-time schedule.

11. MSRS-Department of Transportation Pilots Plan (H.F. 1086 (Smith), Third Engrossment, Article 7, Section 1). The Department of Transportation Pilots Retirement Plan of the Minnesota State Retirement System (MSRS) is modified to accommodate later retirement ages.

12. Judges Retirement Plan Early Retirement Age Reset (H.F. 1086 (Smith), Third Engrossment, Article 7, Section 5). The early reduced retirement annuity age for the Judges Retirement Plan is reduced from age 62 to age 60.

13. Temporary Exemption from the Reemployed Annuitant Earnings Limitation for Metropolitan Airports Commission Police (H.F. 1086 (Smith), Third Engrossment, Article 7, Section 7). Retired police officers employed by the Metropolitan Airports Commission between January 1, 2004, and July 1, 2007, are exempted from the reemployed annuitant earnings limitation.

14. Chiropractors Qualified to Provide Expert Opinion on Disabilities (H.F. 1086 (Smith), Third Engrossment, Article 8, Sections 1, 2, 7, 11, 15, 16, 17, 20, 27, 28, 29, 32, 33, 34, 35, 36, 37, and 38 with Amendment hda-737). Expert assistance from chiropractors on the existence of a disability or the continuation of a disability is permitted as an expert report for the various public retirement plans, including the first class city teacher retirement associations.

15. MSRS-General and PERA-General Restriction on Disabilitant Reemployment Relaxation Demonstration Program (H.F. 1086 (Smith), Third Engrossment, Article 8, Sections 3, 19, and 34). The General State Employees Retirement Plan of the Minnesota State Retirement System (MSRS-General) and the General Employee Retirement Plan of the Public Employees Retirement Association (PERA-General) reduction in disability benefits upon reemployment provisions are suspended for the first six months of reemployment as demonstration programs until 2006.

16. Psychologists Qualified to Provide Expert Opinion on Disabilities (H.F. 1086 (Smith), Third Engrossment, Article 8, Sections 7, 11, 15, 16, 17, and 20 to 38, with Amendment hda-737). Expert testimony from psychologists on the existence of or the continuation of a disability is permitted for the Correctional State Employees Retirement Plan of the Minnesota State Retirement System (MSRS-Correctional), the State Patrol Retirement Plan, the General Employee Retirement Plan of the Public Employees Retirement Association (PERA-General), the Public Employees Police and Fire Retirement Plan (PERA-P&F), the Teachers Retirement Association (TRA), the first class city teacher retirement associations, Minneapolis Employees Retirement Fund (MERF), the Minneapolis Police Relief Association (MPRA), and the Minneapolis Firefighters Relief Association (MFRA).

17. Strengthened PERA-P&F Disability Benefit Procedures (H.F. 1086 (Smith), Third Engrossment, Article 8, Sections 20, 21, 22, 23, 24, and 25). Disability application and review procedures for the Public Employees Police and Fire Retirement Plan (PERA-P&F) are revised by requiring members seeking disability benefits or a continuation of those benefits to release pertinent medical information and to submit to medical evaluations by requiring evidence that the applicant is unable to perform duties of the position held at the time of the disability if the application is filed within two years of the onset of the disabling injury or illness, requiring evidence that the applicant is unable to perform duties assigned within 90 days of the application date if the application is filed more than two years after of the onset of the disabling injury or illness, requiring first reports of injury in all duty-related applications, requiring in all cases that the employer must provide evidence that the applicant is unable to perform applicable duties, voiding the disability application if termination from service does not occur within 45 days after approval of a disability application, clarifying that individuals may simultaneously apply for disability and retirement benefits, although both may not be received at the same time, and permitting repayment of refunds no later than six months after the effective date of the disability benefit.

18. Daily Interest Rather than Fiscal Year Interest on Refunds for the Legislators Retirement Plan, MSRS-General, MSRS-Correctional, the State Patrol Retirement Plan, and the Judges Retirement Plan (H.F. 1086 (Smith), Third Engrossment, Article 9, Sections 1, 2, 3, 4, 7, and 23). Interest on various refunds of member contributions would be calculated daily rather than on fiscal year balances for the Legislators Retirement Plan, the General State Employees Retirement Plan of the Minnesota State Retirement System (MSRS-General), the MSRS Correctional State Employees Retirement Plan (MSRS-Correctional), the State Patrol Retirement Plan, and the Judges Retirement Plan.

19. Enhanced Survivor Coverage under MSRS-General and PERA-General Plans for Privatized Public Employees (H.F. 1086 (Smith), Third Engrossment, Article 9, Sections 15 and 16). The continuing retirement coverage under the General State Employees Retirement Plan of the Minnesota State Retirement System (MSRS-General) or the General Employee Retirement Plan of the Public Employees Retirement Association (PERA-General) provided to involuntarily privatized public employees is clarified to include any applicable survivor benefit coverage.

20. Increase in the TRA Death-While-Eligible Survivor Benefit (H.F. 1086 (Smith), Third Engrossment, Article 9, Section 18). The second portion of a 100 percent joint and survivor optional annuity payable to an active or deferred Teachers Retirement Association (TRA) member is to be calculated based on the surviving spouse’s age when the benefit accrues, rather than the surviving spouse’s age at the member’s date of death.

21. Unmarried TRA Member Survivor Coverage Designation (H.F. 1086 (Smith), Third Engrossment, Article 9, Section 20). An unmarried TRA member is enabled to designate the person’s child or children as the recipients of survivor coverage just as married TRA members are able to do.

22. Refund Repayments or Leave Contribution Equivalent Payments from Tax Sheltered Annuities or Deferred Compensation Programs (H.F. 1086 (Smith), Third Engrossment, Article 9, Section 22). The general law authority permitting refund repayments from other pension plan accumulations is expanded to also allow leave of absence member contribution-equivalent payments and to permit the transfers or payments from tax sheltered annuity or deferred compensation program accumulations.

23. Interest on Judges Retirement Plan Refunds Increased (H.F. 1086 (Smith), Third Engrossment, Article 9, Section 23). The interest payable on member contribution refunds for the Judges Retirement Plan is increased from five percent to six percent.

24. MSRS Health Care Savings Plan Expansion (H.F. 1086 (Smith), Third Engrossment, Article 11, Section 1). The Health Care Savings Plan administered by the Minnesota State Retirement System (MSRS) is expanded to permit account balances to be used to reimburse for active member health care costs.

25. Fair Oaks Lodge, St. Peter Community Healthcare Center, and RenVilla Nursing Home Employees Included in PERA Privatization Benefit Law (H.F. 1086 (Smith), Third Engrossment, Article 12, Section 1). Employees of the privatized Fair Oaks Lodge (Wadena), of the privatized St. Peter Community Healthcare Center, and of the privatized RenVilla Nursing Home are included in the PERA privatization benefit law.

26. Continued PERA-General Membership for Anoka County Achieve Program and Government Training Service Employees (H.F. 1086 (Smith), Third Engrossment, Article 12, Sections 2 and 3). Employees of the privatized Anoka County Achieve Program and the privatized Government Training Service would be permitted to retain coverage by the General Employees Retirement Plan of the Public Employees Retirement Association (PERA-General) after privatization.

27. Minneapolis Firefighters Relief Association Executive Salary Revision (H.F. 1086 (Smith), Third Engrossment, Article 13). The maximum on the salary of the executive secretary of the Minneapolis Fire Relief Association is revised to 50 percent of the salary of a first grade firefighter if the executive director remains an active firefighter or to 100 percent of the highest salary of the Minnesota State Retirement System (MSRS) executive director, the Public Employees Retirement Association (PERA) executive director, or the Teachers Retirement Association (TRA) executive director.

28. Shorter Vesting Requirement for Defined Contribution Volunteer Firefighter Relief Associations (H.F. 1086 (Smith), Third Engrossment, Article 14, Section 1). A shorter vesting requirement is permitted for volunteer firefighter relief associations that pay a defined contribution service pension.

29. An Additional Procedure for Crediting Interest on Volunteer Firefighter Relief Association Deferred Service Pensions (H.F. 1086 (Smith), Third Engrossment, Article 14, Section 2). If their bylaws so permit, volunteer firefighter relief associations can pay actual interest earned, not to exceed five percent, compounded annually, on deferred service pensions.

30. Shorter Vesting Requirement for Marine on St. Croix Volunteer Firefighters (H.F. 1086 (Smith), Third Engrossment, Article 14, Section 3). The Marine on St. Croix Volunteer Firefighter Relief Association is permitted to pay a full service pension with ten years of service credit, rather than the 20 years of service credit required by the generally applicable State law, Minnesota Statutes, Section 424A.02, Subdivision 2, and pays a prorated portion of the service pension with between five and ten years of volunteer fire service.

31. Bellingham Volunteer Firefighter Relief Association Annuity Investment Purchase Ratified (H.F. 1086 (Smith), Third Engrossment, Article 14, Section 4). The purchase of an annuity as an investment by the Bellingham Volunteer Firefighter Relief Association is ratified.

32. Lake Johanna Nonprofit Firefighting Corporation Included in PERA-P&F Membership (H.F. 1086 (Smith), Third Engrossment, Article 15). The Lake Johanna Fire Department, a nonprofit firefighting corporation, is included as a governmental subdivision in Public Employees Police and Fire Plan (PERA-P&F) coverage.

33. PERA-General Service Credit Purchase for TRA Member (H.F. 1086 (Smith), Third Engrossment, Article 16, Section 1). A current member of the Teachers Retirement Association (TRA) is permitted to purchase allowable service credit from the General Employee Retirement Plan of the Public Employees Retirement Association (PERA-General) for prior uncovered non-teaching school district employment.

34. Goodhue County Commissioner Permitted to Transfer to Public Employees Defined Contribution Retirement Plan (H.F. 1086 (Smith), Third Engrossment, Article 16, Section 2). A Red Wing police officer who is a Goodhue County Commissioner is permitted to end PERA-General coverage and transfer to the Public Employees Defined Contribution Retirement Plan coverage.

35. Posthumous Transfer of Prior Contributions to MSRS-Unclassified (H.F. 1086 (Smith), Third Engrossment, Article 16, Section 3). A posthumous election to transfer prior contributions from MSRS-General to MSRS-Unclassified is authorized for the estate of a certain deceased legislative employee.

36. Prior Military Service Credit Purchase Sunset Date Extended to 2006 (H.F. 1086 (Smith), Third Engrossment, Article 17). The sunset on the service credit purchase provisions for prior military service for various retirement plans is extended to 2006, a prohibition against purchase if the individual is entitled to a current or deferred military pension is removed, and a prior prohibition on purchases that was credited by another defined benefit plan is modified to prohibit the multiple purchase of the same military service credit period in more than one Minnesota defined benefit pension plan.

37. Minneapolis Police Relief Association (H.F. 1086 (Smith), Third Engrossment, Article 18). The amortization date for eliminating the relief association unfunded actuarial accrued liability is extended from 2010 to 2020, the period for determining the trigger for and the amount of the "thirteenth check" post-retirement adjustment is shortened from five years to two years, a benefit reduction requirement that should have occurred when the plan became less than 90 percent funded is eliminated, the service pensions for members with 20 or more years of service are enhanced by one unit, the service pension payable to joint-and-survivor annuitants is increased by one unit, the surviving spouse benefits are increased by one unit, and the amount of benefits that have been properly paid are guaranteed. The article is subject to local approval.

Upon final passage of S.F. 676 (Betzold), as amended, by the House of Representatives on May 15, 2004, several provisions of the Senate Version of S. F. 676 (Betzold) were removed. The provisions removed by the House of Representatives are as follows:

1. MTRFA/TRA Merger (S.F. 676 (Betzold), Third Engrossment, Article 22).  MTRFA merges into TRA, with all MTRFA assets and liabilities transferring to TRA. Includes continuation of all pension aids currently received by MTRFA and dedication of MERF aid to MTRFA when that aid is not longer needed by MERF.

2. TRA Benefit Improvement (S.F. 676 (Betzold), Third Engrossment, Article 21).  An increase in the TRA coordinated member level benefit accrual rate from 1.7 percent per year of service to 2.0 percent per year of service is granted.

3. Pre-1969 Teachers Special Post Retirement Adjustment (S.F. 676 (Betzold), Third Engrossment, Article 20).  This article would allow certain pre-1969 TRA members and retirees, who are not eligible under existing law to receive an Improved Money Purchase annuity, to receive an additional benefit equal to 45 percent of the difference between an Improved Money Purchase benefit and a typical formula annuity.

4. Bug-O-Na-Ge-Shig School Employee Retirement Coverage (S.F. 676 (Betzold), Third Engrossment, Article 16, Section 5).  The provision would have allowed an individual at the Bug-O-Na-Ge-Shig school to credit service at the school toward in MSRS Rule-of-90 benefit, although the employees of this school are not currently covered under any Minnesota public pension plan.

5. Hennepin County Retiree and Future Minneapolis Park Board Service (S.F. 676 (Betzold), Third Engrossment, Article 16, Section 3).  This provision would have permitted a Minneapolis Park Board member, who intends to terminate from other Hennepin County public employment, to begin receiving a PERA General annuity although the individual elected PERA General coverage for the Park Board service and will continue in that elected service.

6. University of Minnesota Police Officer Exclusion from PERA-P&F Coverage (S.F. 676 (Betzold), Third Engrossment, Article 1, Section 5).  This section would have authorized a police officer employed by the U of M to contribute to the faculty plan rather than PERA-P&F.

7. Lump Sum Volunteer Firefighter Statewide Retirement Plan Task Force and Study (S.F. 676 (Betzold), Third Engrossment, Article 14, Section 5).  A special study of the potential for a statewide lump sum volunteer firefighter study, funded by a $40,000 appropriation from the General Fund, is authorized.