LCPR05‑081
1.1 M ............... moves to amend S.F. No. 620; H.F. No.
1.2 1758, as follows:
1.3 Page 1, after line 6, insert:
1.4 "Section 1. Minnesota Statutes 2004, section 3A.02,
1.5 subdivision 4, is amended to read:
1.6 Subd. 4. DEFERRED ANNUITIES AUGMENTATION. (a) The
1.7 deferred annuity of any former legislator must be augmented as
1.8 provided herein. The required reserves applicable to the
1.9 deferred annuity, determined as of the date the benefit begins
1.10 to accrue member terminates, using an appropriate mortality
1.11 table and an interest the rate of return assumption of six
1.12 percent in effect when the individual applies for an annuity,
1.13 must be augmented from the first of the month following
1.14 termination of service, or July 1, 1973, whichever is later, to
1.15 the first day of the month in which the annuity begins to
1.16 accrue, as follows:
1.17 (1) at the rate of five percent per annum year compounded
1.18 annually until for members who terminate service on or before
1.19 January 1, 1981, and thereafter;
1.20 (2) for members who terminate service after January 1,
1.21 1981, and before May 16, 1989, at the rate of three percent
1.22 per annum year compounded annually;
1.23 (3) for members who terminate on or after May 16, 1989, and
1.24 before January 1, 2006, at the rate of three percent per year
1.25 compounded annually until January 1 of the year in which the
1.26 former legislator attains age 55. and from that date to the
1.27 effective date of retirement, the rate is five percent per year
1.28 compounded annually; and
1.29 (4) for members who terminate service on or after January
1.30 1, 2006, at the rate of 2.5 percent per year compounded annually
1.31 until the month following the month in which the former member
1.32 attains age 55.
1.33 (b) The retirement allowance of, or the survivor benefit
1.34 payable on behalf of, a former member of the legislature who
1.35 terminated service before July 1, 1997, which is not first
1.36 payable until after June 30, 1997, must be increased on an
2.1 equivalent basis to reflect the change in the postretirement
2.2 interest rate actuarial assumption under section 356.215,
2.3 subdivision 8, from five percent to six percent under a
2.4 calculation procedure and tables adopted by the board of
2.5 directors of the Minnesota State Retirement System and approved
2.6 by the actuary retained by the Legislative Commission on
2.7 Pensions and Retirement.
2.8 Sec. 2. Minnesota Statutes 2004, section 352.72,
2.9 subdivision 2, is amended to read:
2.10 Subd. 2. COMPUTATION OF DEFERRED ANNUITY. (a) The
2.11 deferred annuity, if any, accruing under subdivision 1, or
2.12 section 352.22, subdivision 3, must be computed as provided in
2.13 section 352.22, subdivision 3, on the basis of allowable service
2.14 before termination of state service and augmented as provided
2.15 herein. The required reserves applicable to a deferred annuity
2.16 or to an annuity for which a former employee was eligible but
2.17 had not applied or to any deferred segment of an annuity must be
2.18 determined as of the date the benefit begins to accrue member
2.19 terminated and shall be augmented by interest compounded
2.20 annually from the first day of the month following the month in
2.21 which the employee ceased to be a state employee, or July 1,
2.22 1971, whichever is later, to the first day of the month in which
2.23 the annuity begins to accrue, except as otherwise specified in
2.24 this subdivision. The rates of interest used for this purpose
2.25 must be five percent annual interest compounded annually until
2.26 for members who terminate on or before January 1, 1981, and.
2.27 For members who terminate service after January 1, 1981, and
2.28 before May 16, 1989, the rate is three percent per year
2.29 compounded annually thereafter. For members who terminate
2.30 service on or after May 16, 1989, and before January 1, 2006,
2.31 the rate is three percent per year compounded annually until
2.32 January 1 of the year following the year in which the former
2.33 employee attains age 55. From that date to the effective date
2.34 of retirement, the rate is five percent compounded
2.35 annually. For members who terminate service on or after January
2.36 1, 2006, the rate is 2.5 percent per year compounded annually.
3.1 If a person has more than one period of uninterrupted service,
3.2 the required reserves related to each period must be augmented
3.3 by interest as specified under this subdivision. The sum of the
3.4 augmented required reserves so determined is the present value
3.5 of the annuity. "Uninterrupted service" for the purpose of this
3.6 subdivision means periods of covered employment during which the
3.7 employee has not been separated from state service for more than
3.8 two years. If a person repays a refund, the service restored by
3.9 the repayment must be considered continuous with the next period
3.10 of service for which the employee has credit with this system.
3.11 The formula percentages used for each period of uninterrupted
3.12 service must be those applicable to a new employee. The
3.13 mortality table and interest rate of return assumption used to
3.14 compute the annuity must be those in effect when the employee
3.15 individual files application for annuity. This section does not
3.16 reduce the annuity otherwise payable under this chapter.
3.17 (b) The retirement annuity or disability benefit of, or the
3.18 survivor benefit payable on behalf of, a former state employee
3.19 who terminated service before July 1, 1997, which is not first
3.20 payable until after June 30, 1997, must be increased on an
3.21 actuarial equivalent basis to reflect the change in the
3.22 postretirement interest rate actuarial assumption under section
3.23 356.215, subdivision 8, from five percent to six percent under a
3.24 calculation procedure and the tables adopted by the board and
3.25 approved by the actuary retained by the Legislative Commission
3.26 on Pensions and Retirement.
3.27 Sec. 3. Minnesota Statutes 2004, section 352B.30,
3.28 subdivision 2, is amended to read:
3.29 Subd. 2. COMPUTATION OF DEFERRED ANNUITY. Deferred
3.30 annuities must be computed according to this chapter on the
3.31 basis of allowable service before termination of service and
3.32 augmented as provided in this chapter. The required reserves
3.33 applicable to a deferred annuity must be augmented by annual
3.34 interest compounded annually from the first day of the month
3.35 following the month in which the member terminated service, or
3.36 July 1, 1971, whichever is later, to the first day of the month
4.1 in which the annuity begins to accrue. The rates of interest
4.2 used for this purpose shall be five percent per year compounded
4.3 annually until for members who terminate service on or before
4.4 January 1, 1981, and after that date. For members who terminate
4.5 service after January 1, 1981, and before January 1, 2006, the
4.6 rate is three percent per year compounded annually. For members
4.7 who terminate service on or after January 1, 2006, the rate is
4.8 2.5 percent per year compounded annually. The mortality table
4.9 and interest rate of return assumption used to compute the
4.10 annuity shall be those in effect when the member individual
4.11 files application for annuity.
4.12 Sec. 4. Minnesota Statutes 2004, section 352C.033, is
4.13 amended to read:
4.14 352C.033 DEFERRED ANNUITIES AUGMENTATION.
4.15 (a) The deferred retirement allowance for any former
4.16 constitutional officer must be augmented as provided in this
4.17 section. The required reserves applicable to the deferred
4.18 retirement allowance, determined as of the date the retirement
4.19 allowance begins to accrue of termination of service, using the
4.20 appropriate mortality table and an interest rate of return
4.21 assumption of six percent in effect when the former
4.22 constitutional officer applies for an annuity, shall be
4.23 augmented from the first of the month following termination of
4.24 service as a constitutional officer, or January 1, 1979,
4.25 whichever is later, to the first day of the month in which the
4.26 annuity begins to accrue, as follows, except as otherwise
4.27 specified in this section:
4.28 (1) at the rate of five percent per annum compounded
4.29 annually until January 1, 1981, and thereafter at the rate of
4.30 three percent per annum compounded annually for constitutional
4.31 officers who terminate service before April 15, 1992;
4.32 (2) for constitutional officers who terminate service on or
4.33 after April 15, 1992, and before January 1, 2006, by three
4.34 percent annual interest compounded annually until January 1 of
4.35 the year in which the former constitutional officer attains age
4.36 55., and from that date to the effective date of retirement, the
5.1 rate is five percent annual interest compounded annually; and
5.2 (3) for constitutional officers who terminate service on or
5.3 after January 1, 2006, by 2.5 percent annual interest until the
5.4 first of the month following the month in which the individual
5.5 turns age 55.
5.6 (b) The retirement allowance of, or the survivor benefit
5.7 payable on behalf of, a former constitutional officer who
5.8 terminated service before July 1, 1997, which is not first
5.9 payable until after June 30, 1997, must be increased on an
5.10 actuarial equivalent basis to reflect the change in the
5.11 postretirement interest rate actuarial assumption under section
5.12 356.215, subdivision 8, from five percent to six percent under a
5.13 calculation procedure and tables adopted by the board as
5.14 recommended by an approved actuary and approved by the actuary
5.15 retained by the Legislative Commission on Pensions and
5.16 Retirement."
5.17 Page 2, after line 36, insert:
5.18 "Sec. 6. Minnesota Statutes 2004, section 354.55,
5.19 subdivision 11, is amended to read:
5.20 Subd. 11. DEFERRED ANNUITY; AUGMENTATION. (a) Any person
5.21 covered under section 354.44, subdivision 6, who ceases to
5.22 render teaching service, may leave the person's accumulated
5.23 deductions in the fund for the purpose of receiving a deferred
5.24 annuity at retirement. Eligibility for an annuity under this
5.25 subdivision is governed pursuant to by section 354.44,
5.26 subdivision 1, or 354.60.
5.27 (b) The amount of the deferred retirement annuity is
5.28 determined by section 354.44, subdivision 6, and augmented as
5.29 provided in this subdivision. The required reserves related to
5.30 that portion of the annuity which had accrued when the member
5.31 ceased to render teaching service must be augmented by interest
5.32 compounded annually from the first day of the month following
5.33 the month during which the member ceased to render teaching
5.34 service to the effective date of retirement. There shall be no
5.35 augmentation if this period is less than three months or if this
5.36 period commences prior to July 1, 1971. The rates of interest
6.1 used for this purpose must be five percent annual interest
6.2 compounded annually commencing July 1, 1971, until January 1,
6.3 1981, and for members who cease to render teaching service on or
6.4 before January 1, 1981. For members who cease to render
6.5 teaching service after January 1, 1981, and before May 16, 1989,
6.6 the rate is three percent annual interest compounded annually
6.7 thereafter. For members who cease to render teaching service on
6.8 or after May 16, 1989, and before January 1, 2006, the rate is
6.9 three percent annual interest compounded annually, until January
6.10 1 of the year following the year in which the former member
6.11 attains age 55., and from that date to the effective date of
6.12 retirement, the rate is five percent compounded annually. For
6.13 members who cease to render teaching service on or after January
6.14 1, 2006, the rate is 2.5 percent annual interest compounded
6.15 annually until the first of the month following the month in
6.16 which the former teacher attains age 55. If a person has more
6.17 than one period of uninterrupted service, a separate average
6.18 salary determined under section 354.44, subdivision 6, must be
6.19 used for each period and the required reserves related to each
6.20 period must be augmented by interest pursuant to this
6.21 subdivision. The sum of the augmented required reserves so
6.22 determined shall be the basis for purchasing the deferred
6.23 annuity. If a person repays a refund, the service restored by
6.24 the repayment must be considered as continuous with the next
6.25 period of service for which the person has credit with this
6.26 fund. If a person does not render teaching service in any one
6.27 fiscal year or more consecutive fiscal years and then resumes
6.28 teaching service, the formula percentages used from the date of
6.29 the resumption of teaching service must be those applicable to
6.30 new members. The mortality table and interest rate of return
6.31 assumption used to compute the annuity must be the applicable
6.32 mortality table established by the board under section 354.07,
6.33 subdivision 1, and the interest rate of return assumption under
6.34 section 356.215 in effect when the member retires. A period of
6.35 uninterrupted service for the purposes of this subdivision means
6.36 a period of covered teaching service during which the member has
7.1 not been separated from active service for more than one fiscal
7.2 year.
7.3 (c) In no case shall the annuity payable under this
7.4 subdivision be less than the amount of annuity payable pursuant
7.5 to section 354.44, subdivision 6.
7.6 (d) The requirements and provisions for retirement before
7.7 normal retirement age contained in section 354.44, subdivision
7.8 6, clause (3) or (5), shall also apply to an employee fulfilling
7.9 the requirements with a combination of service as provided in
7.10 section 354.60.
7.11 (e) The augmentation provided by this subdivision applies
7.12 to the benefit provided in section 354.46, subdivision 2.
7.13 (f) The augmentation provided by this subdivision shall not
7.14 apply to any period in which a person is on an approved leave of
7.15 absence from an employer unit covered by the provisions of this
7.16 chapter.
7.17 (g) The retirement annuity or disability benefit of, or the
7.18 survivor benefit payable on behalf of, a former teacher who
7.19 terminated service before July 1, 1997, which is not first
7.20 payable until after June 30, 1997, must be increased on an
7.21 actuarial equivalent basis to reflect the change in the
7.22 postretirement interest rate actuarial assumption under section
7.23 356.215, subdivision 8, from five percent to six percent under a
7.24 calculation procedure and tables adopted by the board as
7.25 recommended by an approved actuary and approved by the actuary
7.26 retained by the Legislative Commission on Pensions and
7.27 Retirement.
7.28 Sec. 7. Minnesota Statutes 2004, section 354A.37,
7.29 subdivision 2, is amended to read:
7.30 Subd. 2. ELIGIBILITY FOR DEFERRED RETIREMENT ANNUITY.
7.31 (a) Any coordinated member who ceases to render teaching
7.32 services for the school district in which the teachers
7.33 retirement fund association is located, with sufficient
7.34 allowable service credit to meet the minimum service
7.35 requirements specified in section 354A.31, subdivision 1, shall
7.36 be entitled to a deferred retirement annuity in lieu of a refund
8.1 pursuant to subdivision 1. The deferred retirement annuity
8.2 shall be computed pursuant to under section 354A.31 and shall be
8.3 augmented as provided in this subdivision. The deferred annuity
8.4 shall commence upon application after the person on deferred
8.5 status attains at least the minimum age specified in section
8.6 354A.31, subdivision 1.
8.7 (b) The monthly annuity amount that had accrued when the
8.8 member ceased to render teaching service must be augmented from
8.9 the first day of the month following the month during which the
8.10 member ceased to render teaching service to the effective date
8.11 of retirement. There is no augmentation if this period is less
8.12 than three months. The rate of augmentation is three percent
8.13 annual interest compounded annually until January 1 of the year
8.14 following the year in which the former member attains age 55,
8.15 and five percent compounded annually after that date to the
8.16 effective date of retirement for members who cease to render
8.17 teaching service on or after May 16, 1989, and before January 1,
8.18 2006. For members who cease to render teaching service on or
8.19 after January 1, 2006, the annual interest rate is 2.5 percent
8.20 annual interest compounded annually from the first of the month
8.21 following the month in which the former teacher attains age 55.
8.22 (c) If a person has more than one period of uninterrupted
8.23 service, a separate average salary determined under section
8.24 354A.31 must be used for each period, and the monthly annuity
8.25 amount related to each period must be augmented as provided in
8.26 this subdivision. The sum of the augmented monthly annuity
8.27 amounts determines the total deferred annuity payable. If a
8.28 person repays a refund, the service restored by the repayment
8.29 must be considered as continuous with the next period of service
8.30 for which the person has credit with the fund. If a person does
8.31 not render teaching services in any one fiscal year or more
8.32 consecutive fiscal years and then resumes teaching service, the
8.33 formula percentages used from the date of resumption of teaching
8.34 service are those applicable to new members. The mortality
8.35 table and interest rate of return assumption used to compute the
8.36 annuity are the table established by the fund to compute other
9.1 annuities, and the interest rate of return assumption under
9.2 section 356.215 in effect when the member retires. A period of
9.3 uninterrupted service for the purpose of this subdivision means
9.4 a period of covered teaching service during which the member has
9.5 not been separated from active service for more than one fiscal
9.6 year.
9.7 (d) The augmentation provided by this subdivision applies
9.8 to the benefit provided in section 354A.35, subdivision 2. The
9.9 augmentation provided by this subdivision does not apply to any
9.10 period in which a person is on an approved leave of absence from
9.11 an employer unit.
9.12 Sec. 8. FIRST CLASS CITY TEACHER FUNDS.
9.13 (a) In accordance with Minnesota Statutes, section 354A.12,
9.14 subdivision 4, the teacher retirement fund associations in each
9.15 of the cities of the first class shall amend their articles of
9.16 incorporation or bylaws in the manner specified in this
9.17 section. The amendments apply only to basic members in the
9.18 Minneapolis Teachers Retirement Fund Association and the St.
9.19 Paul Teachers Retirement Fund Association, and to old law
9.20 coordinated program members in the Duluth Teachers Retirement
9.21 Fund Association.
9.22 (b) The teacher retirement fund associations specified in
9.23 paragraph (a) shall amend their articles of incorporation to
9.24 provide deferred retirement annuity augmentation as provided in
9.25 Minnesota Statutes, section 354A.37, subdivision 2, as amended
9.26 in this act."
9.27 Page 3, line 2, delete "Section 1 is" and insert "Sections
9.28 1 to 8 are"
9.29 Renumber the sections in sequence
9.30 Amend the title accordingly