S.F. 1705 (Pogemiller): H.F. 1692 (Murphy) has provisions applying to the first class city teacher plans and the Minneapolis Employees Retirement Fund (MERF). The companion bills propose new data classification law; would revise several employer reporting provisions including investment business-recipient reporting law, revises MTRFA basic member disability benefits, proposes to annuitize certain lump sum post-retirement provisions; proposes to permit various rollovers to cover refund repayments and service credit purchases, revises the definition of salary for pension purposes; and makes other miscellaneous changes of an administrative nature.

LCPR01-169 is derived from S.F. 1705 (Pogemiller): H.F. 1692 (Murphy) and attempts to present the provisions from those bills which are not benefit-related and which raise the fewest policy considerations. The following is a summary of LCPR01-169, along with policy comments. The numbering corresponds to the order in which the sections appear in the amendment.

Section 1. (Page 1, lines 2 to 15). Proposed coding as Section 13.631. The proposal would add a new section to Chapter 13, Government Data Practices, classifying as private the first class city teacher plan beneficiary and survivor home address, date of birth, direct deposit account number, and tax withholding data; and by explicitly permitting disclosure of data on member, survivor, and beneficiary name and gross annuity or gross benefit.

Policy Issues, Section 1. Data privacy issues are not generally heard by the LCPR. When this provision was proposed in the draft sent to us some months ago, we suggested that the first class city teacher plan administrators might wish to propose this provision in a bill that is not pension related. We note in checking in Chapter 13 that a comparable provision (Section 13.63) is in existing law for MERF. The MERF provision passed in 1993 and was not part of any legislation heard by the LCPR. If the proposal is recommended to pass by the LCPR, it may be necessary to send any bill containing the provision to judicial committees.

Section 2. (Page 1, lines 16 to 24, to page 3, line 1). Section 354A.011, Subdivision 24, the first class city teacher plan definition of salary, is amended by clarifying that salary for pension purposes includes salary before any voluntary salary reduction programs (including contributions to any deferred compensation or supplemental retirement plans); by specifying that salary does not include any employer payments for flexible spending accounts, cafeteria plans, or any pre-tax spending accounts; any form of severance payments, workers’ compensation, or disability insurance payments.

Policy Issues, Section 2. This proposal is very similar to changes enacted a few years ago for TRA and is consistent with efforts to carefully define salary for pension purposes to avoiding inflating salary for use in computing benefits.

Section 3. (Page 3, lines 2 to 36, and page 4, lines 1 to 30). Amends Section 354A.12, Subdivision 5, a first class city teacher plan employer reporting provision, by requiring data reporting comparable to that required by the Teachers Retirement Association (TRA) for TRA-covered districts.

Policy Issues, Section 3. The policy issue is the implications of adding the requirements to law. The list of data reporting elements added to law is information that the associations need to properly administer their plans. Since the information is required to properly administer the benefit plans as they appear in law or bylaw, one can contend that the plans have sufficient legal authority to request the information without any further revision in law. Perhaps the pension fund administrations are dealing with a lack of cooperation from the school districts, and they may contend that stating the data elements in law reinforces the right of the pension fund administrations to request these data. However, a downside is that adding the language in law may make it more difficult to revise data reporting at a later date, or to request any additional information that is not included in the list appearing in statute.

Section 4. (Page 4, lines 31 to 36, to page 6, line 15). Amends Section 354A.31, Subdivision 3, the first class city teacher plan reemployed annuitant provision, by adding a paragraph requiring the school district to report to the applicable first class city teachers fund the income earned after retirement by any annuitant of the association as a teacher, consultant, or independent contractor during the previous calendar year.

Section 5. EFFECTIVE DATE. All sections are effective July 1, 2001.