Minnesota Session Laws - 1988, Regular Session

  

                         Laws of Minnesota 1988 

                        CHAPTER 572-S.F.No. 1749 
           An act relating to the city of Minneapolis; providing 
          conditions for contractors bonds; providing for 
          postretirement payments for Minneapolis police 
          officers and Minneapolis firefighters, their surviving 
          spouses and dependents; amending Laws 1949, chapter 
          406, section 5, by adding a subdivision; and Laws 
          1980, chapter 595, section 3, by adding a subdivision. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [CONTRACTORS BONDS; SERVICES AND SUPPLIES.] 
    A successful bidder under the Uniform Municipal Contracting 
Law, Minnesota Statutes, section 471.345, shall at the time of 
execution of a contract provide the city of Minneapolis with a 
bond conditioned as required by law.  Notwithstanding any 
contrary provision of other law, the city finance officer may, 
in accordance with criteria adopted by the Minneapolis city 
council by ordinance, waive or reduce the amount of the bond 
required for a contract for procurement of supplies, services, 
materials or equipment if the bond is not reasonable or 
necessary for the protection of the city.  No bond required from 
a developer or a contractor on a development project for any 
works of construction may be waived or reduced under this 
section. 
    Sec. 2.  Laws 1980, chapter 595, section 3, is amended by 
adding a subdivision to read: 
    Subd. 12.  A successful bidder under the Uniform Municipal 
Contracting Law, Minnesota Statutes, section 471.345, shall at 
the time of execution of a contract provide the Minneapolis 
community development agency with a bond conditioned as required 
by law.  Notwithstanding any contrary provision of other law, 
the agency's contracting officer may, in accordance with 
criteria adopted by the Minneapolis city council by ordinance, 
waive or reduce the amount of the bond required for a contract 
for procurement of supplies, services, materials or equipment if 
the bond is not reasonable or necessary for the protection of 
the agency.  No bond required from a developer or a contractor 
on a development project for any works of construction may be 
waived or reduced under this subdivision. 
     Sec. 3.  Laws 1949, chapter 406, section 5, is amended by 
adding a subdivision to read: 
    Subd. 7.  [INVESTMENT RELATED POSTRETIREMENT PAYMENTS.] (a) 
For the purpose of this subdivision, these terms have the 
following meaning: 
    (1) "Excess investment income" means the amount by which 
the time weighted total rate of return earned by the fund in the 
most recent fiscal year has exceeded the actual percentage 
increase in the current monthly salary of a top grade patrol 
officer in the most recent fiscal year plus 1.5 percent.  The 
excess investment income must be expressed as a dollar amount; 
excess investment income shall not exceed 1.5 percent of the 
total assets of the fund and does not exist unless the time 
weighted total rate of return of the fund exceeds five percent. 
    (2) "Time weighted total rate of return" means the 
percentage amount determined by using the formula or formulas 
established by the state board of investment under Minnesota 
Statutes, section 11A.04, clause (11), and in effect on January 
1, 1987. 
    (3) "Eligible member" means any person, including service 
pensioners, disability pensioners, their survivors, or 
dependents, who received an annuity during the 12 months prior 
to the determination date.  Members who received an annuity for 
the entire 12 months prior to the determination date are 
eligible for a full annual postretirement payment.  Members who 
received an annuity for less than 12 months prior to the 
determination date are eligible for prorated annual 
postretirement payments.  
    (4) "Determination date" means December 31 of each year. 
     (5) "Annual postretirement payment" means the payment of a 
lump sum postretirement benefit to eligible members on June 1 
following the determination date in any year. 
      (b) The board of trustees of the relief association shall 
determine by May 1 of each year whether the relief association 
has excess investment income.  The amount of excess investment 
income, if any, must be stated as a dollar amount and reported 
by the relief association to the governing body of the 
municipality, the state auditor, the commissioner of finance, 
and the legislative commission on pensions and retirement.  The 
dollar amount of excess investment income up to 1.5 percent of 
the assets of the fund must be applied for the purposes 
specified in paragraphs (c) and (d).  Excess investment income 
must not be considered for actuarial valuations of the fund for 
that year under sections 69.77, 356.215, and 356.216.  
Additional investment income must be included in the actuarial 
valuations performed under sections 69.77, 356.215, and 356.216. 
    (c) The amount determined by paragraph (b) must be applied 
as follows: 
    (1) one-third of the excess investment income must be paid 
as a benefit to eligible members under paragraph (d) in an 
amount not to exceed .5 percent of the assets of the fund or an 
amount equal to the total monthly benefit that the eligible 
member was entitled to in the prior year under the terms of the 
pension plan, whichever is less; 
    (2)  the state amortization state aid or supplementary 
amortization state aid payments otherwise due to the relief 
association under section 423A.02 for the current calendar year 
must be reduced by one-third of the amount of the excess 
investment income; and 
    (3) the minimum obligation of the municipality otherwise 
due to the relief association for the following calendar year 
must be reduced by one-third of the amount of excess investment 
income. 
    (d) The relief association shall pay an annual 
postretirement payment to all eligible members in an amount not 
to exceed .5 percent of the assets of the fund.  Payment of the 
annual postretirement payment shall be in a lump sum amount on 
June 1 following the determination date in any year.  Payment of 
the annual post-retirement payment shall be made only if the 
time weighted total rate of return exceeds five percent in any 
year.  The total amount of all payments to members shall not 
exceed the amount determined under paragraph (b) of this 
subdivision.  Payment to each eligible member shall be 
calculated by dividing the total number of pension units to 
which eligible members are entitled into the excess investment 
income available for distribution to members, and then 
multiplying that result by the number of units to which each 
eligible member is entitled to determine each eligible member's 
annual postretirement payment.  Payment to each eligible member 
shall not exceed an amount equal to the total monthly benefit 
that the eligible member was entitled to in the prior year under 
the terms of the pension plan. 
    (e) In the event an eligible member dies prior to the 
payment of the post-retirement payment, the relief association 
shall pay that eligible member's estate the amount to which the 
eligible member was entitled. 
    (f) The relief association shall submit a report on the 
amount of all post-retirement payments made pursuant to this 
section and the manner in which those payments were determined 
to the state auditor, the executive secretary of the legislative 
commission on pensions and retirement, and the Minneapolis city 
clerk. 
    Sec. 4.  [MINNEAPOLIS FIRE; POSTRETIREMENT PAYMENTS.] 
    Subdivision 1.  [AUTHORIZED.] Notwithstanding the 
provisions of Minnesota Statutes, chapter 69, or any other law 
to the contrary, the Minneapolis fire department relief 
association shall provide postretirement payments to eligible 
members under subdivision 2. 
    Subd. 2.  [DEFINITIONS; CALCULATION.] (a) For the purpose 
of this subdivision these terms have the following meaning: 
    (1) "Excess investment income" means the amount by which 
the time weighted total rate of return earned by the fund in the 
most recent fiscal year has exceeded the actual percentage 
increase in the current monthly salary of a top grade 
firefighter in the most recent fiscal year plus 1.5 percent.  
The excess investment income must be expressed as a dollar 
amount; excess investment income shall not exceed 1.5 percent of 
the total assets of the fund and does not exist unless the time 
weighted total rate of return of the fund exceeds five percent.  
    (2) "Time weighted total rate of return" means the 
percentage amount determined by using the formula or formulas 
established by the state board of investment under Minnesota 
Statutes, section 11A.04, clause (11), and in effect on January 
1, 1987. 
     (3) "Eligible member" means any person, including service 
pensioners, disability pensioners, their survivors, or 
dependents, who received an annuity during the 12 months prior 
to the determination date.  Members who received an annuity for 
the entire 12 months prior to the determination date are 
eligible for a full annual postretirement payment.  Members who 
received an annuity for less than 12 months prior to the 
determination date are eligible for prorated annual 
postretirement payments. 
     (4) "Determination date" means December 31 of each year. 
     (5) "Annual postretirement payment" means the payment of a 
lump sum postretirement benefit to eligible members on June 1 
following the determination date in any year.  
     (b) The board of trustees of the relief association shall 
determine by May 1 of each year whether the relief association 
has excess investment income.  The amount of excess investment 
income, if any, must be stated as a dollar amount and reported 
by the relief association to the governing body of the 
municipality, the state auditor, the commissioner of finance, 
and the legislative commission on pensions and retirement.  The 
dollar amount of excess investment income up to 1.5 percent of 
the assets of the fund must be applied for the purposes 
specified in paragraphs (c) and (d).  Excess investment income 
must not be considered for actuarial valuations of the fund for 
that year under sections 69.77, 356.215, and 356.216.  
Additional investment income must be included in the actuarial 
valuations performed under sections 69.77, 356.215, and 356.216. 
    (c) The amount determined by paragraph (b) must be applied 
as follows: 
    (1) one-third of the excess investment income must be paid 
as a benefit to eligible members under paragraph (d) in an 
amount not to exceed .5 percent of the assets of the fund or an 
amount equal to the total monthly benefit that the eligible 
member was entitled to in the prior year under the terms of the 
pension plan, whichever is less; 
     (2) the state amortization state aid or supplementary 
amortization state aid payments otherwise due to the relief 
association under section 423A.02 for the current calendar year 
must be reduced by one-third of the amount of the excess 
investment income; and 
    (3) the minimum obligation of the municipality otherwise 
due to the relief association for the following calendar year 
must be reduced by one-third of the amount of excess investment 
income. 
    (d) The relief association shall pay an annual 
postretirement payment to all eligible members in an amount not 
to exceed .5 percent of the assets of the fund.  Payment of the 
annual postretirement payment shall be in a lump sum amount on 
June 1 following the determination date in any year.  Payment of 
the annual post-retirement payment shall be made only if the 
time weighted total rate of return exceeds five percent in any 
year.  The total amount of all payments to members shall not 
exceed the amount determined under paragraph (b) of this 
subdivision.  Payment to each eligible member shall be 
calculated by dividing the total number of pension units to 
which eligible members are entitled into the excess investment 
income available for distribution to members, and then 
multiplying that result by the number of units to which each 
eligible member is entitled to determine each eligible members 
annual postretirement payment.  Payment to each eligible member 
shall not exceed an amount equal to the total monthly benefit 
that the eligible member was entitled to in the prior year under 
the terms of the pension plan. 
    (e) In the event an eligible member dies prior to the 
payment of the post-retirement payment, the relief association 
shall pay that eligible member's estate the amount to which the 
eligible member was entitled. 
    (f) The relief association shall submit a report on the 
amount of all post-retirement payments made pursuant to this 
section and the manner in which those payments were determined 
to the state auditor, the executive secretary of the legislative 
commission on pensions and retirement, and the Minneapolis city 
clerk. 
    Sec. 5.  [NONENTITLEMENT OF ANNUAL POSTRETIREMENT PAYMENT.] 
    No provision of, or payment made under, sections 1 or 2 
shall be interpreted or relied upon by any member of either the 
Minneapolis police relief association or the Minneapolis fire 
department relief association to guarantee or entitle a member 
to annual postretirement benefits for a period when no excess 
investment income is earned by either fund. 
    Sec. 6.  [EFFECTIVE DATE.] 
     Sections 1 and 2 are effective on the day after compliance 
with Minnesota Statutes, section 645.021, subdivision 3, by the 
city council of the city of Minneapolis. 
     Sections 3, 4, and 5 are effective the day after approval 
by the Minneapolis city council and compliance with Minnesota 
Statutes, section 645.021 and applies to calendar year 1987 
investment performance. 
    Approved April 20, 1988