Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1993, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1993
CHAPTER 336-S.F.No. 625
An act relating to retirement; providing conditions
for survivor and dependent benefits from various
systems; first class city teachers; annuities,
death-while-active survivor benefits, and
administration; St. Paul teachers postretirement
adjustments; administrative expenses; amending
Minnesota Statutes 1992, sections 352.01, by adding a
subdivision; 352.12, subdivision 2, and by adding
subdivisions; 353.01, subdivision 15, and by adding a
subdivision; 353.32, subdivision 1a, and by adding
subdivisions; 354.05, subdivision 8, and by adding a
subdivision; 354.46, subdivisions 2, 5, and by adding
subdivisions; 354A.011, subdivision 27, and by adding
a subdivision; 354A.021, subdivision 5; 354A.12,
subdivisions 1, 1a, 2a, 2b, and by adding a
subdivision; 354A.23, subdivision 3; 354A.31, by
adding subdivisions; 354A.35, subdivision 2, and by
adding subdivisions; and 356.215, subdivision 4j.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
Section 1. Minnesota Statutes 1992, section 354A.011,
subdivision 27, is amended to read:
Subd. 27. [TEACHER.] "Teacher" means any person who
renders service in a public school district located in the
corporate limits of one of the cities of the first class which
was so classified on January 1, 1979, as any of the following:
(a) a full-time employee in a position for which a valid
license from the state board department of education is
required;
(b) an employee of the teachers retirement fund association
located in the city of the first class unless the employee has
exercised the option pursuant to Laws 1955, chapter 10, section
1, to retain membership in the Minneapolis employees retirement
fund established pursuant to chapter 422A;
(c) a part-time employee in a position for which a valid
license from the state board department of education is
required; or
(d) a part-time employee in a position for which a valid
license from the state board department of education is required
who also renders other nonteaching services for the school
district unless the board of trustees of the teachers retirement
fund association determines that the combined employment is on
the whole so substantially dissimilar to teaching service that
the service shall not be covered by the association.
The term shall not mean any person who renders service in
the school district as any of the following:
(1) an independent contractor or the employee of an
independent contractor;
(2) an employee who is a full-time teacher covered by
another teachers retirement fund association established
pursuant to this chapter or chapter 354;
(3) an employee holding a part-time adult supplementary
technical college license who renders part-time teaching service
in a technical college if (1) the service is incidental to the
regular nonteaching occupation of the person; and (2) the
applicable technical college stipulates annually in advance that
the part-time teaching service will not exceed 300 hours in a
fiscal year; and (3) the part-time teaching service actually
does not exceed 300 hours in a fiscal year; or
(4) an employee exempt from licensure pursuant to section
125.031.
Sec. 2. Minnesota Statutes 1992, section 354A.021,
subdivision 5, is amended to read:
Subd. 5. [TAX SHELTERED ANNUITY PROGRAM AND FUND.] Any
teachers retirement fund association may establish a tax
sheltered annuity program and fund meeting the requirements of
section 403(b) of the Internal Revenue Code of 1954, as amended,
which shall include all assets which were acquired for the
specific purpose of being credited to the program and fund and
to which shall be credited all employee contributions, and
employer contributions if negotiated under a collective
bargaining agreement, designated for this purpose and all
interest income attributable to the assets of the program and
fund.
Sec. 3. Minnesota Statutes 1992, section 354A.12,
subdivision 1, is amended to read:
Subdivision 1. [EMPLOYEE CONTRIBUTIONS.] The contribution
required to be paid by each member of a teachers retirement fund
association shall not be less than the percentage of total
salary specified below for the applicable association and
program:
Association and Program Percentage of
Total Salary
Duluth teachers retirement
association
old law and new law
coordinated programs 4.5 percent
Minneapolis teachers retirement
association
basic program 8.5 percent
coordinated program 4.5 percent
St. Paul teachers retirement
association
basic program 8 percent
coordinated program 4.5 percent
Contributions shall be made by deduction from salary and
must be remitted directly to the respective teachers retirement
fund association at least once each month.
Sec. 4. Minnesota Statutes 1992, section 354A.12,
subdivision 1a, is amended to read:
Subd. 1a. [OBLIGATION FOR OMITTED SALARY DEDUCTIONS.] If
the full required contributions are not deducted from the salary
of a teacher, payment of the shortage in such deductions is the
sole obligation of the employing unit during the three-year
period following the end of the fiscal year in which the
shortage occurred. The shortage is payable by the employing
unit upon notification of the shortage by the executive director
of the applicable retirement fund association. The employing
unit shall also pay any employer contributions related to the
shortage. The amount of the shortage in employee contributions
and associated employer contributions is payable with interest
at the rate of six percent per annum preretirement interest
assumption for the retirement fund as specified in section
356.215, subdivision 4d, compounded annually, from the end of
the fiscal year in which the shortage occurred to the end of the
month in which payment is made and the interest shall be
credited to the fund stated as a monthly rate from the date due
until the date payment is received in the office of the
association, with a minimum interest charge of $10. If the
shortage payment and interest is not paid by the employing unit
within 60 days of notification, the executive director shall
certify the amount of the shortage payment and interest to the
commissioner of finance, who shall deduct the amount from any
state aid or appropriation amount applicable to the employing
unit.
Sec. 5. Minnesota Statutes 1992, section 354A.12,
subdivision 2a, is amended to read:
Subd. 2a. [EMPLOYER REGULAR AND ADDITIONAL CONTRIBUTION
RATES.] (a) The employing units shall make the following
employer contributions to teachers retirement fund associations:
(1) for any coordinated member of a teachers retirement
fund association in a city of the first class, the employing
unit shall pay the employer social security taxes in accordance
with section 355.46, subdivision 3, clause (b);
(2) for any coordinated member of one of the following
teachers retirement fund associations in a city of the first
class, the employing unit shall make a regular employer
contribution to the respective retirement fund association in an
amount equal to the designated percentage of the salary of the
coordinated member as provided below:
Duluth teachers retirement
fund association 4.50 percent
Minneapolis teachers retirement
fund association 4.50 percent
St. Paul teachers retirement
fund association 4.50 percent;
(3) for any basic member of one of the following teachers
retirement fund associations in a city of the first class, the
employing unit shall make a regular employer contribution to the
respective retirement fund in an amount equal to the designated
percentage of the salary of the basic member as provided below:
Minneapolis teachers retirement
fund association 8.50 percent
St. Paul teachers retirement
fund association 8.00 percent
(4) for a basic member of a teachers retirement fund
association in a city of the first class, the employing unit
shall make an additional employer contribution to the respective
fund in an amount equal to the designated percentage of the
salary of the basic member, as provided below:
Minneapolis teachers retirement
fund association 4.85 percent
St. Paul teachers retirement
fund association 4.63 percent
(5) for a coordinated member of a teachers retirement fund
association in a city of the first class, the employing unit
shall make an additional employer contribution to the respective
fund in an amount equal to the applicable percentage of the
coordinated member's salary, as provided below:
Duluth teachers retirement
fund association 1.29 percent
Minneapolis teachers retirement
fund association
July 1, 1992 - June 30, 1993 0.00 percent
July 1, 1993, and thereafter 1.00 percent
St. Paul teachers retirement
fund association
July 1, 1992 - June 30, 1993 0.00 percent
July 1, 1993, and thereafter 1.00 percent
(b) For basic members of the Minneapolis teachers
retirement fund association and the St. Paul teachers retirement
fund association who retire on or after July 1, 1993, the
employing unit shall continue to make an additional employer
contribution to the retirement fund in an amount equal to the
average salary of the employing unit's basic members multiplied
by the relevant percentages in paragraph (a), clause (4).
(c) The regular and additional employer contributions must
be remitted directly to the respective teachers retirement fund
association at least once each month. Delinquent amounts are
payable with interest under the procedure in subdivision 1a.
(d) Payments of regular and additional employer
contributions for school district or technical college employees
who are paid from normal operating funds must be made from the
appropriate fund of the district or technical college.
Sec. 6. Minnesota Statutes 1992, section 354A.12,
subdivision 2b, is amended to read:
Subd. 2b. [REPORT ON CONTRIBUTION INSUFFICIENCIES.] By
January 1 of each year, the executive secretary or director of
each first class city teachers retirement fund association shall
report to the chair of the legislative commission on pensions
and retirement, the chair of the committee on appropriations
ways and means of the house of representatives, and the chair of
the committee on finance of the senate on the amount raised by
the additional employer contribution rates then in effect and
the sufficiency of the total statutory support when compared to
the total required contributions determined under section
356.215.
Sec. 7. Minnesota Statutes 1992, section 354A.12, is
amended by adding a subdivision to read:
Subd. 5. [EMPLOYEE REPORTING.] Each school district shall
provide to the appropriate teachers retirement fund association
information regarding all new or returning employees on a form
provided by the executive secretary or director before the
employee's first payroll date.
Sec. 8. Minnesota Statutes 1992, section 354A.23,
subdivision 3, is amended to read:
Subd. 3. Notwithstanding anything to the contrary in the
articles and bylaws of the basic programs enumerated in chapter
354A, eligibility for payment and the payment of interest on
refunds and interest on repayment of refunds shall be computed
determined in the same manner as for the coordinated programs
covered by this chapter.
Sec. 9. Minnesota Statutes 1992, section 354A.31, is
amended by adding a subdivision to read:
Subd. 1a. [APPLICATION FOR ANNUITY.] Application for a
retirement annuity may be made by a member or by a person
authorized to act on behalf of the member. Every application
for retirement must be made in writing on a form prescribed by
the executive secretary or director and must be substantiated by
written proof of the member's age and identity. The notarized
signature of a member's spouse on a retirement annuity
application acknowledging the member's annuity selection meets
the notice requirement to the spouse under section 356.371,
subdivision 3. An application for a retirement annuity is not
complete until all necessary supporting documents are received
by the executive secretary or director.
Sec. 10. [EFFECTIVE DATE.]
Sections 1 to 9 are effective the day following final
enactment.
ARTICLE 2
Section 1. Minnesota Statutes 1992, section 354A.31, is
amended by adding a subdivision to read:
Subd. 2a. [APPLICATIONS AFTER RETIREMENT.] If an
application for retirement is filed with the board during the
90-day period immediately following the termination of teaching
service, the annuity may begin to accrue as if the application
for retirement had been filed with the board on the date
teaching service terminated. In no event may an annuity begin
to accrue more than one month before the date of final salary
receipt.
Sec. 2. [BYLAW AMENDMENT.]
Consistent with Minnesota Statutes, section 354A.12,
subdivision 4, the boards of the Duluth teachers retirement fund
association, the Minneapolis teachers retirement fund
association, and the St. Paul teachers retirement fund
association may amend the bylaws or articles of incorporation to
provide that, if an application for retirement is filed with the
board during the 90-day period immediately following the
termination of teaching service, the annuity may begin to accrue
as if the application for retirement had been filed with the
board on the date teaching service terminated. An annuity may
not begin to accrue more than one month before the date of final
salary receipt.
Sec. 3. [EFFECTIVE DATE.]
Sections 1 and 2 are effective the day following final
enactment.
ARTICLE 3
Section 1. [ST. PAUL TEACHERS BYLAW AMENDMENT.]
Pursuant to Minnesota Statutes, section 354A.12,
subdivision 4, permission is granted for St. Paul teachers
retirement fund association to amend its articles to:
(a) Reduce the waiting period for receipt of the additional
lump sum postretirement payment from three years to one year.
(b) The assets of the fund used to determine the dollar
amount payable be the assets as defined in Minnesota Statutes,
section 356.215, subdivision 1, clause 6, the actuarial value of
the fund.
(c) The lump sum postretirement adjustment, at the request
of the annuitant or benefit recipient, may be converted to a
monthly annuity of equivalent actuarial value based on:
(1) the age of the annuitant or benefit recipient on
January 1 of the year following the end of the fiscal year;
(2) the mortality table established by the board of
trustees of the association and approved under Minnesota
Statutes, section 356.215, subdivision 7; and
(3) a postretirement interest rate assumption of 7.5
percent.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
ARTICLE 4
Section 1. Minnesota Statutes 1992, section 356.215,
subdivision 4j, is amended to read:
Subd. 4j. [ADMINISTRATIVE EXPENSES.] The actuarial
valuation must indicate the administrative expenses of the fund,
expressed both in dollars and as a percentage of covered payroll.
Administrative expenses are costs incurred by the retirement
plans excluding investment expenses. Investment expenses
include all expenses incurred for the retention of professional
external investment managers and professional investment
consultants, custodian bank fees, investment transaction costs,
and the costs incurred by the retirement plans to manage
investment portfolios or assets internally. Investment expenses
must be deducted from investment return in the actuarial
valuation, and not included in administrative expenses when
calculating the allowance for expenses.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
ARTICLE 5
Section 1. Minnesota Statutes 1992, section 354A.35,
subdivision 2, is amended to read:
Subd. 2. [DEATH WHILE ELIGIBLE TO RETIRE; SURVIVING SPOUSE
OPTIONAL ANNUITY.] The surviving spouse of any coordinated
member who has attained the age of at least 50 years and has
credit for at least three years of service or has credit for at
least 30 years of service regardless of age shall be is entitled
to joint and survivor annuity coverage in the event of death of
the member prior to retirement. The surviving spouse may apply
for the annuity at any time after the date on which the deceased
employee would have attained the required age for retirement
based on the employee's allowable service. The member's
surviving spouse shall be paid a joint and survivor annuity as
provided in section 354A.32 and computed pursuant to section
354A.31. Sections 354A.37, subdivision 2, and 354A.39 apply to
a deferred annuity payable under this section. The benefits
shall be payable for life.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective the day following final enactment.
ARTICLE 6
Section 1. Minnesota Statutes 1992, section 352.01, is
amended by adding a subdivision to read:
Subd. 26. [DEPENDENT CHILD.] "Dependent child" means a
biological or adopted child of a deceased employee who has not
reached the age of 20 and is dependent upon the employee for
more than one-half of the child's support at the time of the
employee's death. It also means a child of the member conceived
during the member's lifetime and born after the member's death.
Sec. 2. Minnesota Statutes 1992, section 352.12,
subdivision 2, is amended to read:
Subd. 2. [SURVIVING SPOUSE BENEFIT.] (a) If an employee or
former employee is at least 50 years old and has credit for at
least three years allowable service or who has credit for at
least 30 years of allowable service, regardless of age, and dies
before an annuity or disability benefit has become payable,
notwithstanding any designation of beneficiary to the contrary,
the surviving spouse of the employee may elect to receive, in
lieu of the refund with interest provided in under subdivision
1, an annuity equal to the joint and 100 percent survivor
annuity which the employee could have qualified for had the
employee terminated service on the date of death.
(b) If the employee was under age 55 and has credit for at
least 30 years of allowable service on the date of death, the
surviving spouse may elect to receive a 100 percent joint and
survivor annuity based on the age of the employee and surviving
spouse on the date of death. The annuity is payable using the
full early retirement reduction under section 352.116,
subdivision 1, paragraph (a), to age 55 and one-half of the
early retirement reduction from age 55 to the age payment begins.
(c) If the employee was under age 55 and has credit for at
least three years of allowable service credit on the date of
death but did not yet qualify for retirement, the surviving
spouse may elect to receive a 100 percent joint and survivor
annuity based on the age of the employee and surviving spouse at
the time of death. The annuity is payable using the full early
retirement reduction under section 352.116, subdivision 1 or 1a,
to age 55 and one-half of the early retirement reduction from
age 55 to the age payment begins.
The surviving spouse eligible for surviving spouse benefits
under paragraph (a) may apply for the annuity at any time after
the date on which the deceased employee would have attained the
required age for retirement based on the employee's allowable
service. The surviving spouse eligible for surviving spouse
benefits under paragraph (b) or (c) may apply for the annuity at
any time after the employee's death. The annuity must be
computed as provided in under sections 352.115, subdivisions 1,
2, and 3, and 352.116, subdivisions 1, 1a, and 3. Sections
352.22, subdivision 3, and 352.72, subdivision 2, apply to a
deferred annuity or surviving spouse benefit payable under this
subdivision. The annuity must cease with the last payment
received by the surviving spouse in the lifetime of
the surviving spouse, or upon expiration of a term certain
benefit payment to a surviving spouse under subdivision 2a. An
amount equal to the excess, if any, of the accumulated
contributions credited to the account of the deceased employee
in excess of the total of the benefits paid and payable to the
surviving spouse must be paid to the deceased employee's last
designated beneficiary or, if none, to the surviving children of
the deceased spouse in equal shares or, if none, to the
surviving parents of the deceased spouse or, if none, to the
representative of the estate of the deceased spouse as specified
under subdivision 1.
Any employee may request in writing that this subdivision
not apply and that payment be made only to a designated
beneficiary as otherwise provided by this chapter.
Sec. 3. Minnesota Statutes 1992, section 352.12, is
amended by adding a subdivision to read:
Subd. 2a. [SURVIVING SPOUSE COVERAGE TERM CERTAIN.] In
lieu of the 100 percent optional annuity under subdivision 2, or
refund under subdivision 1, the surviving spouse of a deceased
employee may elect to receive survivor coverage in a term
certain of five, ten, 15, or 20 years, but monthly payments must
not exceed 75 percent of the average high-five monthly salary of
the deceased employee. The monthly term certain annuity must be
actuarially equivalent to the 100 percent optional annuity under
subdivision 2.
If a survivor elects a term certain annuity and dies before
the expiration of the specified term certain period, the
commuted value of the remaining annuity payments must be paid in
a lump sum to the survivor's estate.
Sec. 4. Minnesota Statutes 1992, section 352.12, is
amended by adding a subdivision to read:
Subd. 2b. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is
no surviving spouse eligible for benefits under subdivision 2, a
dependent child or children as defined in section 352.01,
subdivision 26, is eligible for monthly payments. Payments to a
dependent child must be paid from the date of the employee's
death to the date the dependent child attains age 20 if the
child is under age 15. If the child is 15 years or older on the
date of death, payment must be made for five years. The payment
to a dependent child is an amount actuarially equivalent to the
value of a 100 percent optional annuity under subdivision 2
using the age of the employee and age of the dependent child at
the date of death in lieu of the age of the surviving spouse.
If there is more than one dependent child, each dependent child
shall receive a proportionate share of the actuarial value of
the employee's account.
Sec. 5. Minnesota Statutes 1992, section 353.01,
subdivision 15, is amended to read:
Subd. 15. [DEPENDENT CHILD.] For the purpose of survivor
benefit eligibility under sections 353.31, subdivision 1, and
353.657, subdivision 3, "dependent child" means a natural
biological or adopted child of a deceased member who is
unmarried, and under the age of 18, or age 18 to 23, so long as
the child submits evidence of full-time enrollment in an
accredited educational institution. "Dependent child" also
includes a child of the member conceived during the member's
lifetime and born after the member's death. It also means a
dependent child who is the subject of adoption proceedings filed
by a member, and who within two years after death of the member,
by judgment and decree duly entered, is adjudged to be the
adopted child of the deceased member; subject, however, to the
qualifying conditions of age and dependency under this
subdivision. The dependency of the child dates from the decree
of adoption. "Dependent child" also includes a child age 18 to
23 who had submitted evidence of full-time enrollment in an
accredited educational institution but was determined to be
medically unable to continue school on a full-time basis. The
board of trustees shall adopt written procedures to make
determinations regarding eligibility based on a student being
medically unable to continue school, and may not continue a
benefit for medical reasons for a period greater than one year.
Sec. 6. Minnesota Statutes 1992, section 353.01, is
amended by adding a subdivision to read:
Subd. 15a. [DEPENDENT CHILD.] For the purpose of survivor
benefit eligibility under section 353.32, subdivision 1c,
"dependent child" means any biological or adopted child of a
deceased member who has not reached the age of 20 and is
dependent for more than one-half of support upon the member. It
also includes any child of the member conceived during the
member's lifetime and born after the member's death.
Sec. 7. Minnesota Statutes 1992, section 353.32,
subdivision 1a, is amended to read:
Subd. 1a. [SURVIVING SPOUSE OPTIONAL ANNUITY.] (a) If a
member or former member who has attained at least age 50 and has
credit for not less than three years of allowable service or who
has credit for not less than 30 years of allowable service,
regardless of age attained, and dies before the annuity or
disability benefit begins to accrue under section 353.29,
subdivision 7, or 353.33, subdivision 2, notwithstanding any
designation of beneficiary to the contrary, the surviving spouse
may elect to receive, instead of a refund with interest under
subdivision 1, or surviving spouse benefits otherwise payable
under section 353.31, an annuity equal to the 100 percent joint
and survivor annuity that the member could have qualified for
had the member terminated service on the date of death.
(b) If the member was under age 55 and has credit for at
least 30 years of allowable service on the date of death, the
surviving spouse may elect to receive a 100 percent joint and
survivor annuity based on the age of the member and surviving
spouse on the date of death. The annuity is payable using the
full early retirement reduction under section 353.30,
subdivisions 1b and 1c, to age 55 and one-half of the early
retirement reduction from age 55 to the age payment begins.
(c) If the member was under age 55 and has credit for at
least three years of allowable service on the date of death but
did not qualify for retirement, the surviving spouse may elect
to receive the 100 percent joint and survivor annuity based on
the age of the member and surviving spouse at the time of
death. The annuity is payable using the full early retirement
reduction under section 353.30, subdivision 1, 1b, 1c, or 5, to
age 55 and one-half of the early retirement reduction from age
55 to the age payment begins.
Notwithstanding the definition of surviving spouse in
section 353.01, subdivision 20, a former spouse of the member,
if any, is entitled to a portion of the monthly surviving spouse
optional annuity if stipulated under the terms of a marriage
dissolution decree filed with the association. If there is no
surviving spouse or child or children, a former spouse may be
entitled to a lump-sum refund payment under subdivision 1, if
provided for in a marriage dissolution decree but not a monthly
surviving spouse optional annuity despite the terms of a
marriage dissolution decree filed with the association.
The surviving spouse eligible for surviving spouse benefits
under paragraph (a) may apply for the annuity at any time after
the date on which the deceased employee would have attained the
required age for retirement based on the employee's allowable
service. The surviving spouse eligible for surviving spouse
benefits under paragraph (b) or (c) may apply for an annuity any
time after the member's death. The annuity must be computed
under sections 353.29, subdivisions 2 and 3; 353.30,
subdivisions 1, 1a, 1b, 1c, and 5; and 353.31, subdivision 3.
Sections 353.34, subdivision 3, and 353.71, subdivision 2,
apply to a deferred annuity or surviving spouse benefit payable
under this subdivision. No payment may accrue beyond the end of
the month in which entitlement to the annuity has terminated or
upon expiration of the term certain benefit payment under
subdivision 1b. An amount equal to any excess of the
accumulated contributions that were credited to the account of
the deceased employee over and above the total of the annuities
paid and payable to the surviving spouse must be paid to the
deceased member's last designated beneficiary or, if none, to
the legal representative of the estate of the deceased member as
specified under subdivision 1.
A member may specify in writing that this subdivision does
not apply and that payment may be made only to the designated
beneficiary as otherwise provided by this chapter.
Sec. 8. Minnesota Statutes 1992, section 353.32, is
amended by adding a subdivision to read:
Subd. 1b. [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the
100 percent optional annuity under subdivision 1a, or a refund
under subdivision 1, the surviving spouse of a deceased member
may elect to receive survivor coverage for a term certain of
five, ten, 15, or 20 years, but monthly payments must not exceed
75 percent of the average high-five monthly salary of the
deceased member. The monthly term certain annuity must be
actuarially equivalent to the 100 percent optional annuity under
subdivision 1a.
If a surviving spouse elects a term certain annuity and
dies before the expiration of the specified term certain period,
the commuted value of the remaining annuity payments must be
paid in a lump sum to the survivor's estate.
Sec. 9. Minnesota Statutes 1992, section 353.32, is
amended by adding a subdivision to read:
Subd. 1c. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is
no surviving spouse eligible for benefits under subdivision 1a,
a dependent child or children as defined in section 353.01,
subdivision 15a, is eligible for monthly payments. Payments to
a dependent child must be paid from the date of the member's
death to the date the dependent child attains age 20 if the
child is under age 15. If the child is 15 years or older on the
date of death, payment must be made for five years. The payment
to a dependent child is an amount actuarially equivalent to the
value of a 100 percent optional annuity under subdivision 1a
using the age of the member and age of the dependent child at
the date of death in lieu of the age of the surviving spouse.
If there is more than one dependent child, each dependent child
shall receive a proportionate share of the actuarial value of
the employee's account.
Sec. 10. Minnesota Statutes 1992, section 354.05,
subdivision 8, is amended to read:
Subd. 8. [DEPENDENT CHILD.] For the purpose of survivor
benefit eligibility under section 354.46, subdivision
1, "dependent child" means any natural biological or adopted
child of a deceased member who has not reached the age of 18, or
who is under age 22 and is a full-time student throughout the
normal school year, unmarried and dependent for more than
one-half of support upon such the member and for a period of at
least 90 days prior to the member's death. It also includes any
child of the member conceived while living and born after death.
Sec. 11. Minnesota Statutes 1992, section 354.05, is
amended by adding a subdivision to read:
Subd. 8a. [DEPENDENT CHILD.] For the purpose of survivor
benefit eligibility under section 354.46, subdivision 2b,
"dependent child" means any biological or adopted child of a
deceased member who has not reached the age of 20 and is
dependent for more than one-half of support upon the member. It
also includes any child of the member conceived while living and
born after death.
Sec. 12. Minnesota Statutes 1992, section 354.46,
subdivision 2, is amended to read:
Subd. 2. [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY
BENEFIT.] (a) The surviving spouse of any member or former
member who has attained the age of at least 50 years and has
credit for at least three years of allowable service or who has
credit for at least 30 years of allowable service irrespective
of age is entitled to joint and survivor annuity coverage in the
event of death of the member prior to retirement. If the
surviving spouse does not elect to receive a surviving spouse
benefit provided pursuant to under subdivision 1, if applicable,
or does not elect to receive a refund of accumulated member
contributions provided pursuant to under section 354.47,
subdivision 1, the surviving spouse is entitled to receive, upon
written application on a form prescribed by the executive
director, a benefit equal to the second portion of a 100 percent
joint and survivor annuity as provided pursuant to specified
under section 354.45, based on the age of the member and
surviving spouse at the time of death of the member, and
computed pursuant to under section 354.44, subdivision 2, or 6,
or 7, whichever is applicable.
(b) If the member was under age 55 and has credit for at
least 30 years of allowable service on the date of death, the
surviving spouse may elect to receive a 100 percent joint and
survivor annuity based on the age of the member and surviving
spouse on the date of death. The annuity is payable using the
full early retirement reduction under section 354.44,
subdivision 6, paragraph (3)(ii), to age 55 and one-half of the
early retirement reduction from age 55 to the age payment begins.
(c) If the member was under age 55 and has credit for at
least three years of allowable service on the date of death but
did not yet qualify for retirement, the surviving spouse may
elect to receive the 100 percent joint and survivor annuity
based on the age of the member and the surviving spouse at the
time of death. The annuity is calculated using the full early
retirement reduction under section 354.44, subdivision 6, to age
55 and one-half of the early retirement reduction from age 55 to
the age the annuity begins. The surviving spouse eligible for a
surviving spouse benefit under paragraph (a) may apply for the
annuity at any time after the date on which the deceased
employee would have attained the required age for retirement
based on the employee's allowable service. The surviving spouse
eligible for surviving spouse benefits under paragraph (b) or
(c) may apply for the annuity any time after the member's death.
This benefit accrues from the day following the date of the
member's death but may not begin to accrue more than six months
before the date the application is filed with the executive
director. Sections 354.44 354.55, subdivision 6 11, and 354.60
apply to a deferred annuity payable under this section. The
benefit is payable for life.
Sec. 13. Minnesota Statutes 1992, section 354.46, is
amended by adding a subdivision to read:
Subd. 2a. [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the
100 percent optional annuity under subdivision 2, or a refund
under section 354.47, subdivision 1, the surviving spouse of a
deceased member may elect to receive survivor coverage in a term
certain of five, ten, 15, or 20 years, but monthly payments must
not exceed 75 percent of the average high-five monthly salary of
the deceased member. The monthly term certain annuity must be
actuarially equivalent to the 100 percent optional annuity under
subdivision 2.
If a surviving spouse elects a term certain payment and
dies before the expiration of the specified term certain period,
the commuted value of the remaining annuity payments must be
paid in a lump sum to the survivor's estate.
Sec. 14. Minnesota Statutes 1992, section 354.46, is
amended by adding a subdivision to read:
Subd. 2b. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is
no surviving spouse eligible for benefits under subdivision 2, a
dependent child or children as defined in section 354.05,
subdivision 8a, is eligible for monthly payments. Payments to a
dependent child must be paid from the date of the member's death
to the date the dependent child attains age 20 if the child is
under age 15. If the child is 15 years or older on the date of
death, payment must be made for five years. The payment to a
dependent child is an amount actuarially equivalent to the value
of a 100 percent optional annuity under subdivision 2 using the
age of the member and age of the dependent child at the date of
death in lieu of the age of the member and the spouse. If there
is more than one dependent child, each dependent child shall
receive a proportionate share of the actuarial value of the
member's account.
Sec. 15. Minnesota Statutes 1992, section 354.46,
subdivision 5, is amended to read:
Subd. 5. [PAYMENT TO DESIGNATED BENEFICIARY.] Any member
and the spouse of the member may make a joint specification in
writing on a form prescribed by the executive director that the
benefits provided in subdivision 2, or in section 354.47,
subdivision 1, shall be paid only to a designated beneficiary.
For purposes of this subdivision, a designated beneficiary may
only be either a former spouse or a child, either natural
biological or adopted, of the member, but more than one
beneficiary may be designated for the benefit provided in
section 354.47, subdivision 1.
Sec. 16. Minnesota Statutes 1992, section 354A.011, is
amended by adding a subdivision to read:
Subd. 12a. [DEPENDENT CHILD.] "Dependent child" means any
biological or adopted child of a deceased member who has not
reached the age of 20 and is dependent on the member for more
than one-half of the child's support at the time of the member's
death. It also means a child of the member conceived during the
member's lifetime and born after the member's death.
Sec. 17. Minnesota Statutes 1992, section 354A.35,
subdivision 2, is amended to read:
Subd. 2. [DEATH WHILE ELIGIBLE TO RETIRE; SURVIVING SPOUSE
OPTIONAL ANNUITY.] (a) The surviving spouse of any a coordinated
member who has attained the age of at least 50 years and has
credit for at least three years of service or has credit for at
least 30 years of service regardless of age shall be entitled to
joint and survivor annuity coverage in the event of death of the
member and dies prior to retirement, may elect to receive,
instead of a refund with interest under subdivision 1, an
annuity equal to the 100 percent joint and survivor annuity the
member could have qualified for had the member terminated
service on the date of death. The surviving spouse eligible for
a surviving spouse benefit under this paragraph may apply for
the annuity at any time after the date on which the deceased
employee would have attained the required age for retirement
based on the employee's allowable service. A surviving spouse
eligible for surviving spouse benefits under paragraph (b) and
(c) may apply for an annuity at any time after the member's
death. The member's surviving spouse shall be paid a joint and
survivor annuity as provided in under section 354A.32 and
computed pursuant to under section 354A.31.
(b) If the member was under age 55 and has credit for at
least 30 years of allowable service on the date of death, the
surviving spouse may elect to receive a 100 percent joint and
survivor annuity based on the age of the member and surviving
spouse on the date of death. The annuity is payable using the
full early retirement reduction under section 354A.31,
subdivision 6, paragraph (a), to age 55 and one-half of the
early retirement reduction from age 55 to the age payment begins.
(c) If the member was under age 55 and has credit for at
least three years of allowable service on the date of death but
did not yet qualify for retirement, the surviving spouse may
elect to receive the 100 percent joint and survivor annuity
based on the age of the member and the survivor at the time of
death. The annuity is payable using the full early retirement
reduction under section 354A.31, subdivision 6 or 7, to age 55
and one-half of the early retirement reduction from age 55 to
the date payment begins.
Sections 354A.37, subdivision 2, and 354A.39 apply to a
deferred annuity or surviving spouse benefit payable under this
section. The benefits shall be are payable for the life of the
surviving spouse, or upon expiration of the term certain benefit
payment under subdivision 2b.
Sec. 18. Minnesota Statutes 1992, section 354A.35, is
amended by adding a subdivision to read:
Subd. 2b. [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the
100 percent optional annuity under subdivision 2, or a refund
under subdivision 1, the surviving spouse of a deceased member
may elect to receive survivor coverage in a term certain of
five, ten, 15, or 20 years, but monthly payments must not exceed
75 percent of the average high-five monthly salary of the
deceased member. The monthly term certain annuity must be
actuarially equivalent to the 100 percent optional annuity under
subdivision 2.
If a surviving spouse elects a term certain annuity and
dies before the expiration of the specified term certain period,
the commuted value of the remaining annuity payments must be
paid in a lump sum to the survivor's estate.
Sec. 19. Minnesota Statutes 1992, section 354A.35, is
amended by adding a subdivision to read:
Subd. 2c. [DEPENDENT CHILD SURVIVOR COVERAGE.] If there is
no surviving spouse eligible for benefits under subdivision 2, a
dependent child or children as defined in section 354A.011,
subdivision 12a, is eligible for monthly payments. Payments to
a dependent child must be paid from the date of the member's
death to the date the dependent child attains age 20 if the
child is under age 15. If the child is 15 years or older on the
date of death, payment must be made for five years. The payment
to a dependent child is an amount actuarially equivalent to the
value of a 100 percent optional annuity under subdivision 2
using the age of the member and age of the dependent child at
the date of death. If there is more than one dependent child,
each dependent child shall receive a proportionate share of the
actuarial value of the employee's account.
Sec. 20. [EFFECTIVE DATE.]
Sections 1 to 19 are effective July 1, 1993.
Presented to the governor May 20, 1993
Signed by the governor May 24, 1993, 5:46 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes