1.1                          A bill for an act 
  1.2             relating to retirement; legislators retirement; 
  1.3             establishing defined contribution plan retirement 
  1.4             coverage for certain legislators; amending Minnesota 
  1.5             Statutes 1994, sections 3A.02, subdivision 1; 3A.03; 
  1.6             3A.04, subdivisions 1 and 2; 3A.12, subdivision 1; 
  1.7             352D.02, subdivision 3; 352D.03; 352D.04, subdivision 
  1.8             2; 352D.11, subdivision 1; and 352D.12; proposing 
  1.9             coding for new law in Minnesota Statutes, chapters 3A; 
  1.10            and 352D.  
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  [3A.012] [PLAN MEMBERSHIP.] 
  1.13     (a) A person who first became a member of the legislature 
  1.14  before February 1, 1996, is eligible either to participate in 
  1.15  the legislators retirement plan governed by this chapter, or to 
  1.16  participate in the unclassified employees retirement program 
  1.17  governed by chapter 352D. 
  1.18     (b) A member of the legislature described by paragraph (a) 
  1.19  must elect the retirement coverage on a form prescribed by the 
  1.20  director.  The election must be made by May 30, 1996.  If an 
  1.21  eligible member of the legislature fails to elect between the 
  1.22  retirement coverage options, the member must be considered to 
  1.23  have elected coverage by the legislators retirement plan 
  1.24  governed by this chapter. 
  1.25     (c) No person who newly becomes a member of the legislature 
  1.26  after January 31, 1997, is eligible for membership in the 
  1.27  legislators retirement plan. 
  1.28     Sec. 2.  Minnesota Statutes 1994, section 3A.02, 
  2.1   subdivision 1, is amended to read: 
  2.2      Subdivision 1.  [QUALIFICATIONS.] (a) A former 
  2.3   legislator who was a member of the legislators retirement plan 
  2.4   is entitled, upon written application to the director, to 
  2.5   receive a retirement allowance monthly, if the person: 
  2.6      (1) has served at least six full years, without regard to 
  2.7   the application of section 3A.10, subdivision 2, or has served 
  2.8   during all or part of four regular sessions as a member of the 
  2.9   legislature and as a member of the legislators retirement plan, 
  2.10  which service need not be continuous; 
  2.11     (2) has attained the normal retirement age; 
  2.12     (3) has retired as a member of the legislature; and 
  2.13     (4) has made all contributions provided for in section 
  2.14  3A.03, has made payments for past service under subdivision 2, 
  2.15  or has made payments in lieu of contributions under section 
  2.16  3A.031. 
  2.17     (b) For service rendered before the beginning of the 1979 
  2.18  legislative session, but not to exceed eight years of service, 
  2.19  the retirement allowance is an amount equal to five percent per 
  2.20  year of service and plan membership of that member's average 
  2.21  monthly salary.  For service in excess of eight years rendered 
  2.22  before the beginning of the 1979 legislative session, and for 
  2.23  service rendered after the beginning of the 1979 legislative 
  2.24  session, the retirement allowance is an amount equal to 2-1/2 
  2.25  percent per year of service and plan membership of that member's 
  2.26  average monthly salary. 
  2.27     (c) The retirement allowance accrues beginning with the 
  2.28  first day of the month of receipt of the application, but not 
  2.29  before age 60, and for the remainder of the former legislator's 
  2.30  life, if the former legislator is not serving as a member of the 
  2.31  legislature or as a constitutional officer or commissioner as 
  2.32  defined in section 352C.021, subdivisions 2 and 3.  The annuity 
  2.33  shall not begin to accrue prior to retirement as a legislator.  
  2.34  No annuity payment shall be made retroactive for more than 180 
  2.35  days before the date the annuity application is filed with the 
  2.36  director. 
  3.1      (d) Any member who has served during all or part of four 
  3.2   regular sessions is considered to have served eight years as a 
  3.3   member of the legislature. 
  3.4      (e) The retirement allowance ceases with the last payment 
  3.5   that accrued to the retired legislator during the retired 
  3.6   legislator's lifetime, except that the surviving spouse, if any, 
  3.7   is entitled to the retirement allowance for the calendar month 
  3.8   in which the retired legislator died. 
  3.9      Sec. 3.  Minnesota Statutes 1994, section 3A.03, is amended 
  3.10  to read: 
  3.11     3A.03 [CONTRIBUTIONS.] 
  3.12     Subdivision 1.  [PERCENTAGE.] Every member of the 
  3.13  legislature who is a member of the legislators retirement plan 
  3.14  shall contribute nine percent of total salary, by payroll 
  3.15  deduction, to be paid into the state treasury and deposited in 
  3.16  the general fund.  It shall be the duty of the director to 
  3.17  record the periodic contributions of each contributing member of 
  3.18  the legislature and credit such contribution to the member's 
  3.19  account. 
  3.20     Subd. 2.  [REFUND.] (1) Any person who has made 
  3.21  contributions pursuant to subdivision 1 and who is no longer a 
  3.22  member of the legislature or who is no longer a member of the 
  3.23  legislators retirement plan is entitled to receive upon 
  3.24  application to the director a refund of all contributions 
  3.25  credited to the member's account with interest at an annual rate 
  3.26  of six percent compounded annually.  
  3.27     (2) The refund of contributions as provided in clause (1) 
  3.28  terminates all rights of a former member of the legislature or 
  3.29  survivors of the former member under this chapter.  Should the 
  3.30  former member of the legislature again be a member of the 
  3.31  legislature after having taken a refund as provided above, the 
  3.32  member shall be considered a new member with retirement coverage 
  3.33  by the unclassified employees retirement program governed by 
  3.34  chapter 352D.  However, a new member may reinstate the rights 
  3.35  and credit for service forfeited, provided the new member repays 
  3.36  all refunds taken plus interest at an annual rate of 8.5 percent 
  4.1   compounded annually.  
  4.2      (3) No person shall be required to apply for or accept a 
  4.3   refund. 
  4.4      Sec. 4.  Minnesota Statutes 1994, section 3A.04, 
  4.5   subdivision 1, is amended to read: 
  4.6      Subdivision 1.  [SURVIVING SPOUSE.] Upon the death of a 
  4.7   member of the legislature ~~while~~ who was serving as such member 
  4.8   and who was a member of the legislators retirement plan after 
  4.9   June 30, 1973, or upon the death of a former member of the 
  4.10  legislature with at least the number of years of service and 
  4.11  plan membership as required by section 3A.02, subdivision 1, 
  4.12  clause (1), the surviving spouse shall be paid a survivor 
  4.13  benefit in the amount of one-half of the retirement allowance of 
  4.14  the member of the legislature computed as though the member were 
  4.15  at least normal retirement age on the date of his death and 
  4.16  based upon his allowable service or eight years whichever is 
  4.17  greater.  The augmentation provided in section 3A.02, 
  4.18  subdivision 4, if applicable, shall be applied to the month of 
  4.19  death.  Upon the death of a former legislator receiving a 
  4.20  retirement allowance, the surviving spouse shall be entitled to 
  4.21  one-half of the amount of the allowance being paid to the 
  4.22  legislator.  Such benefit shall be paid during the lifetime of 
  4.23  the surviving spouse, but shall cease and terminate upon the 
  4.24  remarriage of the surviving spouse. 
  4.25     Sec. 5.  Minnesota Statutes 1994, section 3A.04, 
  4.26  subdivision 2, is amended to read: 
  4.27     Subd. 2.  [DEPENDENT CHILDREN.] Upon the death of a member 
  4.28  of the legislature ~~while~~ who was serving as a member and who was 
  4.29  a member of the legislators retirement plan, or upon the death 
  4.30  of a former member of the legislature who has rendered at least 
  4.31  the number of years of service and plan membership as required 
  4.32  by section 3A.02, subdivision 1, clause (1) and who was not 
  4.33  receiving a retirement allowance, each dependent child of the 
  4.34  member or former legislator shall be entitled to receive a 
  4.35  survivor benefit in the following amount:  First dependent 
  4.36  child, a monthly allowance which equals 25 percent of the 
  5.1   monthly retirement allowance of the member of the legislature or 
  5.2   former legislator computed as though the member or former 
  5.3   legislator had attained at least the normal retirement age on 
  5.4   the date of death and based upon the average monthly salary as 
  5.5   of the date of death or as of the date of termination, whichever 
  5.6   is applicable, and the allowable service or eight years 
  5.7   whichever is greater; for each additional dependent child, a 
  5.8   monthly allowance which equals 12-1/2 percent of the monthly 
  5.9   retirement allowance of the member or former legislator computed 
  5.10  as in the case of the first child; but the total amount paid to 
  5.11  the surviving spouse and dependent children shall not exceed in 
  5.12  any one month 100 percent of the monthly retirement allowance of 
  5.13  the member or former legislator computed as in the case of the 
  5.14  first child.  The augmentation provided in section 3A.02, 
  5.15  subdivision 4, if applicable, shall be applied from the first 
  5.16  day of the month next following the date of termination of 
  5.17  service as a member of the legislature to the month of death.  
  5.18  Upon the death of a former legislator who was receiving a 
  5.19  retirement allowance, the surviving dependent child shall be 
  5.20  entitled to the applicable percentage specified above of the 
  5.21  amount of the allowance which was paid to the former legislator 
  5.22  for the month immediately prior to the date of death.  The 
  5.23  payments for dependent children shall be made to the surviving 
  5.24  spouse or the guardian of the estate of the dependent children, 
  5.25  if there is one.  
  5.26     Sec. 6.  Minnesota Statutes 1994, section 3A.12, 
  5.27  subdivision 1, is amended to read: 
  5.28     Subdivision 1.  [ENTITLEMENT TO ANNUITY.] Any 
  5.29  legislator who is a member of the legislators retirement plan 
  5.30  and who has been an employee covered by the Minnesota state 
  5.31  retirement system, or a member of the public employees 
  5.32  retirement association including the public employees retirement 
  5.33  association police and fire fund, or the teachers retirement 
  5.34  association, or the Minneapolis employees retirement fund, or 
  5.35  the state patrol retirement fund, or any other public employee 
  5.36  retirement system in the state of Minnesota having a like 
  6.1   provision but excluding all other funds providing benefits for 
  6.2   police or firefighters, shall be entitled when qualified to an 
  6.3   annuity from each fund if the total allowable service for which 
  6.4   the legislator has credit in all funds or in any two of these 
  6.5   funds totals ten or more years, provided no portion of the 
  6.6   allowable service upon which the retirement annuity from one 
  6.7   fund is based is again used in the computation for benefits from 
  6.8   another fund.  The annuity from each fund shall be determined by 
  6.9   the appropriate provisions of the law except that the 
  6.10  requirement that a person must have at least ten years allowable 
  6.11  service in the respective system or association shall not apply 
  6.12  for the purposes of this section provided the combined service 
  6.13  in two or more of these funds equals ten or more years.  The 
  6.14  augmentation of deferred annuities provided in section 3A.02, 
  6.15  subdivision 4, shall apply to the annuities accruing hereunder. 
  6.16     Sec 7.  [352D.025] [COVERAGE FOR MEMBERS OF THE 
  6.17  LEGISLATURE.] 
  6.18     Subdivision 1.  [PRE-1996 SESSION MEMBERS.] A person who 
  6.19  became a member of the legislature before February 1, 1996, and 
  6.20  who did not elect or was not deemed to have elected to 
  6.21  participate in the legislators retirement plan under section 
  6.22  3A.012, is a participant in the state unclassified employees 
  6.23  retirement program under this chapter. 
  6.24     Subd. 2.  [POST-1997 SESSION MEMBERS.] A person who 
  6.25  initially becomes a member of the legislature after January 31, 
  6.26  1997, is a participant in the state unclassified employees 
  6.27  retirement program under this chapter. 
  6.28     Sec. 8.  Minnesota Statutes 1994, section 352D.02, 
  6.29  subdivision 3, is amended to read: 
  6.30     Subd. 3.  An election to not participate is irrevocable 
  6.31  during any period of covered employment.  An employee, other 
  6.32  than a member of the legislature, who is credited with employee 
  6.33  shares in the unclassified program, after acquiring credit for 
  6.34  ten years of allowable service but prior to termination of 
  6.35  covered employment, may, notwithstanding other provisions of 
  6.36  this subdivision, elect to terminate participation in the 
  7.1   unclassified plan and be covered by the regular plan by filing 
  7.2   such election with the executive director.  The executive 
  7.3   director shall thereupon redeem the employee's total shares and 
  7.4   shall credit to the employee's account in the regular plan the 
  7.5   amount of contributions that would have been so credited had the 
  7.6   employee been covered by the regular plan during the employee's 
  7.7   entire covered employment.  The balance of money so redeemed and 
  7.8   not credited to the employee's account shall be transferred to 
  7.9   the state contribution reserve of the state employees retirement 
  7.10  fund, except that (1) the employee contribution paid to the 
  7.11  unclassified plan must be compared to (2) the employee 
  7.12  contributions that would have been paid to the general plan for 
  7.13  the comparable period, if the individual had been covered by 
  7.14  that plan.  If clause (1) is greater than clause (2), the 
  7.15  difference must be refunded to the employee as provided in 
  7.16  section 352.22.  If clause (2) is greater than clause (1), the 
  7.17  difference must be paid by the employee within six months of 
  7.18  electing general plan coverage or before the effective date of 
  7.19  the annuity, whichever is sooner.  
  7.20     Sec. 9.  Minnesota Statutes 1994, section 352D.03, is 
  7.21  amended to read: 
  7.22     352D.03 [TRANSFER OF ASSETS.] 
  7.23     (a) Unless an eligible employee enumerated in section 
  7.24  352D.02, subdivision 1 or 1a, has elected coverage under the 
  7.25  individual retirement account plan under chapter 354B, a sum of 
  7.26  money representing the assets credited to each employee 
  7.27  exercising the option contained in section 352D.02, plus an 
  7.28  equal employer contribution together with interest for the 
  7.29  employment period at the actuarially assumed rates during this 
  7.30  period, compounded annually, shall be used for the purchase of 
  7.31  shares on behalf of each employee in the accounts of the 
  7.32  supplemental ~~retirement~~ investment fund established by section 
  7.33  11A.17.  Any employer's contribution to amortize the deficit in 
  7.34  the state employee's retirement fund shall not, however, be used 
  7.35  for the purchase of shares.  
  7.36     (b) No transfer of assets under this section applies to a 
  8.1   member of the legislature. 
  8.2      Sec. 10.  Minnesota Statutes 1994, section 352D.04, 
  8.3   subdivision 2, is amended to read: 
  8.4      Subd. 2.  [MEMBER AND EMPLOYER CONTRIBUTION RATES.] (a) The 
  8.5   moneys used to purchase shares under this section ~~shall be~~ are 
  8.6   the employee and employer contributions provided in this 
  8.7   subdivision. 
  8.8      ~~(a)~~ (b) For participating employees other than members of 
  8.9   the legislature, the employee contribution ~~shall be~~ is an amount 
  8.10  equal to the employee contribution specified in section 352.04, 
  8.11  subdivision 2~~.~~  
  8.12     ~~(b)~~ and the employer contribution ~~shall be~~ is an amount 
  8.13  equal to six percent of salary.  
  8.14     (c) For members of the legislature participating in the 
  8.15  program, the employee contribution is an amount equal to 7.65 
  8.16  percent of salary and the employer contribution is an amount 
  8.17  equal to 7.65 percent of salary.  Salary does not include any 
  8.18  per diem amounts. 
  8.19     (d) These contributions shall be made ~~by deduction from~~ 
  8.20  ~~salary~~ in the manner provided in section 352.04, subdivisions 4, 
  8.21  5, and 6.  
  8.22     Sec. 11.  Minnesota Statutes 1994, section 352D.11, 
  8.23  subdivision 1, is amended to read: 
  8.24     Subdivision 1.  [ELIGIBILITY.] (a) A qualified legislative 
  8.25  employee may purchase prior service credit from the Minnesota 
  8.26  state retirement system for service for which the employee did 
  8.27  not receive service credit from the state retirement system.  An 
  8.28  employee is qualified to purchase prior service credit only if:  
  8.29     (1) the employee is a permanent employee of the senate, the 
  8.30  house of representatives, or of a joint legislative agency or 
  8.31  legislative commission, or a former permanent employee of the 
  8.32  senate, the house of representatives, or of a joint legislative 
  8.33  agency or legislative commission who has not withdrawn the value 
  8.34  of shares in the unclassified program; and 
  8.35     (2) before permanent employment the employee served as a 
  8.36  temporary, intermittent, or contract employee of the senate, the 
  9.1   house of representatives, a joint legislative staff agency, or a 
  9.2   legislative commission. 
  9.3      (b) Eligibility under this section does not include a 
  9.4   member of the legislature. 
  9.5      Sec. 12.  Minnesota Statutes 1994, section 352D.12, is 
  9.6   amended to read: 
  9.7      352D.12 [TRANSFER OF PRIOR SERVICE CONTRIBUTIONS.] 
  9.8      An employee, other than a member of the legislature, who is 
  9.9   a participant in the unclassified program and who has prior 
  9.10  service credit in a covered plan under chapters 352, 353, 354, 
  9.11  354A, and 422A may, within the time limits in this section, 
  9.12  elect to transfer to the unclassified program accumulated 
  9.13  employee and equal employer contributions with interest at an 
  9.14  annual rate of 8.5 percent compounded annually, based on fiscal 
  9.15  year balances.  
  9.16     If a participant has taken a refund from a fund listed in 
  9.17  this section, the participant may repay the refund to that fund, 
  9.18  notwithstanding any restrictions on repayment to that fund, plus 
  9.19  8.5 percent interest compounded annually and have the 
  9.20  accumulated employee and equal employer contributions 
  9.21  transferred to the unclassified program with interest at an 
  9.22  annual rate of 8.5 percent compounded annually based on fiscal 
  9.23  year balances.  If a person repays a refund and subsequently 
  9.24  elects to have the money transferred to the unclassified 
  9.25  program, the repayment amount, including interest, is added to 
  9.26  the fiscal year balance in the year which the repayment was made.
  9.27     A participant electing to transfer prior service 
  9.28  contributions under this section must complete the application 
  9.29  for the transfer and repay any refund within one year of July 1, 
  9.30  1985 or the commencement of the employee's participation in the 
  9.31  unclassified program, whichever is later. 
  9.32     Sec. 13.  [EFFECTIVE DATE.] 
  9.33     Sections 1 to 12 are effective on the day following final 
  9.34  enactment.