1.1 	A bill for an act
1.2 	relating to state employment; providing voluntary
1.3 	unpaid leave options and early retirement incentives
1.4 	to state employees.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. EARLY RETIREMENT INCENTIVE.
 1.7 		Subdivision 1.Eligibility. An appointing authority in
1.8 	the executive or legislative branch of state government may
1.9 	offer the early retirement incentive in this section to an
1.10 	employee who:
1.11 	(1) has at least five years of allowable service in one or
1.12 	more of the funds listed in Minnesota Statutes, section 356.30,
1.13 	subdivision 3, and upon retirement is immediately eligible for a
1.14 	retirement annuity from one or more of these funds; and 
1.15 	(2) terminates state service after the effective date of
1.16 	this section and before September 1, 2005.
1.17 		Subd. 2.Incentive. (a) For an employee eligible under
1.18 	subdivision 1, the employer may provide an amount up to $15,000,
1.19 	to be used:
1.20 	(1) for an employee who terminates state service after the
1.21 	effective date of this section and on or before July 15, 2005,
1.22 	for deposit in the employee's account in the health care savings
1.23 	plan established by Minnesota Statutes, section 352.98; or 
1.24 	(2) for an employee who terminates state service after July
1.25 	15, 2005, and before September 1, 2005:
2.1 	(i) notwithstanding Minnesota Statutes, section 352.01,
2.2 	subdivision 11, for purchase of service credit for unperformed
2.3 	service sufficient to enable the employee to retire under
2.4 	Minnesota Statutes, section 352.116, subdivision 1, paragraph
2.5 	(b); or 
2.6 	(ii) for purchase of a lifetime annuity or annuity for a
2.7 	specific number of years from the state unclassified retirement
2.8 	program to provide additional benefits under Minnesota Statutes,
2.9 	section 352D.06, subdivision 1.
2.10 	(b) An employee is eligible for the payment under paragraph
2.11 	(a), clause (2), item (i), if the employee uses money from a
2.12 	deferred compensation account that, combined with the payment
2.13 	under paragraph (a), clause (2), item (i), would be sufficient
2.14 	to purchase enough service credit to qualify for retirement
2.15 	under Minnesota Statutes, section 352.116, subdivision 1,
2.16 	paragraph (b).
2.17 		Subd. 3.Designation of positions; employer
2.18 	discretion. Before offering an incentive under this section, an
2.19 	appointing authority must designate the job classifications or
2.20 	positions within job classifications that qualify for the
2.21 	incentive.  The appointing authority may modify this designation
2.22 	at any time.  Designation of positions eligible for the
2.23 	incentive under this section, participation of individual
2.24 	employees, and the amount of the payment under this section are
2.25 	at the sole discretion of the appointing authority.  Unilateral
2.26 	implementation of this section by the employer is not an unfair
2.27 	labor practice under Minnesota Statutes, chapter 179A.

2.28 	Sec. 2. PHASED RETIREMENT.
 2.29 	(a) This section applies to a state employee who:
2.30 	(1) on the effective date of this section is regularly
2.31 	scheduled to work 1,040 or more hours a year in a position
2.32 	covered by the Minnesota state retirement system general
2.33 	employees retirement plan, correctional plan, or unclassified
2.34 	plan;
2.35 	(2) enters into an agreement with the appointing authority
2.36 	to work a reduced schedule that is both (i) a reduction of at
3.1 	least 25 percent from the number of regularly scheduled work
3.2 	hours; and (ii) 1,040 hours or less in the covered position; and 
3.3 	(3) at the time of entering into the agreement under clause
3.4 	(2), meets the age and service requirements necessary to receive
3.5 	an unreduced retirement benefit from the plan.
3.6 	(b) Notwithstanding any law to the contrary, for service
3.7 	under an agreement entered into under paragraph (a), an employee:
3.8 	(1) may receive a retirement annuity from the plan without
3.9 	separating from state service; and 
3.10 	(2) is not subject to the cessation of annuity provisions
3.11 	in Minnesota Statutes, section 352.115, subdivision 10.
3.12 	(c) The amount of hours worked, the work schedule, and the
3.13 	duration of the phased retirement employment must be mutually
3.14 	agreed to by the employee and the appointing authority.  The
3.15 	appointing authority may not require a person to waive any
3.16 	rights under a collective bargaining agreement as a condition of
3.17 	participation under this section.  The appointing authority has
3.18 	sole discretion to determine if and the extent to which phased
3.19 	retirement under this section is available to an employee.
3.20 	(d) Notwithstanding any law to the contrary, a person may
3.21 	not earn service credit in the Minnesota state retirement system
3.22 	for employment covered under this section, and employer
3.23 	contributions and payroll deductions for the retirement fund
3.24 	must not be made based on earnings of a person working under
3.25 	this section.  No change shall be made to a monthly annuity or
3.26 	retirement allowance based on employment under this section.
3.27 	(e) A person who works under this section is a member of
3.28 	the appropriate bargaining unit; is covered by the appropriate
3.29 	collective bargaining contract or compensation plan; and is
3.30 	eligible for health care coverage as provided in the collective
3.31 	bargaining contract or compensation plan.
3.32 	(f) An agreement under this section may apply only to work
3.33 	through June 30, 2007.

3.34 	Sec. 3. VOLUNTARY HOUR REDUCTION PLAN.
 3.35 	(a) This section applies to a state employee who:
3.36 	(1) on the effective date of this section is regularly
4.1 	scheduled to work 1,040 or more hours a year in a position
4.2 	covered by a pension plan administered by the Minnesota state
4.3 	retirement system; and 
4.4 	(2) enters into an agreement with the appointing authority
4.5 	to work a reduced schedule of 1,040 hours or less in the covered
4.6 	position.
4.7 	(b) Notwithstanding any law to the contrary, for service
4.8 	under an agreement entered into under paragraph (a),
4.9 	contributions may be made to the applicable plan of the
4.10 	Minnesota state retirement system as if the employee had not
4.11 	reduced hours.  The employee must pay the additional employee
4.12 	contributions and the employer must pay the additional employer
4.13 	contributions necessary to bring the service credit and salary
4.14 	up to the level prior to the voluntary reduction in hours.
4.15 	Contributions must be made in a time and manner prescribed by
4.16 	the executive director of the Minnesota state retirement system.
4.17 	(c) The amount of hours worked, the work schedule, and the
4.18 	duration of the voluntary hour reduction must be mutually agreed
4.19 	to by the employee and the appointing authority.  The appointing
4.20 	authority may not require a person to waive any rights under a
4.21 	collective bargaining agreement as a condition of participation
4.22 	under this section.  The appointing authority has sole
4.23 	discretion to determine if and the extent to which voluntary
4.24 	hour reduction under this section is available to an employee.
4.25 	(d) A person who works under this section is a member of
4.26 	the appropriate bargaining unit; is covered by the appropriate
4.27 	collective bargaining contract or compensation plan; and is
4.28 	eligible for health care coverage as provided in the collective
4.29 	bargaining contract or compensation plan.
4.30 	(e) An agreement under this section may apply only to work
4.31 	through June 30, 2007.

4.32 	Sec. 4. VOLUNTARY UNPAID LEAVE OF ABSENCE.
 4.33 	Appointing authorities in state government may allow each
4.34 	employee to take unpaid leaves of absence for up to 1,040 hours
4.35 	between June 1, 2005, and June 30, 2007.  Each appointing
4.36 	authority approving such a leave shall allow the employee to
5.1 	continue accruing vacation and sick leave, be eligible for paid
5.2 	holidays and insurance benefits, accrue seniority, and accrue
5.3 	service credit and credited salary in the state retirement plans
5.4 	as if the employee had actually been employed during the time of
5.5 	leave.  An employee covered by the unclassified plan may
5.6 	voluntarily make both the employee and employer contributions to
5.7 	the unclassified plan during the leave of absence.  If the leave
5.8 	of absence is for one full pay period or longer, any holiday pay
5.9 	shall be included in the first payroll warrant after return from
5.10 	the leave of absence.  The appointing authority shall attempt to
5.11 	grant requests for the unpaid leaves of absence consistent with
5.12 	the need to continue efficient operation of the agency.
5.13 	However, each appointing authority shall retain discretion to
5.14 	grant or refuse to grant requests for leaves of absence and to
5.15 	schedule and cancel leaves, subject to the applicable provisions
5.16 	of collective bargaining agreements and compensation plans.

5.17 	Sec. 5. RELATIONSHIP OF SECTIONS.
 5.18 	(a) An employee covered by a phased retirement agreement
5.19 	under section 2 may not be covered by the voluntary hour
5.20 	reduction provisions of section 3 or by a voluntary unpaid leave
5.21 	of absence agreement under section 4 during the same time period
5.22 	or any later time period.
5.23 	(b) An employee covered by the voluntary hour reduction
5.24 	provisions of section 3:
5.25 	(1) may not be covered by a phased retirement agreement
5.26 	under section 2 during the same time period, but may be covered
5.27 	by a phased retirement agreement under section 2 during a later
5.28 	time period; and 
5.29 	(2) may be covered by the voluntary leave of absence
5.30 	provision of section 4 during an earlier or later time period.
5.31 	(c) An employee may receive the early retirement incentive
5.32 	in section 1 after being covered under section 2, 3, or 4.  An
5.33 	employee who receives an incentive under section 1 may not later
5.34 	be covered by section 2, 3, or 4.

5.35 	Sec. 6. EFFECTIVE DATE.
 5.36 	Sections 1 to 5 are effective the day following final
6.1 	enactment.