1.1 	A bill for an act
1.2 	relating to retirement; Public Employees Retirement Association; purchase of 
1.3 	salary credit procedures in certain partial salary situations; adding new partial 
1.4 	salary credit purchase authority for partial paid medical leaves and budgetary 
1.5 	leaves; amending Minnesota Statutes 2008, section 353.0161, subdivision 2; 
1.6 	proposing coding for new law in Minnesota Statutes, chapter 353; repealing 
1.7 	Minnesota Statutes 2008, section 353.01, subdivision 40.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2008, section 353.0161, subdivision 2, is amended to 
1.10 	read:
1.11 		Subd. 2.Purchase procedure. (a) An employee covered by a plan specified in 
1.12 	subdivision 1 may purchase credit for allowable service in that plan for a period specified 
1.13 	in subdivision 1 if the employee makes a payment as specified in paragraph (b) or (c), 
1.14 	whichever applies. The employing unit, at its option, may pay the employer portion of the 
1.15 	amount specified in paragraph (b) on behalf of its employees.
1.16 	(b) If payment is received by the executive director within one year from the date the 
1.17 	member returned to work following the authorized leave, or within 30 days after the date 
1.18 	of termination of public service if the member did not return to work, the payment amount 
1.19 	is equal to the employee and employer contribution rates specified in law for the applicable 
1.20 	plan at the end of the leave period, or at termination of public service, whichever is earlier, 
1.21 	multiplied by the employee's average monthly salary, excluding overtime, upon which 
1.22 	deductions were paid during the six months, or portion thereof, before the commencement 
1.23 	of the leave of absence and by the number of months of the leave of absence for which 
1.24 	the employee wants allowable service credit. Payments made under this paragraph must 
2.1 	include compound interest at a monthly rate of 0.71 percent from the last day of the leave 
2.2 	period until the last day of the month in which payment is received.
2.3 	(c) If payment is received by the executive director after one year, the payment 
2.4 	amount is the amount determined under section 356.551. Payment under this paragraph 
2.5 	must be made before the date the person terminates public service under section 353.01, 
2.6 	subdivision 11a.

2.7 	EFFECTIVE DATE. This section is effective the day following final enactment.

2.8 	Sec. 2. [353.0162] REDUCED SALARY PERIODS CREDIT PURCHASE.
2.9 	(a) A member may purchase additional salary credit for a period specified in this 
2.10 	section.
2.11 	(b) The applicable period is a period during which the member is receiving a reduced 
2.12 	salary from the employer while:
2.13 	(1) receiving temporary workers' compensation payments related to the member's 
2.14 	service to the public employer;
2.15 	(2) on an authorized medical leave of absence; or
2.16 	(3) on an authorized partial paid leave of absence as a result of a budgetary or salary 
2.17 	savings program offered or mandated by a governmental subdivision.
2.18 	 (c) The differential salary amount is the difference between the average monthly 
2.19 	salary received by the member during the period of reduced salary under this section and 
2.20 	the average monthly salary of the member, excluding overtime, on which contributions 
2.21 	to the applicable plan were made during the period of the last six months of covered 
2.22 	employment occurring immediately before the period of reduced salary, applied to the 
2.23 	member's normal employment period, measured in hours or otherwise, as applicable.
2.24 	 (d) To receive eligible salary credit, the member shall pay an amount equal to 
2.25 	the applicable employee contribution rate under section 353.27, subdivision 2; 353.65, 
2.26 	subdivision 2; or 353E.03, subdivision 1, as applicable, multiplied by the differential 
2.27 	salary amount; plus an employer equivalent payment equal to the applicable employer 
2.28 	contribution rate in section 353.27, subdivision 3; 353.65, subdivision 3; or 353E.03, 
2.29 	subdivision 2, as applicable, multiplied by the differential salary amount; plus, if 
2.30 	applicable, an equivalent employer additional amount equal to the additional employer 
2.31 	contribution rate in section 353.27, subdivision 3a, multiplied by the differential salary 
2.32 	amount. 
2.33 	 (e) The employer may, by appropriate action of its governing body and documented 
2.34 	in its official records, pay the employer equivalent contributions and, as applicable, the 
2.35 	equivalent employer additional contributions on behalf of the member.
3.1 	 (f) Payment under this section must include interest on the contribution amount 
3.2 	or amounts, whichever applies, at an 8.5 percent annual rate, prorated for applicable 
3.3 	months from the date on which the period of reduced salary specified under this section 
3.4 	terminates to the date on which the payment or payments are received by the executive 
3.5 	director. Payment under this section must be completed within the earlier of 30 days from 
3.6 	termination of public service by the employee under section 353.01, subdivision 11a, or 
3.7 	one year after the termination of the period specified in paragraph (b), as further restricted 
3.8 	under this section.
3.9 	(g) The period for which additional allowable salary credit may be purchased is 
3.10 	limited to the period during which the person receives temporary workers' compensation 
3.11 	payments, or for those business years in which the governmental subdivision offers or 
3.12 	mandates a budget or salary savings program, as certified to the executive director by a 
3.13 	resolution of the governing body of the governmental subdivision. For an authorized 
3.14 	medical leave of absence, the period for which allowable salary credit may be purchased 
3.15 	must not exceed 12 consecutive months of authorized medical leave.
3.16 	(h) To purchase salary credit for a subsequent period of temporary workers' 
3.17 	compensation benefits or subsequent authorized medical leave of absence, the member 
3.18 	must return to public service and render a minimum of three months of allowable service.

3.19 	EFFECTIVE DATE. This section is effective July 1, 2010. Purchase of reduced 
3.20 	salary credit may be made for a period mandated or offered by a governmental subdivision 
3.21 	for purposes of budget or salary savings on or after July 1, 2009, upon enactment of 
3.22 	this section.

3.23 	Sec. 3.  REPEALER.
 3.24 	Minnesota Statutes 2008, section 353.01, subdivision 40, is repealed.

3.25 	EFFECTIVE DATE. This section is effective July 1, 2010.