| Home >> General Information >> Legislative Updates | ||
| Legislative Updates | ||
 |
||
|
Minnesota Laws 2008, Chapter 349 Signed by the Governor May 27, 2008 The following is a detailed summary of the 2008 Omnibus Pension Bill. The bill was passed by both the Minnesota House of Representatives and Senate on May 16, 2008. The bill included the modifications to the Post Retirement Investment Fund as recommended by the Boards of the three statewide retirement funds-MSRS, Public Employees Retirement Association (PERA) and Teachers Retirement Association (TRA).
Article 1 - Revisions to the Postretirement Investment Fund (Effective 6/30/08) This article modifies the investment based future increases of retirees in the Post Retirement Investment Fund. Retirees will continue to receive inflation increases up to 2.5% annually. As of July 1, 2007 the Post Retirement Investment Fund was 91.5% funded- if the funds exceeds 100% in the future, retirees may receive an additional increase if there are adequate assets in the fund and only if inflation supports an increase. The maximum increase will remain 5%. In addition, a cohort of retirees that retired since 2001 have not kept pace with inflation, therefore, in very limited circumstances, a small inflation equalizer may be paid to that cohort of retirees if the Post Retirement Fund is more than 90% funded, inflation is less than 2.5% and investment earnings for the year exceed 8.5%. The actuary assumes a 2.5% increase will be paid each year. Article 2 - Dissolution of the Postretirement Investment Fund (Effective 6/30/08) Section 7 requires the Legislative Commission on Pensions and Retirement to complete benefit adequacy study of teacher pension benefits and comparison of benefits to other states. The report is due to the legislature by January 15, 2009. Article 3 - Phased Retirement Option and Return to Work for TRA, St. Paul and Duluth Sections 7-10 -- addresses Phased Retirement and Return to Work provision for TRA, St. Paul and Duluth Teachers These changes allow current teachers who may be contemplating retirement to enter into a contract to resume teaching after their retirement. This allows greater flexibility for teachers to phase-into retirement and greater flexibility for school districts for transition and work force planning. Also raises the earnings threshold above which a teacher's pension is withheld and deferred. The annual threshold would be increased from $13,560 to $46,000 (the same amount that is allowed for MnSCU teachers). After exceeding that earnings threshold, a teacher's pension is reduced by one half of the excess amount and the teacher's pension is deferred and paid at a later date after retirement. Section 11 extends a temporary exemption (through December 31, 2009) from the reemployed annuitant maximum earnings for the Metropolitan Airports Commission Police which will allow the commission to hire experienced officers during the upcoming Republican Convention. Section 12 authorizes St. Paul Teachers and Duluth Teachers to revise their bylaws to be consistent with the statewide TRA. Article 4 - Mandatory Joint and Survivor Benefit Form Beneficiary Designation/Spousal Waiver (Effective day after enactment) Joint and Survivor Election (Effective 1/1/09) Article 5 - Administrative Provisions for the Statewide Plans Sections 2 & 18 set deadlines for when a person must make a payment to the retirement plans for purchasing credit for an unpaid leave of absence for MSRS and PERA plans. (Retroactive to 7/1/07) Section 3 clarifies that the MSRS Board has the duty of oversight over the Health Care Savings Plan (HCSP). (Effective day after enactment) Section 4 provides clarifying language specifying unclassified service for the MSRS Executive Director and Assistant Director. (Effective day after enactment) Section 5 removes a 30-day requirement for a former employee to apply for a refund which is consistent with all other MSRS plans. (Effective day after enactment) Sections 6 & 7 clarify the transfer and purchase of service for Correctional employees who transfer from General Plan coverage to Correctional Plan coverage. (Effective day after enactment) Sections 8 through 12 modify the statute governing the MSRS Health Care Savings Plan (HCSP) to provide clarification of which public employees in Minnesota can participate. In addition, clarifies that the Executive Director is the administrator of the plan. (Effective day after enactment) Section 13 removes the five and six year period certain options for the Unclassified Plan- makes it consistent with other MSRS plans because these options have adverse tax consequences. (Effective day after enactment) Sections 14-28 PERA administrative (Effective day after enactment) Section 28-30 TRA Administrative Provisions (Effective day after enactment) Section 31 revises the reemployed annuitant benefits that are held in abeyance because they have exceeded the earnings limitation- allows the retiree to access those funds one year after the withholding period ends and they have terminated- retirees may need the funds that are held in abeyance until age 65 under current law. (Effective 1/1/08) Section 32 clarifies that individuals who are granted the option to make an actuarial purchase of uncredited service must make the purchase within one year or prior to their effective date of retirement, whichever is earlier. (Effective day after enactment) Sections 35 & 36 Clearwater County Hospital extend the time frame for Clearwater Health Services in Bagley to complete the privatization process that was approved in 2006, but was not completed prior to the start of the next biennial legislative session so legislative authority is necessary. (Effective day after enactment) Section 37 Repealers (a) and (b) repeals obsolete language from TRA law (c) repeals a law passed on 2005 First Special Session that amended a repealed law and is inoperative, but appears in the statutes as a footnote. (Retroactively repealed to 7/26/05) Article 6 - MSRS Correctional Plan coverage Article 7 - PERA privatizations Article 8 - Retirement related state aid programs Article 10 - Financial and Actuarial Reporting Article 10 also extends the amortization periods for paying off unfunded liabilities to 2038 for three smaller plans: PERA Police and Fire, MSRS Correctional and MSRS Judges which have been experiencing wide fluctuations in contribution requirements due to the shortness of current amortization periods. It also implements a rolling 25-year amortization period for St. Paul Teachers. Article 10 reduces duplication in actuarial services by requiring each retirement system to prepare an annual valuation which would be reviewed or audited by an actuary retained by the Pension Commission. Funds of $140,000 per year are re-directed to the Pension Commission to finance those actuarial services. (Effective 6/30/08 and plies to financial reports and actuarial valuations prepared after 6/1/08) Article 11 - Retirement Savings Programs Sections 2-5 recodify and correct cross-references for the Minnesota Deferred Compensation Plan. It allows the plan to offer a Roth IRA or Roth 457 plan if authorized by federal law and also allow the plan to provide investment advice as allowable under federal law. Section 12 also repeals administrative rules. (Effective 8/1/08) Section 6 increases the maximum annual employer match from $2000 to one-half of the annual maximum allowable under IRS Code to a deferred compensation plan- which is currently $7,750 for those under age 50 and $10,250 for those over age 50. This section also allows the match to be contributed to any eligible 457 plan provider or 403(b) provider if they disclose all investment fees and historic rates of return for the prior 1-3-5-10 year periods or since inception in an easily comprehended format not to exceed two pages. This section also allows the United Hospital District in Blue Earth to contribute based on the PERA contribution rates. (United Hospital District Effective 7/1/08, the rest is effective 8/1/08) Sections 7-11 correct cross-references for the Minnesota Deferred Compensation Plan recodification. (Effective 8/1/08) Article 12 - PERA Police and Fire Plan Duty Disability Benefit Article 13 - Local Police and Paid Fire Relief Association Changes Article 14 - Volunteer Firefighter Plans Article 15 - Membership Dues Withholding Article 16 - Small Group Provisions If you have legislative questions, please call Erin Leonard at (651) 284-7848 or Dave Bergstrom at (651) 284-7888.
|
||
60 Empire Drive, Suite 300, St. Paul, MN 55103-3000
Telephone: (651) 296-2761, Toll Free: (800) 657-5757, Fax: (651) 297-5238
E-Mail: msrs@state.mn.us
An Equal Opportunity Employer