Bill Text: MN HF953 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Judges retirement plan; postretirement adjustments reduced, normal retirement age increased for new judges, member and employer contribution rates revised, and existing judges permitted to elect to be treated as a new judge for benefit and contribution purposes.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2013-02-25 - Introduction and first reading, referred to Government Operations [HF953 Detail]
Download: Minnesota-2013-HF953-Introduced.html
1.2relating to retirement; judges retirement plan; reducing postretirement
1.3adjustments; increasing normal retirement age for new judges; revising member
1.4and employer contribution rates; permitting existing judges to elect to be treated
1.5as a new judge for benefit and contribution purposes;amending Minnesota
1.6Statutes 2012, sections 356.315, by adding a subdivision; 356.415, subdivision
1.71, by adding a subdivision; 490.121, subdivision 21f; 490.123, subdivisions
1.81a, 1b; 490.124, subdivision 1; proposing coding for new law in Minnesota
1.9Statutes, chapter 490.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 Section 1. Minnesota Statutes 2012, section 356.315, is amended by adding a
1.12subdivision to read:
1.13 Subd. 8a. Judges plan. The applicable benefit accrual rate is 2.5 percent.
1.14EFFECTIVE DATE.This section is effective July 1, 2013.
1.15 Sec. 2. Minnesota Statutes 2012, section 356.415, subdivision 1, is amended to read:
1.16 Subdivision 1. Annual postretirement adjustments; generally. (a) Except as
1.17otherwise provided in subdivision 1a, 1b, 1c, 1d,or 1e, or 1f, retirement annuity, disability
1.18benefit, or survivor benefit recipients of a covered retirement plan are entitled to a
1.19postretirement adjustment annually on January 1, as follows:
1.20(1) a postretirement increase of 2.5 percent must be applied each year, effective
1.21January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
1.22been receiving an annuity or a benefit for at least 12 full months prior to the January 1
1.23increase; and
1.24(2) for each annuitant or benefit recipient who has been receiving an annuity or a
1.25benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5
2.1percent for each month that the person has been receiving an annuity or benefit must be
2.2applied, effective on January 1 following the calendar year in which the person has been
2.3retired for less than 12 months.
2.4(b) The increases provided by this subdivision commence on January 1, 2010.
2.5(c) An increase in annuity or benefit payments under this section must be made
2.6automatically unless written notice is filed by the annuitant or benefit recipient with the
2.7executive director of the covered retirement plan requesting that the increase not be made.
2.8(d) The retirement annuity payable to a person who retires before becoming eligible
2.9for Social Security benefits and who has elected the optional payment as provided in
2.10section353.29, subdivision 6 , must be treated as the sum of a period certain retirement
2.11annuity and a life retirement annuity for the purposes of any postretirement adjustment.
2.12The period certain retirement annuity plus the life retirement annuity must be the
2.13annuity amount payable until age 62 for section353.29, subdivision 6 . A postretirement
2.14adjustment granted on the period certain retirement annuity must terminate when the
2.15period certain retirement annuity terminates.
2.16EFFECTIVE DATE.This section is effective July 1, 2013.
2.17 Sec. 3. Minnesota Statutes 2012, section 356.415, is amended by adding a subdivision
2.18to read:
2.19 Subd. 1f. Annual postretirement adjustments; Minnesota State Retirement
2.20System judges retirement plan. (a) The increases provided under this subdivision begin
2.21on January 1, 2014, and are in lieu of increases under subdivision 1 or 1a for retirement
2.22annuity, disability benefit, or survivor benefit recipients of the judges retirement plan.
2.23(b) Retirement annuity, disability benefit, or survivor benefit recipients of the
2.24judges retirement plan are entitled to a postretirement adjustment annually on January
2.251, as follows:
2.26(1) a postretirement increase of 1.75 percent must be applied each year, effective
2.27on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient
2.28who has been receiving an annuity or a benefit for at least 18 full months before the
2.29January 1 increase; and
2.30(2) for each annuitant or benefit recipient who has been receiving an annuity or a
2.31benefit for at least six full months, an annual postretirement increase of 1/12 of 1.75
2.32percent for each month that the person has been receiving an annuity or benefit must be
2.33applied, effective January 1, following the calendar year in which the person has been
2.34retired for at least six months, but has been retired for less than 18 months.
3.1(c) Increases under this subdivision terminate on December 31 of the calendar year in
3.2which the actuarial valuation prepared by the approved actuary under sections 356.214 and
3.3356.215 and the standards for actuarial work promulgated by the Legislative Commission
3.4on Pensions and Retirement indicates that the market value of assets of the judges retirement
3.5plan equals or exceeds 70 percent of the actuarial accrued liability of the retirement plan.
3.6Increases under subdivision 1 or 1a, whichever is applicable, begin after that date.
3.7(d) An increase in annuity or benefit payments under this subdivision must be made
3.8automatically unless written notice is filed by the annuitant or benefit recipient with the
3.9executive director of the applicable covered retirement plan requesting that the increase
3.10not be made.
3.11EFFECTIVE DATE.This section is effective July 1, 2013.
3.12 Sec. 4. Minnesota Statutes 2012, section 490.121, subdivision 21f, is amended to read:
3.13 Subd. 21f. Normal retirement date. (a) For a judge in the tier I program, "normal
3.14retirement date" means the datea the judge attains the age of 65.
3.15(b) For a judge in the tier II program, "normal retirement date" means the date
3.16the judge attains age 66.
3.17EFFECTIVE DATE.This section is effective July 1, 2013.
3.18 Sec. 5. [490.1221] JUDGES PLAN PROGRAMS.
3.19Members of the judges retirement plan are members of either the tier I or tier II
3.20program. A tier I program judge is a person who was first appointed or elected as a judge
3.21before July 1, 2013, who was not eligible for the tier II program because the judge had
3.22five or more years of allowable service, or did not elect that program. A tier II program
3.23judge is a person who:
3.24(1) was first appointed or elected as a judge after June 30, 2013; or
3.25(2) was first appointed or elected as a judge before July 1, 2013, and made an
3.26election under section 11 to be in the tier II program.
3.27EFFECTIVE DATE.This section is effective July 1, 2013.
3.28 Sec. 6. [490.1222] APPLICATION OF SERVICE CREDIT LIMIT.
3.29The service credit limit specified in section 490.121, subdivision 22, does not apply
3.30to a judge in the tier II program.
3.31EFFECTIVE DATE.This section is effective July 1, 2013.
4.1 Sec. 7. Minnesota Statutes 2012, section 490.123, subdivision 1a, is amended to read:
4.2 Subd. 1a. Member contribution rates. (a) A judgewho is covered by the federal
4.3Old Age, Survivors, Disability, and Health Insurance Program and in the tier I program
4.4whose service does not exceed the service credit limit in section490.121, subdivision 22 ,
4.5shall contribute to the fund from each salary payment a sum equal to8.00 9.00 percent
4.6of salary.
4.7(b) A judge in the tier II program shall contribute to the fund from each salary
4.8payment a sum equal to 7.00 percent of salary.
4.9(b) The contribution (c) Contributions under this subdivision is are payable by salary
4.10deduction. The deduction must be made by the state court administrator under section
4.11352.04
, subdivisions 4, 5, and 8.
4.12EFFECTIVE DATE.This section is effective beginning on the first day of the first
4.13full payroll period following an increase in judicial salaries of at least one percent due to
4.14action by the legislature during calendar year 2013 or later.
4.15 Sec. 8. Minnesota Statutes 2012, section 490.123, subdivision 1b, is amended to read:
4.16 Subd. 1b. Employer contribution rate. (a) The employer contribution rate to the
4.17fund on behalf of a judge is20.5 22.5 percent of salary. The employer obligation continues
4.18after a judge exceeds the service credit limit in section490.121 , subdivision 22.
4.19 (b) The employer contribution must be paid by the state court administrator. The
4.20employer contribution is payable at the same time as member contributions are made
4.21under subdivision 1a or as employee contributions are made to the unclassified program
4.22governed by chapter 352D for judges whose service exceeds the limit in section490.121 ,
4.23subdivision 22, are remitted.
4.24EFFECTIVE DATE.This section is effective the first day of the first full payroll
4.25period after June 30, 2013.
4.26 Sec. 9. Minnesota Statutes 2012, section 490.124, subdivision 1, is amended to read:
4.27 Subdivision 1.Basic Retirement annuity. (a) Except as qualified hereinafter from
4.28and after the mandatory retirement date, the normal retirement date, the early retirement
4.29date, or one year from the disability retirement date, as the case may be, a retiring judge is
4.30eligible to receive a retirement annuity from the judges' retirement fund.
4.31 (b) For a tier I program judge, the retirement annuity is an amount equal to:
5.1 (1) the percent specified in section356.315, subdivision 7 , multiplied by the judge's
5.2final average compensation with that result then multiplied by the number of years and
5.3fractions of years of allowable service rendered before July 1, 1980; plus
5.4 (2) the percent specified in section356.315, subdivision 8 , multiplied by the judge's
5.5final average compensation with that result then multiplied by the number of years and
5.6fractions of years of allowable service rendered after June 30, 1980.
5.7(c) For a tier II program judge who was first appointed or elected as a judge before
5.8July 1, 2013, the retirement annuity is an amount equal to:
5.9(1) the percent specified in section 356.315, subdivision 8, multiplied by the judge's
5.10final average compensation with that result then multiplied by the number of years and
5.11fractions of years of allowable service rendered before January 1, 2014; plus
5.12(2) the percentage specified in section 356.315, subdivision 8a, multiplied by the
5.13judge's final average compensation with that result then multiplied by the number of years
5.14and fractions of years of allowable service rendered after December 31, 2013.
5.15(d) For a tier II program judge who was first appointed or elected as a judge after
5.16June 30, 2013, the retirement annuity is an amount equal to the percent specified in section
5.17356.315, subdivision 8a, multiplied by the judge's final average compensation with that
5.18result then multiplied by the number of years and fractions of years of allowable service.
5.19(c) (e) For a judge in the tier I program, service that exceeds the service credit limit in
5.20section490.121, subdivision 22 , must be excluded in calculating the retirement annuity, but
5.21the compensation earned by the judge during this period of judicial service must be used in
5.22determining a judge's final average compensation and calculating the retirement annuity.
5.23EFFECTIVE DATE.This section is effective July 1, 2013.
5.24 Sec. 10. MEMBER CONTRIBUTION INCREASE CONDITION.
5.25Any increase in judicial salaries, due to action by the legislature during calendar year
5.262013 or later, is not applicable to a judge in the tier I program if the member contribution
5.27rate applicable to a judge in the tier I program under section 7 is not deducted from the
5.28salary of the judge.
5.29EFFECTIVE DATE.This section is effective July 1, 2013.
5.30 Sec. 11. TIER II PROGRAM ELECTION; PRE-JULY 1, 2013, JUDGES.
5.31 Subdivision 1. Authority. A person who was first appointed or elected as a judge
5.32covered by the Minnesota State Retirement System judges retirement plan before July 1,
6.12013, is eligible to elect treatment as a tier II program judge if the judge has less than five
6.2years of allowable service on the date the judge makes a valid election under subdivision 2.
6.3 Subd. 2. Election procedure. An eligible judge under subdivision 1 may elect to be
6.4subject to provisions of Minnesota Statutes, chapter 490, applicable to a tier II program
6.5judge rather than the tier I program by electing that treatment before January 1, 2014, on a
6.6form provided by the executive director of the Minnesota State Retirement System.
6.7 Subd. 3. Effect of election. (a) The election is irrevocable.
6.8(b) Any eligible judge who fails to make an election remains in the tier I program.
6.9(c) If the tier II program is elected, contributions based on revised member
6.10contribution rates under Minnesota Statutes, section 490.123, subdivision 1a, begin on the
6.11first day of the first full pay period occurring after January 1, 2014.
6.12EFFECTIVE DATE.This section is effective July 1, 2013.
1.3adjustments; increasing normal retirement age for new judges; revising member
1.4and employer contribution rates; permitting existing judges to elect to be treated
1.5as a new judge for benefit and contribution purposes;amending Minnesota
1.6Statutes 2012, sections 356.315, by adding a subdivision; 356.415, subdivision
1.71, by adding a subdivision; 490.121, subdivision 21f; 490.123, subdivisions
1.81a, 1b; 490.124, subdivision 1; proposing coding for new law in Minnesota
1.9Statutes, chapter 490.
1.10BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.11 Section 1. Minnesota Statutes 2012, section 356.315, is amended by adding a
1.12subdivision to read:
1.13 Subd. 8a. Judges plan. The applicable benefit accrual rate is 2.5 percent.
1.14EFFECTIVE DATE.This section is effective July 1, 2013.
1.15 Sec. 2. Minnesota Statutes 2012, section 356.415, subdivision 1, is amended to read:
1.16 Subdivision 1. Annual postretirement adjustments; generally. (a) Except as
1.17otherwise provided in subdivision 1a, 1b, 1c, 1d,
1.18benefit, or survivor benefit recipients of a covered retirement plan are entitled to a
1.19postretirement adjustment annually on January 1, as follows:
1.20(1) a postretirement increase of 2.5 percent must be applied each year, effective
1.21January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
1.22been receiving an annuity or a benefit for at least 12 full months prior to the January 1
1.23increase; and
1.24(2) for each annuitant or benefit recipient who has been receiving an annuity or a
1.25benefit amount for at least one full month, an annual postretirement increase of 1/12 of 2.5
2.1percent for each month that the person has been receiving an annuity or benefit must be
2.2applied, effective on January 1 following the calendar year in which the person has been
2.3retired for less than 12 months.
2.4(b) The increases provided by this subdivision commence on January 1, 2010.
2.5(c) An increase in annuity or benefit payments under this section must be made
2.6automatically unless written notice is filed by the annuitant or benefit recipient with the
2.7executive director of the covered retirement plan requesting that the increase not be made.
2.8(d) The retirement annuity payable to a person who retires before becoming eligible
2.9for Social Security benefits and who has elected the optional payment as provided in
2.10section
2.11annuity and a life retirement annuity for the purposes of any postretirement adjustment.
2.12The period certain retirement annuity plus the life retirement annuity must be the
2.13annuity amount payable until age 62 for section
2.14adjustment granted on the period certain retirement annuity must terminate when the
2.15period certain retirement annuity terminates.
2.16EFFECTIVE DATE.This section is effective July 1, 2013.
2.17 Sec. 3. Minnesota Statutes 2012, section 356.415, is amended by adding a subdivision
2.18to read:
2.19 Subd. 1f. Annual postretirement adjustments; Minnesota State Retirement
2.20System judges retirement plan. (a) The increases provided under this subdivision begin
2.21on January 1, 2014, and are in lieu of increases under subdivision 1 or 1a for retirement
2.22annuity, disability benefit, or survivor benefit recipients of the judges retirement plan.
2.23(b) Retirement annuity, disability benefit, or survivor benefit recipients of the
2.24judges retirement plan are entitled to a postretirement adjustment annually on January
2.251, as follows:
2.26(1) a postretirement increase of 1.75 percent must be applied each year, effective
2.27on January 1, to the monthly annuity or benefit of each annuitant or benefit recipient
2.28who has been receiving an annuity or a benefit for at least 18 full months before the
2.29January 1 increase; and
2.30(2) for each annuitant or benefit recipient who has been receiving an annuity or a
2.31benefit for at least six full months, an annual postretirement increase of 1/12 of 1.75
2.32percent for each month that the person has been receiving an annuity or benefit must be
2.33applied, effective January 1, following the calendar year in which the person has been
2.34retired for at least six months, but has been retired for less than 18 months.
3.1(c) Increases under this subdivision terminate on December 31 of the calendar year in
3.2which the actuarial valuation prepared by the approved actuary under sections 356.214 and
3.3356.215 and the standards for actuarial work promulgated by the Legislative Commission
3.4on Pensions and Retirement indicates that the market value of assets of the judges retirement
3.5plan equals or exceeds 70 percent of the actuarial accrued liability of the retirement plan.
3.6Increases under subdivision 1 or 1a, whichever is applicable, begin after that date.
3.7(d) An increase in annuity or benefit payments under this subdivision must be made
3.8automatically unless written notice is filed by the annuitant or benefit recipient with the
3.9executive director of the applicable covered retirement plan requesting that the increase
3.10not be made.
3.11EFFECTIVE DATE.This section is effective July 1, 2013.
3.12 Sec. 4. Minnesota Statutes 2012, section 490.121, subdivision 21f, is amended to read:
3.13 Subd. 21f. Normal retirement date. (a) For a judge in the tier I program, "normal
3.14retirement date" means the date
3.15(b) For a judge in the tier II program, "normal retirement date" means the date
3.16the judge attains age 66.
3.17EFFECTIVE DATE.This section is effective July 1, 2013.
3.18 Sec. 5. [490.1221] JUDGES PLAN PROGRAMS.
3.19Members of the judges retirement plan are members of either the tier I or tier II
3.20program. A tier I program judge is a person who was first appointed or elected as a judge
3.21before July 1, 2013, who was not eligible for the tier II program because the judge had
3.22five or more years of allowable service, or did not elect that program. A tier II program
3.23judge is a person who:
3.24(1) was first appointed or elected as a judge after June 30, 2013; or
3.25(2) was first appointed or elected as a judge before July 1, 2013, and made an
3.26election under section 11 to be in the tier II program.
3.27EFFECTIVE DATE.This section is effective July 1, 2013.
3.28 Sec. 6. [490.1222] APPLICATION OF SERVICE CREDIT LIMIT.
3.29The service credit limit specified in section 490.121, subdivision 22, does not apply
3.30to a judge in the tier II program.
3.31EFFECTIVE DATE.This section is effective July 1, 2013.
4.1 Sec. 7. Minnesota Statutes 2012, section 490.123, subdivision 1a, is amended to read:
4.2 Subd. 1a. Member contribution rates. (a) A judge
4.3
4.4whose service does not exceed the service credit limit in section
4.5shall contribute to the fund from each salary payment a sum equal to
4.6of salary.
4.7(b) A judge in the tier II program shall contribute to the fund from each salary
4.8payment a sum equal to 7.00 percent of salary.
4.9
4.10deduction. The deduction must be made by the state court administrator under section
4.12EFFECTIVE DATE.This section is effective beginning on the first day of the first
4.13full payroll period following an increase in judicial salaries of at least one percent due to
4.14action by the legislature during calendar year 2013 or later.
4.15 Sec. 8. Minnesota Statutes 2012, section 490.123, subdivision 1b, is amended to read:
4.16 Subd. 1b. Employer contribution rate. (a) The employer contribution rate to the
4.17fund on behalf of a judge is
4.18after a judge exceeds the service credit limit in section
4.19 (b) The employer contribution must be paid by the state court administrator. The
4.20employer contribution is payable at the same time as member contributions are made
4.21under subdivision 1a or as employee contributions are made to the unclassified program
4.22governed by chapter 352D for judges whose service exceeds the limit in section
4.23subdivision 22, are remitted.
4.24EFFECTIVE DATE.This section is effective the first day of the first full payroll
4.25period after June 30, 2013.
4.26 Sec. 9. Minnesota Statutes 2012, section 490.124, subdivision 1, is amended to read:
4.27 Subdivision 1.
4.28and after the mandatory retirement date, the normal retirement date, the early retirement
4.29date, or one year from the disability retirement date, as the case may be, a retiring judge is
4.30eligible to receive a retirement annuity from the judges' retirement fund.
4.31 (b) For a tier I program judge, the retirement annuity is an amount equal to:
5.1 (1) the percent specified in section
5.2final average compensation with that result then multiplied by the number of years and
5.3fractions of years of allowable service rendered before July 1, 1980; plus
5.4 (2) the percent specified in section
5.5final average compensation with that result then multiplied by the number of years and
5.6fractions of years of allowable service rendered after June 30, 1980.
5.7(c) For a tier II program judge who was first appointed or elected as a judge before
5.8July 1, 2013, the retirement annuity is an amount equal to:
5.9(1) the percent specified in section 356.315, subdivision 8, multiplied by the judge's
5.10final average compensation with that result then multiplied by the number of years and
5.11fractions of years of allowable service rendered before January 1, 2014; plus
5.12(2) the percentage specified in section 356.315, subdivision 8a, multiplied by the
5.13judge's final average compensation with that result then multiplied by the number of years
5.14and fractions of years of allowable service rendered after December 31, 2013.
5.15(d) For a tier II program judge who was first appointed or elected as a judge after
5.16June 30, 2013, the retirement annuity is an amount equal to the percent specified in section
5.17356.315, subdivision 8a, multiplied by the judge's final average compensation with that
5.18result then multiplied by the number of years and fractions of years of allowable service.
5.19
5.20section
5.21the compensation earned by the judge during this period of judicial service must be used in
5.22determining a judge's final average compensation and calculating the retirement annuity.
5.23EFFECTIVE DATE.This section is effective July 1, 2013.
5.24 Sec. 10. MEMBER CONTRIBUTION INCREASE CONDITION.
5.25Any increase in judicial salaries, due to action by the legislature during calendar year
5.262013 or later, is not applicable to a judge in the tier I program if the member contribution
5.27rate applicable to a judge in the tier I program under section 7 is not deducted from the
5.28salary of the judge.
5.29EFFECTIVE DATE.This section is effective July 1, 2013.
5.30 Sec. 11. TIER II PROGRAM ELECTION; PRE-JULY 1, 2013, JUDGES.
5.31 Subdivision 1. Authority. A person who was first appointed or elected as a judge
5.32covered by the Minnesota State Retirement System judges retirement plan before July 1,
6.12013, is eligible to elect treatment as a tier II program judge if the judge has less than five
6.2years of allowable service on the date the judge makes a valid election under subdivision 2.
6.3 Subd. 2. Election procedure. An eligible judge under subdivision 1 may elect to be
6.4subject to provisions of Minnesota Statutes, chapter 490, applicable to a tier II program
6.5judge rather than the tier I program by electing that treatment before January 1, 2014, on a
6.6form provided by the executive director of the Minnesota State Retirement System.
6.7 Subd. 3. Effect of election. (a) The election is irrevocable.
6.8(b) Any eligible judge who fails to make an election remains in the tier I program.
6.9(c) If the tier II program is elected, contributions based on revised member
6.10contribution rates under Minnesota Statutes, section 490.123, subdivision 1a, begin on the
6.11first day of the first full pay period occurring after January 1, 2014.
6.12EFFECTIVE DATE.This section is effective July 1, 2013.
