SF3828

Purpose

• This bill modifies how the Maple Plain fire department participates in the statewide Volunteer Firefighter Pension Plan and how assets tied to Maple Plain are managed and distributed if the department terminates its participation.

Key Provisions

• Public Employees Retirement Association (PERA) duties
  • The executive director of PERA must reinvest Maple Plain fire department assets in low-risk investments within ten days after the section’s effective date to minimize investment losses before a distribution occurs.
• Termination from the statewide volunteer firefighter plan
  • The Maple Plain fire department’s participation in the statewide Volunteer Firefighter Plan ends on the date all requirements are met and all assets credited to Maple Plain’s account are distributed.
  • The City of Maple Plain’s governing board must adopt resolutions to terminate participation under the applicable Minnesota law and provide those resolutions to PERA’s executive director.
  • The PERA executive director must fully vest all departing firefighters as of the termination date and treat each departing firefighter as 100% vested in the pension benefit accrued through that date.
  • The PERA executive director must determine the present value of each departing firefighter’s accrued benefit as of the termination date, and determine accrued liabilities (including expected administrative expenses) and the corresponding value of assets for Maple Plain’s fire department account.
  • The ongoing strategy must continue to minimize investment risk by investing the Maple Plain account assets in low-risk investments.
  • If there are assets in excess of accrued liabilities, the executive director must allocate the surplus among departing firefighters using a two-stage process:
  • Stage 1: Allocate a portion of the surplus to each departing firefighter under age 50. This portion equals the firefighter’s years of service multiplied by the benefit level (as defined by statute or current rules) minus the present value of that firefighter’s accrued benefit.
  • Stage 2: Allocate any remaining surplus to all departing firefighters in proportion to each firefighter’s years of service relative to the total years of service for all departing firefighters. Each firefighter’s benefit may be increased by that same proportion of any remaining surplus.
  • If there isn’t enough surplus in Stage 1 to provide an allocation to every departing firefighter under 50, the executive director may reduce the Stage 1 amount by reducing the benefit level used in Stage 1 so that the total surplus is exhausted, applying the same reduced level to all under-50 departing firefighters.
  • Distribution of benefits: As soon as practicable after the termination date, each departing firefighter must receive the calculated benefit as a lump-sum payment (or a direct rollover if elected). If the firefighter is deceased, the benefit goes to the survivor per statute, or via a direct rollover if elected by the survivor.
  • Supplemental benefits: Supplemental benefits under Minnesota statutes section 424A.10 may be paid to the extent that the executive director is reimbursed under Minnesota statutes section 424A.10, subdivision 3.
• Remaining provisions
  • The termination remains subject to the remaining provisions of Minnesota Statutes section 353G.18, including subdivisions 1–3 and 5.
• Sec. 4
  • The text includes a Sec. 4 placeholder; no further details are shown in the provided material.

Significant Changes

• Transfers Maple Plain’s plan assets to low-risk investments to protect against losses during the distribution window.
• Introduces a formal, two-stage surplus allocation method for distributing assets to departing firefighters, with specific rules for vesting, present value calculations, and prioritization by age (under 50) and years of service.
• Requires full vesting at termination and a present-value assessment of each firefighter’s accrued benefits, along with a structured path to distribute any surplus.

Source of authority and context

• The bill relies on existing Minnesota statutes governing the Public Employees Retirement Association, the statewide volunteer firefighter plan, vesting and benefit calculations, and related sections (e.g., 353G.18, 353G.11, 353G.12, 424A.10). It specifies procedures for Maple Plain and aligns with the state’s framework for retirement benefits for volunteer firefighters.

Relevant Terms - Public Employees Retirement Association (PERA) - State Board of Investment (SBI) - Maple Plain fire department - low-risk investments - termination from the statewide volunteer firefighter plan - surplus - vesting (fully vest; 100 percent vesting) - present value of accrued benefits - accrued liabilities - administrative expenses - years of service - benefit level - Minnesota Statutes section 353G.11 - Minnesota Statutes section 353G.12 - Minnesota Statutes section 353G.18 - Minnesota Statutes section 424A.10 - lump-sum distribution - direct rollover - survivor benefits - 424A.10 reimbursement