Minnesota Statutes 353F.04 – Augmentation Interest Rates for Privatized Former Public Employees
Subdivision 1.Enhanced augmentation rates.
(a) The deferred annuity of a privatized former public employee is subject to augmentation under section 353.34, subdivision 3, except that the rate of augmentation is as specified in this section.
(b) This paragraph applies if the effective date of privatization was on or before January 1, 2007, and also applies to Hutchinson Area Health Care with a privatization effective date of January 1, 2008. For a privatized former public employee, the augmentation rate is 5.5 percent compounded annually until January 1 following the year in which the person attains age 55. After that date, the augmentation rate is 7.5 percent compounded annually.
(c) If paragraph (b) is not applicable, and if the effective date of the privatization is after January 1, 2007, and before January 1, 2011, then the augmentation rate is four percent compounded annually until January 1, following the year in which the person attains age 55. After that date, the augmentation rate is six percent compounded annually.
(d) If the effective date of the privatization is after December 31, 2010, the augmentation rate depends on the result of computations specified in section 353F.025, subdivision 1. If those computations indicate no loss or a net gain to the fund of the general employees retirement plan of the Public Employees Retirement Association, the augmentation rate is two percent compounded annually. If the computations under that subdivision indicate a net loss to the fund if a two percent augmentation rate is used, but a net gain or no loss if a one percent rate is used, then the augmentation rate is one percent compounded annually.
Terms Used In Minnesota Statutes 353F.04
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Effective date of privatization: means the date that the operation of a medical facility is assumed by another employer or the date that a medical facility is purchased by another employer and active membership in the Public Employees Retirement Association consequently terminates. See Minnesota Statutes 353F.02
- Month: means a calendar month and "year" means a calendar year, unless otherwise expressed; and "year" is equivalent to the expression "year of our Lord. See Minnesota Statutes 645.44
- Person: may extend and be applied to bodies politic and corporate, and to partnerships and other unincorporated associations. See Minnesota Statutes 645.44
- Privatization: means a medical facility that privatizes when the facility ceases to be a governmental subdivision for any reason other than that the medical facility closes or permanently ceases to operate. See Minnesota Statutes 353F.02
- Privatized former public employee: means a person who:
(1) was employed by the privatized former public employer on the day before the effective date of privatization; or
(2) terminated employment with the privatized former public employer on the day before the effective date; and
(3) was a participant in the general employees retirement plan of the Public Employees Retirement Association at the time of termination of employment with the privatized former public employer. See Minnesota Statutes 353F.02
- Privatized former public employer: means a medical facility that was included in the definition of governmental subdivision under section 353. See Minnesota Statutes 353F.02
(e) Notwithstanding paragraphs (b) to (d), after June 30, 2020, and before January 1, 2024, the augmentation rate for all privatized former public employees under paragraphs (b) to (d) is two percent compounded annually. After December 31, 2023, no additional augmentation is applied to the privatized former public employee’s deferred annuity.
Subd. 2.Exceptions.
The augmentation rates specified in subdivision 1 do not apply to a privatized former public employee:
(1) beginning the first of the month in which the privatized former public employee becomes covered again by a retirement plan enumerated in section 356.30, subdivision 3, if the employee accrues at least six months of credited service in any single plan enumerated in section 356.30, subdivision 3, except clause (6);
(2) beginning the first of the month in which the privatized former public employee becomes covered again by the general employees retirement plan of the Public Employees Retirement Association;
(3) beginning the first of the month after a privatized former public employee terminates service with the privatized former public employer;
(4) if the privatized former public employee begins receipt of a retirement annuity while employed by the privatized former public employer; or
(5) if the effective date of privatization occurs after June 30, 2020.