Governor Pawlenty signs the Early Retirement Health Care Incentive Bill and State Contract Legislation ...

May 13, 2010

Governor Pawlenty signs the Early Retirement Health Care Incentive Bill and State Contract Legislation

Good news for state employees! This morning Pawlenty signed the Early Retirement Health Care Incentive Bill and the State Employee Contract Legislation.

There has been a great deal of interest in the Early Retirement Bill, so we are posting the bill, as signed, in its entirety. 

Please note that with the passage of this bill, state agencies and other state entities will have the option to offer this health care incentive -- it is at the employer's discretion. 

Here is the full text that details the legislation:

S.F. No. 1481, 3rd Engrossment - 86th Legislative Session (2009-2010)
1.1A bill for an act
1.2relating to state government finance; authorizing retirement incentives for certain
1.3state employees.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5    Section 1. RETIREMENT INCENTIVE.
1.6    Subdivision 1. Eligibility. (a) An eligible appointing authority may provide the
1.7retirement incentive in this section to an employee who:
1.8(1) has at least 15 years of allowable service in one or more of the funds listed in
1.9Minnesota Statutes, section 356.30, subdivision 3, or has at least 15 years of coverage by
1.10the individual retirement account plan governed by Minnesota Statutes, chapter 354B,
1.11and upon retirement is immediately eligible for a retirement annuity or benefit from one
1.12or more of these funds;
1.13(2) accepts the incentive no later than December 31, 2010, and retires no later than
1.14June 30, 2011; and
1.15(3) is not in receipt of a retirement plan, retirement annuity, retirement allowance, or
1.16service pension from a fund listed in Minnesota Statutes, section 356.30, subdivision 3,
1.17during the month preceding the termination of qualified employment.
1.18(b) An eligible appointing authority is any appointing authority in the executive,
1.19legislative, or judicial branch of state government, the Public Employees Retirement
1.20Association, the Minnesota State Retirement System, the Teachers Retirement Association,
1.21or the Minnesota State Colleges and Universities.
1.22(c) An elected official is not eligible to receive an incentive under this section.
2.1(d) An employee who, after termination of employment, receives an employer
2.2contribution for health insurance may not receive a payment for health insurance under
2.3this section from that appointing authority.
2.4    Subd. 2. Incentive. For an employee eligible under subdivision 1, the appointing
2.5authority will deposit into the employee's account in the health care savings plan
2.6established in Minnesota Statutes, section 352.98, up to 24 months of the employer
2.7contribution, as specified in the collective bargaining agreement or compensation plan
2.8covering the position from which the employee terminates service, for health and dental
2.9insurance for the employee, and, if the employee had dependent coverage immediately
2.10before retirement, for the employee's dependents. The contributions provided under this
2.11section are those the employee was receiving as of the date of termination, subject to any
2.12changes in contributions specified in the collective bargaining agreement or compensation
2.13plan covering the position from which the employee terminated service.
2.14    Subd. 3. Employer discretion; implementation. Provision of an incentive under
2.15this section is at the discretion of the appointing authority. Appointing authorities in the
2.16executive branch must apply for approval from the commissioner of management and
2.17budget before providing early retirement incentives under this section. All appointing
2.18authorities and the commissioner's review must give consideration to issues such as
2.19equity within the agency, budgetary constraints, and workforce planning concerns. The
2.20appointing authority will determine the date of retirement upon consultation with the
2.21employee. Unilateral implementation of this section by the appointing authority is not an
2.22unfair labor practice under Minnesota Statutes, chapter 179A.
2.23    Subd. 4. Acceptance. An employee who is eligible for an incentive under this
2.24section, who is offered an incentive by the appointing authority, and who accepts the
2.25incentive offer must do so in writing. A copy of the acceptance document must be
2.26provided by the appointing authority to the applicable retirement plan within 15 days of
2.27its execution.
2.28    Subd. 5. Reemployment prohibition. An individual who receives an incentive
2.29payment under this section may not be reemployed or hired as a consultant by any agency
2.30or entity that participates in the State Employee Group Insurance Program for a period
2.31of three years after termination of service.
2.32    Subd. 6. Report. The commissioner of management and budget must report to the
2.33legislature by April 2, 2011, regarding use of the retirement incentive for calendar year
2.342010, with a recommendation regarding renewal of the incentive.

2.35    Sec. 2. EFFECTIVE DATE.
3.1Section 1 is effective the day following final enactment.

Bill Synopsis: 
If the employer chooses to offer the incentive, employees who have 15 years of state service and are eligible for a retirement annuity can apply to receive the benefits. After qualifying and being accepted into the early retirement incentive program, an employee may receive two lump sum payments in their health care savings plan for up to 24 months after leaving state service. Payment timing will vary and it is the responsibility of the employee to work out the payment schedule to ensure that there isn’t a break in health insurance coverage.

It’s important to note that all early retirement incentive recipients are allowed to stay on SEGIP. All funds can be used to pay for SEGIP health and dental premiums.

Check with your employer to see if this incentive will be offered.