Public employees police and fire retirement plan; application of the reduction for reemployment earnings taken from disability benefits to members who began disability payments before July 1, 2023 modified.

A bill for an act

relating to retirement; public employees police and fire retirement plan; modifying

the application of the reduction for reemployment earnings taken from disability

benefits to members who began disability payments before July 1, 2023; amending

Minnesota Statutes 2024, section 353.656, subdivision 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 353.656, subdivision 4, is amended to read:

Subd. 4.

Limitation on disability benefit payments.

(a) No member is entitled to

receive a disability benefit payment when there remains to the member's credit unused

annual leave, sick leave, or any other employer-provided salary continuation plan, or under

any other circumstances when, during the period of disability, there has been no impairment

of the person's salary as a police officer, a firefighter, or a paramedic as defined in section

353.64
, subdivision 10, whichever applies.

(b) This paragraph applies to members who begin disability payments before July 1,

2023
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, and either are not required to reapply under section
353.031, subdivision 8
, or have

not reached the end of one year or three years, as applicable, when reapplication under

section
353.031, subdivision 8
, is required
deleted text end
. If a disabled member resumes a gainful

occupation with earnings that, when added to the single life disability benefit, and workers'

compensation benefit if applicable, exceed the disability benefit recipient's reemployment

earnings limit, the amount of the disability benefit must be reduced during the months of

employment and receipt of workers' compensation benefits, if applicable, as provided in

this paragraph. The disability benefit recipient's reemployment earnings limit is the greater

of (1) the monthly salary earned at the date of disability, or (2) 125 percent of the base

monthly salary currently paid by the employing governmental subdivision for similar

positions.

The disability benefit must be reduced by one dollar for each three dollars by which the

total amount of the current monthly disability benefit, any monthly workers' compensation

benefits if applicable, and actual monthly earnings exceed the greater disability benefit

recipient's reemployment earnings limit. In no event may the monthly disability benefit as

adjusted under this subdivision exceed the disability benefit originally allowed.

(c) This paragraph applies to members who begin disability payments
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or are required

to reapply under section
353.031, subdivision 8
,
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on or after July 1, 2023. Beginning the

calendar year after application
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or reapplication
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, if a disabled member resumes a gainful

occupation with earnings, the amount of the member's disability benefit must be reduced

each year until normal retirement age by the sum of clauses (1) and (2), not to exceed the

amount of the member's disability benefit:

(1) for members with less than 20 years of service for a duty disability benefit or less

than 15 years of service for a regular disability benefit, one dollar for each dollar of

reemployment earnings, but not more than the lesser of (i) and (ii), and not to exceed the

employee contribution rate as defined under section
353.65, subdivision 2
, multiplied by

the average salary used to determine the amount of the member's disability benefit when

granted:

(i) an amount equal to the employee contribution rate as defined under section
353.65
,

subdivision 2, multiplied by the average salary used to determine the amount of the member's

disability benefit, when granted, multiplied by the difference between 20 for a duty disability

benefit or 15 for a regular disability benefit and the member's years of service, divided by

55 minus the member's age at the time of disability; or

(ii) 50 percent of the member's yearly reemployment earnings; and

(2) for all members:

(i) one dollar for every two dollars, up to 125 percent of the base monthly salary, by

which the sum exceeds the base monthly salary; and

(ii) one dollar for each dollar by which the sum exceeds 125 percent of the base monthly

salary;

where "sum" means the sum of the current disability benefit plus actual monthly

reemployment earnings and "base monthly salary" means the base monthly salary currently

paid by the employing governmental subdivision for similar positions.

(d) Paragraphs (b) and (c) do not apply to a member receiving total and permanent

disability benefits under section
353.656, subdivision 1a
or 3a.

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EFFECTIVE DATE.

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This section is effective the day following final enactment.

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