Section 1. ACCOUNTS FOR POSTEMPLOYMENT BENEFITS.

Subdivision 1. Establishment. requires PERA to establish two funds for political subdivisions to use for postemployment benefits owed to officers and employees after the leave service. Directs that one of the funds must provide that each account within the fund is irrevocable and that the other fund must allow a political subdivision to revoke its accounts within the fund and withdraw some or all money for any reason. Appropriates all the money in the funds to PERA for the purposes of this section.

Subdivision 2. Definitions. provides definitions for "political subdivision," "postemployment benefit," and "plan administrator."

Subdivision 3. Account maintenance and investment. authorizes political subdivisions to establish an account in one or both funds that are created in this bill. Authorizes PERA to charge administrative costs to political subdivisions and appropriates the fees to PERA. Authorizes PERA to establish other terms and conditions for participation. Paragraph (b) requires PERA to certify all of the money in the fund to the State Board of Investment for investment in combined investment funds.

Subdivision 4. Limit on deposit in revocable account. prohibits a political subdivision from depositing money in an revocable account if the deposit would cause the political subdivision's revocable and irrevocable accounts to exceed actuarialy determined liabilities for postretirement benefits.

Subdivision 5. Withdrawal of funds and termination of account. allows withdrawal of some or all money in an revocable account at any time for any reason. Requires that any money withdrawn from a revocable account must be deposited in an separate fund that must be used only to pay postemployment benefits. For irrevocable accounts, authorizes withdrawals only for:

(1) payment of postemployment benefits; or

(2) only to the extent the political subdivision's actuarial liability is satisfied or otherwise defeased.

Subdivision 6. Status of irrevocable fund. exempts money deposited in the irrevocable funds from the claims of former officers and employees, creditors of the state, participating political subdivisions, or officers and employees of political subdivisions. Deems the irrevocable fund equivalent to a trust arrangement for all legal purposes.

TSB:rdr

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