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Overview
This bill requires a 15 percent reduction in the number of executive branch employees from a July 1, 2011, baseline by June 30, 2015, and a 15 percent reduction in the costs associated with those positions within the same timeframe. The bill would authorize the Commissioner of Management and Budget and executive branch appointing authorities to use a variety of options to accomplish this result, including attrition, a hiring freeze, pension and health incentive early retirement incentives, furloughs, and layoffs. This bill does not apply to the Minnesota State Colleges and Universities and the state patrol.
Section-by-Section Summary
Section 1 [Reduction in State Workforce.]
Subdivision 1 [Required reduction.] directs a 15 percent reduction in the executive branch employee count by June 30, 2015, as compared to July 1, 2011, and requires an identical reduction in costs associated with employing those individuals within the same timeframe. Allows appointing authorities within the executive branch to accomplish the 15 percent reduction by providing authority to use attrition, a hard hiring freeze, the early retirement incentives authorized in this bill, restructuring of benefit or pension programs as authorized by other laws, furloughs, and layoffs.
Paragraph (b), clause (2), specifies that this bill does not apply to the Minnesota State Colleges and Universities (MnSCU) and the state patrol.
Subdivision 2 [Analysis.] requires the Commissioner of Management and Budget to perform an actuarial analysis before any early retirement incentive under this bill is authorized. The analysis must determine the maximum number of employees who may receive incentives. The analysis must also determine the percentage of the savings resulting from early retirements that are estimated to be needed to pay pension funds to cover the costs of the early retirement incentives.
Subdivision 3 [Pension early retirement incentive.] authorizes the Commissioner of Management and Budget to provide authority to a specific executive branch appointing authority to offer the early retirement incentive specified in this subdivision to an employee who would be immediately eligible to receive an annuity from the applicable public pension plan. Allows the Commissioner of Management and Budget the authority to establish the time periods for the incentive, and limits on the number of employees who may receive the incentive and other conditions for the incentive.
Paragraph (b) specifies that the amount of the pension early retirement incentive must be an additional month of service credit in the applicable plan for each full year of service credit the employee already has in a pension plan covered by this bill. Any increase in service credit provided under this paragraph will have the effect of increasing the pension benefit for the employee.
Paragraph (c) allows the appointing authority to request assistance from the director of the applicable public pension plan in preparing an estimate of the present value of additional service credit provided to an employee. If the appointing authority provides the incentive, the authority must pay the applicable pension plan the present value of the additional service credit from the first savings realized from the incentive. The payment for the present value of the additional service credit must be made to the pension plan within one year after the employee accepting the incentive retires.
Subdivision 4 [Insurance early retirement incentive.] allows the Commissioner of Management and Budget to authorize individual executive appointing authorities to offer the health insurance early retirement incentive provided in Laws 2010, Chapter 337. This incentive authorizes payment of up to 24 months of the employer contribution for health insurance for the employee, subject to certain terms and conditions, including a requirement that recipients have at least 15 years of allowable covered service, and a prohibition that prevents the employee from receiving any additional employer contribution for health insurance from an appointing authority after terminating employment.
Subdivision 5 [Best practices.] requires the Commissioner of Management and Budget and agencies using the early retirement incentives to use best practices identified by other states that have implemented early retirement programs.
Subdivision 6 [Hiring freeze.] prohibits an appointing authority from filling a position vacated through use of an early retirement incentive provided in this bill with an outside hire.
Subdivision 7 [Reappointments prohibition.] prevents employees who receive an early retirement incentive under this bill from reemployment with the state or contracting with the state as a consultant within five years after the date of termination.
Subdivision 8 [Savings.] specifies that net savings from the application of this bill cancel back to the fund where the savings occurred.
Subdivision 9 [Not applicable to elected officials.] clarifies that state elected officials are not state employees for purposes of this bill.
Subdivision 10 [Application of Public Employment Labor Relations Act.] specifies that any unilateral implementation of this section, including the provision of an early retirement incentive, is not an unfair labor practice under the Public Employment Labor Relations Act.
TSB/rdr
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