Summary of HF 3512 (2025-2026) – Minnesota
Purpose and intent
HF 3512 proposes modifications to Minnesota’s Public Employees Retirement Association (PERA) statewide Volunteer Firefighter Plan specific to the Maple Plain fire department. The bill:
- Directs the executive director of PERA to shift Maple Plain fire department assets into low-risk investments to minimize potential losses between the effective date and distribution.
- Establishes a structured, two-stage allocation of any surplus assets (assets in excess of accrued liabilities) to Maple Plain firefighters upon termination from the statewide volunteer firefighter plan.
- Alters the termination process for Maple Plain’s participation in the plan by replacing certain state statute provisions with the bill’s procedures.
Key provisions and changes
Section 1 – Investment of Maple Plain assets
- Requires the PERA executive director, within 10 days after the section’s effective date, to direct the State Board of Investment to reinvest Maple Plain fire department assets in low-risk investments to reduce investment risk during the transition to distribution.
Section 2 – Termination and surplus allocation
- Replaces Minnesota Statutes, section 353G.18, subdivision 4, with this bill’s termination procedures for Maple Plain.
- Maple Plain’s removal from the statewide plan and cessation of coverage for departing firefighters occur when all distribution-related requirements are completed and assets credited to Maple Plain are distributed.
- Maple Plain’s governing board must adopt resolutions per 353G.18, subdiv. 5, and submit them to the PERA executive director.
Executive director’s duties upon termination:
1. Fully vest all departing firefighters as of the termination date, treating them as 100% vested in the pension benefit accrued as of termination.
2. Determine each departing firefighter’s present value of accrued benefit as of termination, considering the applicable benefit level.
3. Determine the value of accrued liabilities (including anticipated administrative expenses) and the value of assets attributable to Maple Plain’s account.
4. Continue low-risk investing to minimize losses.
Surplus allocation (if assets exceed liabilities):
- Stage 1: Allocate a portion of surplus to each departing firefighter under 50 years old. The allocation equals years of service × benefit level (per statute) minus the present value of accrued benefit.
- Stage 2: Allocate any remaining surplus pro rata by each departing firefighter’s years of service, adding the share to their calculated benefits.
- If Stage 1 cannot fully fund Stage 1 amounts for all under-50 firefighters, reduce the Stage 1 benefit level proportionally so the surplus is exhausted evenly among them.
Distribution (Section 2, Subsection f):
- Distribute the calculated benefits to departing firefighters in a lump sum (or direct rollover if chosen), regardless of age. If a firefighter is deceased, benefits go to survivors per statute or via rollover if elected.
Supplemental benefits (Section 2, Subsection g):
- Pay supplemental benefits under Minnesota Statutes 424A.10 only to the extent PERA is reimbursed under 424A.10, subdivision 3.
Section 3 – Remaining provisions
- Applies the remaining provisions of 353G.18 (subdivisions 1-3 and 5) to Maple Plain’s termination.
Section 4 – Effective date
- Sections 1–3 take effect the day after final enactment.
Who is affected
- Maple Plain Fire Department and its departing firefighters enrolled in the statewide Volunteer Firefighter Plan.
- PERA and the State Board of Investment, in terms of implementing low-risk investment strategies.
- Maple Plain’s city governing board (through required resolutions).
Procedural and timeline aspects
- Effective date timing: immediate for Sections 1–3 following enactment.
- Section 1 requires reinvestment decisions no later than 10 days after effective date.
- Termination and distribution occur after all termination requirements are satisfied and assets are fully credited and distributed.
- Two-stage surplus allocation governs post-termination distributions to eligible firefighters.
Overall, HF 3512 aims to protect Maple Plain firefighters’ benefits during and after termination from the statewide volunteer plan, while minimizing investment risk and providing a defined, staged method for any surplus distribution.
