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Public Employees Retirement Association (PERA) 60 Empire Dr., Suite 200, St. Paul MN 55103 Employer Fax: 651 296-2493; Employer Lines: 651 296-3636 or 1-888-892-737 Referendum Procedures -- Offering Social Security Coverage to Eligible Local Elected Officials in Minnesota The following procedures are based on Minnesota Statutes Section 355 (as amended by Act 271 of 2006) and Section 218 of the Social Security Act. These procedures describe the activities that must be completed to provide Social Security coverage to eligible local elected officials holding positions covered by the Defined Contribution Plan (and excluded from membership in the Coordinated Plan). 1. The governing body of the local governmental subdivision adopts a resolution to do the following: (A sample resolution is online at www.mnoera.org under the Employer Section and Social Security) a) Request a divided vote referendum be conducted within the subdivision, b) Authorize the appropriate individual within the subdivision to conduct the referendum, c) Establish the effective date of coverage for the officials eligible to vote in the referendum ■ Coverage may be prospective or retroactive within limits set by Section 218(e) (1) of federal law. If retroactive coverage is sought, it must be restricted under Social Security provisions to five calendar years prior to the year in which the subdivision's 218 agreement modification is mailed by the PERA staff to the Social Security Administration. For each official, the retroactive period will begin on the later of either: a) the effective date established in the 218 modification, or b) the date the particular individual took office. Once the retroactive coverage is approved by the Social Security Administration, full payment of the retroactive employer and employee taxes will be due in a lump sum. d) Request a modification to Minnesota's section 218 Agreement to provide full Social Security coverage to local elected positions covered by the Defined Contribution Plan, and e) Acknowledge the applicable state and federal laws and regulations regarding employee tax withholdings, employer contributions and record keeping. 2. The authorized representative of the governmental subdivision (employer) will: a) Prepare a listing with the names and Social Security Numbers of elected officials who are eligible to participate in the referendum. Those eligible are elected officials excluded from joining the Coordinated Plan, who fall into these two categories: ■ Active DCP members who pay 5.0% of their earnings into the DCP instead of paying 6.2% to Social Security (those elected after March 31, 1986 will be paying Medicare tax of 1.45%), ■ DCP-eligible officials paying 6.2% to Social Security on their earnings, instead of paying 5.0% into the DCP (those elected after March 31, 1986 will be paying Medicare tax of 1.45%). Additionally, the elected officials must be in office on two specific dates: 1) The date of the referendum and II) the date that the section 218 modification is effective for the subdivision. 3. Submit the adopted resolution and the list of potential referendum participants, by postal mail to: Attn: State Social Security Administrator Public Employees Retirement Association 60 Empire Drive, Ste 200 Saint Paul, MN 55103-2088 4. Upon receipt of the resolution and list of eligible DCP members, staff of PERA will: a) Work with the employer to establish the date(s) upon which the referendum will be conducted. Under federal requirements, all eligible individuals must be given no less than 90 days' notice regarding the referendum. An additional 10 days notice is required for absentee voting. The 90 -day notice period is required under federal law and may not be shortened. It exists to allow each voter a sufficient period in which to obtain information about the Social Security program to determine whether it would be advantageous to obtain such coverage for his or her elective services. PERA staff cannot provide counseling on Social Security benefits; therefore, employers should refer elected officials to the Social Security office (1-800-772-1213). Medicare information is available by calling either the Social Security office or by dialing 1-800-633-4227. July 17, 2007 Page 1