HF 1040

4th Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; providing various benefit 
  1.3             increases and related modifications; requiring 
  1.4             collateralization and investment authority statement; 
  1.5             amending Minnesota Statutes 1994, sections 3A.02, 
  1.6             subdivision 5; 352.01, subdivision 13; 352B.02, 
  1.7             subdivision 1a; 352B.08, subdivision 2; 352B.10, 
  1.8             subdivision 1; 353.65, subdivision 7; 353.651, 
  1.9             subdivision 4; 353A.083; 354.445; 354.66, subdivision 
  1.10            4; 354A.094, subdivision 4; 354A.12, subdivision 1; 
  1.11            354A.27, subdivision 1, and by adding subdivisions; 
  1.12            354A.31, subdivision 4, and by adding subdivisions; 
  1.13            354B.05, subdivisions 2 and 3; 354B.07, subdivisions 1 
  1.14            and 2; 354B.08, subdivision 2; 356.219, subdivision 2; 
  1.15            356.30, subdivision 1; 356.611; 356.865, subdivision 
  1.16            3; 356A.06, by adding subdivisions; 422A.05, by adding 
  1.17            a subdivision; and 422A.09, subdivision 2; Laws 1994, 
  1.18            chapter 499, section 2; proposing coding for new law 
  1.19            in Minnesota Statutes, chapters 125; 354A; and 356; 
  1.20            proposing coding for new law as Minnesota Statutes, 
  1.21            chapter 136F; repealing Minnesota Statutes 1994, 
  1.22            sections 3A.10, subdivision 2; 352.021, subdivision 5; 
  1.23            354A.27, subdivisions 2, 3, and 4; and 423B.02; Laws 
  1.24            1969, chapter 1088; Laws 1971, chapters 114 and 127, 
  1.25            section 1, as amended; Laws 1978, chapters 562, 
  1.26            section 32, and 753; Laws 1979, chapters 97 and 201, 
  1.27            section 27; and Laws 1981, chapter 224, sections 250 
  1.28            and 254. 
  1.29  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.30                             ARTICLE 1 
  1.31              STATEWIDE GENERAL EMPLOYEE PENSION PLAN 
  1.32                 BENEFIT AND RELATED MODIFICATIONS 
  1.33     Section 1.  [125.615] [RETURN TO FULL-TIME WORK.] 
  1.34     A teacher with 20 or more years of allowable service credit 
  1.35  under chapter 354 or 354A who was assigned to a part-time 
  1.36  position under section 354.66 or 354A.094 after June 30, 1994, 
  1.37  must be given the option of returning to full-time employment if 
  2.1   the employer does not make the full employer contribution to the 
  2.2   applicable pension fund under section 354.66, subdivision 4, or 
  2.3   354A.094, subdivision 4, after July 1, 1995.  If an employer 
  2.4   decides not to make the full employer contribution to the 
  2.5   pension fund after July 1, 1995, it must notify any affected 
  2.6   part-time teacher of this decision in writing within 30 days of 
  2.7   the employer's decision.  A teacher receiving this notice who 
  2.8   wishes to return to work full time must notify the employer of 
  2.9   intent to return to full-time employment within 30 days of 
  2.10  receiving notice from the employer, and must return to full-time 
  2.11  employment by the beginning of the next school year. 
  2.12     Sec. 2.  [136F.45] [EMPLOYER-PAID HEALTH INSURANCE.] 
  2.13     (a) This section applies to a person who:  
  2.14     (1) retires from the state university system, the technical 
  2.15  college system, or the community college system, or from a 
  2.16  successor system employing state university, technical college, 
  2.17  or community college faculty, with at least ten years of 
  2.18  combined service credit in a system under the jurisdiction of 
  2.19  the higher education board; 
  2.20     (2) was employed on a full-time basis immediately preceding 
  2.21  retirement as a state university, technical college, or 
  2.22  community college faculty member or as an unclassified 
  2.23  administrator in one of those systems; 
  2.24     (3) begins drawing an annuity from the teachers retirement 
  2.25  association or from a first class city teacher plan; and 
  2.26     (4) returns to work on not less than a one-third time basis 
  2.27  and not more than a two-thirds time basis in the system from 
  2.28  which the person retired under an agreement in which the person 
  2.29  may not earn a salary of more than $35,000 in a calendar year 
  2.30  from employment after retirement in the system from which the 
  2.31  person retired.  
  2.32     (b) Initial participation, the amount of time worked, and 
  2.33  the duration of participation under this section must be 
  2.34  mutually agreed upon by the employer and the employee.  The 
  2.35  employer may require up to one-year notice of intent to 
  2.36  participate in the program as a condition of participation under 
  3.1   this section.  The employer shall determine the time of year the 
  3.2   employee shall work.  
  3.3      (c) For a person eligible under paragraphs (a) and (b), the 
  3.4   employing board shall make the same employer contribution for 
  3.5   hospital, medical, and dental benefits as would be made if the 
  3.6   person were employed full time.  
  3.7      (d) For work under paragraph (a), a person must receive a 
  3.8   percentage of the person's salary at the time of retirement that 
  3.9   is equal to the percentage of time the person works compared to 
  3.10  full-time work.  
  3.11     (e) If a collective bargaining agreement covering a person 
  3.12  provides for an early retirement incentive that is based on age, 
  3.13  the incentive provided to the person must be based on the 
  3.14  person's age at the time employment under this section ends.  
  3.15  However, the salary used to determine the amount of the 
  3.16  incentive must be the salary that would have been paid if the 
  3.17  person had been employed full time for the year immediately 
  3.18  preceding the time employment under this section ends. 
  3.19     Sec. 3.  Minnesota Statutes 1994, section 352.01, 
  3.20  subdivision 13, is amended to read: 
  3.21     Subd. 13.  [SALARY.] "Salary" means the periodical wages, 
  3.22  or other periodic compensation, paid to any an employee before 
  3.23  deductions for deferred compensation, supplemental retirement 
  3.24  plans, or other voluntary salary reduction programs.  It also 
  3.25  means wages and includes net income from fees.  Lump sum sick 
  3.26  leave payments, severance payments, lump sum annual leave 
  3.27  payments and overtime payments made at the time of separation 
  3.28  from state service, payments in lieu of any employer-paid group 
  3.29  insurance coverage, including the difference between single and 
  3.30  family rates that may be paid to an employee with single 
  3.31  coverage, and payments made as an employer-paid fringe 
  3.32  benefit and, workers' compensation payments, employer 
  3.33  contributions to a deferred compensation or tax sheltered 
  3.34  annuity program, and amounts contributed under a benevolent 
  3.35  vacation and sick leave donation program are not salary. 
  3.36     Sec. 4.  Minnesota Statutes 1994, section 354.445, is 
  4.1   amended to read: 
  4.2      354.445 [NO ANNUITY REDUCTION.] 
  4.3      (a) The annuity reduction provisions of section 354.44, 
  4.4   subdivision 5, do not apply to a person who: 
  4.5      (1) retires from the state university system, technical 
  4.6   college system, or the community college system, or from a 
  4.7   successor system employing state university, technical college, 
  4.8   or community college faculty, with at least ten years 
  4.9   of combined service credit in the system from which the person 
  4.10  retires a system under the jurisdiction of the higher education 
  4.11  board; 
  4.12     (2) was employed on a full-time basis immediately preceding 
  4.13  retirement as a state university, technical college, or 
  4.14  community college faculty member or as an unclassified 
  4.15  administrator in one of these systems; 
  4.16     (3) begins drawing an annuity from the teachers retirement 
  4.17  association; and 
  4.18     (4) returns to work on not less than a one-third time basis 
  4.19  and not more than a two-thirds time basis in the system from 
  4.20  which the person retired under an agreement in which the person 
  4.21  may not earn a salary of more than $35,000 in a calendar year 
  4.22  from employment after retirement in the system from which the 
  4.23  person retired. 
  4.24     (b) Initial participation, the amount of time worked, and 
  4.25  the duration of participation under this section must be 
  4.26  mutually agreed upon by the employer and the employee.  The 
  4.27  employer may require up to one-year notice of intent to 
  4.28  participate in the program as a condition of participation under 
  4.29  this section.  The employer shall determine the time of year the 
  4.30  employee shall work.  
  4.31     (c) Notwithstanding any law to the contrary, a person 
  4.32  eligible under paragraphs (a) and (b) may not earn further 
  4.33  service credit in the teachers retirement association and is not 
  4.34  eligible to participate in the individual retirement account 
  4.35  plan or the supplemental retirement plan established in chapter 
  4.36  354B as a result of service under this section.  No employer or 
  5.1   employee contribution to any of these plans may be made on 
  5.2   behalf of such a person. 
  5.3      (d) For a person eligible under paragraphs (a) and (b) who 
  5.4   earns more than $35,000 in a calendar year from employment after 
  5.5   retirement in the system from which the person retired, the 
  5.6   annuity reduction provisions of section 354.44, subdivision 5, 
  5.7   apply only to income over $35,000. 
  5.8      Sec. 5.  Minnesota Statutes 1994, section 354.66, 
  5.9   subdivision 4, is amended to read: 
  5.10     Subd. 4.  [RETIREMENT CONTRIBUTIONS.] Notwithstanding any 
  5.11  provision to the contrary in this chapter relating to the salary 
  5.12  figure to be used for the determination of contributions or the 
  5.13  accrual of service credit, a teacher assigned to a part-time 
  5.14  position under this section shall continue to make employee 
  5.15  contributions to and to accrue allowable service credit in the 
  5.16  retirement fund during the period of part-time employment on the 
  5.17  same basis and in the same amounts as would have been paid and 
  5.18  accrued if the teacher had been employed on a full-time basis 
  5.19  provided that, prior to June 30 each year, or within 30 days 
  5.20  after notification by the association of the amount due, 
  5.21  whichever is later, the member and the employing board make that 
  5.22  portion of the required employer contribution to the retirement 
  5.23  fund, in any proportion which they may agree upon, that is based 
  5.24  on the difference between the amount of compensation that would 
  5.25  have been paid if the teacher had been employed on a full-time 
  5.26  basis and the amount of compensation actually received by the 
  5.27  teacher for the services rendered in the part-time assignment.  
  5.28  The employing unit shall make that portion of the required 
  5.29  employer contributions to the retirement fund on behalf of the 
  5.30  teacher that is based on the amount of compensation actually 
  5.31  received by the teacher for the services rendered in the 
  5.32  part-time assignment in the manner described in section 354.43, 
  5.33  subdivision 3.  If the teacher has 20 years or more of allowable 
  5.34  service in the fund or 20 years or more of full-time teaching 
  5.35  service, the employer shall make the full employer contribution 
  5.36  to the fund based on the compensation that would have been paid 
  6.1   if the teacher had been employed on a full-time basis.  The 
  6.2   employee and employer contributions shall be based upon the 
  6.3   rates of contribution prescribed by section 354.42.  Full 
  6.4   accrual of allowable service credit and employee contributions 
  6.5   for part-time teaching service pursuant to this section and 
  6.6   section 354A.094 shall not continue for a period longer than ten 
  6.7   years.  
  6.8      Sec. 6.  Minnesota Statutes 1994, section 354A.094, 
  6.9   subdivision 4, is amended to read: 
  6.10     Subd. 4.  [RETIREMENT CONTRIBUTIONS.] Notwithstanding any 
  6.11  provision to the contrary in this chapter or the articles of 
  6.12  incorporation or bylaws of an association relating to the salary 
  6.13  figure to be used for the determination of contributions or the 
  6.14  accrual of service credit, a teacher assigned to a part-time 
  6.15  position under this section shall continue to make employee 
  6.16  contributions to and to accrue allowable service credit in the 
  6.17  applicable association during the period of part-time employment 
  6.18  on the same basis and in the same amounts as would have been 
  6.19  paid and accrued if the teacher had been employed on a full-time 
  6.20  basis provided that, prior to June 30 each year the member and 
  6.21  the employing board make that portion of the required employer 
  6.22  contribution to the applicable association in any proportion 
  6.23  which they may agree upon, that is based on the difference 
  6.24  between the amount of compensation that would have been paid if 
  6.25  the teacher had been employed on a full-time basis and the 
  6.26  amount of compensation actually received by the teacher for 
  6.27  services rendered in the part-time assignment.  The employer 
  6.28  contributions to the applicable association on behalf of the 
  6.29  teacher shall be based on the amount of compensation actually 
  6.30  received by the teacher for the services rendered in the 
  6.31  part-time assignment in the manner described in section 354.43, 
  6.32  subdivision 3.  If the teacher has 20 years or more of allowable 
  6.33  service in the association or 20 years or more of full-time 
  6.34  teaching service, the employer shall make the full employer 
  6.35  contribution to the fund, based on the compensation that would 
  6.36  have been paid if the teacher had been employed on a full-time 
  7.1   basis.  The employee and employer contributions shall be based 
  7.2   upon the rates of contribution prescribed by section 354A.12.  
  7.3   Full membership, accrual of allowable service credit and 
  7.4   employee contributions for part-time teaching service by a 
  7.5   teacher pursuant to this section and section 354.66 shall not 
  7.6   continue for a period longer than ten years.  
  7.7      Sec. 7.  Minnesota Statutes 1994, section 354A.31, is 
  7.8   amended by adding a subdivision to read: 
  7.9      Subd. 3a.  [NO ANNUITY REDUCTION.] (a) The annuity 
  7.10  reduction provisions of subdivision 3 do not apply to a person 
  7.11  who: 
  7.12     (1) retires from the technical college system with at least 
  7.13  ten years of service credit in the system from which the person 
  7.14  retires; 
  7.15     (2) was employed on a full-time basis immediately preceding 
  7.16  retirement as a technical college faculty member; 
  7.17     (3) begins drawing an annuity from a first class city 
  7.18  teachers retirement association; and 
  7.19     (4) returns to work on not less than a one-third time basis 
  7.20  and not more than a two-thirds time basis in the technical 
  7.21  college system under an agreement in which the person may not 
  7.22  earn a salary of more than $35,000 in a calendar year from the 
  7.23  technical college system. 
  7.24     (b) Initial participation, the amount of time worked, and 
  7.25  the duration of participation under this section must be 
  7.26  mutually agreed upon by the employer and the employee.  The 
  7.27  employer may require up to a one-year notice of intent to 
  7.28  participate in the program as a condition of participation under 
  7.29  this section.  The employer shall determine the time of year the 
  7.30  employee shall work. 
  7.31     (c) Notwithstanding any law to the contrary, a person 
  7.32  eligible under paragraphs (a) and (b) may not earn further 
  7.33  service credit in a first class city teachers retirement 
  7.34  association and is not eligible to participate in the individual 
  7.35  retirement account plan or the supplemental retirement plan 
  7.36  established in chapter 354B as a result of service under this 
  8.1   section.  No employer or employee contribution to any of these 
  8.2   plans may be made on behalf of such a person. 
  8.3      Sec. 8.  Minnesota Statutes 1994, section 354B.05, 
  8.4   subdivision 2, is amended to read: 
  8.5      Subd. 2.  [PURCHASE OF CONTRACTS.] The state university 
  8.6   board and the community college higher education board shall 
  8.7   arrange for the purchase of annuity contracts, fixed, variable, 
  8.8   or a combination of fixed and variable, or custodial accounts 
  8.9   from financial institutions selected by the state board of 
  8.10  investment under subdivision 3, to provide retirement benefits 
  8.11  to members of the plan.  The contracts or accounts must be 
  8.12  purchased with contributions under section 354B.04 or money or 
  8.13  assets otherwise provided by law or by authority of the state 
  8.14  university board or community college higher education board and 
  8.15  acceptable by the financial institutions from which the 
  8.16  contracts or accounts are purchased. 
  8.17     Sec. 9.  Minnesota Statutes 1994, section 354B.05, 
  8.18  subdivision 3, is amended to read: 
  8.19     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] The 
  8.20  supplemental investment fund administered by the state board of 
  8.21  investment is one of the investment options for the plan.  The 
  8.22  state board of investment may select up to five other financial 
  8.23  institutions to provide annuity products.  In making their 
  8.24  selections, the board shall consider at least these criteria: 
  8.25     (1) the experience and ability of the financial institution 
  8.26  to provide retirement and death benefits suited to the needs of 
  8.27  the covered employees; 
  8.28     (2) the relationship of the benefits to their cost; and 
  8.29     (3) the financial strength and stability of the institution.
  8.30     The state board of investment must periodically review at 
  8.31  least every three years each financial institution selected by 
  8.32  the state board of investment.  The state board of investment 
  8.33  may retain consulting services to assist in the periodic review, 
  8.34  may establish a budget for its costs in the periodic review 
  8.35  process, and may charge a proportional share of those costs to 
  8.36  each financial institution selected by the state board of 
  9.1   investment.  All contracts must be approved by the state board 
  9.2   of investment before execution by the state university board and 
  9.3   the community college higher education board.  The state board 
  9.4   of investment shall also establish policies and procedures under 
  9.5   section 11A.04, clause (2), to carry out this subdivision. 
  9.6      The chancellor of the state university system and the 
  9.7   chancellor of the state community college higher education 
  9.8   system shall redeem all shares in the accounts of the Minnesota 
  9.9   supplemental investment fund held on behalf of personnel in the 
  9.10  supplemental plan who elect an investment option other than the 
  9.11  supplemental investment fund, except that shares in the fixed 
  9.12  interest account attributable to any guaranteed investment 
  9.13  contract as of July 1, 1994, must not be redeemed until the 
  9.14  expiration dates for the guaranteed investment contracts.  
  9.15  The chancellors chancellor shall transfer the cash realized to 
  9.16  the financial institutions selected by the state university 
  9.17  board and the community college board under this section 354B.05.
  9.18     Sec. 10.  Minnesota Statutes 1994, section 354B.07, 
  9.19  subdivision 1, is amended to read: 
  9.20     Subdivision 1.  [ESTABLISHMENT AND ELIGIBILITY.] (a) 
  9.21  [REGULAR UNCLASSIFIED EMPLOYEES.] The supplemental retirement 
  9.22  plan for personnel employed by the state university board, the 
  9.23  state board for community colleges, the higher education board, 
  9.24  and effective July 1, 1995, the technical colleges, who are in 
  9.25  the unclassified service of the state commencing July 1 
  9.26  following the completion of the second year of their full-time 
  9.27  contract is governed by this section.  Once a person qualifies 
  9.28  for participation in the supplemental plan, all subsequent 
  9.29  service by the person as an unclassified employee of the state 
  9.30  university board, the state board for community colleges, the 
  9.31  higher education board, or the technical colleges is covered by 
  9.32  the supplemental plan.  
  9.33     (b) [CETA UNCLASSIFIED EMPLOYEES.] An unclassified employee 
  9.34  employed by the state university board or the state board for 
  9.35  community colleges in subsidized on-the-job training, work 
  9.36  experience, or public service employment as an enrollee under 
 10.1   the federal Comprehensive Employment and Training Act is not 
 10.2   included in the supplemental retirement plan provided for in 
 10.3   this section after March 30, 1978, unless the unclassified 
 10.4   employee has as of the later of March 30, 1978, or the date of 
 10.5   employment sufficient service credit in the retirement fund 
 10.6   providing primary retirement coverage to meet the minimum 
 10.7   vesting requirements for a deferred retirement annuity, or the 
 10.8   board agrees in writing to make the employer contribution 
 10.9   required by this section on account of that unclassified 
 10.10  employee from revenue sources other than funds provided under 
 10.11  the federal Comprehensive Employment and Training Act, or the 
 10.12  unclassified employee agrees in writing to make the employer 
 10.13  contribution required by this section in addition to the member 
 10.14  contribution. 
 10.15     Sec. 11.  Minnesota Statutes 1994, section 354B.07, 
 10.16  subdivision 2, is amended to read: 
 10.17     Subd. 2.  [REDEMPTIONS.] The chancellor of the state 
 10.18  university system and the chancellor of the state community 
 10.19  college higher education system shall redeem all shares in the 
 10.20  accounts of the Minnesota supplemental investment fund held on 
 10.21  behalf of personnel in the supplemental plan who elect an 
 10.22  investment option other than the supplemental investment fund, 
 10.23  except that shares in the fixed interest account attributable to 
 10.24  any guaranteed investment contract as of July 1, 1994, may not 
 10.25  be redeemed until the expiration dates for the guaranteed 
 10.26  investment contracts.  The chancellors chancellor shall transfer 
 10.27  the cash realized to the financial institutions selected by 
 10.28  the state university board and the community college board under 
 10.29  section 354B.05. 
 10.30     Sec. 12.  Minnesota Statutes 1994, section 354B.08, 
 10.31  subdivision 2, is amended to read: 
 10.32     Subd. 2.  [ADMINISTRATION.] (a) The chancellor of the state 
 10.33  university system and the chancellor of the state community 
 10.34  college higher education system shall administer the 
 10.35  supplemental retirement plan for their employees.  
 10.36  The chancellors chancellor shall invest contributions made under 
 11.1   this section, less amounts used for administrative expenses, as 
 11.2   authorized by law.  The retirement contributions and death 
 11.3   benefits provided by annuity contracts or custodial accounts 
 11.4   purchased by the chancellors chancellor are owned by the plan 
 11.5   and must be paid in accordance with the annuity contracts or 
 11.6   custodial accounts.  
 11.7      (b) Effective July 1, 1995, administration of the plan must 
 11.8   transfer to the higher education board. 
 11.9      Sec. 13.  Minnesota Statutes 1994, section 356.30, 
 11.10  subdivision 1, is amended to read: 
 11.11     Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 
 11.12  Notwithstanding any provisions to the contrary of the laws 
 11.13  governing the funds enumerated in subdivision 3, a person who 
 11.14  has met the qualifications of clause (2) may elect to receive a 
 11.15  retirement annuity from each fund in which the person has at 
 11.16  least six months allowable service, based on the allowable 
 11.17  service in each fund, subject to the provisions of clause (3).  
 11.18     (2) A person may receive upon retirement a retirement 
 11.19  annuity from each fund in which the person has at least six 
 11.20  months allowable service, and augmentation of a deferred annuity 
 11.21  calculated under the laws governing each public pension plan or 
 11.22  fund named in subdivision 3, from the date the person terminated 
 11.23  all public service if: 
 11.24     (a) the person has allowable service totaling an amount 
 11.25  that allows the person to receive an annuity in any two or more 
 11.26  of the enumerated funds; and 
 11.27     (b) the person has not begun to receive an annuity from any 
 11.28  enumerated fund or the person has made application for benefits 
 11.29  from all funds and the effective dates of the retirement annuity 
 11.30  with each fund under which the person chooses to receive an 
 11.31  annuity are within a one-year period.  
 11.32     (3) The retirement annuity from each fund must be based 
 11.33  upon the allowable service in each fund, except that:  
 11.34     (a) The laws governing annuities must be the law in effect 
 11.35  on the date of termination from the last period of public 
 11.36  service under a covered fund with which the person earned a 
 12.1   minimum of one-half year of allowable service credit during that 
 12.2   employment.  
 12.3      (b) The "average salary" on which the annuity from each 
 12.4   covered fund in which the employee has credit in a formula plan 
 12.5   shall be based on the employee's highest five successive years 
 12.6   of covered salary during the entire service in covered funds.  
 12.7      (c) The formula percentages to be used by each fund must be 
 12.8   those percentages prescribed by each fund's formula as continued 
 12.9   for the respective years of allowable service from one fund to 
 12.10  the next, recognizing all previous allowable service with the 
 12.11  other covered funds.  
 12.12     (d) Allowable service in all the funds must be combined in 
 12.13  determining eligibility for and the application of each fund's 
 12.14  provisions in respect to actuarial reduction in the annuity 
 12.15  amount for retirement prior to normal retirement.  
 12.16     (e) The annuity amount payable for any allowable service 
 12.17  under a nonformula plan of a covered fund must not be affected 
 12.18  but such service and covered salary must be used in the above 
 12.19  calculation.  
 12.20     (f) This section shall not apply to any person whose final 
 12.21  termination from the last public service under a covered fund is 
 12.22  prior to May 1, 1975.  
 12.23     (g) For the purpose of computing annuities under this 
 12.24  section the formula percentages used by any covered fund, except 
 12.25  the basic program of the teachers retirement association, the 
 12.26  public employees police and fire fund, must not exceed 2-1/2 
 12.27  percent per year of service for any year of service or fraction 
 12.28  thereof.  The formula percentage used by the public employees 
 12.29  police and fire fund must not exceed 2.65 percent per year of 
 12.30  service for any year of service or fraction thereof.  The 
 12.31  formula percentage used by the teachers retirement association 
 12.32  must not exceed 2.63 percent per year of basic program service 
 12.33  for any year of basic program service or fraction thereof. 
 12.34     (h) Any period of time for which a person has credit in 
 12.35  more than one of the covered funds must be used only once for 
 12.36  the purpose of determining total allowable service.  
 13.1      (i) If the period of duplicated service credit is more than 
 13.2   six months, or the person has credit for more than six months 
 13.3   with each of the funds, each fund shall apply its formula to a 
 13.4   prorated service credit for the period of duplicated service 
 13.5   based on a fraction of the salary on which deductions were paid 
 13.6   to that fund for the period divided by the total salary on which 
 13.7   deductions were paid to all funds for the period.  
 13.8      (j) If the period of duplicated service credit is less than 
 13.9   six months, or when added to other service credit with that fund 
 13.10  is less than six months, the service credit must be ignored and 
 13.11  a refund of contributions made to the person in accord with that 
 13.12  fund's refund provisions.  
 13.13     Sec. 14.  [356.305] [PARTIAL PAYMENT OF PENSION PLAN 
 13.14  REFUND.] 
 13.15     (a) Notwithstanding any provision of law to the contrary, a 
 13.16  member of a pension plan listed in section 356.30, subdivision 
 13.17  3, with at least two years of forfeited service taken from a 
 13.18  single pension plan may repay a portion of all refunds.  A 
 13.19  partial refund repayment must comply with this section. 
 13.20     (b) The minimum portion of a refund repayment is one-third 
 13.21  of the total service credit period of all refunds taken from a 
 13.22  single plan.  
 13.23     (c) The cost of the partial refund repayment is the product 
 13.24  of the cost of the total repayment multiplied by the ratio of 
 13.25  the restored service credit to the total forfeited service 
 13.26  credit.  The total repayment amount includes interest at the 
 13.27  annual rate of 8.5 percent, compounded annually, from the refund 
 13.28  date to the date repayment is received.  
 13.29     (d) The restored service credit is allocated based on the 
 13.30  relationship the restored service bears to the total service 
 13.31  credit period for all refunds taken from a single pension plan. 
 13.32     (e) This section does not authorize a public pension plan 
 13.33  member to repay a refund if the law governing the plan does not 
 13.34  authorize the repayment of a refund of member contributions. 
 13.35     Sec. 15.  Minnesota Statutes 1994, section 356.611, is 
 13.36  amended to read: 
 14.1      356.611 [LIMITATION ON PUBLIC EMPLOYEE SALARIES FOR PENSION 
 14.2   PURPOSES.] 
 14.3      Subdivision 1.  [STATE SALARY LIMITATIONS.] (a) 
 14.4   Notwithstanding any provision of law, bylaws, articles or of 
 14.5   incorporation, retirement and disability allowance plan 
 14.6   agreements, or retirement plan contracts to the contrary, the 
 14.7   covered salary for pension purposes for a plan participant of a 
 14.8   covered retirement fund under section 356.30, subdivision 3, may 
 14.9   not exceed 95 percent of the salary established for the governor 
 14.10  under section 15A.082 at the time the person received the salary.
 14.11     (b) This section does not apply to a salary paid: 
 14.12     (1) to the governor; 
 14.13     (2) to an employee of a political subdivision in a position 
 14.14  that is excluded from the limit as specified under section 
 14.15  43A.17, subdivision 9; or 
 14.16     (3) to a state employee in a position for which the 
 14.17  commissioner of employee relations has approved a salary rate 
 14.18  that exceeds 95 percent of the governor's salary. 
 14.19     (c) The limited covered salary determined under this 
 14.20  section must be used in determining employee and employer 
 14.21  contributions and in determining retirement annuities and other 
 14.22  benefits under the respective covered retirement fund and under 
 14.23  this chapter. 
 14.24     Subd. 2.  [FEDERAL COMPENSATION LIMITS.] For members first 
 14.25  contributing to a pension plan covered under section 356.30, 
 14.26  subdivision 3, on or after July 1, 1995, compensation in excess 
 14.27  of the limitation set forth in Internal Revenue Code 401(a)(17) 
 14.28  shall not be included for contribution and benefit computation 
 14.29  purposes.  The compensation limit set forth in Internal Revenue 
 14.30  Code 401(a)(17) on June 30, 1993, shall apply to members first 
 14.31  contributing before July 1, 1995. 
 14.32     Sec. 16.  [RETROACTIVE PROVISIONS.] 
 14.33     (a) A teacher who had at least three years of allowable 
 14.34  service credit under Minnesota Statutes, chapter 354 or 354A, on 
 14.35  July 1, 1994, and who worked part-time between July 1, 1994, and 
 14.36  June 30, 1995, may be allowed to make contributions to and 
 15.1   accrue allowable service credit in the applicable retirement 
 15.2   fund, as if the teacher had been working full time, as provided 
 15.3   in Minnesota Statutes, sections 354.66, subdivision 4, and 
 15.4   354A.094, subdivision 4, for service after July 1, 1994, and 
 15.5   before June 30, 1995.  If a teacher described in this paragraph 
 15.6   wishes to obtain allowable service credit as if the teacher had 
 15.7   been working full time for the period from July 1, 1994, to June 
 15.8   30, 1995, the teacher must: 
 15.9      (1) make a lump sum payment to the applicable pension fund 
 15.10  within 60 days after the effective date of this section of the 
 15.11  difference between the amount of the employer and employee 
 15.12  contributions to the pension fund that would have been paid if 
 15.13  the teacher had been working full time, and that amount that was 
 15.14  actually paid for part-time service during that period; and 
 15.15     (2) submit to the association a letter or other document 
 15.16  from the board of the teacher's employing district stating that 
 15.17  the board would have agreed to the teacher's participation in 
 15.18  the part-time mobility program during the 1994-1995 school year 
 15.19  but for the requirement then in effect that the district make 
 15.20  the full employer contribution to the retirement fund for 
 15.21  teachers with 20 or more years of service, based on the 
 15.22  compensation that would have been paid if the teacher had been 
 15.23  employed on a full-time basis. 
 15.24     (b) An employer of a teacher covered by paragraph (a) must 
 15.25  notify the teacher of the option available under paragraph (a) 
 15.26  in writing within 30 days of the effective date of this section. 
 15.27     Sec. 17.  [EARLY RETIREMENT INCENTIVE.] 
 15.28     The metropolitan council or the Minnesota historical 
 15.29  society may offer its eligible employees the early retirement 
 15.30  incentive provided in sections 17 to 25. 
 15.31     Sec. 18.  [ELIGIBILITY.] 
 15.32     An employee of a public employer specified in section 17 is 
 15.33  eligible to receive the early retirement incentive if the 
 15.34  employee: 
 15.35     (1) has at least 25 years of combined service credit in any 
 15.36  covered fund or funds listed in Minnesota Statutes, section 
 16.1   356.30, subdivision 3, or for purposes of the incentive in 
 16.2   section 19, subdivision 2 only, is at least 65 years old and has 
 16.3   at least one year of combined service credit in these covered 
 16.4   funds; 
 16.5      (2) upon retirement is immediately eligible for a 
 16.6   retirement annuity from a defined benefit plan, if the person is 
 16.7   a member of a defined benefit plan; 
 16.8      (3) is at least 55 years of age; and 
 16.9      (4) retires on or after May 23, 1995, and before January 
 16.10  31, 1996. 
 16.11     Sec. 19.  [EARLY RETIREMENT INCENTIVE.] 
 16.12     Subdivision 1.  [CHOICE.] An eligible employee may not 
 16.13  choose both the incentive in subdivision 2 and the incentive in 
 16.14  subdivision 3.  The public employers specified in section 17 
 16.15  that choose to offer the early retirement incentive must offer 
 16.16  included employees eligible for both incentives a choice between 
 16.17  the incentive in subdivision 2 or 3. 
 16.18     Subd. 2.  [FORMULA INCREASE OPTION.] For an employee 
 16.19  covered by a retirement plan established in Minnesota Statutes, 
 16.20  section 352.115, 352.116, 353.29, or 353.30, or chapter 354 or 
 16.21  422A, who selects the incentive under this subdivision, the 
 16.22  multiplier percentage used to calculate the retirement annuity 
 16.23  must be increased for each year of service credit up to 30 
 16.24  years.  The amount of the increase is: 
 16.25     (1) .25 for each year of service credit calculated under 
 16.26  Minnesota Statutes, section 352.115, 352.116, 353.29, or 353.30, 
 16.27  or chapter 422A; and 
 16.28     (2) .10 for each year of service credit calculated under 
 16.29  Minnesota Statutes, chapter 354 or 354A.  
 16.30     If an employee has more than 30 years of service credit, 
 16.31  the increased multiplier applies only to the first 30 years. 
 16.32     Subd. 3.  [INSURANCE OPTION.] For an employee who selects 
 16.33  the incentive under this subdivision, the employer must pay for 
 16.34  hospital, medical, and dental insurance under the following 
 16.35  conditions and limitations.  An employee is eligible for this 
 16.36  employer-paid insurance only if the person: 
 17.1      (1) is eligible for employer-paid insurance under a 
 17.2   collective bargaining agreement or personnel plan in effect on 
 17.3   the day before the effective date of sections 17 to 25; 
 17.4      (2) has at least as many months of service with the current 
 17.5   employer as the number of months younger than age 65 the person 
 17.6   is at the time of retirement; and 
 17.7      (3) is under age 65. 
 17.8      Sec. 20.  [LIMIT ON REHIRING.] 
 17.9      A public employer may not rehire an employee who retires 
 17.10  under sections 17 to 25. 
 17.11     Sec. 21.  [RETIREMENT.] 
 17.12     For purposes of sections 17 to 25, an employee retires when 
 17.13  the employee terminates active employment and applies for 
 17.14  retirement benefits. 
 17.15     Sec. 22.  [CONDITIONS; INSURANCE COVERAGE.] 
 17.16     A retired employee is eligible for single and dependent 
 17.17  insurance coverages and employer payments to which the employee 
 17.18  was entitled immediately before retirement, subject to any 
 17.19  changes in coverage and employer and employee payments through 
 17.20  collective bargaining or personnel plans for employees in 
 17.21  positions equivalent to the position from which the employee 
 17.22  retired.  The retired employee is not eligible for employer-paid 
 17.23  life insurance.  Eligibility ceases when the retired employee 
 17.24  attains the age of 65, chooses not to receive the retirement 
 17.25  benefits for which the employee has applied, or becomes eligible 
 17.26  for employer-paid health insurance from a new employer.  
 17.27  Coverages must be coordinated with relevant health insurance 
 17.28  benefits provided through the federally sponsored Medicare 
 17.29  program. 
 17.30     Sec. 23.  [INCLUSION.] 
 17.31     A public employer that offers incentives under sections 17 
 17.32  to 25 shall designate the positions or group of positions 
 17.33  affected by downsizing or restructuring that will qualify for 
 17.34  participation in its early retirement plan and may exclude 
 17.35  otherwise eligible employees. 
 17.36     Sec. 24.  [PAYMENT OF COST OF EARLY RETIREMENT INCENTIVE.] 
 18.1      (a) A public employer referenced in section 17 which offers 
 18.2   an early retirement incentive under section 19 must make an 
 18.3   additional employer contribution to the applicable retirement 
 18.4   plan from which an employee retired under the incentive program. 
 18.5      (b) The additional employer contribution is an amount equal 
 18.6   to the difference in the amount of the reserve transfer under 
 18.7   Minnesota Statutes, section 11A.18, or 422A.06, subdivision 8, 
 18.8   with the early retirement incentive under section 19, 
 18.9   subdivision 2, and without the early retirement incentive.  The 
 18.10  additional employer contribution must be paid prior to July 1, 
 18.11  1997.  The public employer shall also pay compound interest on 
 18.12  the additional employer contribution at an annual rate of 8.5 
 18.13  percent from the effective date of the retirement to the date of 
 18.14  the payment of the additional employer contribution. 
 18.15     Sec. 25.  [APPLICATION OF OTHER LAWS.] 
 18.16     Unilateral implementation of sections 17 to 25 by a public 
 18.17  employer is not an unfair labor practice for purposes of 
 18.18  Minnesota Statutes, chapter 179A.  The requirement in sections 
 18.19  17 to 25 for an employer to pay health insurance coverage costs 
 18.20  for certain retired employees is not subject to the limits in 
 18.21  Minnesota Statutes, section 179A.20, subdivision 2a. 
 18.22     Sec. 26. [REPEALER.] 
 18.23     Minnesota Statutes 1994, sections 3A.10, subdivision 2; and 
 18.24  352.021, subdivision 5, are repealed. 
 18.25     Sec. 27.  [EFFECTIVE DATE.] 
 18.26     (a) Sections 1, 10, and 15 are effective on July 1, 1995. 
 18.27     (b) Sections 3 and 16 are effective on the day following 
 18.28  final enactment. 
 18.29     (c) Sections 5, 6, and 7 are effective on July 1, 1995 and 
 18.30  apply to teaching service rendered after that date. 
 18.31     (d) Section 13 is effective retroactively to May 16, 1994. 
 18.32     (e) Sections 17 to 25 are effective on the day after final 
 18.33  enactment. 
 18.34     (f) Section 26 is effective on July 1, 1995 and is not 
 18.35  intended to reduce the service credit of a legislator for 
 18.36  service recorded by the Minnesota state retirement system before 
 19.1   July 1, 1995. 
 19.2      (g) Section 14 is effective on January 1, 1996. 
 19.3                              ARTICLE 2 
 19.4                 LOCAL GENERAL EMPLOYEE PENSION PLAN  
 19.5                  BENEFIT AND RELATED MODIFICATIONS  
 19.6      Section 1.  [354A.026] [DULUTH TEACHERS RETIREMENT FUND 
 19.7   ASSOCIATION; EXCEPTION TO CERTAIN ACTUARIAL VALUATION 
 19.8   PROVISIONS.] 
 19.9      Notwithstanding any provision of section 356.215, 
 19.10  subdivision 4g, to the contrary, the amortization target date 
 19.11  for use in determining the amortization contribution requirement 
 19.12  in any actuarial valuation of the Duluth teachers retirement 
 19.13  fund association after the date of enactment must be June 30, 
 19.14  2020. 
 19.15     Sec. 2.  Minnesota Statutes 1994, section 354A.12, 
 19.16  subdivision 1, is amended to read: 
 19.17     Subdivision 1.  [EMPLOYEE CONTRIBUTIONS.] The contribution 
 19.18  required to be paid by each member of a teachers retirement fund 
 19.19  association shall not be less than the percentage of total 
 19.20  salary specified below for the applicable association and 
 19.21  program: 
 19.22       Association and Program              Percentage of
 19.23                                            Total Salary
 19.24  Duluth teachers retirement
 19.25    association
 19.26            old law and new law
 19.27            coordinated programs              4.5 5.5 percent
 19.28  Minneapolis teachers retirement
 19.29    association
 19.30            basic program                     8.5 percent
 19.31            coordinated program               4.5 percent
 19.32  St. Paul teachers retirement
 19.33    association
 19.34            basic program                     8 percent
 19.35            coordinated program               4.5 percent
 19.36     Contributions shall be made by deduction from salary and 
 20.1   must be remitted directly to the respective teachers retirement 
 20.2   fund association at least once each month. 
 20.3      Sec. 3.  Minnesota Statutes 1994, section 354A.27, 
 20.4   subdivision 1, is amended to read: 
 20.5      Subdivision 1.  [ELIGIBILITY POSTRETIREMENT ADJUSTMENT 
 20.6   MODIFICATION.] A person receiving a retirement annuity, 
 20.7   disability benefit, or surviving spouse benefit or annuity from 
 20.8   the Duluth teachers retirement fund association who has received 
 20.9   the annuity or benefit for at least one year may be entitled to 
 20.10  receive a lump sum postretirement adjustment under subdivision 
 20.11  2, in the discretion of the board of trustees under subdivision 
 20.12  3.  Any postretirement adjustment payable from the Duluth 
 20.13  teachers retirement fund association must be computed and paid 
 20.14  according to this section. 
 20.15     Sec. 4.  Minnesota Statutes 1994, section 354A.27, is 
 20.16  amended by adding a subdivision to read: 
 20.17     Subd. 5.  [CALCULATION OF POSTRETIREMENT ADJUSTMENTS.] (a) 
 20.18  Annually, after June 30, the board of trustees determines the 
 20.19  amount of any postretirement adjustment using the procedures in 
 20.20  this subdivision and subdivision 6. 
 20.21     (b) Each person who has been receiving an annuity or 
 20.22  benefit under the articles of incorporation, bylaws, or under 
 20.23  this section for at least 12 months as of the date of the 
 20.24  postretirement adjustment shall be eligible for a postretirement 
 20.25  adjustment.  The postretirement adjustment shall be payable each 
 20.26  January 1.  The postretirement adjustment shall be equal to two 
 20.27  percent of the annuity or benefit to which the person is 
 20.28  entitled one month prior to the payment of the postretirement 
 20.29  adjustment. 
 20.30     Sec. 5.  Minnesota Statutes 1994, section 354A.27, is 
 20.31  amended by adding a subdivision to read: 
 20.32     Subd. 6.  [ADDITIONAL INCREASE.] (a) In addition to the 
 20.33  postretirement increases granted under subdivision 5, an 
 20.34  additional percentage increase must be computed and paid under 
 20.35  this subdivision. 
 20.36     (b) The board of trustees shall determine the number of 
 21.1   annuitants or benefit recipients who have been receiving an 
 21.2   annuity or benefit for at least 12 months as of the current June 
 21.3   30.  These recipients are entitled to receive the surplus 
 21.4   investment earnings additional postretirement increase. 
 21.5      (c) Annually, as of each June 30, the board shall determine 
 21.6   the five-year annualized rate of return attributable to the 
 21.7   assets of the Duluth teachers retirement fund association under 
 21.8   the formula or formulas specified in section 11A.04, clause (11).
 21.9      (d) The board shall determine the amount of excess 
 21.10  five-year annualized rate of return over the preretirement 
 21.11  interest assumption as specified in section 356.215. 
 21.12     (e) The additional percentage increase must be determined 
 21.13  by multiplying the quantity one minus the rate of contribution 
 21.14  deficiency, as specified in the most recent actuarial report of 
 21.15  the actuary retained by the legislative commission on pensions 
 21.16  and retirement, times the rate of return excess as determined in 
 21.17  paragraph (d). 
 21.18     (f) The additional increase is payable to all eligible 
 21.19  annuitants or benefit recipients on the following January 1. 
 21.20     Sec. 6.  Minnesota Statutes 1994, section 354A.31, 
 21.21  subdivision 4, is amended to read: 
 21.22     Subd. 4.  [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 
 21.23  ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 
 21.24  applies to the coordinated programs of the Minneapolis teachers 
 21.25  retirement fund association and the St. Paul teachers retirement 
 21.26  fund association.  
 21.27     (b) The normal coordinated retirement annuity shall be an 
 21.28  amount equal to a retiring coordinated member's average salary 
 21.29  multiplied by the retirement annuity formula percentage.  
 21.30  Average salary for purposes of this section shall mean an amount 
 21.31  equal to the average salary upon which contributions were made 
 21.32  for the highest five successive years of service credit, but 
 21.33  which shall not in any event include any more than the 
 21.34  equivalent of 60 monthly salary payments.  Average salary must 
 21.35  be based upon all years of service credit if this service credit 
 21.36  is less than five years. 
 22.1      (b) (c) This paragraph, in conjunction with subdivision 6, 
 22.2   applies to a person who first became a member or a member in a 
 22.3   pension fund listed in section 356.30, subdivision 3, before 
 22.4   July 1, 1989, unless paragraph (c) (d), in conjunction with 
 22.5   subdivision 7, produces a higher annuity amount, in which case 
 22.6   paragraph (c) (d) will apply.  The retirement annuity formula 
 22.7   percentage for purposes of this paragraph is one percent per 
 22.8   year for each year of coordinated service for the first ten 
 22.9   years and 1.5 percent for each year of coordinated service 
 22.10  thereafter.  
 22.11     (c) (d) This paragraph applies to a person who has become 
 22.12  at least 55 years old and who first becomes a member after June 
 22.13  30, 1989, and to any other member who has become at least 55 
 22.14  years old and whose annuity amount, when calculated under this 
 22.15  paragraph and in conjunction with subdivision 7 is higher than 
 22.16  it is when calculated under paragraph (b) (c), in conjunction 
 22.17  with the provisions of subdivision 6.  The retirement annuity 
 22.18  formula percentage for purposes of this paragraph is 1.5 percent 
 22.19  for each year of coordinated service.  
 22.20     Sec. 7.  Minnesota Statutes 1994, section 354A.31, is 
 22.21  amended by adding a subdivision to read: 
 22.22     Subd. 4a.  [COMPUTATION OF THE NORMAL COORDINATED 
 22.23  RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 
 22.24  to the new law coordinated program of the Duluth teachers 
 22.25  retirement fund association. 
 22.26     (b) The normal coordinated retirement annuity is an amount 
 22.27  equal to a retiring coordinated member's average salary 
 22.28  multiplied by the retirement annuity formula percentage.  
 22.29  Average salary for purposes of this section means an amount 
 22.30  equal to the average salary upon which contributions were made 
 22.31  for the highest five successive years of service credit, but may 
 22.32  not in any event include any more than the equivalent of 60 
 22.33  monthly salary payments.  Average salary must be based upon all 
 22.34  years of service credit if this service credit is less than five 
 22.35  years. 
 22.36     (c) This paragraph, in conjunction with subdivision 6, 
 23.1   applies to a person who first became a member or a member in a 
 23.2   pension fund listed in section 356.30, subdivision 3, before 
 23.3   July 1, 1989, unless paragraph (d), in conjunction with 
 23.4   subdivision 7, produces a higher annuity amount, in which case 
 23.5   paragraph (d) applies.  The retirement annuity formula 
 23.6   percentage for purposes of this paragraph is 1.13 percent per 
 23.7   year for each year of coordinated service for the first ten 
 23.8   years and 1.63 percent for each subsequent year of coordinated 
 23.9   service. 
 23.10     (d) This paragraph applies to a person who is at least 55 
 23.11  years old and who first becomes a member after June 30, 1989, 
 23.12  and to any other member who is at least 55 years old and whose 
 23.13  annuity amount, when calculated under this paragraph and in 
 23.14  conjunction with subdivision 7, is higher than it is when 
 23.15  calculated under paragraph (c) in conjunction with subdivision 
 23.16  6.  The retirement annuity formula percentage for purposes of 
 23.17  this paragraph is 1.63 percent for each year of coordinated 
 23.18  service. 
 23.19     Sec. 8.  Minnesota Statutes 1994, section 356.865, 
 23.20  subdivision 3, is amended to read: 
 23.21     Subd. 3.  [COST.] The cost of the payments made under this 
 23.22  section is the responsibility of the state.  The annual 
 23.23  amortization amount must For state fiscal years 1992 to 2001 
 23.24  inclusive, there is appropriated annually $550,000 from the 
 23.25  general fund to the commissioner of finance to be added, in 
 23.26  quarterly installments, to the annual state contribution amount 
 23.27  determined under section 422A.101, subdivision 3, effective July 
 23.28  1, 1991. 
 23.29     Sec. 9.  Minnesota Statutes 1994, section 422A.05, is 
 23.30  amended by adding a subdivision to read: 
 23.31     Subd. 8.  [HEALTH INSURANCE.] The retirement board may 
 23.32  authorize the executive director or the executive director's 
 23.33  designee to:  
 23.34     (1) offer the beneficiaries of the fund the option of 
 23.35  having their health insurance premiums deducted automatically 
 23.36  from their monthly benefit amounts and paid to a designated 
 24.1   insurer; and 
 24.2      (2) provide beneficiaries information about available group 
 24.3   health insurance plan options. 
 24.4      Beneficiaries who elect to avail themselves of this service 
 24.5   are ultimately responsible for the timely payment of premiums 
 24.6   and the payment of premiums in the proper amount. 
 24.7      Sec. 10.  Minnesota Statutes 1994, section 422A.09, 
 24.8   subdivision 2, is amended to read: 
 24.9      Subd. 2.  The contributing class shall consist of all 
 24.10  employees not included in the exempt class, who become 
 24.11  prospective beneficiaries of the fund created by sections 
 24.12  422A.01 to 422A.25. 
 24.13     A member of the contributing class who is granted a leave 
 24.14  of absence without pay by the member's employer to serve as an 
 24.15  employee or agent of a labor union primarily representing 
 24.16  members of the contributing class may continue as a member of 
 24.17  the contributing class during the period of such leave of 
 24.18  absence by depositing each month with the fund the amount of the 
 24.19  contribution of the employee as required by sections 422A.01 to 
 24.20  422A.25 which amount shall be the normal employee contribution. 
 24.21     The contributions referred to in this subdivision shall be 
 24.22  based on the salary for the position or its equivalent held by 
 24.23  the member immediately prior to such leave of absence subject to 
 24.24  any adjustment thereof during the period of such leave. 
 24.25     Sec. 11.  [INITIAL ADJUSTMENT.] 
 24.26     Subdivision 1.  [LUMP-SUM POSTRETIREMENT ADJUSTMENT 
 24.27  TRANSITION.] For all annuitants and beneficiaries of the 
 24.28  association who previously received a lump-sum postretirement 
 24.29  adjustment, before calculation of the first postretirement 
 24.30  adjustment under sections 5 and 6, their annual retirement 
 24.31  annuity or benefit shall be permanently increased by the amount 
 24.32  of their previous lump-sum postretirement adjustment. 
 24.33     Subd. 2.  [ANNUITIZED POSTRETIREMENT ADJUSTMENT 
 24.34  TRANSITION.] For all annuitants and beneficiaries of the 
 24.35  association who chose to annuitize previous lump-sum 
 24.36  postretirement adjustments, before calculation of the first 
 25.1   postretirement adjustment under sections 5 and 6, their annual 
 25.2   retirement annuity or benefit shall include the benefits 
 25.3   supported by the accumulated annuitized value due to annuitizing 
 25.4   their previous lump-sum postretirement adjustments. 
 25.5      Sec. 12.  [DULUTH OLD PLAN BYLAWS; AUTHORITY GRANTED TO 
 25.6   INCREASE FORMULAS.] 
 25.7      In accordance with Minnesota Statutes, section 354A.12, 
 25.8   subdivision 4, approval is granted for the Duluth teachers 
 25.9   retirement fund association to amend its articles of 
 25.10  incorporation or bylaws by increasing the formula percentage 
 25.11  used in computing annuities for old law coordinated program 
 25.12  members in the Duluth teachers retirement fund association to 
 25.13  1.38 percent for each year of service. 
 25.14     Sec. 13.  [DULUTH OLD PLAN BYLAWS.] 
 25.15     In accordance with Minnesota Statutes, section 354A.12, 
 25.16  subdivision 4, the Duluth teachers retirement fund association 
 25.17  shall amend its articles of incorporation or bylaws to conform 
 25.18  to sections 2, 3, 4, 5, and 11. 
 25.19     Sec. 14.  [REPEALER.] 
 25.20     Minnesota Statutes 1994, section 354A.27, subdivisions 2, 
 25.21  3, and 4, are repealed. 
 25.22     Sec. 15.  [EFFECTIVE DATE.] 
 25.23     (a) Section 2 is effective on the first day of the first 
 25.24  payroll period beginning after July 1, 1995. 
 25.25     (b) Sections 3, 4, 5, 11, 13, and 14 are effective November 
 25.26  1, 1995. 
 25.27     (c) Sections 1, 6, 7, and 12 are effective May 15, 1995. 
 25.28     (d) Sections 9 and 10 are effective on the day following 
 25.29  final enactment. 
 25.30     (e) Section 8 is effective on the day following final 
 25.31  enactment. 
 25.32                             ARTICLE 3 
 25.33                PUBLIC SAFETY EMPLOYEE PENSION PLAN 
 25.34                 BENEFIT AND RELATED MODIFICATIONS 
 25.35     Section 1.  Minnesota Statutes 1994, section 352B.02, 
 25.36  subdivision 1a, is amended to read: 
 26.1      Subd. 1a.  [MEMBER CONTRIBUTIONS.] Each member shall pay a 
 26.2   sum equal to 8.5 8.92 percent of the member's salary, which 
 26.3   shall constitute the member contribution to the fund.  
 26.4      Sec. 2.  Minnesota Statutes 1994, section 352B.08, 
 26.5   subdivision 2, is amended to read: 
 26.6      Subd. 2.  [NORMAL RETIREMENT ANNUITY.] The annuity must be 
 26.7   paid in monthly installments.  The annuity shall be equal to the 
 26.8   amount determined by multiplying the average monthly salary of 
 26.9   the member by 2-1/2 2.65 percent for each year and pro rata for 
 26.10  completed months of service.  
 26.11     Sec. 3.  Minnesota Statutes 1994, section 352B.10, 
 26.12  subdivision 1, is amended to read: 
 26.13     Subdivision 1.  [INJURIES, PAYMENT AMOUNTS.] Any member who 
 26.14  becomes disabled and physically or mentally unfit to perform 
 26.15  duties as a direct result of an injury, sickness, or other 
 26.16  disability incurred in or arising out of any act of duty, shall 
 26.17  receive disability benefits while disabled.  The benefits must 
 26.18  be paid in monthly installments equal to the member's average 
 26.19  monthly salary multiplied by 50 53 percent, plus an additional 
 26.20  2-1/2 2.65 percent for each year and pro rata for completed 
 26.21  months of service in excess of 20 years, if any. 
 26.22     Sec. 4.  Minnesota Statutes 1994, section 353.651, 
 26.23  subdivision 4, is amended to read: 
 26.24     Subd. 4.  [EARLY RETIREMENT.] Any police officer or 
 26.25  firefighter member who has become at least 50 years old and who 
 26.26  has at least three years of allowable service is entitled upon 
 26.27  application to a retirement annuity equal to the normal annuity 
 26.28  calculated under subdivision 3, reduced so that the reduced 
 26.29  annuity is the actuarial equivalent of the annuity that would be 
 26.30  payable to the member if the member deferred receipt of the 
 26.31  annuity from the day the annuity begins to accrue until the 
 26.32  member attains age 55 by two-tenths of one percent for each 
 26.33  month that the member is under age 55 at the time of retirement. 
 26.34     Sec. 5.  Minnesota Statutes 1994, section 353A.083, is 
 26.35  amended to read: 
 26.36     353A.083 [PERA-P&F BENEFIT PLAN APPLICABLE TO PRE-1993 
 27.1   CONSOLIDATIONS.] 
 27.2      Subdivision 1.  [PRE-1993 CONSOLIDATIONS.] For any 
 27.3   consolidation account in effect on May 24, 1993, the public 
 27.4   employee police and fire fund benefit plan applicable to 
 27.5   consolidation account members who have elected or will elect 
 27.6   that benefit plan coverage under section 353A.08 is the pre-July 
 27.7   1, 1993, public employees police and fire fund benefit plan 
 27.8   unless the applicable municipality approves the extension of the 
 27.9   post-June 30, 1993, public employees police and fire fund 
 27.10  benefit plan to the consolidation account. 
 27.11     Subd. 2.  [PRE-1995 CONSOLIDATIONS.] For any consolidation 
 27.12  account in effect on July 1, 1995, the public employee police 
 27.13  and fire fund benefit plan applicable to consolidation account 
 27.14  members who have elected or will elect that benefit plan 
 27.15  coverage under section 353A.08 is the pre-July 1, 1995, public 
 27.16  employees police and fire fund benefit plan unless the 
 27.17  applicable municipality approves the extension of the post-June 
 27.18  30, 1995, public employees police and fire fund benefit plan to 
 27.19  the consolidation account. 
 27.20     Sec. 6.  Minnesota Statutes 1994, section 356.30, 
 27.21  subdivision 1, is amended to read: 
 27.22     Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 
 27.23  Notwithstanding any provisions to the contrary of the laws 
 27.24  governing the funds enumerated in subdivision 3, a person who 
 27.25  has met the qualifications of clause (2) may elect to receive a 
 27.26  retirement annuity from each fund in which the person has at 
 27.27  least six months allowable service, based on the allowable 
 27.28  service in each fund, subject to the provisions of clause (3).  
 27.29     (2) A person may receive upon retirement a retirement 
 27.30  annuity from each fund in which the person has at least six 
 27.31  months allowable service, and augmentation of a deferred annuity 
 27.32  calculated under the laws governing each public pension plan or 
 27.33  fund named in subdivision 3, from the date the person terminated 
 27.34  all public service if: 
 27.35     (a) the person has allowable service totaling an amount 
 27.36  that allows the person to receive an annuity in any two or more 
 28.1   of the enumerated funds; and 
 28.2      (b) the person has not begun to receive an annuity from any 
 28.3   enumerated fund or the person has made application for benefits 
 28.4   from all funds and the effective dates of the retirement annuity 
 28.5   with each fund under which the person chooses to receive an 
 28.6   annuity are within a one-year period.  
 28.7      (3) The retirement annuity from each fund must be based 
 28.8   upon the allowable service in each fund, except that:  
 28.9      (a) The laws governing annuities must be the law in effect 
 28.10  on the date of termination from the last period of public 
 28.11  service under a covered fund with which the person earned a 
 28.12  minimum of one-half year of allowable service credit during that 
 28.13  employment.  
 28.14     (b) The "average salary" on which the annuity from each 
 28.15  covered fund in which the employee has credit in a formula plan 
 28.16  shall be based on the employee's highest five successive years 
 28.17  of covered salary during the entire service in covered funds.  
 28.18     (c) The formula percentages to be used by each fund must be 
 28.19  those percentages prescribed by each fund's formula as continued 
 28.20  for the respective years of allowable service from one fund to 
 28.21  the next, recognizing all previous allowable service with the 
 28.22  other covered funds.  
 28.23     (d) Allowable service in all the funds must be combined in 
 28.24  determining eligibility for and the application of each fund's 
 28.25  provisions in respect to actuarial reduction in the annuity 
 28.26  amount for retirement prior to normal retirement.  
 28.27     (e) The annuity amount payable for any allowable service 
 28.28  under a nonformula plan of a covered fund must not be affected 
 28.29  but such service and covered salary must be used in the above 
 28.30  calculation.  
 28.31     (f) This section shall not apply to any person whose final 
 28.32  termination from the last public service under a covered fund is 
 28.33  prior to May 1, 1975.  
 28.34     (g) For the purpose of computing annuities under this 
 28.35  section the formula percentages used by any covered fund, except 
 28.36  the public employees police and fire fund and the state patrol 
 29.1   retirement fund, must not exceed 2-1/2 percent per year of 
 29.2   service for any year of service or fraction thereof.  The 
 29.3   formula percentage used by the public employees police and fire 
 29.4   fund and the state patrol retirement fund must not exceed 2.65 
 29.5   percent per year of service for any year of service or fraction 
 29.6   thereof.  
 29.7      (h) Any period of time for which a person has credit in 
 29.8   more than one of the covered funds must be used only once for 
 29.9   the purpose of determining total allowable service.  
 29.10     (i) If the period of duplicated service credit is more than 
 29.11  six months, or the person has credit for more than six months 
 29.12  with each of the funds, each fund shall apply its formula to a 
 29.13  prorated service credit for the period of duplicated service 
 29.14  based on a fraction of the salary on which deductions were paid 
 29.15  to that fund for the period divided by the total salary on which 
 29.16  deductions were paid to all funds for the period.  
 29.17     (j) If the period of duplicated service credit is less than 
 29.18  six months, or when added to other service credit with that fund 
 29.19  is less than six months, the service credit must be ignored and 
 29.20  a refund of contributions made to the person in accord with that 
 29.21  fund's refund provisions.  
 29.22     Sec. 7.  Laws 1994, chapter 499, section 2, is amended to 
 29.23  read: 
 29.24     Sec. 2.  [EFFECTIVE DATE.] 
 29.25     Section 1 is effective on the first of the month next 
 29.26  following: 
 29.27     (1) receipt of an affirmative written determination from 
 29.28  the Secretary of the federal Department of Health and Human 
 29.29  Services Social Security Administration of ineligibility for 
 29.30  coverage under the federal old age, survivors, and disability 
 29.31  insurance; and 
 29.32     (2) approval by the Hennepin county board and compliance 
 29.33  with Minnesota Statutes, section 645.021, subdivisions 2 and 3, 
 29.34  except that, for section 1 to be deemed approved, a certificate 
 29.35  of approval must be filed within the year following receipt of 
 29.36  the written affirmative determination from the Social Security 
 30.1   Administration, or before January 1, 1998, whichever is earlier. 
 30.2      Sec. 8.  [REPEALER; WILLMAR VOLUNTEER FIRE DISABILITY 
 30.3   PROVISION.] 
 30.4      Laws 1971, chapter 127, section 1, as amended by Laws 1979, 
 30.5   chapter 201, section 28, is repealed. 
 30.6      Sec. 9.  [EFFECTIVE DATE.] 
 30.7      (a) Section 1 is effective on the first day of the first 
 30.8   full pay period occurring after July 1, 1995. 
 30.9      (b) Sections 2, 3, and 6 are effective on July 1, 1995. 
 30.10     (c) Section 7 is effective on the day following final 
 30.11  enactment. 
 30.12     (d) Sections 4 and 5 are effective on July 1, 1996. 
 30.13     (e) Section 8 is effective on the day following approval by 
 30.14  the city council of the city of Willmar and compliance with 
 30.15  Minnesota Statutes, section 645.021. 
 30.16                             ARTICLE 4 
 30.17            ADDITIONAL POLICE AND FIRE AMORTIZATION AID 
 30.18     Section 1.  Minnesota Statutes 1994, section 353.65, 
 30.19  subdivision 7, is amended to read: 
 30.20     Subd. 7.  [EXCESS CONTRIBUTIONS HOLDING ACCOUNT.] (a) The 
 30.21  excess contributions holding account is established in the 
 30.22  public employees retirement association.  Excess contributions 
 30.23  established by section 69.031, subdivision 5, paragraphs (2), 
 30.24  clauses (b) and (c), and (3) must be deposited in the account.  
 30.25  These contributions and all investment earnings associated with 
 30.26  them must be regularly transferred as provided in paragraph (b). 
 30.27     (b) From the amount of the excess contributions and 
 30.28  associated investment earnings: 
 30.29     (1) $1,000,000 must be transferred annually to the 
 30.30  ambulance service personnel longevity award and incentive 
 30.31  suspense account established by section 144C.03, subdivision 2; 
 30.32  and 
 30.33     (2) any remaining balance, after deduction of the 
 30.34  additional amortization aid allocation, if any, under paragraph 
 30.35  (d), must be transferred to the general fund. 
 30.36     (c) If a law is enacted creating a police officer stress 
 31.1   reduction program, and money is appropriated for the program, an 
 31.2   amount equal to the appropriation must be transferred from the 
 31.3   excess contributions holding account to the stress reduction 
 31.4   program before money is transferred to the general fund 
 31.5   allocated under paragraph (b), clause (2). 
 31.6      (d) On October 1, 1997, and annually on each October 1 
 31.7   thereafter, one-half of the money in the excess contributions 
 31.8   holding account under paragraph (b), clause (2), collected 
 31.9   during the immediately preceding July 1 through June 30 period 
 31.10  must be allocated by the commissioner of revenue to all local 
 31.11  police or salaried firefighter relief associations governed by 
 31.12  and in full compliance with section 69.77 that had an unfunded 
 31.13  actuarial accrued liability in the actuarial valuation prepared 
 31.14  under sections 356.215 and 356.216 as of the preceding December 
 31.15  31, and to all local police or salaried firefighter 
 31.16  consolidation accounts governed by chapter 353A that are 
 31.17  certified by the executive director of the public employees 
 31.18  retirement association as having for the current fiscal year an 
 31.19  additional municipal contribution amount under section 353A.09, 
 31.20  subdivision 5, paragraph (b), and that have implemented 
 31.21  Minnesota Statutes 1994, section 353A.083, if the effective date 
 31.22  of the consolidation preceded May 24, 1993, and that have 
 31.23  implemented section 5, if the effective date of the 
 31.24  consolidation preceded the date of enactment, on the basis of 
 31.25  the relief association or consolidation account's proportional 
 31.26  share of the total unfunded actuarial accrued liability of all 
 31.27  recipient relief associations and consolidation accounts as of 
 31.28  December 31, 1993, or June 30, 1994, whichever applies. 
 31.29     Sec. 2.  [EFFECTIVE DATE.] 
 31.30     Section 1 is effective on the day following enactment. 
 31.31                             ARTICLE 5 
 31.32              HIGHER EDUCATION SYSTEM EARLY RETIREMENT 
 31.33          EMPLOYER-PAID HEALTH INSURANCE PREMIUM INCENTIVE 
 31.34     Section 1.  [STATE COLLEGE AND UNIVERSITY EARLY RETIREMENT 
 31.35  INCENTIVES.] 
 31.36     Subdivision 1.  [INTENT.] To avoid the disruptive effects 
 32.1   of employee layoffs due to campus consolidations, mergers, and 
 32.2   budget reductions resulting in downsizing within the Minnesota 
 32.3   state colleges and universities and the higher education 
 32.4   coordinating board, an employer-funded early retirement 
 32.5   incentive is made available in this section to employees of the 
 32.6   state universities, community colleges, technical colleges, the 
 32.7   existing system central offices, and the higher education 
 32.8   coordinating board. 
 32.9      Subd. 2.  [EMPLOYER PARTICIPATION.] The early retirement 
 32.10  incentives provided in this section may be offered to eligible 
 32.11  employees in the state university, community college, technical 
 32.12  college systems, the higher education board, and the higher 
 32.13  education coordinating board.  The incentives apply to personnel 
 32.14  in any state university, community college, or technical college 
 32.15  department being downsized or where a reduction in force has 
 32.16  been declared by the president of the institution.  In the case 
 32.17  of personnel in the chancellor's office, a reduction in force 
 32.18  must be declared by the chancellor or the chancellor's designee 
 32.19  or the executive director of the higher education coordinating 
 32.20  board.  Positions that are not assigned to a specific department 
 32.21  or support positions that are assigned campus-wide or to a 
 32.22  specific department are considered to be campus-wide in 
 32.23  jurisdiction and eligible for this incentive as part of the 
 32.24  reduction-in-force declaration. 
 32.25     Subd. 3.  [ELIGIBILITY.] A person identified in subdivision 
 32.26  2 is eligible to receive the incentives if the person:  
 32.27     (1) has at least 15 years of combined service credit in any 
 32.28  Minnesota public pension plans governed by Minnesota Statutes, 
 32.29  section 356.30, subdivision 3, and the plan governed by 
 32.30  Minnesota Statutes, chapter 354B; 
 32.31     (2) upon retirement is immediately eligible for a 
 32.32  retirement annuity from a defined benefit plan if the person is 
 32.33  a member of a defined benefit plan; 
 32.34     (3) is at least 55 years of age; and 
 32.35     (4) either retires before January 31, 1996, or, for a 
 32.36  person who first becomes eligible for this incentive between 
 33.1   January 31, 1996, and December 31, 1996, retires before January 
 33.2   31, 1997.  
 33.3      Subd. 4.  [INCENTIVE.] Persons who retire under this 
 33.4   section are eligible to receive employer-paid hospital, medical, 
 33.5   and dental insurance, subject to the conditions in subdivision 5 
 33.6   and at the level and under conditions existing at the time of 
 33.7   retirement. 
 33.8      Subd. 5.  [LIMITS ON REHIRING.] Persons retiring under the 
 33.9   provisions of this section may not be reemployed by the state or 
 33.10  hired under a professional technical contract in any capacity 
 33.11  except: 
 33.12     (1) under conditions of a stated emergency, and then only 
 33.13  if the rehire or contract is approved by the higher education 
 33.14  board or the higher education coordinating board under 
 33.15  procedures adopted by the boards; and 
 33.16     (2) if rehired as adjunct faculty as defined in the 
 33.17  appropriate bargaining agreement, or, if rehired by another 
 33.18  executive branch agency of state government, if the retired 
 33.19  employee works only on a seasonal, temporary, or intermittent 
 33.20  basis as defined in Minnesota Statutes, section 43A.02, 
 33.21  subdivision 23, or 179A.03, subdivision 14, clause (f), for no 
 33.22  more than 1,044 hours in any consecutive 12-month period.  
 33.23     Subd. 6.  [CONDITIONS; INSURANCE COVERAGE.] (a) A retired 
 33.24  employee is eligible for single and dependent insurance 
 33.25  coverages and employer payments to which the person was entitled 
 33.26  immediately before retirement, subject to any changes in 
 33.27  coverage and employer and employee payments through collective 
 33.28  bargaining or personnel plans for employees in positions 
 33.29  equivalent to the position from which the employee retired.  The 
 33.30  retired employee is not eligible for employer-paid life 
 33.31  insurance.  Eligibility ceases when the retired employee reaches 
 33.32  age 65, when the person chooses not to receive the retirement 
 33.33  benefits for which the person has applied, or when the person is 
 33.34  eligible for employer-paid health insurance from a new 
 33.35  employer.  Coverages must be coordinated with relevant health 
 33.36  insurance benefits provided through the federally sponsored 
 34.1   Medicare program.  
 34.2      (b) If an employing unit referenced in subdivision 1 offers 
 34.3   the incentive under this section and is subsequently eliminated 
 34.4   or reorganized, the successor organization, if any, is obligated 
 34.5   to pay the insurance premium incentive. 
 34.6      Subd. 7.  [APPLICATION OF OTHER LAWS.] Unilateral 
 34.7   implementation of this section by a public employer is not an 
 34.8   unfair labor practice for the purposes of Minnesota Statutes, 
 34.9   chapter 179A.  The requirement in this section for an employer 
 34.10  to pay health insurance costs for certain retired employees is 
 34.11  not subject to the limits in Minnesota Statutes, section 
 34.12  179A.20, subdivision 2a.  
 34.13     Sec. 2.  [NOTIFICATION OF SUBSEQUENT HEALTH COVERAGE: 
 34.14  PENALTY FOR NOTIFICATION FAILURE.] 
 34.15     (a) An employee who accepts the early retirement incentive 
 34.16  benefit under section 1 agrees as a condition of receipt of the 
 34.17  incentive to notify the higher education board or the higher 
 34.18  education coordinating board within 30 days of the event that 
 34.19  the person is eligible for employer-paid health insurance from 
 34.20  subsequent employment. 
 34.21     (b) Failure to make the notification required in paragraph 
 34.22  (a) obligates the person to reimburse the higher education board 
 34.23  or the higher education coordinating board for any insurance 
 34.24  premiums that it paid since the person became eligible for the 
 34.25  subsequent employment health insurance coverage. 
 34.26     Sec. 3.  [EFFECTIVE DATE.] 
 34.27     Sections 1 and 2 are effective on the day following final 
 34.28  enactment. 
 34.29                             ARTICLE 6 
 34.30         PUBLIC PENSION PLAN COLLATERALIZATION REQUIREMENT 
 34.31                 AND INVESTMENT AUTHORITY STATEMENT 
 34.32     Section 1.  Minnesota Statutes 1994, section 356A.06, is 
 34.33  amended by adding a subdivision to read: 
 34.34     Subd. 8a.  [COLLATERALIZATION REQUIREMENT.] (a) The 
 34.35  governing board of a covered pension plan shall designate a 
 34.36  national bank, an insured state bank, an insured credit union, 
 35.1   or an insured thrift institution as the depository for the 
 35.2   pension plan for assets not held by the pension plan's custodian 
 35.3   bank. 
 35.4      (b) Unless collateralized as provided under paragraph (c), 
 35.5   a covered pension plan may not deposit in a designated 
 35.6   depository an amount in excess of the insurance held by the 
 35.7   depository in the federal deposit insurance corporation, the 
 35.8   federal savings and loan insurance corporation, or the national 
 35.9   credit union administration, whichever applies. 
 35.10     (c) For an amount greater than the insurance under 
 35.11  paragraph (b), the depository must provide collateral in 
 35.12  compliance with section 118.01 or with any comparable successor 
 35.13  enactment relating to the collateralization of municipal 
 35.14  deposits. 
 35.15     Sec. 2.  Minnesota Statutes 1994, section 356A.06, is 
 35.16  amended by adding a subdivision to read: 
 35.17     Subd. 8b.  [DISCLOSURE OF INVESTMENT AUTHORITY; RECEIPT OF 
 35.18  STATEMENT.] (a) For this subdivision, the term "broker" means a 
 35.19  broker, broker-dealer, investment advisor, investment manager, 
 35.20  or third party agent who transfers, purchases, sells, or obtains 
 35.21  investment securities for, or on behalf of, a covered pension 
 35.22  plan. 
 35.23     (b) Before a covered pension plan may complete an 
 35.24  investment transaction with or in accord with the advice of a 
 35.25  broker, the covered pension plan shall provide annually to the 
 35.26  broker a written statement of investment restrictions applicable 
 35.27  under state law to the covered pension plan or applicable under 
 35.28  the pension plan governing board investment policy. 
 35.29     (c) A broker must acknowledge in writing annually the 
 35.30  receipt of the statement of investment restrictions and must 
 35.31  agree to handle the covered pension plan's investments and 
 35.32  assets in accord with the provided investment restrictions.  A 
 35.33  covered pension plan may not enter into or continue a business 
 35.34  arrangement with a broker until the broker has provided this 
 35.35  written acknowledgment to the chief administrative officer of 
 35.36  the covered pension plan.  
 36.1      Sec. 3.  [EFFECTIVE DATE.] 
 36.2      Sections 1 and 2 are effective January 1, 1996. 
 36.3                              ARTICLE 7
 36.4                       MEDICAL CENTER EMPLOYEES
 36.5      Section 1.  [EMPLOYEES.] 
 36.6      This section applies if the Itasca county medical center is 
 36.7   sold, leased, or transferred to a private entity.  
 36.8   Notwithstanding any provision of Minnesota Statutes, sections 
 36.9   356.24 and 356.25 to the contrary, to facilitate the orderly 
 36.10  transition of employees affected by the sale, lease, or 
 36.11  transfer, the county may, in its discretion, make, from assets 
 36.12  to be transferred to the private entity, payments to a qualified 
 36.13  pension plan established for the transferred employees by the 
 36.14  private entity, to provide benefits substantially similar to 
 36.15  those the employees would have been entitled to under the 
 36.16  provisions of the public employees retirement association, 
 36.17  Minnesota Statutes 1994, sections 353.01 to 353.46. 
 36.18                             ARTICLE 8
 36.19                   LEGISLATORS' SURVIVOR BENEFITS
 36.20     Section 1.  Minnesota Statutes 1994, section 3A.02, 
 36.21  subdivision 5, is amended to read: 
 36.22     Subd. 5.  [OPTIONAL ANNUITIES.] (a) The board of directors 
 36.23  shall establish an optional retirement annuity in the form of a 
 36.24  joint and survivor annuity and an optional retirement annuity in 
 36.25  the form of a period certain and life thereafter.  Except as 
 36.26  provided in paragraph (b), these optional annuity forms must be 
 36.27  actuarially equivalent to the normal annuity computed under this 
 36.28  section, plus the actuarial value of any surviving spouse 
 36.29  benefit otherwise potentially payable at the time of retirement 
 36.30  under section 3A.04, subdivision 1.  An individual selecting the 
 36.31  an optional annuity under this subdivision waives any rights to 
 36.32  surviving spouse benefits under section 3A.04, subdivision 1. 
 36.33     (b) If a retired legislator selects the joint and survivor 
 36.34  annuity option, the retired legislator must receive a normal 
 36.35  single-life annuity if the designated optional annuity 
 36.36  beneficiary dies before the retired legislator and no reduction 
 37.1   may be made in the annuity to provide for restoration of the 
 37.2   normal single-life annuity in the event of the death of the 
 37.3   designated optional annuity beneficiary. 
 37.4      (c) The surviving spouse of a legislator who has attained 
 37.5   at least age 60 and who dies while a member of the legislature 
 37.6   may elect an optional joint and survivor annuity under paragraph 
 37.7   (a), in lieu of surviving spouse benefits under section 3A.04, 
 37.8   subdivision 1. 
 37.9      Sec. 2.  [EFFECTIVE DATE.] 
 37.10     Section 1 is effective the day following final enactment. 
 37.11                             ARTICLE 9
 37.12                  VOLUNTEER FIREFIGHTER REPORTING
 37.13     Section 1.  Minnesota Statutes 1994, section 356.219, 
 37.14  subdivision 2, is amended to read: 
 37.15     Subd. 2.  [CONTENT AND TIMING OF REPORTS.] (a) The 
 37.16  following information shall be included in the report required 
 37.17  by subdivision 1: 
 37.18     (1) the market value of all investments at the close of the 
 37.19  reporting period; 
 37.20     (2) regular payroll-based contributions to the fund; 
 37.21     (3) other contributions and revenue paid into the fund, 
 37.22  including, but not limited to, state or local non-payroll-based 
 37.23  contributions, repaid refunds, and buybacks; 
 37.24     (4) total benefits paid to members; 
 37.25     (5) fees paid for investment management services; 
 37.26     (6) salaries and other administrative expenses paid; and 
 37.27     (7) total return on investment. 
 37.28     The report must also include a written statement of the 
 37.29  investment policy in effect on June 30, 1988, and any investment 
 37.30  policy changes made subsequently and shall include the effective 
 37.31  date of each policy change.  The information required under this 
 37.32  subdivision must be reported separately for each investment 
 37.33  account or investment portfolio included in the pension fund. 
 37.34     (b) For public pension plans other than volunteer 
 37.35  firefighters' relief associations governed by sections 69.77 or 
 37.36  69.771 to 69.775, the information specified in paragraph (a) 
 38.1   must be provided separately for each quarter for the fiscal 
 38.2   years of the pension fund ending during calendar years 1989 
 38.3   through 1991 and on a monthly basis thereafter.  For volunteer 
 38.4   firefighters' relief associations governed by sections 69.77 or 
 38.5   69.771 to 69.775, the information specified in paragraph (a) 
 38.6   must be provided separately each quarter. 
 38.7      (c) Firefighters' relief associations that have assets with 
 38.8   a market value of less than $300,000 must begin collecting the 
 38.9   required information January 1, 1996, and must submit the 
 38.10  required information to the state auditor on or before October 
 38.11  1, 1995 1997, and subsequently within six months of the end of 
 38.12  each fiscal year.  Other associations must submit the required 
 38.13  information through fiscal year 1993 to the state auditor on or 
 38.14  before October 1, 1994, and subsequently within six months of 
 38.15  the end of each fiscal year. 
 38.16                             ARTICLE 10
 38.17                  LOCAL PENSION PLAN MODIFICATIONS 
 38.18     Section 1.  [EVELETH POLICE AND FIREFIGHTERS; BENEFIT 
 38.19  INCREASE.] 
 38.20     Notwithstanding any general or special law to the contrary, 
 38.21  in addition to the current pensions and other retirement 
 38.22  benefits payable, the pensions and retirement benefits payable 
 38.23  to retired police officers and firefighters and their surviving 
 38.24  spouses by the Eveleth police and fire trust fund are increased 
 38.25  by $100 a month.  Increases are retroactive to January 1, 1995.  
 38.26  If the city of Eveleth fails to contribute an amount required in 
 38.27  a given year sufficient to amortize the unfunded actuarial 
 38.28  accrued liability of the police and fire trust fund by December 
 38.29  31, 1998, the increases under this section in the following year 
 38.30  are not payable. 
 38.31     Sec. 2.  [DULUTH TEACHERS RETIREMENT FUND ASSOCIATION; 
 38.32  SPECIAL SERVICE PURCHASE AUTHORIZATION FOR CERTAIN FORMER DULUTH 
 38.33  TECHNICAL COLLEGE TEACHERS.] 
 38.34     (a) A retired member of the Duluth teachers retirement fund 
 38.35  association who: 
 38.36     (1) was born on April 29, 1932; 
 39.1      (2) was initially employed by independent school district 
 39.2   No. 709 on September 8, 1970; 
 39.3      (3) terminated employment as a teacher at the Duluth 
 39.4   technical college on July 1, 1994; 
 39.5      (4) retired from the Duluth teachers retirement fund 
 39.6   association effective on July 15, 1994; and 
 39.7      (5) did not receive certification of eligibility for an 
 39.8   early separation incentive from the chancellor of the higher 
 39.9   education board in a timely fashion, but did eventually receive 
 39.10  the required certification on October 24, 1994; 
 39.11  may purchase two years of additional service credit from the 
 39.12  Duluth teachers retirement fund association as provided in Laws 
 39.13  1994, chapter 572, section 3, subdivision 3, paragraph (e), 
 39.14  clause (2), item (i), as though otherwise qualified, to have the 
 39.15  person's retirement annuity from the Duluth teachers retirement 
 39.16  fund association recomputed based on the additional service 
 39.17  credit, and to have any medical insurance premiums that the 
 39.18  person paid subsequent to retirement reimbursed by the Duluth 
 39.19  technical college on the basis of the provisions of Laws 1994, 
 39.20  chapter 572, section 3, subdivision 3, paragraph (e), clause (1).
 39.21     (b) The purchase of additional service credit must be made 
 39.22  before July 1, 1995. 
 39.23     (c) The recomputed retirement annuity must be based on any 
 39.24  optional annuity form selected upon retirement and must be 
 39.25  subject to the early retirement reduction imposed upon 
 39.26  retirement.  The recomputed annuity accrues as of the effective 
 39.27  date of retirement and any omitted retirement annuity amounts 
 39.28  from the date of retirement to the date of recomputation must be 
 39.29  paid in a lump sum as soon as practicable following the 
 39.30  recomputation and must include annual interest on the omitted 
 39.31  amounts at the rate of six percent, expressed as a monthly rate, 
 39.32  and compounded monthly. 
 39.33     (d) If the retired member seeks reimbursement for medical 
 39.34  insurance premiums, the retired member must furnish the 
 39.35  president of the Duluth technical college with reasonable 
 39.36  verification of medical insurance coverage and of prior medical 
 40.1   insurance premiums paid. 
 40.2      Sec. 3.  [MINNEAPOLIS EMPLOYEES RETIREMENT FUND; TEMPORARY 
 40.3   OPTION.] 
 40.4      Notwithstanding any law to the contrary, a retired member 
 40.5   of the Minneapolis employees retirement fund who elected a joint 
 40.6   and survivor optional annuity form at the time of retirement and 
 40.7   who has a living designated optional annuity recipient may 
 40.8   select a substitute joint and survivor option under which the 
 40.9   retired member will receive a normal single-life annuity if the 
 40.10  previously designated recipient dies before the retired member.  
 40.11  This substitute optional annuity must be the actuarial 
 40.12  equivalent of the joint and survivor annuity option amount in 
 40.13  effect at the time this option substitution is selected, as 
 40.14  determined by an actuary selected by the legislative commission 
 40.15  on pensions and retirement.  This option must be exercised 
 40.16  before July 1, 1996, according to procedures specified by the 
 40.17  board of the Minneapolis employees retirement fund. 
 40.18     Sec. 4.  [WEST ST. PAUL POLICE CONSOLIDATION ACCOUNT; 
 40.19  CERTAIN SURVIVING SPOUSE BENEFITS.] 
 40.20     (a) Notwithstanding Minnesota Statutes, section 353A.08, 
 40.21  the surviving spouse of a person described in paragraph (b) is 
 40.22  entitled to receive survivor benefits provided under paragraph 
 40.23  (c). 
 40.24     (b) This section applies to the surviving spouse of a 
 40.25  person who was: 
 40.26     (1) employed as a police chief by the city of West St. 
 40.27  Paul; 
 40.28     (2) an active member of the West St. Paul police relief 
 40.29  association on February 8, 1993, when the governing body of West 
 40.30  St. Paul, in accordance with Minnesota Statutes, section 
 40.31  353A.04, subdivision 5, gave preliminary approval to the 
 40.32  consolidation of the association with the public employees 
 40.33  retirement association; 
 40.34     (3) whose intention, upon consolidation, to elect benefits 
 40.35  provided under the relevant provisions of the public employees 
 40.36  retirement association police and fire fund benefit plan was 
 41.1   recognized by the governing body of West St. Paul in a 
 41.2   resolution adopted March 16, 1994; 
 41.3      (4) who died in April 1993, before the governing body of 
 41.4   West St. Paul, on August 23, 1993, gave final approval to the 
 41.5   consolidation in accordance with Minnesota Statutes, section 
 41.6   353A.04, subdivision 8; and 
 41.7      (5) who was thus unable, before his death, to carry out his 
 41.8   intent to elect public employees retirement association benefits 
 41.9   under Minnesota Statutes, section 353A.08. 
 41.10     (c) As of the effective date of this section, benefits for 
 41.11  the surviving spouse identified in paragraph (b) computed under 
 41.12  provisions of the West St. Paul police relief association plan 
 41.13  terminate and survivor benefits computed under relevant 
 41.14  provisions of the public employees retirement association police 
 41.15  and fire plan commence.  The relevant provisions of the public 
 41.16  employees retirement association police and fire plan are 
 41.17  survivor benefits computed under section 353.657, assuming the 
 41.18  deceased police officer was covered by that plan at the time of 
 41.19  death.  The benefit will include adjustments, if any, under 
 41.20  section 353.271.  Retroactive payment of benefits is not 
 41.21  authorized. 
 41.22     Sec. 5.  [EDEN PRAIRIE VOLUNTEER FIREFIGHTERS RELIEF 
 41.23  ASSOCIATION SERVICE PENSIONS.] 
 41.24     Subdivision 1.  [SERVICE PENSION VESTING REQUIREMENT.] (a) 
 41.25  Notwithstanding any provision of Minnesota Statutes, section 
 41.26  424A.02, subdivision 2, to the contrary, if the bylaws of the 
 41.27  relief association so provide, the Eden Prairie volunteer 
 41.28  firefighters relief association may pay an unreduced service 
 41.29  pension to a member of the association who has terminated active 
 41.30  service as a firefighter in the Eden Prairie fire department, 
 41.31  who has at least ten years of service as an active firefighter 
 41.32  in good standing with the department and at least ten years of 
 41.33  membership in good standing in the association, and who meets 
 41.34  all other applicable eligibility requirements of the association 
 41.35  for entitlement to a service pension.  
 41.36     (b) Notwithstanding any provision of Minnesota Statutes, 
 42.1   section 424A.02, subdivision 2, to the contrary, if the bylaws 
 42.2   of the association so provide, the association may pay a reduced 
 42.3   service pension to a member of the association who has 
 42.4   terminated active service as a firefighter in the department, 
 42.5   who has at least five years of service but less than ten years 
 42.6   of service as an active firefighter in good standing with the 
 42.7   department and at least five years but less than ten years as a 
 42.8   member in good standing in the association, and who meets all 
 42.9   other applicable eligibility requirements of the association for 
 42.10  entitlement to a service pension.  The amount of the reduced 
 42.11  service pension is the amount determined by multiplying the 
 42.12  total service pension amount as specified in the articles of 
 42.13  incorporation or bylaws of the association that is appropriate 
 42.14  for the number of completed years of service to the credit of 
 42.15  the retiring member by the applicable percentage, as follows: 
 42.16    Completed years of service            Applicable percentage 
 42.17               5                              40 percent
 42.18               6                              52 percent
 42.19               7                              64 percent
 42.20               8                              76 percent
 42.21               9                              88 percent
 42.22              10 and thereafter              100 percent.
 42.23     Subd. 2.  [POSTRETIREMENT SERVICE PENSION ADJUSTMENTS FOR 
 42.24  DEFERRED RETIREES.] (a) A "deferred retiree" is a former Eden 
 42.25  Prairie volunteer firefighter who has completed at least five 
 42.26  years of service as a firefighter in good standing with the Eden 
 42.27  Prairie volunteer fire department and five years as a member in 
 42.28  good standing in the Eden Prairie volunteer firefighters relief 
 42.29  association and has separated from active service as a 
 42.30  firefighter before attaining the earliest age for immediate 
 42.31  receipt of service pension from the association as provided in 
 42.32  the articles of incorporation or the bylaws of the association. 
 42.33     (b) Notwithstanding any provision of Minnesota Statutes, 
 42.34  section 424A.02 to the contrary, if the articles of 
 42.35  incorporation or bylaws of the association so provide, and if 
 42.36  the Eden Prairie city council approves the deferred service 
 43.1   pension increase under Minnesota Statutes, sections 69.773, 
 43.2   subdivision 6, and 424A.02, subdivision 10, a deferred retiree 
 43.3   who has credit for at least 15 years of active service with the 
 43.4   department and who has not elected to receive a lump sum service 
 43.5   pension as an alternative to a monthly service pension, may 
 43.6   receive the same postretirement increase in the amount of that 
 43.7   deferred monthly service pension that is approved and is payable 
 43.8   to an association service pension recipient under Minnesota 
 43.9   Statutes, section 424A.02, subdivision 9a. 
 43.10     (c) A deferred retiree who has credit for less than 15 
 43.11  years of active service with the department is not eligible for 
 43.12  a postretirement increase. 
 43.13     Sec. 6.  [RETURNING ANNUITANT.] 
 43.14     (a) Notwithstanding any provision of Minnesota Statutes, 
 43.15  section 353.37 to the contrary, an eligible person described in 
 43.16  paragraph (b) will be treated as specified in paragraph (c). 
 43.17     (b) An eligible person is a person who: 
 43.18     (1) was born on December 9, 1936; 
 43.19     (2) terminated from the Carlton county human services 
 43.20  department as a financial eligibility specialist and retired 
 43.21  from the public employees retirement association on April 1, 
 43.22  1992; and 
 43.23     (3) returned to Carlton county employment as a financial 
 43.24  worker. 
 43.25     (c) As of the effective date of this section, annuity 
 43.26  payments from the public employees retirement association 
 43.27  terminate for an eligible person described in paragraph (b).  As 
 43.28  of that date the person is considered to have elected a deferred 
 43.29  annuity under Minnesota Statutes, section 353.34, subdivision 3, 
 43.30  with deferred annuity payments to commence upon the termination 
 43.31  of the person's present employment.  During the person's present 
 43.32  employment, the person is entitled to participation in the 
 43.33  public employees unclassified plan, and the person and the 
 43.34  county shall make the contributions required under Minnesota 
 43.35  Statutes, section 353D.03, paragraph (a). 
 43.36     Sec. 7.  [REPEALER.] 
 44.1      Minnesota Statutes 1994, section 423B.02, is repealed 
 44.2   effective March 1, 1995. 
 44.3      Sec. 8.  [EFFECTIVE DATE.] 
 44.4      (a) Section 1 is effective on approval by the Eveleth city 
 44.5   council and compliance with Minnesota Statutes, section 645.021. 
 44.6      (b) Section 2 is effective on the day following approval by 
 44.7   the board of education of independent school district No. 709 
 44.8   and compliance with Minnesota Statutes, section 645.021. 
 44.9      (c) Section 3 is effective on approval by the Minneapolis 
 44.10  city council and compliance with Minnesota Statutes, section 
 44.11  645.021. 
 44.12     (d) Section 4 is effective on the day following approval by 
 44.13  the governing body of the city of West St. Paul and compliance 
 44.14  with Minnesota Statutes, section 645.021, subdivision 2. 
 44.15     (e) Section 5 is effective on the day following compliance 
 44.16  with Minnesota Statutes, section 69.773, subdivision 6, approval 
 44.17  by the Eden Prairie city council, and compliance with Minnesota 
 44.18  Statutes, section 645.021, subdivision 3. 
 44.19     (f) Section 6 is effective on the day following approval by 
 44.20  the Carlton county board and compliance with Minnesota Statutes, 
 44.21  section 645.021. 
 44.22                             ARTICLE 11
 44.23               CRYSTAL-NEW HOPE VOLUNTEER FIREFIGHTER 
 44.24                  RELIEF ASSOCIATION CONSOLIDATION 
 44.25     Section 1.  [CONSOLIDATED CRYSTAL-NEW HOPE VOLUNTEER 
 44.26  FIREFIGHTERS RELIEF ASSOCIATION; CREATION.] 
 44.27     Notwithstanding any provision of law to the contrary, if 
 44.28  the cities of Crystal and New Hope enter into a joint powers 
 44.29  agreement under Minnesota Statutes, section 471.59, to establish 
 44.30  and operate a joint powers fire department, the Crystal 
 44.31  volunteer firefighters relief association and the New Hope 
 44.32  volunteer firefighters relief association shall consolidate into 
 44.33  a single volunteer firefighters relief association.  The 
 44.34  consolidated volunteer firefighters relief association must be 
 44.35  governed by sections 1 to 7 and the applicable provisions of 
 44.36  Minnesota Statutes, chapters 69, 356, 356A, and 424A. 
 45.1      Sec. 2.  [CONSOLIDATED VOLUNTEER FIREFIGHTERS RELIEF 
 45.2   ASSOCIATION.] 
 45.3      Subdivision 1.  [ESTABLISHMENT.] The consolidated volunteer 
 45.4   firefighters relief association for the joint powers fire 
 45.5   department serving the cities of Crystal and New Hope must be 
 45.6   incorporated under Minnesota Statutes, chapter 317A.  The 
 45.7   incorporators of the consolidated relief association must 
 45.8   include at least one board member of the Crystal volunteer 
 45.9   firefighters relief association and at least one board member of 
 45.10  the former New Hope volunteer firefighters relief association.  
 45.11  The consolidated relief association must be incorporated within 
 45.12  90 days of the establishment of the joint powers fire 
 45.13  department.  The joint powers fire department is established on 
 45.14  the date specified in the joint powers agreement. 
 45.15     Subd. 2.  [GOVERNANCE OF CONSOLIDATED VOLUNTEER 
 45.16  FIREFIGHTERS RELIEF ASSOCIATION.] (a) Notwithstanding Minnesota 
 45.17  Statutes, section 424A.04, subdivision 1, the consolidated 
 45.18  volunteer firefighters relief association is governed by a board 
 45.19  of trustees consisting of nine members, as provided in the 
 45.20  bylaws of the consolidated relief association, composed of: 
 45.21     (1) six firefighters in the joint fire department elected 
 45.22  by the membership of the consolidated relief association; and 
 45.23     (2) three appointed members, including the fire chief of 
 45.24  the joint fire department, one member appointed by the city 
 45.25  council of the city of New Hope, and one member appointed by the 
 45.26  city council of the city of Crystal. 
 45.27     (b) The board must have three officers, including a 
 45.28  president, a secretary, and a treasurer.  The membership of the 
 45.29  consolidated volunteer firefighters relief association must 
 45.30  elect the three officers from the nine board members.  A board 
 45.31  of trustees member may not hold more than one officer position 
 45.32  at the same time. 
 45.33     (c) The board of trustees must administer the affairs of 
 45.34  the relief association consistent with sections 1 to 7 and the 
 45.35  applicable provisions of Minnesota Statutes, chapters 69, 356A, 
 45.36  and 424A. 
 46.1      Subd. 3.  [SPECIAL AND GENERAL FUNDS.] (a) The consolidated 
 46.2   volunteer firefighters relief association must establish and 
 46.3   maintain a special fund and may establish and maintain a general 
 46.4   fund. 
 46.5      (b) The special fund must be established and maintained as 
 46.6   provided in Minnesota Statutes, section 424A.05. 
 46.7      (c) The general fund must be established and maintained as 
 46.8   provided in Minnesota Statutes, section 424A.06. 
 46.9      Sec. 3.  [CONSOLIDATION OF FORMER RELIEF ASSOCIATIONS.] 
 46.10     Subdivision 1.  [EFFECTIVE DATE OF CONSOLIDATION.] On the 
 46.11  first business day occurring 30 days after the establishment of 
 46.12  the consolidated volunteer firefighters relief association under 
 46.13  section 2, which is the effective date of consolidation, the 
 46.14  administration, records, assets, and liabilities of the prior 
 46.15  Crystal volunteer firefighters relief association and of the 
 46.16  prior New Hope volunteer firefighters relief association 
 46.17  transfer to the consolidated volunteer firefighters relief 
 46.18  association and the Crystal volunteer firefighters relief 
 46.19  association and the New Hope volunteer firefighters relief 
 46.20  association cease to exist as legal entities. 
 46.21     Subd. 2.  [TRANSFER OF ADMINISTRATION.] On the effective 
 46.22  date of consolidation, the administration of the prior relief 
 46.23  associations is transferred to the board of trustees of the 
 46.24  consolidated volunteer firefighters relief association. 
 46.25     Subd. 3.  [TRANSFER OF RECORDS.] On the effective date of 
 46.26  consolidation, the secretary and the treasurer of the Crystal 
 46.27  volunteer firefighters relief association and the secretary and 
 46.28  the treasurer of the New Hope volunteer firefighters relief 
 46.29  association shall transfer all records and documents relating to 
 46.30  the prior relief associations to the secretary and the treasurer 
 46.31  of the consolidated volunteer firefighters relief association. 
 46.32     Subd. 4.  [TRANSFER OF SPECIAL FUND ASSETS AND 
 46.33  LIABILITIES.] (a) On the effective date of consolidation, the 
 46.34  secretary and the treasurer of the Crystal volunteer 
 46.35  firefighters relief association and the secretary and the 
 46.36  treasurer of the New Hope volunteer firefighters relief 
 47.1   association shall cause to occur the transfer of the assets of 
 47.2   the special fund of the applicable relief association to the 
 47.3   special fund of the consolidated relief association.  Unless the 
 47.4   applicable secretary and treasurer decide otherwise, the assets 
 47.5   may be transferred as investment securities rather than as 
 47.6   cash.  The transfer must include any accounts receivable.  The 
 47.7   applicable secretary shall settle any accounts payable from the 
 47.8   special fund of the relief association before the effective date 
 47.9   of consolidation. 
 47.10     (b) Upon the transfer of the assets of the special fund of 
 47.11  a prior relief association, the pension liabilities of that 
 47.12  special fund become the obligation of the special fund of the 
 47.13  consolidated volunteer firefighters relief association. 
 47.14     (c) Upon the transfer of the prior relief association 
 47.15  special fund assets, the board of trustees of the consolidated 
 47.16  volunteer firefighters relief association has legal title to and 
 47.17  management responsibility for the transferred assets as trustees 
 47.18  for persons having a beneficial interest in those assets arising 
 47.19  out of the benefit coverage provided by the prior relief 
 47.20  association. 
 47.21     (d) The consolidated volunteer firefighters relief 
 47.22  association is the successor in interest for all claims for and 
 47.23  against the special funds of the prior Crystal volunteer 
 47.24  firefighters relief association and the prior New Hope volunteer 
 47.25  firefighters relief association, or the cities of Crystal and 
 47.26  New Hope with respect to the special funds of the prior relief 
 47.27  associations.  The status of successor in interest does not 
 47.28  apply to any claim against a prior relief association, the city 
 47.29  in which that relief association is located, or any person 
 47.30  connected with the prior relief association or the city, based 
 47.31  on any act or acts that were not done in good faith and that 
 47.32  constituted a breach of fiduciary responsibility under common 
 47.33  law or Minnesota Statutes, chapter 356A. 
 47.34     Subd. 5.  [DISSOLUTION OF PRIOR GENERAL FUND 
 47.35  BALANCES.] Before the effective date of consolidation, the 
 47.36  secretary of the Crystal volunteer firefighters relief 
 48.1   association and the secretary of the New Hope volunteer 
 48.2   firefighters relief association shall settle any accounts 
 48.3   payable from the respective general fund or any other relief 
 48.4   association fund in addition to the relief association special 
 48.5   fund.  Any investments held by a fund of the prior relief 
 48.6   associations in addition to the special fund must be liquidated 
 48.7   before the effective date of consolidation as the bylaws of the 
 48.8   relief association provide.  Before consolidation, the 
 48.9   respective relief associations shall pay all applicable general 
 48.10  fund expenses from their respective general funds and any 
 48.11  balance remaining in the general fund or in a fund other than 
 48.12  the relief association special fund as of the effective date of 
 48.13  consolidation must be paid to the new general fund of the 
 48.14  consolidated volunteer relief association. 
 48.15     Subd. 6.  [TERMINATION OF PRIOR RELIEF ASSOCIATIONS.] 
 48.16  Following the transfer of administration, records, special fund 
 48.17  assets, and special fund liabilities from the prior relief 
 48.18  associations to the consolidated volunteer firefighters relief 
 48.19  association, the Crystal volunteer firefighters relief 
 48.20  association and the New Hope volunteer firefighters relief 
 48.21  association cease to exist as legal entities.  The city manager 
 48.22  of the city of Crystal and the city manager of the city of New 
 48.23  Hope must notify the following government officials of the 
 48.24  termination of the respective relief associations and of the 
 48.25  establishment of the consolidated volunteer firefighters relief 
 48.26  association: 
 48.27     (1) Minnesota secretary of state; 
 48.28     (2) Minnesota state auditor; 
 48.29     (3) Minnesota commissioner of revenue; and 
 48.30     (4) commissioner of the federal Internal Revenue Service. 
 48.31     Sec. 4.  [EFFECT ON PREVIOUS BENEFIT PLAN COVERAGE.] 
 48.32     Subdivision 1.  [BENEFIT COVERAGE FOR CURRENT RETIRED 
 48.33  MEMBERS.] (a) A person who is receiving a monthly service 
 48.34  pension, a monthly disability benefit, or a monthly survivorship 
 48.35  benefit from the Crystal volunteer firefighters relief 
 48.36  association or from the New Hope volunteer firefighters relief 
 49.1   association on the effective date of consolidation is entitled 
 49.2   to a continuation of that pension or benefit, including any 
 49.3   death benefit or monthly survivorship benefit provided for in 
 49.4   the benefit plan document of the applicable prior relief 
 49.5   association in effect on the day before the effective date of 
 49.6   the consolidation, from the consolidated volunteer firefighters 
 49.7   relief association.  Unless paragraph (b) applies, the amount of 
 49.8   the pension or benefit payable after the effective date of 
 49.9   consolidation must be identical to the amount payable before the 
 49.10  effective date of consolidation.  The pension or benefit payable 
 49.11  after the effective date of consolidation is subject to the same 
 49.12  terms, conditions, and qualifications as were in effect before 
 49.13  the effective date of consolidation. 
 49.14     (b) If the board of trustees of the consolidated volunteer 
 49.15  firefighters relief association establishes the option, a 
 49.16  pension or benefit recipient to whom paragraph (a) applies is 
 49.17  entitled to elect an alternative pension or benefit amount as 
 49.18  offered by the relief association board.  To provide this 
 49.19  alternative pension or benefit, the relief association board may 
 49.20  arrange for a lump-sum payment or the purchase of an annuity 
 49.21  contract for the pension or benefit recipient in place of a 
 49.22  direct payment from the relief association to the person.  The 
 49.23  annuity contract may be purchased only from an insurance company 
 49.24  that is licensed to do business in this state, regularly 
 49.25  undertakes life insurance and annuity business, and is rated by 
 49.26  a recognized national rating agency or organization as being 
 49.27  among the top 25 percent of all insurance companies undertaking 
 49.28  life insurance and annuity business.  The alternative pension or 
 49.29  benefit payable monthly may be in an amount greater than the 
 49.30  pension or benefit payable before the effective date of 
 49.31  consolidation, but may not exceed the maximum service pension or 
 49.32  benefit payable under Minnesota Statutes, chapter 424A.  In 
 49.33  electing the alternative pension or benefit payable under an 
 49.34  annuity contract from a qualified insurance company, the 
 49.35  affected person must waive in writing the person's eligibility 
 49.36  and entitlement to any direct future pension or benefit payments 
 50.1   from the consolidated volunteer firefighters relief association. 
 50.2      Subd. 2.  [BENEFIT COVERAGE FOR CURRENT DEFERRED 
 50.3   MEMBERS.] (a) A person who is not an active member of the 
 50.4   Crystal volunteer firefighters relief association or an active 
 50.5   member of the New Hope volunteer firefighters relief association 
 50.6   but who has sufficient service credit with one of the relief 
 50.7   associations to be entitled to a future service pension from the 
 50.8   appropriate relief association remains entitled to the receipt 
 50.9   of that service pension, upon application, when the person 
 50.10  attains at least the minimum age for receipt of a service 
 50.11  pension unless the person elects an alternative service pension 
 50.12  under paragraph (b).  A deferred member may transfer the 
 50.13  member's current service pension to a member's individual 
 50.14  account established under subdivision 3, paragraph (c), subject 
 50.15  to the same conditions of individual accounts for active 
 50.16  members, and remain entitled to receipt of a service pension 
 50.17  when the member reaches the normal retirement age. 
 50.18     (b) If the board of trustees of the consolidated volunteer 
 50.19  firefighters relief association establishes the option for 
 50.20  benefit recipients under subdivision 1, the deferred service 
 50.21  pensioner described in paragraph (a) may elect the same 
 50.22  alternative service pension as established under subdivision 1, 
 50.23  paragraph (b), except that the deferred service pensioner may 
 50.24  not receive the alternative service pension at an age younger 
 50.25  than the normal retirement age in effect for the prior 
 50.26  applicable relief association. 
 50.27     Subd. 3.  [BENEFIT COVERAGE FOR NEW FIREFIGHTERS AND 
 50.28  CURRENT VESTED AND NONVESTED ACTIVE MEMBERS.] (a) The benefit 
 50.29  coverage for persons who become firefighters for the joint fire 
 50.30  department for the first time after the effective date of 
 50.31  consolidation and for persons who are active members of the 
 50.32  consolidated volunteer firefighters relief association as of the 
 50.33  effective date of consolidation is a defined contribution plan 
 50.34  governed under this subdivision and Minnesota Statutes, section 
 50.35  424A.02, subdivision 4. 
 50.36     (b) For an active member of the consolidated volunteer 
 51.1   firefighters relief association as of the effective date of 
 51.2   consolidation, that member's prior service as a firefighter in 
 51.3   the prior Crystal fire department or the prior New Hope fire 
 51.4   department must be converted into a dollar accumulation by 
 51.5   multiplying each full year of prior service as a firefighter in 
 51.6   the prior fire department of Crystal or the prior fire 
 51.7   department of New Hope by not less than $3,000.  A member's 
 51.8   prior service of a partial year will be converted into a dollar 
 51.9   accumulation by prorating the full year of prior service yearly 
 51.10  amount by the number of months served in the partial year.  The 
 51.11  total calculated dollar accumulation must be credited to the 
 51.12  member's individual account established under paragraph (c). 
 51.13     (c) For each active member of the consolidated volunteer 
 51.14  firefighters relief association covered by the defined 
 51.15  contribution plan, an individual account must be established, as 
 51.16  provided in Minnesota Statutes, section 424A.02, subdivision 4, 
 51.17  with an initial balance based on the conversion accumulation 
 51.18  determined under paragraph (b), if applicable.  Notwithstanding 
 51.19  Minnesota Statutes, section 424A.02, subdivision 4, the amount 
 51.20  of fire state aid and the amount of regular municipal 
 51.21  contributions must be credited to individual active firefighter 
 51.22  accounts as specified in section 6, subdivision 4. 
 51.23     Sec. 5.  [ACTUARIAL VALUATIONS REQUIRED.] 
 51.24     (a) Unless all benefit recipients and deferred service 
 51.25  pensioners elect alternative pensions or benefits under section 
 51.26  4, subdivisions 1, paragraph (b); and 2, paragraph (b), a 
 51.27  special actuarial valuation of the consolidated volunteer 
 51.28  firefighters relief association must be prepared as soon as 
 51.29  practicable following the benefit selection under section 4, 
 51.30  subdivision 1.  The actuarial valuation must be prepared under 
 51.31  the applicable provisions of Minnesota Statutes, sections 
 51.32  356.215 and 356.216. 
 51.33     (b) Subsequent actuarial valuations must be prepared as 
 51.34  required under Minnesota Statutes, section 69.773, subdivisions 
 51.35  2 and 3, if any person is entitled or is reasonably anticipated 
 51.36  to be entitled to a direct future monthly benefit from the 
 52.1   consolidated relief association. 
 52.2      Sec. 6.  [ANNUAL RELIEF ASSOCIATION FUNDING.] 
 52.3      Subdivision 1.  [SOURCES.] In addition to investment income 
 52.4   earned by the special fund, the sources of the annual funding of 
 52.5   the consolidated volunteer firefighters relief association are 
 52.6   the fire state aid received by the city of Crystal, the fire 
 52.7   state aid received by the city of New Hope, the regular 
 52.8   municipal contribution from the city of Crystal, and the regular 
 52.9   municipal contribution from the city of New Hope. 
 52.10     Subd. 2.  [FIRE STATE AID.] The fire state aid received by 
 52.11  the city of Crystal and the fire state aid received by the city 
 52.12  of New Hope must be deposited in the special fund of the 
 52.13  consolidated volunteer firefighters relief association, for 
 52.14  allocation as provided in subdivision 4. 
 52.15     Subd. 3.  [REGULAR MUNICIPAL CONTRIBUTION.] (a) Annually, 
 52.16  as part of the municipal budget setting process, the city 
 52.17  council of the city of Crystal and the city council of the city 
 52.18  of New Hope must jointly establish the amount of the regular 
 52.19  municipal contribution by each city to the consolidated 
 52.20  volunteer firefighters relief association. 
 52.21     (b) The regular municipal contribution in total must be at 
 52.22  least equal to (1) the amount of the fire state aid received by 
 52.23  the city of Crystal and the fire state aid received by the city 
 52.24  of New Hope, plus (2) whatever additional amount is needed to 
 52.25  equal the sum determined by multiplying $1,811 by the total of 
 52.26  the number of active firefighters who are members of the 
 52.27  consolidated volunteer firefighters relief association. 
 52.28     (c) The established amount for each city must be included 
 52.29  in the budget of the respective city, and, if not payable from a 
 52.30  municipal revenue source other than the city's property tax levy 
 52.31  or fire state aid, must be included in the property tax levy of 
 52.32  the respective city.  The regular municipal contribution must be 
 52.33  allocated in the manner specified in subdivision 4. 
 52.34     (d) If a direct service pension or entitlement is payable 
 52.35  under section 4, subdivision 1, paragraph (a); or subdivision 2, 
 52.36  paragraph (a), to a retiree or deferred retiree, the applicable 
 53.1   city remains responsible for any amount of service pension that 
 53.2   is payable beyond the relief association assets allocated for 
 53.3   the retiree or deferred retiree.  Following any actuarial 
 53.4   valuation of the consolidated relief association, if there is a 
 53.5   net mortality loss attributable to the applicable city, the city 
 53.6   shall make a contribution in addition to the regular municipal 
 53.7   contribution under paragraphs (a) to (c) equal to the amount of 
 53.8   that net mortality loss.  The municipal contribution under this 
 53.9   paragraph is payable on or before the last business day of the 
 53.10  month next following the completion of the actuarial valuation. 
 53.11     Subd. 4.  [ALLOCATION OF FUNDING AMOUNTS.] (a) The annual 
 53.12  fire state aid and the regular municipal contribution, after 
 53.13  deduction for payment of administrative expenses as specified in 
 53.14  subdivision 5, must be allocated to individual active 
 53.15  firefighter accounts based on the level of firefighting services 
 53.16  rendered by the individual active firefighter as stated in the 
 53.17  bylaws of the consolidated volunteer firefighters relief 
 53.18  association. 
 53.19     (b) Investment income earned by the special fund of the 
 53.20  consolidated relief association must be allocated to each 
 53.21  individual account based on the proportion of the total assets 
 53.22  of the special fund represented by the account. 
 53.23     Subd. 5.  [PAYMENT OF RELIEF ASSOCIATION ADMINISTRATIVE 
 53.24  EXPENSES.] (a) The payment of authorized administrative expenses 
 53.25  of the consolidated volunteer firefighters relief association 
 53.26  shall be from the special fund of the relief association 
 53.27  according to Minnesota Statutes, section 69.80, and as provided 
 53.28  for in the bylaws of the consolidated relief association and 
 53.29  approved by the board of trustees of the consolidated relief 
 53.30  association.  The allocation of these administrative expenses to 
 53.31  the individual member accounts must occur as provided in the 
 53.32  bylaws of the consolidated relief association. 
 53.33     (b) The payment of any other expenses of the consolidated 
 53.34  relief association shall be from the general fund of the 
 53.35  consolidated relief association according to Minnesota Statutes, 
 53.36  section 69.80, and as provided for in the bylaws of the 
 54.1   consolidated relief association and approved by the board of 
 54.2   trustees of the consolidated relief association. 
 54.3      Sec. 7.  [VALIDATION OF CURRENT BENEFIT PLANS AND PRIOR 
 54.4   ACTIONS.] 
 54.5      Notwithstanding any provisions of Laws 1969, chapter 1088, 
 54.6   as amended by Laws 1978, chapters 562, section 32, and 753; Laws 
 54.7   1979, chapter 201, section 44; or Laws 1981, chapter 224, 
 54.8   section 250; or Laws 1971, chapter 114, as amended by Laws 1979, 
 54.9   chapters 97, and 201, sections 27 and 44; and Laws 1981, chapter 
 54.10  224, section 254, the benefit plans of the Crystal volunteer 
 54.11  firefighters relief association and of the New Hope volunteer 
 54.12  firefighters relief association as reflected in each relief 
 54.13  association's articles of incorporation and bylaws as of 
 54.14  December 15, 1993, are hereby ratified and validated.  Any acts 
 54.15  previously taken by the Crystal volunteer firefighters relief 
 54.16  association and by the New Hope volunteer firefighters relief 
 54.17  association with those ratified articles of incorporation and 
 54.18  bylaws are also ratified and validated. 
 54.19     Sec. 8.  [REPEALER OF PRIOR SPECIAL LAWS.] 
 54.20     Laws 1969, chapter 1088; Laws 1971, chapter 114; Laws 1978, 
 54.21  chapters 562, section 32, and 753; Laws 1979, chapters 97, and 
 54.22  201, section 27; and Laws 1981, chapter 224, sections 250 and 
 54.23  254, are repealed.  
 54.24     Sec. 9.  [EFFECTIVE DATE.] 
 54.25     Sections 1 to 7 are effective on the day following final 
 54.26  approval by the city council of the city of Crystal and by the 
 54.27  city council of the city of New Hope and compliance with 
 54.28  Minnesota Statutes, section 645.021, subdivision 3.  Section 8 
 54.29  is effective on the effective date of consolidation of the 
 54.30  Crystal volunteer firefighters relief association and the New 
 54.31  Hope volunteer firefighters relief association.