Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

SF 992

as introduced - 90th Legislature (2017 - 2018) Posted on 02/16/2017 09:07am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

Line numbers 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14
1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 2.1 2.2 2.3 2.4 2.5
2.6
2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15
2.16
2.17 2.18 2.19 2.20 2.21 2.22 2.23
2.24
2.25 2.26 2.27 2.28 2.29 2.30 2.31 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15
3.16
3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33
3.34
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 5.1 5.2 5.3 5.4 5.5
5.6
5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17
5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 6.20 6.21 6.22
6.23
6.24 6.25 6.26 6.27 6.28 6.29 6.30 6.31 6.32 6.33 7.1 7.2 7.3 7.4 7.5 7.6
7.7
7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 7.21
7.22
7.23 7.24 7.25 7.26 7.27 7.28 7.29
7.30
8.1 8.2 8.3 8.4 8.6 8.5 8.7 8.8 8.9 8.10 8.11 8.14 8.12 8.13 8.15 8.16 8.17 8.18 8.19 8.20 8.21 8.22 8.23 8.24 8.25 8.26 8.27 8.28 8.29 8.30 8.31 8.32 8.33 8.34 8.35 8.36 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 9.20 9.21 9.22 9.23 9.24 9.25 9.26 9.27 9.28 9.29 9.30 9.31 9.32 9.33 9.34 9.35 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.20 10.21 10.22 10.23 10.24 10.25 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 10.34 10.35 10.36 10.37 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 11.20 11.21 11.22 11.23 11.24 11.25 11.26 11.27 11.28 11.29 11.30 11.31 11.32 11.33 11.34 11.35 11.36 11.37 11.38 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11 12.12 12.13 12.14 12.15 12.16 12.17 12.18 12.19 12.20 12.21 12.22 12.23 12.24 12.25 12.26 12.27 12.28 12.29 12.30 12.31 12.32 12.33 12.34 12.35 12.36 12.37 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 13.11 13.12 13.13
13.14
13.15 13.16 13.17 13.18 13.19 13.20 13.21 13.22 13.23 13.24 13.25 13.26 13.27 13.28 13.29 13.30 13.31 13.32 13.33 14.1 14.2 14.3 14.4 14.5 14.6 14.7 14.8 14.9 14.10 14.11 14.12 14.13 14.14 14.15 14.16 14.17 14.18 14.19 14.20 14.21 14.22 14.23 14.24 14.25 14.26 14.27 14.28 14.29 14.30 14.31 14.32 14.33 14.34 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 15.10 15.11 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19 15.20 15.21 15.22 15.23 15.24 15.25 15.26 15.27 15.28 15.29 15.30 15.31 15.32
15.33
16.1 16.2 16.3 16.4 16.5 16.6 16.7 16.8 16.9 16.10 16.11 16.12 16.13 16.14 16.15 16.16 16.17 16.18 16.19 16.20 16.21 16.22 16.23 16.24 16.25 16.26 16.27 16.28
16.29
16.30 16.31
16.32

A bill for an act
relating to retirement; St. Paul Teachers Retirement Fund Association financial
solvency measures; increasing employer contribution rates; modifying the
investment return actuarial assumption; extending the amortization target date;
eliminating postretirement adjustment trigger procedures; authorizing additional
funding for school districts to pay for higher teacher retirement employer
contribution costs; modifying interest rates charged on certain payments;
appropriating money; amending Minnesota Statutes 2016, sections 126C.10,
subdivision 37; 354A.011, subdivision 3a; 354A.093, subdivision 6; 354A.096;
354A.12, subdivisions 1a, 2a, 3a, 7; 354A.29, subdivision 7; 354A.34; 354A.38,
subdivision 3; 356.215, subdivisions 8, 11; proposing coding for new law in
Minnesota Statutes, chapter 356; repealing Minnesota Statutes 2016, section
354A.29, subdivisions 8, 9.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 126C.10, subdivision 37, is amended to read:


Subd. 37.

Pension adjustment revenue.

A school district's pension adjustment revenue
equals the new text beginsum of:
new text end

new text begin (1) the greater of zero or the product of:
new text end

new text begin (i) the difference between the teacher retirement fund employer contribution rate
established in section 354.42 or 354A.12 for the current fiscal year and the employer
contribution rate for fiscal year 2017; and
new text end

new text begin (ii) the salaries paid to employees who are members of the Teachers Retirement
Association or the St. Paul Teachers Retirement Association for the previous fiscal year;
and
new text end

new text begin (2) the new text endgreater of zero or the product of:

deleted text begin (1)deleted text endnew text begin (i)new text end the difference between the district's adjustment under Minnesota Statutes 2012,
section 127A.50, subdivision 1, for fiscal year 2014 per adjusted pupil unit and the state
average adjustment under Minnesota Statutes 2012, section 127A.50, subdivision 1, for
fiscal year 2014 per adjusted pupil unit; and

deleted text begin (2)deleted text endnew text begin (ii)new text end the district's adjusted pupil units for the fiscal year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fiscal year 2018 and later.
new text end

Sec. 2.

Minnesota Statutes 2016, section 354A.011, subdivision 3a, is amended to read:


Subd. 3a.

Actuarial equivalent.

"Actuarial equivalent" means the condition of one
annuity or benefit having an equal actuarial present value as another annuity or benefit,
determined as of a given date with each actuarial present value based on the appropriate
mortality table adopted by the appropriate board of trustees based on the experience of that
retirement fund association as recommended by the actuary retained under section 356.214,
and approved under section 356.215, subdivision 18, and using the applicable deleted text beginpreretirement
or postretirement interest rate
deleted text end new text begininvestment return new text endassumption specified in section 356.215,
subdivision 8
.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 3.

Minnesota Statutes 2016, section 354A.093, subdivision 6, is amended to read:


Subd. 6.

Interest requirements.

The employer shall pay interest on all equivalent
employee and employer contribution amounts payable under this section. Interest must be
computed at the deleted text beginrate of 8.5 percent until June 30, 2015, and eight percent thereafterdeleted text end new text beginapplicable
rate or rates specified in section 356.59, subdivision 5,
new text endcompounded annuallynew text begin,new text end from the end
of each fiscal year of the leave or break in service to the end of the month in which payment
is received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 4.

Minnesota Statutes 2016, section 354A.096, is amended to read:


354A.096 MEDICAL LEAVE.

Any teacher in the coordinated program of the St. Paul Teachers Retirement Fund
Association who is on an authorized medical leave of absence and subsequently returns to
teaching service is entitled to receive allowable service credit, not to exceed one year, for
the period of leave, upon making the prescribed payment to the fund. This payment must
include the required employee and employer contributions at the rates specified in section
354A.12, subdivisions 1 and 2a, as applied to the member's average full-time monthly salary
rate on the date the leave of absence commenced plus deleted text beginannualdeleted text end interest at the deleted text beginrate of 8.5
percent until June 30, 2015, and eight percent thereafter per year
deleted text end new text beginapplicable rate or rates
specified in section 356.59, subdivision 5, compounded annually,
new text endfrom the end of the fiscal
year during which the leave terminates to the end of the month during which payment is
made. The member must pay the total amount required unless the employing unit, at its
option, pays the employer contributions. The total amount required must be paid by the end
of the fiscal year following the fiscal year in which the leave of absence terminated or before
the member retires, whichever is earlier. Payment must be accompanied by a copy of the
resolution or action of the employing authority granting the leave and the employing
authority, upon granting the leave, must certify the leave to the association in a manner
specified by the executive director. A member may not receive more than one year of
allowable service credit during any fiscal year by making payment under this section. A
member may not receive disability benefits under section 354A.36 and receive allowable
service credit under this section for the same period of time.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 5.

Minnesota Statutes 2016, section 354A.12, subdivision 1a, is amended to read:


Subd. 1a.

Obligation for omitted salary deductions.

If the full required contributions
are not deducted from the salary of a teacher, payment of the shortage in such deductions
is the sole obligation of the employing unit during the three-year period following the end
of the fiscal year in which the shortage occurred. The shortage is payable by the employing
unit upon notification of the shortage by the executive director of the applicable retirement
fund association. The employing unit shall also pay any employer contributions related to
the shortage. The amount of the shortage in employee contributions and associated employer
contributions is payable with interest at the deleted text beginpreretirement interest assumption for the
retirement fund as specified in section 356.215, subdivision 8, stated as a monthly rate
deleted text end
new text begin applicable rate or rates specified in section 356.59, subdivision 5, new text endfrom the date due until
the date payment is received in the office of the association, new text begincompounded annually, new text endwith a
minimum interest charge of $10. If the shortage payment and interest is not paid by the
employing unit within 60 days of notification, the executive director shall certify the amount
of the shortage payment and interest to the commissioner of management and budget, who
shall deduct the amount from any state aid or appropriation amount applicable to the
employing unit.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 6.

Minnesota Statutes 2016, section 354A.12, subdivision 2a, is amended to read:


Subd. 2a.

Employer regular and additional contributions.

(a) The employing units
shall make the following employer contributions to the teachers retirement fund association:

(1) for deleted text beginanydeleted text end new text begineach new text endcoordinated member of the St. Paul Teachers Retirement Fund
Association, the employing unit shall make a regular employer contribution to the retirement
fund association in an amount equal to the designated percentage of the salary of the
coordinated member as provided below:

deleted text begin after June 30, 2014
deleted text end
deleted text begin 5.5 percent
deleted text end
deleted text begin after June 30, 2015
deleted text end
deleted text begin 6 percent
deleted text end
after June 30, 2016
6.25 percent
after June 30, 2017
deleted text begin6.5deleted text end new text begin7.5 new text endpercent
new text begin after June 30, 2018
new text end
new text begin 8.25 percent
new text end
new text begin after June 30, 2019
new text end
new text begin 8.75 percent
new text end
new text begin after June 30, 2020
new text end
new text begin 9.5 percent
new text end

(2) for deleted text beginanydeleted text end new text begineach new text endbasic member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make a regular employer contribution to the respective retirement
fund in an amount according to the schedule below:

deleted text begin after June 30, 2014
deleted text end
deleted text begin 9 percent of salary
deleted text end
deleted text begin after June 30, 2015
deleted text end
deleted text begin 9.5 percent of salary
deleted text end
after June 30, 2016
9.75 percent of salary
after June 30, 2017
deleted text begin10deleted text end new text begin11 new text endpercent of salary
new text begin after June 30, 2018
new text end
new text begin 11.75 percent of salary
new text end
new text begin after June 30, 2019
new text end
new text begin 12.25 percent of salary
new text end
new text begin after June 30, 2020
new text end
new text begin 13 percent of salary
new text end

(3) for deleted text beginadeleted text end new text begineach new text endbasic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make an additional employer contribution to the respective fund in an
amount equal to 3.64 percent of the salary of the basic member;

(4) for deleted text beginadeleted text end new text begineach new text endcoordinated member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make an additional employer contribution to the respective fund
in an amount equal to 3.84 percent of the coordinated member's salary.

(b) The regular and additional employer contributions must be remitted directly to the
St. Paul Teachers Retirement Fund Association at least once each month. Delinquent amounts
are payable with interest under the procedure in subdivision 1a.

(c) Payments of regular and additional employer contributions for school district or
technical college employees who are paid from normal operating funds must be made from
the appropriate fund of the district or technical college.

(d) When an employer contribution rate changes for a fiscal year, the new contribution
rate is effective for the entire salary paid by the employer with the first payroll cycle reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 7.

Minnesota Statutes 2016, section 354A.12, subdivision 3a, is amended to read:


Subd. 3a.

Direct state aid to deleted text beginfirst class citydeleted text end new text beginthe St. Paul new text endTeachers Retirement Fund
deleted text begin associationsdeleted text endnew text begin Associationnew text end.

(a) The state shall pay deleted text begin$2,827,000deleted text end new text begin$9,827,000 new text endto the St. Paul
Teachers Retirement Fund Association.

(b) In addition to deleted text beginother amounts specified in this subdivisiondeleted text endnew text begin the amount in paragraph
(a)
new text end, the state shall pay deleted text begin$7,000,000deleted text end new text begin$5,000,000 new text endas state aid to the St. Paul Teachers Retirement
Fund Association.

(c) The aid under this subdivision is payable October 1 annually. The commissioner of
management and budget shall pay the aid specified in this subdivision. The amount required
is appropriated annually from the general fund to the commissioner of management and
budget.

Sec. 8.

Minnesota Statutes 2016, section 354A.12, subdivision 7, is amended to read:


Subd. 7.

Recovery of benefit overpayments.

(a) If the executive director discovers,
within the time period specified in subdivision 8 following the payment of a refund or the
accrual date of any retirement annuity, survivor benefit, or disability benefit, that benefit
overpayment has occurred due to using invalid service or salary, or due to any erroneous
calculation procedure, the executive director must recalculate the annuity or benefit payable
and recover any overpayment. The executive director shall recover the overpayment by
requiring direct repayment or by suspending or reducing the payment of a retirement annuity
or other benefit payable under this chapter to the applicable person or the person's estate,
whichever applies, until all outstanding amounts have been recovered. If a benefit
overpayment or improper payment of benefits occurred caused by a failure of the person
to satisfy length of separation requirements for retirement under section 354A.011,
subdivision 21
, the executive director shall recover the improper payments by requiring
direct repayment. The repayment must include interest at the deleted text beginrate of 0.71 percent per monthdeleted text end
new text begin applicable rate or rates specified in section 356.59, subdivision 5, new text endfrom the first of the month
in which a monthly benefit amount was paid to the first of the month in which the amount
is repaid, with annual compounding.

(b) In the event the executive director determines that an overpaid annuity or benefit
that is the result of invalid salary included in the average salary used to calculate the payment
amount must be recovered, the executive director must determine the amount of the employee
deductions taken in error on the invalid salary, with interest as determined under 354A.37,
subdivision 3
, and must subtract that amount from the total annuity or benefit overpayment,
and the remaining balance of the overpaid annuity or benefit, if any, must be recovered.

(c) If the invalid employee deductions plus interest exceed the amount of the overpaid
benefits, the balance must be refunded to the person to whom the benefit or annuity is being
paid.

(d) Any invalid employer contributions reported on the invalid salary must be credited
against future contributions payable by the employer.

(e) If a member or former member, who is receiving a retirement annuity or disability
benefit for which an overpayment is being recovered, dies before recovery of the overpayment
is completed and an optional annuity or refund is payable, the remaining balance of the
overpaid annuity or benefit must continue to be recovered from the payment to the optional
annuity beneficiary or refund recipient.

(f) The board of trustees shall adopt policies directing the period of time and manner
for the collection of any overpaid retirement or optional annuity, and survivor or disability
benefit, or a refund that the executive director determines must be recovered as provided
under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 9.

Minnesota Statutes 2016, section 354A.29, subdivision 7, is amended to read:


Subd. 7.

deleted text beginEligibility for payment ofdeleted text end Postretirement adjustments.

deleted text begin(a) Annually, after
June 30, the board of trustees of the St. Paul Teachers Retirement Fund Association must
determine the amount of any postretirement adjustment using the procedures in this
subdivision and subdivision 8 or 9, whichever is applicable.(b) On
deleted text end new text beginEach new text endJanuary 1, each
person who has been receiving an annuity or benefit under the articles of incorporation, the
bylaws, or this chapterdeleted text begin, whose effective date of benefit commencement occurreddeleted text end new text beginthat
commenced
new text endon or before July 1 of the new text beginimmediately preceding new text endcalendar year deleted text beginimmediately
before the adjustment, is eligible to
deleted text end new text beginwill new text endreceive deleted text beginadeleted text end new text beginan annual new text endpostretirement deleted text beginincrease as
specified in subdivision 8 or 9.
deleted text endnew text begin adjustment as follows:
new text end

new text begin (1) the monthly annuity or benefit amount of each person whose annuity or benefit
commenced on or before January 1 of the immediately preceding calendar year shall be
increased by one percent of the monthly amount; and
new text end

new text begin (2) the monthly annuity or benefit amount of each person whose annuity or benefit
commenced after January 1 of the immediately preceding calendar year shall be increased
by one-half of one percent of the monthly amount.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 10.

Minnesota Statutes 2016, section 354A.34, is amended to read:


354A.34 DISPOSITION OF UNPAID PERIOD CERTAIN FOR LIFE OR
GUARANTEED REFUND OPTIONAL ANNUITIES.

If a retiree from a coordinated program who has elected a period certain and for life
thereafter or a guaranteed refund optional annuity form dies without having a designated
beneficiary who has survived the retiree, any remaining unpaid guaranteed annuity payments
shall be computed at the rate of interest specified in section 356.215, subdivision 8, and
paid in one lump sum to the estate of the retiree. If a retiree from a coordinated program
who has elected a period certain and for life or a guaranteed refund optional annuity form
dies with a designated beneficiary who has survived the retiree but the designated beneficiary
dies without there existing another designated beneficiary, any remaining unpaid guaranteed
annuity payments shall be computed new text beginwith interest new text endat the new text beginapplicable new text endrate deleted text beginof interestdeleted text end new text beginor rates
new text end specified in section deleted text begin356.215deleted text endnew text begin 356.59new text end, subdivision deleted text begin8deleted text endnew text begin 5new text end, and paid in one lump sum to the estate
of the designated beneficiary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 354A.38, subdivision 3, is amended to read:


Subd. 3.

Computation of refund repayment amount.

If the coordinated member elects
to repay a refund under subdivision 2, the repayment to the fund must be in an amount equal
to refunds the member has accepted plus interest at the deleted text beginrate of 8.5 percent until June 30,
2015, and eight percent thereafter
deleted text end new text beginapplicable rate or rates specified in section 356.59,
subdivision 5,
new text endcompounded annuallynew text begin,new text end from the date that the refund was accepted to the date
that the refund is repaid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 12.

Minnesota Statutes 2016, section 356.215, subdivision 8, is amended to read:


Subd. 8.

deleted text beginInterest and salarydeleted text end new text beginActuarial new text endassumptions.

(a) The actuarial valuation must
use the applicable following deleted text begininterestdeleted text end new text begininvestment return new text endassumption:

(1) select and ultimate interest rate assumption

plan
ultimate interest rate
assumption
teachers retirement plan
8.5%

the select preretirement interest rate assumption for the period through June 30, 2017,
is eight percent.

(2) deleted text beginsingle rate interest ratedeleted text end new text beginfor all plans other than the teachers retirement plan, the
investment return
new text endassumptionnew text begin is:
new text end

plan
deleted text begin interest ratedeleted text endnew text begin
investment return
new text end
assumption
general state employees retirement plan
8%
correctional state employees retirement plan
8
State Patrol retirement plan
8
legislators retirement plan, and for the
constitutional officers calculation of total plan
liabilities
0
judges retirement plan
8
general public employees retirement plan
8
public employees police and fire retirement plan
8
local government correctional service retirement
plan
8
St. Paul teachers retirement plan
deleted text begin 8 deleted text end new text begin 7.5
new text end
Bloomington Fire Department Relief Association
6
local monthly benefit volunteer firefighter relief
associations
5
monthly benefit retirement plans in the statewide
volunteer firefighter retirement plan
6

(b)deleted text begin(1) If funding stability has been attained,deleted text end The new text beginactuarial new text endvaluation new text beginfor each of the
covered retirement plans listed in section 356.415, subdivision 2,
new text endmust deleted text beginuse adeleted text end new text begintake into account
the
new text endpostretirement adjustment rate deleted text beginactuarial assumption equal to the postretirement adjustment
rate
deleted text end new text beginor rates applicable to the plan as new text endspecified in section deleted text begin354A.27, subdivision 7;deleted text end 354A.29,
subdivision deleted text begin9;deleted text end new text begin7, new text endor 356.415deleted text begin, subdivision 1deleted text end, whichever applies.

deleted text begin (2) If funding stability has not been attained, the valuation must use a select postretirement
adjustment rate actuarial assumption equal to the postretirement adjustment rate specified
in section 354A.27, subdivision 6a; 354A.29, subdivision 8; or 356.415, subdivision 1a,
1b, 1c, 1d, 1e, or 1f, whichever applies, for a period ending when the approved actuary
estimates that the plan will attain the defined funding stability measure, and thereafter an
ultimate postretirement adjustment rate actuarial assumption equal to the postretirement
adjustment rate under section 354A.27, subdivision 7; 354A.29, subdivision 9; or 356.415,
subdivision 1
, for the applicable period or periods beginning when funding stability is
projected to be attained.
deleted text end

(c) The actuarial valuation must use the applicable following single rate future salary
increase assumption, the applicable following modified single rate future salary increase
assumption, or the applicable following graded rate future salary increase assumption:

(1) single rate future salary increase assumption

plan
future salary increase assumption
legislators retirement plan
5%
judges retirement plan
2.75
Bloomington Fire Department Relief Association
4

(2) age-related future salary increase age-related select and ultimate future salary increase
assumption or graded rate future salary increase assumption

plan
future salary increase assumption
local government correctional service retirement plan
assumption B
St. Paul teachers retirement plan
assumption A

For plans other than the St. Paul teachers
retirement plan and the local government
correctional service retirement plan, the select
calculation is: during the designated select
period, a designated percentage rate is
multiplied by the result of the designated
integer minus T, where T is the number of
completed years of service, and is added to
the applicable future salary increase
assumption. The designated select period is
ten years and the designated integer is ten for
the local government correctional service
retirement plan and 15 for the St. Paul
Teachers Retirement Fund Association. The
designated percentage rate is 0.2 percent for
the St. Paul Teachers Retirement Fund
Association.

The ultimate future salary increase assumption is:

age
A
B
16
5.9%
8.75%
17
5.9
8.75
18
5.9
8.75
19
5.9
8.75
20
5.9
8.75
21
5.9
8.5
22
5.9
8.25
23
5.85
8
24
5.8
7.75
25
5.75
7.5
26
5.7
7.25
27
5.65
7
28
5.6
6.75
29
5.55
6.5
30
5.5
6.5
31
5.45
6.25
32
5.4
6.25
33
5.35
6.25
34
5.3
6
35
5.25
6
36
5.2
5.75
37
5.15
5.75
38
5.1
5.75
39
5.05
5.5
40
5
5.5
41
4.95
5.5
42
4.9
5.25
43
4.85
5
44
4.8
5
45
4.75
4.75
46
4.7
4.75
47
4.65
4.75
48
4.6
4.75
49
4.55
4.75
50
4.5
4.75
51
4.45
4.75
52
4.4
4.75
53
4.35
4.75
54
4.3
4.75
55
4.25
4.5
56
4.2
4.5
57
4.15
4.25
58
4.1
4
59
4.05
4
60
4
4
61
4
4
62
4
4
63
4
4
64
4
4
65
4
3.75
66
4
3.75
67
4
3.75
68
4
3.75
69
4
3.75
70
4
3.75

(3) service-related ultimate future salary increase assumption

general state employees retirement plan of the Minnesota
State Retirement System
assumption A
general employees retirement plan of the Public
Employees Retirement Association
assumption B
Teachers Retirement Association
assumption C
public employees police and fire retirement plan
assumption D
State Patrol retirement plan
assumption E
correctional state employees retirement plan of the
Minnesota State Retirement System
assumption F
service
length
A
B
C
D
E
F
1
10.25%
11.78%
12%
12.75%
7.75%
5.75%
2
7.85
8.65
9
10.75
7.25
5.6
3
6.65
7.21
8
8.75
6.75
5.45
4
5.95
6.33
7.5
7.75
6.5
5.3
5
5.45
5.72
7.25
6.25
6.25
5.15
6
5.05
5.27
7
5.85
6
5
7
4.75
4.91
6.85
5.55
5.75
4.85
8
4.45
4.62
6.7
5.35
5.6
4.7
9
4.25
4.38
6.55
5.15
5.45
4.55
10
4.15
4.17
6.4
5.05
5.3
4.4
11
3.95
3.99
6.25
4.95
5.15
4.3
12
3.85
3.83
6
4.85
5
4.2
13
3.75
3.69
5.75
4.75
4.85
4.1
14
3.55
3.57
5.5
4.65
4.7
4
15
3.45
3.45
5.25
4.55
4.55
3.9
16
3.35
3.35
5
4.55
4.4
3.8
17
3.25
3.26
4.75
4.55
4.25
3.7
18
3.25
3.25
4.5
4.55
4.1
3.6
19
3.25
3.25
4.25
4.55
3.95
3.5
20
3.25
3.25
4
4.55
3.8
3.5
21
3.25
3.25
3.9
4.45
3.75
3.5
22
3.25
3.25
3.8
4.35
3.75
3.5
23
3.25
3.25
3.7
4.25
3.75
3.5
24
3.25
3.25
3.6
4.25
3.75
3.5
25
3.25
3.25
3.5
4.25
3.75
3.5
26
3.25
3.25
3.5
4.25
3.75
3.5
27
3.25
3.25
3.5
4.25
3.75
3.5
28
3.25
3.25
3.5
4.25
3.75
3.5
29
3.25
3.25
3.5
4.25
3.75
3.5
30 or more
3.25
3.25
3.5
4.25
3.75
3.5

(d) The actuarial valuation must use the applicable following payroll growth assumption
for calculating the amortization requirement for the unfunded actuarial accrued liability
where the amortization retirement is calculated as a level percentage of an increasing payroll:

plan
payroll growth assumption
general state employees retirement plan of the Minnesota
State Retirement System
3.5%
correctional state employees retirement plan
3.5
State Patrol retirement plan
3.5
judges retirement plan
2.75
general employees retirement plan of the Public
Employees Retirement Association
3.5
public employees police and fire retirement plan
3.5
local government correctional service retirement plan
3.5
teachers retirement plan
3.75
St. Paul teachers retirement plan
4

(e) The assumptions set forth in paragraphs (c) and (d) continue to apply, unless a
different salary assumption or a different payroll increase assumption:

(1) has been proposed by the governing board of the applicable retirement plan;

(2) is accompanied by the concurring recommendation of the actuary retained under
section 356.214, subdivision 1, if applicable, or by the approved actuary preparing the most
recent actuarial valuation report if section 356.214 does not apply; and

(3) has been approved or deemed approved under subdivision 18.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 356.215, subdivision 11, is amended to read:


Subd. 11.

Amortization contributions.

(a) In addition to the exhibit indicating the level
normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial
reporting purposes indicating the additional annual contribution sufficient to amortize the
unfunded actuarial accrued liability and must contain an exhibit for contribution
determination purposes indicating the additional contribution sufficient to amortize the
unfunded actuarial accrued liability. For the retirement plans listed in subdivision 8, paragraph
(c), but excluding the legislators retirement plan, the additional contribution must be
calculated on a level percentage of covered payroll basis by the established date for full
funding in effect when the valuation is prepared, assuming annual payroll growth at the
applicable percentage rate set forth in subdivision 8, paragraph (d). For all other retirement
plans and for the legislators retirement plan, the additional annual contribution must be
calculated on a level annual dollar amount basis.

(b) For any retirement plan other than a retirement plan governed by paragraph (d), (e),
(f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for
calculating the actuarial accrued liability of the fund, a change in the benefit plan governing
annuities and benefits payable from the fund, a change in the actuarial cost method used in
calculating the actuarial accrued liability of all or a portion of the fund, or a combination
of the three, which change or changes by itself or by themselves without inclusion of any
other items of increase or decrease produce a net increase in the unfunded actuarial accrued
liability of the fund, the established date for full funding is the first actuarial valuation date
occurring after June 1, 2020.

(c) For any retirement plan, if there has been a change in any or all of the actuarial
assumptions used for calculating the actuarial accrued liability of the fund, a change in the
benefit plan governing annuities and benefits payable from the fund, a change in the actuarial
cost method used in calculating the actuarial accrued liability of all or a portion of the fund,
or a combination of the three, and the change or changes, by itself or by themselves and
without inclusion of any other items of increase or decrease, produce a net increase in the
unfunded actuarial accrued liability in the fund, the established date for full funding must
be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in accordance
with the plan provisions governing annuities and retirement benefits and the actuarial
assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the unfunded actuarial accrued liability amount determined under item
(i) by the established date for full funding in effect before the change must be calculated
using the interest assumption specified in subdivision 8 in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance
with any new plan provisions governing annuities and benefits payable from the fund and
any new actuarial assumptions and the remaining plan provisions governing annuities and
benefits payable from the fund and actuarial assumptions in effect before the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable,
needed to amortize the difference between the unfunded actuarial accrued liability amount
calculated under item (i) and the unfunded actuarial accrued liability amount calculated
under item (iii) over a period of 30 years from the end of the plan year in which the applicable
change is effective must be calculated using the applicable interest assumption specified in
subdivision 8 in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item (iv)
must be added to the level annual dollar amortization contribution or level percentage
calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined in
item (iii) is amortized by the total level annual dollar or level percentage amortization
contribution computed under item (v) must be calculated using the interest assumption
specified in subdivision 8 in effect after any applicable change, rounded to the nearest
integral number of years, but not to exceed 30 years from the end of the plan year in which
the determination of the established date for full funding using the procedure set forth in
this clause is made and not to be less than the period of years beginning in the plan year in
which the determination of the established date for full funding using the procedure set forth
in this clause is made and ending by the date for full funding in effect before the change;
and

(vii) the period determined under item (vi) must be added to the date as of which the
actuarial valuation was prepared and the date obtained is the new established date for full
funding.

(d) For the general employees retirement plan of the Public Employees Retirement
Association, the established date for full funding is June 30, 2031.

(e) For the Teachers Retirement Association, the established date for full funding is June
30, 2037.

(f) For the correctional state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, 2038.

(g) For the judges retirement plan, the established date for full funding is June 30, 2038.

(h) For the public employees police and fire retirement plan, the established date for full
funding is June 30, 2038.

(i) For the St. Paul Teachers Retirement Fund Association, the established date for full
funding is June 30, deleted text begin2042. In addition to other requirements of this chapter, the annual
actuarial valuation must contain an exhibit indicating the funded ratio and the deficiency
or sufficiency in annual contributions when comparing liabilities to the market value of the
assets of the fund as of the close of the most recent fiscal year
deleted text endnew text begin 2047new text end.

(j) For the general state employees retirement plan of the Minnesota State Retirement
System, the established date for full funding is June 30, 2040.

(k) For the retirement plans for which the annual actuarial valuation indicates an excess
of valuation assets over the actuarial accrued liability, the valuation assets in excess of the
actuarial accrued liability must be recognized as a reduction in the current contribution
requirements by an amount equal to the amortization of the excess expressed as a level
percentage of pay over a 30-year period beginning anew with each annual actuarial valuation
of the plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 14.

new text begin [356.59] INTEREST RATES.
new text end

new text begin Subdivision 1. new text end

new text begin Applicable interest rates. new text end

new text begin Whenever the payment of interest is required
with respect to any payment, including refunds, remittances, shortages, contributions, or
repayments, the rate of interest is the rate or rates specified in subdivisions 2 to 4 for each
public retirement plan.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota State Retirement System. new text end

new text begin The interest rates for all retirement plans
administered by the Minnesota State Retirement System are as follows:
new text end

new text begin Annual
new text end
new text begin Monthly
new text end
new text begin before July 1, 2015
new text end
new text begin 8.5 percent
new text end
new text begin 0.71 percent
new text end
new text begin from July 1, 2015, to June 30, 2017
new text end
new text begin 8.0 percent
new text end
new text begin 0.667 percent
new text end
new text begin after June 30, 2017
new text end
new text begin 7.5 percent
new text end
new text begin 0.625 percent
new text end

new text begin Subd. 3. new text end

new text begin Public Employees Retirement Association. new text end

new text begin The interest rates for all retirement
plans administered by the Public Employees Retirement Association are as follows:
new text end

new text begin Annual
new text end
new text begin Monthly
new text end
new text begin before July 1, 2015
new text end
new text begin 8.5 percent
new text end
new text begin 0.71 percent
new text end
new text begin from July 1, 2015, to June 30, 2017
new text end
new text begin 8.0 percent
new text end
new text begin 0.667 percent
new text end
new text begin after June 30, 2017
new text end
new text begin 7.5 percent
new text end
new text begin 0.625 percent
new text end

new text begin Subd. 4. new text end

new text begin Teachers Retirement Association. new text end

new text begin The interest rates for the retirement plan
administered by the Teachers Retirement Association are as follows:
new text end

new text begin Annual
new text end
new text begin Monthly
new text end
new text begin 8.5 percent
new text end
new text begin 0.71 percent
new text end

new text begin Subd. 5. new text end

new text begin St. Paul Teachers Retirement Fund Association. new text end

new text begin The interest rates for the
retirement plan administered by the St. Paul Teachers Retirement Fund Association are as
follows:
new text end

new text begin Annual
new text end
new text begin Monthly
new text end
new text begin before July 1, 2015
new text end
new text begin 8.5 percent
new text end
new text begin 0.71 percent
new text end
new text begin from July 1, 2015, to June 30, 2017
new text end
new text begin 8.0 percent
new text end
new text begin 0.667 percent
new text end
new text begin after June 30, 2017
new text end
new text begin 7.5 percent
new text end
new text begin 0.625 percent
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 15. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 354A.29, subdivisions 8 and 9, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

APPENDIX

Repealed Minnesota Statutes: 17-2806

354A.29 ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION POSTRETIREMENT ADJUSTMENT.

Subd. 8.

Calculation of postretirement adjustments; percentage based.

(a) For purposes of computing postretirement adjustments for eligible benefit recipients of the St. Paul Teachers Retirement Fund Association, the accrued liability funding ratio based on the actuarial value of assets of the plan as determined by the two most recent actuarial valuations prepared under sections 356.214 and 356.215 determines the postretirement increase, as follows:

Funding ratio Postretirement increase
Less than 80 percent 1 percent
At least 80 percent but less than 90 percent 2 percent

(b) The amount determined under paragraph (a) is the full postretirement increase to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement increase is applied, the amount determined under paragraph (a) must be reduced by 50 percent.

(c) If the accrued liability funding ratio based on the actuarial value of assets is at least 90 percent in two consecutive actuarial valuations, subsequent postretirement increases must be paid as specified in subdivision 9.

(d) If, following a postretirement increase under paragraph (a), the accrued liability funding ratio, based on the actuarial value of assets, falls below 80 percent for two consecutive actuarial valuations, the applicable postretirement increase must be reduced to one percent until January 1 of the calendar year next following the date on which the requirements for an increase under paragraph (a) are again satisfied.

Subd. 9.

Calculation of postretirement adjustments.

(a) This subdivision applies if the requirements of subdivision 8, paragraph (c), have been satisfied.

(b) A percentage adjustment must be paid under this subdivision to eligible persons under subdivision 7.

(c) The amount of 2.5 percent is the full postretirement adjustment to be applied as a permanent increase to the regular payment of each eligible member on January 1 of the next calendar year. For any eligible member whose effective date of benefit commencement occurred after January 1 of the calendar year immediately before the postretirement adjustment is applied, the postretirement adjustment amount must be reduced by 50 percent.

(d) In the event the accrued liability funding ratio based on the actuarial value of assets falls below 90 percent for two consecutive actuarial valuations, the applicable postretirement increase must be determined under subdivision 8 until January 1 of the calendar year next following the date on which the requirements of subdivision 8, paragraph (c), are again satisfied.