HF 885

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; modifying various public 
  1.3             pension plan provisions; providing for uniformity in 
  1.4             various administrative provisions; modifying 
  1.5             definitions; making technical and administrative 
  1.6             changes; establishing a pilot program; amending 
  1.7             Minnesota Statutes 1998, sections 3A.03, subdivision 
  1.8             2; 122A.46, subdivision 2; 352.01, subdivision 26; 
  1.9             352.03, subdivision 1; 352.04, subdivision 8; 352.12, 
  1.10            subdivisions 2 and 2a; 352.22, subdivision 2; 352B.01, 
  1.11            subdivisions 3 and 10; 352B.11, subdivisions 1 and 2; 
  1.12            352D.05, subdivision 3; 352D.06, subdivision 3; 
  1.13            352D.09, subdivision 5a; 353.01, subdivisions 6, 15a, 
  1.14            and 28; 353.03, subdivision 4; 353.15, subdivision 2; 
  1.15            353.32, subdivisions 1a and 1b; 353.33, subdivisions 
  1.16            2, 6, 7, and 9; 353.34, subdivision 3; 353.656, 
  1.17            subdivisions 1, 3, and 4; 353.71, subdivision 2; 
  1.18            353B.11, subdivision 3; 354.05, subdivisions 2, 8a, 
  1.19            35, 37, and 40; 354.06, subdivision 1; 354.091; 
  1.20            354.092, subdivision 2; 354.093; 354.094, subdivision 
  1.21            1; 354.10, subdivisions 2 and 4; 354.35; 354.445; 
  1.22            354.46, subdivisions 2 and 2a; 354.48, subdivision 6; 
  1.23            354.49, subdivision 1; 354.52, subdivisions 3, 4, 4a, 
  1.24            and 4b; 354.63, subdivision 2; 356.30, subdivision 1; 
  1.25            490.121, subdivision 17; and 490.124, subdivision 12; 
  1.26            proposing coding for new law in Minnesota Statutes, 
  1.27            chapter 356; repealing Minnesota Statutes 1998, 
  1.28            sections 353.024; and 354.52, subdivision 2. 
  1.29  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.30                             ARTICLE 1 
  1.31                 MINNESOTA STATE RETIREMENT SYSTEM 
  1.32     Section 1.  Minnesota Statutes 1998, section 3A.03, 
  1.33  subdivision 2, is amended to read: 
  1.34     Subd. 2.  [REFUND.] (1) Any person former member who has 
  1.35  ever made contributions pursuant to subdivision 1 who is no 
  1.36  longer a member of the legislature is entitled to receive upon 
  1.37  application to the director a refund of all contributions 
  2.1   credited to the member's account with interest at an annual rate 
  2.2   of six percent compounded annually.  
  2.3      (2) The refund of contributions as provided in clause (1) 
  2.4   terminates all rights of a former member of the legislature or 
  2.5   survivors of the former member under this chapter.  Should the 
  2.6   former member of the legislature again be a member of the 
  2.7   legislature after having taken a refund as provided above, the 
  2.8   member shall be considered a new member.  However, a new member 
  2.9   may reinstate the rights and credit for service forfeited, 
  2.10  provided the new member repays all refunds taken plus interest 
  2.11  at an annual rate of 8.5 percent compounded annually.  
  2.12     (3) No person shall be required to apply for or accept a 
  2.13  refund. 
  2.14     Sec. 2.  Minnesota Statutes 1998, section 352.01, 
  2.15  subdivision 26, is amended to read: 
  2.16     Subd. 26.  [DEPENDENT CHILD.] "Dependent child" means a 
  2.17  biological or adopted child of a deceased employee who has not 
  2.18  reached the age of 20 and is dependent upon the employee for 
  2.19  more than one-half of the child's support 22 or a dependent 
  2.20  child at any age if totally and permanently disabled as defined 
  2.21  in subdivision 17 at the time of the employee's death.  It also 
  2.22  means a child of the member employee conceived during the 
  2.23  member's employee's lifetime and born after the member's 
  2.24  employee's death. 
  2.25     Sec. 3.  Minnesota Statutes 1998, section 352.03, 
  2.26  subdivision 1, is amended to read: 
  2.27     Subdivision 1.  [MEMBERSHIP OF BOARD; ELECTION; TERM.] The 
  2.28  policy-making function of the system is vested in a board of 11 
  2.29  members, who must be known as the board of directors.  This 
  2.30  board shall consist of three members appointed by the governor, 
  2.31  one of whom must be a constitutional officer or appointed state 
  2.32  official and two of whom must be public members knowledgeable in 
  2.33  pension matters, four state employees elected by state employees 
  2.34  covered by the system excluding employees in categories 
  2.35  specifically authorized to designate or elect a member by this 
  2.36  subdivision, one employee of the transit operating division of 
  3.1   the metropolitan council's transit commission operations or its 
  3.2   successor agency designated by the executive committee of the 
  3.3   labor organization that is the exclusive bargaining agent 
  3.4   representing employees of the transit division, one member of 
  3.5   the state patrol retirement fund elected by members of that fund 
  3.6   at a time and in a manner fixed by the board, one employee 
  3.7   covered by the correctional employees plan elected by employees 
  3.8   covered by that plan, and one retired employee elected by 
  3.9   disabled and retired employees of all plans administered by the 
  3.10  system at a time and in a manner to be fixed by the board.  Two 
  3.11  state employee members, whose terms of office begin on the first 
  3.12  Monday in May after their election, must be elected biennially.  
  3.13  Elected members and the appointed member of the metropolitan 
  3.14  council's office of transit operations hold office for a term of 
  3.15  four years, except the retired member whose term is two years, 
  3.16  and until their successors are elected or appointed, and have 
  3.17  qualified.  An employee of the system is not eligible for 
  3.18  membership on the board of directors.  A state employee on leave 
  3.19  of absence is not eligible for election or reelection to 
  3.20  membership on the board of directors.  The term of any board 
  3.21  member who is on leave for more than six months automatically 
  3.22  ends on expiration of this period the term of office. 
  3.23     Sec. 4.  Minnesota Statutes 1998, section 352.04, 
  3.24  subdivision 8, is amended to read: 
  3.25     Subd. 8.  [DEPARTMENT REQUIRED TO PAY OMITTED SALARY 
  3.26  DEDUCTIONS.] (a) If a department fails to take deductions past 
  3.27  due for a period of 60 15 days or less from an employee's salary 
  3.28  as provided in this section, those deductions must be taken on 
  3.29  later payroll abstracts.  
  3.30     (b) If a department fails to take deductions past due for a 
  3.31  period in excess of 60 15 days from an employee's salary as 
  3.32  provided in this section, the department, and not the employee, 
  3.33  must pay on later payroll abstracts the employee and employer 
  3.34  contributions and an amount equivalent to 8.5 percent of the 
  3.35  total amount due in lieu of interest, or if the delay in payment 
  3.36  exceeds one year, 8.5 percent compound annual interest.  
  4.1      (c) If a department fails to take deductions past due for a 
  4.2   period of 60 15 days or less and the employee is no longer in 
  4.3   state service so that the required deductions cannot be taken 
  4.4   from the salary of the employee, the department must 
  4.5   nevertheless pay the required employer contributions.  If any 
  4.6   department fails to take deductions past due for a period in 
  4.7   excess of 60 15 days and the employee is no longer in state 
  4.8   service, the omitted contributions must be recovered under 
  4.9   paragraph (b).  
  4.10     (d) If an employee from whose salary required deductions 
  4.11  were past due for a period of 60 15 days or less leaves state 
  4.12  service before the payment of the omitted deductions and 
  4.13  subsequently returns to state service, the unpaid amount is 
  4.14  considered the equivalent of a refund.  The employee accrues no 
  4.15  right by reason of the unpaid amount, except that the employee 
  4.16  may pay the amount of omitted deductions as provided in section 
  4.17  352.23. 
  4.18     Sec. 5.  Minnesota Statutes 1998, section 352.12, 
  4.19  subdivision 2, is amended to read: 
  4.20     Subd. 2.  [SURVIVING SPOUSE BENEFIT.] (a) If an employee or 
  4.21  former employee has credit for at least three years allowable 
  4.22  service and dies before an annuity or disability benefit has 
  4.23  become payable, notwithstanding any designation of beneficiary 
  4.24  to the contrary, the surviving spouse of the employee may elect 
  4.25  to receive, in lieu of the refund with interest under 
  4.26  subdivision 1, an annuity equal to the joint and 100 percent 
  4.27  survivor annuity which the employee or former employee could 
  4.28  have qualified for on the date of death had earned based on 
  4.29  length of service, average salary, and age the employee would 
  4.30  have been at the date payment begins. 
  4.31     (b) If the employee was under age 55 and has credit for at 
  4.32  least 30 years of allowable service on the date of death, the 
  4.33  surviving spouse may elect to receive a 100 percent joint and 
  4.34  survivor annuity based on the age of the employee would have 
  4.35  been and the age of the surviving spouse on the date of death 
  4.36  payment begins.  The annuity is payable using the full early 
  5.1   retirement reduction under section 352.116, subdivision 1, 
  5.2   paragraph (a), from age 55 to age 55 62 and one-half of the 
  5.3   early retirement reduction from age 55 to the age payment begins.
  5.4      (c) If the employee was under age 55 and has credit for at 
  5.5   least three years of allowable service credit on the date of 
  5.6   death but did not yet qualify for retirement, the surviving 
  5.7   spouse may elect to receive a 100 percent joint and survivor 
  5.8   annuity based on the age of the deceased employee would have 
  5.9   been and the age of the surviving spouse at the time of death 
  5.10  date payment begins.  The annuity is payable using the full 
  5.11  early retirement reduction under section 352.116, subdivision 1 
  5.12  or 1a, to age 55 from age 55 to retirement age and one-half of 
  5.13  the early retirement reduction from age 55 to the age payment 
  5.14  begins.  
  5.15     The surviving spouse of a former employee eligible for 
  5.16  benefits under paragraph (a) may apply for the annuity at any 
  5.17  time after the date on which the employee or former employee 
  5.18  would have attained the required age for retirement based on the 
  5.19  allowable service earned.  The surviving spouse eligible for 
  5.20  surviving spouse benefits under paragraph (b) or (c) may apply 
  5.21  for the annuity at any time after the employee's death.  The 
  5.22  annuity must be computed under sections 352.115, subdivisions 1, 
  5.23  2, and 3, and 352.116, subdivisions 1, 1a, and 3.  Sections 
  5.24  352.22, subdivision 3, and 352.72, subdivision 2, apply to a 
  5.25  deferred annuity or surviving spouse benefit payable under this 
  5.26  subdivision.  The annuity must cease with the last payment 
  5.27  received by the surviving spouse in the lifetime of the 
  5.28  surviving spouse, or upon expiration of a term certain benefit 
  5.29  payment to a surviving spouse under subdivision 2a.  An amount 
  5.30  equal to the excess, if any, of the accumulated contributions 
  5.31  credited to the account of the deceased employee in excess of 
  5.32  the total of the benefits paid and payable to the surviving 
  5.33  spouse must be paid to the deceased employee's or former 
  5.34  employee's last designated beneficiary or, if none, as specified 
  5.35  under subdivision 1 surviving spouse's estate.  
  5.36     Any employee or former employee may request in writing that 
  6.1   this subdivision not apply and that payment be made only to a 
  6.2   designated beneficiary as otherwise provided by this chapter. 
  6.3      Sec. 6.  Minnesota Statutes 1998, section 352.12, 
  6.4   subdivision 2a, is amended to read: 
  6.5      Subd. 2a.  [SURVIVING SPOUSE COVERAGE TERM CERTAIN.] In 
  6.6   lieu of the 100 percent optional annuity under subdivision 2, or 
  6.7   refund under subdivision 1, the surviving spouse of a deceased 
  6.8   employee or former employee may elect to receive survivor 
  6.9   coverage in a term certain of five, ten, 15, or 20 years, but 
  6.10  monthly payments must not exceed 75 percent of the average 
  6.11  high-five monthly salary of the deceased employee or former 
  6.12  employee.  The monthly term certain annuity must be actuarially 
  6.13  equivalent to the 100 percent optional annuity under subdivision 
  6.14  2. 
  6.15     If a survivor elects a term certain annuity and dies before 
  6.16  the expiration of the specified term certain period, the 
  6.17  commuted value of the remaining annuity payments must be paid in 
  6.18  a lump sum to the survivor's estate. 
  6.19     Sec. 7.  Minnesota Statutes 1998, section 352.22, 
  6.20  subdivision 2, is amended to read: 
  6.21     Subd. 2.  [AMOUNT OF REFUND.] Except as provided in 
  6.22  subdivision 3, the refund payable to a person who at any time in 
  6.23  the past ceased to be a state employee by reason of termination 
  6.24  of state service is in an amount equal to employee accumulated 
  6.25  contributions plus interest at the rate of six percent per year 
  6.26  compounded annually.  Included with the refund is any interest 
  6.27  paid as part of repayment of a past refund, plus interest 
  6.28  thereon from the date of repayment.  Interest must be computed 
  6.29  to the first day of the month in which the refund is processed 
  6.30  and must be based on fiscal year or monthly balances, whichever 
  6.31  applies. 
  6.32     Sec. 8.  Minnesota Statutes 1998, section 352B.01, 
  6.33  subdivision 3, is amended to read: 
  6.34     Subd. 3.  [ALLOWABLE SERVICES.] "Allowable service" means:  
  6.35     (a) for members defined in subdivision 2, clause 
  6.36  (a), monthly service is granted for any month for which payments 
  7.1   have been made to the state patrol retirement fund, and 
  7.2      (b) for members defined in subdivision 2, clauses (b) and 
  7.3   (c), service for which payments have been made to the state 
  7.4   patrol retirement fund, service for which payments were made to 
  7.5   the state police officers retirement fund after June 30, 1961, 
  7.6   and all prior service which was credited to a member for service 
  7.7   on or before June 30, 1961.  
  7.8   Allowable service also includes any period of absence from duty 
  7.9   by a member who, by reason of injury incurred in the performance 
  7.10  of duty, is temporarily disabled and for which disability the 
  7.11  state is liable under the workers' compensation law, until the 
  7.12  date authorized by the executive director for commencement of 
  7.13  payment of a disability benefit or return to employment.  
  7.14     Sec. 9.  Minnesota Statutes 1998, section 352B.01, 
  7.15  subdivision 10, is amended to read: 
  7.16     Subd. 10.  [DEPENDENT CHILD.] "Dependent child" means a 
  7.17  natural biological or adopted unmarried child of a deceased 
  7.18  member under the age of 18 23 years, or a dependent child of any 
  7.19  age if totally and permanently disabled as defined in section 
  7.20  352.01, subdivision 17, including any child of the member 
  7.21  conceived during the lifetime of the member and born after the 
  7.22  death of the member. 
  7.23     Sec. 10.  Minnesota Statutes 1998, section 352B.11, 
  7.24  subdivision 1, is amended to read: 
  7.25     Subdivision 1.  [REFUND OF PAYMENTS.] A member who has not 
  7.26  received other benefits under this chapter is entitled to a 
  7.27  refund of payments made by salary deduction at any time in the 
  7.28  past, plus interest, if the member is separated, either 
  7.29  voluntarily or involuntarily, from state service that entitled 
  7.30  the member to membership.  In the event of the member's death, 
  7.31  if there are no survivor benefits payable under this chapter, a 
  7.32  refund is payable to the last designated beneficiary on a form 
  7.33  filed with the director before death, or if no designation is 
  7.34  filed, the refund is payable to the member's estate.  Interest 
  7.35  must be computed at the rate of six percent a year, compounded 
  7.36  annually.  To receive a refund, application must be made on a 
  8.1   form prescribed by the executive director. 
  8.2      Sec. 11.  Minnesota Statutes 1998, section 352B.11, 
  8.3   subdivision 2, is amended to read: 
  8.4      Subd. 2.  [DEATH; PAYMENT TO SPOUSE AND CHILDREN.] If a 
  8.5   member serving actively as a member, or a member or former 
  8.6   member receiving the disability benefit before attaining age 65 
  8.7   or reaching the five-year anniversary of the effective date of 
  8.8   the disability benefit, whichever is later, provided by section 
  8.9   352B.10, subdivisions 1 and 2, dies from any cause before 
  8.10  attaining age 65 or reaching the five-year anniversary of the 
  8.11  effective date of the disability benefit, whichever is later, 
  8.12  the surviving spouse and dependent children are entitled to 
  8.13  benefit payments as follows: 
  8.14     (a) A member with at least three years of allowable service 
  8.15  is deemed to have elected a 100 percent joint and survivor 
  8.16  annuity payable to a surviving spouse only on or after the date 
  8.17  the member or former member became or would have become 55. 
  8.18     (b) The surviving spouse of a member who had credit for 
  8.19  less than three years of service shall receive, for life, a 
  8.20  monthly annuity equal to 50 percent of that part of the average 
  8.21  monthly salary of the member from which deductions were made for 
  8.22  retirement.  
  8.23     (c) The surviving spouse of a member who had credit for at 
  8.24  least three years service and who died after becoming 55 years 
  8.25  old, may elect to receive a 100 percent joint and survivor 
  8.26  annuity, for life, notwithstanding a subsequent remarriage, in 
  8.27  lieu of the annuity prescribed in paragraph (b). 
  8.28     (d) The surviving spouse of any member who had credit for 
  8.29  three years or more and who was not 55 years old at death, shall 
  8.30  receive the benefit equal to 50 percent of the average monthly 
  8.31  salary as described in clause (b) until the deceased member 
  8.32  would have become 55 years old, and beginning the first of the 
  8.33  month following that date, may elect to receive the 100 percent 
  8.34  joint and survivor annuity.  
  8.35     (e) Each dependent child shall receive a monthly annuity 
  8.36  equal to ten 12-1/2 percent of that part of the average monthly 
  9.1   salary of the former member from which deductions were made for 
  9.2   retirement.  A dependent child over 18 and under 23 years of age 
  9.3   also may receive the monthly benefit provided in this section, 
  9.4   if the child is continuously attending an accredited school as a 
  9.5   full-time student during the normal school year as determined by 
  9.6   the director.  If the child does not continuously attend school 
  9.7   but separates from full-time attendance during any part of a 
  9.8   school year, the annuity shall cease at the end of the month of 
  9.9   separation.  In addition, a payment of $20 per month shall be 
  9.10  prorated equally to surviving dependent children when the former 
  9.11  member is survived by one or more dependent children.  Payments 
  9.12  for the benefit of any qualified dependent minor child must be 
  9.13  made to the surviving spouse, or if there is none, to the legal 
  9.14  guardian of the child.  The maximum monthly benefit for any one 
  9.15  family must not be less than 50 nor exceed 70 percent of the 
  9.16  average monthly salary for any number of children. 
  9.17     (f) If the member dies under circumstances that entitle the 
  9.18  surviving spouse and dependent children to receive benefits 
  9.19  under the workers' compensation law, the workers' compensation 
  9.20  benefits received by them must not be deducted from the benefits 
  9.21  payable under this section. 
  9.22     (g) The surviving spouse of a deceased former member who 
  9.23  had credit for three or more years of allowable service, but not 
  9.24  the spouse of a former member receiving a disability benefit 
  9.25  under section 352B.10, subdivision 2, is entitled to receive the 
  9.26  100 percent joint and survivor annuity at the time the deceased 
  9.27  member would have become 55 years old.  If a former member dies 
  9.28  who does not qualify for other benefits under this chapter, the 
  9.29  surviving spouse or, if none, the children, designated 
  9.30  beneficiary, or heirs the member's estate are entitled to a 
  9.31  refund of the accumulated deductions left in the fund plus 
  9.32  interest at the rate of six percent per year compounded annually.
  9.33     Sec. 12.  Minnesota Statutes 1998, section 352D.05, 
  9.34  subdivision 3, is amended to read: 
  9.35     Subd. 3.  After termination of covered employment or at any 
  9.36  time thereafter, a participant is entitled, upon application, to 
 10.1   withdraw the cash value of the participant's total shares or 
 10.2   leave such shares on deposit with the supplemental retirement 
 10.3   fund.  The account is valued at the end of the month in which 
 10.4   application for withdrawal is made.  Shares not withdrawn remain 
 10.5   on deposit with the supplemental retirement fund until the 
 10.6   former participant becomes at least 55 years old, and applies 
 10.7   for an annuity under section 352D.06, subdivision 1.  
 10.8      Sec. 13.  Minnesota Statutes 1998, section 352D.06, 
 10.9   subdivision 3, is amended to read: 
 10.10     Subd. 3.  An annuity herein shall begin to accrue the first 
 10.11  day of the first full month after an application is received or 
 10.12  after termination of state service, whichever is later.  Upon 
 10.13  the former employee's request, the annuity may begin to accrue 
 10.14  up to six months before redemption of shares, and will be based 
 10.15  on the account value at redemption and upon the age of the 
 10.16  former employee at the date annuity accrual starts.  The account 
 10.17  is valued and redeemed the later of the end of the month of 
 10.18  termination of employment, or the end of the month of receipt of 
 10.19  the annuity application for the purpose of computing the annuity.
 10.20     Sec. 14.  Minnesota Statutes 1998, section 352D.09, 
 10.21  subdivision 5a, is amended to read: 
 10.22     Subd. 5a.  [SMALL BALANCE ACCOUNTS.] If a former 
 10.23  participant who contributed less than $100 $500 in employee 
 10.24  contributions cannot be contacted by the system for five or more 
 10.25  years, the value of the shares shall be appropriated to the 
 10.26  general employees retirement fund, but upon subsequent contact 
 10.27  by the former employee the account shall be reinstated to the 
 10.28  amount that would have been payable had the money been left in 
 10.29  the unclassified plan. 
 10.30     Sec. 15.  [356.89] [PILOT PROGRAM.] 
 10.31     The Minnesota state retirement system and the public 
 10.32  employees retirement association are authorized to start a pilot 
 10.33  program to transfer previous service credit to the plan to which 
 10.34  the employee is currently contributing, transfer credit to the 
 10.35  plan to which the employee is currently contributing, transfer 
 10.36  credit for employees who are no longer contributing, and 
 11.1   transfer payments to current retirees who had service covered by 
 11.2   both of the plans.  The pilot program will be established for a 
 11.3   three-year period after being certified by the actuary retained 
 11.4   by the legislative commission on pensions and retirement that 
 11.5   there is no significant additional liability added to the fund 
 11.6   receiving the additional service credit and that the employees' 
 11.7   benefits will not increase or decrease under the pilot program. 
 11.8      The plan receiving the service credit or benefit obligation 
 11.9   will pay all future benefits to the employee and must retain the 
 11.10  appropriate records to pay future benefits.  The amount of the 
 11.11  benefit from the plan receiving the service credit must be equal 
 11.12  to the benefit that would have been payable from the plan 
 11.13  transferring the service credit under the applicable laws under 
 11.14  this chapter and chapters 352 and 353. 
 11.15     Upon the transfer of service credit or benefit payment, the 
 11.16  fund transferring the service will transfer assets representing 
 11.17  the actuarial present value of the service credit being 
 11.18  transferred to the fund receiving the service credit.  Once the 
 11.19  service credit is transferred, the fund transferring the service 
 11.20  is no longer liable to make benefit payments of any kind, and 
 11.21  any future liability will be the responsibility of the fund 
 11.22  receiving the service credit. 
 11.23     Full details of the pilot program must be submitted to the 
 11.24  actuary retained by the legislative commission on pensions and 
 11.25  retirement prior to implementation.  The transfer of service 
 11.26  credit must result in no benefit increase or decrease for the 
 11.27  member and cannot result in a significant cost to either the 
 11.28  fund transferring the service credit or the fund receiving the 
 11.29  service credit.  The actuary retained by the legislative 
 11.30  commission on pensions and retirement must certify that the 
 11.31  pilot program meets the requirements under this statute before 
 11.32  it is implemented. 
 11.33     The executive director of the Minnesota state retirement 
 11.34  system and the public employees retirement association will 
 11.35  report back to the legislative commission on pensions and 
 11.36  retirement one year after the program is established.  The 
 12.1   report will include data regarding the number of accounts 
 12.2   transferred and whether or not any financial impact resulted 
 12.3   from the pilot project.  
 12.4      Sec. 16.  Minnesota Statutes 1998, section 490.121, 
 12.5   subdivision 17, is amended to read: 
 12.6      Subd. 17.  [DEPENDENT CHILD.] "Dependent child" means any 
 12.7   natural a biological or adopted child of a deceased judge who 
 12.8   has not reached the age of 18 years, or having reached the age 
 12.9   of 18, is under age 22 and is a full time student throughout the 
 12.10  normal school year, unmarried, or at any age who is totally and 
 12.11  permanently disabled as defined in section 352.01, subdivision 
 12.12  17, and actually dependent for more than one-half of the child's 
 12.13  support upon such judge for a period of at least 90 days prior 
 12.14  to the judge's death.  It also includes any natural a biological 
 12.15  child of the judge born after the judge's death. 
 12.16     Sec. 17.  Minnesota Statutes 1998, section 490.124, 
 12.17  subdivision 12, is amended to read: 
 12.18     Subd. 12.  [REFUND.] (a) Any person who ceases to be a 
 12.19  judge but who does not qualify for a retirement annuity or other 
 12.20  benefit under section 490.121 shall be entitled to a refund in 
 12.21  an amount equal to all the person's contributions to the judges' 
 12.22  retirement fund, regardless of when they were made, plus 
 12.23  interest computed to the first day of the month in which the 
 12.24  refund is processed based on fiscal year balances at an annual 
 12.25  rate of five six percent compounded annually.  
 12.26     (b) A refund of contributions under paragraph (a) 
 12.27  terminates all service credits and all rights and benefits of 
 12.28  the judge and the judge's survivors.  A person who becomes a 
 12.29  judge again after taking a refund under paragraph (a) may 
 12.30  reinstate previously terminated service credits, rights, and 
 12.31  benefits by repaying all refunds.  A repayment must include 
 12.32  interest at an annual rate of 8.5 percent compounded annually. 
 12.33     Sec. 18.  [EFFECTIVE DATE.] 
 12.34     Sections 1 to 17 are effective July 1, 1999. 
 12.35                             ARTICLE 2 
 12.36              PUBLIC EMPLOYEES RETIREMENT ASSOCIATION 
 13.1      Section 1.  Minnesota Statutes 1998, section 353.01, 
 13.2   subdivision 6, is amended to read: 
 13.3      Subd. 6.  [GOVERNMENTAL SUBDIVISION.] (a) "Governmental 
 13.4   subdivision" means a county, city, town, school district within 
 13.5   this state, or a department or unit of state government, or any 
 13.6   public body whose revenues are derived from taxation, fees, 
 13.7   assessments or from other sources. 
 13.8      (b) Governmental subdivision also means the public 
 13.9   employees retirement association, the league of Minnesota 
 13.10  cities, the association of metropolitan municipalities, public 
 13.11  hospitals owned or operated by, or an integral part of, a 
 13.12  governmental subdivision or governmental subdivisions, the 
 13.13  association of Minnesota counties, the metropolitan intercounty 
 13.14  association, the Minnesota municipal utilities association, the 
 13.15  metropolitan airports commission, and the Minneapolis employees 
 13.16  retirement fund for employment initially commenced after June 
 13.17  30, 1979, the range association of municipalities and schools, 
 13.18  soil and water conservation districts, and economic development 
 13.19  authorities created or operating under sections 469.090 to 
 13.20  469.108. 
 13.21     (c) Governmental subdivision does not mean any municipal 
 13.22  housing and redevelopment authority organized under the 
 13.23  provisions of sections 469.001 to 469.047; or any port authority 
 13.24  organized under sections 469.048 to 469.068 469.089; or any 
 13.25  hospital district organized or reorganized prior to July 1, 
 13.26  1975, under sections 447.31 to 447.37 or the successor of the 
 13.27  district, nor the Minneapolis community development agency.  
 13.28     Sec. 2.  Minnesota Statutes 1998, section 353.01, 
 13.29  subdivision 15a, is amended to read: 
 13.30     Subd. 15a.  [DEPENDENT CHILD.] For the purpose of survivor 
 13.31  benefit eligibility under section 353.32, subdivision 1c, 
 13.32  "dependent child" means any biological or adopted, unmarried 
 13.33  child of a deceased member who has not reached the age of 20 and 
 13.34  is dependent for more than one-half of support upon the member.  
 13.35  It also includes any child of the member conceived during the 
 13.36  member's lifetime and born after the member's death. 
 14.1      Sec. 3.  Minnesota Statutes 1998, section 353.01, 
 14.2   subdivision 28, is amended to read: 
 14.3      Subd. 28.  [RETIREMENT.] (a) "Retirement" means the 
 14.4   commencement of payment of an annuity based on a date designated 
 14.5   by the board of trustees.  This date determines the rights under 
 14.6   this chapter which occur either before or after retirement.  A 
 14.7   right to retirement is subject to termination of public service 
 14.8   under subdivision 11a or termination of membership under 
 14.9   subdivision 11b, the earlier of which will determine the date 
 14.10  membership and coverage cease.  A right to retirement must not 
 14.11  accrue without is contingent upon a complete and continuous 
 14.12  separation for 30 days from employment as a public 
 14.13  employee under subdivision 2 or independent contractor with a 
 14.14  governmental subdivision as defined under subdivision 6. 
 14.15     A former member of the basic or police and fire fund who 
 14.16  becomes a coordinated member upon returning to eligible, 
 14.17  nontemporary public service, terminates employment before 
 14.18  obtaining six months' allowable service under subdivision 16, 
 14.19  paragraph (a), in the coordinated fund, and is eligible to 
 14.20  receive an annuity the first day of the month after the most 
 14.21  recent termination date shall not accrue a right to a retirement 
 14.22  annuity under the coordinated fund.  An annuity otherwise 
 14.23  payable to the former member must be based on the laws in effect 
 14.24  on the date of termination of the most recent service under the 
 14.25  basic or police and fire fund and shall be retroactive to the 
 14.26  first day of the month following that termination date or one 
 14.27  year preceding the filing of an application for retirement 
 14.28  annuity as provided by section 353.29, subdivision 7, whichever 
 14.29  is later.  The annuity payment must be suspended or reduced 
 14.30  under the provisions of section 353.37, if earned compensation 
 14.31  for the reemployment equals or exceeds the amounts indicated 
 14.32  under that section.  The association will refund the employee 
 14.33  deductions made to the coordinated fund, with interest under 
 14.34  section 353.34, subdivision 2, return the accompanying employer 
 14.35  contributions, and remove the allowable service credits covering 
 14.36  the deductions refunded. 
 15.1      (b) Notwithstanding the 30-day separation requirement under 
 15.2   clause (a), a member of the defined benefit plan under this 
 15.3   chapter, who also participates in the public employees defined 
 15.4   contribution plan under chapter 353D for other public service, 
 15.5   may be paid, if eligible, a retirement annuity from the defined 
 15.6   benefit plan while participating in the defined contribution 
 15.7   plan. 
 15.8      Sec. 4.  Minnesota Statutes 1998, section 353.03, 
 15.9   subdivision 4, is amended to read: 
 15.10     Subd. 4.  [OFFICES.] The board of trustees with approval of 
 15.11  the commissioner of administration shall make provision for 
 15.12  suitable office space in the state capitol or other state office 
 15.13  buildings, or at such other location in St. Paul as is 
 15.14  determined by the board with approval of the commissioner for 
 15.15  the use of the board of trustees and its executive director.  
 15.16  The commissioner shall give the board at least four months 
 15.17  notice for any proposed removal from their present 
 15.18  location association.  Any and all purchase or rental charges 
 15.19  shall be paid by the trustees from the public employees 
 15.20  retirement fund. 
 15.21     Sec. 5.  Minnesota Statutes 1998, section 353.15, 
 15.22  subdivision 2, is amended to read: 
 15.23     Subd. 2.  [AUTOMATIC DEPOSITS.] The association may pay an 
 15.24  annuity, benefit or refund to a trust company, qualified under 
 15.25  chapter 48, that is trustee for a person eligible to receive 
 15.26  such annuity, benefit, or refund.  Upon the request of a 
 15.27  retired, disabled or former member, the association may mail or 
 15.28  send by electronic transfer the annuity, benefit or refund check 
 15.29  to a banking institution, savings association, domestic cash 
 15.30  management account, or credit union for deposit to such person's 
 15.31  account or joint account with a spouse.  The association may 
 15.32  prescribe the conditions under which such payment will be made.  
 15.33     Sec. 6.  Minnesota Statutes 1998, section 353.32, 
 15.34  subdivision 1a, is amended to read: 
 15.35     Subd. 1a.  [SURVIVING SPOUSE OPTIONAL ANNUITY.] (a) If a 
 15.36  member or former member who has credit for not less than three 
 16.1   years of allowable service and dies before the annuity or 
 16.2   disability benefit begins to accrue under section 353.29, 
 16.3   subdivision 7, or 353.33, subdivision 2, notwithstanding any 
 16.4   designation of beneficiary to the contrary, the surviving spouse 
 16.5   may elect to receive, instead of a refund with interest under 
 16.6   subdivision 1, or surviving spouse benefits otherwise payable 
 16.7   under section 353.31, an annuity equal to the 100 percent joint 
 16.8   and survivor annuity that the member could have qualified for 
 16.9   had the member terminated earned based on length of service and 
 16.10  average salary on the date of death and the age the member would 
 16.11  have been and the age of the surviving spouse on the date 
 16.12  payment begins.  
 16.13     (b) If the member was under age 55 and has credit for at 
 16.14  least 30 years of allowable service on the date of death, the 
 16.15  surviving spouse may elect to receive a 100 percent joint and 
 16.16  survivor annuity based on the age of the member would have been 
 16.17  and the age of the surviving spouse on the date of death payment 
 16.18  begins.  The annuity is payable using the full early retirement 
 16.19  reduction under section 353.30, subdivisions 1b and 1c, to from 
 16.20  age 55 to age 62 and one-half of the early retirement reduction 
 16.21  from age 55 to the age payment begins.  
 16.22     (c) If the member was under age 55 and has credit for at 
 16.23  least three years of allowable service on the date of death but 
 16.24  did not qualify for retirement, the surviving spouse may elect 
 16.25  to receive the 100 percent joint and survivor annuity based on 
 16.26  the age of the member would have been and the age of the 
 16.27  surviving spouse at on the time of death date payment begins.  
 16.28  The annuity is payable using the full early retirement reduction 
 16.29  under section 353.30, subdivision 1, 1b, 1c, or 5, to age 55 and 
 16.30  one-half of the early retirement reduction from age 55 to the 
 16.31  age payment begins. 
 16.32     Notwithstanding the definition of surviving spouse in 
 16.33  section 353.01, subdivision 20, a former spouse of the member, 
 16.34  if any, is entitled to a portion of the monthly surviving spouse 
 16.35  optional annuity if stipulated under the terms of a marriage 
 16.36  dissolution decree filed with the association.  If there is no 
 17.1   surviving spouse or child or children, a former spouse may be 
 17.2   entitled to a lump-sum refund payment under subdivision 1, if 
 17.3   provided for in a marriage dissolution decree but not a monthly 
 17.4   surviving spouse optional annuity despite the terms of a 
 17.5   marriage dissolution decree filed with the association. 
 17.6      The surviving spouse eligible for surviving spouse benefits 
 17.7   under paragraph (a) may apply for the annuity at any time after 
 17.8   the date on which the deceased employee would have attained the 
 17.9   required age for retirement based on the employee's allowable 
 17.10  service.  The surviving spouse eligible for surviving spouse 
 17.11  benefits under paragraph (b) or (c) may apply for an annuity any 
 17.12  time after the member's death.  The annuity must be computed 
 17.13  under sections 353.29, subdivisions 2 and 3; 353.30, 
 17.14  subdivisions 1, 1a, 1b, 1c, and 5; and 353.31, subdivision 3.  
 17.15     Sections 353.34, subdivision 3, and 353.71, subdivision 2, 
 17.16  apply to a deferred annuity or surviving spouse benefit payable 
 17.17  under this subdivision.  No payment may accrue beyond the end of 
 17.18  the month in which entitlement to the annuity has terminated or 
 17.19  upon expiration of the term certain benefit payment under 
 17.20  subdivision 1b.  An amount equal to any excess of the 
 17.21  accumulated contributions that were credited to the account of 
 17.22  the deceased employee over and above the total of the annuities 
 17.23  paid and payable to the surviving spouse must be paid to the 
 17.24  deceased member's last designated beneficiary or, if none, as 
 17.25  specified under subdivision 1 surviving spouse's estate.  
 17.26     A member may specify in writing that this subdivision does 
 17.27  not apply and that payment may be made only to the designated 
 17.28  beneficiary as otherwise provided by this chapter.  The waiver 
 17.29  of a surviving spouse annuity under this section does not make a 
 17.30  dependent child eligible for benefits under subdivision 1c. 
 17.31     Sec. 7.  Minnesota Statutes 1998, section 353.32, 
 17.32  subdivision 1b, is amended to read: 
 17.33     Subd. 1b.  [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the 
 17.34  100 percent optional annuity under subdivision 1a, or a refund 
 17.35  under subdivision 1, the surviving spouse of a deceased member 
 17.36  may elect to receive survivor coverage for a term certain 
 18.1   of five, ten, 15, or 20 years, but monthly payments must not 
 18.2   exceed 75 percent of the average high-five monthly salary of the 
 18.3   deceased member.  The monthly term certain annuity must be 
 18.4   actuarially equivalent to the 100 percent optional annuity under 
 18.5   subdivision 1a. 
 18.6      If a surviving spouse elects a term certain annuity and 
 18.7   dies before the expiration of the specified term certain period, 
 18.8   the commuted value of the remaining annuity payments must be 
 18.9   paid in a lump sum to the survivor's estate. 
 18.10     Sec. 8.  Minnesota Statutes 1998, section 353.33, 
 18.11  subdivision 2, is amended to read: 
 18.12     Subd. 2.  [APPLICATIONS; ACCRUAL OF BENEFITS.] Every claim 
 18.13  or demand for a total and permanent disability benefit must be 
 18.14  initiated by written application in the manner and form 
 18.15  prescribed by the executive director showing compliance with the 
 18.16  statutory conditions qualifying the applicant for a total and 
 18.17  permanent disability benefit and filed with the executive 
 18.18  director.  A member or former member who became totally and 
 18.19  permanently disabled during a period of membership shall file 
 18.20  application for total and permanent disability benefits within 
 18.21  three years next following termination of public service.  This 
 18.22  benefit begins to accrue the day following the commencement of 
 18.23  disability, 90 days preceding the filing of the application, or, 
 18.24  if annual or sick leave is paid for more than the 90-day period, 
 18.25  from the date salary ceased, whichever is later.  No member is 
 18.26  entitled to receive a disability benefit payment when there 
 18.27  remains to the member's credit unused annual leave or sick leave 
 18.28  or under any other circumstances when, during the period of 
 18.29  disability, there has been no impairment of the person's 
 18.30  salary.  Payment must not accrue beyond the end of the month in 
 18.31  which entitlement has terminated.  If the disabilitant dies 
 18.32  prior to negotiating the check for the month in which death 
 18.33  occurs, payment is made to the surviving spouse, or if none, to 
 18.34  the designated beneficiary, or if none, to the estate.  An 
 18.35  applicant for total and permanent disability benefits may file a 
 18.36  retirement annuity application under section 353.29, subdivision 
 19.1   4, simultaneously with an application for total and permanent 
 19.2   disability benefits.  The retirement annuity application is void 
 19.3   upon the determination of the entitlement for disability 
 19.4   benefits by the executive director.  If disability benefits are 
 19.5   denied, the retirement annuity application must be initiated and 
 19.6   processed. 
 19.7      Sec. 9.  Minnesota Statutes 1998, section 353.33, 
 19.8   subdivision 6, is amended to read: 
 19.9      Subd. 6.  [CONTINUING ELIGIBILITY FOR BENEFITS.] The 
 19.10  association shall determine eligibility for continuation of 
 19.11  disability benefits and require periodic examinations and 
 19.12  evaluations of disabled members as frequently as deemed 
 19.13  necessary.  The association shall require the disabled member to 
 19.14  provide and authorize release of medical evidence, including all 
 19.15  medical records and information from any source, relating to an 
 19.16  application for continuation of disability benefits.  Disability 
 19.17  benefits are contingent upon a disabled person's participation 
 19.18  in a vocational rehabilitation program if the executive director 
 19.19  determines that the disabled person may be able to return to a 
 19.20  gainful occupation.  If a member is found to be no longer 
 19.21  totally and permanently disabled and is reinstated to the 
 19.22  payroll, payments must cease the first of the month following 
 19.23  the reinstatement to the payroll the expiration of 30 days after 
 19.24  the member receives a certified letter notifying the member that 
 19.25  payments will cease. 
 19.26     Sec. 10.  Minnesota Statutes 1998, section 353.33, 
 19.27  subdivision 7, is amended to read: 
 19.28     Subd. 7.  [PARTIAL REEMPLOYMENT.] If, following a work or 
 19.29  non-work-related injury or illness, a disabled person resumes 
 19.30  a gainful part-time occupation from which earnings are less than 
 19.31  the salary at the date of disability or the salary currently 
 19.32  paid for similar positions, the board shall continue the 
 19.33  disability benefit in an amount that, when the normal disability 
 19.34  benefit is added to the earnings, and workers' compensation 
 19.35  benefit if applicable, does not exceed the salary at the date of 
 19.36  disability or the salary currently paid for similar positions, 
 20.1   whichever is higher, provided that the member remains disabled 
 20.2   and the disability benefit does not exceed the disability 
 20.3   benefit originally allowed, plus any postretirement adjustments 
 20.4   payable after December 31, 1988, in accordance with section 
 20.5   11A.18, subdivision 10.  No deductions for the retirement fund 
 20.6   may be taken from the salary of a disabled person who is 
 20.7   receiving a disability benefit as provided in this subdivision. 
 20.8      Sec. 11.  Minnesota Statutes 1998, section 353.33, 
 20.9   subdivision 9, is amended to read: 
 20.10     Subd. 9.  [RETURN TO PUBLIC SERVICE FULL-TIME EMPLOYMENT.] 
 20.11  Any person receiving a disability benefit under this section who 
 20.12  is restored to active public service except persons receiving 
 20.13  benefits as provided in subdivision 7, full-time employment 
 20.14  shall have the disability benefit discontinued on the first day 
 20.15  of the month following the return to full-time employment: 
 20.16     (1) if the person is employed by a governmental subdivision 
 20.17  as defined under section 353.01, subdivision 6, deductions must 
 20.18  be taken for the retirement fund and upon subsequent retirement 
 20.19  have the retirement annuity payable based upon all allowable 
 20.20  service including that upon which the disability benefits were 
 20.21  based; or 
 20.22     (2) if the full-time employment is not through public 
 20.23  service covered under this chapter, the account shall be placed 
 20.24  on a deferred status and the subsequent retirement annuity will 
 20.25  be calculated as provided in section 353.34, subdivision 3, and 
 20.26  will be based upon all allowable service including that upon 
 20.27  which the disability benefits were based. 
 20.28     Sec. 12.  Minnesota Statutes 1998, section 353.34, 
 20.29  subdivision 3, is amended to read: 
 20.30     Subd. 3.  [DEFERRED ANNUITY; ELIGIBILITY; COMPUTATION.] A 
 20.31  member with at least three years of allowable service when 
 20.32  termination of public service or termination of membership 
 20.33  occurs, instead of applying for a refund, has the option of 
 20.34  leaving the accumulated deductions in the fund and being 
 20.35  entitled to a deferred retirement annuity commencing at normal 
 20.36  retirement age or to a deferred early retirement annuity under 
 21.1   section 353.30, subdivision 1, 1a, 1b, 1c, or 5.  The deferred 
 21.2   annuity must be computed under section 353.29, subdivisions 2 
 21.3   and 3, on the basis of the law in effect on the date of 
 21.4   termination of public service or termination of membership and 
 21.5   must be augmented as provided in section 353.71, subdivision 2.  
 21.6   A former member qualified to apply for a deferred retirement 
 21.7   annuity may revoke this option at any time before the 
 21.8   commencement of deferred annuity payments by making application 
 21.9   for a refund.  The person is entitled to a refund of accumulated 
 21.10  member contributions within 30 days following date of receipt of 
 21.11  the application by the executive director. 
 21.12     Sec. 13.  Minnesota Statutes 1998, section 353.656, 
 21.13  subdivision 1, is amended to read: 
 21.14     Subdivision 1.  [IN LINE OF DUTY; COMPUTATION OF BENEFITS.] 
 21.15  A member of the police and fire fund who becomes disabled and 
 21.16  physically unfit to perform duties as a police officer or, 
 21.17  firefighter subsequent to June 30, 1973, or paramedic as defined 
 21.18  under section 353.64, subdivision 10, as a direct result of an 
 21.19  injury, sickness, or other disability incurred in or arising out 
 21.20  of any act of duty, which has or is expected to render the 
 21.21  member physically or mentally unable to perform the duties as a 
 21.22  police officer or, firefighter, or paramedic as defined under 
 21.23  section 353.64, subdivision 10, for a period of at least one 
 21.24  year, shall receive disability benefits during the period of 
 21.25  such disability.  The benefits must be in an amount equal to 60 
 21.26  percent of the "average salary" under subdivision 3, plus an 
 21.27  additional percent specified in section 356.19, subdivision 6, 
 21.28  of said average salary for each year of service in excess of 20 
 21.29  years.  Should disability under this subdivision occur before 
 21.30  the member has at least five years of allowable service credit 
 21.31  in the police and fire fund, the disability benefit must be 
 21.32  computed on the "average salary" from which deductions were made 
 21.33  for contribution to the police and fire fund. 
 21.34     Sec. 14.  Minnesota Statutes 1998, section 353.656, 
 21.35  subdivision 3, is amended to read: 
 21.36     Subd. 3.  [NONDUTY DISABILITY BENEFIT.] Any member of the 
 22.1   police and fire fund who becomes disabled after not less than 
 22.2   one year of allowable service because of sickness or injury 
 22.3   occurring while not on duty as a police officer or, firefighter, 
 22.4   or paramedic as defined under section 353.64, subdivision 10, 
 22.5   and by reason of that sickness or injury the member has been or 
 22.6   is expected to be unable to perform the duties as a police 
 22.7   officer or, firefighter, or paramedic as defined under section 
 22.8   353.64, subdivision 10, for a period of at least one year, is 
 22.9   entitled to receive a disability benefit.  The benefit must be 
 22.10  paid in the same manner as if the benefit were paid under 
 22.11  section 353.651.  If a disability under this subdivision occurs 
 22.12  after one but in less than 15 years of allowable service, the 
 22.13  disability benefit must be the same as though the member had at 
 22.14  least 15 years service.  For a member who is employed as a 
 22.15  full-time firefighter by the department of military affairs of 
 22.16  the state of Minnesota, allowable service as a full-time state 
 22.17  military affairs department firefighter credited by the 
 22.18  Minnesota state retirement system may be used in meeting the 
 22.19  minimum allowable service requirement of this subdivision. 
 22.20     Sec. 15.  Minnesota Statutes 1998, section 353.656, 
 22.21  subdivision 4, is amended to read: 
 22.22     Subd. 4.  [LIMITATION ON DISABILITY BENEFIT PAYMENTS.] (a) 
 22.23  No member is entitled to receive a disability benefit payment 
 22.24  when there remains to the member's credit unused annual leave or 
 22.25  sick leave or under any other circumstances when, during the 
 22.26  period of disability, there has been no impairment of the 
 22.27  person's salary as a police officer or, a firefighter, or a 
 22.28  paramedic as defined under section 353.64, subdivision 10, 
 22.29  whichever applies.  
 22.30     (b) If a disabled member resumes a gainful occupation with 
 22.31  earnings less than, that when added to the normal disability 
 22.32  benefit, and workers' compensation benefit if applicable, exceed 
 22.33  the disabilitant reemployment earnings limit, the amount of the 
 22.34  disability benefit must be reduced as provided in this 
 22.35  paragraph.  The disabilitant reemployment earnings limit is the 
 22.36  greater of: 
 23.1      (1) the salary earned at the date of disability; or 
 23.2      (2) 125 percent of the salary currently paid by the 
 23.3   employing governmental subdivision for similar positions.  
 23.4      The disability benefit must be reduced by one dollar for 
 23.5   each three dollars by which the total amount of the current 
 23.6   disability benefit, any workers' compensation benefits if 
 23.7   applicable, and actual earnings exceed the greater disabilitant 
 23.8   reemployment earnings limit.  In no event may the disability 
 23.9   benefit as adjusted under this subdivision exceed the disability 
 23.10  benefit originally allowed.  
 23.11     Sec. 16.  Minnesota Statutes 1998, section 353.71, 
 23.12  subdivision 2, is amended to read: 
 23.13     Subd. 2.  [DEFERRED ANNUITY COMPUTATION; AUGMENTATION.] (a) 
 23.14  The deferred annuity, if any, accruing under subdivision 1, or 
 23.15  sections 353.34, subdivision 3, and 353.68, subdivision 4, must 
 23.16  be computed in the manner provided in said sections, on the 
 23.17  basis of allowable service prior to termination of public 
 23.18  service and augmented as provided herein.  The required reserves 
 23.19  applicable to a deferred annuity, or to an annuity for which a 
 23.20  former member was eligible but had not applied, or to any 
 23.21  deferred segment of an annuity shall be determined as of the 
 23.22  date the annuity begins to accrue and shall be augmented from 
 23.23  the first day of the month following the month in which the 
 23.24  former member ceased to be a public employee, or July 1, 1971, 
 23.25  whichever is later, to the first day of the month in which the 
 23.26  annuity begins to accrue, at the rate of five percent per annum 
 23.27  compounded annually until January 1, 1981, and at the rate of 
 23.28  three percent thereafter until January 1 of the year following 
 23.29  the year in which the former member attains age 55.  From that 
 23.30  date to the effective date of retirement, the rate is five 
 23.31  percent per annum compounded annually.  If a person has more 
 23.32  than one period of uninterrupted service, the required reserves 
 23.33  related to each period shall be augmented by interest pursuant 
 23.34  to this subdivision.  The sum of the augmented required reserves 
 23.35  so determined shall be the present value of the annuity.  
 23.36  Uninterrupted service for the purpose of this subdivision shall 
 24.1   mean periods of covered employment during which the employee has 
 24.2   not been separated from public service for more than two years.  
 24.3   If a person repays a refund, the service restored thereby shall 
 24.4   be considered as continuous with the next period of service for 
 24.5   which the employee has credit with this association. The formula 
 24.6   percentages used for each period of uninterrupted service shall 
 24.7   be those as would be applicable to a new employee.  This section 
 24.8   shall not reduce the annuity otherwise payable under this 
 24.9   chapter.  This subdivision shall apply to deferred annuitants of 
 24.10  record on July 1, 1971, and to employees who thereafter become 
 24.11  deferred annuitants; it shall also apply from July 1, 1971, to 
 24.12  former members who make application for an annuity after July 1, 
 24.13  1973. 
 24.14     (b) The retirement annuity or disability benefit of, or the 
 24.15  survivor benefit payable on behalf of, a former member who 
 24.16  terminated service before July 1, 1997, or the survivor benefit 
 24.17  payable on behalf of a basic or police and fire member who was 
 24.18  receiving disability benefits before July 1, 1997, which is not 
 24.19  first payable until after June 30, 1997, must be increased on an 
 24.20  actuarial equivalent basis to reflect the change in the 
 24.21  postretirement interest rate actuarial assumption under section 
 24.22  356.215, subdivision 4d, from five percent to six percent under 
 24.23  a calculation procedure and tables adopted by the board and 
 24.24  approved by the actuary retained by the legislative commission 
 24.25  on pensions and retirement. 
 24.26     Sec. 17.  Minnesota Statutes 1998, section 353B.11, 
 24.27  subdivision 3, is amended to read: 
 24.28     Subd. 3.  [AMOUNT; SURVIVING SPOUSE BENEFIT.] (a) The 
 24.29  surviving spouse benefit shall be 30 percent of the salary base 
 24.30  for the former members of the following consolidating relief 
 24.31  associations:  
 24.32     (1) Albert Lea firefighters relief association; 
 24.33     (2) Albert Lea police relief association; 
 24.34     (3) Anoka police relief association; 
 24.35     (4) Austin police relief association; 
 24.36     (5) Brainerd police benefit association; 
 25.1      (6) Crookston police relief association; 
 25.2      (7) Faribault fire department relief association; and 
 25.3      (8) West St. Paul firefighters relief association.  
 25.4      (b) The surviving spouse benefit shall be 25 percent of the 
 25.5   salary base for the former members of the following 
 25.6   consolidating relief associations:  
 25.7      (1) Chisholm police relief association; 
 25.8      (2) Duluth firefighters relief association; 
 25.9      (3) Duluth police pension association; 
 25.10     (4) Fairmont police benefit association; 
 25.11     (5) Red Wing fire department relief association; 
 25.12     (6) South St. Paul police relief association; and 
 25.13     (7) West St. Paul police relief association. 
 25.14     (c) The surviving spouse benefit shall be 24 percent of the 
 25.15  salary base for the former members of the following 
 25.16  consolidating relief associations: 
 25.17     (1) Fridley police pension association; 
 25.18     (2) Richfield police relief association; 
 25.19     (3) Rochester fire department relief association; 
 25.20     (4) Rochester police relief association; 
 25.21     (5) Winona fire department relief association; and 
 25.22     (6) Winona police relief association. 
 25.23     (d) The surviving spouse benefit shall be 40 percent of the 
 25.24  salary base for the former members of the following 
 25.25  consolidating relief associations: 
 25.26     (1) Columbia Heights fire department relief association, 
 25.27  paid division; and 
 25.28     (2) New Ulm police relief association.  
 25.29     (e) The surviving spouse benefit shall be $250 per month 30 
 25.30  percent of the average salary during the last six months of 
 25.31  service for the former members of the following consolidating 
 25.32  relief associations: 
 25.33     (1) Hibbing firefighters relief association; and 
 25.34     (2) Hibbing police relief association. 
 25.35     (f) The surviving spouse benefit shall be 23.75 percent of 
 25.36  the salary base for the former members of the following 
 26.1   consolidating relief associations: 
 26.2      (1) Crystal police relief associations; and 
 26.3      (2) Minneapolis police relief association.  
 26.4      (g) The surviving spouse benefit shall be 32 percent of the 
 26.5   salary base for the former members of the following 
 26.6   consolidating relief associations: 
 26.7      (1) St. Cloud fire department relief association; and 
 26.8      (2) St. Cloud police relief association. 
 26.9      (h) The surviving spouse benefit shall be one-half of the 
 26.10  service pension or disability benefit which the deceased member 
 26.11  was receiving as of the date of death, or of the service pension 
 26.12  which the deferred member would have been receiving if the 
 26.13  service pension had commenced as of the date of death or of the 
 26.14  service pension which the active member would have received 
 26.15  based on the greater of the allowable service credit of the 
 26.16  person as of the date of death or 20 years of allowable service 
 26.17  credit if the person would have been eligible as of the date of 
 26.18  death, for the former members of the following consolidating 
 26.19  relief associations: 
 26.20     (1) Virginia fire department relief association; and 
 26.21     (2) Virginia police relief association. 
 26.22     (i) The surviving spouse benefit shall be the following for 
 26.23  the former members of the consolidating relief associations as 
 26.24  indicated: 
 26.25     (1) 30 percent of the salary base, reduced by any amount 
 26.26  awarded or payable from the service pension or disability 
 26.27  benefit of the deceased former firefighter to a former spouse of 
 26.28  the member by virtue of the legal dissolution of the member's 
 26.29  marriage to the former spouse if the surviving spouse married 
 26.30  the member after the time of separation from active service, 
 26.31  Austin firefighters relief association; 
 26.32     (2) 27.333 percent of the salary base, or one-half of the 
 26.33  service pension payable to or accrued by the deceased former 
 26.34  member, whichever is greater, Bloomington police relief 
 26.35  association; 
 26.36     (3) 72.25 percent of the salary base, Buhl police relief 
 27.1   association; 
 27.2      (4) 50 percent of the service pension which the active 
 27.3   member would have received based on allowable service credit to 
 27.4   the date of death and prospective service from the date of death 
 27.5   until the date on which the person would have attained the 
 27.6   normal retirement age, 50 percent of the service pension which 
 27.7   the deferred member would have been receiving if the service 
 27.8   pension had commenced as of the date of death or $175 per month 
 27.9   if the deceased member was receiving a service pension or 
 27.10  disability benefit as of the date of death, Chisholm 
 27.11  firefighters relief association; 
 27.12     (5) two-thirds of the service pension or disability benefit 
 27.13  which the deceased member was receiving as of the date of death, 
 27.14  or of the service pension which the deferred member would have 
 27.15  been receiving if the service pension had commenced as of the 
 27.16  date of death or of the service pension which the active member 
 27.17  would have received based on the greater of the allowable 
 27.18  service credit of the person as of the date of death or 20 years 
 27.19  of allowable service credit if the person would have been 
 27.20  eligible as of the date of death, Columbia Heights police relief 
 27.21  association; 
 27.22     (6) the greater of $300 per month or one-half of the 
 27.23  service pension or disability benefit which the deceased member 
 27.24  was receiving as of the date of death, or of the service pension 
 27.25  which the deferred member would have been receiving if the 
 27.26  service pension had commenced as of the date of death or of the 
 27.27  service pension which the active member would have received 
 27.28  based on the allowable service credit of the person as of the 
 27.29  date of death if the person would have been eligible as of the 
 27.30  date of death, Crookston fire department relief association; 
 27.31     (7) $100 per month, Faribault police benefit association; 
 27.32     (8) 60 percent of the service pension or disability benefit 
 27.33  which the deceased member was receiving as of the date of death, 
 27.34  or of the service pension which the deferred member would have 
 27.35  been receiving if the service pension had commenced as of the 
 27.36  date of death or of the service pension which the active member 
 28.1   would have received based on the allowable service credit of the 
 28.2   person as of the date of death if the person would have been 
 28.3   eligible as of the date of death, Mankato fire department relief 
 28.4   association; 
 28.5      (9) $175 per month, Mankato police benefit association; 
 28.6      (10) 26.25 percent of the salary base, Minneapolis fire 
 28.7   department relief association; 
 28.8      (11) equal to the service pension or disability benefit 
 28.9   which the deceased member was receiving as of the date of death, 
 28.10  or of the service pension which the deferred member would have 
 28.11  been receiving if the service pension had commenced as of the 
 28.12  date of death or of the service pension which the active member 
 28.13  would have received based on the allowable service credit of the 
 28.14  person as of the date of death if the person would have been 
 28.15  eligible as of the date of death, Red Wing police relief 
 28.16  association; 
 28.17     (12) 78.545 percent of the benefit amount payable prior to 
 28.18  the death of the deceased active, disabled, deferred, or retired 
 28.19  firefighter if that firefighter's benefit was 55 percent of 
 28.20  salary or would have been 55 percent of salary if the 
 28.21  firefighter had survived to begin benefit receipt; or 80 percent 
 28.22  of the benefit amount payable prior to the death of the deceased 
 28.23  active, disabled, deferred, or retired firefighter if that 
 28.24  firefighter's benefit was 54 percent of salary or would have 
 28.25  been 54 percent of salary if the firefighter had survived to 
 28.26  begin benefit receipt, Richfield fire department relief 
 28.27  association; 
 28.28     (13) 40 percent of the salary base for a surviving spouse 
 28.29  of a deceased active member, disabled member, or retired or 
 28.30  deferred member with at least 20 years of allowable service, or 
 28.31  the prorated portion of 40 percent of the salary base that bears 
 28.32  the same relationship to 40 percent that the deceased member's 
 28.33  years of allowable service bear to 20 years of allowable service 
 28.34  for the surviving spouse of a deceased retired or deferred 
 28.35  member with at least ten but less than 20 years of allowable 
 28.36  service, St. Louis Park fire department relief association; 
 29.1      (14) 26.6667 percent of the salary base, St. Louis Park 
 29.2   police relief association; 
 29.3      (15) 27.5 percent of the salary base, St. Paul fire 
 29.4   department relief association; 
 29.5      (16) 20 27.5 percent of the salary base, St. Paul police 
 29.6   relief association; and 
 29.7      (17) 27 percent of the salary base, South St. Paul 
 29.8   firefighters relief association. 
 29.9      Sec. 18.  [REPEALER.] 
 29.10     Minnesota Statutes 1998, section 353.024, is repealed. 
 29.11     Sec. 19.  [EFFECTIVE DATE.] 
 29.12     Sections 1 to 18 are effective July 1, 1999. 
 29.13                             ARTICLE 3 
 29.14                  TEACHERS RETIREMENT ASSOCIATION 
 29.15     Section 1.  Minnesota Statutes 1998, section 122A.46, 
 29.16  subdivision 2, is amended to read: 
 29.17     Subd. 2.  [LEAVE OF ABSENCE.] The board of any district may 
 29.18  grant an extended leave of absence without salary to any full- 
 29.19  or part-time elementary or secondary teacher who has been 
 29.20  employed by the district for at least five years and has at 
 29.21  least ten years of allowable service, as defined in section 
 29.22  354.05, subdivision 13, or the bylaws of the appropriate 
 29.23  retirement association or ten years of full-time teaching 
 29.24  service in Minnesota public elementary and secondary schools.  
 29.25  The maximum duration of an extended leave of absence pursuant to 
 29.26  this section must be determined by mutual agreement of the board 
 29.27  and the teacher at the time the leave is granted and shall be at 
 29.28  least three but no more than five years.  An extended leave of 
 29.29  absence pursuant to this section shall be taken by mutual 
 29.30  consent of the board and the teacher.  If the school board 
 29.31  denies a teacher's request, it must provide reasonable 
 29.32  justification for the denial.  
 29.33     Sec. 2.  Minnesota Statutes 1998, section 354.05, 
 29.34  subdivision 2, is amended to read: 
 29.35     Subd. 2.  [TEACHER.] (a) "Teacher" means: 
 29.36     (1) a person who renders service as a teacher, supervisor, 
 30.1   principal, superintendent, librarian, nurse, counselor, social 
 30.2   worker, therapist, or psychologist in the public schools of the 
 30.3   state located outside of the corporate limits of the cities of 
 30.4   the first class as those cities were so classified on January 1, 
 30.5   1979, or in the state colleges and universities system, or in 
 30.6   any charitable, penal, or correctional institutions of a 
 30.7   governmental subdivision, or who is engaged in educational 
 30.8   administration in connection with the state public school 
 30.9   system, including the state colleges and university system, but 
 30.10  excluding the University of Minnesota, whether the position be a 
 30.11  public office or an employment, not including members or 
 30.12  officers of any general governing or managing board or body; 
 30.13     (2) an employee of the teachers retirement association 
 30.14  unless the employee is covered by the Minnesota state retirement 
 30.15  system by virtue of prior employment by the association; 
 30.16     (3) a person who renders teaching service on a part-time 
 30.17  basis and who also renders other services for a single employing 
 30.18  unit.  In such cases, the executive director shall determine 
 30.19  whether all or none of the combined service is covered by the 
 30.20  association, however a person whose teaching service comprises 
 30.21  at least 50 percent of the combined employment salary is a 
 30.22  member of the association for all services with the single 
 30.23  employing unit. 
 30.24     (b) The term does not mean: 
 30.25     (1) an employee described in section 352D.02, subdivision 
 30.26  1a, who is hired after the effective date of Laws 1986, chapter 
 30.27  458; 
 30.28     (2) a person who works for a school or institution as an 
 30.29  independent contractor as defined by the Internal Revenue 
 30.30  Service; 
 30.31     (3) a person employed in subsidized on-the-job training, 
 30.32  work experience or public service employment as an enrollee 
 30.33  under the federal Comprehensive Employment and Training Act from 
 30.34  and after March 30, 1978, unless the person has, as of the later 
 30.35  of March 30, 1978, or the date of employment, sufficient service 
 30.36  credit in the retirement association to meet the minimum vesting 
 31.1   requirements for a deferred retirement annuity, or the employer 
 31.2   agrees in writing on forms prescribed by the executive director 
 31.3   to make the required employer contributions, including any 
 31.4   employer additional contributions, on account of that person 
 31.5   from revenue sources other than funds provided under the federal 
 31.6   Comprehensive Training and Employment Act, or the person agrees 
 31.7   in writing on forms prescribed by the executive director to make 
 31.8   the required employer contribution in addition to the required 
 31.9   employee contribution; 
 31.10     (4) a person holding a part-time adult supplementary 
 31.11  technical college license who renders part-time adult noncredit 
 31.12  teaching service or a customized trainer as defined by the 
 31.13  Minnesota state colleges and universities system in a technical 
 31.14  college if (i) the service is incidental to the regular 
 31.15  nonteaching occupation of the person; and (ii) the applicable 
 31.16  technical college stipulates annually in advance that the 
 31.17  part-time teaching service or customized training will not 
 31.18  exceed 300 hours in a fiscal year and retains the stipulation in 
 31.19  its records; and (iii) the part-time teaching service or 
 31.20  customized training actually does not exceed 300 hours in a 
 31.21  fiscal year; or 
 31.22     (5) a person exempt from licensure pursuant to section 
 31.23  122A.30. 
 31.24     Sec. 3.  Minnesota Statutes 1998, section 354.05, 
 31.25  subdivision 35, is amended to read: 
 31.26     Subd. 35.  [SALARY.] (a) "Salary" means the periodic 
 31.27  compensation, upon which member contributions are required and 
 31.28  made, that is paid to a teacher before employee-paid fringe 
 31.29  benefits, tax sheltered annuities, deferred compensation, or any 
 31.30  combination of these employee-paid items are deducted before 
 31.31  deductions for deferred compensation, supplemental retirement 
 31.32  plans, or other voluntary salary reduction programs. 
 31.33     (b) "Salary" does not mean: 
 31.34     (1) lump sum annual leave payments; 
 31.35     (2) lump sum wellness and sick leave payments; 
 31.36     (3) payments in lieu of any employer-paid group insurance 
 32.1   coverage; 
 32.2      (4) payments for the difference between single and family 
 32.3   premium rates that may be paid to a member with single coverage; 
 32.4      (5) employer-paid fringe benefits including, but not 
 32.5   limited to, flexible spending accounts, cafeteria plans, health 
 32.6   care expense accounts, day care expenses, or automobile 
 32.7   allowances and expenses; employer-paid amounts used by an 
 32.8   employee toward the cost of insurance coverage, employer-paid 
 32.9   fringe benefits, flexible spending accounts, cafeteria plans, 
 32.10  health care expense accounts, day care expenses, or any payments 
 32.11  in lieu of any employer-paid group insurance coverage, including 
 32.12  the difference between single and family rates that may be paid 
 32.13  to a member with single coverage and certain amounts determined 
 32.14  by the executive director to be ineligible; 
 32.15     (6) (4) any form of payment made in lieu of any other 
 32.16  employer-paid fringe benefit or expense; 
 32.17     (7) (5) any form of severance payments; 
 32.18     (8) (6) workers' compensation payments; 
 32.19     (9) (7) disability insurance payments including 
 32.20  self-insured disability payments; 
 32.21     (10) (8) payments to school principals and all other 
 32.22  administrators for services in addition to the normal work year 
 32.23  contract if these additional services are performed on an 
 32.24  extended duty day, Saturday, Sunday, holiday, annual leave day, 
 32.25  sick leave day, or any other nonduty day; 
 32.26     (11) (9) payments under section 356.24, subdivision 1, 
 32.27  clause (4); and 
 32.28     (12) (10) payments made under section 122A.40, subdivision 
 32.29  12, except for payments for sick leave accumulated under the 
 32.30  provisions of a uniform school district policy that applies 
 32.31  equally to all similarly situated persons in the district. 
 32.32     Sec. 4.  Minnesota Statutes 1998, section 354.05, 
 32.33  subdivision 37, is amended to read: 
 32.34     Subd. 37.  [TERMINATION OF TEACHING SERVICE.] "Termination 
 32.35  of teaching service" means the withdrawal of a member from 
 32.36  active teaching service by resignation or the termination of the 
 33.1   member's teaching contract by the employer.  A member is not 
 33.2   considered to have terminated teaching service, if before the 
 33.3   effective date of the termination or retirement, the member has 
 33.4   entered into a contract to resume teaching service with an 
 33.5   employing unit covered by the provisions of this chapter.  If a 
 33.6   member is paid a full annual contract salary for the performance 
 33.7   of a full year's teaching service contract duties, termination 
 33.8   of teaching service occurs on the last day of the school 
 33.9   calendar as stipulated by the employer at the end of the school 
 33.10  year. 
 33.11     Sec. 5.  Minnesota Statutes 1998, section 354.05, 
 33.12  subdivision 40, is amended to read: 
 33.13     Subd. 40.  [TIMELY RECEIPT.] An application, payment, 
 33.14  return, claim, or other document that is not personally 
 33.15  delivered to the association on or before the applicable due 
 33.16  date is considered to be a timely receipt if officially 
 33.17  postmarked received on or before the due date or if delivered or 
 33.18  filed under section 645.151. 
 33.19     Sec. 6.  Minnesota Statutes 1998, section 354.06, 
 33.20  subdivision 1, is amended to read: 
 33.21     Subdivision 1.  [BOARD OF TRUSTEES; MEMBERSHIP; DUTIES.] 
 33.22  The management of the association is vested in a board of eight 
 33.23  trustees known as the board of trustees of the teachers 
 33.24  retirement association.  It is composed of the following 
 33.25  persons:  the commissioner of children, families, and learning, 
 33.26  the commissioner of finance, a representative of the Minnesota 
 33.27  school boards association, four members of the association 
 33.28  elected by the members of the association, and one retiree 
 33.29  elected by the retirees of the association.  The five elected 
 33.30  members of the board of trustees must be chosen by mail ballot 
 33.31  in a manner fixed by the board of trustees of the association.  
 33.32  In every odd-numbered year there shall be elected two members of 
 33.33  the association to the board of trustees for terms of four years 
 33.34  commencing on the first of July next succeeding their election.  
 33.35  In every other odd-numbered year one retiree of the association 
 33.36  must be elected to the board of trustees for a term of two four 
 34.1   years commencing on the first of July next succeeding the 
 34.2   election.  The filing of candidacy for a retiree election must 
 34.3   include a petition of endorsement signed by at least ten 
 34.4   retirees of the association.  Each election must be completed by 
 34.5   June first of each succeeding odd-numbered year.  In the case of 
 34.6   elective members, any vacancy must be filled by appointment by 
 34.7   the remainder of the board, and the appointee shall serve until 
 34.8   the members or retirees of the association at the next regular 
 34.9   election have elected a trustee to serve for the unexpired term 
 34.10  caused by the vacancy.  No member or retiree may be appointed by 
 34.11  the board, or elected by the members of the association as a 
 34.12  trustee, if the person is not a member or retiree of the 
 34.13  association in good standing at the time of the appointment or 
 34.14  election.  
 34.15     Sec. 7.  Minnesota Statutes 1998, section 354.091, is 
 34.16  amended to read: 
 34.17     354.091 [SERVICE CREDIT.] 
 34.18     In computing the time of service of a teacher, the length 
 34.19  of a legal school year in the district or institution where such 
 34.20  service was rendered must constitute a year under sections 
 34.21  354.05 to 354.10, provided the year is not less than the legal 
 34.22  minimum school year of this state. service credit, no person 
 34.23  teacher shall receive credit for more than one year of teaching 
 34.24  service for any fiscal year.  Commencing July 1, 1961, (1) if a 
 34.25  teacher teaches only a fractional part of a day, credit must be 
 34.26  given for a day of teaching service for each less than five 
 34.27  hours taught in a day, service credit must be given for the 
 34.28  fractional part of the day as the term of service performed 
 34.29  bears to five hours, and (2) if a teacher teaches five or more 
 34.30  hours in a day, service credit must be given for only one day, 
 34.31  and (3) if a teacher teaches at least 170 full days in any 
 34.32  fiscal year, credit must be given for a full year of teaching 
 34.33  service, and (3) (4) if a teacher teaches for only a fractional 
 34.34  part of the year, credit must be given for such fractional part 
 34.35  of the year as the term of service rendered performed bears to 
 34.36  170 days.  A person who teaches in the state colleges and 
 35.1   university system teacher shall receive a full year of service 
 35.2   credit based on the number of days in the system's employer's 
 35.3   full school year if it is less than 170 days.  Teaching service 
 35.4   performed prior to before July 1, 1961, must be computed under 
 35.5   the law in effect at the time it was rendered performed. 
 35.6      A teacher shall does not lose or gain retirement service 
 35.7   credit as a result of the employer converting to a four-day work 
 35.8   week flexible or alternate work schedule.  If the employer does 
 35.9   convert converts to a four-day work week flexible or alternate 
 35.10  work schedule, the forms for reporting and procedures for 
 35.11  determining service credit shall must be determined by the 
 35.12  executive director with the approval of the board of trustees.  
 35.13     Sec. 8.  Minnesota Statutes 1998, section 354.092, 
 35.14  subdivision 2, is amended to read: 
 35.15     Subd. 2.  [PAY RATE; CERTIFICATION.] A sabbatical leave 
 35.16  must be compensated by a minimum of one-third of the salary the 
 35.17  member received for a comparable period during the prior fiscal 
 35.18  year.  Before the end of the fiscal year during which any 
 35.19  sabbatical leave is granted Upon granting a sabbatical leave, 
 35.20  the employing unit granting the leave must certify the leave to 
 35.21  the association on a form specified by the executive director.  
 35.22     Sec. 9.  Minnesota Statutes 1998, section 354.093, is 
 35.23  amended to read: 
 35.24     354.093 [PARENTAL OR MATERNITY LEAVE.] 
 35.25     Before the end of the fiscal year during which any parental 
 35.26  or maternity leave is granted, Upon granting a parental leave 
 35.27  for the birth or adoption of a child, the employing unit 
 35.28  granting the leave must certify the leave to the association on 
 35.29  a form specified by the executive director.  A member of the 
 35.30  association granted a parental or maternity leave of absence by 
 35.31  the employing unit is entitled to service credit not to exceed 
 35.32  one year for the period of leave upon payment to the association 
 35.33  by the end of the fiscal year following the fiscal year in which 
 35.34  the leave of absence terminated.  This payment must include the 
 35.35  required employee, employer and amortization contributions for 
 35.36  the period of leave prescribed in section 354.42.  The payment 
 36.1   must be based on the member's average full-time monthly salary 
 36.2   rate on the date the leave of absence commenced, and must be 
 36.3   without interest.  Notwithstanding the provisions of any 
 36.4   agreements to the contrary, employee and employer contributions 
 36.5   may not be made to receive allowable service credit under this 
 36.6   section if the member does not retain the right to full 
 36.7   reinstatement at the end of the leave. 
 36.8      Sec. 10.  Minnesota Statutes 1998, section 354.094, 
 36.9   subdivision 1, is amended to read: 
 36.10     Subdivision 1.  [SERVICE CREDIT CONTRIBUTIONS.] Before the 
 36.11  end of the fiscal year during which Upon granting any extended 
 36.12  leave of absence is granted pursuant to section 122A.46 or 
 36.13  136F.43, the employing unit granting the leave must certify the 
 36.14  leave to the association on a form specified by the executive 
 36.15  director.  A member granted an extended leave of absence 
 36.16  pursuant to section 122A.46 or 136F.43 may pay employee 
 36.17  contributions and receive allowable service credit toward 
 36.18  annuities and other benefits under this chapter, for each year 
 36.19  of the leave provided the member and the employing board make 
 36.20  the required employer contribution in any proportion they may 
 36.21  agree upon, during the period of the leave which shall not 
 36.22  exceed five years.  A member may not receive more than five 
 36.23  years of allowable service credit under this section.  The 
 36.24  employee and employer contributions must be based upon the rates 
 36.25  of contribution prescribed by section 354.42 for the salary 
 36.26  received during the year immediately preceding the extended 
 36.27  leave.  Payments for the years for which a member is receiving 
 36.28  service credit while on extended leave must be made on or before 
 36.29  the later of June 30 of each fiscal year for which service 
 36.30  credit is received or within 30 days after first notification of 
 36.31  the amount due, if requested by the member, is given by the 
 36.32  association.  No payment is permitted after the following 
 36.33  September 30.  Payments received after June 30 must include 
 36.34  interest at an annual rate of 8.5 percent from June 30 through 
 36.35  the end of the month in which payment is received.  
 36.36  Notwithstanding the provisions of any agreements to the 
 37.1   contrary, employee and employer contributions may not be made to 
 37.2   receive allowable service credit if the member does not have 
 37.3   full reinstatement rights as provided in section 122A.46 or 
 37.4   136F.43, both during and at the end of the extended leave. 
 37.5      Sec. 11.  Minnesota Statutes 1998, section 354.10, 
 37.6   subdivision 2, is amended to read: 
 37.7      Subd. 2.  [AUTOMATIC DEPOSITS.] Upon receipt of the 
 37.8   properly completed forms as provided by the executive director, 
 37.9   the annuity or benefit amount may be electronically transferred 
 37.10  or the annuity or benefit check may be mailed to a banking 
 37.11  institution, savings association, domestic cash management 
 37.12  account, or credit union for deposit to the recipient's 
 37.13  individual account or joint account with the recipient's spouse 
 37.14  or any other person designated by the recipient.  An overpayment 
 37.15  to a joint account after the death of the annuity or benefit 
 37.16  recipient must be repaid to the fund by the joint tenant if the 
 37.17  overpayment is not repaid to the fund by the banking 
 37.18  institution, savings association, or credit union, or the 
 37.19  domestic cash management account institution.  The board may 
 37.20  prescribe the conditions which govern these procedures.  
 37.21     Sec. 12.  Minnesota Statutes 1998, section 354.10, 
 37.22  subdivision 4, is amended to read: 
 37.23     Subd. 4.  [CHANGES IN DESIGNATED BENEFICIARIES.] Any 
 37.24  beneficiary designated by a retiree or member under section 
 37.25  354.05, subdivision 22, may be changed or revoked by the retiree 
 37.26  or member on a form provided by the executive director.  A 
 37.27  change or revocation made under this subdivision is valid only 
 37.28  if the properly completed form is received by the association 
 37.29  postmarked on or before the date of death of the retiree or the 
 37.30  member.  If a designated beneficiary dies before the retiree or 
 37.31  member designating the beneficiary, and a new beneficiary is not 
 37.32  designated, the retiree's or member's estate is the beneficiary. 
 37.33     Sec. 13.  Minnesota Statutes 1998, section 354.35, is 
 37.34  amended to read: 
 37.35     354.35 [OPTIONAL ACCELERATED RETIREMENT ANNUITY BEFORE AGE 
 37.36  65.] 
 38.1      Any coordinated member who retires before age 65 may elect 
 38.2   to receive an optional accelerated retirement annuity from the 
 38.3   association which provides for different annuity amounts over 
 38.4   different periods of retirement.  The election of this optional 
 38.5   accelerated retirement annuity is exercised by making an 
 38.6   application to the board on a form provided by the executive 
 38.7   director.  The optional accelerated retirement annuity must take 
 38.8   the form of an annuity payable for the period before the member 
 38.9   attains age 65 in a greater amount than the amount of the 
 38.10  annuity calculated under section 354.44 on the basis of the age 
 38.11  of the member at retirement, but the optional accelerated 
 38.12  retirement annuity must be the actuarial equivalent of the 
 38.13  member's annuity computed on the basis of the member's age at 
 38.14  retirement.  The greater amount must be paid until the retiree 
 38.15  reaches age 65 and at that time the payment from the association 
 38.16  must be reduced.  For each year the retiree is under age 65, up 
 38.17  to five percent of the total life annuity required reserves may 
 38.18  be used to accelerate the optional retirement annuity under this 
 38.19  section.  At retirement, members who retire before age 62 may 
 38.20  elect to have the age specified in this section be 62 instead of 
 38.21  65.  This election is irrevocable and may must be made only once 
 38.22  on the application form provided by the executive director.  The 
 38.23  method of computing the optional accelerated retirement annuity 
 38.24  provided in this section is established by the board of 
 38.25  trustees.  In establishing the method of computing the optional 
 38.26  accelerated retirement annuity, the board of trustees must 
 38.27  obtain the written approval of the commission-retained actuary.  
 38.28  The written approval must be a part of the permanent records of 
 38.29  the board of trustees.  
 38.30     Sec. 14.  Minnesota Statutes 1998, section 354.445, is 
 38.31  amended to read: 
 38.32     354.445 [NO ANNUITY REDUCTION.] 
 38.33     (a) The annuity reduction provisions of section 354.44, 
 38.34  subdivision 5, do not apply to a person who: 
 38.35     (1) retires from the state university system, technical 
 38.36  college system, or the community college system, or from a 
 39.1   successor system employing state university, technical college, 
 39.2   or community college faculty, with at least ten years of 
 39.3   combined service credit in a system under the jurisdiction of 
 39.4   the board of trustees of the Minnesota state colleges and 
 39.5   universities; 
 39.6      (2) was employed on a full-time basis immediately preceding 
 39.7   retirement as a state university, technical college, or 
 39.8   community college faculty member or as an unclassified 
 39.9   administrator in one of these systems; 
 39.10     (3) begins drawing an annuity from the teachers retirement 
 39.11  association; and 
 39.12     (4) returns to work on not less than a one-third time basis 
 39.13  and not more than a two-thirds time basis in the system from 
 39.14  which the person retired under an agreement in which the person 
 39.15  may not earn a salary of more than $35,000 in a calendar year 
 39.16  from employment after retirement in the system from which the 
 39.17  person retired. 
 39.18     If the person is retired for only a fractional part of the 
 39.19  calendar year during the initial year of retirement, the maximum 
 39.20  reemployment income specified in this subdivision must be 
 39.21  prorated for that calendar year. 
 39.22     (b) Initial participation, the amount of time worked, and 
 39.23  the duration of participation under this section must be 
 39.24  mutually agreed upon by the president of the institution where 
 39.25  the person returns to work and the employee.  The president may 
 39.26  require up to one-year notice of intent to participate in the 
 39.27  program as a condition of participation under this section.  The 
 39.28  president shall determine the time of year the employee shall 
 39.29  work.  The employer or the president may not require a person to 
 39.30  waive any rights under a collective bargaining agreement as a 
 39.31  condition of participation under this section.  
 39.32     (c) Notwithstanding any law to the contrary, a person 
 39.33  eligible under paragraphs (a) and (b) may not earn further 
 39.34  service credit in the teachers retirement association and is not 
 39.35  eligible to participate in the individual retirement account 
 39.36  plan or the supplemental retirement plan established in chapter 
 40.1   354B as a result of service under this section.  No employer or 
 40.2   employee contribution to any of these plans may be made on 
 40.3   behalf of such a person. 
 40.4      (d) For a person eligible under paragraphs (a) and (b) who 
 40.5   earns more than $35,000 in a calendar year from employment after 
 40.6   retirement in the system from which the person retired, the 
 40.7   annuity reduction provisions of section 354.44, subdivision 5, 
 40.8   apply only to income over $35,000. 
 40.9      (e) A person who returns to work under this section is a 
 40.10  member of the appropriate bargaining unit and is covered by the 
 40.11  appropriate collective bargaining contract.  Except as provided 
 40.12  in this section, the person's coverage is subject to any part of 
 40.13  the contract limiting rights of part-time employees. 
 40.14     Sec. 15.  Minnesota Statutes 1998, section 354.48, 
 40.15  subdivision 6, is amended to read: 
 40.16     Subd. 6.  [REGULAR PHYSICAL EXAMINATIONS.] At least once 
 40.17  each year during the first five years following the allowance of 
 40.18  a disability benefit to any member, and at least once in every 
 40.19  three-year period thereafter, the executive director shall 
 40.20  require the disability beneficiary to undergo a medical 
 40.21  examination to be made at the place of residence of such person, 
 40.22  or at any other place mutually agreed upon, by a physician or 
 40.23  physicians engaged by the executive director.  If any 
 40.24  examination indicates that the member is no longer permanently 
 40.25  and totally disabled or that the member is engaged or is able to 
 40.26  engage in a substantial gainful occupation, payments of the 
 40.27  disability benefit by the association shall be discontinued.  
 40.28  The payments shall discontinue as soon as the member is 
 40.29  reinstated to the payroll following sick leave, but payment may 
 40.30  not be made for more than 60 days after physicians engaged by 
 40.31  the executive director find that the person is no longer 
 40.32  permanently and totally disabled. 
 40.33     Sec. 16.  Minnesota Statutes 1998, section 354.49, 
 40.34  subdivision 1, is amended to read: 
 40.35     Subdivision 1.  [ENTITLEMENT, APPLICATION.] A person who 
 40.36  ceases to render teaching service in any school or institution 
 41.1   to which the provisions of this chapter apply is entitled to a 
 41.2   refund provided in subdivision 2, or a deferred retirement 
 41.3   annuity under section 354.55, subdivision 11.  An application 
 41.4   for a refund must not be made sooner than 30 days after 
 41.5   termination of teaching service if the applicant has not again 
 41.6   become a teacher.  This payment must be made within 90 45 days 
 41.7   after receipt of application for refund or upon completion of 
 41.8   processing the report made pursuant to section 354.52, 
 41.9   subdivision 2 receipt of member reporting data under section 
 41.10  354.52, subdivision 4a and payroll cycle data under section 
 41.11  354.52, subdivision 4b, whichever is later. 
 41.12     Sec. 17.  Minnesota Statutes 1998, section 354.52, 
 41.13  subdivision 3, is amended to read: 
 41.14     Subd. 3.  [DUTY OF FINANCE OFFICIALS DEDUCTION 
 41.15  REQUIREMENTS.] It is the duty of each person, officer, school 
 41.16  board, or managing body required by law to draw the warrants or 
 41.17  orders for payment of salaries to teachers to Every pay period 
 41.18  each employer shall deduct and withhold from all the salary paid 
 41.19  each pay period to every teacher who is a member of the fund the 
 41.20  amount which the teacher is required to pay into the fund 
 41.21  and, required under section 354.42.  At the time of each 
 41.22  deduction, to the employer shall also furnish to each teacher a 
 41.23  statement showing the amount of the deduction.  
 41.24     Sec. 18.  Minnesota Statutes 1998, section 354.52, 
 41.25  subdivision 4, is amended to read: 
 41.26     Subd. 4.  [REPORTING AND REMITTANCE REQUIREMENTS.] At least 
 41.27  once each month, a representative authorized by An employing 
 41.28  unit employer shall transmit remit all amounts due to the 
 41.29  association and furnish a signed statement indicating the amount 
 41.30  due and transmitted with any other information required by the 
 41.31  executive director.  Signing the statement has the force and 
 41.32  effect of an oath as to the correctness of the amount due and 
 41.33  transmitted.  If an amount due and is not transmitted 
 41.34  remitted to the association within seven calendar days of the 
 41.35  payroll warrant, the amount accrues interest at an annual rate 
 41.36  of 8.5 percent compounded annually commencing 15 days after the 
 42.1   date first due until the amount is transmitted and must be paid 
 42.2   by the employing unit.  These payments received by the 
 42.3   association.  An amount due and other employing unit employer 
 42.4   obligations not remitted within 60 days of notification by the 
 42.5   association must be certified to the commissioner of finance who 
 42.6   shall deduct the amount from any state aid or appropriation 
 42.7   amount applicable to the employing unit. 
 42.8      Sec. 19.  Minnesota Statutes 1998, section 354.52, 
 42.9   subdivision 4a, is amended to read: 
 42.10     Subd. 4a.  [MEMBER DATA REPORTING REQUIREMENTS.] (a) An 
 42.11  employing unit shall initially provide the following member data 
 42.12  or any of that data not previously provided to the association 
 42.13  for payroll warrants dated after June 30, 1995, in a format 
 42.14  prescribed by the executive director.  Data changes and the 
 42.15  dates of those changes under this subdivision must be reported 
 42.16  to the association on an ongoing basis for within 14 calendar 
 42.17  days after the date of the end of the payroll cycle in which 
 42.18  they occur with the data under subdivision 4b.  Data on the 
 42.19  member includes:  
 42.20     (1) legal name, address, date of birth, association member 
 42.21  number, employer-assigned employee number, and social security 
 42.22  number; 
 42.23     (2) association status, including, but not limited to, 
 42.24  basic, coordinated, exempt annuitant, exempt technical college 
 42.25  teacher, and exempt independent contractor or consultant; 
 42.26     (3) employment status, including, but not limited to, full 
 42.27  time, part time, intermittent, substitute, or part-time 
 42.28  mobility; 
 42.29     (4) employment position, including, but not limited to, 
 42.30  teacher, superintendent, principal, administrator, or other; 
 42.31     (5) employment activity, including, but not limited to, 
 42.32  hire, termination, resumption of employment, disability, or 
 42.33  death; 
 42.34     (6) leaves of absence; 
 42.35     (7) county district number assigned by the association for 
 42.36  the employing unit; 
 43.1      (8) data center identification number, if applicable; and 
 43.2      (9) other information as may be required by the executive 
 43.3   director. 
 43.4      Sec. 20.  Minnesota Statutes 1998, section 354.52, 
 43.5   subdivision 4b, is amended to read: 
 43.6      Subd. 4b.  [PAYROLL CYCLE REPORTING REQUIREMENTS.] An 
 43.7   employing unit shall provide the following data to the 
 43.8   association for payroll warrants dated after June 30, 1995, for 
 43.9   each on an ongoing basis within 14 calendar days after the date 
 43.10  of the payroll cycle warrant in a format prescribed by the 
 43.11  executive director:  
 43.12     (1) association member number; 
 43.13     (2) employer-assigned employee number; 
 43.14     (3) social security number; 
 43.15     (4) amount of each salary deduction; 
 43.16     (5) amount of salary as defined in section 354.05, 
 43.17  subdivision 35, from which each deduction was made; 
 43.18     (6) reason for payment; 
 43.19     (7) service credit; 
 43.20     (8) the beginning and ending dates of the payroll period 
 43.21  covered and the date of actual payment; 
 43.22     (9) fiscal year of salary earnings; 
 43.23     (10) total remittance amount including employee, employer, 
 43.24  and additional employer contributions; and 
 43.25     (11) other information as may be required by the executive 
 43.26  director. 
 43.27     Sec. 21.  Minnesota Statutes 1998, section 354.63, 
 43.28  subdivision 2, is amended to read: 
 43.29     Subd. 2.  [VALUATION OF ASSETS; ADJUSTMENT OF BENEFITS.] 
 43.30  (1) The required reserves for retirement annuities as determined 
 43.31  in accordance with this chapter shall be transferred to the 
 43.32  Minnesota postretirement investment fund as of no later than the 
 43.33  last business day of the month in which the retirement annuity 
 43.34  begins.  The required reserves shall be determined in accordance 
 43.35  with the appropriate annuity table of mortality adopted by the 
 43.36  board of trustees as provided in section 354.07, subdivision 1, 
 44.1   based on the experience of the fund as recommended by the 
 44.2   commission-retained actuary and using the interest assumption 
 44.3   specified in section 356.215, subdivision 4d.  
 44.4      (2) Annuity payments shall be adjusted in accordance with 
 44.5   the provisions of section 11A.18.  In making these adjustments, 
 44.6   members who retire effective July 1 shall be considered to have 
 44.7   retired effective the preceding June 30.  This section applies 
 44.8   to persons who retired effective July 1, 1982, or later.  
 44.9      (3) An increase in annuity payments pursuant to this 
 44.10  section will be made automatically unless written notice is 
 44.11  filed by the annuitant with the executive director of the 
 44.12  teachers retirement association requesting that the increase 
 44.13  shall not be made. 
 44.14     Sec. 22.  [REPEALER.] 
 44.15     Minnesota Statutes, section 354.52, subdivision 2, is 
 44.16  repealed. 
 44.17     Sec. 23.  [EFFECTIVE DATE.] 
 44.18     Sections 1 to 13 and 15 to 22 are effective July 1, 1999. 
 44.19  Section 14 is effective January 1, 2000. 
 44.20                             ARTICLE 4 
 44.21             TEACHERS RETIREMENT; MISCELLANEOUS CHANGES 
 44.22     Section 1.  Minnesota Statutes 1998, section 354.05, 
 44.23  subdivision 8a, is amended to read: 
 44.24     Subd. 8a.  [DEPENDENT CHILD.] For the purpose of survivor 
 44.25  benefit eligibility under section 354.46, subdivision 2b, 
 44.26  "dependent child" means any biological or adopted child of a 
 44.27  deceased member who has not reached the age of 20 and is 
 44.28  dependent for more than one-half of support upon the member.  It 
 44.29  also includes any child of the member conceived while living and 
 44.30  born after death. 
 44.31     Sec. 2.  Minnesota Statutes 1998, section 354.46, 
 44.32  subdivision 2, is amended to read: 
 44.33     Subd. 2.  [DEATH WHILE ELIGIBLE DESIGNATED BENEFICIARY 
 44.34  BENEFIT.] (a) The surviving spouse of any member or former 
 44.35  member who has credit for at least three years of allowable 
 44.36  service is entitled to joint and survivor annuity coverage in 
 45.1   the event of death of the member prior to retirement.  If the 
 45.2   surviving spouse does not elect to receive a surviving spouse 
 45.3   benefit under subdivision 1, if applicable, or does not elect to 
 45.4   receive a refund of accumulated member contributions under 
 45.5   section 354.47, subdivision 1, the surviving spouse is entitled 
 45.6   to receive, upon written application on a form prescribed by the 
 45.7   executive director, a benefit equal to the second portion of a 
 45.8   100 percent joint and survivor annuity specified under section 
 45.9   354.45, based on the age of the member and surviving spouse at 
 45.10  the time of death of the member would have been and the age of 
 45.11  the surviving spouse at the time the benefit accrues, and 
 45.12  computed under section 354.44, subdivision 2 or 6, whichever is 
 45.13  applicable.  
 45.14     (b) If the member was under age 55 and has credit for at 
 45.15  least 30 years of allowable service on the date of death, the 
 45.16  surviving spouse may elect to receive a 100 percent joint and 
 45.17  survivor annuity based on the age of the member and surviving 
 45.18  spouse on the date of death would have been and the age of the 
 45.19  surviving spouse at the time the benefit accrues.  The annuity 
 45.20  is payable using the full early retirement reduction under 
 45.21  section 354.44, subdivision 6, paragraph (3)(ii), to age 55 and 
 45.22  one-half of the early retirement reduction from age 55 to the 
 45.23  age payment begins. 
 45.24     (c) If the member was under age 55 and has credit for at 
 45.25  least three years of allowable service on the date of death but 
 45.26  did not yet qualify for retirement, the surviving spouse may 
 45.27  elect to receive the 100 percent joint and survivor annuity 
 45.28  based on the age of the member and the surviving spouse would 
 45.29  have been at the time of death and the age of the surviving 
 45.30  spouse at the time the benefit accrues.  The annuity is 
 45.31  calculated using the full early retirement reduction under 
 45.32  section 354.44, subdivision 6, to age 55 and one-half of the 
 45.33  early retirement reduction from age 55 to the age the annuity 
 45.34  begins.  The surviving spouse eligible for a surviving spouse 
 45.35  benefit under paragraph (a) may apply for the annuity at any 
 45.36  time after the date on which the deceased employee would have 
 46.1   attained the required age for retirement based on the employee's 
 46.2   allowable service.  The surviving spouse eligible for surviving 
 46.3   spouse benefits under paragraph (b) or (c) may apply for the 
 46.4   annuity any time after the member's death. This benefit accrues 
 46.5   from the day following the date of the member's death but may 
 46.6   not begin to accrue more than six months before the date the 
 46.7   application is filed with the executive director.  Sections 
 46.8   354.55, subdivision 11, and 354.60 apply to a deferred annuity 
 46.9   payable under this section.  The benefit is payable for life. 
 46.10     Sec. 3.  Minnesota Statutes 1998, section 354.46, 
 46.11  subdivision 2a, is amended to read: 
 46.12     Subd. 2a.  [SURVIVOR COVERAGE TERM CERTAIN.] In lieu of the 
 46.13  100 percent optional annuity under subdivision 2, or a refund 
 46.14  under section 354.47, subdivision 1, the surviving spouse of a 
 46.15  deceased member may elect to receive survivor coverage in a term 
 46.16  certain of five, ten, 15, or 20 years, but monthly payments must 
 46.17  not exceed 75 percent of the average high-five monthly salary of 
 46.18  the deceased member.  The monthly term certain annuity must be 
 46.19  actuarially equivalent to the 100 percent optional annuity under 
 46.20  subdivision 2. 
 46.21     If a surviving spouse elects a term certain payment and 
 46.22  dies before the expiration of the specified term certain period, 
 46.23  the commuted value of the remaining annuity payments must be 
 46.24  paid in a lump sum to the survivor's surviving spouse's estate. 
 46.25     Sec. 4.  Minnesota Statutes 1998, section 356.30, 
 46.26  subdivision 1, is amended to read: 
 46.27     Subdivision 1.  [ELIGIBILITY; COMPUTATION OF ANNUITY.] (1) 
 46.28  Notwithstanding any provisions to the contrary of the laws 
 46.29  governing the funds enumerated in subdivision 3, a person who 
 46.30  has met the qualifications of clause (2) may elect to receive a 
 46.31  retirement annuity from each fund in which the person has at 
 46.32  least six months one-half year of allowable service, based on 
 46.33  the allowable service in each fund, subject to the provisions of 
 46.34  clause (3).  
 46.35     (2) A person may receive upon retirement a retirement 
 46.36  annuity from each fund in which the person has at least six 
 47.1   months one-half year of allowable service, and augmentation of a 
 47.2   deferred annuity calculated under the laws governing each public 
 47.3   pension plan or fund named in subdivision 3, from the date the 
 47.4   person terminated all public service if: 
 47.5      (a) the person has allowable service totaling an amount 
 47.6   that allows the person to receive an annuity in any two or more 
 47.7   of the enumerated funds; and 
 47.8      (b) the person has not begun to receive an annuity from any 
 47.9   enumerated fund or the person has made application for benefits 
 47.10  from all funds and the effective dates of the retirement annuity 
 47.11  with each fund under which the person chooses to receive an 
 47.12  annuity are within a one-year period.  
 47.13     (3) The retirement annuity from each fund must be based 
 47.14  upon the allowable service in each fund, except that:  
 47.15     (a) The laws governing annuities must be the law in effect 
 47.16  on the date of termination from the last period of public 
 47.17  service under a covered fund with which the person earned a 
 47.18  minimum of one-half year of allowable service credit during that 
 47.19  employment.  
 47.20     (b) The "average salary" on which the annuity from each 
 47.21  covered fund in which the employee has credit in a formula plan 
 47.22  shall be based on the employee's highest five successive years 
 47.23  of covered salary during the entire service in covered funds.  
 47.24     (c) The formula percentages to be used by each fund must be 
 47.25  those percentages prescribed by each fund's formula as continued 
 47.26  for the respective years of allowable service from one fund to 
 47.27  the next, recognizing all previous allowable service with the 
 47.28  other covered funds.  
 47.29     (d) Allowable service in all the funds must be combined in 
 47.30  determining eligibility for and the application of each fund's 
 47.31  provisions in respect to actuarial reduction in the annuity 
 47.32  amount for retirement prior to normal retirement.  
 47.33     (e) The annuity amount payable for any allowable service 
 47.34  under a nonformula plan of a covered fund must not be affected 
 47.35  but such service and covered salary must be used in the above 
 47.36  calculation.  
 48.1      (f) This section shall not apply to any person whose final 
 48.2   termination from the last public service under a covered fund is 
 48.3   prior to May 1, 1975.  
 48.4      (g) For the purpose of computing annuities under this 
 48.5   section the formula percentages used by any covered fund, except 
 48.6   the public employees police and fire fund and the state patrol 
 48.7   retirement fund, must not exceed the percent specified in 
 48.8   section 356.19, subdivision 4, per year of service for any year 
 48.9   of service or fraction thereof.  The formula percentage used by 
 48.10  the public employees police and fire fund and the state patrol 
 48.11  retirement fund must not exceed the percent specified in section 
 48.12  356.19, subdivision 6, per year of service for any year of 
 48.13  service or fraction thereof.  The formula percentage used by the 
 48.14  legislators retirement plan and the elective state officers 
 48.15  retirement must not exceed 2.5 percent, but this limit does not 
 48.16  apply to the adjustment provided under section 3A.02, 
 48.17  subdivision 1, paragraph (c), or 352C.031, paragraph (b). 
 48.18     (h) Any period of time for which a person has credit in 
 48.19  more than one of the covered funds must be used only once for 
 48.20  the purpose of determining total allowable service.  
 48.21     (i) If the period of duplicated service credit is more than 
 48.22  six months, or the person has credit for more than six months 
 48.23  with each of the funds, each fund shall apply its formula to a 
 48.24  prorated service credit for the period of duplicated service 
 48.25  based on a fraction of the salary on which deductions were paid 
 48.26  to that fund for the period divided by the total salary on which 
 48.27  deductions were paid to all funds for the period.  
 48.28     (j) If the period of duplicated service credit is less than 
 48.29  six months, or when added to other service credit with that fund 
 48.30  is less than six months, the service credit must be ignored and 
 48.31  a refund of contributions made to the person in accord with that 
 48.32  fund's refund provisions. 
 48.33     Sec. 5.  [EFFECTIVE DATE.] 
 48.34     Sections 1 to 4 are effective July 1, 1999. 
 48.35                             ARTICLE 5 
 48.36                TEACHERS RETIREMENT; CHARTER SCHOOLS 
 49.1      Section 1.  [CHARTER SCHOOL SERVICE CREDIT PURCHASE.] 
 49.2      A member of the teachers retirement association who 
 49.3   performed teaching service in a charter school under Minnesota 
 49.4   Statutes, section 124D.125, before July 1, 1995, may purchase 
 49.5   credit for any prior service that otherwise would be covered 
 49.6   under Minnesota Statutes, chapter 354.  The purchase may be made 
 49.7   during a two-year window period from July 1, 1999, to June 30, 
 49.8   2001.  The member must not have received nor be eligible to 
 49.9   receive service credit in a public pension fund listed under 
 49.10  Minnesota Statutes, section 356.30, subdivision 3, for the 
 49.11  purchased period of service.  The member also must prove 
 49.12  eligibility to make a service credit purchase by providing 
 49.13  sufficient and satisfactory documentation as prescribed by the 
 49.14  executive director.  The service credit purchase payment amount 
 49.15  must be determined and calculated under Minnesota Statutes, 
 49.16  section 356.55. 
 49.17     Sec. 2.  [EFFECTIVE DATE.] 
 49.18     Section 1 is effective July 1, 1999.