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; teacher retirement plans; 1.3 adjusting benefit coverage to account for certain 1.4 extracurricular activity management compensation 1.5 amounts; requiring rulemaking by the commissioner of 1.6 children, families, and learning; amending Minnesota 1.7 Statutes 1998, sections 354.05, by adding 1.8 subdivisions; 354.07, by adding a subdivision; 354.44, 1.9 subdivision 6; 354.46, subdivision 1; 354A.011, by 1.10 adding subdivisions; 354A.021, by adding a 1.11 subdivision; and 354A.31, subdivisions 4 and 4a; 1.12 proposing coding for new law in Minnesota Statutes, 1.13 chapters 122A; 354; and 354A. 1.14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.15 ARTICLE 1 1.16 TEACHERS RETIREMENT ASSOCIATION 1.17 EXTRACURRICULAR ACTIVITY MANAGEMENT 1.18 BENEFIT COVERAGE 1.19 Section 1. Minnesota Statutes 1998, section 354.05, is 1.20 amended by adding a subdivision to read: 1.21 Subd. 35b. [BASE SALARY.] (a) For an elementary or 1.22 secondary school teacher, "base salary" means the annual 1.23 contract or equivalent regular salary of the teacher for the 1.24 teacher's regular teaching duties and does not include 1.25 extracurricular activity compensation. 1.26 (b) For any other teacher, including a school district 1.27 superintendent or an elementary or secondary school principal or 1.28 other administrator, base salary means salary as defined in 1.29 subdivision 35. 2.1 Sec. 2. Minnesota Statutes 1998, section 354.05, is 2.2 amended by adding a subdivision to read: 2.3 Subd. 35c. [EXTRACURRICULAR ACTIVITY 2.4 COMPENSATION.] "Extracurricular activity compensation" means 2.5 that portion of the compensation for teaching services paid to a 2.6 teacher covered by subdivision 35b, paragraph (a), for 2.7 extracurricular activity management. 2.8 Sec. 3. Minnesota Statutes 1998, section 354.05, is 2.9 amended by adding a subdivision to read: 2.10 Subd. 35d. [EXTRACURRICULAR ACTIVITY MANAGEMENT.] (a) 2.11 "Extracurricular activity management," for purposes of 2.12 subdivisions 35b and 35c, means a teaching duty that has 2.13 substantial direct student contact, is performed by an 2.14 elementary or secondary school teacher for a separate or 2.15 determinable amount of compensation, is performed in addition to 2.16 the person's regular or base teaching duties, and is not 2.17 uniformly performed by all or substantially all other similarly 2.18 situated teachers. 2.19 (b) Extracurricular activity management includes the 2.20 management of interscholastic and intramural competitive 2.21 activities. 2.22 (c) Extracurricular activity management does not include 2.23 any activities by a school district superintendent or an 2.24 elementary or secondary school principal or other category of 2.25 school administrator. 2.26 Sec. 4. Minnesota Statutes 1998, section 354.05, is 2.27 amended by adding a subdivision to read: 2.28 Subd. 35e. [AVERAGE SALARY.] "Average salary" means the 2.29 period of base salary as defined in subdivision 35b upon which 2.30 contributions were made that produces the highest amount for a 2.31 five successive-year period of formula service credit, but not 2.32 to exceed the equivalent of 60 successive monthly applicable 2.33 compensation payments, or for all years of formula service 2.34 credit if the person has credit for less than five years of 2.35 formula service. 2.36 Sec. 5. Minnesota Statutes 1998, section 354.07, is 3.1 amended by adding a subdivision to read: 3.2 Subd. 10. [BASE SALARY AND EXTRACURRICULAR ACTIVITY 3.3 COMPENSATION REPORTING.] (a) The board shall adopt necessary 3.4 standards for the reporting of base salary amounts and 3.5 extracurricular activity compensation amounts. Reporting of 3.6 base salary amounts and extracurricular activity compensation 3.7 amounts is the responsibility of an employing unit with members 3.8 covered by the fund. An employing unit with a member covered by 3.9 the fund who manages an extracurricular activity must comply 3.10 with the standards in reporting salary and compensation amounts. 3.11 (b) No amount may be credited as extracurricular activity 3.12 compensation paid before July 1, 2000, unless the teacher 3.13 involved supplies adequate documentation of the amount of the 3.14 extracurricular teaching activity compensation and the length of 3.15 the extracurricular teaching activity management service. The 3.16 extracurricular teaching activity compensation must have been 3.17 salary subject to member contributions at the time the service 3.18 was rendered. The documentation must be supplied at least six 3.19 months before the teacher's effective date of retirement. 3.20 (c) The board shall establish standards for the 3.21 documentation required to be provided by a teacher to establish 3.22 the existence and amount of any extracurricular activity 3.23 compensation received before July 1, 2000. Pre-July 1, 2000, 3.24 extracurricular activity compensation is only creditable if 3.25 contemporaneous member contributions were made on the 3.26 extracurricular activity compensation amount. The documentation 3.27 standards may not unreasonably differentiate between the various 3.28 types of teaching personnel engaged in extracurricular activity 3.29 management and may not differentiate between the various school 3.30 districts in a given school year. 3.31 Sec. 6. Minnesota Statutes 1998, section 354.44, 3.32 subdivision 6, is amended to read: 3.33 Subd. 6. [COMPUTATION OF FORMULA PROGRAM RETIREMENT 3.34 ANNUITY.](1)(a) The formula retirement annuity must be 3.35 computedin accordance withusing the applicable provisions of 3.36 the formulas stated inclause (2) or (4)paragraph (b) or (d) on 4.1 the basis ofeachthe member's average salary for the period of 4.2 the member's formula service credit. 4.3For all years of formula service credit, "average salary,"4.4for the purpose of determining the member's retirement annuity,4.5means the average salary upon which contributions were made and4.6upon which payments were made to increase the salary limitation4.7provided in Minnesota Statutes 1971, section 354.511, for the4.8highest five successive years of formula service credit4.9provided, however, that such "average salary" shall not include4.10any more than the equivalent of 60 monthly salary payments.4.11Average salary must be based upon all years of formula service4.12credit if this service credit is less than five years.4.13(2)(b) Thisclauseparagraph, in conjunction withclause4.14(3)paragraph (c), applies to a person who first became a member 4.15 of the association or a member of a pension fund listed in 4.16 section 356.30, subdivision 3, before July 1, 1989, 4.17 unlessclause (4)paragraph (d), in conjunction withclause4.18(5)paragraph (e), produces a higher annuity amount, in which 4.19 caseclause (4)paragraph (d) applies. The average salary as 4.20 defined inclause (1)section 354.05, subdivision 35e, 4.21 multiplied by the following percentages per year of formula 4.22 service creditshall determine, determines the amount of the 4.23 annuity to which the member qualifying therefor is entitled: 4.24 Coordinated Member Basic Member 4.25 Each year of service the percent the percent 4.26 during first ten specified in specified in 4.27 section 356.19, section 356.19, 4.28 subdivision 1, subdivision 3, 4.29 per year per year 4.30 Each year of service the percent the percent 4.31 thereafter specified in specified in 4.32 section 356.19, section 356.19, 4.33 subdivision 2, subdivision 4, 4.34 per year per year 4.35(3)(c)(i) Thisclauseparagraph applies only to a person 4.36 who first became a member of the association or a member of a 5.1 pension fund listed in section 356.30, subdivision 3, before 5.2 July 1, 1989, and whose annuity is higher when calculated 5.3 underclause (2)paragraph (b), in conjunction with thisclause5.4 paragraph than when calculated underclause (4)paragraph (d), 5.5 in conjunction withclause (5)paragraph (e). 5.6 (ii) Where any member retiresprior tobefore the normal 5.7 retirement age under a formula annuity, the membershall be paid5.8 is entitled to a retirement annuity in an amount equal to the 5.9 normal annuity provided inclause (2)paragraph (b), reduced by 5.10 one-quarter of one percent for each month that the member is 5.11 under normal retirement age at the time of retirement except 5.12 that for any member who has 30 or more years of allowable 5.13 service credit, the reductionshall be appliedis applicable 5.14 only for each month that the member is under age 62. 5.15 (iii) Any member whose attained age plus credited allowable 5.16 service totals 90 years is entitled, upon application, to a 5.17 retirement annuity in an amount equal to the normal annuity 5.18 provided inclause (2)paragraph (b), without any reduction by 5.19 reason of early retirement. 5.20(4)(d) Thisclauseparagraph applies to a member who has 5.21 become at least 55 years old and first became a member of the 5.22 association after June 30, 1989, and to any other member who has 5.23 become at least 55 years old and whose annuity amount when 5.24 calculated under thisclauseparagraph and in conjunction with 5.25clause (5)paragraph (e), is higher than it is when calculated 5.26 underclause (2)paragraph (b), in conjunction withclause5.27(3)paragraph (c). The average salary, as defined inclause (1)5.28 section 354.05, subdivision 35e, multiplied by the percent 5.29 specified by section 356.19, subdivision 4, for each year of 5.30 service for a basic member and by the percent specified in 5.31 section 356.19, subdivision 2, for each year of service for a 5.32 coordinated membershall determinedetermines the amount of the 5.33 retirement annuity to which the member is entitled. 5.34(5)(e) Thisclauseparagraph applies to a person who has 5.35 become at least 55 years old and first becomes a member of the 5.36 association after June 30, 1989, and to any other member who has 6.1 become at least 55 years old and whose annuity is higher when 6.2 calculated underclause (4)paragraph (d) in conjunction with 6.3 thisclauseparagraph than when calculated underclause6.4(2)paragraph (b), in conjunction withclause (3)paragraph 6.5 (c). An employee who retires under the formula annuity before 6.6 the normal retirement ageshall be paidis entitled to the 6.7 normal annuity provided inclause (4)paragraph (d), reduced so 6.8 that the reduced annuity is the actuarial equivalent of the 6.9 annuity that would be payable to the employee if the employee 6.10 deferred receipt of the annuity and the annuity amount were 6.11 augmented at an annual rate of three percent compounded annually 6.12 from the day the annuity begins to accrue until the normal 6.13 retirement age. 6.14 Sec. 7. Minnesota Statutes 1998, section 354.46, 6.15 subdivision 1, is amended to read: 6.16 Subdivision 1. [BASIC PROGRAM; BENEFITS FOR SPOUSE AND 6.17 CHILDREN OF TEACHER.] (a) If a basic member who has at least 18 6.18 months of allowable service credit and who has an average salary 6.19 as defined in section354.44354.05, subdivision635e, equal to 6.20 or greater than $75 diesprior tobefore retirement or if a 6.21 former basic member who, at the time of death, was totally and 6.22 permanently disabled and receiving disability benefitspursuant6.23tounder section 354.48 dies before attaining age 65 or reaching 6.24 the five-year anniversary of the effective date of the 6.25 disability benefit, whichever is later, the surviving spouse and 6.26 dependent children of the basic member or former basic member 6.27 are entitled to receive a monthly benefit as follows: 6.28(a)(1) Surviving 6.29 spouse .....50 percent of the basic member's monthly 6.30 average salary paid in the last full 6.31 fiscal year preceding death 6.32(b)(2) Each 6.33 dependent 6.34 child ......ten percent of the basic member's 6.35 monthly average salary paid in the 6.36 last full fiscal year preceding death 7.1 (b) Payments for the benefit of any dependent child under 7.2 the age of 22 years must be made to the surviving parent, or if 7.3 there be none, to the legal guardian of the child. The maximum 7.4 monthly benefitmust not exceedis $1,000 for any one family, 7.5 and the minimum benefit per familymust not be less thanis 50 7.6 percent of the basic member's average salary, subject to the 7.7 foregoing maximum. The surviving dependent children's benefit 7.8 must be reduced pro tanto when any surviving child is no longer 7.9 dependent. 7.10 (c) If the basic member and the surviving spouse are killed 7.11 in a common disaster and if the total of all survivors benefits 7.12 payablepursuant tounder this subdivision is less than the 7.13 accumulated deductions plus interest payable, the surviving 7.14 dependent childrenshallare entitled to receive the difference 7.15 in a lump sum payment. 7.16 (d) If the survivor benefits provided in this subdivision 7.17 exceed in total the monthly average salary of the deceased basic 7.18 member, these benefits must be reduced to an amount equal to the 7.19 deceased basic member's monthly average salary. 7.20Prior to(e) Before payment of any survivor benefit 7.21pursuant tounder this subdivision, in lieu of that benefit, the 7.22 surviving spouse may elect to receive the joint and survivor 7.23 annuity providedpursuant tounder subdivision 2, or may elect 7.24 to receive a refund of accumulated deductions with interest in a 7.25 lump sum as providedpursuant tounder section 354.47, 7.26 subdivision 1. If there are any surviving dependent children, 7.27 the surviving spouse may elect to receive the refund of 7.28 accumulated deductions only with the consent of the district 7.29 court of the district in which the surviving dependent child or 7.30 children reside. 7.31 Sec. 8. [354.515] [DEFINED CONTRIBUTION BENEFIT DERIVED 7.32 FROM CONTRIBUTIONS ON EXTRACURRICULAR COMPENSATION.] 7.33 Subdivision 1. [POST-JULY 1, 2000, CONTRIBUTIONS.] (a) 7.34 Member contributions on extracurricular compensation received by 7.35 a teacher after June 30, 2000, and the related employer 7.36 contributions, after deduction of the applicable amount 8.1 representing administrative expenses, must be deposited in a 8.2 separate account established for the member and must be used to 8.3 purchase shares in one or more account of the Minnesota 8.4 supplemental investment fund under section 11A.17. The teacher 8.5 must specify, on a form prescribed by the executive director, 8.6 the percentage of the total contribution available for deposit 8.7 to be used to purchase shares in each account of the 8.8 supplemental investment fund. 8.9 (b) The teacher may indicate, in writing on a form 8.10 prescribed by the executive director, a choice of options for 8.11 subsequent purchases of shares. The choice filed governs the 8.12 purchase of shares until a different choice is filed. If no 8.13 initial option is chosen, 100 percent of the available 8.14 contribution amounts must be used to purchase shares in the 8.15 income share account. A change in the investment option is 8.16 effective no later than the first compensation payment date 8.17 first occurring 30 days after the change form is filed. 8.18 (c) A teacher also may change the investment option that 8.19 was selected for all or a portion of the shares in the 8.20 supplemental investment fund previously purchased. Changes in 8.21 past investment options must be effected as soon as the cash 8.22 flow to the applicable account practically permits, but not 8.23 later than six months after the requested change. 8.24 Subd. 2. [PRE-JULY 1, 2000, CONTRIBUTIONS.] (a) Member 8.25 contributions on pre-July 1, 2000, documented or reported 8.26 extracurricular activity compensation and the related employer 8.27 contributions, after deduction of the accumulated administrative 8.28 expense, plus investment income on those amounts credited at the 8.29 rate credited to members accounts under section 354.44, 8.30 subdivision 2, must be deducted from the teachers retirement 8.31 fund, transferred to the Minnesota supplemental investment fund, 8.32 and deposited to the credit of the separate account of the 8.33 teacher. 8.34 (b) Reported extracurricular activity compensation is 8.35 compensation for extracurricular teaching services that the 8.36 applicable school district has certified to the executive 9.1 director as having been paid before July 1, 2000. The executive 9.2 director may request additional verification as to the amount 9.3 and the nature of the reported extracurricular activity 9.4 compensation and makes the final determination of the amounts 9.5 appropriate for transfer. The decision of the executive 9.6 director is appealable under section 354.071. 9.7 (c) Documented extracurricular activity compensation is 9.8 compensation paid before July 1, 2000, for extracurricular 9.9 teaching services that the applicable teacher has identified by 9.10 supplying copies of applicable teaching contracts, federal 9.11 Internal Revenue documents, and other relevant information. The 9.12 executive director may request additional information from the 9.13 teacher or from the applicable school district as to the amount 9.14 and the nature of the documented extracurricular activity 9.15 compensation and makes the final determination of the amounts 9.16 appropriate for transfer. The decision of the executive 9.17 director is applicable under section 354.071. 9.18 Subd. 3. [DEFINED CONTRIBUTION RETIREMENT ANNUITY.] (a) 9.19 Upon retirement under section 354.44, the retiring teacher is 9.20 also eligible to receive a defined contribution retirement 9.21 annuity under this section. The value of the shares to the 9.22 credit of the retiring teacher must be transferred to the 9.23 Minnesota postretirement investment fund. The annuity must be 9.24 based on the amount to the credit of the retiring teacher and 9.25 the age of the retiring teacher at retirement, calculated under 9.26 the reserve basis used by the teachers retirement association in 9.27 determining pensions and reserves. 9.28 (b) An annuity under this subdivision accrues on the first 9.29 day of the first full month after the retirement application is 9.30 received or after teaching service terminates, whichever is 9.31 later. 9.32 Subd. 4. [DEFINED CONTRIBUTION DISABILITY BENEFIT.] (a) A 9.33 teacher covered by this section, upon becoming totally and 9.34 permanently disabled, has the option to receive: 9.35 (1) the value of the person's total shares; or 9.36 (2) an annuity under subdivision 3 based on the value of 10.1 the person's total shares. 10.2 (b) The disability benefit accrues on the first day of the 10.3 month next following the date of disability. 10.4 (c) The disability benefit must be based on the 10.5 disabilitant's age when the benefit begins to accrue. The 10.6 shares to the credit of the disabilitant in the Minnesota 10.7 supplemental investment fund must be valued as of the end of the 10.8 month following authorization of the payment of the disability 10.9 benefit. 10.10 (d) The disability benefit is not subject to any reduction 10.11 for amounts received or receivable under the applicable workers' 10.12 compensation laws. 10.13 (e) A person who returns to teaching after receiving 10.14 disability benefits must have those disability benefits 10.15 suspended pending the payment of a future retirement annuity 10.16 under subdivision 3. Upon returning to teaching, the person is 10.17 not obligated or permitted to repay any previously received 10.18 disability benefits. 10.19 Subd. 5. [DEFINED CONTRIBUTION DEATH BENEFIT.] (a) If a 10.20 teacher covered by this section dies leaving a spouse and having 10.21 no named beneficiary, the spouse has the option to receive: 10.22 (1) the value of the decedent's total shares; or 10.23 (2) an annuity when the spouse attains the age of 55 years, 10.24 calculated under subdivision 3 based on the value of the 10.25 decedent's total shares. 10.26 (b) If a teacher covered by this section dies and has named 10.27 a beneficiary, the beneficiary is entitled to receive the value 10.28 of the decedent's total shares. 10.29 (c) If a teacher covered by this section dies and leaves no 10.30 spouse, has named no beneficiary, but leaves a surviving child, 10.31 surviving children, a surviving parent, or surviving parents, 10.32 the value of the decedent's total shares are payable to the 10.33 child or to the children in equal shares, or if none, to the 10.34 surviving parent or to the surviving parents in equal shares. 10.35 (d) If a teacher covered by this section dies leaving no 10.36 surviving spouse, surviving child, or surviving parent and has 11.1 not named a beneficiary, the decedent's estate is entitled to 11.2 the value of the decedent's total shares. 11.3 (e) A decedent's total shares must be valued as of the end 11.4 of the month following the teacher's death. 11.5 Subd. 6. [DEFINED CONTRIBUTION WITHDRAWAL BENEFIT.] (a) No 11.6 withdrawal of amounts from the account of a teacher covered by 11.7 this section may occur before the termination of teaching 11.8 service. 11.9 (b) Upon the termination of teaching service or thereafter, 11.10 a former teacher, upon application, is entitled to withdraw the 11.11 value of the person's total shares. The withdrawal benefit is 11.12 payable 30 days following the termination of teaching service or 11.13 30 days following the filing of the application for the benefit, 11.14 whichever is later. 11.15 (c) The share value for a withdrawal benefit must be 11.16 determined as of the end of the month following the filing of 11.17 the application for the benefit. 11.18 (d) The withdrawal benefit may not be repaid. 11.19 Sec. 9. [EFFECTIVE DATE.] 11.20 Sections 1 to 8 are effective on July 1, 2000. 11.21 ARTICLE 2 11.22 FIRST CLASS CITY RETIREMENT FUND ASSOCIATIONS 11.23 EXTRACURRICULAR ACTIVITY MANAGEMENT 11.24 BENEFIT COVERAGE 11.25 Section 1. Minnesota Statutes 1998, section 354A.011, is 11.26 amended by adding a subdivision to read: 11.27 Subd. 7a. [AVERAGE SALARY.] "Average salary" means the 11.28 period of base salary as defined in subdivision 7b upon which 11.29 contributions were made that produces the highest amount for a 11.30 five successive-year period of formula service credit, but not 11.31 to exceed the equivalent of 60 successive monthly applicable 11.32 compensation payments, or for all years of formula service 11.33 credit if the person has credit for less than five years of 11.34 formula service. 11.35 Sec. 2. Minnesota Statutes 1998, section 354A.011, is 11.36 amended by adding a subdivision to read: 12.1 Subd. 7b. [BASE SALARY.] (a) For an elementary or 12.2 secondary school teacher, "base salary" means the annual 12.3 contract or equivalent regular salary of the teacher for the 12.4 teacher's regular teaching duties and does not include 12.5 extracurricular activity compensation. 12.6 (b) For any other teacher, including a school district 12.7 superintendent or an elementary or secondary school principal or 12.8 other administrator, base salary means salary as defined in 12.9 subdivision 24. 12.10 Sec. 3. Minnesota Statutes 1998, section 354A.011, is 12.11 amended by adding a subdivision to read: 12.12 Subd. 14b. [EXTRACURRICULAR ACTIVITY 12.13 COMPENSATION.] "Extracurricular activity compensation" means 12.14 that portion of the compensation for teaching services paid to a 12.15 teacher covered by subdivision 7b, paragraph (a), for 12.16 extracurricular activity management. 12.17 Sec. 4. Minnesota Statutes 1998, section 354A.011, is 12.18 amended by adding a subdivision to read: 12.19 Subd. 14c. [EXTRACURRICULAR ACTIVITY MANAGEMENT.] (a) 12.20 "Extracurricular activity management," for purposes of 12.21 subdivisions 7b and 14b, means a teaching duty that has 12.22 substantial direct student contact, is performed by an 12.23 elementary or secondary school teacher for a separate or 12.24 determinable amount of compensation, is performed in addition to 12.25 the person's regular or base teaching duties, and is not 12.26 uniformly performed by all or substantially all other similarly 12.27 situated teachers. 12.28 (b) Extracurricular activity management includes the 12.29 management of interscholastic and intramural competitive 12.30 activities. 12.31 (c) Extracurricular activity management does not include 12.32 any activities by a school district superintendent or an 12.33 elementary or secondary school principal or other category of 12.34 school administrator. 12.35 Sec. 5. Minnesota Statutes 1998, section 354A.021, is 12.36 amended by adding a subdivision to read: 13.1 Subd. 9. [BASE SALARY AND EXTRACURRICULAR ACTIVITY 13.2 COMPENSATION REPORTING.] (a) The board shall adopt necessary 13.3 standards for the reporting of base salary amounts and 13.4 extracurricular activity compensation amounts. Reporting of 13.5 base salary amounts and extracurricular activity compensation 13.6 amounts is the responsibility of an employing unit with members 13.7 covered by the fund. An employing unit with a member covered by 13.8 the fund who manages an extracurricular activity must comply 13.9 with the standards in reporting salary and compensation amounts. 13.10 (b) No amount may be credited as extracurricular activity 13.11 compensation paid before July 1, 2000, unless the teacher 13.12 involved supplies adequate documentation of the amount of the 13.13 extracurricular teaching activity compensation and the length of 13.14 the extracurricular teaching activity management service. The 13.15 extracurricular teaching activity compensation must have been 13.16 salary subject to member contributions at the time the service 13.17 was rendered. The documentation must be supplied at least six 13.18 months before the teacher's effective date of retirement. 13.19 (c) The board shall establish standards for the 13.20 documentation required to be provided by a teacher to establish 13.21 the existence and amount of any extracurricular activity 13.22 compensation received before July 1, 2000. Pre-July 1, 2000, 13.23 extracurricular activity compensation is only creditable if 13.24 contemporaneous member contributions were made on the 13.25 extracurricular activity compensation amount. The documentation 13.26 standards may not unreasonably differentiate between the various 13.27 types of teaching personnel engaged in extracurricular activity 13.28 management and may not differentiate between the various school 13.29 districts in a given school year. 13.30 Sec. 6. Minnesota Statutes 1998, section 354A.31, 13.31 subdivision 4, is amended to read: 13.32 Subd. 4. [COMPUTATION OF THE NORMAL COORDINATED RETIREMENT 13.33 ANNUITY; MINNEAPOLIS AND ST. PAUL FUNDS.] (a) This subdivision 13.34 applies to the coordinated programs of the Minneapolis teachers 13.35 retirement fund association and the St. Paul teachers retirement 13.36 fund association. 14.1 (b) The normal coordinated retirement annuityshall beis 14.2 an amount equal to a retiring coordinated member's average 14.3 salary as defined in section 354A.011, subdivision 7a, 14.4 multiplied by the retirement annuity formula percentage. 14.5Average salary for purposes of this section shall mean an amount14.6equal to the average salary upon which contributions were made14.7for the highest five successive years of service credit, but14.8which shall not in any event include any more than the14.9equivalent of 60 monthly salary payments. Average salary must14.10be based upon all years of service credit if this service credit14.11is less than five years.14.12 (c) This paragraph, in conjunction with subdivision 6, 14.13 applies to a person who first became a member or a member in a 14.14 pension fund listed in section 356.30, subdivision 3, before 14.15 July 1, 1989, unless paragraph (d), in conjunction with 14.16 subdivision 7, produces a higher annuity amount, in which case 14.17 paragraph (d) will apply. The retirement annuity formula 14.18 percentage for purposes of this paragraph is the percent 14.19 specified in section 356.19, subdivision 1, per year for each 14.20 year of coordinated service for the first ten years and the 14.21 percent specified in section 356.19, subdivision 2, for each 14.22 year of coordinated service thereafter. 14.23 (d) This paragraph applies to a person who has become at 14.24 least 55 years old and who first becomes a member after June 30, 14.25 1989, and to any other member who has become at least 55 years 14.26 old and whose annuity amount, when calculated under this 14.27 paragraph and in conjunction with subdivision 7 is higher than 14.28 it is when calculated under paragraph (c), in conjunction with 14.29 the provisions of subdivision 6. The retirement annuity formula 14.30 percentage for purposes of this paragraph is the percent 14.31 specified in section 356.19, subdivision 2, for each year of 14.32 coordinated service. 14.33 Sec. 7. Minnesota Statutes 1998, section 354A.31, 14.34 subdivision 4a, is amended to read: 14.35 Subd. 4a. [COMPUTATION OF THE NORMAL COORDINATED 14.36 RETIREMENT ANNUITY; DULUTH FUND.] (a) This subdivision applies 15.1 to the new law coordinated program of the Duluth teachers 15.2 retirement fund association. 15.3 (b) The normal coordinated retirement annuity is an amount 15.4 equal to a retiring coordinated member's average salary as 15.5 defined in section 354A.011, subdivision 7a, multiplied by the 15.6 retirement annuity formula percentage.Average salary for15.7purposes of this section means an amount equal to the average15.8salary upon which contributions were made for the highest five15.9successive years of service credit, but may not in any event15.10include any more than the equivalent of 60 monthly salary15.11payments. Average salary must be based upon all years of15.12service credit if this service credit is less than five years.15.13 (c) This paragraph, in conjunction with subdivision 6, 15.14 applies to a person who first became a member or a member in a 15.15 pension fund listed in section 356.30, subdivision 3, before 15.16 July 1, 1989, unless paragraph (d), in conjunction with 15.17 subdivision 7, produces a higher annuity amount, in which case 15.18 paragraph (d) applies. The retirement annuity formula 15.19 percentage for purposes of this paragraph is the percent 15.20 specified in section 356.19, subdivision 1, per year for each 15.21 year of coordinated service for the first ten years and the 15.22 percent specified in section 356.19, subdivision 2, for each 15.23 subsequent year of coordinated service. 15.24 (d) This paragraph applies to a person who is at least 55 15.25 years old and who first becomes a member after June 30, 1989, 15.26 and to any other member who is at least 55 years old and whose 15.27 annuity amount, when calculated under this paragraph and in 15.28 conjunction with subdivision 7, is higher than it is when 15.29 calculated under paragraph (c) in conjunction with subdivision 15.30 6. The retirement annuity formula percentage for purposes of 15.31 this paragraph is the percent specified in section 356.19, 15.32 subdivision 2, for each year of coordinated service. 15.33 Sec. 8. [354A.45] [DEFINED CONTRIBUTION BENEFIT DERIVED 15.34 FROM CONTRIBUTIONS ON EXTRACURRICULAR COMPENSATION.] 15.35 Subdivision 1. [POST-JULY 1, 2000, CONTRIBUTIONS.] (a) 15.36 Member contributions on extracurricular compensation received by 16.1 a teacher after June 30, 2000, and the related employer 16.2 contributions, after deduction of the applicable amount 16.3 representing administrative expenses, must be deposited in a 16.4 separate account established for the member and must be used to 16.5 purchase shares in one or more account of the Minnesota 16.6 supplemental investment fund under section 11A.17. The teacher 16.7 must specify, on a form prescribed by the executive director, 16.8 the percentage of the total contribution available for deposit 16.9 to be used to purchase shares in each account of the 16.10 supplemental investment fund. 16.11 (b) The teacher may indicate, in writing on a form 16.12 prescribed by the executive director, a choice of options for 16.13 subsequent purchases of shares. The choice filed governs the 16.14 purchase of shares until a different choice is filed. If no 16.15 initial option is chosen, 100 percent of the available 16.16 contribution amounts must be used to purchase shares in the 16.17 income share account. A change in the investment option is 16.18 effective no later than the first compensation payment date 16.19 first occurring 30 days after the change form is filed. 16.20 (c) A teacher also may change the investment option that 16.21 was selected for all or a portion of the shares in the 16.22 supplemental investment fund previously purchased. Changes in 16.23 past investment options must be effected as soon as the cash 16.24 flow to the applicable account practically permits, but not 16.25 later than six months after the requested change. 16.26 Subd. 2. [PRE-JULY 1, 2000, CONTRIBUTIONS.] (a) Member 16.27 contributions on pre-July 1, 2000, documented or reported 16.28 extracurricular activity compensation and the related employer 16.29 contributions, after deduction of the accumulated administrative 16.30 expense, plus investment income on those amounts credited at the 16.31 rate credited to members' accounts under section 354.44, 16.32 subdivision 2, must be deducted from the teachers retirement 16.33 fund, transferred to the Minnesota supplemental investment fund, 16.34 and deposited to the credit of the separate account of the 16.35 teacher. 16.36 (b) Reported extracurricular activity compensation is 17.1 compensation for extracurricular teaching services that the 17.2 applicable school district has certified to the executive 17.3 director as having been paid before July 1, 2000. The executive 17.4 director may request additional verification as to the amount 17.5 and the nature of the reported extracurricular activity 17.6 compensation and makes the final determination of the amounts 17.7 appropriate for transfer. The decision of the executive 17.8 director is appealable under section 354.071. 17.9 (c) Documented extracurricular activity compensation is 17.10 compensation paid before July 1, 2000, for extracurricular 17.11 teaching services that the applicable teacher has identified by 17.12 supplying copies of applicable teaching contracts, federal 17.13 Internal Revenue documents, and other relevant information. The 17.14 executive director may request additional information from the 17.15 teacher or from the applicable school district as to the amount 17.16 and the nature of the documented extracurricular activity 17.17 compensation and makes the final determination of the amounts 17.18 appropriate for transfer. The decision of the executive 17.19 director is applicable under section 354.071. 17.20 Subd. 3. [DEFINED CONTRIBUTION RETIREMENT ANNUITY.] (a) 17.21 Upon retirement under section 354.44, the retiring teacher is 17.22 also eligible to receive a defined contribution retirement 17.23 annuity under this section. The value of the shares to the 17.24 credit of the retiring teacher must be transferred to the 17.25 Minnesota postretirement investment fund. The annuity must be 17.26 based on the amount to the credit of the retiring teacher and 17.27 the age of the retiring teacher at retirement, calculated under 17.28 the reserve basis used by the teachers retirement association in 17.29 determining pensions and reserves. 17.30 (b) An annuity under this subdivision accrues on the first 17.31 day of the first full month after the retirement application is 17.32 received or after teaching service terminates, whichever is 17.33 later. 17.34 Subd. 4. [DEFINED CONTRIBUTION DISABILITY BENEFIT.] (a) A 17.35 teacher covered by this section, upon becoming totally and 17.36 permanently disabled, has the option to receive: 18.1 (1) the value of the person's total shares; or 18.2 (2) an annuity under subdivision 3 based on the value of 18.3 the person's total shares. 18.4 (b) The disability benefit accrues on the first day of the 18.5 month next following the date of disability. 18.6 (c) The disability benefit must be based on the 18.7 disabilitant's age when the benefit begins to accrue. The 18.8 shares to the credit of the disabilitant in the Minnesota 18.9 supplemental investment fund must be valued as of the end of the 18.10 month following authorization of the payment of the disability 18.11 benefit. 18.12 (d) The disability benefit is not subject to any reduction 18.13 for amounts received or receivable under the applicable workers' 18.14 compensation laws. 18.15 (e) A person who returns to teaching after receiving 18.16 disability benefits must have those disability benefits 18.17 suspended pending the payment of a future retirement annuity 18.18 under subdivision 3. Upon returning to teaching, the person is 18.19 not obligated or permitted to repay any previously received 18.20 disability benefits. 18.21 Subd. 5. [DEFINED CONTRIBUTION DEATH BENEFIT.] (a) If a 18.22 teacher covered by this section dies leaving a spouse and having 18.23 no named beneficiary, the spouse has the option to receive: 18.24 (1) the value of the decedent's total shares; or 18.25 (2) an annuity when the spouse attains the age of 55 years, 18.26 calculated under subdivision 3 based on the value of the 18.27 decedent's total shares. 18.28 (b) If a teacher covered by this section dies and has named 18.29 a beneficiary, the beneficiary is entitled to receive the value 18.30 of the decedent's total shares. 18.31 (c) If a teacher covered by this section dies and leaves no 18.32 spouse, has named no beneficiary, but leaves a surviving child, 18.33 surviving children, a surviving parent, or surviving parents, 18.34 the value of the decedent's total shares are payable to the 18.35 child or to the children in equal shares, or if none, to the 18.36 surviving parent or to the surviving parents in equal shares. 19.1 (d) If a teacher covered by this section dies leaving no 19.2 surviving spouse, surviving child, or surviving parent and has 19.3 not named a beneficiary, the decedent's estate is entitled to 19.4 the value of the decedent's total shares. 19.5 (e) A decedent's total shares must be valued as of the end 19.6 of the month following the teacher's death. 19.7 Subd. 6. [DEFINED CONTRIBUTION WITHDRAWAL BENEFIT.] (a) No 19.8 withdrawal of amounts from the account of a teacher covered by 19.9 this section may occur before the termination of teaching 19.10 service. 19.11 (b) Upon the termination of teaching service or thereafter, 19.12 a former teacher, upon application, is entitled to withdraw the 19.13 value of the person's total shares. The withdrawal benefit is 19.14 payable 30 days following the termination of teaching service or 19.15 30 days following the filing of the application for the benefit, 19.16 whichever is later. 19.17 (c) The share value for a withdrawal benefit must be 19.18 determined as of the end of the month following the filing of 19.19 the application for the benefit. 19.20 (d) The withdrawal benefit may not be repaid. 19.21 Sec. 9. [EFFECTIVE DATE.] 19.22 Sections 1 to 8 are effective on July 1, 2000. 19.23 ARTICLE 3 19.24 FEE FOR DOCUMENTING PRIOR EXTRACURRICULAR TEACHING 19.25 SERVICE AND COMPENSATION 19.26 Section 1. [122A.59] [EXTRACURRICULAR TEACHING ACTIVITY 19.27 MANAGERS; DOCUMENTATION FEE AUTHORITY.] 19.28 To cover the cost of documenting prior extracurricular 19.29 teaching activity management service and compensation under 19.30 section 354.07, subdivision 10, or 354A.021, subdivision 9, a 19.31 school district may charge the extracurricular teaching activity 19.32 manager a documentation fee, not to exceed $....... 19.33 Sec. 2. [EFFECTIVE DATE.] 19.34 Section 1 is effective on the day following final enactment. 19.35 ARTICLE 4 19.36 DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 20.1 SPECIFICATION OF ELIGIBLE EXTRACURRICULAR ACTIVITY MANAGERS 20.2 Section 1. [122A.591] [SPECIFICATION OF ELIGIBLE 20.3 EXTRACURRICULAR ACTIVITY MANAGEMENT DUTIES.] 20.4 For purposes of the special retirement plan provisions 20.5 contained in section 354.515 or 354A.385, the commissioner shall 20.6 adopt reasonable and appropriate emergency and permanent rules 20.7 consistent with sections 354.05, subdivision 35d, and 354A.011, 20.8 subdivision 14b, defining the various teaching duties that 20.9 constitute extracurricular activity management. 20.10 Sec. 2. [EFFECTIVE DATE.] 20.11 (a) Section 1 is effective on the day following final 20.12 enactment. 20.13 (b) The commissioner of children, families, and learning 20.14 shall issue emergency rules under section 1 as soon as 20.15 practicable following the effective date specified in paragraph 20.16 (a).