HF 2584

as introduced - 87th Legislature (2011 - 2012) Posted on 02/29/2012 01:37pm

A bill for an act
relating to retirement; statewide and major local Minnesota defined benefit
retirement plans; limiting contribution rate reductions or benefit improvements in
certain instances; requiring funding recommendations from plan administrators
in certain instances; amending Minnesota Statutes 2010, sections 352.03, by
adding a subdivision; 352.04, subdivisions 2, 3; 352.045, subdivision 3; 352.85,
subdivision 3; 352.86, subdivision 7; 352.87, subdivision 7; 352.92, subdivisions
1, 2; 352B.02, subdivisions 1a, 1c; 352B.03, by adding a subdivision; 353.03,
by adding a subdivision; 353.27, subdivisions 2, 3, 3a, 3b; 353E.03; 354.06,
by adding a subdivision; 354.42, subdivisions 2, 3, 4b; 354A.021, by adding a
subdivision; 354A.12, subdivisions 1, 2a; 490.122, by adding a subdivision;
490.123, subdivisions 1a, 1b; Minnesota Statutes 2011 Supplement, section
353.65, subdivisions 2, 3; proposing coding for new law in Minnesota Statutes,
chapter 356.

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

Section 1.

Minnesota Statutes 2010, section 352.03, is amended by adding a
subdivision to read:

new text begin Subd. 16. new text end

new text begin Application of limitation. new text end

new text begin Any modification of any benefit plan
provision in this chapter is subject to section 356.2175.
new text end

Sec. 2.

Minnesota Statutes 2010, section 352.04, subdivision 2, is amended to read:

Subd. 2.

Employee contributions.

(a) The employee contribution to the fund must
be equal to the following percent of salary:

	before July 1, 2007	4.00
	from July 1, 2007, to June 30, 2008	4.25
	from July 1, 2008, to June 30, 2009	4.50
	from July 1, 2009, to June 30, 2010	4.75
	from July 1, 2010, and thereafter	5.00 deleted text begin . deleted text end

(b) These contributions must be made by deduction from salary as provided in
subdivision 4.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 3.

Minnesota Statutes 2010, section 352.04, subdivision 3, is amended to read:

Subd. 3.

Employer contributions.

new text begin (a) new text end The employer contribution to the fund must
be equal to the following percent of salary:

	before July 1, 2007	4.00
	from July 1, 2007, to June 30, 2008	4.25
	from July 1, 2008, to June 30, 2009	4.50
	from July 1, 2009, to June 30, 2010	4.75
	from July 1, 2010, and thereafter	5.00 deleted text begin . deleted text end

new text begin (b) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 4.

Minnesota Statutes 2010, section 352.045, subdivision 3, is amended to read:

Subd. 3.

Contribution rate revision.

new text begin (a) new text end Notwithstanding the contribution rate
provisions stated in plan law, the employee and employer contribution rates must be
adjusted:

(1) if, after July 1, 2011, the regular actuarial valuations of the applicable plan under
section 356.215 indicate that there is a contribution sufficiency under subdivision 2 equal
to or greater than 0.5 percent of covered payroll for two consecutive years, the employee
and employer contribution rates for the applicable plan must be decreased as determined
under subdivision 4 to a level such that the sufficiency equals no more than 0.25 percent of
covered payroll based on the most recent actuarial valuation; or

(2) if, after July 1, 2011, the regular actuarial valuations of the applicable plan under
section 356.215 indicate that there is a deficiency equal to or greater than 0.5 percent of
covered payroll for two consecutive years, the employee and employer contribution rates
for the applicable plan must be increased as determined under subdivision 4 to a level such
that no deficiency exists based on the most recent actuarial valuation.

new text begin (b) Any contribution rate reduction under this section is subject to section 356.2175.
new text end

Sec. 5.

Minnesota Statutes 2010, section 352.85, subdivision 3, is amended to read:

Subd. 3.

Additional contributions.

new text begin (a) new text end The special retirement annuities and
disability benefits authorized by this section shall be financed by an employee contribution
from the covered Department of Military Affairs employee of 1.6 percent and an employer
contribution from the Department of Military Affairs of 1.6 percent. These contributions
are in addition to the contributions required by section 352.04, subdivisions 2 and 3. They
must be made as provided in section 352.04, subdivisions 4, 5, and 6.

new text begin (b) Any change in the contribution rates is subject to section 356.2175.
new text end

Sec. 6.

Minnesota Statutes 2010, section 352.86, subdivision 7, is amended to read:

Subd. 7.

Additional contributions.

new text begin (a) new text end An employee covered by this section must
pay an additional employee contribution of 1.6 percent of salary. The Department of
Transportation must pay an additional employer contribution of 1.6 percent of salary.
These contributions are in addition to the contributions required by section 352.04,
subdivisions 2 and 3. They must be made in the manner provided for in section 352.04,
subdivisions 4, 5, and 6.

new text begin (b) Any change in the contribution rates is subject to section 356.2175.
new text end

Sec. 7.

Minnesota Statutes 2010, section 352.87, subdivision 7, is amended to read:

Subd. 7.

Additional contributions.

new text begin (a) new text end The special retirement annuity and
disability coverage under this section must be financed by an employee contribution of
2.78 percent of covered salary and an employer contribution of 4.20 percent of covered
salary. These contributions are in addition to the contributions required by section 352.04,
subdivisions 2 and 3, and must be made in the manner provided for in section 352.04,
subdivisions 4, 5, and 6.

new text begin (b) Any change in the contribution rates is subject to section 356.2175.
new text end

Sec. 8.

Minnesota Statutes 2010, section 352.92, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

(a) Employee contributions of covered
correctional employees must be in an amount equal to the following percent of salary:

	before July 1, 2007	5.69
	from July 1, 2007, to June 30, 2008	6.40
	from July 1, 2008, to June 30, 2009	7.00
	from July 1, 2009, to June 30, 2010	7.70
	from July 1, 2010, and thereafter	8.60 deleted text begin . deleted text end

(b) These contributions must be made by deduction from salary as provided in
section 352.04, subdivision 4.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 9.

Minnesota Statutes 2010, section 352.92, subdivision 2, is amended to read:

Subd. 2.

Employer contributions.

new text begin (a) new text end The employer shall contribute for covered
correctional employees an amount equal to the following percent of salary:

	before July 1, 2007	7.98
	from July 1, 2007, to June 30, 2008	9.10
	from July 1, 2008, to June 30, 2009	10.10
	from July 1, 2009, to June 30, 2010	11.10
	from July 1, 2010, and thereafter	12.10 deleted text begin . deleted text end

new text begin (b) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 10.

Minnesota Statutes 2010, section 352B.02, subdivision 1a, is amended to read:

Subd. 1a.

Member contributions.

(a) The member contribution is the following
percentage of the member's salary:

	(1) before the first day of the first pay period beginning after July 1, 2011	10.40 percent
	(2) on or after the first day of the first pay period beginning after July 1, 2011	12.40 percent

(b) These contributions must be made by deduction from salary as provided in
section 352.04, subdivision 4.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 11.

Minnesota Statutes 2010, section 352B.02, subdivision 1c, is amended to read:

Subd. 1c.

Employer contributions.

(a) In addition to member contributions,
department heads shall pay a sum equal to the specified percentage of the salary upon
which deductions were made, which constitutes the employer contribution to the fund
as follows:

	(1) before the first day of the first pay period beginning after July 1, 2011	15.60 percent
	(2) on or after the first day of the first pay period beginning after July 1, 2011	18.60 percent

(b) Department contributions must be paid out of money appropriated to departments
for this purpose.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 12.

Minnesota Statutes 2010, section 352B.03, is amended by adding a
subdivision to read:

new text begin Subd. 3. new text end

new text begin Application of limitation. new text end

new text begin Any modification of any benefit plan provision
in this chapter is subject to section 356.2175.
new text end

Sec. 13.

Minnesota Statutes 2010, section 353.03, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Application of limitation. new text end

new text begin Any modification of any benefit plan provision
in this chapter or chapter 353E is subject to section 356.2175.
new text end

Sec. 14.

Minnesota Statutes 2010, section 353.27, subdivision 2, is amended to read:

Subd. 2.

General employees retirement plan; employee contribution.

(a) For
a basic member of the general employees retirement plan of the Public Employees
Retirement Association, the employee contribution is 9.10 percent of salary. For a
coordinated member of the general employees retirement plan of the Public Employees
Retirement Association, the employee contribution is the following percentage of salary
plus any contribution rate adjustment under subdivision 3b:

	Effective before January 1, 2011	6.00
	Effective after December 31, 2010	6.25

(b) These contributions must be made by deduction from salary as defined in section
353.01, subdivision 10, in the manner provided in subdivision 4. If any portion of a
member's salary is paid from other than public funds, the member's employee contribution
must be based on the total salary received by the member from all sources.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 15.

Minnesota Statutes 2010, section 353.27, subdivision 3, is amended to read:

Subd. 3.

General employees retirement plan; employer contribution.

(a) For
a basic member of the general employees retirement plan of the Public Employees
Retirement Association, the employer contribution is 9.10 percent of salary. For a
coordinated member of the general employees retirement plan of the Public Employees
Retirement Association, the employer contribution is the following percentage of salary
plus any contribution rate adjustment under subdivision 3b:

	Effective before January 1, 2011	6.00
	Effective after December 31, 2010	6.25

(b) This contribution must be made from funds available to the employing
subdivision by the means and in the manner provided in section 353.28.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 16.

Minnesota Statutes 2010, section 353.27, subdivision 3a, is amended to read:

Subd. 3a.

Additional employer contribution.

(a) An additional employer
contribution to the general employees retirement fund of the Public Employees Retirement
Association must be made equal to the following applicable percentage of the total salary
amount for "basic members" and for "coordinated members":

		Basic Program		Coordinated Program
Effective before January 1, 2006		2.68		.43
Effective January 1, 2006		2.68		.50
Effective January 1, 2009		2.68		.75
Effective January 1, 2010		2.68		1.00

These contributions must be made from funds available to the employing subdivision
by the means and in the manner provided in section 353.28.

(b) The coordinated program contribution rates set forth in paragraph (a) effective
for January 1, 2010, must not be implemented if, following receipt of the July 1, 2009,
annual actuarial valuation report under section 356.215, respectively, the actuarially
required contributions are equal to or less than the total rates under this section in effect as
of January 1, 2008.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end This subdivision is repealed once the actuarial value of the assets of the
general employees retirement plan of the Public Employees Retirement Association equal
or exceed the actuarial accrued liability of the plan as determined by the actuary retained
under sections 356.214 and 356.215. The repeal is effective on the first day of the first full
pay period occurring after March 31 of the calendar year following the issuance of the
actuarial valuation upon which the repeal is based.

Sec. 17.

Minnesota Statutes 2010, section 353.27, subdivision 3b, is amended to read:

Subd. 3b.

Change in employee and employer contributions in certain instances.

(a) For purposes of this section:

(1) a contribution sufficiency exists if the total of the employee contribution under
subdivision 2, the employer contribution under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional contribution previously imposed
under this subdivision exceeds the total of the normal cost, the administrative expenses,
and the amortization contribution of the general employees retirement plan as reported in
the most recent actuarial valuation of the retirement plan prepared by the actuary retained
under section 356.214 and prepared under section 356.215 and the standards for actuarial
work of the Legislative Commission on Pensions and Retirement; and

(2) a contribution deficiency exists if the total of the employee contributions under
subdivision 2, the employer contributions under subdivision 3, the additional employer
contribution under subdivision 3a, and any additional contribution previously imposed
under this subdivision is less than the total of the normal cost, the administrative expenses,
and the amortization contribution of the general employees retirement plan as reported in
the most recent actuarial valuation of the retirement plan prepared by the actuary retained
under section 356.214 and prepared under section 356.215 and the standards for actuarial
work of the Legislative Commission on Pensions and Retirement.

(b) Employee and employer contributions to the general employees retirement plan
under subdivisions 2 and 3 must be adjusted:

(1) if, on or after July 1, 2010, the regular actuarial valuation of the general
employees retirement plan of the Public Employees Retirement Association under section
356.215 indicates that there is a contribution sufficiency under paragraph (a) greater
than one percent of covered payroll and that the sufficiency has existed for at least two
consecutive years, the coordinated program employee and employer contribution rates
must be decreased as determined under paragraph (c) to a level such that the sufficiency
is no greater than one percent of covered payroll based on the most recent actuarial
valuation; or

(2) if, on or after July 1, 2010, the regular actuarial valuation of the general
employees retirement plan of the Public Employees Retirement Association under section
356.215 indicates that there is a contribution deficiency equal to or greater than 0.5 percent
of covered payroll and that the deficiency has existed for at least two consecutive years,
the coordinated program employee and employer contribution rates must be increased
as determined under paragraph (d) to a level such that no deficiency exists based on the
most recent actuarial valuation.

(c) If the actuarially required contribution of the general employees retirement
plan is less than the total support provided by the combined employee and employer
contribution rates under subdivisions 2, 3, and 3a, by more than one percent of covered
payroll, the general employees retirement plan coordinated program employee and
employer contribution rates under subdivisions 2 and 3 must be decreased incrementally
over one or more years by no more than 0.25 percent of pay each for employee and
employer matching contribution rates to a level such that there remains a contribution
sufficiency of at least one percent of covered payroll. No contribution rate decrease may
be made until at least two years have elapsed since any adjustment under this subdivision
has been fully implemented.

(d) If the actuarially required contribution exceeds the total support provided by the
combined employee and employer contribution rates under subdivisions 2, 3, and 3a,
the employee and matching employer contribution rates must be increased equally to
eliminate that contribution deficiency. If the contribution deficiency is:

(1) less than two percent, the incremental increase may be up to 0.25 percent for the
general employees retirement plan employee and matching employer contribution rates;

(2) greater than 1.99 percent and less than 4.01 percent, the incremental increase
may be up to 0.5 percent for the employee and matching employer contribution rates; or

(3) greater than four percent, the incremental increase may be up to 0.75 percent for
the employee and matching employer contribution.

(e) The general employees retirement plan contribution sufficiency or deficiency
determination under paragraphs (a) to (d) must be made without the inclusion of the
contributions to, the funded condition of, or the actuarial funding requirements of the
MERF division.

(f) Any recommended adjustment to the contribution rates must be reported
to the chair and the executive director of the Legislative Commission on Pensions
and Retirement by January 15 following receipt of the most recent annual actuarial
valuation prepared under section 356.215. If the Legislative Commission on Pensions
and Retirement does not recommend against the rate change or does not recommend a
modification in the rate change, the recommended adjustment becomes effective on the
first day of the first full payroll period in the fiscal year following receipt of the most
recent actuarial valuation that gave rise to the adjustment.

(g) A contribution sufficiency of up to one percent of covered payroll must be held in
reserve to be used to offset any future actuarially required contributions that are more than
the total combined employee and employer contributions under subdivisions 2, 3, and 3a.

(h) Before any reduction in contributions to eliminate a sufficiency in excess of one
percent of covered pay may be recommended, the executive director must review any
need for a change in actuarial assumptions, as recommended by the actuary retained under
section 356.214 in the most recent experience study of the general employees retirement
plan prepared under section 356.215 and the standards for actuarial work promulgated by
the Legislative Commission on Pensions and Retirement that may result in an increase
in the actuarially required contribution and must report to the Legislative Commission
on Pensions and Retirement any recommendation by the board to use the sufficiency
exceeding one percent of covered payroll to offset the impact of an actuarial assumption
change recommended by the actuary retained under section 356.214, subdivision 1, and
reviewed by the actuary retained by the commission under section 356.214, subdivision 4.

(i) No contribution sufficiency in excess of one percent of covered pay may be
proposed to be used to increase benefits, and no benefit increase may be proposed that
would initiate an automatic adjustment to increase contributions under this subdivision.
Any proposed benefit improvement must include a recommendation, prepared by the
actuary retained under section 356.214, subdivision 1, and reviewed by the actuary
retained by the Legislative Commission on Pensions and Retirement as provided under
section 356.214, subdivision 4, on how the benefit modification will be funded.

new text begin (j) Any change in the contribution rates is subject to section 356.2175.
new text end

Sec. 18.

Minnesota Statutes 2011 Supplement, section 353.65, subdivision 2, is
amended to read:

Subd. 2.

Employee contribution.

(a) For members other than members who were
active members of the former Minneapolis Firefighters Relief Association on the day prior
to the effective date of consolidation under Laws 2011, First Special Session chapter 8,
article 6, section 19, or for members other than members who were active members of
the former Minneapolis Police Relief Association on the day prior to the effective date of
consolidation under Laws 2011, First Special Session chapter 8, article 7, section 19, the
employee contribution is 9.4 percent of the salary of the member in calendar year 2010
and is 9.6 percent of the salary of the member in each calendar year after 2010.

(b) For members who were active members of the former Minneapolis Firefighters
Relief Association on the day prior to the effective date of consolidation under Laws 2011,
First Special Session chapter 8, article 6, section 19, the employee contribution is an
amount equal to eight percent of the monthly unit value under section 353.01, subdivision
10a, multiplied by 80 and expressed as a biweekly amount for each member. The employee
contribution made by a member with at least 25 years of service credit as an active
member of the former Minneapolis Firefighters Relief Association must be deposited in
the postretirement health care savings account established under section 352.98.

(c) For members who were active members of the former Minneapolis Police Relief
Association on the day prior to the effective date of consolidation under Laws 2011, First
Special Session chapter 8, article 7, section 19, the employee contribution is an amount
equal to eight percent of the monthly unit value under section 353.01, subdivision 10b,
multiplied by 80 and expressed as a biweekly amount for each member. The employee
contribution made by a member with at least 25 years of service credit as an active
member of the former Minneapolis Police Relief Association must be deposited in the
postretirement health care savings account established under section 352.98.

(d) Contributions under this section must be made by deduction from salary in
the manner provided in subdivision 4. Where any portion of a member's salary is paid
from other than public funds, the member's employee contribution is based on the total
salary received from all sources.

new text begin (e) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 19.

Minnesota Statutes 2011 Supplement, section 353.65, subdivision 3, is
amended to read:

Subd. 3.

Employer contribution.

(a) With respect to members other than members
who were active members of the former Minneapolis Firefighters Relief Association
on the day prior to the effective date of consolidation under Laws 2011, First Special
Session chapter 8, article 6, section 19, or for members other than members who were
active members of the former Minneapolis Police Relief Association on the day prior
to the effective date of consolidation under Laws 2011, First Special Session chapter
8, article 7, section 19, the employer contribution is 14.1 percent of the salary of the
member in calendar year 2010 and is 14.4 percent of the salary of the member in each
calendar year after 2010.

(b) With respect to members who were active members of the former Minneapolis
Firefighters Relief Association on the day prior to the effective date of consolidation under
Laws 2011, First Special Session chapter 8, article 6, section 19, the employer contribution
is an amount equal to the amount of the member contributions under subdivision 2,
paragraph (b).

(c) With respect to members who were active members of the former Minneapolis
Police Relief Association on the day prior to the effective date of consolidation under
Laws 2011, First Special Session chapter 8, article 7, section 19, the employer contribution
is an amount equal to the amount of the member contributions under subdivision 2,
paragraph (c).

(d) Contributions under this subdivision must be made from funds available to the
employing subdivision by the means and in the manner provided in section 353.28.

new text begin (e) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 20.

Minnesota Statutes 2010, section 353E.03, is amended to read:

353E.03 CORRECTIONAL SERVICE PLAN CONTRIBUTIONS.

Subdivision 1.

Member contributions.

new text begin (a) new text end A member of the local government
correctional service retirement plan shall make an employee contribution in an amount
equal to 5.83 percent of salary.

new text begin (b) Any change in the contribution rate is subject to section 356.2175.
new text end

Subd. 2.

Employer contributions.

new text begin (a) new text end The employer shall contribute for a member
of the local government correctional service retirement plan an amount equal to 8.75
percent of salary.

new text begin (b) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 21.

Minnesota Statutes 2010, section 354.06, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Application of limitation. new text end

new text begin Any modification of any benefit plan provision
in this chapter is subject to section 356.2175.
new text end

Sec. 22.

Minnesota Statutes 2010, section 354.42, subdivision 2, is amended to read:

Subd. 2.

Employee contribution.

(a) For a basic member, the employee
contribution to the fund is the following percentage of the member's salary:

	before July 1, 2011	9.0 percent
	from July 1, 2011, until June 30, 2012	9.5 percent
	from July 1, 2012, until June 30, 2013	10.0 percent
	from July 1, 2013, until June 30, 2014	10.5 percent
	after June 30, 2014	11.0 percent

(b) For a coordinated member, the employee contribution is the following percentage
of the member's salary:

	before July 1, 2011	5.5 percent
	from July 1, 2011, until June 30, 2012	6.0 percent
	from July 1, 2012, until June 30, 2013	6.5 percent
	from July 1, 2013, until June 30, 2014	7.0 percent
	after June 30, 2014	7.5 percent

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

(d) After June 30, 2015, if a contribution rate revision is required under subdivisions
4a, 4b, and 4c, the employee contributions under paragraphs (a) and (b) must be adjusted
accordingly.

(e) This contribution must be made by deduction from salary. Where any portion of a
member's salary is paid from other than public funds, the member's employee contribution
must be based on the entire salary received.

new text begin (f) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 23.

Minnesota Statutes 2010, section 354.42, subdivision 3, is amended to read:

Subd. 3.

Employer.

(a) The regular employer contribution to the fund by Special
School District No. 1, Minneapolis, is an amount equal to the applicable following
percentage of salary of each coordinated member and the applicable following percentage
of salary of each basic member:

	Period	Coordinated Member			Basic Member
	before July 1, 2011		5.5 percent		9.5 percent
	from July 1, 2011, until June 30, 2012		6.0 percent		10.0 percent
	from July 1, 2012, until June 30, 2013		6.5 percent		10.5 percent
	from July 1, 2013, until June 30, 2014		7.0 percent		11.0 percent
	after June 30, 2014		7.5 percent		11.5 percent

The additional employer contribution to the fund by Special School District No. 1,
Minneapolis, is an amount equal to 3.64 percent of the salary of each teacher who is a
coordinated member or is a basic member.

(b) The employer contribution to the fund for every other employer is an amount
equal to the applicable following percentage of the salary of each coordinated member and
the applicable following percentage of the salary of each basic member:

	Period	Coordinated Member			Basic Member
	before July 1, 2011		5.5 percent		9.5 percent
	from July 1, 2011, until June 30, 2012		6.0 percent		10.0 percent
	from July 1, 2012, until June 30, 2013		6.5 percent		10.5 percent
	from July 1, 2013, until June 30, 2014		7.0 percent		11.0 percent
	after June 30, 2014		7.5 percent		11.5 percent

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

(d) After June 30, 2015, if a contribution rate revision is made under subdivisions
4a, 4b, and 4c, the employer contributions under paragraphs (a) and (b) must be adjusted
accordingly.

new text begin (e) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 24.

Minnesota Statutes 2010, section 354.42, subdivision 4b, is amended to read:

Subd. 4b.

Contribution rate revision.

new text begin (a) new text end Notwithstanding the contribution rate
provisions under subdivisions 2 and 3, the employee and employer contribution rates
may be adjusted as follows:

(1) if, after June 30, 2015, the regular actuarial valuation of the plan under section
356.215 indicates that there is a contribution sufficiency under subdivision 4a equal to or
greater than one percent of covered payroll and the sufficiency has existed for at least two
consecutive years, the employee and employer contribution rates for the plan may each be
decreased to a level such that the sufficiency equals no more than one percent of covered
payroll based on the most recent actuarial valuation; or

(2) if, after June 30, 2015, the regular valuation of the plan under section 356.215
indicates that there is a deficiency equal to or greater than 0.25 percent of covered payroll
and the deficiency has existed for at least two consecutive years, the employee and
employer contribution rates for the applicable plan may each be increased by:

(i) 0.25 percent if the deficiency is less than 2.00 percent of covered payroll;

(ii) 0.5 percent if the deficiency is equal to or greater than 2.00 percent of covered
payroll and less than or equal to four percent; and

(iii) 0.75 percent if the deficiency is greater than four percent.

new text begin (b) Any change in contribution rates under this subdivision is subject to section
356.2175.
new text end

Sec. 25.

Minnesota Statutes 2010, section 354A.021, is amended by adding a
subdivision to read:

new text begin Subd. 10. new text end

new text begin Application of limitation. new text end

new text begin Any modification of any benefit plan
provision in this chapter is subject to section 356.2175.
new text end

Sec. 26.

Minnesota Statutes 2010, section 354A.12, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

(a) The contribution required to be paid
by each member of a teachers retirement fund association is the percentage of total salary
specified below for the applicable association and program:

	Association and Program	Percentage of Total Salary
Duluth Teachers Retirement Fund Association
	old law and new law
	coordinated programs
	before July 1, 2011	5.5 percent
	effective July 1, 2011	6.0 percent
	effective July 1, 2012	6.5 percent
St. Paul Teachers Retirement Fund Association
	basic program before July 1, 2011	8 percent
	basic program after June 30, 2011	8.25 percent
	basic program after June 30, 2012	8.5 percent
	basic program after June 30, 2013	8.75 percent
	basic program after June 30, 2014	9.0 percent
	coordinated program before July 1, 2011	5.5 percent
	coordinated program after June 30, 2011	5.75 percent
	coordinated program after June 30, 2012	6.0 percent
	coordinated program after June 30, 2013	6.25 percent
	coordinated program after June 30, 2014	6.50 percent

(b) Contributions shall be made by deduction from salary and must be remitted
directly to the respective teachers retirement fund association at least once each month.

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

new text begin (d) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 27.

Minnesota Statutes 2010, section 354A.12, subdivision 2a, is amended to read:

Subd. 2a.

Employer regular and additional contributions.

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

(1) for any coordinated member of one of the following teachers retirement fund
associations in a city of the first class, the employing unit shall make a regular employer
contribution to the respective retirement fund association in an amount equal to the
designated percentage of the salary of the coordinated member as provided below:

Duluth Teachers Retirement Fund Association
	before July 1, 2011	5.79 percent
	effective July 1, 2011	6.29 percent
	effective July 1, 2012	6.79 percent
St. Paul Teachers Retirement Fund Association
	before July 1, 2011	4.50 percent
	after June 30, 2011	4.75 percent
	after June 30, 2012	5.0 percent
	after June 30, 2013	5.25 percent
	after June 30, 2014	5.5 percent

(2) for any basic member of the St. Paul Teachers Retirement Fund Association, the
employing unit shall make a regular employer contribution to the respective retirement
fund in an amount according to the schedule below:

	before July 1, 2011	8.0 percent of salary
	after June 30, 2011	8.25 percent of salary
	after June 30, 2012	8.5 percent of salary
	after June 30, 2013	8.75 percent of salary
	after June 30, 2014	9.0 percent of salary

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

(4) for a coordinated member of the St. Paul Teachers Retirement Fund Association,
the employing unit shall make an additional employer contribution to the respective fund
in an amount equal to the applicable percentage of the coordinated member's salary,
as provided below:

St. Paul Teachers Retirement Fund Association

3.84 percent

(b) The regular and additional employer contributions must be remitted directly to
the respective teachers retirement fund association at least once each month. Delinquent
amounts are payable with interest under the procedure in subdivision 1a.

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

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

new text begin (e) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 28.

new text begin [356.2175] LIMITATIONS ON CONTRIBUTION REDUCTIONS OR
BENEFIT INCREASES.
new text end

new text begin For a retirement plan listed in section 356.30, subdivision 3, clauses (1), (2), (4),
or (7) to (13), if the assets of the retirement fund associated with the retirement plan,
either at market value or at actuarial value, are less than 120 percent of the actuarial
accrued liability of the retirement plan as disclosed in the most recent actuarial valuation
of the retirement plan prepared by the approved actuary retained under section 356.214 in
conformity with the requirements of section 356.215 and with the standards for actuarial
work promulgated by the Legislative Commission on Pensions and Retirement, the
following limitations apply:
new text end

new text begin (1) no reduction in member contribution rates or employer contribution rates is
effective until the actuarial valuation of the retirement plan prepared by the approved
actuary retained under sections 356.214 and 356.215 and the standards for actuarial work
for at least two successive actuarial valuations indicates that the actuarial value of the
assets of the retirement plan and the market value of the assets of the retirement plan both
exceed the actuarial accrued liability of the retirement plan by more than 20 percent
and are effective only if the total postreduction member and employer contribution
rates equal or exceed the normal cost of the retirement plan disclosed in the most recent
actuarial valuation; and
new text end

new text begin (2) no change in the benefit plan of the retirement plan that would cause an increase
in the actuarial accrued liability of the retirement plan is effective until the actuarial
valuation of the retirement plan prepared by the approved actuary retained under sections
356.214 and 356.215 and the standards for actuarial work indicate that the actuarial value
of the assets of the retirement plan or the market value of the assets of the retirement
plan both exceed the actuarial accrued liability of the retirement plan by more than 20
percent and are effective only if the total post-benefit change member and employer
contribution rates exceed the normal cost of the retirement plan disclosed in the most
recent actuarial valuation as adjusted by the estimated actuarial cost impact report
prepared by the approved actuary retained under section 356.214 and conforming with
the standards for actuarial work.
new text end

Sec. 29.

new text begin [356.2176] REQUIRED FUNDING DEFICIENCY
RECOMMENDATIONS IN CERTAIN INSTANCES.
new text end

new text begin If a retirement plan listed in section 356.30, subdivision 3, clauses (1), (2), (4),
or (7) to (13), has assets in the retirement fund associated with the retirement plan,
either at market value or at actuarial value, that, for two consecutive years, are less than
70 percent of the actuarial accrued liability of the retirement plan as indicated in the
most recent actuarial valuation of the retirement plan prepared by the approved actuary
retained under section 356.214 in conformity with the requirements of section 356.215
and with the standards for actuarial work promulgated by the Legislative Commission
on Pensions and Retirement, the chief administrative officer of the retirement plan shall
prepare and file a report with the Legislative Commission on Pensions and Retirement
with recommendations to address that funding deficiency. In addition to the option
of increasing contribution rates by members and employers, the report must address
one or more options for modifying benefit plan provisions sufficient to reverse the
funding deficiency. The report must be filed with the executive director of the Legislative
Commission on Pensions and Retirement on or before February 1 next following the
receipt of the second actuarial valuation disclosing the funding deficiency.
new text end

Sec. 30.

Minnesota Statutes 2010, section 490.122, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Application of limitation. new text end

new text begin Any modification of any benefit plan provision
in this chapter is subject to section 356.2175.
new text end

Sec. 31.

Minnesota Statutes 2010, section 490.123, subdivision 1a, is amended to read:

Subd. 1a.

Member contribution rates.

(a) A judge who is covered by the federal
Old Age, Survivors, Disability, and Health Insurance Program and whose service does not
exceed the service credit limit in section 490.121, subdivision 22, shall contribute to the
fund from each salary payment a sum equal to 8.00 percent of salary.

(b) The contribution under this subdivision is payable by salary deduction.
The deduction must be made by the state court administrator under section 352.04,
subdivisions 4, 5, and 8.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 32.

Minnesota Statutes 2010, section 490.123, subdivision 1b, is amended to read:

Subd. 1b.

Employer contribution rate.

(a) The employer contribution rate to the
fund on behalf of a judge is 20.5 percent of salary. The employer obligation continues
after a judge exceeds the service credit limit in section 490.121, subdivision 22.

(b) The employer contribution must be paid by the state court administrator. The
employer contribution is payable at the same time as member contributions are made
under subdivision 1a or as employee contributions are made to the unclassified program
governed by chapter 352D for judges whose service exceeds the limit in section 490.121,
subdivision 22, are remitted.

new text begin (c) Any change in the contribution rate is subject to section 356.2175.
new text end

Sec. 33. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 32 are effective July 1, 2012.
new text end