HF 2999

as introduced - 86th Legislature (2009 - 2010) Posted on 02/16/2010 10:23am

A bill for an act
relating to retirement; amending certain Public Employees Retirement
Association plan provisions; defining terms; adjusting contribution rates;
modifying vesting requirements; adjusting interest rates; providing for
postretirement adjustments; eliminating privatized hospital employee election;
amending Minnesota Statutes 2008, sections 353.01, by adding a subdivision;
353.27, subdivision 3b; 353.29, subdivision 1; 353.30, subdivision 1c; 353.32,
subdivisions 1, 1a; 353.34, subdivisions 1, 2, 3; 353.651, subdivisions 1, 4;
353.657, subdivisions 1, 2a; 353.71, subdivisions 1, 2; 353E.04, subdivisions
1, 4; 353E.07, subdivisions 1, 2; 353F.03; 356.215, subdivision 8; 356.30,
subdivision 1; 356.47, subdivision 3; Minnesota Statutes 2009 Supplement,
sections 353.27, subdivisions 2, 3; 353.33, subdivision 1; 353.65, subdivisions 2,
3; 356.415, subdivision 1, by adding a subdivision; repealing Minnesota Statutes
2008, section 353.34, subdivision 3a.

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

Section 1.

Minnesota Statutes 2008, section 353.01, is amended by adding a
subdivision to read:

new text begin Subd. 47. new text end

new text begin Vesting. new text end

new text begin (a) "Vesting" means obtaining a nonforfeitable entitlement
to an annuity or benefit from a retirement plan administered by the Public Employees
Retirement Association by having credit for sufficient allowable service under paragraph
(b) or (c), whichever applies.
new text end

new text begin (b) For purposes of qualifying for an annuity or benefit as a basic or coordinated plan
member of the general employees retirement plan of the Public Employees Retirement
Association:
new text end

new text begin (1) a member who first became a public employee before July 1, 2010, is vested
when the person has accrued credit for not less than three years of allowable service as
defined under subdivision 16; and
new text end

new text begin (2) a member who first becomes a public employee after June 30, 2010, is vested
when the person has accrued credit for not less than five years of allowable service
as defined under subdivision 16.
new text end

new text begin (c) For purposes of qualifying for an annuity or benefit as a member of the police
and fire plan or a member of the local government correctional employees retirement plan:
new text end

new text begin (1) a member who first became a public employee before July 1, 2010, is vested
when the person has accrued credit for not less than three years of allowable service as
defined under subdivision 16; and
new text end

new text begin (2) a member who first becomes a public employee after June 30, 2010, is vested
at the following percentages when the person has accrued credited allowable service as
defined under subdivision 16, as follows:
new text end

new text begin (i) 50 percent after five years;
new text end

new text begin (ii) 60 percent after six years;
new text end

new text begin (iii) 70 percent after seven years;
new text end

new text begin (iv) 80 percent after eight years;
new text end

new text begin (v) 90 percent after nine years; and
new text end

new text begin (vi) 100 percent after ten years.
new text end

Sec. 2.

Minnesota Statutes 2009 Supplement, section 353.27, subdivision 2, is
amended to read:

Subd. 2.

Employee contribution.

(a) For a basic member, the employee
contribution is 9.10 percent of salary. For a coordinated member, the employee
contribution is deleted text begin six percent deleted text end new text begin the following percentage new text end of salary plus any contribution rate
adjustment under subdivision 3b deleted text begin . deleted text end new text begin :
new text end

	new text begin Effective before January 1, 2011 new text end	new text begin 6.00 new text end
	new text begin Effective after December 31, 2010 new text end	new text begin 6.25 new text end

(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.

Sec. 3.

Minnesota Statutes 2009 Supplement, section 353.27, subdivision 3, is
amended to read:

Subd. 3.

Employer contribution.

(a) For a basic member, the employer
contribution is 9.10 percent of salary. For a coordinated member, the employer
contribution is deleted text begin six percent deleted text end new text begin the following percentage new text end of salary plus any contribution rate
adjustment under subdivision 3b deleted text begin . deleted text end new text begin :
new text end

	new text begin Effective before January 1, 2011 new text end	new text begin 6.00 new text end
	new text begin Effective after December 31, 2010 new text end	new text begin 6.25 new text end

(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.

Sec. 4.

Minnesota Statutes 2008, 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 deleted text begin , deleted text end new text begin :
new text end

new text begin (1) new text end 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 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 deleted text begin . For purposes of this section, deleted text end new text begin ; and
new text end

new text begin (2) new text end 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 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 under subdivisions 2 and 3 must be
adjusted:

(1) if, new text begin on or new text end after July 1, 2010, the regular actuarial deleted text begin valuations deleted text end new text begin valuation new text end of the
general employees retirement plan of the Public Employees Retirement Association under
section 356.215 deleted text begin indicate deleted text end new text begin indicates new text end that there is a contribution sufficiency under paragraph
(a) deleted text begin equal to or deleted text end greater than deleted text begin 0.5 deleted text end new text begin one new text end percent of covered payroll new text begin and that the sufficiency
has existed new text end for new text begin at least new text end 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 deleted text begin equals deleted text end new text begin is new text end no deleted text begin more deleted text end new text begin greater new text end than deleted text begin 0.25 deleted text end new text begin one new text end percent of covered
payroll based on the most recent actuarial valuation; or

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

(c) deleted text begin The contribution rate increase or decrease must be determined by the executive
director of the Public Employees Retirement Association, must be reported to the chair
and the executive director of the Legislative Commission on Pensions and Retirement
on or before the next February 1, and, 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, is effective on the next July 1 following the determination
by the executive director that a contribution deficiency or sufficiency has existed for
two consecutive fiscal years based on the most recent actuarial valuations under section
356.215. deleted text end If the actuarially required contribution deleted text begin exceeds or deleted text end is less than the total support
provided by the combined employee and employer contribution rates new text begin under subdivisions
2, 3, and 3a, new text end by more than deleted text begin 0.5 deleted text end new text begin one new text end percent of covered payroll, the coordinated program
employee and employer contribution rates new text begin under subdivisions 2 and 3 new text end must be deleted text begin adjusted deleted text end
new text begin decreased new text end incrementally over one or more years new text begin by no more than 0.25 percent of pay each
for employee and employer matching contribution rates new text end to a level such that there remains
a contribution sufficiency of deleted text begin no more than 0.25 deleted text end new text begin at least one new text end percent of covered payroll. new text begin No
contribution rate decrease may be made until at least two years have elapsed since any
adjustment under this subdivision has been fully implemented.
new text end

(d) deleted text begin No deleted text end new text begin 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:
new text end

new text begin (1) less than two percent, the new text end incremental deleted text begin adjustment deleted text end new text begin increase new text end may deleted text begin exceed deleted text end new text begin be up
to new text end 0.25 percent for deleted text begin either deleted text end the deleted text begin coordinated program deleted text end employee and new text begin matching new text end employer
contribution rates deleted text begin per year in which any adjustment is implemented. A contribution rate
adjustment under this subdivision must not be made until at least two years have passed
since fully implementing a previous adjustment under this subdivision. deleted text end new text begin ;
new text end

new text begin (2) is 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
new text end

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

new text begin (e) 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.
new text end

new text begin (f) 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.
new text end

new text begin (g) 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.
new text end

new text begin (h) 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 end

Sec. 5.

Minnesota Statutes 2008, section 353.29, subdivision 1, is amended to read:

Subdivision 1.

Age and allowable service requirements.

Upon termination of
membership, a person who has attained normal retirement age and who deleted text begin received credit for
not less than three years of allowable service deleted text end new text begin is vested under section 353.01, subdivision
47, new text end is entitled upon application to a retirement annuity. The retirement annuity is known
as the "normal" retirement annuity.

Sec. 6.

Minnesota Statutes 2008, section 353.30, subdivision 1c, is amended to read:

Subd. 1c.

Pre-July 1, 1989, members: early retirement.

Upon termination of
public service, a person who first became a public employee or a member of a pension
fund listed in section 356.30, subdivision 3, before July 1, 1989, who has become at least
55 years old but not normal retirement age, and deleted text begin has received credit for at least three years
of allowable service deleted text end new text begin is vested under section 353.01, subdivision 47, new text end is entitled new text begin , new text end upon
application new text begin , new text end to a retirement annuity in an amount equal to the normal annuity provided in
section 353.29, subdivision 3, paragraph (a), reduced by one-quarter of one percent for
each month that the member is under normal retirement age at the time of retirement.

Sec. 7.

Minnesota Statutes 2008, section 353.32, subdivision 1, is amended to read:

Subdivision 1.

Before retirement.

If a member or former member who terminated
public service dies before retirement or before receiving any retirement annuity and no
other payment of any kind is or may become payable to any person, a refund deleted text begin shall be paid deleted text end
new text begin is payable new text end to the designated beneficiary or, if there be none, to the surviving spouse,
or, if none, to the legal representative of the decedent's estate. deleted text begin Such deleted text end new text begin The new text end refund deleted text begin shall deleted text end
new text begin must new text end be in an amount equal to accumulated deductions plus new text begin annual compound new text end interest
thereon at the rate deleted text begin of six percent per annum compounded annually deleted text end new text begin specified in section
353.34, subdivision 2, and new text end less the sum of any disability or survivor benefits, if any, that
may have been paid by the fund; provided that a survivor who has a right to benefits
deleted text begin pursuant to deleted text end new text begin under new text end section 353.31 may waive such benefits in writing, except such benefits
for a dependent child under the age of 18 years may only be waived deleted text begin pursuant to deleted text end new text begin under new text end an
order of the district court.

Sec. 8.

Minnesota Statutes 2008, section 353.32, subdivision 1a, is amended to read:

Subd. 1a.

Surviving spouse optional annuity.

(a) If a member or former member
who deleted text begin has credit for not less than three years of allowable service deleted text end new text begin is vested under section
353.01, subdivision 47, new text end and new text begin who new text end dies before the annuity or disability benefit begins to
accrue under section 353.29, subdivision 7, or 353.33, subdivision 2, notwithstanding any
designation of beneficiary to the contrary, the surviving spouse may elect to receive,
instead of a refund with interest under subdivision 1, or surviving spouse benefits otherwise
payable under section 353.31, an annuity equal to a 100 percent joint and survivor annuity
computed consistent with section 353.30, subdivision 1a, 1c, or 5, whichever is applicable.

(b) If a member first became a public employee or a member of a pension fund listed
in section 356.30, subdivision 3, before July 1, 1989, and has credit for at least 30 years
of allowable service on the date of death, the surviving spouse may elect to receive a
100 percent joint and survivor annuity computed using section 353.30, subdivision 1b,
except that the early retirement reduction under that provision will be applied from age
62 back to age 55 and one-half of the early retirement reduction from age 55 back to
the age payment begins.

(c) If a member who was under age 55 and deleted text begin has credit for at least three years of
allowable service deleted text end new text begin who is vested under section 353.01, subdivision 47, new text end dies, but did not
qualify for retirement on the date of death, the surviving spouse may elect to receive a
100 percent joint and survivor annuity computed using section 353.30, subdivision 1c or
5, as applicable, except that the early retirement reduction specified in the applicable
subdivision will be applied to age 55 and one-half of the early retirement reduction from
age 55 back to the age payment begins.

(d) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20, a former spouse of the member, if any, is entitled to a portion of the monthly surviving
spouse optional annuity if stipulated under the terms of a marriage dissolution decree filed
with the association. If there is no surviving spouse or child or children, a former spouse
may be entitled to a lump-sum refund payment under subdivision 1, if provided for in a
marriage dissolution decree, but not a monthly surviving spouse optional annuity, despite
the terms of a marriage dissolution decree filed with the association.

(e) The surviving spouse eligible for surviving spouse benefits under paragraph (a)
may apply for the annuity at any time after the date on which the deceased employee
would have attained the required age for retirement based on the employee's allowable
service. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or
(c) may apply for an annuity any time after the member's death.

(f) Sections 353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred
annuity or surviving spouse benefit payable under this subdivision.

(g) An amount equal to any excess of the accumulated contributions that were
credited to the account of the deceased employee over and above the total of the annuities
paid and payable to the surviving spouse must be paid to the surviving spouse's estate.

(h) A member may specify in writing, with the signed consent of the spouse, that
this subdivision does not apply and that payment may be made only to the designated
beneficiary as otherwise provided by this chapter. The waiver of a surviving spouse
annuity under this section does not make a dependent child eligible for benefits under
subdivision 1c.

(i) If the deceased member or former member first became a public employee or a
member of a public pension plan listed in section 356.30, subdivision 3, on or after July
1, 1989, a survivor annuity computed under paragraph (a) or (c) must be computed as
specified in section 353.30, subdivision 5, except for the revised early retirement reduction
specified in paragraph (c), if paragraph (c) is the applicable provision.

(j) For any survivor annuity determined under this subdivision, the payment is to be
based on the total allowable service that the member had accrued as of the date of death
and the age of the member and surviving spouse on that date.

Sec. 9.

Minnesota Statutes 2009 Supplement, section 353.33, subdivision 1, is
amended to read:

Subdivision 1.

Age, service, and salary requirements.

new text begin (a) new text end A coordinated or
basic member who deleted text begin has at least three years of allowable service deleted text end new text begin is vested under section
353.01, subdivision 47, new text end and new text begin who new text end becomes totally and permanently disabled before normal
retirement age, upon application as defined under section 353.031, is entitled to a disability
benefit in an amount determined under subdivision 3.

new text begin (b) new text end If the disabled person's public service has terminated at any time, at least two of
the deleted text begin required three deleted text end years of allowable service new text begin required to be vested under section 353.01,
subdivision 47, new text end must have been rendered after last becoming an active member.

Sec. 10.

Minnesota Statutes 2008, section 353.34, subdivision 1, is amended to read:

Subdivision 1.

Refund or deferred annuity.

(a) A former member is entitled to
new text begin either new text end a refund of accumulated employee deductions under subdivision 2, or to a deferred
annuity under subdivision 3. Application for a refund may not be made before the date of
termination of public service. Except as specified in paragraph (b), a refund must be paid
within 120 days following receipt of the application unless the applicant has again become
a public employee required to be covered by the association.

(b) If an individual was placed on layoff under section 353.01, subdivision 12 or 12c,
a refund is not payable before termination of service under section 353.01, subdivision 11a.

(c) An individual who terminates public service covered by the Public Employees
Retirement Association general employees retirement plan, the Public Employees
Retirement Association police and fire retirement plan, or the public employees local
government deleted text begin corrections deleted text end new text begin correctional new text end service retirement plan, and who is employed by a
different employer and who becomes an active member covered by one of the other two
plans, may receive a refund of employee contributions plus deleted text begin six percent deleted text end new text begin annual compound
new text end interest deleted text begin compounded annually deleted text end from the plan from which the member terminated service new text begin at
the applicable rate specified in subdivision 2 new text end .

Sec. 11.

Minnesota Statutes 2008, section 353.34, subdivision 2, is amended to read:

Subd. 2.

Refund with interest.

new text begin (a) new text end Except as provided in subdivision 1, any person
who ceases to be a public employee deleted text begin shall deleted text end new text begin is entitled to new text end receive a refund in an amount equal
to accumulated deductions with new text begin annual compound new text end interest to the first day of the month
in which the refund is processed deleted text begin at the rate of six percent compounded annually based
on fiscal year balances deleted text end .

new text begin (b) For a person who ceases to be a public employee before July 1, 2011, the refund
interest is at the rate of six percent to June 30, 2011, and at the rate of four percent after
June 30, 2011. For a person who ceases to be a public employee after July 1, 2011, the
refund interest is at the rate of four percent.
new text end

new text begin (c) new text end If a person repays a refund and subsequently applies for another refund, the
repayment amount, including interest, is added to the fiscal year balance in which the
repayment was made.

Sec. 12.

Minnesota Statutes 2008, section 353.34, subdivision 3, is amended to read:

Subd. 3.

Deferred annuity; eligibility; computation.

new text begin (a) new text end A member deleted text begin with at least
three years of allowable service deleted text end new text begin who is vested under section 353.01, subdivision 47, new text end when
termination of public service or termination of membership occurs has the option of
leaving the accumulated deductions in the fund and being entitled to a deferred retirement
annuity commencing at normal retirement age or to a deferred early retirement annuity
under section 353.30, subdivision 1a, 1b, 1c, or 5.

new text begin (b) new text end The deferred annuity must be computed under section 353.29, subdivision 3, on
the basis of the law in effect on the date of termination of public service or termination of
membership, whichever is earlier, and must be augmented as provided in section 353.71,
subdivision 2.

new text begin (c) new text end A former member qualified to apply for a deferred retirement annuity may
revoke this option at any time before the commencement of deferred annuity payments
by making application for a refund. The person is entitled to a refund of accumulated
member contributions within 30 days following date of receipt of the application by the
executive director.

Sec. 13.

Minnesota Statutes 2009 Supplement, section 353.65, subdivision 2, is
amended to read:

Subd. 2.

Employee contribution.

The employee contribution is 9.4 percent of the
salary of the member new text begin in calendar year 2010 and is 9.6 percent of the salary of the member
in each calendar year after 2010 new text end . This contribution 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.

Sec. 14.

Minnesota Statutes 2009 Supplement, section 353.65, subdivision 3, is
amended to read:

Subd. 3.

Employer contribution.

The employer contribution is 14.1 percent of the
salary of the member new text begin in calendar year 2010 and is 14.4 percent of the salary of the member
in each calendar year after 2010 new text end . This contribution must be made from funds available to
the employing subdivision by the means and in the manner provided in section 353.28.

Sec. 15.

Minnesota Statutes 2008, section 353.651, subdivision 1, is amended to read:

Subdivision 1.

Age and allowable service requirements.

Upon separation from
public service, any police officer or firefighter member who has attained the age of at
least 55 years and who deleted text begin received credit for not less than three years of allowable service deleted text end
new text begin is vested under section 353.01, subdivision 47, new text end is entitled upon application to a retirement
annuity deleted text begin . Such retirement annuity is deleted text end new text begin , new text end known as the "normal" retirement annuity.

Sec. 16.

Minnesota Statutes 2008, section 353.651, subdivision 4, is amended to read:

Subd. 4.

Early retirement.

(a) A person who becomes a police and fire plan
member after June 30, 2007, or a former member who is reinstated as a member of the
plan after that date, who is at least 50 years of age deleted text begin with at least three years of allowable
service deleted text end new text begin and who is vested under section 353.01, subdivision 47 new text end , upon the termination of
public service is entitled upon application to a retirement annuity equal to the normal
annuity calculated under subdivision 3, reduced by two-tenths of one percent for each
month that the member is under age 55 at the time of retirement.

(b) Upon the termination of public service, any police and fire plan member not
specified in paragraph (a), upon attaining at least 50 years of age with at least three years
of allowable service is entitled upon application to a retirement annuity equal to the
normal annuity calculated under subdivision 3, reduced by one-tenth of one percent for
each month that the member is under age 55 at the time of retirement.

Sec. 17.

Minnesota Statutes 2008, section 353.657, subdivision 1, is amended to read:

Subdivision 1.

Generally.

(a) In the event that a member of the police and fire
fund dies from any cause before retirement or before becoming disabled and receiving
disability benefits, the association shall grant survivor benefits to a surviving spouse, as
defined in section 353.01, subdivision 20, and to a dependent child or children, as defined
in section 353.01, subdivision 15, except that if the death is not a line of duty death, the
member must deleted text begin have accrued at least three years of credited service deleted text end new text begin be vested under section
353.01, subdivision 47 new text end .

(b) Notwithstanding the definition of surviving spouse, a former spouse of the
member, if any, is entitled to a portion of the monthly surviving spouse benefit if
stipulated under the terms of a marriage dissolution decree filed with the association. If
there is no surviving spouse or child or children, a former spouse may be entitled to
a lump-sum refund payment under section 353.32, subdivision 1, if provided for in a
marriage dissolution decree but not a monthly surviving spouse benefit despite the terms
of a marriage dissolution decree filed with the association.

(c) The spouse and child or children are entitled to monthly benefits as provided in
subdivisions 2 to 4.

Sec. 18.

Minnesota Statutes 2008, section 353.657, subdivision 2a, is amended to read:

Subd. 2a.

Death while eligible survivor benefit.

(a) If a member or former member
who has attained the age of at least 50 years and deleted text begin has credit for not less than three years
allowable service deleted text end new text begin either who is vested under section 353.01, subdivision 47, new text end or who has
credit for at least 30 years of allowable service, regardless of age attained, dies before
the annuity or disability benefit becomes payable, notwithstanding any designation of
beneficiary to the contrary, the surviving spouse may elect to receive a death while
eligible survivor benefit.

(b) Notwithstanding the definition of surviving spouse in section 353.01, subdivision
20, a former spouse of the member, if any, is entitled to a portion of the death while
eligible survivor benefit if stipulated under the terms of a marriage dissolution decree
filed with the association. If there is no surviving spouse or child or children, a former
spouse may be entitled to a lump-sum refund payment under section 353.32, subdivision
1, if provided for in a marriage dissolution decree but not a death while eligible survivor
benefit despite the terms of a marriage dissolution decree filed with the association.

(c) The benefit may be elected instead of a refund with interest under section 353.32,
subdivision 1, or surviving spouse benefits otherwise payable under subdivisions 1 and
2. The benefit must be an annuity equal to the 100 percent joint and survivor annuity
which the member could have qualified for on the date of death, computed as provided in
sections 353.651, subdivisions 2 and 3, and 353.30, subdivision 3.

(d) The surviving spouse may apply for the annuity at any time after the date
on which the deceased employee would have attained the required age for retirement
based on the employee's allowable service. Sections 353.34, subdivision 3, and 353.71,
subdivision 2, apply to a deferred annuity payable under this subdivision.

(e) No payment accrues beyond the end of the month in which entitlement to
such annuity has terminated. An amount equal to the excess, if any, of the accumulated
contributions which were credited to the account of the deceased employee over and
above the total of the annuities paid and payable to the surviving spouse must be paid to
the deceased member's last designated beneficiary or, if none, to the legal representative of
the estate of such deceased member.

(f) Any member may request in writing, with the signed consent of the spouse, that
this subdivision not apply and that payment be made only to the designated beneficiary, as
otherwise provided by this chapter.

(g) For a member who is employed as a full-time firefighter by the Department of
Military Affairs of the state of Minnesota, allowable service as a full-time state Military
Affairs Department firefighter credited by the Minnesota State Retirement System may be
used in meeting the minimum allowable service requirement of this subdivision.

Sec. 19.

Minnesota Statutes 2008, section 353.71, subdivision 1, is amended to read:

Subdivision 1.

Eligibility.

Any person who has been a member of new text begin a defined benefit
retirement plan administered by new text end the Public Employees Retirement Association, or new text begin a
retirement plan administered by new text end the Minnesota State Retirement System, or the Teachers
Retirement Association, or any other public retirement system in the state of Minnesota
having a like provision, except a deleted text begin fund deleted text end new text begin retirement plan new text end providing benefits for police officers
or firefighters governed by sections 69.77 or 69.771 to 69.776, deleted text begin shall be deleted text end new text begin is new text end entitled new text begin , new text end when
qualified new text begin , new text end to an annuity from each deleted text begin fund deleted text end new text begin retirement plan new text end if the total allowable service in all
deleted text begin funds deleted text end new text begin retirement plans new text end or in any two of these deleted text begin funds deleted text end new text begin retirement plans new text end totals deleted text begin three or more
years deleted text end new text begin the number of years of allowable service required to receive a normal retirement
annuity for that retirement plan new text end , provided new text begin that new text end no portion of the allowable service upon
which the retirement annuity from one deleted text begin fund deleted text end new text begin retirement plan new text end is based is again used in the
computation for benefits from another deleted text begin fund deleted text end new text begin retirement plan new text end and provided further that the
person has not taken a refund from any one of these deleted text begin funds deleted text end new text begin retirement plans new text end since the
person's membership in that association or system last terminated. The annuity from
each fund deleted text begin shall deleted text end new text begin must new text end be determined by the appropriate provisions of the law except that
the requirement that a person must have at least deleted text begin three years deleted text end new text begin a specific minimum period
new text end of allowable service in the respective association or system deleted text begin shall deleted text end new text begin does new text end not apply for the
purposes of this section deleted text begin provided deleted text end new text begin if new text end the combined service in two or more of these deleted text begin funds deleted text end
new text begin retirement plans new text end equals deleted text begin three or more deleted text end new text begin the number of new text end years new text begin of allowable service required to
receive a normal retirement annuity for that retirement plan new text end .

Sec. 20.

Minnesota Statutes 2008, section 353.71, subdivision 2, is amended to read:

Subd. 2.

Deferred annuity computation; augmentation.

(a) The deferred annuity
accruing under subdivision 1, or under sections 353.34, subdivision 3, and 353.68,
subdivision 4, must be computed on the basis of allowable service prior to the termination
of public service and augmented as provided in this deleted text begin paragraph deleted text end new text begin subdivision new text end . The required
reserves applicable to a deferred annuity, or to any deferred segment of an annuity must
be determined as of the first day of the month following the month in which the former
member ceased to be a public employee, or July 1, 1971, whichever is later. deleted text begin These
deleted text end

new text begin (b) For a person who became a public employee before July 1, 2006, and whose
period of deferral began after June 30, 1971, the new text end required reserves new text begin of the deferred annuity
new text end must be augmented at the new text begin following applicable new text end rate deleted text begin of deleted text end new text begin or rates:
new text end

new text begin (1) new text end five percent deleted text begin annually compounded annually deleted text end new text begin annual compound interest new text end until
January 1, 1981 deleted text begin , and at the rate of deleted text end new text begin ;
new text end

new text begin (2) new text end three percent deleted text begin thereafter deleted text end new text begin annual compound interest after January 1, 1981, or until
the earlier of December 31, 2010, or after the date of the termination of public service or
the termination of membership, whichever is later, new text end until January 1 of the year following
the year in which the former member attains age 55 deleted text begin and deleted text end new text begin ;
new text end

new text begin (3) five percent annual compound interest new text end from deleted text begin that date to the effective date of
retirement, the rate is five percent compounded annually if the employee became an
employee before July 1, 2006, and at 2.5 percent compounded annually if the employee
becomes an deleted text end new text begin January 1 of the year following the year in which the former member attains
age 55, or until December 31, 2010, whichever is earlier; and
new text end

new text begin (4) one percent annual compound interest from January 1, 2011.
new text end

new text begin (c) For a person who became a public new text end employee after June 30, 2006 new text begin , the required
reserves of the deferred annuity must be augmented at 2.5 percent annual compound
interest from the date of termination of public service or termination of membership,
whichever is earlier, until December 31, 2010, and one percent annual compound interest
after December 31, 2010 new text end .

new text begin (d) new text end If a person has more than one period of uninterrupted service, the required
reserves related to each period must be augmented as specified in this paragraph. The sum
of the augmented required reserves is the present value of the annuity. Uninterrupted
service for the purpose of this subdivision means periods of covered employment during
which the employee has not been separated from public service for more than two years.
If a person repays a refund, the restored service must be considered as continuous with the
next period of service for which the employee has credit with this association. This section
must not reduce the annuity otherwise payable under this chapter. This paragraph applies
to individuals who become deferred annuitants on or after July 1, 1971. For a member
who became a deferred annuitant before July 1, 1971, the paragraph applies from July 1,
1971, if the former active member applies for an annuity after July 1, 1973.

deleted text begin (b) deleted text end new text begin (e) new text end The retirement annuity or disability benefit of, or the survivor benefit payable
on behalf of, a former member who terminated service before July 1, 1997, or the
survivor benefit payable on behalf of a basic or police and fire member who was receiving
disability benefits before July 1, 1997, which is first payable after June 30, 1997, must
be increased on an actuarial equivalent basis to reflect the change in the postretirement
interest rate actuarial assumption under section 356.215, subdivision 8, from five percent
to six percent under a calculation procedure and tables adopted by the board and approved
by the actuary retained under section 356.214.

Sec. 21.

Minnesota Statutes 2008, section 353E.04, subdivision 1, is amended to read:

Subdivision 1.

Eligibility requirements.

After termination of public employment,
an employee covered under section 353E.02 who has attained the age of at least 55 years
and deleted text begin has credit for not less than three years of coverage deleted text end new text begin who is vested under section
353.01, subdivision 47, new text end in the local government correctional service plan is entitled, upon
application, to a normal retirement annuity. Instead of a normal retirement annuity, a
retiring employee may elect to receive the optional annuity provided in section 353.30,
subdivision 3.

Sec. 22.

Minnesota Statutes 2008, section 353E.04, subdivision 4, is amended to read:

Subd. 4.

Early retirement.

An employee covered under section 353E.02 who has
attained the age of at least 50 years and deleted text begin has credit for not less than three years of coverage deleted text end
new text begin who is vested under section 353.01, subdivision 47, new text end in the local government correctional
service plan is entitled, upon application, to a reduced retirement annuity equal to the
annuity calculated under subdivision 3, reduced so that the reduced annuity is the actuarial
equivalent of the annuity that would be payable if the employee deferred receipt of the
annuity from the day the annuity begins to accrue until age 55.

Sec. 23.

Minnesota Statutes 2008, section 353E.07, subdivision 1, is amended to read:

Subdivision 1.

Member at least age 50.

If a member or former member of the local
government correctional service retirement plan who has attained the age of at least 50
years and deleted text begin has credit for not less than three years of allowable service deleted text end new text begin who is vested under
section 353.01, subdivision 47, new text end dies before the annuity or disability benefit has become
payable, notwithstanding any designation of beneficiary to the contrary, the surviving
spouse may elect to receive, in lieu of a refund with interest provided in section 353.32,
subdivision 1, a surviving spouse annuity equal to the 100 percent joint and survivor
annuity for which the member could have qualified had the member terminated service
on the date of death.

Sec. 24.

Minnesota Statutes 2008, section 353E.07, subdivision 2, is amended to read:

Subd. 2.

Member not yet age 50.

If the member was under age 50, dies, and deleted text begin had
credit for not less than three years of allowable service deleted text end new text begin was vested under section 353.01,
subdivision 47, new text end on the date of death but did not yet qualify for retirement, the surviving
spouse may elect to receive a 100 percent joint and survivor annuity based on the age
of the employee and the surviving spouse at the time of death. The annuity is payable
using the early retirement reduction under section 353E.04, subdivision 4, to age 50 and
one-half the early retirement reduction from age 50 to the age payment begins. Sections
353.34, subdivision 3, and 353.71, subdivision 2, apply to a deferred annuity or surviving
spouse benefit payable under this subdivision.

Sec. 25.

Minnesota Statutes 2008, section 353F.03, is amended to read:

353F.03 VESTING RULE FOR CERTAIN EMPLOYEES.

Notwithstanding any provision of chapter 353 to the contrary, a terminated medical
facility or other public employing unit employee is eligible to receive a retirement annuity
under section 353.29 of the edition of Minnesota Statutes published in the year before the
year in which the privatization occurred, without regard to the requirement deleted text begin for three years
of allowable service deleted text end new text begin specified in section 353.01, subdivision 47 new text end .

Sec. 26.

Minnesota Statutes 2008, section 356.215, subdivision 8, is amended to read:

Subd. 8.

Interest and salary assumptions.

(a) The actuarial valuation must use
the applicable following preretirement interest assumption and the applicable following
postretirement interest assumption:

plan	preretirement interest rate assumption		postretirement interest rate assumption
general state employees retirement plan		8.5%	6.0%
correctional state employees retirement plan		8.5	6.0
State Patrol retirement plan		8.5	6.0
legislators retirement plan		8.5	6.0
elective state officers retirement plan		8.5	6.0
judges retirement plan		8.5	6.0
general public employees retirement plan		8.5	6.0
public employees police and fire retirement plan		8.5	6.0
local government correctional service retirement plan		8.5	6.0
teachers retirement plan		8.5	6.0
Minneapolis employees retirement plan		6.0	5.0
Duluth teachers retirement plan		8.5	8.5
St. Paul teachers retirement plan		8.5	8.5
Minneapolis Police Relief Association		6.0	6.0
Fairmont Police Relief Association		5.0	5.0
Minneapolis Fire Department Relief Association		6.0	6.0
Virginia Fire Department Relief Association		5.0	5.0
Bloomington Fire Department Relief Association		6.0	6.0
local monthly benefit volunteer firefighters relief associations		5.0	5.0

(b) Before July 1, 2010, the actuarial valuation must use the applicable following
single rate future salary increase assumption, the applicable following modified single
rate future salary increase assumption, or the applicable following graded rate future
salary increase assumption:

(1) single rate future salary increase assumption

plan	future salary increase assumption
legislators retirement plan		5.0%
judges retirement plan		4.0
Minneapolis Police Relief Association		4.0
Fairmont Police Relief Association		3.5
Minneapolis Fire Department Relief Association		4.0
Virginia Fire Department Relief Association		3.5
Bloomington Fire Department Relief Association		4.0

(2) modified single rate future salary increase assumption

plan		future salary increase assumption
Minneapolis employees retirement plan		the prior calendar year amount increased first by 1.0198 percent to prior fiscal year date and then increased by 4.0 percent annually for each future year

(3) new text begin age-related new text end select and ultimate future salary increase assumption or graded rate
future salary increase assumption

plan	future salary increase assumption
general state employees retirement plan	select calculation and assumption A
correctional state employees retirement plan	assumption deleted text begin H deleted text end new text begin G new text end
State Patrol retirement plan	assumption deleted text begin G deleted text end new text begin F new text end
deleted text begin general public employees retirement plan deleted text end	deleted text begin select calculation and assumption B deleted text end
public employees police and fire fund retirement plan	assumption deleted text begin C deleted text end new text begin B new text end
local government correctional service retirement plan	assumption deleted text begin G deleted text end new text begin F new text end
teachers retirement plan	assumption deleted text begin D deleted text end new text begin C new text end
Duluth teachers retirement plan	assumption deleted text begin E deleted text end new text begin D new text end
St. Paul teachers retirement plan	assumption deleted text begin F deleted text end new text begin E new text end

The select calculation is: during the
designated select period, a designated
percentage rate is multiplied by the result of
the designated integer minus T, where T is the
number of completed years of service, and is
added to the applicable future salary increase
assumption. The designated select period is
five years and the designated integer is five
for the general state employees retirement
plan deleted text begin and the general public employees
retirement plan deleted text end . The designated select period
is ten years and the designated integer is ten
for all other retirement plans covered by
this clause. The designated percentage rate
is: (1) 0.2 percent for the correctional state
employees retirement plan, the State Patrol
retirement plan, the public employees police
and fire plan, and the local government
correctional service plan; (2) 0.6 percent
for the general state employees retirement
plan deleted text begin and the general public employees
retirement plan deleted text end ; and (3) 0.3 percent for the
teachers retirement plan, the Duluth Teachers
Retirement Fund Association, and the St.
Paul Teachers Retirement Fund Association.
The select calculation for the Duluth Teachers
Retirement Fund Association is 8.00 percent
per year for service years one through seven,
7.25 percent per year for service years seven
and eight, and 6.50 percent per year for
service years eight and nine.

The ultimate future salary increase assumption is:

age	A	deleted text begin B deleted text end	deleted text begin C deleted text end new text begin B new text end	deleted text begin D deleted text end new text begin C new text end	deleted text begin E deleted text end new text begin D new text end	deleted text begin F deleted text end new text begin E new text end	deleted text begin G deleted text end new text begin F new text end	deleted text begin H deleted text end new text begin G new text end
16	5.95%	deleted text begin 5.95% deleted text end	11.00%	7.70%	8.00%	6.90%	7.7500%	7.2500%
17	5.90	deleted text begin 5.90 deleted text end	11.00	7.65	8.00	6.90	7.7500	7.2500
18	5.85	deleted text begin 5.85 deleted text end	11.00	7.60	8.00	6.90	7.7500	7.2500
19	5.80	deleted text begin 5.80 deleted text end	11.00	7.55	8.00	6.90	7.7500	7.2500
20	5.75	deleted text begin 5.40 deleted text end	11.00	5.50	6.90	6.90	7.7500	7.2500
21	5.75	deleted text begin 5.40 deleted text end	11.00	5.50	6.90	6.90	7.1454	6.6454
22	5.75	deleted text begin 5.40 deleted text end	10.50	5.50	6.90	6.90	7.0725	6.5725
23	5.75	deleted text begin 5.40 deleted text end	10.00	5.50	6.85	6.85	7.0544	6.5544
24	5.75	deleted text begin 5.40 deleted text end	9.50	5.50	6.80	6.80	7.0363	6.5363
25	5.75	deleted text begin 5.40 deleted text end	9.00	5.50	6.75	6.75	7.0000	6.5000
26	5.75	deleted text begin 5.36 deleted text end	8.70	5.50	6.70	6.70	7.0000	6.5000
27	5.75	deleted text begin 5.32 deleted text end	8.40	5.50	6.65	6.65	7.0000	6.5000
28	5.75	deleted text begin 5.28 deleted text end	8.10	5.50	6.60	6.60	7.0000	6.5000
29	5.75	deleted text begin 5.24 deleted text end	7.80	5.50	6.55	6.55	7.0000	6.5000
30	5.75	deleted text begin 5.20 deleted text end	7.50	5.50	6.50	6.50	7.0000	6.5000
31	5.75	deleted text begin 5.16 deleted text end	7.30	5.50	6.45	6.45	7.0000	6.5000
32	5.75	deleted text begin 5.12 deleted text end	7.10	5.50	6.40	6.40	7.0000	6.5000
33	5.75	deleted text begin 5.08 deleted text end	6.90	5.50	6.35	6.35	7.0000	6.5000
34	5.75	deleted text begin 5.04 deleted text end	6.70	5.50	6.30	6.30	7.0000	6.5000
35	5.75	deleted text begin 5.00 deleted text end	6.50	5.50	6.25	6.25	7.0000	6.5000
36	5.75	deleted text begin 4.96 deleted text end	6.30	5.50	6.20	6.20	6.9019	6.4019
37	5.75	deleted text begin 4.92 deleted text end	6.10	5.50	6.15	6.15	6.8074	6.3074
38	5.75	deleted text begin 4.88 deleted text end	5.90	5.40	6.10	6.10	6.7125	6.2125
39	5.75	deleted text begin 4.84 deleted text end	5.70	5.30	6.05	6.05	6.6054	6.1054
40	5.75	deleted text begin 4.80 deleted text end	5.50	5.20	6.00	6.00	6.5000	6.0000
41	5.75	deleted text begin 4.76 deleted text end	5.40	5.10	5.90	5.95	6.3540	5.8540
42	5.75	deleted text begin 4.72 deleted text end	5.30	5.00	5.80	5.90	6.2087	5.7087
43	5.65	deleted text begin 4.68 deleted text end	5.20	4.90	5.70	5.85	6.0622	5.5622
44	5.55	deleted text begin 4.64 deleted text end	5.10	4.80	5.60	5.80	5.9048	5.4078
45	5.45	deleted text begin 4.60 deleted text end	5.00	4.70	5.50	5.75	5.7500	5.2500
46	5.35	deleted text begin 4.56 deleted text end	4.95	4.60	5.40	5.70	5.6940	5.1940
47	5.25	deleted text begin 4.52 deleted text end	4.90	4.50	5.30	5.65	5.6375	5.1375
48	5.15	deleted text begin 4.48 deleted text end	4.85	4.50	5.20	5.60	5.5822	5.0822
49	5.05	deleted text begin 4.44 deleted text end	4.80	4.50	5.10	5.55	5.5404	5.0404
50	4.95	deleted text begin 4.40 deleted text end	4.75	4.50	5.00	5.50	5.5000	5.0000
51	4.85	deleted text begin 4.36 deleted text end	4.75	4.50	4.90	5.45	5.4384	4.9384
52	4.75	deleted text begin 4.32 deleted text end	4.75	4.50	4.80	5.40	5.3776	4.8776
53	4.65	deleted text begin 4.28 deleted text end	4.75	4.50	4.70	5.35	5.3167	4.8167
54	4.55	deleted text begin 4.24 deleted text end	4.75	4.50	4.60	5.30	5.2826	4.7826
55	4.45	deleted text begin 4.20 deleted text end	4.75	4.50	4.50	5.25	5.2500	4.7500
56	4.35	deleted text begin 4.16 deleted text end	4.75	4.50	4.40	5.20	5.2500	4.7500
57	4.25	deleted text begin 4.12 deleted text end	4.75	4.50	4.30	5.15	5.2500	4.7500
58	4.25	deleted text begin 4.08 deleted text end	4.75	4.60	4.20	5.10	5.2500	4.7500
59	4.25	deleted text begin 4.04 deleted text end	4.75	4.70	4.10	5.05	5.2500	4.7500
60	4.25	deleted text begin 4.00 deleted text end	4.75	4.80	4.00	5.00	5.2500	4.7500
61	4.25	deleted text begin 4.00 deleted text end	4.75	4.90	3.90	5.00	5.2500	4.7500
62	4.25	deleted text begin 4.00 deleted text end	4.75	5.00	3.80	5.00	5.2500	4.7500
63	4.25	deleted text begin 4.00 deleted text end	4.75	5.10	3.70	5.00	5.2500	4.7500
64	4.25	deleted text begin 4.00 deleted text end	4.75	5.20	3.60	5.00	5.2500	4.7500
65	4.25	deleted text begin 4.00 deleted text end	4.75	5.20	3.50	5.00	5.2500	4.7500
66	4.25	deleted text begin 4.00 deleted text end	4.75	5.20	3.50	5.00	5.2500	4.7500
67	4.25	deleted text begin 4.00 deleted text end	4.75	5.20	3.50	5.00	5.2500	4.7500
68	4.25	deleted text begin 4.00 deleted text end	4.75	5.20	3.50	5.00	5.2500	4.7500
69	4.25	deleted text begin 4.00 deleted text end	4.75	5.20	3.50	5.00	5.2500	4.7500
70	4.25	deleted text begin 4.00 deleted text end	4.75	5.20	3.50	5.00	5.2500	4.7500
71	4.25	deleted text begin 4.00 deleted text end		5.20

new text begin (4) service-related ultimate future salary increase assumption
new text end

new text begin service length new text end	new text begin general employees retirement plan of the Public Employees Retirement Association new text end
new text begin 1 new text end	new text begin 12.03% new text end
new text begin 2 new text end	new text begin 8.90 new text end
new text begin 3 new text end	new text begin 7.46 new text end
new text begin 4 new text end	new text begin 6.58 new text end
new text begin 5 new text end	new text begin 5.97 new text end
new text begin 6 new text end	new text begin 5.52 new text end
new text begin 7 new text end	new text begin 5.16 new text end
new text begin 8 new text end	new text begin 4.87 new text end
new text begin 9 new text end	new text begin 4.63 new text end
new text begin 10 new text end	new text begin 4.42 new text end
new text begin 11 new text end	new text begin 4.24 new text end
new text begin 12 new text end	new text begin 4.08 new text end
new text begin 13 new text end	new text begin 3.94 new text end
new text begin 14 new text end	new text begin 3.82 new text end
new text begin 15 new text end	new text begin 3.70 new text end
new text begin 16 new text end	new text begin 3.60 new text end
new text begin 17 new text end	new text begin 3.51 new text end
new text begin 18 new text end	new text begin 3.50 new text end
new text begin 19 new text end	new text begin 3.50 new text end
new text begin 20 new text end	new text begin 3.50 new text end
new text begin 21 new text end	new text begin 3.50 new text end
new text begin 22 new text end	new text begin 3.50 new text end
new text begin 23 new text end	new text begin 3.50 new text end
new text begin 24 new text end	new text begin 3.50 new text end
new text begin 25 new text end	new text begin 3.50 new text end
new text begin 26 new text end	new text begin 3.50 new text end
new text begin 27 new text end	new text begin 3.50 new text end
new text begin 28 new text end	new text begin 3.50 new text end
new text begin 29 new text end	new text begin 3.50 new text end
new text begin 30 or more new text end	new text begin 3.50 new text end

(c) Before July 2, 2010, the actuarial valuation must use the applicable following
payroll growth assumption for calculating the amortization requirement for the unfunded
actuarial accrued liability where the amortization retirement is calculated as a level
percentage of an increasing payroll:

plan	payroll growth assumption
general state employees retirement plan		4.50%
correctional state employees retirement plan		4.50
State Patrol retirement plan		4.50
legislators retirement plan		4.50
judges retirement plan		4.00
general deleted text begin public deleted text end employees retirement plan new text begin of the Public Employees Retirement Association new text end		deleted text begin 4.50 deleted text end new text begin 4.00 new text end
public employees police and fire retirement plan		4.50
local government correctional service retirement plan		4.50
teachers retirement plan		4.50
Duluth teachers retirement plan		4.50
St. Paul teachers retirement plan		5.00

(d) After July 1, 2010, the assumptions set forth in paragraphs (b) and (c) continue to
apply, unless a different salary assumption or a different payroll increase assumption:

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

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

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

Sec. 27.

Minnesota Statutes 2008, section 356.30, subdivision 1, is amended to read:

Subdivision 1.

Eligibility; computation of annuity.

(a) Notwithstanding any
provisions of the laws governing the retirement plans enumerated in subdivision 3, a
person who has met the qualifications of paragraph (b) may elect to receive a retirement
annuity from each enumerated retirement plan in which the person has at least one-half
year of allowable service, based on the allowable service in each plan, subject to the
provisions of paragraph (c).

(b) A person may new text begin elect to new text end receive, upon retirement, a retirement annuity from each
enumerated retirement plan in which the person has at least one-half year of allowable
service, and augmentation of a deferred annuity calculated at the appropriate rate under
the laws governing each public pension plan or fund named in subdivision 3, based on
the date of the person's initial entry into public employment from the date the person
terminated all public service if:

(1) the person has allowable service totaling an amount that allows the person to
receive an annuity in deleted text begin any two or more of deleted text end the enumerated deleted text begin plans deleted text end new text begin retirement plan with
the longest allowable service vesting requirement or retirement annuity eligibility
requirement new text end ; and

(2) the person has not begun to receive an annuity from any enumerated plan or the
person has made application for benefits from each applicable plan and the effective
dates of the retirement annuity with each plan under which the person chooses to receive
an annuity are within a one-year period.

(c) The retirement annuity from each plan must be based upon the allowable service,
accrual rates, and average salary in the applicable plan except as further specified or
modified in the following clauses:

(1) the laws governing annuities must be the law in effect on the date of termination
from the last period of public service under a covered retirement plan with which the
person earned a minimum of one-half year of allowable service credit during that
employment;

(2) the "average salary" on which the annuity from each covered plan in which
the employee has credit in a formula plan must be based on the employee's highest five
successive years of covered salary during the entire service in covered plans;

(3) the accrual rates to be used by each plan must be those percentages prescribed by
each plan's formula as continued for the respective years of allowable service from one
plan to the next, recognizing all previous allowable service with the other covered plans;

(4) the allowable service in all the plans must be combined in determining eligibility
for and the application of each plan's provisions in respect to reduction in the annuity
amount for retirement prior to normal retirement age; and

(5) the annuity amount payable for any allowable service under a nonformula plan
of a covered plan must not be affected, but such service and covered salary must be used
in the above calculation.

(d) This section does not apply to any person whose final termination from the last
public service under a covered plan was before May 1, 1975.

(e) For the purpose of computing annuities under this section, the accrual rates
used by any covered plan, except the public employees police and fire plan, the judges
retirement fund, and the State Patrol retirement plan, must not exceed the percent specified
in section 356.315, subdivision 4, per year of service for any year of service or fraction
thereof. The formula percentage used by the judges retirement fund must not exceed the
percentage rate specified in section 356.315, subdivision 8, per year of service for any
year of service or fraction thereof. The accrual rate used by the public employees police
and fire plan and the State Patrol retirement plan must not exceed the percentage rate
specified in section 356.315, subdivision 6, per year of service for any year of service or
fraction thereof. The accrual rate or rates used by the legislators retirement plan must not
exceed 2.5 percent, but this limit does not apply to the adjustment provided under section
3A.02, subdivision 1, paragraph (c).

(f) Any period of time for which a person has credit in more than one of the covered
plans must be used only once for the purpose of determining total allowable service.

(g) If the period of duplicated service credit is more than one-half year, or the person
has credit for more than one-half year, with each of the plans, each plan must apply its
formula to a prorated service credit for the period of duplicated service based on a fraction
of the salary on which deductions were paid to that fund for the period divided by the total
salary on which deductions were paid to all plans for the period.

(h) If the period of duplicated service credit is less than one-half year, or when
added to other service credit with that plan is less than one-half year, the service credit
must be ignored and a refund of contributions made to the person in accord with that
plan's refund provisions.

Sec. 28.

Minnesota Statutes 2009 Supplement, section 356.415, subdivision 1, is
amended to read:

Subdivision 1.

Annual postretirement adjustments new text begin ; generally new text end .

(a) Retirement
annuity, disability benefit, or survivor benefit recipients of a covered retirement plan
new text begin other than the general employees retirement plan of the Public Employees Retirement
Association, the public employees police and fire retirement plan, and the local
government correctional employees retirement plan new text end are entitled to a postretirement
adjustment annually on January 1, as follows:

(1) a postretirement increase of 2.5 percent must be applied each year, effective
January 1, to the monthly annuity or benefit of each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least 12 full months prior to the January 1
increase; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a
benefit for at least one full month, an annual postretirement increase of 1/12 of 2.5 percent
for each month the person has been receiving an annuity or benefit must be applied,
effective January 1 following the year in which the person has been retired for less than
12 months.

(b) The increases provided by this section commence on January 1, 2010.

(c) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the covered retirement plan requesting that the increase not be made.

(d) The retirement annuity payable to a person who retires before becoming eligible
for Social Security benefits and who has elected the optional payment as provided in
section deleted text begin 353.29, subdivision 6, or deleted text end 354.35 must be treated as the sum of a period certain
retirement annuity and a life retirement annuity for the purposes of any postretirement
adjustment. The period certain retirement annuity plus the life retirement annuity must be
the annuity amount payable until age deleted text begin 62 for section 353.29, subdivision 6, or age deleted text end 62, 65,
or normal retirement age, as selected by the member at retirement, for an annuity amount
payable under section 354.35. A postretirement adjustment granted on the period certain
retirement annuity must terminate when the period certain retirement annuity terminates.

Sec. 29.

Minnesota Statutes 2009 Supplement, section 356.415, is amended by adding
a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Annual postretirement adjustments; retirement plans administered
by the Public Employees Retirement Association. new text end

new text begin (a) Retirement annuity, disability
benefit or survivor benefit recipients of the general employees retirement plan of the
Public Employees Retirement Association, the public employees police and fire retirement
plan, and the local government correctional service retirement plan are entitled to a
postretirement adjustment annually on January 1, as follows:
new text end

new text begin (1) for January 1, 2011, and each successive January 1 until funding stability is
restored for the applicable retirement plan, a postretirement increase of one percent must
be applied each year, effective on January 1, to the monthly annuity or benefit amount of
each annuitant or benefit recipient who has been receiving an annuity or benefit for at least
12 full months as of the current June 30;
new text end

new text begin (2) for January 1, 2011, and each successive January 1 until funding stability is
restored for the applicable retirement plan, for each annuitant or benefit recipient who has
been receiving an annuity or a benefit for at least one full month, but less than 12 full
months as of the current June 30, an annual postretirement increase of 1/12 of one percent
for each month the person has been receiving an annuity or benefit must be applied;
new text end

new text begin (3) for each January 1 following the restoration of funding stability for the applicable
retirement plan, a postretirement increase of 2.5 percent must be applied each year,
effective January 1, to the monthly annuity or benefit amount of each annuitant or benefit
recipient who has been receiving an annuity or benefit for at least 12 full months as of
the current June 30; and
new text end

new text begin (4) for each January 1 following restoration of funding stability for the applicable
retirement plan, for each annuity or benefit recipient who has been receiving an annuity or
a benefit for at least one full month, but less than 12 full months as of the current June
30, an annual postretirement increase of 1/12 of 2.5 percent for each month the person
has been receiving an annuity or benefit must be applied.
new text end

new text begin (b) Funding stability is restored when the market value of assets of the applicable
retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities of the
applicable plan in the most recent prior actuarial valuation prepared under section 356.215
and the standards for actuarial work by the approved actuary retained by the Public
Employees Retirement Association under section 356.214.
new text end

new text begin (c) If, after applying the increase as provided for in clauses (3) and (4) of this
subdivision, the market value of the applicable retirement plan is determined in the next
subsequent actuarial valuation prepared under section 356.215 to be less than 90 percent
of the actuarial accrued liability of any of the applicable Public Employees Retirement
Association plans, the increase provided in clauses (1) and (2) are to be applied as of the
next successive January until funding stability is again restored.
new text end

new text begin (d) An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the Public Employees Retirement Association requesting that the
increase not be made.
new text end

new text begin (e) The retirement annuity payable to a person who retires before becoming eligible
for Social Security benefits and who has elected the optional payment, as provided in
section 353.29, subdivision 6, must be treated as the sum of a period-certain retirement
annuity and a life retirement annuity for the purposes of any postretirement adjustment.
The period-certain retirement annuity plus the life retirement annuity must be the
annuity amount payable until age 62 for section 353.29, subdivision 6. A postretirement
adjustment granted on the period-certain retirement annuity must terminate when the
period-certain retirement annuity terminates.
new text end

Sec. 30.

Minnesota Statutes 2008, section 356.47, subdivision 3, is amended to read:

Subd. 3.

Payment.

(a) Beginning one year after the reemployment withholding
period ends relating to the reemployment that gave rise to the limitation, and the filing of a
written application, the retired member is entitled to the payment, in a lump sum, of the
value of the person's amount under subdivision 2, plus interest at the compound annual
rate of six percent from the date that the amount was deducted from the retirement annuity
to the date of payment new text begin for retirement plans governed by section 352.115, subdivision 10;
354.44, subdivision 5; or 354A.31, subdivision 3, plus interest at the compound annual
rate of six percent from the date that the amount was deducted from the retirement annuity
to the date of payment or until December 31, 2010, whichever is earlier, for retirement
plans governed by section 353.37, and without interest after December 31, 2010, for
retirement plans governed by section 353.37 new text end .

(b) The written application must be on a form prescribed by the chief administrative
officer of the applicable retirement plan.

(c) If the retired member dies before the payment provided for in paragraph (a) is
made, the amount is payable, upon written application, to the deceased person's surviving
spouse, or if none, to the deceased person's designated beneficiary, or if none, to the
deceased person's estate.

(d) In lieu of the direct payment of the person's amount under subdivision 2, on
or after the payment date under paragraph (a), if the federal Internal Revenue Code so
permits, the retired member may elect to have all or any portion of the payment amount
under this section paid in the form of a direct rollover to an eligible retirement plan as
defined in section 402(c) of the federal Internal Revenue Code that is specified by the
retired member. If the retired member dies with a balance remaining payable under this
section, the surviving spouse of the retired member, or if none, the deceased person's
designated beneficiary, or if none, the administrator of the deceased person's estate may
elect a direct rollover under this paragraph.

Sec. 31. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 353.34, subdivision 3a, new text end new text begin is repealed.
new text end

Sec. 32. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 31 are effective July 1, 2010.
new text end