HF 3113

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to retirement; Minneapolis police, fire, and 
  1.3             municipal employees retirement plans; making various 
  1.4             retirement funding modifications; amending Minnesota 
  1.5             Statutes 2002, sections 69.77, subdivision 4; 356A.06, 
  1.6             subdivision 7; 422A.06, subdivision 8; 422A.101, 
  1.7             subdivision 4; 423B.21; 423C.15, subdivisions 3, 4; 
  1.8             proposing coding for new law as Minnesota Statutes, 
  1.9             chapter 423D. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 2002, section 69.77, 
  1.12  subdivision 4, is amended to read: 
  1.13     Subd. 4.  [RELIEF ASSOCIATION FINANCIAL REQUIREMENTS; 
  1.14  MINIMUM MUNICIPAL OBLIGATION.] (a) The officers of the relief 
  1.15  association shall determine the financial requirements of the 
  1.16  relief association and minimum obligation of the municipality 
  1.17  for the following calendar year in accordance with the 
  1.18  requirements of this subdivision.  The financial requirements of 
  1.19  the relief association and the minimum obligation of the 
  1.20  municipality must be determined on or before the submission date 
  1.21  established by the municipality under subdivision 5. 
  1.22     (b) The financial requirements of the relief association 
  1.23  for the following calendar year must be based on the most recent 
  1.24  actuarial valuation or survey of the special fund of the 
  1.25  association if more than one fund is maintained by the 
  1.26  association, or of the association, if only one fund is 
  1.27  maintained, prepared in accordance with sections 356.215, 
  2.1   subdivisions 4 to 15, and 356.216, as required under subdivision 
  2.2   10.  If an actuarial estimate is prepared by the actuary of the 
  2.3   relief association as part of obtaining a modification of the 
  2.4   benefit plan of the relief association and the modification is 
  2.5   implemented, the actuarial estimate must be used in calculating 
  2.6   the subsequent financial requirements of the relief association. 
  2.7      (c) If the relief association has an unfunded actuarial 
  2.8   accrued liability as reported in the most recent actuarial 
  2.9   valuation or survey, the total of the amounts calculated under 
  2.10  clauses (1), (2), and (3), constitute the financial requirements 
  2.11  of the relief association for the following year.  If the relief 
  2.12  association does not have an unfunded actuarial accrued 
  2.13  liability as reported in the most recent actuarial valuation or 
  2.14  survey, the amount calculated under clauses (1) and (2) 
  2.15  constitute the financial requirements of the relief association 
  2.16  for the following year.  The financial requirement elements are: 
  2.17     (1) the normal level cost requirement for the following 
  2.18  year, expressed as a dollar amount, which must be determined by 
  2.19  applying the normal level cost of the relief association as 
  2.20  reported in the actuarial valuation or survey and expressed as a 
  2.21  percentage of covered payroll to the estimated covered payroll 
  2.22  of the active membership of the relief association, including 
  2.23  any projected change in the active membership, for the following 
  2.24  year; 
  2.25     (2) for the Bloomington Fire Department Relief Association, 
  2.26  the Fairmont Police Relief Association, and the Virginia Fire 
  2.27  Department Relief Association, to the dollar amount of normal 
  2.28  cost determined under clause (1) must be added an amount equal 
  2.29  to the dollar amount of the administrative expenses of the 
  2.30  special fund of the association if more than one fund is 
  2.31  maintained by the association, or of the association if only one 
  2.32  fund is maintained, for the most recent year, multiplied by the 
  2.33  factor of 1.035.  The administrative expenses are those 
  2.34  authorized under section 69.80.  No amount of administrative 
  2.35  expenses under this clause are to be included in the financial 
  2.36  requirements of the Minneapolis Firefighters Relief Association 
  3.1   or the Minneapolis Police Relief Association; and 
  3.2      (3) for the Bloomington Fire Department Relief Association, 
  3.3   the Fairmont Police Relief Association, and the Virginia Fire 
  3.4   Department Relief Association, to the dollar amount of normal 
  3.5   cost and expenses determined under clauses (1) and (2) must be 
  3.6   added an amount equal to the level annual dollar amount which is 
  3.7   sufficient to amortize the unfunded actuarial accrued liability 
  3.8   by December 31, 2010, as determined from the actuarial valuation 
  3.9   or survey of the fund plan, using an interest assumption set at 
  3.10  the applicable rate specified in section 356.215, subdivision 
  3.11  8.  For the Minneapolis Firefighters Relief Association and the 
  3.12  Minneapolis Police Relief Association, to the dollar amount of 
  3.13  normal cost determined under clause (1) must be added an amount 
  3.14  equal to the level annual dollar amount which is sufficient to 
  3.15  amortize the unfunded actuarial accrued liability by December 
  3.16  30, 2030, as determined from the actuarial valuations or survey 
  3.17  of the plan, using an interest assumption set at the applicable 
  3.18  rate specified in section 356.215, subdivision 8.  The 
  3.19  amortization date specified in this clause applies to all local 
  3.20  police or salaried firefighters' relief associations and that 
  3.21  date supersedes any amortization date specified in any 
  3.22  applicable special law. 
  3.23     (d) The minimum obligation of the municipality is an amount 
  3.24  equal to the financial requirements of the relief association 
  3.25  reduced by the estimated amount of member contributions from 
  3.26  covered salary anticipated for the following calendar year and 
  3.27  the estimated amounts anticipated for the following calendar 
  3.28  year from the applicable state aid program established under 
  3.29  sections 69.011 to 69.051 receivable by the relief association 
  3.30  after any allocation made under section 69.031, subdivision 5, 
  3.31  paragraph (b), clause (2), or 423A.01, subdivision 2, clause 
  3.32  (6), from the local police and salaried firefighters' relief 
  3.33  association amortization aid program established under section 
  3.34  423A.02, subdivision 1, from the supplementary amortization 
  3.35  state-aid program established under section 423A.02, subdivision 
  3.36  1a, and from the additional amortization state aid under section 
  4.1   423A.02, subdivision 1b. 
  4.2      Sec. 2.  Minnesota Statutes 2002, section 356A.06, 
  4.3   subdivision 7, is amended to read: 
  4.4      Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
  4.5   SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
  4.6   authorized by law or bylaws, a covered pension plan not 
  4.7   described by subdivision 6, paragraph (a), may invest its assets 
  4.8   only in accordance with this subdivision. 
  4.9      (b)  [SECURITIES GENERALLY.] The covered pension plan has 
  4.10  the authority to purchase, sell, lend, or exchange the 
  4.11  securities specified in paragraphs (c) to (g), including puts 
  4.12  and call options and future contracts traded on a contract 
  4.13  market regulated by a governmental agency or by a financial 
  4.14  institution regulated by a governmental agency.  These 
  4.15  securities may be owned as units in commingled trusts that own 
  4.16  the securities described in paragraphs (c) to (g).  
  4.17     (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
  4.18  invest funds in governmental bonds, notes, bills, mortgages, and 
  4.19  other evidences of indebtedness provided the issue is backed by 
  4.20  the full faith and credit of the issuer or the issue is rated 
  4.21  among the top four quality rating categories by a nationally 
  4.22  recognized rating agency.  The obligations in which funds may be 
  4.23  invested under this paragraph include guaranteed or insured 
  4.24  issues of (1) the United States, its agencies, its 
  4.25  instrumentalities, or organizations created and regulated by an 
  4.26  act of Congress; (2) Canada and its provinces, provided the 
  4.27  principal and interest is payable in United States dollars; (3) 
  4.28  the states and their municipalities, political subdivisions, 
  4.29  agencies, or instrumentalities; (4) the International Bank for 
  4.30  Reconstruction and Development, the Inter-American Development 
  4.31  Bank, the Asian Development Bank, the African Development Bank, 
  4.32  or any other United States government sponsored organization of 
  4.33  which the United States is a member, provided the principal and 
  4.34  interest is payable in United States dollars. 
  4.35     (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
  4.36  invest funds in bonds, notes, debentures, transportation 
  5.1   equipment obligations, or any other longer term evidences of 
  5.2   indebtedness issued or guaranteed by a corporation organized 
  5.3   under the laws of the United States or any state thereof, or the 
  5.4   Dominion of Canada or any province thereof if they conform to 
  5.5   the following provisions: 
  5.6      (1) the principal and interest of obligations of 
  5.7   corporations incorporated or organized under the laws of the 
  5.8   Dominion of Canada or any province thereof must be payable in 
  5.9   United States dollars; and 
  5.10     (2) obligations must be rated among the top four quality 
  5.11  categories by a nationally recognized rating agency. 
  5.12     (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
  5.13  invest funds in bankers acceptances, certificates of deposit, 
  5.14  deposit notes, commercial paper, mortgage participation 
  5.15  certificates and pools, asset backed securities, repurchase 
  5.16  agreements and reverse repurchase agreements, guaranteed 
  5.17  investment contracts, savings accounts, and guaranty fund 
  5.18  certificates, surplus notes, or debentures of domestic mutual 
  5.19  insurance companies if they conform to the following provisions: 
  5.20     (i) bankers acceptances and deposit notes of United States 
  5.21  banks are limited to those issued by banks rated in the highest 
  5.22  four quality categories by a nationally recognized rating 
  5.23  agency; 
  5.24     (ii) certificates of deposit are limited to those issued by 
  5.25  (A) United States banks and savings institutions that are rated 
  5.26  in the highest four quality categories by a nationally 
  5.27  recognized rating agency or whose certificates of deposit are 
  5.28  fully insured by federal agencies; or (B) credit unions in 
  5.29  amounts up to the limit of insurance coverage provided by the 
  5.30  National Credit Union Administration; 
  5.31     (iii) commercial paper is limited to those issued by United 
  5.32  States corporations or their Canadian subsidiaries and rated in 
  5.33  the highest two quality categories by a nationally recognized 
  5.34  rating agency; 
  5.35     (iv) mortgage participation or pass through certificates 
  5.36  evidencing interests in pools of first mortgages or trust deeds 
  6.1   on improved real estate located in the United States where the 
  6.2   loan to value ratio for each loan as calculated in accordance 
  6.3   with section 61A.28, subdivision 3, does not exceed 80 percent 
  6.4   for fully amortizable residential properties and in all other 
  6.5   respects meets the requirements of section 61A.28, subdivision 
  6.6   3; 
  6.7      (v) collateral for repurchase agreements and reverse 
  6.8   repurchase agreements is limited to letters of credit and 
  6.9   securities authorized in this section; 
  6.10     (vi) guaranteed investment contracts are limited to those 
  6.11  issued by insurance companies or banks rated in the top four 
  6.12  quality categories by a nationally recognized rating agency or 
  6.13  to alternative guaranteed investment contracts where the 
  6.14  underlying assets comply with the requirements of this 
  6.15  subdivision; 
  6.16     (vii) savings accounts are limited to those fully insured 
  6.17  by federal agencies; and 
  6.18     (viii) asset backed securities must be rated in the top 
  6.19  four quality categories by a nationally recognized rating agency.
  6.20     (2) Sections 16A.58, 16C.03, subdivision 4, and 16C.05 do 
  6.21  not apply to certificates of deposit and collateralization 
  6.22  agreements executed by the covered pension plan under clause 
  6.23  (1), item (ii). 
  6.24     (3) In addition to investments authorized by clause (1), 
  6.25  item (iv), the covered pension plan may purchase from the 
  6.26  Minnesota Housing Finance Agency all or any part of a pool of 
  6.27  residential mortgages, not in default, that has previously been 
  6.28  financed by the issuance of bonds or notes of the agency.  The 
  6.29  covered pension plan may also enter into a commitment with the 
  6.30  agency, at the time of any issue of bonds or notes, to purchase 
  6.31  at a specified future date, not exceeding 12 years from the date 
  6.32  of the issue, the amount of mortgage loans then outstanding and 
  6.33  not in default that have been made or purchased from the 
  6.34  proceeds of the bonds or notes.  The covered pension plan may 
  6.35  charge reasonable fees for any such commitment and may agree to 
  6.36  purchase the mortgage loans at a price sufficient to produce a 
  7.1   yield to the covered pension plan comparable, in its judgment, 
  7.2   to the yield available on similar mortgage loans at the date of 
  7.3   the bonds or notes.  The covered pension plan may also enter 
  7.4   into agreements with the agency for the investment of any 
  7.5   portion of the funds of the agency.  The agreement must cover 
  7.6   the period of the investment, withdrawal privileges, and any 
  7.7   guaranteed rate of return. 
  7.8      (f)  [CORPORATE STOCKS.] The covered pension plan may 
  7.9   invest funds in stocks or convertible issues of any corporation 
  7.10  organized under the laws of the United States or the states 
  7.11  thereof, the Dominion of Canada or its provinces, or any 
  7.12  corporation listed on the New York Stock Exchange or the 
  7.13  American Stock Exchange, if they conform to the following 
  7.14  provisions: 
  7.15     (1) the aggregate value of corporate stock investments, as 
  7.16  adjusted for realized profits and losses, must not exceed 85 
  7.17  percent of the market or book value, whichever is less, of a 
  7.18  fund, less the aggregate value of investments according to 
  7.19  subdivision 6; 
  7.20     (2) investments must not exceed five percent of the total 
  7.21  outstanding shares of any one corporation. 
  7.22     (g)  [OTHER INVESTMENTS.] (1) In addition to the 
  7.23  investments authorized in paragraphs (b) to (f), and subject to 
  7.24  the provisions in clause (2), the covered pension plan may 
  7.25  invest funds in:  
  7.26     (i) venture capital investment businesses through 
  7.27  participation in limited partnerships and corporations; 
  7.28     (ii) real estate ownership interests or loans secured by 
  7.29  mortgages or deeds of trust through investment in limited 
  7.30  partnerships, bank sponsored collective funds, trusts, and 
  7.31  insurance company commingled accounts, including separate 
  7.32  accounts; 
  7.33     (iii) regional and mutual funds through bank sponsored 
  7.34  collective funds and open-end investment companies registered 
  7.35  under the Federal Investment Company Act of 1940; 
  7.36     (iv) resource investments through limited partnerships, 
  8.1   private placements, and corporations; and 
  8.2      (v) international securities. 
  8.3      (2) The investments authorized in clause (1) must conform 
  8.4   to the following provisions:  
  8.5      (i) the aggregate value of all investments made according 
  8.6   to clause (1) may not exceed 35 percent of the market value of 
  8.7   the fund for which the covered pension plan is investing; 
  8.8      (ii) there must be at least four unrelated owners of the 
  8.9   investment other than the state board for investments made under 
  8.10  clause (1), item (i), (ii), (iii), or (iv); 
  8.11     (iii) covered pension plan participation in an investment 
  8.12  vehicle is limited to 20 percent thereof for investments made 
  8.13  under clause (1), item (i), (ii), (iii), or (iv); and 
  8.14     (iv) covered pension plan participation in a limited 
  8.15  partnership does not include a general partnership interest or 
  8.16  other interest involving general liability.  The covered pension 
  8.17  plan may not engage in any activity as a limited partner which 
  8.18  creates general liability. 
  8.19     (h)  [CERTAIN EMPLOYER PROMISSORY NOTES.] Promissory notes 
  8.20  issued by the city of Minneapolis and deposited in the 
  8.21  retirement benefit fund under section 422A.06, subdivision 8, 
  8.22  are authorized investments of the Minneapolis Employee 
  8.23  Retirement Fund. 
  8.24     Sec. 3.  Minnesota Statutes 2002, section 422A.06, 
  8.25  subdivision 8, is amended to read: 
  8.26     Subd. 8.  [RETIREMENT BENEFIT FUND.] (a) The retirement 
  8.27  benefit fund shall consist consists of amounts held for payment 
  8.28  of retirement allowances for members retired pursuant to under 
  8.29  this chapter.  
  8.30     (b) Assets equal to the required reserves for retirement 
  8.31  allowances pursuant to under this chapter determined in 
  8.32  accordance with the appropriate mortality table adopted by the 
  8.33  board of trustees based on the experience of the fund as 
  8.34  recommended by the commission-retained actuary shall and 
  8.35  approved under section 356.215, subdivision 18, must be 
  8.36  transferred from the deposit accumulation fund to the retirement 
  9.1   benefit fund as of the last business day of the month in which 
  9.2   the retirement allowance begins.  If there are insufficient 
  9.3   assets in the deposit accumulation fund to make the required 
  9.4   transfer to the retirement benefit fund, the city of Minneapolis 
  9.5   may issue promissory notes in the amount of the cash-flow 
  9.6   deficiency for deposit in the retirement benefit fund.  The 
  9.7   promissory note must bear compound interest, computed daily, 
  9.8   equal to the average time weighted total rate of investment 
  9.9   return for the retirement benefit fund for the most recently 
  9.10  available six-month period, expressed as a daily amount.  The 
  9.11  promissory note must be redeemed by the deposit accumulation 
  9.12  fund when the fund has sufficient assets to cover the note and 
  9.13  may otherwise be redeemed earlier by the city of Minneapolis.  
  9.14  The income from investments of these assets shall must be 
  9.15  allocated to this fund.  There shall must be paid from this fund 
  9.16  the retirement annuities authorized by law.  A required reserve 
  9.17  calculation for the retirement benefit fund must be made by the 
  9.18  actuary retained by the Legislative Commission on Pensions and 
  9.19  Retirement and must be certified to the retirement board by the 
  9.20  commission-retained actuary. 
  9.21     (c) The retirement benefit fund shall be is governed by the 
  9.22  applicable laws governing the accounting and audit procedures, 
  9.23  investment, actuarial requirements, calculation and payment of 
  9.24  postretirement benefit adjustments, discharge of any deficiency 
  9.25  in the assets of the fund when compared to the actuarially 
  9.26  determined required reserves, and other applicable operations 
  9.27  and procedures regarding the Minnesota postretirement investment 
  9.28  fund in effect on June 30, 1997, established under Minnesota 
  9.29  Statutes 1996, section 11A.18, and any legal or administrative 
  9.30  interpretations of those laws of the State Board of Investment, 
  9.31  the legal advisor to the State Board of Investment, and the 
  9.32  executive director of the State Board of Investment in effect on 
  9.33  June 30, 1997.  If a deferred yield adjustment account is 
  9.34  established for the Minnesota postretirement investment fund 
  9.35  before June 30, 1997, under Minnesota Statutes 1996, section 
  9.36  11A.18, subdivision 5, the retirement board shall also establish 
 10.1   and maintain a deferred yield adjustment account within this 
 10.2   fund.  
 10.3      (d) Annually, following the calculation of any 
 10.4   postretirement adjustment payable from the retirement benefit 
 10.5   fund, the board of trustees shall submit a report to the 
 10.6   executive director of the Legislative Commission on Pensions and 
 10.7   Retirement and to the commissioner of finance indicating the 
 10.8   amount of any postretirement adjustment and the underlying 
 10.9   calculations on which that postretirement adjustment amount is 
 10.10  based, including the amount of dividends, the amount of 
 10.11  interest, and the amount of net realized capital gains or losses 
 10.12  utilized in the calculations. 
 10.13     (e) With respect to a former contributing member who began 
 10.14  receiving a retirement annuity or disability benefit under 
 10.15  section 422A.151, paragraph (a), clause (2), after June 30, 
 10.16  1997, or with respect to a survivor of a former contributing 
 10.17  member who began receiving a survivor benefit under section 
 10.18  422A.151, paragraph (a), clause (2), after June 30, 1997, the 
 10.19  reserves attributable to the one percent lower amount of the 
 10.20  cost-of-living adjustment payable to those annuity or benefit 
 10.21  recipients annually must be transferred back to the deposit 
 10.22  accumulation fund to the credit of the Metropolitan Airports 
 10.23  Commission.  The calculation of this annual reduced 
 10.24  cost-of-living adjustment reserve transfer must be reviewed by 
 10.25  the actuary retained by the Legislative Commission on Pensions 
 10.26  and Retirement. 
 10.27     Sec. 4.  Minnesota Statutes 2002, section 422A.101, 
 10.28  subdivision 4, is amended to read: 
 10.29     Subd. 4.  [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 
 10.30  INSTANCES.] (a) If a participating employing unit, other than 
 10.31  the state, has a negative asset balance in the deposit 
 10.32  accumulation fund, the executive director shall bill the 
 10.33  employing unit for the amount of the deficiency.  Any amount 
 10.34  billed must include six percent interest, compounded annually, 
 10.35  for any year or portion of a year from the billing date until 
 10.36  the date of payment. 
 11.1      (b) If assets in the deposit accumulation fund are 
 11.2   insufficient to make a transfer to the retirement benefit fund, 
 11.3   the city of Minneapolis shall pay the amount of that 
 11.4   insufficiency to the retirement benefit fund within three days 
 11.5   of certification of the insufficiency by the executive director 
 11.6   of the fund.  Payment by the city of Minneapolis may be in cash 
 11.7   or may be by deposit of a promissory note under section 422A.06, 
 11.8   subdivision 8, paragraph (b).  The city of Minneapolis may bill 
 11.9   any other participating employing unit other than the state for 
 11.10  its proportion of the amount paid.  Any amount billed by the 
 11.11  city under this paragraph must include interest as specified in 
 11.12  paragraph (a).  
 11.13     Sec. 5.  Minnesota Statutes 2002, section 423B.21, is 
 11.14  amended to read: 
 11.15     423B.21 [CHANGE IN AMORTIZATION PERIOD.] 
 11.16     Subdivision 1.  [AMORTIZATION TREATMENT.] Notwithstanding 
 11.17  section 69.77, subdivision 4; 356.215; 356.216; or any other law 
 11.18  to the contrary, if the actuarial report for the association 
 11.19  indicates an unfunded actuarial accrued liability after the fund 
 11.20  has first achieved 100 percent funding, the unfunded obligation 
 11.21  is to be amortized on a level dollar basis by December 31 of the 
 11.22  year occurring 15 years later or 2030, whichever is later.  If 
 11.23  subsequent actuarial valuations determine a net actuarial 
 11.24  experience loss incurred during the year which ended as of the 
 11.25  day before the most recent actuarial valuation date, any 
 11.26  unfunded liability due to that loss is to be amortized on a 
 11.27  level dollar basis by December 31 of the year occurring 15 years 
 11.28  later or 2030, whichever is later. 
 11.29     Subd. 2.  [LIMITATION.] Notwithstanding subdivision 1, the 
 11.30  amortization period may not exceed the average life expectancy 
 11.31  of the remaining members or 2030, whichever is later. 
 11.32     Sec. 6.  Minnesota Statutes 2002, section 423C.15, 
 11.33  subdivision 3, is amended to read: 
 11.34     Subd. 3.  [AMORTIZATION TREATMENT.] Notwithstanding section 
 11.35  69.77, subdivision 4, 356.215, 356.216, or any other law to the 
 11.36  contrary, if the actuarial report for the Minneapolis 
 12.1   Firefighters Relief Association indicates an unfunded actuarial 
 12.2   accrued liability, the unfunded obligation is to be amortized on 
 12.3   a level dollar basis by December 31 of the year occurring 15 
 12.4   years later or 2030, whichever is later.  If subsequent 
 12.5   actuarial valuations determine a net actuarial experience loss 
 12.6   incurred during the year which ended as of the day before the 
 12.7   most recent actuarial valuation date, any unfunded liability due 
 12.8   to that loss is to be amortized on a level dollar basis by 
 12.9   December 31 of the year occurring 15 years later or 2030, 
 12.10  whichever is later. 
 12.11     Sec. 7.  Minnesota Statutes 2002, section 423C.15, 
 12.12  subdivision 4, is amended to read: 
 12.13     Subd. 4.  [LIMITATION.] Notwithstanding subdivision 3, the 
 12.14  amortization period may not exceed the average life expectancy 
 12.15  of the remaining members or 2030, whichever is later. 
 12.16     Sec. 8.  [423D.01] [MINNEAPOLIS PUBLIC PENSION PLANS; 
 12.17  INVESTMENT ADVISORY BOARD.] 
 12.18     Subdivision 1.  [CREATION.] An investment advisory board 
 12.19  for Minneapolis public pension plans is hereby created. 
 12.20     Subd. 2.  [BOARD COMPOSITION.] (a) The Minneapolis Public 
 12.21  Pension Plan Investment Advisory Board consists of the following 
 12.22  members: 
 12.23     (1) the secretary of the Minneapolis Firefighters Relief 
 12.24  Association; 
 12.25     (2) the secretary of the Minneapolis Police Relief 
 12.26  Association; 
 12.27     (3) the executive director of the Minneapolis Employee 
 12.28  Retirement Fund; 
 12.29     (4) the finance director of the city of Minneapolis or the 
 12.30  finance director's designee; 
 12.31     (5) the city coordinator of the city of Minneapolis or the 
 12.32  city coordinator's designee; 
 12.33     (6) the executive director of the State Board of 
 12.34  Investment; and 
 12.35     (7) seven investment professionals appointed by the 
 12.36  Minneapolis City Council. 
 13.1      (b) An investment professional, for purposes of this 
 13.2   section, is a person who by training or experience is 
 13.3   knowledgeable in pension plan, endowment, or other institutional 
 13.4   investment matters and who is currently employed in a position 
 13.5   which regularly involves pension plan, endowment, or other 
 13.6   institutional investment activities.  No person who is employed 
 13.7   or retained by a Minneapolis retirement plan as an investment 
 13.8   advisor, investment consultant, investment performance 
 13.9   evaluator, or investment broker is eligible during the course of 
 13.10  that engagement to be an investment professional for appointment 
 13.11  under this subdivision. 
 13.12     Subd. 3.  [TERMS.] The term of board members under 
 13.13  subdivision 2, paragraph (a), clauses (1) to (6), is for the 
 13.14  period of incumbency in the position that gave rise to the 
 13.15  appointment.  The term of board members under subdivision 2, 
 13.16  paragraph (a), clause (7), is two years and until the person's 
 13.17  successor is appointed.  
 13.18     Subd. 4.  [DUTIES.] The Minneapolis Public Pension Plan 
 13.19  Investment Advisory Board shall meet at least quarterly; shall 
 13.20  review the investment policies of the Minneapolis public pension 
 13.21  plans enumerated in subdivision 6, the plans' portfolio mix, the 
 13.22  level of investment risk, and the total time weighted rates of 
 13.23  return; and shall provide advice to the pension plans on 
 13.24  policies and strategies that would increase investment 
 13.25  performance at an acceptable level of risk. 
 13.26     Subd. 5.  [REPORTS.] Each Minneapolis public pension plan 
 13.27  shall report quarterly to the investment advisory board on the 
 13.28  plan's investment policy changes, portfolio mix, total time 
 13.29  weighted rates of return, and relative investment risk.  The 
 13.30  plan shall also report on the difference between its investment 
 13.31  performance assets for the quarter, fiscal year, and the most 
 13.32  recent market cycle and the plan's best estimate as to the 
 13.33  plan's performance if the plan had completely implemented the 
 13.34  recommendations of the advisory board and on the plan's 
 13.35  rationale for not following the recommendations of the advisory 
 13.36  board.  
 14.1      Subd. 6.  [COVERED PENSION PLANS.] The public pension plans 
 14.2   to which this section applies are: 
 14.3      (1) the Minneapolis Firefighters Relief Association; 
 14.4      (2) the Minneapolis Police Relief Association; and 
 14.5      (3) the Minneapolis Employee Retirement Fund. 
 14.6      Sec. 9.  [EFFECTIVE DATE.] 
 14.7      Sections 1 to 8 are effective the day following final 
 14.8   enactment.