Minnesota Session Laws - 2024, Regular Session

CHAPTER 102--H.F.No. 5040

An act

relating to retirement; accelerating the effective date from July 1, 2025, to July 1, 2024, for the change in the normal retirement age for the teachers retirement association from 66 to 65; reducing the employee contribution rates for two years by 0.25 percent for St. Paul Teachers Retirement Fund Association; extending the suspension of earnings limitation for retired teachers who return to teaching; authorizing eligible employees of Minnesota State Colleges and Universities who are members of the higher education individual retirement account plan to elect coverage by the Teachers Retirement Association and purchase past service credit; implementing the recommendations of the State Auditor's volunteer firefighter working group; adding a defined contribution plan and making other changes to the statewide volunteer firefighter plan; modifying requirements for electing to participate in the public employees defined contribution plan; increasing the multiplier in the benefit formula for prospective service and increasing employee and employer contribution rates for the local government correctional service retirement plan; eliminating the workers' compensation offset for the Public Employees Retirement Association general and correctional plans; clarifying eligibility for firefighters in the public employees police and fire plan; making changes of an administrative nature for plans administered by the Minnesota State Retirement System; authorizing employees on a H-1B, H-1B1, or E3 visa to purchase service credit for a prior period of employment when excluded from the general state employees retirement plan; codifying the right to return to employment and continue receiving an annuity from the State Patrol plan; adding additional positions to the list of positions eligible for the correctional state employees retirement plan coverage and permitting the purchase of past service credit; establishing a work group on correctional state employees plan eligibility; modifying the Minnesota Secure Choice retirement program by permitting participation by home and community-based services employees; modifying requirements for Minnesota Secure Choice retirement program board of directors; allowing employer matching contributions on an employee's qualified student loan payments under Secure 2.0 and modifying investment rates of return and fee disclosure requirements and other provisions for supplemental deferred compensation plans; resolving a conflict in the statute setting the plans' established date for full funding and establishing an amortization work group; restructuring statutes applicable to tax-qualified pension and retirement plans that impose requirements under the Internal Revenue Code; modifying the authority of pension fund executive directors to correct operational and other errors and requiring an annual report; changing the expiration date for state aids by requiring three years at 100 percent funded rather than one year before the state aid expires; making other administrative and conforming changes; appropriating money to the IRAP to TRA transfer account, the Teachers Retirement Association, and St. Paul Teachers Retirement Association;

amending Minnesota Statutes 2022, sections 352.01, subdivision 13; 352.03, subdivision 5; 352.113, subdivision 1; 352.1155, subdivision 3; 352.12, subdivisions 1, 2, 2b, 7, 8; 352.95, subdivision 4; 353.028, subdivisions 1, 2, 3, 5; 353.03, subdivision 3a; 353.27, subdivision 4; 353.33, subdivisions 7, 7a; 353.64, subdivisions 1, 2, 4, 5a; 353.65, subdivision 3b; 353.87, subdivision 1; 353D.02, as amended; 353E.03; 353E.04, subdivision 3; 353E.06, subdivision 6; 353G.01, subdivisions 9, 9a, 11, by adding subdivisions; 353G.05, as amended; 353G.08, subdivision 2; 354.435, subdivision 4; 354.436, subdivision 3; 354.44, subdivision 9; 354A.011, subdivision 7; 354A.021, subdivisions 2, 3, 6, 7, 8, 9; 354A.05; 354A.091; 354A.094; 354A.12, subdivisions 3a, 3c, 5; 354A.31, subdivision 3a; 354A.32, subdivision 1a; 354B.20, subdivision 18, by adding subdivisions; 356.215, subdivisions 2, 3; 356.24, subdivision 3; 356.611, subdivision 2, by adding a subdivision; 356.62; 356.635, subdivisions 1, 2, by adding subdivisions; 356A.06, subdivision 5; 423A.02, subdivision 5; 423A.022, subdivision 5; 424A.001, subdivisions 4, 5, 8, 9, 10, by adding subdivisions; 424A.003; 424A.01, subdivisions 1, 2, 5; 424A.015, subdivisions 1, 5, 7; 424A.016, subdivisions 2, 6; 424A.02, subdivisions 1, 3, 7, 9; 424A.021; 424A.092, subdivision 6; 424A.093, subdivision 6; 424A.094, subdivision 1; 424A.095, subdivision 2; 424A.10; 424B.22, subdivisions 2, 10; Minnesota Statutes 2023 Supplement, sections 187.03, by adding a subdivision; 187.05, subdivision 7; 187.08, subdivisions 1, 7, 8; 352.91, subdivision 3f, as amended; 353.335, subdivision 1; 353D.01, subdivision 2; 353G.01, subdivisions 7b, 8b, 12, 12a, 14a, 15; 353G.02, subdivisions 1, 3, 4; 353G.03, subdivision 3; 353G.07; 353G.08, subdivision 1; 353G.09, subdivisions 1, 1a, 2; 353G.10; 353G.11, subdivision 2, by adding a subdivision; 353G.115; 353G.12, subdivision 2, by adding a subdivision; 353G.14; 354.05, subdivision 38; 354.06, subdivision 2; 354A.12, subdivision 1; 356.215, subdivision 11; 356.24, subdivision 1; 477B.02, subdivision 3; Laws 2021, chapter 22, article 2, section 3; Laws 2022, chapter 65, article 3, section 1, subdivisions 2, 3; Laws 2023, chapter 46, section 11; proposing coding for new law in Minnesota Statutes, chapters 352B; 353G; 354B; 356; repealing Minnesota Statutes 2022, sections 353.33, subdivision 5; 353.86; 353.87, subdivisions 2, 3, 4; 353D.071; 353G.01, subdivision 10; 356.635, subdivisions 3, 4, 5, 6, 7, 8, 9a, 10, 11, 12, 13; 424A.01, subdivision 5a; Minnesota Statutes 2023 Supplement, sections 353.335, subdivision 2; 353G.01, subdivisions 7a, 8a; 353G.02, subdivision 6; 353G.08, subdivision 3; 353G.11, subdivisions 1, 1a, 3, 4; 353G.112; 353G.121.

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

ARTICLE 1

TEACHER PENSIONS

Section 1.

Minnesota Statutes 2023 Supplement, section 354.05, subdivision 38, is amended to read:

Subd. 38.

Normal retirement age.

"Normal retirement age" means age 65 for a person who first became a member of the association or a member of a pension fund listed in section 356.30, subdivision 3, before July 1, 1989. Through June 30, deleted text begin 2025 deleted text end new text begin 2024 new text end , for a person who first becomes a member of the association after June 30, 1989, normal retirement age means the higher of age 65 or "retirement age," as defined in United States Code, title 42, section 416(l), as amended, but not to exceed age 66. Beginning July 1, deleted text begin 2025 deleted text end new text begin 2024 new text end , normal retirement age for all members means age 65.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from May 24, 2023, and applies to members and any former teacher if the former teacher is not receiving a retirement annuity under Minnesota Statutes, section 354.44, has returned to covered service, and has earned at least one-half year of credited service following the return to covered service, notwithstanding Minnesota Statutes, section 354.44, subdivision 9. new text end

Sec. 2.

Minnesota Statutes 2022, section 354.44, subdivision 9, is amended to read:

Subd. 9.

Determining applicable law.

new text begin An annuity under this chapter must be computed under the law in effect as of the date of termination of teaching service. new text end A former teacher who returns to covered service following a termination and who is not receiving a retirement annuity under this section must have earned at least one-half year of credited service following the return to covered service to be eligible for improved benefits resulting from any law change enacted subsequent to that termination.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2023 Supplement, section 354A.12, subdivision 1, is amended to read:

Subdivision 1.

Employee contributions.

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

	Program	Percentage of Total Salary
	basic program after June 30, 2016, through June 30, 2023		10 deleted text begin percent deleted text end
	basic program after June 30, 2023, through June 30, deleted text begin 2025 deleted text end new text begin 2024 new text end		10.25 deleted text begin percent deleted text end
	new text begin basic program after June 30, 2024, through June 30, 2025 new text end		new text begin 10 new text end
	new text begin basic program after June 30, 2025, through June 30, 2026 new text end		new text begin 11.25 new text end
	basic program after June 30, deleted text begin 2025 deleted text end new text begin 2026 new text end		11.5 deleted text begin percent deleted text end
	coordinated program after June 30, 2016, through June 30, 2023		7.5 deleted text begin percent deleted text end
	coordinated program after June 30, 2023, through June 30, deleted text begin 2025 deleted text end new text begin 2024 new text end		7.75 deleted text begin percent deleted text end
	new text begin coordinated program after June 30, 2024, through June 30, 2025 new text end		new text begin 7.5 new text end
	new text begin coordinated program after June 30, 2025, through June 30, 2026 new text end		new text begin 8.75 new text end
	coordinated program after June 30, deleted text begin 2025 deleted text end new text begin 2026 new text end		9 deleted text begin percent deleted text end

(b) Contributions must be made by deduction from salary and must be remitted directly to the deleted text begin St. Paul Teachers Retirement Fund deleted text end association at least once each month.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 4.

Minnesota Statutes 2022, section 354B.20, is amended by adding a subdivision to read:

new text begin Subd. 10a. new text end

new text begin IRAP to TRA transfer account. new text end

new text begin "IRAP to TRA transfer account" means the account established under section 354B.215, subdivision 11. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 5.

Minnesota Statutes 2022, section 354B.20, is amended by adding a subdivision to read:

new text begin Subd. 11a. new text end

new text begin Offset amount. new text end

new text begin "Offset amount" means the lesser of $10,000 or 25 percent of the cost to purchase the maximum past service credit by an eligible person under section 354B.215, subdivision 6, except that, if the eligible person elects to purchase, under section 354B.215, subdivision 6, paragraph (c), less than the maximum past service credit, the offset amount must not exceed the cost to purchase the amount of past service credit elected. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 6.

Minnesota Statutes 2022, section 354B.20, subdivision 18, is amended to read:

Subd. 18.

Teachers Retirement deleted text begin plan deleted text end new text begin Association new text end .

"Teachers Retirement deleted text begin plan deleted text end new text begin Association new text end " means the retirement plan established by chapter 354.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 7.

new text begin [354B.215] TEACHERS RETIREMENT ASSOCIATION COVERAGE FOR EMPLOYEES WHO DID NOT RECEIVE ELECTION TO TRANSFER. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this subdivision have the meanings given them, unless the context clearly indicates another meaning is intended. new text end

new text begin (b) "Executive director" means the executive director of the Teachers Retirement Association. new text end

new text begin (c) "Individual retirement account plan" means the individual retirement account plan governed by chapter 354B. new text end

new text begin (d) "Maximum past service credit" means service credit for the period beginning with the date the eligible person was first covered by the individual retirement account plan to the transfer date. new text end

new text begin (e) "Minnesota State" means the Minnesota State Colleges and Universities. new text end

new text begin (f) "Transfer date" means the date selected by the executive director under subdivision 5 for the purpose of preparing the estimates required by subdivision 5. new text end

new text begin Subd. 2. new text end

new text begin Authority to transfer coverage. new text end

new text begin Notwithstanding any provision of law to the contrary, an eligible person described in subdivision 3 is authorized to become a member of the Teachers Retirement Association and purchase service credit upon making an election under subdivision 6. new text end

new text begin Subd. 3. new text end

new text begin Eligible person. new text end

new text begin (a) An eligible person is a person who: new text end

new text begin (1) is employed by Minnesota State; new text end

new text begin (2) has an account in the individual retirement account plan; and new text end

new text begin (3) satisfies paragraph (b). new text end

new text begin (b) A person satisfies this paragraph if Minnesota State is not able to produce at least one of the following items by the end of the 60-day period under subdivision 4, paragraph (b): new text end

new text begin (1) a record indicating that the person received notice regarding the person's eligibility to elect prospective coverage by the Teachers Retirement Association within the election period under section 354B.211, subdivision 4 or 6, or its predecessor; new text end

new text begin (2) a record that the person elected retirement coverage by the individual retirement account plan; or new text end

new text begin (3) other credible documentation demonstrating that the person was aware of the person's right to elect retirement coverage by the Teachers Retirement Association. new text end

new text begin Subd. 4. new text end

new text begin Eligible person application; information required from Minnesota State. new text end

new text begin (a) To elect coverage by the Teachers Retirement Association, an eligible person must submit a written application to the chancellor on a form provided by Minnesota State. The application must include: new text end

new text begin (1) an attestation that the person was not informed of the right to elect a transfer from the individual retirement account plan to the Teachers Retirement Association and the person was unaware of the right to elect such a transfer; new text end

new text begin (2) the date on which the person first became a participant in the individual retirement account plan; new text end

new text begin (3) a signed release authorizing Minnesota State to provide employment and other personnel information to the Teachers Retirement Association; and new text end

new text begin (4) any other information that Minnesota State may require. new text end

new text begin (b) No later than 60 days after receipt of the application under paragraph (a), Minnesota State must verify the information provided by the person in the application, determine whether the person is an eligible person under subdivision 3, and provide a written response to the person regarding the determination of eligibility. If Minnesota State determines that the person is not an eligible person, Minnesota State must include a copy of any documentation identified in subdivision 3, paragraph (b), in its written response to the person. new text end

new text begin (c) If Minnesota State determines that the person is an eligible person under subdivision 3, Minnesota State must forward to the executive director: new text end

new text begin (1) the application; new text end

new text begin (2) confirmation or modification of the information provided by the eligible person in the application; new text end

new text begin (3) salary history for the eligible person; new text end

new text begin (4) an estimate of the amount available for transfer from the eligible person's account in the individual retirement account plan to the Teachers Retirement Association; and new text end

new text begin (5) any other relevant information. new text end

new text begin Subd. 5. new text end

new text begin Determination of service credit purchase amounts. new text end

new text begin (a) Upon receipt of the application and information under subdivision 4, the executive director must prepare estimates of the following as of a prospective transfer date selected by the executive director that is no later than 90 days after receiving the application and information under subdivision 4: new text end

new text begin (1) the purchase payment amount determined under section 356.551 to purchase the maximum past service credit; new text end

new text begin (2) the amount of service credit the eligible person would receive if the amount estimated under subdivision 4, paragraph (c), clause (4), is transferred to the Teachers Retirement Association and used to purchase service credit under section 356.551; new text end

new text begin (3) the purchase payment amount for additional years of service credit, if any, not to exceed the maximum past service credit; and new text end

new text begin (4) the offset amount attributable to the eligible person. new text end

new text begin (b) No later than 90 days after receiving the application and information under subdivision 4, the executive director must send a written communication to the eligible person with the amounts determined in paragraph (a) and inform Minnesota State of the offset amount. The executive director may charge the eligible person a reasonable fee to cover the costs of calculating the amounts required by paragraph (a). new text end

new text begin (c) Minnesota State must notify the eligible person and the executive director no later than 30 days after receiving notice of the offset amount from the executive director under paragraph (b) if there are sufficient funds in the IRAP to TRA transfer account to pay the full offset amount or, if there are not sufficient funds, the portion of the offset amount, if any, that will be paid. new text end

new text begin Subd. 6. new text end

new text begin Election to transfer coverage and purchase of service credit. new text end

new text begin (a) No later than 60 days after the executive director sends the written communication required by subdivision 5, the eligible person may elect to transfer coverage from the individual retirement account plan to the Teachers Retirement Association effective as of the transfer date. new text end

new text begin (b) If the eligible person elects to transfer coverage under paragraph (a), the available balance in the eligible person's account in the individual retirement account plan must be transferred to the Teachers Retirement Association, not to exceed the amount required by the Teachers Retirement Association to purchase the maximum past service credit, as adjusted for the offset amount, if any. new text end

new text begin (c) If the available balance in the eligible person's account in the individual retirement account plan plus the offset amount, if any, is less than the amount needed to cover the cost to purchase the maximum past service credit, the eligible person must: new text end

new text begin (1) direct the transfer of funds from the eligible person's account in the higher education supplemental retirement plan established under chapter 354C, from a source specified in section 356.441, subdivision 1, or from more than one of the foregoing sources in an amount, in total, sufficient to cover the rest of the cost to purchase the maximum past service credit; or new text end

new text begin (2) elect fewer years or partial years of service credit corresponding to the amount of service credit that may be purchased using the funds transferred from the individual retirement account plan, the offset amount, and if directed by the eligible person, funds from any of the sources described in clause (1). new text end

new text begin (d) Minnesota State must promptly initiate the transfer of funds or work with the eligible person to initiate the transfer of funds to the Teachers Retirement Association from the eligible person's account in the individual retirement account plan and, if directed by the eligible person under paragraph (c), from any other account over which Minnesota State has the authority to initiate or approve transfers when directed by a participant. new text end

new text begin (e) Unless the balance in the IRAP to TRA transfer account is zero, Minnesota State must direct a transfer to the Teachers Retirement Association of an amount that is equal to the offset amount attributable to the eligible person. If the balance in the IRAP to TRA transfer account is less than the amount needed to transfer the offset amount, Minnesota State must direct a transfer of the remaining balance in the IRAP to TRA transfer account to the Teachers Retirement Association. new text end

new text begin Subd. 7. new text end

new text begin Commencement of membership in the Teachers Retirement Association. new text end

new text begin (a) Upon receipt by the Teachers Retirement Association of the transfer or transfers under subdivision 6, the eligible person's membership in the Teachers Retirement Association commences effective as of the transfer date and the executive director must grant past service credit to the eligible person. new text end

new text begin (b) The executive director may adjust the amount of past service credit granted to the eligible person as necessary to ensure that the Teachers Retirement Association does not receive less than required to cover the cost of the past service credit granted. new text end

new text begin (c) Upon membership commencement, the eligible person ceases to be an active participant in the individual retirement account plan. new text end

new text begin (d) Upon membership commencement, the person's membership status is irrevocable. Neither Minnesota State nor the Teachers Retirement Association may seek to revoke the eligible person's membership status due to events, including but not limited to Minnesota State producing documentation that would have previously disqualified the person as an eligible person under subdivision 3. new text end

new text begin Subd. 8. new text end

new text begin Service credit for vesting. new text end

new text begin The Teachers Retirement Association must grant service credit to the eligible person for all years or partial years of service with Minnesota State for the purpose of vesting in a retirement annuity under section 354.44 or in a retirement benefit under section 354.46 or 354.48. new text end

new text begin Subd. 9. new text end

new text begin Notice to employees. new text end

new text begin No later than March 31, 2025, and periodically thereafter, Minnesota State must provide notice to all employees summarizing this section and offer assistance to any eligible person who wishes to elect to transfer coverage from the individual retirement account plan to the Teachers Retirement Association. Minnesota State must designate personnel responsible for assisting employees with the requirements of this section. The notice must identify these personnel and provide their contact information. new text end

new text begin Subd. 10. new text end

new text begin Annual report required. new text end

new text begin The chancellor and the executive director must submit an annual report to the Legislative Commission on Pensions and Retirement stating the number of employees who elected a transfer during the prior calendar year. Without identifying any eligible person, the report must include for each eligible person the total amount transferred by the eligible person from the eligible person's account in the individual retirement account plan and other sources to purchase past service credit and the offset amount, if any. The report must be submitted to the Legislative Commission on Pensions and Retirement no later than January 31 of each year. new text end

new text begin Subd. 11. new text end

new text begin IRAP to TRA transfer account created. new text end

new text begin (a) The IRAP to TRA transfer account is created in the special revenue fund. new text end

new text begin (b) Minnesota State must use the money in the IRAP to TRA transfer account established under paragraph (a) to transfer amounts required by subdivision 6, paragraph (e), until the balance in the account is zero. new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) Subdivisions 1 to 10 are effective January 1, 2025. new text end

new text begin (b) Subdivision 11 is effective July 1, 2024. new text end

Sec. 8.

Laws 2022, chapter 65, article 3, section 1, subdivision 2, is amended to read:

Subd. 2.

deleted text begin Three-year deleted text end new text begin Temporary new text end suspension of earnings limitation for teachers covered by TRA and SPTRFA.

(a) Notwithstanding Minnesota Statutes, section 354.44, subdivision 5, no portion of a reemployed teacher's annuity paid under Minnesota Statutes, chapter 354, shall be deferred regardless of the amount of the salary earned from the teaching service during the preceding fiscal year. This paragraph applies only to salary earned during fiscal years 2022, 2023, deleted text begin and deleted text end 2024 new text begin , 2025, 2026, and 2027 new text end and annuity payments made during calendar years 2023, 2024, deleted text begin and deleted text end 2025 new text begin , 2026, 2027, and 2028 new text end .

(b) Notwithstanding Minnesota Statutes, section 354A.31, subdivision 3, no portion of a reemployed teacher's annuity paid under Minnesota Statutes, chapter 354A, shall be deferred or forfeited regardless of the amount of the salary earned from the teaching service during the preceding calendar year. This deleted text begin subdivision deleted text end new text begin paragraph new text end applies only to salary earned during calendar years 2022, 2023, deleted text begin and deleted text end 2024 new text begin , 2025, 2026, and 2027 new text end and annuity payments made during calendar years 2023, 2024, deleted text begin and deleted text end 2025 new text begin , 2026, 2027, and 2028 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 9.

Laws 2022, chapter 65, article 3, section 1, subdivision 3, is amended to read:

Subd. 3.

Expiration date.

This section expires effective January 1, deleted text begin 2026 deleted text end new text begin 2029 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 2

VOLUNTEER FIREFIGHTER RELIEF ASSOCIATIONS

Section 1.

Minnesota Statutes 2022, section 424A.001, subdivision 4, is amended to read:

Subd. 4.

Relief association.

(a) "Relief association" or " deleted text begin volunteer deleted text end firefighters relief association" means a deleted text begin volunteer deleted text end firefighters relief association deleted text begin or a volunteer firefighters division or account of a partially salaried and partially volunteer firefighters relief association deleted text end that is:

(1) organized and incorporated as a nonprofit corporation to provide retirement benefits to volunteer firefighters new text begin and paid on-call firefighters new text end under chapter 317A and any laws of the state;

(2) governed by this chapter and sections 424A.091 to 424A.095; and

(3) directly associated with:

(i) a fire department established by municipal ordinance;

(ii) an independent nonprofit firefighting corporation that is organized under the provisions of chapter 317A and that operates primarily for firefighting purposes; or

(iii) a fire department operated as or by a joint powers entity that operates primarily for firefighting purposes.

(b) "Relief association" or " deleted text begin volunteer deleted text end firefighters relief association" does not mean:

(1) the Bloomington Fire Department Relief Association governed by Laws 2013, chapter 111, article 5, sections 31 to 42; Minnesota Statutes 2000, chapter 424; and Laws 1965, chapter 446, as amended; or

(2) the statewide volunteer firefighter plan governed by chapter 353G.

(c) A relief association or deleted text begin volunteer deleted text end firefighters relief association is a governmental entity that receives and manages public money to provide retirement benefits for individuals providing the governmental services of firefighting and emergency first response.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 2.

Minnesota Statutes 2022, section 424A.001, subdivision 5, is amended to read:

Subd. 5.

Special fund.

"Special fund" means the special fund of a deleted text begin volunteer deleted text end firefighters relief association deleted text begin or the account for volunteer firefighters within the special fund of a partially salaried and partially volunteer firefighters relief association deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 3.

Minnesota Statutes 2022, section 424A.001, subdivision 8, is amended to read:

Subd. 8.

Firefighting service.

"Firefighting service deleted text begin , deleted text end " deleted text begin if the applicable municipality approves for a fire department that is a municipal department, or if the applicable contracting municipality or municipalities approve for a fire department that is an independent nonprofit firefighting corporation, includes fire department service rendered deleted text end new text begin means duties performed by firefighters and, if approved by the appropriate municipality or municipalities, duties performed new text end by fire prevention personnel.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 4.

Minnesota Statutes 2022, section 424A.001, subdivision 9, is amended to read:

Subd. 9.

Separate from active service.

"Separate from active service" means that a firefighter permanently ceases to perform fire suppression duties deleted text begin with a particular volunteer fire department, permanently ceases to perform deleted text end new text begin and new text end fire prevention duties new text begin and new text end , permanently ceases to supervise fire suppression deleted text begin duties deleted text end , and deleted text begin permanently ceases to supervise deleted text end fire prevention duties new text begin with a particular fire department new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 5.

Minnesota Statutes 2022, section 424A.001, is amended by adding a subdivision to read:

new text begin Subd. 9b. new text end

new text begin Firefighter. new text end

new text begin "Firefighter" means a person who is a volunteer firefighter, paid on-call firefighter, part-time firefighter, full-time firefighter, career firefighter, or any combination thereof. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 6.

Minnesota Statutes 2022, section 424A.001, subdivision 10, is amended to read:

Subd. 10.

Volunteer firefighter.

"Volunteer firefighter" means a deleted text begin person deleted text end new text begin firefighter new text end who deleted text begin is a member of the applicable fire department or the independent nonprofit firefighting corporation deleted text end new text begin does not receive compensation per call or hour for firefighting services but who may receive reimbursement for expenses, who has a choice of availability in providing services with the fire department, new text end and new text begin who new text end is eligible for membership in deleted text begin the applicable deleted text end new text begin a new text end relief association deleted text begin and: deleted text end new text begin associated with the fire department or participates in the statewide volunteer firefighter plan under chapter 353G. new text end

deleted text begin (i) is engaged in providing emergency response services or delivering fire education or prevention services as a member of a fire department; deleted text end

deleted text begin (ii) is trained in or is qualified to provide fire suppression duties or to provide fire prevention duties under subdivision 8; and deleted text end

deleted text begin (iii) meets any other minimum firefighter and service standards established by the fire department or specified in the articles of incorporation or bylaws of the relief association. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 7.

Minnesota Statutes 2022, section 424A.001, is amended by adding a subdivision to read:

new text begin Subd. 10a. new text end

new text begin Paid on-call firefighter. new text end

new text begin "Paid on-call firefighter" means a firefighter who receives compensation per call or per hour for firefighting services, who has a choice of availability regarding the firefighter's hours or scheduled shifts in providing services with the fire department, and who is eligible for membership in a relief association associated with the fire department or participates in the statewide volunteer firefighter plan under chapter 353G. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 8.

Minnesota Statutes 2022, section 424A.001, is amended by adding a subdivision to read:

new text begin Subd. 10b. new text end

new text begin Part-time firefighter. new text end

new text begin "Part-time firefighter" means a firefighter who receives compensation per call or per hour for firefighting services, whose services with the fire department are scheduled, who is considered by the firefighter's employer to be in part-time employment, and who, as a result of providing firefighting services, is a member or is eligible to be a member of the general employees retirement plan or the public employees police and fire plan under chapter 353. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 9.

Minnesota Statutes 2022, section 424A.001, is amended by adding a subdivision to read:

new text begin Subd. 10c. new text end

new text begin Full-time firefighter or career firefighter. new text end

new text begin "Full-time firefighter" or "career firefighter" means a firefighter who receives compensation per hour or a salary for firefighting services, whose services with the fire department are scheduled and who, as a result of providing firefighting services, is a member or is eligible to be a member of the general employees retirement plan or the public employees police and fire plan under chapter 353. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 10.

Minnesota Statutes 2022, section 424A.003, is amended to read:

424A.003 CERTIFICATION OF SERVICE CREDIT.

(a) When a municipal fire department, a joint powers fire department, or an independent nonprofit firefighting corporation is directly associated with deleted text begin the volunteer deleted text end new text begin a new text end firefighters relief association, the fire chief shall certify annually by March 31 the service credit for the previous calendar year of each volunteer firefighter new text begin and paid on-call firefighter new text end rendering active service with the fire department.

(b) The certification shall be made to an officer of the relief association's board of trustees and to the municipal clerk or clerk-treasurer of the largest municipality in population served by the associated fire department.

(c) The fire chief shall notify each volunteer firefighter new text begin and paid on-call firefighter new text end rendering active service with the fire department of the amount of service credit rendered by the firefighter for the previous calendar year. Upon request, the fire chief shall provide the firefighter with a written explanation and documentation to support the determination of service credit. The service credit notification and a description of the process and deadlines for the firefighter to challenge the fire chief's determination of service credit must be provided to the firefighter at least 21 days prior to its certification to the relief association and municipality. If the service credit amount is challenged, the fire chief shall accept and consider any additional pertinent information and shall make a final determination of service credit.

(d) The service credit certification must be expressed as the number of completed months of the previous year during which an active volunteer firefighter new text begin or paid on-call firefighter new text end rendered at least the minimum level of duties as specified and required by the fire department under the rules, regulations, and policies applicable to the fire department. No more than one year of service credit may be certified for a calendar year.

(e) If a volunteer firefighter new text begin or paid on-call firefighter new text end who is a member of the relief association leaves active firefighting service to render active military service that is required to be governed by the federal Uniformed Services Employment and Reemployment Rights Act, as amended, the firefighter must be certified as providing service credit for the period of the military service, up to the applicable limit of the federal Uniformed Services Employment and Reemployment Rights Act. If the volunteer firefighter new text begin or paid on-call firefighter new text end does not return from the military service in compliance with the federal Uniformed Services Employment and Reemployment Rights Act, the service credits applicable to that military service credit period are forfeited and canceled at the end of the calendar year in which the time limit set by federal law occurs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 11.

Minnesota Statutes 2022, section 424A.01, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Minors deleted text end new text begin Membership eligibility new text end .

deleted text begin No volunteer deleted text end new text begin (a) A firefighter or any volunteer emergency medical personnel is eligible for membership in a new text end firefighters relief association deleted text begin associated with a deleted text end new text begin if the firefighter or volunteer emergency medical personnel satisfies the requirements of paragraph (b) or (c), as applicable, and is not otherwise prohibited from membership under this chapter. new text end

new text begin (b) To be eligible for membership in a relief association, a firefighter must be a member of the fire department and: new text end

new text begin (1) provide services as a volunteer firefighter or as a paid on-call firefighter, although the firefighter need not exclusively provide services as either a volunteer firefighter or a paid on-call firefighter; new text end

new text begin (2) be engaged in providing emergency response services or delivering fire education or prevention services as a member of a fire department; new text end

new text begin (3) be trained in or qualified to provide fire suppression duties or to provide fire prevention duties; and new text end

new text begin (4) meet any other minimum firefighter and service standards established by the fire department or specified in the articles of incorporation or bylaws of the firefighters relief association. new text end

new text begin (c) A volunteer emergency medical personnel is eligible to be a member of the firefighters relief association and to qualify for a service pension or other benefit coverage of the relief association on the same basis as fire department personnel who perform or supervise fire suppression or fire prevention duties if: new text end

new text begin (1) the fire department employs or otherwise uses the services of the person solely as volunteer emergency medical personnel to perform emergency medical response duties or supervise emergency medical response activities; new text end

new text begin (2) the bylaws of the firefighters relief association authorize the volunteer emergency medical personnel's eligibility; and new text end

new text begin (3) the volunteer emergency medical personnel's eligibility is approved by: new text end

new text begin (i) the new text end municipality, deleted text begin a deleted text end new text begin if the fire department is a municipal department; new text end

new text begin (ii) the new text end joint powers deleted text begin entity deleted text end new text begin board new text end , new text begin if the fire department is a joint powers entity; new text end or

new text begin (iii) the contracting municipality or municipalities, if the fire department is new text end an independent nonprofit firefighting corporation deleted text begin may include as a deleted text end new text begin . new text end

new text begin (d) Minors are prohibited from membership in a firefighters new text end relief association deleted text begin member a minor serving as a volunteer firefighter deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 12.

Minnesota Statutes 2022, section 424A.01, subdivision 2, is amended to read:

Subd. 2.

Status of substitute deleted text begin volunteer deleted text end firefighters.

No person who is serving as a substitute deleted text begin volunteer deleted text end firefighter may be considered to be a firefighter for purposes of chapter 477B or this chapter and no substitute deleted text begin volunteer deleted text end firefighter is authorized to be a member of any deleted text begin volunteer deleted text end firefighters relief association governed by chapter 477B or this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 13.

Minnesota Statutes 2022, section 424A.01, subdivision 5, is amended to read:

Subd. 5.

Fire prevention personnel.

(a) If the applicable municipality or municipalities approve, the fire department may employ or otherwise utilize the services of persons as deleted text begin volunteer deleted text end firefighters to perform fire prevention duties and to supervise fire prevention activities.

(b) deleted text begin Personnel deleted text end new text begin Volunteer firefighters and paid on-call firefighters new text end serving in fire prevention positions are eligible to be members of the applicable deleted text begin volunteer firefighter deleted text end new text begin firefighters new text end relief association and to qualify for service pension or other benefit coverage of the relief association on the same basis as fire department personnel who perform fire suppression duties.

(c) deleted text begin Personnel deleted text end new text begin Volunteer firefighters and paid on-call firefighters new text end serving in fire prevention positions also are eligible to receive any other benefits under the applicable law or practice for services on the same basis as personnel who are employed to perform fire suppression duties.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 14.

Minnesota Statutes 2022, section 424A.015, subdivision 1, is amended to read:

Subdivision 1.

Separation from active service; exception.

(a) No service pension is payable to a person while the person remains an active member of the respective fire department, and a person who is receiving a service pension is not entitled to receive any other benefits from the special fund of the relief association.

(b) No relief association as defined in section 424A.001, subdivision 4, may pay a service pension or disability benefit to a former member of the relief association if that person has not separated from active service with the fire department to which the relief association is directly associated, unless:

(1) the person discontinues volunteer firefighter new text begin and paid on-call firefighter new text end duties with the fire department and performs duties within the fire department on a new text begin part-time or new text end full-time basis;

(2) the governing body of the municipality, of the independent nonprofit firefighting corporation, or of the joint powers entity has filed its determination with the board of trustees of the relief association that the person's experience with and service to the fire department in that person's new text begin part-time or new text end full-time capacity would be difficult to replace; and

(3) the bylaws of the relief association were amended to provide for the payment of a service pension or disability benefit for such new text begin part-time or new text end full-time employees.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 15.

Minnesota Statutes 2022, section 424A.015, subdivision 5, is amended to read:

Subd. 5.

Minnesota deferred compensation plan transfers.

A relief association may directly transfer on an institution-to-institution basis the eligible member's lump-sum pension amount to the requesting member's account in the Minnesota deferred compensation plan, if:

(1) the governing articles of incorporation or bylaws so provide;

(2) the deleted text begin volunteer deleted text end firefighter participates in the Minnesota deferred compensation plan at the time of retirement; and

(3) the applicable retiring firefighter requests in writing that the relief association do so.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 16.

Minnesota Statutes 2022, section 424A.015, subdivision 7, is amended to read:

Subd. 7.

Combined service pensions.

(a) A member with credit for service as an active firefighter in more than one deleted text begin volunteer deleted text end firefighters relief association is entitled to a service pension from each participating relief association if:

(1) the articles of incorporation or bylaws of the relief associations provide for such combined service pensions;

(2) the applicable requirements of paragraphs (b) to (e) are met; and

(3) the member otherwise qualifies.

(b) A member receiving a service pension under this subdivision must be at least partially vested under the bylaws of the first participating relief association on the date on which the member terminates active service with that relief association. The service pension paid from the first participating relief association shall be based on the years of active service accrued in the first relief association and the vesting percentage applicable to those years of active service.

(c) To receive a service pension from each subsequent relief association, the member must be at least partially vested under the bylaws of the subsequent relief association, taking into consideration the member's total service credit accrued in all participating relief associations to the date the member terminates active service with the subsequent relief association. The service pension paid from each subsequent relief association shall be based on the years of active service accrued solely in that relief association and the vesting percentage applicable to the combined amount of total service credit accrued in all of the participating relief associations.

(d) The member must have one or more years of service credit in each participating relief association. The service pension must be based on:

(1) for defined benefit relief associations, the service pension amount in effect for the relief association on the date on which the member's active deleted text begin volunteer deleted text end firefighting services covered by that relief association terminate; and

(2) for defined contribution relief associations, the member's individual account balance on the date on which the member's active deleted text begin volunteer deleted text end firefighting services covered by that relief association terminate.

(e) To receive a service pension under this subdivision, the member must become a member of the subsequent relief association within two years of the date of termination of active service with the prior relief association. If requested by the member or a subsequent relief association, the secretary of each prior relief association must provide written notice to the member and the subsequent relief association regarding the amount of active service accrued by the member in the prior relief association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 17.

Minnesota Statutes 2022, section 424A.016, subdivision 2, is amended to read:

Subd. 2.

Defined contribution service pension eligibility.

(a) A relief association, when its articles of incorporation or bylaws so provide, may pay out of the assets of its special fund a defined contribution service pension to each of its members who:

(1) separates from active service with the fire department;

(2) reaches age 50;

(3) completes at least five years of active service as an active member of the fire department to which the relief association is associated;

(4) completes at least five years of active membership with the relief association before separation from active service; and

(5) complies with any additional conditions as to age, service, and membership that are prescribed by the bylaws of the relief association.

(b) In the case of a member who has completed at least five years of active service as an active member of the fire department to which the relief association is associated on the date that the relief association is established and incorporated, the requirement that the member complete at least five years of active membership with the relief association before separation from active service may be waived by the board of trustees of the relief association if the member completes at least five years of inactive membership with the relief association before the date of the payment of the service pension. During the period of inactive membership, the member is not entitled to receive any disability benefit coverage, is not entitled to receive additional individual account allocation of fire state aid or municipal contribution deleted text begin towards deleted text end new text begin toward new text end a service pension, and is considered to have the status of a person entitled to a deferred service pension.

(c) The service pension earned by a deleted text begin volunteer deleted text end new text begin firefighter new text end under this chapter and the articles of incorporation and bylaws of the relief association may be paid whether or not the municipality or independent nonprofit firefighting corporation to which the relief association is associated qualifies for the receipt of fire state aid under chapter 477B.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 18.

Minnesota Statutes 2022, section 424A.016, subdivision 6, is amended to read:

Subd. 6.

Deferred service pensions.

(a) A "deferred member" means a member of a relief association who has separated from active service and membership and has completed the minimum service and membership requirements in subdivision 2. The requirement that a member separate from active service and membership is waived for persons who have discontinued their volunteer firefighter new text begin and paid on-call firefighter new text end duties and who are employed on a new text begin part-time or new text end full-time basis under section 424A.015, subdivision 1.

(b) A deferred member is entitled to receive a deferred service pension when the member reaches at least age 50, or at least the minimum age specified in the bylaws governing the relief association if that age is greater than age 50, and makes a valid written application.

(c) A defined contribution relief association must credit interest or additional investment performance on the deferred lump-sum service pension during the period of deferral for all deferred members on or after January 1, 2021. A defined contribution relief association may specify in its bylaws the method by which it will credit interest or additional investment performance to the accounts of deferred members. Such method shall be limited to one of the three methods provided in this paragraph. In the event the bylaws do not specify a method, the interest or additional investment performance must be credited using the method defined in clause (3). The permissible methods are:

(1) at the investment performance rate actually earned on that portion of the assets if the deferred benefit amount is invested by the relief association in a separate account established and maintained by the relief association;

(2) at the investment performance rate actually earned on that portion of the assets if the deferred benefit amount is invested in a separate investment vehicle held by the relief association; or

(3) at the investment return on the assets of the special fund of the defined contribution deleted text begin volunteer firefighters deleted text end relief association in proportion to the share of the assets of the special fund to the credit of each individual deferred member account deleted text begin through the accounting date on which the investment return is recognized by and credited to the special fund deleted text end .

(d) Notwithstanding the requirements of section 424A.015, subdivision 6, bylaw amendments made in accordance with paragraph (c) on or before January 1, 2022, shall apply to members already in deferred status as of January 1, 2021.

(e) Unless the bylaws provide differently, deleted text begin the dates that will be used by a relief association in determining the creditable amount of deleted text end interest or additional investment performance deleted text begin on a deleted text end new text begin must be allocated to each deferred member account beginning on the date that the member separates from active service and membership and ending on the last date that the deferred member account is valued before the final distribution of the new text end deferred service pension deleted text begin shall be as follows: deleted text end new text begin . new text end

deleted text begin (1) for a relief association that has elected to credit interest or additional investment performance under paragraph (c), clause (1) or (3), beginning on the date that the member separates from active service and membership and ending on the accounting date immediately before the deferred member commences receipt of the deferred service pension; or deleted text end

deleted text begin (2) for a relief association that has elected to credit interest or additional investment performance under paragraph (c), clause (2), beginning on the date that the member separates from active service and membership and ending on the date that the separate investment vehicle is valued immediately before the date on which the deferred member commences receipt of the deferred service pension. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 19.

Minnesota Statutes 2022, section 424A.02, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

(a) A defined benefit relief association, when its articles of incorporation or bylaws so provide, may pay out of the assets of its special fund a defined benefit service pension to each of its members who: (1) separates from active service with the fire department; (2) reaches age 50; (3) completes at least five years of active service as an active member of the fire department to which the relief association is associated; (4) completes at least five years of active membership with the relief association before separation from active service; and (5) complies with any additional conditions as to age, service, and membership that are prescribed by the bylaws of the relief association. A service pension computed under this section may be prorated monthly for fractional years of service as the bylaws or articles of incorporation of the relief association so provide. The bylaws or articles of incorporation may define a "month," but the definition must require a calendar month to have at least 16 days of active service. If the bylaws or articles of incorporation do not define a "month," a "month" is a completed calendar month of active service measured from the member's date of entry to the same date in the subsequent month. The service pension earned by a deleted text begin volunteer deleted text end firefighter under this chapter and the articles of incorporation and bylaws of the deleted text begin volunteer deleted text end firefighters relief association may be paid whether or not the municipality or independent nonprofit firefighting corporation to which the relief association is associated qualifies for the receipt of fire state aid under chapter 477B.

(b) In the case of a member who has completed at least five years of active service as an active member of the fire department to which the relief association is associated on the date that the relief association is established and incorporated, the requirement that the member complete at least five years of active membership with the relief association before separation from active service may be waived by the board of trustees of the relief association if the member completes at least five years of inactive membership with the relief association before the date of the payment of the service pension. During the period of inactive membership, the member is not entitled to receive disability benefit coverage, is not entitled to receive additional service credit deleted text begin towards deleted text end new text begin toward new text end computation of a service pension, and is considered to have the status of a person entitled to a deferred service pension under subdivision 7.

(c) No municipality, independent nonprofit firefighting corporation, or joint powers entity may delegate the power to take final action in setting a service pension or ancillary benefit amount or level to the board of trustees of the relief association or to approve in advance a service pension or ancillary benefit amount or level equal to the maximum amount or level that this chapter would allow rather than a specific dollar amount or level.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 20.

Minnesota Statutes 2022, section 424A.02, subdivision 3, is amended to read:

Subd. 3.

Determining maximum pension benefit.

(a) Except as provided in paragraph (b) and section 424B.22, subdivision 4, a defined benefit relief association may not set in its bylaws a service pension amount above the following maximum amounts:

(1) for a defined benefit relief association in which the governing bylaws provide for a monthly service pension, the maximum monthly service pension amount per month for each year of service credited is the lesser of $100 or the maximum monthly service pension amount that could be adopted by the relief association as a bylaws amendment that satisfies section 424A.093, subdivision 6, paragraph (d); and

(2) for a defined benefit relief association in which the governing bylaws provide for a lump-sum service pension, the maximum lump-sum service pension amount for each year of service credited is the lesser of $15,000 or the maximum lump-sum service pension amount that could be adopted by the relief association as a bylaws amendment that satisfies section 424A.092, subdivision 6, paragraph (e).

(b) A defined benefit relief association may set in its bylaws a service pension amount that is not greater than the maximum amounts in clause (1) or (2), as applicable, but only if the service pension amount has been ratified by the municipality.

(1) For a defined benefit relief association that pays a monthly service pension, the maximum monthly service pension amount per month for each year of service credited is $100.

(2) For a defined benefit relief association that pays a lump-sum service pension, the maximum lump-sum service pension amount for each year of service credited is $15,000.

(c) The method of calculating service pensions must be applied uniformly for all years of active service. Credit must be given for all years of active service, unless the bylaws of the relief association provide that service credit is not given for:

(1) years of active service in excess of caps on service credit; or

(2) years of active service earned by a former member who:

(i) has ceased duties as a volunteer firefighter new text begin and paid on-call firefighter new text end with the fire department before becoming vested under subdivision 2; and

(ii) has not resumed active service with the fire department and active membership in the relief association for a period as defined in the relief association's bylaws, of not less than five years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 21.

Minnesota Statutes 2022, section 424A.02, subdivision 7, is amended to read:

Subd. 7.

Deferred service pensions.

(a) A member of a defined benefit relief association is entitled to a deferred service pension if the member separates from active service and membership and has completed the minimum service and membership requirements in subdivision 1. The requirement that a member separate from active service and membership is waived for persons who have discontinued their volunteer firefighter new text begin and paid on-call firefighter new text end duties and who are employed on a new text begin part-time or new text end full-time basis under section 424A.015, subdivision 1.

(b) The deferred service pension is payable when the former member reaches at least age 50, or at least the minimum age specified in the bylaws governing the relief association if that age is greater than age 50, and when the former member makes a valid written application.

(c) A defined benefit relief association that provides a lump-sum service pension governed by subdivision 2c may, when its governing bylaws so provide, credit interest on the deferred lump-sum service pension during the period of deferral. If provided for in the bylaws, interest must be credited in one of the following manners:

(1) at the investment performance rate actually earned on that portion of the assets if the deferred benefit amount is invested by the relief association in a separate account established and maintained by the relief association;

(2) at the investment performance rate actually earned on that portion of the assets if the deferred benefit amount is invested in a separate investment vehicle held by the relief association; or

(3) at an interest rate of up to five percent, compounded annually, as set by the board of trustees.

(d) Any change in the interest rate set by the board of trustees under paragraph (c), clause (3), must be ratified by the governing body of the municipality or joint powers entity served by the fire department to which the relief association is directly associated, or by the independent nonprofit firefighting corporation, as applicable.

(e) Interest under paragraph (c), clause (3), is credited beginning on the January 1 next following the date on which the deferred service pension interest rate as set by the board of trustees was ratified by the governing body of the municipality or joint powers entity served by the fire department to which the relief association is directly associated, or by the independent nonprofit firefighting corporation, as applicable.

(f) Unless the bylaws of a relief association that has elected to credit interest or additional investment performance on deferred lump-sum service pensions under paragraph (c) specifies a different interest or additional investment performance method, including the interest or additional investment performance period starting date and ending date, the interest or additional investment performance on a deferred service pension is creditable as follows:

(1) for a relief association that has elected to credit interest or additional investment performance under paragraph (c), clause (1) or (3), beginning on the first day of the month next following the date on which the member separates from active service and membership and ending on the last day of the month immediately before the month in which the deferred member commences receipt of the deferred service pension; or

(2) for a relief association that has elected to credit interest or additional investment performance under paragraph (c), clause (2), beginning on the date that the member separates from active service and membership and ending on the date that the separate investment vehicle is valued immediately before the date on which the deferred member commences receipt of the deferred service pension.

(g) For a deferred service pension that is transferred to a separate account established and maintained by the relief association or separate investment vehicle held by the relief association, the deferred member bears the full investment risk subsequent to transfer and in calculating the accrued liability of the deleted text begin volunteer deleted text end firefighters relief association that pays a lump-sum service pension, the accrued liability for deferred service pensions is equal to the separate relief association account balance or the fair market value of the separate investment vehicle held by the relief association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 22.

Minnesota Statutes 2022, section 424A.02, subdivision 9, is amended to read:

Subd. 9.

Limitation on ancillary benefits.

A defined benefit relief association deleted text begin , including any volunteer firefighters relief association governed by Laws 2013, chapter 111, article 5, sections 31 to 42, or any volunteer firefighters division of a relief association governed by chapter 424, deleted text end new text begin and the Bloomington Fire Department Relief Association new text end may only pay ancillary benefits deleted text begin which deleted text end new text begin that new text end would constitute an authorized disbursement as specified in section 424A.05 subject to the following requirements or limitations:

(1) with respect to a defined benefit relief association in which governing bylaws provide solely for a lump-sum service pension to a retiring member, or provide a retiring member the choice of either a lump-sum service pension or a monthly service pension and the lump-sum service pension was chosen, no ancillary benefit may be paid to any former member or paid to any person on behalf of any former member after the former member (i) terminates active service with the fire department and active membership in the relief association; and (ii) commences receipt of a service pension as authorized under this section; and

(2) with respect to any defined benefit relief association, no ancillary benefit paid or payable to any member, to any former member, or to any person on behalf of any member or former member, may exceed in amount the total earned service pension of the member or former member. The total earned service pension must be calculated by multiplying the service pension amount specified in the bylaws of the relief association at the time of death or disability, whichever applies, by the years of service credited to the member or former member. The years of service must be determined as of (i) the date the member or former member became entitled to the ancillary benefit; or (ii) the date the member or former member died entitling a survivor or the estate of the member or former member to an ancillary benefit. The ancillary benefit must be calculated without regard to whether the member had attained the minimum amount of service and membership credit specified in the governing bylaws. For active members, the amount of a permanent disability benefit or a survivor benefit must be equal to the member's total earned service pension except that the bylaws of a defined benefit relief association may provide for the payment of a survivor benefit in an amount not to exceed five times the yearly service pension amount specified in the bylaws on behalf of any member who dies before having performed five years of active service in the fire department with which the relief association is affiliated. For deferred members, the amount of a permanent disability benefit or a survivor benefit must be calculated using the service pension amount in effect on the date specified in section 424A.015, subdivision 6, unless the bylaws of the relief association specify a different service pension amount to be used for the calculation.

(3)(i) If a lump sum survivor or death benefit is payable under the articles of incorporation or bylaws, the benefit must be paid:

(A) as a survivor benefit to the surviving spouse of the deceased firefighter;

(B) as a survivor benefit to the surviving children of the deceased firefighter if no surviving spouse;

(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no surviving spouse or surviving children; or

(D) as a death benefit to the estate of the deceased active or deferred firefighter if no surviving children and no beneficiary designated.

(ii) If there are no surviving children, the surviving spouse may waive, in writing, wholly or partially, the spouse's entitlement to a survivor benefit.

(4)(i) If a monthly benefit survivor or death benefit is payable under the articles of incorporation or bylaws, the benefit must be paid:

(A) as a survivor benefit to the surviving spouse of the deceased firefighter;

(B) as a survivor benefit to the surviving children of the deceased firefighter if no surviving spouse;

(C) as a survivor benefit to a designated beneficiary of the deceased firefighter if no surviving spouse or surviving children; or

(D) as a death benefit to the estate of the deceased active or deferred firefighter if no surviving spouse, no surviving children, and no beneficiary designated.

(ii) If there are no surviving children, the surviving spouse may waive, in writing, wholly or partially, the spouse's entitlement to a survivor benefit.

(iii) For purposes of this clause, if the relief association bylaws authorize a monthly survivor benefit payable to a designated beneficiary, the relief association bylaws may limit the total survivor benefit amount payable.

(5) For purposes of this section, for a monthly benefit deleted text begin volunteer fire deleted text end new text begin firefighters new text end relief association or for a combination lump-sum and monthly benefit deleted text begin volunteer fire deleted text end new text begin firefighters new text end relief association where a monthly benefit service pension has been elected by or a monthly benefit is payable with respect to a firefighter, a designated beneficiary must be a natural person. For purposes of this section, for a lump-sum deleted text begin volunteer fire deleted text end new text begin firefighters new text end relief association or for a combination lump-sum and monthly benefit deleted text begin volunteer fire deleted text end new text begin firefighters new text end relief association where a lump-sum service pension has been elected by or a lump-sum benefit is payable with respect to a firefighter, a trust created under chapter 501C may be a designated beneficiary. If a trust is payable to the surviving children organized under chapter 501C as authorized by this section and there is no surviving spouse, the survivor benefit may be paid to the trust, notwithstanding a requirement of this section to the contrary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 23.

Minnesota Statutes 2022, section 424A.021, is amended to read:

424A.021 CREDIT FOR BREAK IN SERVICE TO PROVIDE UNIFORMED SERVICE.

Subdivision 1.

Authorization.

Subject to restrictions stated in this section, a volunteer firefighter new text begin or paid on-call firefighter new text end who is absent from firefighting service due to service in the uniformed services, as defined in United States Code, title 38, section 4303(13), may obtain service credit if the relief association is a defined benefit plan or an allocation by the relief association as though the person was an active member if the relief association is a defined contribution plan for the period of the uniformed service, not to exceed five years, unless a longer period is required under United States Code, title 38, section 4312.

Subd. 2.

Limitations.

(a) To be eligible for service credit or an allocation as though an active member under this section, the deleted text begin volunteer deleted text end firefighter must return to firefighting service with coverage by the same relief association or by the successor to that relief association upon discharge from service in the uniformed service within the time frame required in United States Code, title 38, section 4312(e).

(b) Service credit or an allocation as though an active member is not authorized if the firefighter separates from uniformed service with a dishonorable or bad conduct discharge or under other than honorable conditions.

(c) Service credit or an allocation as though an active member is not authorized if the firefighter fails to provide notice to the fire department that the individual is leaving to provide service in the uniformed service, unless it is not feasible to provide that notice due to the emergency nature of the situation.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 24.

Minnesota Statutes 2022, section 424A.092, subdivision 6, is amended to read:

Subd. 6.

Municipal ratification for bylaws amendments.

(a) The board of trustees of a relief association may adopt an amendment to the articles of incorporation or bylaws that increases the coverage, service pensions, or retirement benefits provided by the relief association only after preparing an estimate of the expected deleted text begin increase in the financial requirements and deleted text end new text begin change to new text end the accrued liability new text begin and the overall funding balance of the special fund new text end resulting from the amendment.

(b) For purposes of this subdivision, deleted text begin "financial requirements" deleted text end new text begin "overall funding balance" new text end means the amount new text begin of the surplus or deficit new text end calculated under subdivision 3, paragraph deleted text begin (c) deleted text end new text begin (b) new text end . "Accrued liability" means the amount calculated under subdivision 2 or 2a, as applicable. "Estimate" means the estimate required in paragraph (a).

(c) If the special fund of a relief association to which this section applies deleted text begin does not have a surplus over deleted text end new text begin has a deficit from new text end full funding under subdivision 3, paragraph deleted text begin (c) deleted text end new text begin (b) new text end , clause deleted text begin (5) deleted text end new text begin (3) new text end , deleted text begin and deleted text end new text begin or new text end if the municipality deleted text begin is required to provide financial support to the special fund under this section deleted text end new text begin has a minimum obligation under subdivision 3, paragraph (d) new text end , deleted text begin the board of trustees of the relief association may adopt an deleted text end new text begin any new text end amendment to the articles of incorporation or bylaws new text begin adopted by the board of trustees new text end that increases the coverage, service pensions, or retirement benefits provided by the relief association deleted text begin . The amendment deleted text end is not effective until it is ratified by the governing body of the affiliated municipality or independent nonprofit firefighting corporation, as applicable. The governing body may ratify deleted text begin such deleted text end new text begin the new text end amendment only if the relief association has delivered to the governing body the estimate described in paragraphs (a) and (b), certified by an officer of the relief association.

(d) If the special fund of a relief association to which this section applies new text begin is fully funded or new text end has a surplus over full funding under subdivision 3, paragraph deleted text begin (c) deleted text end new text begin (b) new text end , clause deleted text begin (5) deleted text end new text begin (3) new text end , and if the municipality deleted text begin is not required to provide financial support deleted text end new text begin does not have a minimum obligation under subdivision 3, paragraph (d), new text end to the special fund under this section, the relief association may adopt an amendment to the articles of incorporation or bylaws that increases the coverage, service pensions, or retirement benefits provided by the relief association. deleted text begin (1) deleted text end The amendment is effective if the municipality ratifies the amendment deleted text begin . (2) The amendment is effective without municipal ratification if deleted text end new text begin or, in the absence of municipal ratification, new text end the amendment satisfies paragraph (e).

(e) An amendment satisfies this paragraph if the estimate described in paragraphs (a) and (b) demonstrates that the amendment will not cause:

(1) the amount of the resulting increase in the accrued liability of the special fund to exceed 90 percent of the amount of the surplus over full funding reported in the prior year; deleted text begin and deleted text end

(2) deleted text begin the financial requirements of the special fund to exceed the expected amount of the future fire state aid and police and firefighter retirement supplemental state aid to be received by the relief association. deleted text end new text begin an increase in the minimum obligation of the municipality for the upcoming calendar year under subdivision 3, paragraph (d); and new text end

new text begin (3) the special fund of the relief association to have a deficit from full funding under subdivision 3, paragraph (c), clause (5), on the day immediately following the adoption of the amendment. new text end

(f) If a relief association amends the articles of incorporation or bylaws without municipal ratification under this subdivision deleted text begin , deleted text end and, subsequent to the amendment, the deleted text begin financial requirements of the special fund of the relief association under this section are such so as to require financial support from deleted text end new text begin minimum obligation of new text end the municipality new text begin under subdivision 3, paragraph (d) new text end , new text begin increases, new text end the provision deleted text begin which deleted text end new text begin that new text end was implemented without municipal ratification is no longer effective deleted text begin and deleted text end new text begin on July 31. new text end Any service pensions or retirement benefits payable after that date may be paid only in accordance with the articles of incorporation or bylaws as amended with municipal ratification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 25.

Minnesota Statutes 2022, section 424A.093, subdivision 6, is amended to read:

Subd. 6.

Municipal ratification for bylaws amendments.

(a) The board of trustees of a relief association may adopt an amendment to the articles of incorporation or bylaws that increases the coverage, service pensions, or retirement benefits provided by the relief association only after the board of trustees has had an updated actuarial valuation including the proposed change or an estimate of the expected actuarial impact of the proposed change prepared by the actuary of the relief association.

(b) If the special fund of a relief association to which this section applies deleted text begin does not have a surplus over deleted text end new text begin has a deficit from new text end full funding under subdivision 4, deleted text begin and deleted text end new text begin or new text end if the municipality deleted text begin is required to provide financial support to the special fund deleted text end new text begin has a minimum obligation new text end under deleted text begin this section deleted text end new text begin subdivision 5 new text end , deleted text begin the board of trustees of the relief association may adopt an deleted text end new text begin any new text end amendment to the articles of incorporation or bylaws new text begin adopted by the board of trustees new text end that increases the coverage, service pensions, or retirement benefits provided by the relief association deleted text begin . The amendment deleted text end is not effective until it is ratified by the governing body of the affiliated municipality or independent nonprofit firefighting corporation, as applicable. The governing body may ratify deleted text begin such deleted text end new text begin the new text end amendment only if the relief association has delivered to the governing body the actuarial valuation or estimate described in paragraph (a), certified by an officer of the relief association.

(c) If the special fund of a relief association to which this section applies new text begin is fully funded or new text end has a surplus over full funding under subdivision 4, and if the municipality deleted text begin is deleted text end new text begin does new text end not deleted text begin required to provide financial support to the special fund deleted text end new text begin have a minimum obligation new text end under deleted text begin this section deleted text end new text begin subdivision 5 new text end , the relief association may adopt an amendment to the articles of incorporation or bylaws that increases the coverage, service pensions, or retirement benefits provided by the relief association. The amendment is effective:

(1) if the municipality ratifies the amendment; or

(2) without municipal ratification if the amendment satisfies paragraph (d).

(d) An amendment satisfies this paragraph if the actuarial valuation or estimate described in paragraph (a) demonstrates that the amendment will not cause:

(1) the amount of the resulting increase in the accrued liability of the special fund to exceed 90 percent of the amount of the surplus over full funding reported in the prior year; deleted text begin and deleted text end

(2) deleted text begin the financial requirements of the special fund to exceed the expected amount of the future fire state aid and police and firefighter retirement supplemental state aid to be received by the relief association. deleted text end new text begin an increase in the minimum obligation of the municipality for the upcoming calendar year; and new text end

new text begin (3) the special fund of the relief association to have a deficit from full funding under subdivision 4 on the day immediately following the adoption of the amendment. new text end

(e) If a relief association amends its articles of incorporation or bylaws without municipal ratification pursuant to this subdivision deleted text begin , deleted text end and, subsequent to the amendment, the deleted text begin financial requirements of the special fund of the relief association under this section are such so as to require financial support from deleted text end new text begin minimum obligation of new text end the municipality new text begin increases under this section new text end , the provision deleted text begin which deleted text end new text begin that new text end was implemented without municipal ratification is no longer effective deleted text begin and deleted text end new text begin on July 31. new text end Any service pensions or retirement benefits payable after that date may be paid only in accordance with the articles of incorporation or bylaws as amended with municipal ratification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 26.

Minnesota Statutes 2022, section 424A.094, subdivision 1, is amended to read:

Subdivision 1.

Authorized inclusion in fire state aid program; covered nonprofit corporations.

(a) This section applies to any independent nonprofit firefighting corporation incorporated or organized under chapter 317A deleted text begin which deleted text end new text begin that new text end : (1) operates exclusively for firefighting purposes; (2) deleted text begin which deleted text end is composed of volunteer firefighters new text begin , paid on-call firefighters, or both volunteer firefighters and paid on-call firefighters new text end ; and (3) deleted text begin which deleted text end has a duly established separate subsidiary incorporated firefighters relief association deleted text begin which deleted text end new text begin that new text end provides retirement coverage for or pays a service pension to a retired firefighter or a retirement benefit to a surviving dependent of either an active or a retired firefighter, and deleted text begin which deleted text end new text begin that new text end is subject to the applicable provisions of chapter 424A.

(b) Notwithstanding any law to the contrary, a municipality contracting with an independent nonprofit firefighting corporation must be included in the distribution of fire state aid to the appropriate county auditor by the state auditor only if the independent nonprofit firefighting corporation complies with the provisions of this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 27.

Minnesota Statutes 2022, section 424A.095, subdivision 2, is amended to read:

Subd. 2.

Investment report.

(a) Annually, the state auditor must provide an investment report to each relief association that has complied with the reporting requirements under section 356.219, subdivisions 1 and 3. The investment report must contain the following information:

(1) the relief association's average annual rates of return for at least the previous one-, three-, five-, ten-, 15-, and 20-year periods for which the state auditor has investment information;

(2) the relief association's asset allocation;

(3) the average annual one-year and ten-year benchmark rates of return;

(4) the average annual one-year and ten-year rates of return for the statewide volunteer firefighter plan;

(5) the one-year and ten-year average annual rates of return for the State Board of Investment supplemental investment fund; and

(6) a graphical comparison between:

(i) the relief association's average annual rates of return for the previous year and for the previous multiyear periods provided under clause (1); and

(ii) the average annual rates of return for the same periods for the supplemental investment fund's balanced fund or any successor fund.

(b) The state auditor shall select the benchmark rates of return based on the best practice in the industry.

(c) new text begin An officer of new text end the relief association's board of trustees must certify to the state auditor that the board reviewed the investment report. The certification must accompany the audited financial statements or detailed financial statement under section 424A.014, subdivision 1 or 2, whichever applies. A copy of the report must be kept on file by the relief association and must be available for inspection by any member of the public.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 28.

Minnesota Statutes 2022, section 424A.10, is amended to read:

424A.10 STATE SUPPLEMENTAL BENEFIT; deleted text begin VOLUNTEER deleted text end FIREFIGHTERS.

Subdivision 1.

Definitions.

For purposes of this section:

(1) "qualified recipient" means a deleted text begin volunteer deleted text end firefighter who receives a lump-sum distribution of pension or retirement benefits from a deleted text begin volunteer deleted text end firefighters relief association or from the statewide volunteer firefighter plan; new text begin and new text end

(2) "survivor of a deceased active or deferred deleted text begin volunteer deleted text end firefighter" means the surviving spouse of a deceased active or deferred deleted text begin volunteer deleted text end firefighter or, if none, the surviving child or children of a deceased active or deferred deleted text begin volunteer deleted text end firefighter, or, if none, the designated beneficiary of the deceased active or deferred deleted text begin volunteer deleted text end firefighter, or, if no beneficiary has been designated, the estate of the deceased active or deferred deleted text begin volunteer deleted text end firefighter deleted text begin ; deleted text end new text begin . new text end

deleted text begin (3) "active volunteer firefighter" means a person who: deleted text end

deleted text begin (i) regularly renders fire suppression service, the performance or supervision of authorized fire prevention duties, or the performance or supervision of authorized emergency medical deleted text end deleted text begin response activities for a fire department; deleted text end

deleted text begin (ii) has met the statutory and other requirements for relief association membership; and deleted text end

deleted text begin (iii) is deemed by the relief association under law and its bylaws to be a fully qualified deleted text end deleted text begin member of the relief association or from the statewide volunteer firefighter plan for at least deleted text end deleted text begin one month; deleted text end

deleted text begin (4) "deferred volunteer firefighter" means a former active volunteer firefighter who: deleted text end

deleted text begin (i) terminated active firefighting service, the performance or supervision of authorized fire prevention duties, or the performance or supervision of authorized emergency medical response activities; and deleted text end

deleted text begin (ii) has sufficient service credit from the applicable relief association or from the statewide volunteer firefighter plan to be entitled to a service pension under the bylaws of the relief association, but has not applied for or has not received the service pension; and deleted text end

deleted text begin (5) "volunteer firefighter" includes an individual whose services were utilized to perform or supervise fire prevention duties if authorized under section 424A.01, subdivision 5, and individuals whose services were used to perform emergency medical response duties or supervise emergency medical response activities if authorized under section 424A.01, subdivision 5a. deleted text end

Subd. 2.

Payment of supplemental benefit.

(a) Upon the payment by a deleted text begin volunteer deleted text end firefighters relief association or by the statewide volunteer firefighter plan of a lump-sum distribution to a qualified recipient, the association or retirement plan, as applicable, must pay a supplemental benefit to the qualified recipient. Notwithstanding any law to the contrary, the relief association must pay the supplemental benefit out of its special fund and the statewide volunteer firefighter plan must pay the supplemental benefit out of the statewide volunteer firefighter plan. This benefit is an amount equal to ten percent of the regular lump-sum distribution that is paid on the basis of the recipient's service as a deleted text begin volunteer deleted text end firefighter. In no case may the amount of the supplemental benefit exceed $1,000. A supplemental benefit under this paragraph may not be paid to a survivor of a deceased deleted text begin active or deferred volunteer deleted text end firefighter in that capacity.

(b) Upon the payment by a relief association or the retirement plan of a lump-sum survivor benefit to a survivor of a deceased deleted text begin active volunteer firefighter or of a deceased deferred volunteer deleted text end firefighter, the association or retirement plan, as applicable, must pay a supplemental survivor benefit to the survivor of the deceased deleted text begin active or deferred volunteer deleted text end firefighter from the special fund of the relief association and the retirement plan must pay a supplemental survivor benefit to the survivor of the deceased deleted text begin active or deferred volunteer deleted text end firefighter from the retirement fund if chapter 353G so provides. The amount of the supplemental survivor benefit is 20 percent of the survivor benefit, but not to exceed $2,000.

(c) For purposes of this section, the term "regular lump-sum distribution" means the pretax lump-sum distribution excluding any interest that may have been credited during a deleted text begin volunteer deleted text end firefighter's period of deferral.

(d) An individual may receive a supplemental benefit under paragraph (a) or under paragraph (b), but not under both paragraphs with respect to one lump-sum deleted text begin volunteer deleted text end firefighter benefit.

(e) If a qualified recipient receives more than one lump-sum distribution, the qualified recipient is eligible to receive a supplemental benefit or supplemental survivor benefit, whichever is applicable, with each lump-sum distribution. Each supplemental benefit shall be calculated pursuant to paragraph (a) or (b), as applicable, and shall be subject to a separate limit.

(f) Qualified recipients who elect to receive their lump-sum distribution in installments under section 424A.016, subdivision 5, or 424A.02, subdivision 8, are eligible to receive one supplemental benefit calculated on the total lump-sum distribution amount under paragraph (a) or (b), as applicable.

Subd. 3.

State reimbursement.

(a) Each year, to be eligible for state reimbursement of the amount of supplemental benefits paid under subdivision 2 during the preceding calendar year, the deleted text begin volunteer deleted text end firefighters relief association or the statewide volunteer firefighter plan shall apply to the commissioner of revenue by February 15. By March 15, the commissioner shall reimburse the relief association for the amount of the supplemental benefits paid by the relief association to qualified recipients and to survivors of deceased deleted text begin active or deferred volunteer deleted text end firefighters.

(b) The commissioner of revenue shall prescribe the form of and supporting information that must be supplied as part of the application for state reimbursement. The commissioner of revenue shall reimburse the relief association by paying the reimbursement amount to the treasurer of the municipality where the association is located and shall reimburse the retirement plan by paying the reimbursement amount to the executive director of the Public Employees Retirement Association. Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement to the treasurer of the association if the association has filed a financial report with the municipality. If the relief association has not filed a financial report with the municipality, the municipal treasurer shall delay transmission of the reimbursement payment to the association until the complete financial report is filed. If the association has dissolved or has been removed as a trustee of state aid, the treasurer shall deposit the money in a special account in the municipal treasury, and the money may be disbursed only for the purposes and in the manner provided in section 424A.08. When paid to the association, the reimbursement payment must be deposited in the special fund of the relief association and when paid to the retirement plan, the reimbursement payment must be deposited in the retirement fund of the plan.

(c) A sum sufficient to make the payments is appropriated from the general fund to the commissioner of revenue.

Subd. 4.

In lieu of income tax exclusion.

(a) The supplemental benefit provided by this section is in lieu of the state income tax exclusion for lump-sum distributions of retirement benefits paid to deleted text begin volunteer deleted text end firefighters.

(b) If the law is modified to exclude or exempt deleted text begin volunteer deleted text end firefighters' lump-sum distributions from state income taxation, the supplemental benefits under this section are no longer payable, beginning with the first calendar year in which the exclusion or exemption is effective. This subdivision does not apply to exemption of all or part of a lump-sum distribution under section 290.032 or 290.0802.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 29.

Minnesota Statutes 2022, section 424B.22, subdivision 2, is amended to read:

Subd. 2.

Involuntary dissolution and termination.

(a) A relief association is dissolved and the retirement plan administered by the relief association is terminated automatically if:

(1) the fire department affiliated with a relief association is dissolved by action of the governing body of the municipality in which the fire department is located or by the governing body of the independent nonprofit firefighting corporation, whichever applies; or

(2) the fire department affiliated with a relief association has terminated the employment or services of all active members of the relief association.

(b) An involuntary termination of a relief association under this subdivision is effective on the December 31 that is at least eight months after the date on which the fire department is dissolved or the termination of employment or services of all active members of the relief association occurs. new text begin The board of trustees must comply with subdivisions 3 and 5 to 12. The board of trustees may comply with subdivision 4. The state auditor has the discretion to waive these requirements if the board of trustees requests a waiver in advance and provides adequate demonstration that meeting these requirements is not practicable. new text end

(c) The retirement plan administered by a relief association is terminated automatically if the relief association is dissolved, effective on the date of the dissolution of the relief association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 30.

Minnesota Statutes 2022, section 424B.22, subdivision 10, is amended to read:

Subd. 10.

Supplemental benefits.

Within 60 days after the distribution of benefits under subdivision 8, the municipality or firefighting corporation with which the fire department is affiliated shall pay supplemental benefits under section 424A.10 to each participant and survivor who satisfies the requirements of section 424A.10, subdivision 2 deleted text begin , deleted text end new text begin . A supplemental benefit is payable to each participant who receives a retirement benefit new text end if the participant is at least age 50. new text begin A supplemental benefit is payable to each participant or survivor who receives, respectively, a disability benefit or survivor benefit without regard to any minimum age requirement. new text end The commissioner of revenue shall reimburse the municipality or deleted text begin independent nonprofit deleted text end firefighting corporation for all supplemental benefits paid as provided in section 424A.10, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for supplemental benefits reimbursed in calendar year 2025 and thereafter. new text end

Sec. 31.

new text begin REVISOR INSTRUCTION. new text end

new text begin In Minnesota Statutes, the revisor of statutes shall change the terms "volunteer firefighters relief association," "volunteer firefighter relief association," "volunteer firefighters' relief association," and "volunteer fire relief association" to "firefighters relief association" wherever the terms appear. The revisor shall make any necessary grammatical changes or changes to sentence structure necessary to preserve the meaning of the text as a result of the changes. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 32.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2022, section 424A.01, subdivision 5a, new text end new text begin is repealed. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

ARTICLE 3

STATEWIDE VOLUNTEER FIREFIGHTER PLAN; ADDING A DEFINED CONTRIBUTION PLAN

Section 1.

Minnesota Statutes 2022, section 352.1155, subdivision 3, is amended to read:

Subd. 3.

Service credit prohibition.

Notwithstanding any law to the contrary, a person eligible under this section may not, based on employment to which the waiver in this section applies, earn further service credit in a Minnesota public defined benefit plan and is not eligible to participate in a Minnesota public defined contribution plan, other than a deleted text begin volunteer fire plan deleted text end new text begin firefighter relief association new text end governed by chapter 424A new text begin or the statewide volunteer firefighter plan governed by chapter 353G new text end . No employer or employee contribution to any of these plans may be made on behalf of such a person.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 2.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Association. new text end

new text begin "Association" means the Public Employees Retirement Association established under chapter 353. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 3.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Defined contribution fund. new text end

new text begin "Defined contribution fund" means that portion of the fund consisting of the assets attributable to the defined contribution plan. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 4.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 4b. new text end

new text begin Defined contribution plan. new text end

new text begin "Defined contribution plan" means the plan that is one of the two plans that comprise the statewide volunteer firefighter plan. The defined contribution plan provides each member with a retirement benefit equal to the member's individual account balance, to which state aid, contributions, forfeitures, and investment earnings and losses have been credited. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 5.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 4c. new text end

new text begin Defined benefit fund. new text end

new text begin "Defined benefit fund" means that portion of the fund consisting of the assets attributable to the defined benefit plan. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 6.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 4d. new text end

new text begin Defined benefit plan. new text end

new text begin "Defined benefit plan" means the plan that is one of the two plans that comprise the statewide volunteer firefighter plan. The defined benefit plan provides each member with a retirement benefit that is either a lump sum or a monthly pension in an amount determined by using a formula that takes into account years of service, vesting percentage, and the benefit level for the member's fire department. The defined benefit plan consists of the lump-sum division and the monthly division. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 7.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 5a. new text end

new text begin Fire department account. new text end

new text begin "Fire department account" means the account in the name of each participating employer to which is credited the assets and, in the case of a participating employer in the defined benefit plan, the liabilities related to the retirement benefits for members who are or were providing service to the participating employer. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 8.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 5b. new text end

new text begin Firefighting corporation. new text end

new text begin "Firefighting corporation" means an independent nonprofit firefighting corporation that is organized under the provisions of chapter 317A and that operates primarily for firefighting purposes. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 9.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 5c. new text end

new text begin Forfeiture. new text end

new text begin "Forfeiture" means the portion of an account or pension benefit that is forfeited when a volunteer firefighter ends service before becoming 100 percent vested in the account or pension benefit. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 10.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 6b. new text end

new text begin Individual account. new text end

new text begin "Individual account" means the account in a fire department account in the defined contribution plan established for a member under section 353G.082 to which allocations are credited and from which deductions are taken under section 353G.082. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 11.

Minnesota Statutes 2023 Supplement, section 353G.01, subdivision 7b, is amended to read:

Subd. 7b.

Lump-sum division.

"Lump-sum division" means the division of the new text begin defined benefit new text end plan governed by section 353G.11.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 12.

Minnesota Statutes 2023 Supplement, section 353G.01, subdivision 8b, is amended to read:

Subd. 8b.

Monthly deleted text begin benefit deleted text end division.

"Monthly deleted text begin benefit deleted text end division" means the division of the new text begin defined benefit new text end plan governed by section 353G.112.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 13.

Minnesota Statutes 2022, section 353G.01, subdivision 9, is amended to read:

Subd. 9.

Municipality.

"Municipality" means deleted text begin a governmental entity specified in section 477B.01, subdivision 10, deleted text end a city or township that has new text begin established a fire department, a city or township that has new text end entered into a contract with deleted text begin an independent nonprofit deleted text end new text begin a new text end firefighting corporation, or a city or township that has entered into a contract with a joint powers entity deleted text begin established deleted text end under section 471.59 new text begin that has established or operates a fire department new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 14.

Minnesota Statutes 2022, section 353G.01, subdivision 9a, is amended to read:

Subd. 9a.

Relief association.

"Relief association" means a deleted text begin volunteer firefighter deleted text end relief association deleted text begin established deleted text end new text begin as defined new text end under deleted text begin chapter 424A, including a volunteer firefighter relief association to which records, assets, and liabilities related to lump-sum or monthly benefits for active and former firefighters will be transferred from the retirement fund upon satisfaction of the requirements of deleted text end section deleted text begin 353G.17 deleted text end new text begin 424A.001, subdivision 4 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 15.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 9b. new text end

new text begin Normal retirement age. new text end

new text begin "Normal retirement age" means age 50. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 16.

Minnesota Statutes 2022, section 353G.01, is amended by adding a subdivision to read:

new text begin Subd. 9c. new text end

new text begin Participating employer. new text end

new text begin "Participating employer" means the municipality or firefighting corporation that has joined the retirement plan and is associated with a fire department with volunteer firefighters who are covered by the retirement plan. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 17.

Minnesota Statutes 2022, section 353G.01, subdivision 11, is amended to read:

Subd. 11.

Retirement fund.

"Retirement fund" means the statewide volunteer firefighter fund established under section 353G.02, subdivision 3 new text begin , consisting of the defined contribution fund and the defined benefit fund new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 18.

Minnesota Statutes 2023 Supplement, section 353G.01, subdivision 12, is amended to read:

Subd. 12.

Retirement plan.

"Retirement plan" new text begin or "plan" new text end means the deleted text begin retirement deleted text end new text begin statewide volunteer firefighter new text end plan, deleted text begin either the lump-sum division or the monthly benefit division deleted text end new text begin consisting of the defined contribution plan and the defined benefit plan new text end , established by this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 19.

Minnesota Statutes 2023 Supplement, section 353G.01, subdivision 12a, is amended to read:

Subd. 12a.

Service credit.

"Service credit" means the period of service rendered by a volunteer firefighter that is certified under section 353G.07 by the fire chief of the fire department in which the volunteer firefighter serves. deleted text begin A volunteer firefighter's service credit equals all periods of service with any fire department covered by the plan. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024. new text end

Sec. 20.

Minnesota Statutes 2023 Supplement, section 353G.01, subdivision 14a, is amended to read:

Subd. 14a.

Vesting service credit.

"Vesting service credit" means service credit plus any earlier period of service rendered as a volunteer firefighter new text begin , as defined in subdivision 15, new text end in new text begin another fire department covered by the plan or in new text end a fire department in the state that was not covered by the plan at the time the service was rendered. deleted text begin The earlier period of service must be certified by the fire chief of the fire department covered by the plan in a manner similar to the requirements of section 353G.07. The volunteer firefighter must provide documentation in a form acceptable to the executive director regarding the earlier period of service. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024. new text end

Sec. 21.

Minnesota Statutes 2023 Supplement, section 353G.01, subdivision 15, is amended to read:

Subd. 15.

Volunteer firefighter.

"Volunteer firefighter" means a person who is deleted text begin an active deleted text end new text begin a new text end member of the fire department of a municipality or deleted text begin an independent nonprofit deleted text end new text begin a new text end firefighting corporation and who, in that capacity, new text begin on either a volunteer or on-call basis, new text end engages in new text begin : new text end

new text begin (1) new text end fire suppression new text begin or prevention new text end activities deleted text begin , provides deleted text end new text begin ; new text end

new text begin (2) new text end emergency response services deleted text begin , deleted text end new text begin ; new text end

new text begin (3) emergency medical response activities; new text end or deleted text begin delivers deleted text end

new text begin (4) new text end fire education or deleted text begin prevention services on an on-call basis deleted text end new text begin supervises personnel engaged in any of the foregoing new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 22.

Minnesota Statutes 2023 Supplement, section 353G.02, subdivision 1, is amended to read:

Subdivision 1.

new text begin Retirement new text end plan.

The statewide volunteer firefighter plan, consisting of a deleted text begin lump-sum division deleted text end new text begin defined contribution plan new text end and a deleted text begin monthly benefit division deleted text end new text begin defined benefit plan new text end , is deleted text begin created deleted text end new text begin established new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 23.

Minnesota Statutes 2023 Supplement, section 353G.02, subdivision 3, is amended to read:

Subd. 3.

Retirement fund.

(a) The statewide volunteer firefighter fund deleted text begin , consisting of a lump-sum account and a monthly benefit account, deleted text end is deleted text begin created deleted text end new text begin established new text end . The new text begin retirement new text end fund contains the assets attributable to the deleted text begin statewide volunteer firefighter deleted text end new text begin defined contribution plan and the defined benefit new text end plan.

(b) The State Board of Investment shall invest those portions of the retirement fund not required for immediate purposes in the deleted text begin statewide lump-sum volunteer firefighter plan in the deleted text end statewide volunteer firefighter account of the Minnesota supplemental investment fund under section 11A.17.

(c) The commissioner of management and budget is the ex officio treasurer of the deleted text begin statewide volunteer firefighter deleted text end new text begin retirement new text end fund. The commissioner of management and budget's general bond to the state covers all liability for actions taken as the treasurer of the retirement fund.

(d) The revenues of the plan beyond investment returns are governed by section 353G.08 and must be deposited in the fund. The disbursements of the plan are governed by section 353G.08. The commissioner of management and budget shall transmit a detailed statement showing all credits to and disbursements from the retirement fund to the executive director monthly.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 24.

Minnesota Statutes 2023 Supplement, section 353G.02, subdivision 4, is amended to read:

Subd. 4.

new text begin Periodic new text end audit; new text begin biennial new text end actuarial valuation new text begin ; biennial funding report new text end .

(a) The legislative auditor shall periodically audit the deleted text begin statewide volunteer firefighter deleted text end new text begin retirement new text end fund.

(b) new text begin The executive director must retain new text end an new text begin approved actuary under section 356.214 to perform biennial new text end actuarial deleted text begin valuation deleted text end new text begin valuations new text end of new text begin each fire department account in new text end the deleted text begin lump-sum deleted text end new text begin monthly new text end division deleted text begin of the statewide volunteer firefighter plan may be performed periodically as determined to be appropriate or useful by the board. An actuarial valuation of the monthly benefit division of the statewide volunteer firefighter plan must be performed as frequently as required by government sector generally accepted accounting standards. An deleted text end new text begin . The new text end actuarial valuation must deleted text begin be performed by the approved actuary retained under section 356.214 and must deleted text end conform with section 356.215 and the standards for actuarial work. deleted text begin An deleted text end new text begin The new text end actuarial valuation must contain sufficient detail for each participating deleted text begin employing entity deleted text end new text begin employer new text end to ascertain the actuarial condition of its account in the new text begin retirement new text end fund and the new text begin amount of its required new text end contribution deleted text begin requirement towards its deleted text end new text begin to the new text end account.

new text begin (c) The executive director must perform biennial funding assessments of each fire department account in the lump-sum division. The assessment must comply with section 353G.08, subdivision 1. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 25.

Minnesota Statutes 2023 Supplement, section 353G.03, subdivision 3, is amended to read:

Subd. 3.

Composition.

(a) The advisory board consists of ten members.

(b) The advisory board members are:

(1) one representative of Minnesota townships, appointed by the Minnesota Association of Townships;

(2) two representatives of Minnesota cities, appointed by the League of Minnesota Cities;

(3) one representative of Minnesota fire chiefs, who is a fire chief, appointed by the Minnesota State Fire Chiefs Association;

(4) two representatives of Minnesota volunteer firefighters deleted text begin , all deleted text end who are active volunteer firefighters, one of whom is covered by the lump-sum division and one of whom is covered by the monthly deleted text begin benefit deleted text end division, appointed by the Minnesota State Fire Chiefs Association;

(5) three representatives of Minnesota volunteer firefighters deleted text begin who are deleted text end new text begin , at least one of whom is new text end covered by the lump-sum division new text begin of the defined benefit plan and at least one of whom is covered by the defined contribution plan new text end , appointed by the Minnesota State Fire Departments Association; and

(6) one representative of the Office of the State Auditor, designated by the state auditor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2027. new text end

Sec. 26.

Minnesota Statutes 2022, section 353G.05, as amended by Laws 2023, chapter 47, article 10, section 9, is amended to read:

353G.05 PLAN COVERAGE ELECTION.

Subdivision 1.

Entities eligible to request coverage.

deleted text begin (a) deleted text end A relief association deleted text begin or a deleted text end new text begin , new text end municipality new text begin , new text end or deleted text begin independent nonprofit deleted text end firefighting corporation deleted text begin affiliated with a relief association deleted text end may elect to have its volunteer firefighters covered by the deleted text begin lump-sum division, if the volunteer firefighters for whom coverage is being requested are covered by a relief association that is a lump-sum defined benefit relief association or a defined contribution relief association governed by chapter deleted text end deleted text begin 424A deleted text end new text begin retirement plan new text end .

deleted text begin (b) A relief association or a municipality or independent nonprofit firefighting corporation affiliated with a relief association may elect to have its volunteer firefighters covered by the lump-sum division or the monthly benefit division of the retirement plan, if the volunteer firefighters for whom coverage is being requested are covered by a relief association that is a monthly benefit defined benefit relief association governed by chapter deleted text end deleted text begin 424A deleted text end deleted text begin . deleted text end

deleted text begin (c) A municipality or independent nonprofit firefighting corporation that is not affiliated with a relief association may elect to have its volunteer firefighters covered by the lump-sum division of the plan. deleted text end

Subd. 1a.

Requesting coverage.

(a) An entity that is eligible under subdivision 1 to make a request for coverage may initiate the process of obtaining coverage by filing a request with the executive director, as described in this subdivision.

(b) The request for coverage must be in writing and on a form prescribed by the executive director.

new text begin (c) If the request for coverage is for volunteer firefighters covered by a relief association retirement plan, the secretary of the relief association, following approval of the request by the board of trustees of the relief association, and the chief administrative officer of the entity affiliated with the relief association, following approval of the request by the governing body of the entity, must jointly make the request. If the relief association is affiliated with more than one entity, the chief administrative officer of each affiliated entity must execute the request. new text end

new text begin (d) If the request for coverage is for volunteer firefighters who are not covered by a relief association retirement plan, the chief administrative officer of the entity operating the fire department must make the request. new text end

new text begin Subd. 1b. new text end

new text begin Selection of plan and division. new text end

new text begin (a) In the request for coverage, the entity must select coverage by either the defined benefit plan or the defined contribution plan. new text end

new text begin (b) If the entity selects coverage by the defined benefit plan, the entity must select coverage by either the lump-sum division or the monthly division, except that the entity may select coverage by the monthly division only if the relief association with which the entity is affiliated is a defined benefit relief association, as defined under section 424A.001, subdivision 1b, that provides a monthly pension. new text end

new text begin (c) If the entity selects coverage by the defined contribution plan and the relief association with which the entity is affiliated is a defined benefit relief association, as defined under section 424A.001, subdivision 1b, the defined benefit relief association must complete a conversion under section 353G.19 as part of the process of joining the retirement plan. new text end

new text begin Subd. 1c. new text end

new text begin Selection of vesting schedule. new text end

deleted text begin (c) deleted text end In the request for coverage, the entity must deleted text begin identify the desired service pension amount and deleted text end select a vesting schedule from the following options:

(1) incremental vesting beginning with 40 percent vested after completing five years of deleted text begin active deleted text end service and increasing by four percent upon completion of each additional year of deleted text begin active deleted text end service, until 100 percent vested upon completion of 20 years of deleted text begin active deleted text end service;

(2) incremental vesting beginning with 40 percent vested after completing five years of deleted text begin active deleted text end service and increasing by 12 percent upon completion of each additional year of deleted text begin active deleted text end service, until 100 percent vested upon completion of ten years of deleted text begin active deleted text end service; or

(3) incremental vesting beginning with 40 percent vested after completing ten years of deleted text begin active deleted text end service and increasing by six percent upon completion of each additional year of deleted text begin active deleted text end service, until 100 percent vested upon completion of 20 years of deleted text begin active deleted text end service.

The entity must not select a vesting schedule that requires more years of service to become partially or fully vested than the vesting schedule in effect under the former affiliated relief association, if any.

deleted text begin (d) If the request for coverage is for volunteer firefighters covered by a monthly benefit defined benefit relief association, the entity making the request must elect coverage either by the monthly benefit division or by the lump-sum division. deleted text end

deleted text begin (e) If the request for coverage is for volunteer firefighters covered by a relief association that provides both a monthly benefit and a lump-sum benefit, the entity making the request must elect coverage by the monthly benefit division, the lump-sum division, or by both divisions. deleted text end

deleted text begin (f) If the request for coverage is for volunteer firefighters covered by a relief association with a plan governed by chapter deleted text end deleted text begin 424A deleted text end deleted text begin , the secretary of the relief association, following approval of the request by the board of the relief association, and the chief administrative officer of the entity affiliated with the relief association, following approval of the request by the governing body of the entity, must jointly make the request. If the relief association is affiliated with more than one entity, the chief administrative officer of each affiliated entity must execute the request. deleted text end

deleted text begin (g) If the request for coverage is for volunteer firefighters who are not covered by a relief association, the chief administrative officer of the entity operating the fire department must make the request. deleted text end

new text begin Subd. 1d. new text end

new text begin Selection of benefit level. new text end

new text begin (a) If the request for coverage is for coverage by the defined benefit plan, the entity making the request must identify the desired benefit level. new text end

new text begin (b) If the request for coverage is for the lump-sum division of the defined benefit plan, the benefit level identified must be no less than $500 per full year of service credit and no more than the maximum amount permitted under section 424A.02, subdivision 3, per full year of service credit. Benefit levels between the minimum and maximum must be in $100 increments. new text end

new text begin (c) If the request for coverage is for the monthly division of the defined benefit plan, the benefit level is the amount specified in the retirement benefit plan document applicable to the fire department. new text end

Subd. 2.

Cost analysis for coverage by the deleted text begin lump sum deleted text end new text begin lump-sum new text end division new text begin of the defined benefit plan new text end .

(a) Upon receipt of a request for coverage by the deleted text begin lump-sum division deleted text end new text begin defined benefit plan new text end , the executive director must prepare a cost analysis as described in this subdivision new text begin and deliver the cost analysis to the board of trustees of the relief association, if one exists, and the governing body new text end .

(b) The cost analysis under this subdivision must be based on:

(1) the deleted text begin service pension amount deleted text end new text begin benefit level new text end under section 353G.11 closest to the deleted text begin service pension amount deleted text end new text begin benefit level new text end provided by the relief association if the relief association is a lump-sum defined benefit plan, an amount that is equal to 95 percent of the most current average account balance per relief association member if the relief association is a defined contribution plan, or the lowest deleted text begin service pension amount deleted text end new text begin benefit level new text end under section 353G.11 if there is no relief association, rounded up; and

(2) if different than the amount under clause (1), the deleted text begin service pension amount deleted text end new text begin benefit level new text end identified in the request under subdivision deleted text begin 1a deleted text end new text begin 1d new text end .

(c) The cost analysis must take into account the vesting option selected in the request under subdivision deleted text begin 1a deleted text end new text begin 1c new text end .

(d) The cost analysis must be prepared using a mathematical procedure certified as accurate by an approved actuary retained by the Public Employees Retirement Association.

(e) If the request for coverage was made by a relief association that has filed the information required under section 424A.014 in a timely fashion, upon request by the executive director, the state auditor shall provide the most recent data available on the financial condition of the relief association, the most recent firefighter demographic data available, and a copy of the current relief association bylaws. If a cost analysis is requested, but no relief association exists, the chief administrative officer of the entity operating the fire department shall provide the demographic information on the volunteer firefighters serving as members of the fire department requested by the executive director.

Subd. 3.

Cost analysis for coverage by the monthly deleted text begin benefit deleted text end division new text begin of the defined benefit plan new text end .

(a) Upon receipt of a request for coverage by the monthly deleted text begin benefit deleted text end division, the executive director must prepare a cost analysis as described in this subdivision new text begin and deliver the cost analysis to the board of trustees of the relief association, if one exists, and the governing body new text end .

(b) The cost analysis under this subdivision must be prepared by the approved actuary retained by the Public Employees Retirement Association. The cost analysis must be based on:

(1) the monthly deleted text begin service pension amount deleted text end new text begin benefit level new text end and other retirement benefit types and amounts in effect for the relief association as of the date of the request;

(2) if different than the amount under clause (1), the monthly pension amount identified in the request under subdivision deleted text begin 1a deleted text end new text begin 1d new text end and evaluated in a special actuarial valuation prepared under sections 356.215 and 356.216; and

(3) the standards for actuarial work and the actuarial assumptions utilized in the most recent actuarial valuation, except that the applicable investment return actuarial assumption is six percent.

(c) The cost analysis must take into account the vesting option selected in the request under subdivision deleted text begin 1a deleted text end new text begin 1c new text end .

(d) The secretary of the relief association making the request must supply the demographic and financial data necessary for the cost analysis to be prepared.

Subd. 4.

Invested assets review.

deleted text begin If a cost analysis is requested under subdivision 2 or 3, deleted text end The executive director of the State Board of Investment shall review the investment portfolio of the relief association new text begin retirement plan new text end , if deleted text begin applicable deleted text end new text begin one exists new text end , for compliance with the applicable provisions of chapter 11A and for appropriateness for retention under the established investment objectives and investment policies of the State Board of Investment. If the prospective retirement coverage change is approved under subdivision 5, the State Board of Investment may require that the relief association liquidate any investment security or other asset which the executive director of the State Board of Investment has determined to be an ineligible or inappropriate investment for retention by the State Board of Investment. The security or asset liquidation must occur before the effective date of the transfer of plan coverage. If requested to do so by the chief administrative officer of the relief association, the executive director of the State Board of Investment shall provide advice about the best means to conduct the liquidation.

Subd. 5.

Finalization; coverage transfer.

(a) new text begin The transfer of coverage to the defined contribution plan is considered approved if, no later than 120 days after the filing of the request for coverage with new text end the executive director deleted text begin shall deliver the cost analysis requested under subdivision 2 or 3 to deleted text end new text begin , the transfer is approved by both (1) new text end the board of trustees of the relief association, if one exists, and new text begin (2) new text end the governing body. new text begin If either the governing body or the board of trustees of the relief association does not take action to approve the transfer within 120 days after the filing of the request for coverage, the transfer is not approved. new text end

(b) The transfer of coverage to the new text begin defined benefit new text end plan is considered approved if, deleted text begin within deleted text end new text begin no later than new text end 120 days deleted text begin of deleted text end new text begin after new text end receipt of the cost analysis, the transfer is approved by both (1) the board of trustees of the relief association, if one exists, and (2) the governing body. If either the governing body or the board of trustees of the relief association does not take action to approve the transfer within 120 days deleted text begin of deleted text end new text begin after new text end receipt of the cost analysis, the transfer is not approved.

(c) If the transfer is approved, coverage by the plan is effective on the January 1 next following the date of approval by the last governing body or, if later, the date of approval by the board of trustees of the relief association.

Subd. 6.

Joint powers entities.

If transfer of coverage to the plan is being requested for volunteer firefighters that provide services to a fire department operated as or by a joint powers entity, whenever an election or approval by or delivery to the governing body of a municipality is required under this section, all municipalities that executed the joint powers agreement must execute the election or approval or receive delivery, unless the joint powers agreement specifies another process be followed in order for the action of a joint powers entity to be effective.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 27.

Minnesota Statutes 2023 Supplement, section 353G.07, is amended to read:

353G.07 deleted text begin CERTIFICATION OF deleted text end SERVICE CREDIT new text begin FOR PENSION BENEFIT ACCRUAL OR CONTRIBUTION ALLOCATION new text end .

(a) Annually, by March 31, the fire chief of deleted text begin the deleted text end new text begin a new text end fire department with new text begin volunteer new text end firefighters who are active members of deleted text begin either deleted text end the deleted text begin lump-sum division or the monthly benefit division shall deleted text end new text begin retirement plan must new text end certify to the executive director the service credit for the previous calendar year of each new text begin volunteer new text end firefighter rendering active service with the fire department.

(b) The fire chief shall provide to each firefighter rendering active service with the fire department notification of the amount of service credit rendered by the firefighter for the calendar year. The service credit notification must be provided to the firefighter 60 days before its certification to the executive director deleted text begin of the Public Employees Retirement Association deleted text end , along with an deleted text begin indication deleted text end new text begin explanation new text end of the process for the firefighter to challenge the fire chief's determination of service credit. If the service credit amount is challenged in a timely fashion, the fire chief shall hold a hearing on the challenge, accept and consider any additional pertinent information, and make a final determination of service credit. The final determination of service credit by the fire chief is not reviewable by the executive director deleted text begin of the Public Employees Retirement Association deleted text end or by the board of trustees deleted text begin of the Public Employees Retirement Association deleted text end .

(c) The service credit certification is an official public document. If a false service credit certification is filed or if false information regarding service credits is provided, section 353.19 applies.

(d) The service credit certification must be expressed as a percentage of a full year of service during which an active firefighter rendered at least the minimum level and quantity of fire suppression, emergency response, fire prevention, or fire education duties required by the fire department under the rules and regulations applicable to the fire department. No more than one year of service credit may be certified for a calendar year.

(e) If a firefighter covered by the new text begin retirement new text end plan leaves active firefighting service to render active military service that is required to be governed by the federal Uniformed Services Employment and Reemployment Rights Act, as amended, the person must be certified as providing a full year of service credit in each year of the military service, up to the applicable limit of the federal Uniformed Services Employment and Reemployment Rights Act. If the firefighter does not return from the military service in compliance with the federal Uniformed Services Employment and Reemployment Rights Act, the service credits applicable to that military service credit period are forfeited and cancel at the end of the calendar year in which the federal law time limit occurs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 28.

new text begin [353G.075] SERVICE CREDIT FOR VESTING. new text end

new text begin (a) Annually, the executive director must credit each volunteer firefighter with a year of service credit for vesting for each year of service credited for benefit accrual or contribution allocation under section 353G.07. new text end

new text begin (b) A volunteer firefighter is entitled to receive service credit toward vesting in the retirement plan for any period of service as a volunteer firefighter, as defined under section 353G.01, subdivision 15, rendered as a firefighter in a fire department in the state that was not covered by the retirement plan at the time the service was rendered if the firefighter submits a request to the executive director indicating the number of years and months of service for which credit is requested and provides documentation in a form acceptable to the executive director regarding the earlier period of service. The firefighter must submit a copy of the request and documentation to the fire chief of the fire department to which the firefighter is currently providing service. new text end

new text begin (c) The executive director must credit a firefighter with all years of service as a member of the retirement plan for any participating employer for vesting purposes. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024. new text end

Sec. 29.

Minnesota Statutes 2023 Supplement, section 353G.08, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Annual deleted text end new text begin Biennial new text end funding deleted text begin requirements deleted text end new text begin reports new text end ; lump-sum division.

(a) deleted text begin Annually, deleted text end The executive director deleted text begin shall deleted text end new text begin must new text end determine the funding requirements deleted text begin of deleted text end new text begin for new text end each new text begin fire department new text end account in the lump-sum division deleted text begin of the statewide volunteer firefighter plan deleted text end on or before August 1 new text begin every other year new text end . The funding requirements computed under this subdivision must be determined using a mathematical procedure developed and certified as accurate by the approved actuary retained by the deleted text begin Public Employees Retirement deleted text end association and must be based on present value factors using a six percent investment return rate, without any decrement assumptions. The deleted text begin funding requirements deleted text end new text begin executive director new text end must deleted text begin be certified deleted text end new text begin provide written notice of the funding requirements new text end to the entity or entities associated with the fire department whose active firefighters are covered by the plan.

(b) The overall funding balance of each deleted text begin lump-sum deleted text end new text begin fire department new text end account for the current calendar year must be determined in the following manner:

(1) The total accrued liability for all active and deferred members of the deleted text begin account deleted text end new text begin fire department new text end as of December 31 of the current year must be calculated based on the service credit of active and deferred members as of that date.

(2) The deleted text begin total present deleted text end assets of the new text begin fire department new text end account projected to December 31 of the current year, including receipts by and disbursements from the account anticipated to occur on or before December 31, must be calculated. deleted text begin To the extent possible, deleted text end The deleted text begin market deleted text end new text begin executive director must begin phasing in the use of actuarial new text end value of assets deleted text begin must be utilized deleted text end in making this calculation new text begin beginning with the funding reports for 2026 new text end .

(3) The amount of the deleted text begin total present deleted text end assets calculated under clause (2) must be subtracted from the amount of the total accrued liability calculated under clause (1). If the amount of deleted text begin total present deleted text end new text begin the new text end assets exceeds the amount of the total accrued liability, then the account is considered to have a surplus over full funding. If the amount of the deleted text begin total present deleted text end assets is less than the amount of the total accrued liability, then the account is considered to have a deficit from full funding. If the amount of deleted text begin total present deleted text end assets is equal to the amount of the total accrued liability, then the deleted text begin special fund deleted text end new text begin account new text end is considered to be fully funded.

(c) The financial requirements of each deleted text begin lump-sum account deleted text end new text begin fire department new text end for the following calendar year must be determined in the following manner:

(1) The total accrued liability for all active and deferred members of the deleted text begin account deleted text end new text begin fire department new text end as of December 31 of the calendar year next following the current calendar year must be calculated based on the service used in the calculation under paragraph (b), clause (1), increased by one year.

(2) The increase in the total accrued liability of the account for the following calendar year over the total accrued liability of the account for the current year must be calculated.

(3) The amount of administrative expenses of the account must be calculated by multiplying the per-person dollar amount of the administrative expenses for the most recent prior calendar year by the number of active and deferred firefighters reported to deleted text begin PERA deleted text end new text begin the association new text end on the most recent service credit certification form for deleted text begin each deleted text end new text begin the new text end account.

(4) If the account is fully funded, the financial requirement of the account for the following calendar year is the total of the amounts calculated under clauses (2) and (3).

(5) If the account has a deficit from full funding, the financial requirement of the account for the following calendar year is the total of the amounts calculated under clauses (2) and (3) plus an amount equal to one-tenth of the amount of the deficit from full funding of the account.

(6) If the account has a surplus over full funding, the financial requirement of the account for the following calendar year is the financial requirement of the account calculated as though the account was fully funded under clause (4) and, if the account has also had a surplus over full funding during the prior two years, additionally reduced by an amount equal to one-tenth of the amount of the surplus over full funding of the account.

(d) The required contribution of the entity or entities associated with the fire department whose active firefighters are covered by the lump-sum division is the annual financial requirements of the deleted text begin lump-sum deleted text end new text begin fire department new text end account deleted text begin of the plan deleted text end under paragraph (c) reduced by the amount of any fire state aid payable under chapter 477B or police and firefighter retirement supplemental state aid payable under section 423A.022 that is reasonably anticipated to be received by the new text begin retirement new text end plan attributable to the entity or entities during the following calendar year, and an amount of deleted text begin interest deleted text end new text begin investment earnings new text end on the assets projected to be received during the following calendar year calculated at the rate of six percent per annum. The required contribution must be allocated between the entities if more than one entity is involved. A reasonable amount of anticipated fire state aid is an amount that does not exceed the fire state aid deleted text begin actually deleted text end received in the prior year multiplied by the factor 1.035.

new text begin (e) The financial requirement for each fire department account in the lump-sum division for the second year of the biennial valuation period must be in the amount determined in paragraph (d) increased by six percent, but no more than the excess, if any, of the amount determined under paragraph (c), clause (1), less the actual market value of assets in the fire department account as of that date. new text end

deleted text begin (e) deleted text end new text begin (f) new text end The required contribution calculated in paragraph (d) must be paid to the new text begin retirement new text end plan on or before December 31 of the year for which it was calculated. If the contribution is not received by the plan by December 31, it is payable with interest at an annual compound rate of six percent from the date due until the date payment is received by the plan. If the entity does not pay the full amount of the required contribution, the executive director shall collect the unpaid amount under section 353.28, subdivision 6.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 30.

Minnesota Statutes 2022, section 353G.08, subdivision 2, is amended to read:

Subd. 2.

Cash flow funding requirement.

If the executive director determines that a new text begin fire department account in the new text end lump-sum deleted text begin retirement deleted text end new text begin division new text end or deleted text begin a deleted text end new text begin the new text end monthly deleted text begin benefit retirement account in the statewide volunteer firefighter plan deleted text end new text begin division new text end has insufficient assets to meet the service pensions expected to be payable from the account over the succeeding two years, the executive director shall certify the amount of the potential service pension shortfall to the deleted text begin municipality or municipalities and the municipality or municipalities shall deleted text end new text begin participating employer, which must new text end make an additional employer contribution to the account within ten days of the certification. If more than one deleted text begin municipality deleted text end new text begin participating employer new text end is associated with the account, unless the deleted text begin municipalities deleted text end new text begin participating employers new text end agree to and implement a different allocation, the deleted text begin municipalities shall deleted text end new text begin participating employers must new text end allocate the additional employer contribution one-half in proportion to the population of each deleted text begin municipality deleted text end new text begin participating employer new text end and one-half in proportion to the estimated market value of the property of each deleted text begin municipality deleted text end new text begin participating employer new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 31.

new text begin [353G.082] FUNDING OF FIRE DEPARTMENT ACCOUNTS AND ANNUAL ALLOCATION TO INDIVIDUAL ACCOUNTS IN THE DEFINED CONTRIBUTION PLAN. new text end

new text begin Subdivision 1. new text end

new text begin Fire department accounts and individual accounts established. new text end

new text begin (a) The executive director must establish a fire department account for each participating employer in the defined contribution plan that consists of individual accounts for the volunteer firefighters providing firefighting services to the participating employer. new text end

new text begin (b) The executive director must establish an individual account within each fire department account for each volunteer firefighter covered by the defined contribution plan, to which the executive director must credit an allocation of state aid, contributions, forfeitures, and investment earnings and from which the executive director must deduct investment losses and administrative expenses. new text end

new text begin Subd. 2. new text end

new text begin State aid and contributions by the participating employer. new text end

new text begin Notwithstanding any law to the contrary, the executive director must deposit in each fire department account in the defined contribution plan for allocation to individual accounts under subdivision 3: new text end

new text begin (1) any fire state aid payable under chapter 477B or police and firefighter retirement supplemental state aid payable under section 423A.022 on behalf of the participating employer with which the fire department is associated; and new text end

new text begin (2) any contributions from the participating employer with which the fire department is associated. new text end

new text begin Subd. 3. new text end

new text begin Annual allocation and deduction in equal shares. new text end

new text begin (a) As of the end of each calendar year, the executive director must credit to the individual account of each firefighter providing services to a fire department and who did not leave firefighting service with the fire department during the calendar year an equal share of: new text end

new text begin (1) any fire state aid payable under chapter 477B and police and firefighter retirement supplemental state aid payable under section 423A.022 received by the retirement fund that is attributable to the participating employer associated with the fire department as soon as practicable after the aid is received by the retirement fund; new text end

new text begin (2) any contributions made by the participating employer to the retirement fund for the benefit of the volunteer firefighters providing firefighting services to the participating employer as soon as practicable after the contribution is received by the retirement fund; and new text end

new text begin (3) any forfeiture under section 353G.10, subdivision 4, attributable to a former volunteer firefighter of the fire department. new text end

new text begin (b) As of the end of each calendar year, the executive director must deduct an equal share of administrative expenses from each individual account. new text end

new text begin (c) As of the end of the calendar year, the executive director must allocate to the individual account of a volunteer firefighter who has less than a full year of service a fractional share of the amount that would have been allocated to the individual account for a full year of service. The fractional amount is equal to the number of months of service divided by twelve. A month will be credited if the volunteer firefighter was credited with at least 16 days of service. new text end

new text begin Subd. 4. new text end

new text begin Investment earnings and losses. new text end

new text begin As of the end of each calendar year or more frequently, if determined necessary by the executive director to make distributions or for other purposes, the executive director must: new text end

new text begin (1) credit investment earnings on the assets of each fire department account to each individual account in proportion to the share of the assets of the fire department account credited to the individual account; and new text end

new text begin (2) deduct investment losses on the assets of each fire department account from each individual account in proportion to the share of the assets of the fire department account credited to the individual account. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 32.

new text begin [353G.085] AUTHORIZED DISBURSEMENTS. new text end

new text begin The assets of the retirement fund may be disbursed only as a distribution of lump-sum retirement benefits, monthly retirement benefits, or individual accounts or for: new text end

new text begin (1) administrative expenses of the retirement plan; new text end

new text begin (2) investment expenses of the retirement fund; new text end

new text begin (3) survivor benefits; and new text end

new text begin (4) a transfer of assets under section 353G.17. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 33.

Minnesota Statutes 2023 Supplement, section 353G.09, subdivision 1, is amended to read:

Subdivision 1.

Entitlement.

(a) A member deleted text begin with at least one year of service credit with a fire department with active firefighters that are covered by the plan deleted text end is entitled to a retirement benefit as defined in subdivision 1a from the fire department's account in the plan if the member:

(1) has separated from deleted text begin active deleted text end service with the fire department for at least 30 days;

(2) has attained the new text begin normal retirement new text end age deleted text begin of at least 50 years deleted text end ;

(3) has satisfied the minimum service requirement in paragraph (b) or (c), as applicable; and

(4) applies in a manner prescribed by the executive director.

(b) If the member is a member of the lump-sum division new text begin or the defined contribution plan new text end , the member satisfies the minimum service requirement if the member is at least 40 percent vested as determined under subdivision 2.

(c) If the member is a member of the monthly deleted text begin benefit deleted text end division, the member satisfies the minimum service requirement if the member has completed at least the minimum number of years of service specified in the retirement benefit plan document applicable to the member.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 34.

Minnesota Statutes 2023 Supplement, section 353G.09, subdivision 1a, is amended to read:

Subd. 1a.

Retirement benefit.

(a) A volunteer firefighter who is entitled to a deleted text begin service pension deleted text end new text begin retirement benefit new text end under subdivision 1 must receive a retirement benefit under deleted text begin subdivision 1, deleted text end paragraph deleted text begin (a) or deleted text end (b), new text begin (c), or (d), new text end as applicable.

(b) The retirement benefit of a member of the lump-sum division is equal to the number of years of service credit certified under section 353G.07 for the member, multiplied by the deleted text begin service pension deleted text end new text begin benefit new text end level applicable to the member under section 353G.11, multiplied by the member's vested percentage under subdivision 2.

(c) The retirement benefit of a member of the monthly deleted text begin benefit deleted text end division is equal to the number of years of service credit certified under section 353G.07 for the member, multiplied by the deleted text begin service pension deleted text end new text begin benefit new text end level applicable to the member under section 353G.112, multiplied by the member's vested percentage under subdivision 2.

new text begin (d) The retirement benefit of a member of the defined contribution plan is equal to the balance in the member's account in the plan as of the end of the month after the month in which the executive director receives the application for a distribution of the retirement benefit multiplied by the member's vested percentage under subdivision 2. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 35.

Minnesota Statutes 2023 Supplement, section 353G.09, subdivision 2, is amended to read:

Subd. 2.

Vested percentage.

A member of the plan has a nonforfeitable right to a retirement benefit, up to the percent vested. The member's vested percentage is determined under paragraph (a), (b), or (c), as applicable.

(a) If the member is a member of the lump-sum division and employed in a fire department that joined the plan before January 1, 2023, the member's vested percentage is equal to the percentage that corresponds to the number of years of vesting service credit, as follows:

Completed years of service credit		Vested percentage
less than 5		0 percent
5		40 percent
6		44 percent
7		48 percent
8		52 percent
9		56 percent
10		60 percent
11		64 percent
12		68 percent
13		72 percent
14		76 percent
15		80 percent
16		84 percent
17		88 percent
18		92 percent
19		96 percent

(b) If the member is a member of the lump-sum division new text begin or the defined contribution plan new text end and employed in a fire department that deleted text begin joined deleted text end new text begin joins new text end the plan on or after January 1, 2023, the member's vested percentage is equal to the percentage determined by applying the vesting schedule selected in the request for coverage under section 353G.05, subdivision deleted text begin 1a deleted text end new text begin 1c new text end , taking into account years of vesting service credit.

(c) If the member is a member of the monthly benefit division and has completed 20 years of service as a member of the plan, the member is 100 percent vested. If the member has completed less than 20 years of service as a member of the plan, the member's vested percentage is equal to the percentage determined under the retirement benefit plan document applicable to the member.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 36.

Minnesota Statutes 2023 Supplement, section 353G.10, is amended to read:

353G.10 deleted text begin DEFERRED deleted text end new text begin LEAVING FIREFIGHTING new text end SERVICE deleted text begin PENSION AMOUNT deleted text end new text begin BEFORE REACHING NORMAL RETIREMENT AGE new text end .

new text begin Subdivision 1. new text end

new text begin Entitlement to a retirement benefit, to the extent vested. new text end

deleted text begin A person who was an active member of a fire department covered by either the lump-sum division or the monthly benefit division of the plan who has separated deleted text end new text begin If a volunteer firefighter separates new text end from active firefighting service deleted text begin for at least deleted text end new text begin before reaching normal retirement age, the volunteer firefighter is entitled to a distribution of the volunteer firefighter's retirement benefit under section 353G.09, subdivision 1a, as follows: new text end

new text begin (1) if the volunteer firefighter is covered by the defined contribution plan, the volunteer firefighter is entitled to a distribution of the retirement benefit as soon as practicable after the volunteer firefighter submits an application for a distribution; new text end

new text begin (2) if the volunteer firefighter is covered by the lump-sum division of the defined benefit plan, the volunteer firefighter is entitled to a distribution of the volunteer firefighter's retirement benefit after the volunteer firefighter has reached age 50 and as soon as practicable after the volunteer firefighter submits an application for a distribution; and new text end

new text begin (3) if the volunteer firefighter is covered by the monthly benefit division of the defined benefit plan, the volunteer firefighter is entitled to begin a distribution of the volunteer firefighter's retirement benefit after the volunteer firefighter has reached age 50 and as soon as practicable after the volunteer firefighter submits an application for a distribution. new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin No earlier than new text end 30 days deleted text begin and who has completed at least five years of service credit, but has not attained the age of 50 years, is entitled to a deferred service pension on or after attaining the age of 50 years and applying deleted text end new text begin after leaving active firefighting service, a volunteer firefighter entitled to a distribution under subdivision 1 must submit an application to the executive director new text end in a manner specified by the executive director deleted text begin for the service pension. The service pension payable is the nonforfeitable percentage of the service pension under section 353G.09, subdivision 2, and is payable deleted text end new text begin . new text end

new text begin Subd. 3. new text end

new text begin Retirement benefit during period of deferral. new text end

new text begin (a) A volunteer firefighter's account in the defined contribution plan must continue to be invested with the rest of the assets of the individual accounts in the volunteer firefighter's fire department account and, until the account is distributed, credited with investment earnings or reduced by investment losses under section 353G.082, subdivision 4, and a deduction taken for an equal share of the administrative expenses under section 353G.082, subdivision 3, paragraph (b), until the volunteer firefighter's account is distributed. new text end

new text begin (b) A volunteer firefighter's retirement benefit in the defined benefit plan must be retained in the defined benefit plan new text end without any interest on or increase in the service pension deleted text begin over deleted text end new text begin during new text end the period of deferral.

new text begin Subd. 4. new text end

new text begin Forfeiture of accounts of volunteer firefighters who end service. new text end

new text begin (a) The portion of an account or pension benefit that is not vested is forfeited as of the earliest of: new text end

new text begin (1) the last day of the calendar year that includes the fifth anniversary of the date on which the volunteer firefighter ended service; new text end

new text begin (2) immediately upon receiving a lump-sum payment of the entire vested portion of the account or pension benefit; or new text end

new text begin (3) immediately upon receiving the final payment consisting of the entire amount remaining in the account or pension benefit that is vested. new text end

new text begin (b) A volunteer firefighter with a zero percent vested interest in the account or pension benefit is deemed to have received a distribution on the last day of service, and the account or pension benefit must immediately be forfeited. new text end

new text begin (c) Amounts forfeited remain forfeited and must not be reinstated upon the resumption of service with the fire department or any other fire department covered by the retirement plan. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 37.

Minnesota Statutes 2023 Supplement, section 353G.11, subdivision 2, is amended to read:

Subd. 2.

new text begin Benefit level changes in the new text end lump-sum division deleted text begin level selection deleted text end new text begin of the defined benefit plan new text end .

new text begin (a) A fire department's fire chief or the governing body operating a fire department may request an increase in the benefit level as provided in this subdivision. new text end

new text begin (b) The fire chief or governing body must request new text end a cost estimate from the executive director of an increase in the service pension level applicable to the active firefighters of the fire department deleted text begin may be requested by: (1) the fire chief of a department that has active membership covered by the lump-sum division; or (2) the governing body operating a fire department that has active membership covered by the lump-sum division. deleted text end

new text begin (c) The executive director must prepare the cost estimate using a procedure certified as accurate by the approved actuary retained by the association. new text end

new text begin (d) new text end Within 120 days deleted text begin of the receipt of deleted text end new text begin after receiving new text end the cost estimate deleted text begin prepared by deleted text end new text begin from new text end the executive director deleted text begin using a procedure certified as accurate by the approved actuary retained by the Public Employees Retirement Association deleted text end , the governing body may approve the deleted text begin service pension deleted text end new text begin benefit new text end level change, effective for January 1 of the following calendar year unless the governing body specifies in the approval document an effective date that is January 1 of the second year following the approval date. If the approval occurs after April 30, the required municipal contribution for the following calendar year must be recalculated and the results reported to the governing body. If not approved within 120 days of the receipt of the cost estimate, the deleted text begin service pension deleted text end new text begin benefit new text end level change is considered to have been disapproved.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 38.

Minnesota Statutes 2023 Supplement, section 353G.11, is amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Procedure for changing benefit level. new text end

new text begin (a) The fire chief of a fire department that has an active membership that is covered by the monthly benefit retirement division of the plan may initiate the process of modifying the retirement benefit plan document under this section. new text end

new text begin (b) The modification procedure is initiated when the applicable fire chief files with the executive director of the Public Employees Retirement Association a written summary of the desired benefit plan document modification, the proposed benefit plan document modification language, a written request for the preparation of an actuarial cost estimate for the proposed benefit plan document modification, and payment of the estimated cost of the actuarial cost estimate. new text end

new text begin (c) Upon receipt of the modification request and related documents, the executive director shall review the language of the proposed benefit plan document modification and, if a clarification is needed in the submitted language, shall inform the fire chief of the necessary clarification. Once the proposed benefit plan document modification language has been clarified by the fire chief and resubmitted to the executive director, the executive director shall arrange for the approved actuary retained by the Public Employees Retirement Association to prepare a benefit plan document modification cost estimate under the applicable provisions of section 356.215 and of the standards for actuarial work adopted by the Legislative Commission on Pensions and Retirement. Upon completion of the benefit plan document modification cost estimate, the executive director shall forward the estimate to the fire chief who requested it and to the chief financial officer of the municipality or entity with which the fire department is primarily associated. new text end

new text begin (d) The fire chief, upon receipt of the cost estimate, shall circulate the cost estimate with the active firefighters in the fire department and shall take reasonable steps to provide the estimate results to any affected retired members of the fire department and their beneficiaries. The chief financial officer of the municipality or entity associated with the fire department shall present the proposed modification language and the cost estimate to the governing body of the municipality or entity for its consideration at a public hearing held for that purpose. new text end

new text begin (e) If the governing body of the municipality or entity approves the modification language, the chief administrative officer of the municipality or entity shall notify the executive director of the Public Employees Retirement Association of that approval. The benefit plan document modification is effective on the January 1 following the date of filing the approval with the Public Employees Retirement Association. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 39.

new text begin [353G.114] ANCILLARY BENEFITS AND SUPPLEMENTAL BENEFITS. new text end

new text begin (a) Except as provided under paragraph (b) and sections 353G.115 and 353G.12, no disability, death, funeral, or other ancillary benefit beyond a retirement benefit is payable from the lump-sum division of the defined benefit plan or the defined contribution plan. new text end

new text begin (b) Any member or survivor of a deceased member who receives a lump-sum distribution of the member's retirement benefit from the lump-sum division of the defined benefit plan or the defined contribution plan is entitled to a supplemental benefit under section 424A.10. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 40.

Minnesota Statutes 2023 Supplement, section 353G.115, is amended to read:

353G.115 DISABILITY BENEFIT COVERAGE; AUTHORITY FOR deleted text begin CASUALTY deleted text end new text begin DISABILITY new text end INSURANCE.

(a) Except as provided in paragraph (b) deleted text begin or (c) deleted text end , no disability benefit is payable from the deleted text begin statewide deleted text end new text begin retirement new text end plan.

deleted text begin (b) If the board approves the arrangement, disability coverage for the lump-sum division of the statewide plan members may be provided through a group disability insurance policy obtained from an insurance company licensed to do business in this state. The lump-sum retirement account of the statewide volunteer firefighter plan is authorized to pay the premium for the disability insurance authorized by this paragraph. The proportional amount of the total annual disability insurance premium must be added to the required contribution amount determined under section 353G.08. deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end The disability benefit coverage for new text begin a fire department in new text end the monthly deleted text begin benefit deleted text end division is the disability service pension amount specified in the new text begin retirement new text end benefit plan document applicable to the deleted text begin fire department, applicable deleted text end former deleted text begin volunteer firefighter deleted text end relief association new text begin affiliated with the fire department and new text end in effect as of the last day before the date on which retirement coverage transferred to the deleted text begin statewide volunteer firefighter deleted text end new text begin retirement new text end plan, subject to all conditions and limitations in the disability service pension specified therein.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 41.

Minnesota Statutes 2023 Supplement, section 353G.12, subdivision 2, is amended to read:

Subd. 2.

Lump-sum deleted text begin plan deleted text end new text begin division new text end ; survivor benefit amount.

The amount of the survivor benefit for the lump-sum division is the amount of the deleted text begin lump-sum service pension deleted text end new text begin retirement benefit new text end that would have been payable to the member of the lump-sum division on the date of death if the member had been age 50 or older on that date.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 42.

Minnesota Statutes 2023 Supplement, section 353G.12, is amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Defined contribution plan; survivor benefit amount. new text end

new text begin The amount of the survivor benefit for the defined contribution plan is the amount credited to the individual account of the deceased member on the date of death. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 43.

Minnesota Statutes 2023 Supplement, section 353G.14, is amended to read:

353G.14 DISTRIBUTIONS deleted text begin FROM LUMP-SUM DIVISION deleted text end .

Subdivision 1.

Lump sum.

deleted text begin Unless a volunteer firefighter requests an annuity under subdivision 2, deleted text end The executive director must distribute deleted text begin a deleted text end new text begin the retirement benefit under section 353G.09, subdivision 1a, of a member of the new text end lump-sum deleted text begin service pension deleted text end new text begin division of the defined benefit plan or the defined contribution plan new text end in the form of a single new text begin lump-sum new text end payment deleted text begin from the account of each fire department covered by the plan in which the volunteer firefighter earned a retirement benefit under section 353G.09 deleted text end .

Subd. 2.

deleted text begin Annuity deleted text end new text begin Monthly payments new text end .

deleted text begin The executive director may purchase an annuity contract on behalf of a volunteer firefighter retiring from the lump-sum division of the plan with a total premium payment in an amount equal to the lump-sum service pension payable under section 353G.09 if the purchase was requested by the volunteer firefighter in a manner prescribed by the executive director. The annuity contract must be purchased from an insurance carrier that is licensed to do business in this state. If purchased, the annuity contract is in lieu of any service pension or other benefit from the lump-sum plan of the plan. The annuity contract may be purchased at any time after the volunteer firefighter discontinues active service, but the annuity contract must stipulate that no annuity amounts are payable before the volunteer firefighter attains the age of 50. deleted text end new text begin The executive director must distribute the retirement benefit under section 353G.09, subdivision 1a, of a member of the monthly division of the defined benefit plan in the form of monthly payments as authorized under the retirement benefit plan document for the fire department in which the member is employed or for which the member provides services. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 44.

new text begin [353G.19] CONVERSION TO DEFINED CONTRIBUTION PLAN. new text end

new text begin Subdivision 1. new text end

new text begin Authority to initiate conversion. new text end

new text begin (a) A participating employer associated with a fire department covered by the defined benefit plan, including an entity previously affiliated with a defined benefit relief association when the entity made a request for coverage by the defined contribution plan under section 353G.05, subdivision 1b, paragraph (c), may convert to coverage by the defined contribution plan in accordance with this section. new text end

new text begin (b) Conversion from coverage by the defined benefit plan to coverage by the defined contribution plan consists of: new text end

new text begin (1) a resolution by the governing body of the participating employer; new text end

new text begin (2) notice to all former and active volunteer firefighters of the fire department; new text end

new text begin (3) full vesting of all active and former volunteer firefighters with an accrued benefit in the defined benefit plan attributable to service with the fire department; and new text end

new text begin (4) allocation of surplus over full funding, if any, to individual accounts in the fire department's new account in the defined contribution plan. new text end

new text begin (c) For an entity previously affiliated with a defined benefit relief association when the entity made a request for coverage by the defined contribution plan under section 353G.05, subdivision 1b, paragraph (c), a conversion must occur under paragraph (b) immediately after coverage by the retirement plan of the entity's fire department and the entity's volunteer firefighters takes effect. new text end

new text begin Subd. 2. new text end

new text begin Resolutions by the governing body. new text end

new text begin To initiate a conversion, the governing body of the participating employer must file with the executive director at least 30 days before the end of a calendar year: new text end

new text begin (1) a resolution that states that the fire department elects to participate in the defined contribution plan effective on conversion effective date, which is the first day of the next calendar year; and new text end

new text begin (2) if the fire department account had a deficit from full funding as defined under section 353G.08, subdivision 1, paragraph (c), or the special fund of the defined benefit relief association had a deficit from full funding as defined in section 424A.092, subdivision 3, paragraph (b), a resolution approving a contribution to the retirement plan in the amount necessary to eliminate the deficit, which is to be paid within 30 days of the filing of the resolution or in installments over three years, with the first payment to be made within 30 days of the filing of the resolution. new text end

new text begin Subd. 3. new text end

new text begin Notice to participants. new text end

new text begin The participating employer must provide notice to all active and former volunteer firefighters in the fire department at least 30 days before the conversion effective date. The notice must include: new text end

new text begin (1) an explanation that the plan is converting from a defined benefit plan to a defined contribution plan, including definitions of those terms, on the conversion effective date and that the active and former volunteer firefighters will become fully vested in their accrued benefit as of the conversion effective date; new text end

new text begin (2) a summary of the terms of the defined contribution plan; new text end

new text begin (3) a section tailored to each volunteer firefighter that provides an estimate of the present value of the participant's fully vested accrued benefit and the calculation that resulted in that value; new text end

new text begin (4) an estimate of any anticipated surplus and an explanation of the allocation of the surplus; and new text end

new text begin (5) contact information for the chief administrative officer or chief financial officer of the participating employer and the designated staff member of the retirement plan who will answer questions and directions to a website. new text end

new text begin Subd. 4. new text end

new text begin Full vesting and determination of accrued benefit. new text end

new text begin (a) On the conversion effective date, each active or former volunteer firefighter with a retirement benefit under the defined benefit plan, except any retiree in pay status who is receiving a monthly benefit, becomes 100 percent vested as of the conversion effective date in the firefighter's retirement benefit, without regard to the number of years of vesting service credit. new text end

new text begin (b) The executive director must determine the present value of each active or former firefighter's accrued benefit as of the conversion effective date, taking into account the full vesting requirement under paragraph (a). new text end

new text begin Subd. 5. new text end

new text begin Surplus over full funding. new text end

new text begin If the fire department account has a surplus over full funding, as defined under section 353G.08, subdivision 1, paragraph (c), the executive director must allocate the surplus over full funding to the individual account of each active and former volunteer firefighter, except any former volunteer firefighter receiving an annuity, in the same proportion that the volunteer firefighter's accrued benefit bears to the total accrued benefits of all active and former volunteer firefighters. new text end

new text begin Subd. 6. new text end

new text begin Distribution to former volunteer firefighters in pay status. new text end

new text begin (a) If any former volunteer firefighter or beneficiary is receiving an annuity, the executive director must determine the present value of the remaining payments to the former volunteer firefighter or beneficiary and offer the former volunteer firefighter or beneficiary: new text end

new text begin (1) continued payments in the same monthly amount; or new text end

new text begin (2) an immediate lump-sum distribution of the present value amount. new text end

new text begin (b) The offer of an immediate lump-sum distribution must include an offer to the former volunteer firefighter or beneficiary to elect a direct rollover of the amount to an eligible retirement plan as permitted under section 356.635, subdivisions 3 to 7, if the distribution is an eligible rollover distribution as defined in section 356.635, subdivisions 4 and 5. new text end

new text begin Subd. 7. new text end

new text begin Prohibition against reduction in accrued benefit. new text end

new text begin In no event may the value of a volunteer firefighter's individual account in the defined contribution plan be less as of the day following the conversion effective date than the present value of the volunteer firefighter's accrued benefit as of the day before the conversion effective date. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026. new text end

Sec. 45.

new text begin REVISOR INSTRUCTION. new text end

new text begin The revisor of statutes shall change the following terms wherever the terms appear in Minnesota Statutes, chapter 353G, unless the context indicates that the previous term should remain. The revisor of statutes shall also make grammatical changes related to the changes in terms: new text end

new text begin (1) "Public Employees Retirement Association" to "association"; new text end

new text begin (2) "independent nonprofit firefighting corporation" to "firefighting corporation"; and new text end

new text begin (3) "monthly benefit division" to "monthly division." new text end

Sec. 46.

new text begin REPEALER. new text end

new text begin (a) new text end new text begin Minnesota Statutes 2022, section 353G.01, subdivision 10, new text end new text begin is repealed. new text end

new text begin (b) new text end new text begin Minnesota Statutes 2023 Supplement, sections 353G.01, subdivisions 7a and 8a; 353G.02, subdivision 6; 353G.08, subdivision 3; 353G.11, subdivisions 1, 1a, 3, and 4; 353G.112; and 353G.121, new text end new text begin are repealed. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

ARTICLE 4

PUBLIC EMPLOYEES RETIREMENT ASSOCIATION

Section 1.

Minnesota Statutes 2022, section 353.028, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, each of the terms in this subdivision has the meaning indicated.

(b) "City manager" means new text begin : new text end

(1) a person who is duly appointed to and is holding the position of city manager in a Plan B statutory city or in a home rule city operating under the "council-manager" form of government deleted text begin , deleted text end new text begin ; new text end or

(2) a person who is appointed to and is holding the position of chief administrative officer of a home rule charter city or a statutory city under a charter provision, ordinance, or resolution establishing such a position and prescribing its duties and responsibilities.

(c) "Governing body" means the city council of the city employing the city manager.

(d) "Election" means the election described in subdivision 2.

new text begin (e) "First employed" means a city manager employed by a city who, prior to employment as a city manager, has not been an employee in any position covered by any retirement plan administered by the association to which the city contributed or by any supplemental pension or deferred compensation plan under section 356.24 sponsored by the city. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024. new text end

Sec. 2.

Minnesota Statutes 2022, section 353.028, subdivision 2, is amended to read:

Subd. 2.

Election.

(a) A city manager new text begin first employed by a city new text end may deleted text begin elect deleted text end new text begin make a onetime, irrevocable election new text end to be excluded from membership in the general employees retirement plan of the deleted text begin Public Employees Retirement deleted text end association. The election of exclusion must be made within deleted text begin six months deleted text end new text begin 30 days new text end following the commencement of employment, must be made in writing on a form prescribed by the executive director, and must be approved by a resolution adopted by the governing body of the city. The election of exclusion is not effective until it is filed with the executive director. Membership of a city manager in the general employees retirement plan ceases on the date the written election is received by the executive director deleted text begin or upon a later date specified deleted text end . Employee and employer contributions made new text begin during the first 30 days of employment new text end on behalf of a person exercising the option to be excluded from membership under this deleted text begin section deleted text end new text begin paragraph new text end must be refunded new text begin or credited new text end in accordance with section 353.27, subdivision 7.

(b) A city manager who has deleted text begin elected exclusion under this subdivision may elect to revoke that action by filing a written notice with the executive director. The notice must be on a form prescribed by the executive director and must be approved by a resolution of the governing body of the city. Membership of the city manager in the association resumes prospectively from the date of the first day of the pay period for which contributions were deducted or, if pay period coverage dates are not provided, the date on which the notice of revocation or contributions are received in the office of the association, provided that the notice of revocation is received by the association within 60 days of the receipt of contributions deleted text end new text begin previously been an employee in any position covered by any retirement plan administered by the association to which the city contributed or by any supplemental pension or deferred compensation plan under section 356.24 sponsored by the city is not eligible to make the election under paragraph (a) new text end .

(c) deleted text begin An election under paragraph (b) is irrevocable. deleted text end Any election under paragraph (a) deleted text begin or (b) deleted text end must include a statement that the individual will not seek authorization to purchase service credit for any period of excluded service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024. new text end

Sec. 3.

Minnesota Statutes 2022, section 353.028, subdivision 3, is amended to read:

Subd. 3.

Deferred compensation; city contribution.

(a) If an election of exclusion under subdivision 2 is made, and if the city manager and the governing body of the city additionally agree in writing that the additional compensation is to be deferred and is to be contributed on behalf of the city manager to a deferred compensation program deleted text begin which deleted text end new text begin that new text end meets the requirements of section 457 of the Internal Revenue Code of 1986, as amended, new text begin and section 356.24, new text end the governing body may compensate the city manager, in addition to the salary allowed under any limitation imposed on salaries by law or charter, in an amount equal to the employer contribution deleted text begin which deleted text end new text begin that new text end would be required by section 353.27, subdivision 3, if the city manager were a member of the general employees retirement plan.

(b) Alternatively, if an election of exclusion under subdivision 2 is made, the city manager and the governing body of the city may agree in writing that the equivalent employer contribution to the contribution under section 353.27, subdivision 3, be contributed by the city to the defined contribution plan of the Public Employees Retirement Association under chapter 353D. new text begin Any agreement under this paragraph must be entered into within 30 days following the commencement of employment. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024. new text end

Sec. 4.

Minnesota Statutes 2022, section 353.028, subdivision 5, is amended to read:

Subd. 5.

deleted text begin Election; deleted text end Other employment.

If a city manager who has made an election to be excluded new text begin under subdivision 2 new text end subsequently accepts employment in another governmental subdivision or deleted text begin subsequently accepts employment deleted text end new text begin in a position new text end other than as a city manager in the same city, the election is rescinded on the effective date of employment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024. new text end

Sec. 5.

Minnesota Statutes 2022, section 353.33, subdivision 7, is amended to read:

Subd. 7.

deleted text begin Partial reemployment deleted text end new text begin Limitation on disability benefit payments new text end .

new text begin (a) new text end If, following a work or non-work-related injury or illness, a deleted text begin disabled person deleted text end new text begin member new text end who remains totally and permanently disabled as defined in section 353.01, subdivision 19, has deleted text begin income deleted text end new text begin earnings new text end from employment that is not substantial gainful activity deleted text begin and the rate of earnings from that employment are less than deleted text end new text begin , the amount of the member's disability benefit must be reduced as described in paragraph (b) if the total of the disability benefit and earnings exceeds the greater of: new text end

new text begin (1) new text end the new text begin base monthly new text end salary rate new text begin the member had been receiving new text end at the date of disability new text begin ; new text end or

new text begin (2) new text end the new text begin base monthly new text end salary rate currently paid new text begin by the employing governmental subdivision new text end for new text begin similar new text end positions deleted text begin similar to the employment position held by the disabled person immediately before becoming disabled, whichever is greater, the executive director shall continue deleted text end new text begin . new text end

new text begin (b) If paragraph (a) applies, new text end the new text begin member's new text end disability benefit deleted text begin in an amount that, when added to the earnings and any workers' compensation benefit, does deleted text end new text begin must be reduced until the disability benefit plus the monthly earnings from employment do new text end not exceed the deleted text begin salary rate at the date of disability or the salary currently paid for positions similar to the employment position held by the disabled person immediately before becoming disabled, whichever is higher deleted text end new text begin greater of the salaries described in paragraph (a), clause (1) or (2) new text end .

deleted text begin The disability benefit under this subdivision may not exceed the disability benefit originally allowed, plus any postretirement adjustments payable after December 31, 1988, in accordance with Minnesota Statutes 2008, section 11A.18, subdivision 10, or Minnesota Statutes 2008, section 356.41, through January 1, 2009, and thereafter as provided in section 356.415. No deductions for the retirement fund may be taken from the salary of a disabled person who is receiving a disability benefit as provided in this subdivision. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 6.

Minnesota Statutes 2022, section 353.33, subdivision 7a, is amended to read:

Subd. 7a.

Trial work period.

(a) This subdivision applies only to the Public Employees Retirement Association general employees retirement plan.

(b) If, following a work or non-work-related injury or illness, a deleted text begin disabled deleted text end member new text begin receiving disability benefits new text end attempts to return to work for deleted text begin their deleted text end new text begin the member's new text end previous public employer or attempts to return to a similar position with another public employer, on a full-time or less than full-time basis, the deleted text begin Public Employees Retirement deleted text end association deleted text begin shall deleted text end new text begin must new text end continue paying the disability benefit for a period not to exceed six months. The disability benefit must continue in an amount that, when added to the subsequent employment earnings deleted text begin and workers' compensation benefit deleted text end , does not exceed the new text begin base monthly new text end salary new text begin the member had been receiving new text end at the date of disability or the new text begin base monthly new text end salary new text begin rate new text end currently paid for similar positions, whichever is higher.

(c) No deductions for the general employees retirement plan may be taken from the salary of a disabled person who is attempting to return to work under this provision unless the member waives further disability benefits.

(d) A member only may return to employment and continue disability benefit payments once while receiving disability benefits from the general employees retirement plan deleted text begin administered by the Public Employees Retirement Association deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 7.

Minnesota Statutes 2023 Supplement, section 353.335, subdivision 1, is amended to read:

Subdivision 1.

Reemployment earnings reporting required.

Unless waived by the executive director, a disability benefit recipient must report all earnings from reemployment deleted text begin and from income from workers' compensation deleted text end to the association annually by May 15 in a format prescribed by the executive director. If the form is not submitted by May 15, benefits must be suspended effective June 1. If, upon receipt of the form, the executive director determines that the disability benefit recipient is eligible for continued payment, benefits must be reinstated retroactive to June 1. The executive director may waive the requirements in this section if the medical evidence supports that the disability benefit recipient will not have earnings from reemployment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 8.

Minnesota Statutes 2022, section 353.64, subdivision 1, is amended to read:

Subdivision 1.

Police and fire plan membership; mandatory.

new text begin (a) new text end A governmental subdivision must report a public employee for membership in the police and fire plan if the employee is employed full time as specified in clause (1), (2), or (3):

(1) a full-time police officer or a person in charge of a designated police or sheriff's department, who by virtue of that employment is required by the employing governmental subdivision to be and is licensed by the Minnesota peace officer standards and training board under sections 626.84 to 626.863, who is charged with the prevention and detection of crime, who has the full power of arrest, who is assigned to a designated police or sheriff's department, and whose primary job is the enforcement of the general criminal laws of the state;

(2) a full-time firefighter or a deleted text begin person in charge of a designated fire company or companies who deleted text end new text begin supervisor of other firefighters who, in either case, is employed in a fire department, is required by the employing governmental subdivision to be and is licensed by the Board of Firefighter Training and Education under section 299N.05, and who new text end is engaged in deleted text begin the hazards of deleted text end new text begin or exposed to hazardous conditions resulting from new text end firefighting new text begin or fire prevention, suppression, or investigation new text end ; or

(3) a full-time police officer or firefighter meeting deleted text begin all deleted text end new text begin the new text end requirements of clause (1) or (2), as applicable, who as part of the employment position is deleted text begin periodically deleted text end assigned new text begin less than 50 percent of the time new text end to new text begin perform new text end employment duties in the same department that are not within the scope of deleted text begin this subdivision deleted text end new text begin the employment duties described in clause (1) or (2) new text end .

new text begin (b) new text end An individual to which new text begin paragraph (a), new text end clause (3) new text begin , new text end applies must contribute as a member of the police and fire plan for deleted text begin both the primary and secondary deleted text end new text begin all new text end services deleted text begin that are deleted text end provided to the employing governmental subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 9.

Minnesota Statutes 2022, section 353.64, subdivision 2, is amended to read:

Subd. 2.

Police and fire deleted text begin fund deleted text end new text begin plan new text end membership; part-time employment coverage option.

(a) The governing body of a governmental subdivision may adopt a resolution, subject to requirements specified in paragraph (b), declaring that a public employee employed in a position on a part-time basis by that governmental subdivision is covered by the police and fire plan for that employment.

(b) If the public employee's position is related to police service, the resolution is valid if the conditions specified in paragraph (c) are met. If the public employee's position is related to fire service, the resolution is valid if the conditions specified in paragraph (d) are met. If the public employee in the applicable position is periodically assigned to employment duties not within the scope of deleted text begin this deleted text end new text begin the employment duties described in new text end subdivision new text begin 1, paragraph (a), clause (1) or (2) new text end , the resolution is considered valid if the governing body of the governmental subdivision declares that the public employee's position, for deleted text begin primary services provided deleted text end new text begin at least 50 percent of the time worked new text end , satisfies deleted text begin all of deleted text end the requirements of subdivision 1, new text begin paragraph (a), new text end clause (3), other than the requirement of full-time employment.

(c) For the governing body of the governmental subdivision to declare a position to be that of a police officer, the duties and qualifications of the person so employed must, at a minimum, satisfy all of the requirements of subdivision 1, new text begin paragraph (a), new text end clause (1), other than the requirement of full-time employment.

(d) For the governing body of a governmental subdivision to declare a position to be that of a firefighter, the duties and qualifications of the person so employed must, at a minimum, satisfy deleted text begin all of deleted text end the requirements of subdivision 1, new text begin paragraph (a), new text end clause (2), other than the requirement of full-time employment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 10.

Minnesota Statutes 2022, section 353.64, subdivision 4, is amended to read:

Subd. 4.

Resolution filing.

(a) A copy of the resolution of the governing body declaring a position to be that of police officer or firefighter shall be promptly filed with the board of trustees and shall be irrevocable.

(b) Following the receipt of deleted text begin adequate deleted text end notice from the association, if a valid resolution is not filed with the deleted text begin public employees retirement deleted text end association within six months following the date of that notice, any contributions or deductions made to the police and fire deleted text begin fund deleted text end new text begin plan new text end for the applicable employment are deemed to be contributions or deductions transmitted in error under section 353.27, subdivision 7a.

new text begin (c) The association must consider the filing by the governing body of a governmental subdivision of a resolution that satisfies the requirements of this section regarding an employee as sufficient evidence that the employee satisfies the eligibility requirements of this section, including subdivision 1, paragraph (a), clause (3), and subdivision 2. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 11.

Minnesota Statutes 2022, section 353.64, subdivision 5a, is amended to read:

Subd. 5a.

Transfers.

new text begin (a) new text end A member of the police and fire deleted text begin fund deleted text end new text begin plan new text end continues to be a member of deleted text begin that fund deleted text end new text begin the police and fire plan new text end if new text begin the member is new text end transferred new text begin or has a change in employment: new text end

new text begin (1) new text end to a different position deleted text begin with associated deleted text end new text begin within the same new text end police or fire department deleted text begin functions in the same department or a related deleted text end new text begin ; new text end

new text begin (2) to a police new text end department in deleted text begin the same deleted text end new text begin another new text end governmental subdivision deleted text begin provided deleted text end new text begin in the state of Minnesota; or new text end

new text begin (3) to a fire department in another governmental subdivision in the state of Minnesota. new text end

new text begin (b) new text end The governing body deleted text begin sends deleted text end new text begin of the governmental subdivision that employs the member, in the case of a transfer under paragraph (a), clause (1), or the governing body of the governmental subdivision by which the member becomes employed, in the case of a transfer under paragraph (a), clause (2) or (3), must send new text end a copy of a resolution to that effect to the association. A police and fire deleted text begin fund deleted text end new text begin plan new text end member who is elected or assumes an appointive position, including but not limited to, the positions of city council member, city manager, and finance director is not eligible to retain membership in the public employees police and fire deleted text begin fund deleted text end new text begin plan new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 12.

Minnesota Statutes 2023 Supplement, section 353D.01, subdivision 2, is amended to read:

Subd. 2.

Eligibility.

(a) Eligibility to participate in the plan is available to:

(1) any elected or appointed local government official of a governmental subdivision who elects to participate in the plan under section 353D.02, subdivision 1, and who, for the service rendered to a governmental subdivision, is not a member of the association within the meaning of section 353.01, subdivision 7;

(2) physicians who, if they did not elect to participate in the plan under section 353D.02, subdivision 2, would meet the definition of member under section 353.01, subdivision 7;

(3) basic and advanced life-support emergency medical service personnel who are employed by any public ambulance service that elects to participate under section 353D.02, subdivision 3;

(4) members of a municipal rescue squad associated with the city of Litchfield in Meeker County, or of a county rescue squad associated with Kandiyohi County, if an independent nonprofit rescue squad corporation, incorporated under chapter 317A, performing emergency management services, and if not affiliated with a fire department or ambulance service and if its members are not eligible for membership in that fire department's or ambulance service's relief association or comparable pension plan;

(5) employees of the Port Authority of the city of St. Paul who elect to participate in the plan under section 353D.02, subdivision 5, and who are not members of the association under section 353.01, subdivision 7;

(6) city managers who elected to be excluded from the general employees retirement plan of the association under section 353.028 and who elected to participate in the public employees defined contribution plan under section 353.028, subdivision 3, paragraph (b);

(7) volunteer or emergency on-call firefighters serving in a municipal fire department or an independent nonprofit firefighting corporation who are not covered by the police and fire retirement plan and who are not covered by a volunteer firefighters relief association and who elect to participate in the public employees defined contribution plan;

(8) new text begin any new text end elected county deleted text begin sheriffs deleted text end new text begin sheriff new text end who deleted text begin are deleted text end new text begin is a new text end former deleted text begin members deleted text end new text begin member new text end of the police and fire plan deleted text begin and who are deleted text end new text begin , is new text end receiving a retirement annuity as provided under section 353.651 new text begin , who does not have previous employment with the county for which the sheriff was elected new text end ; and

(9) persons appointed to serve on a board or commission of a governmental subdivision or an instrumentality thereof.

(b) Individuals otherwise eligible to participate in the plan under this subdivision who are currently covered by a public or private pension plan because of their employment or provision of services are not eligible to participate in the public employees defined contribution plan.

(c) A former participant is a person who has terminated eligible employment or service and has not withdrawn the value of the person's individual account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024. new text end

Sec. 13.

Minnesota Statutes 2022, section 353D.02, as amended by Laws 2023, chapter 47, article 3, section 3, is amended to read:

353D.02 ELECTION OF COVERAGE.

Subdivision 1.

Local government officials.

Eligible elected or appointed local government officials may elect to participate in the defined contribution plan deleted text begin after deleted text end new text begin within the first 30 days of new text end being elected or appointed to public office by filing a membership application on a form prescribed by the executive director of the association authorizing contributions to be deducted from the official's salary. Participation begins on the first day of the pay period for which the contributions were deducted or, if pay period coverage dates are not provided, the date on which the membership application or contributions are received in the office of the association, whichever is received first, provided further that the membership application is received by the association within 60 days of the receipt of the contributions. An election to participate in the plan is deleted text begin revocable during incumbency deleted text end new text begin irrevocable new text end .

Subd. 2.

Eligible physician.

Eligible physicians may elect to participate in the defined contribution plan within deleted text begin 90 deleted text end new text begin the first 30 new text end days of commencing employment with a government subdivision under section 353.01, subdivision 6, by filing a membership application on a form prescribed by the executive director of the association authorizing contributions to be deducted from the physician's salary. Participation begins on the first day of the pay period for which the contributions were deducted. An election to participate in the defined contribution plan is irrevocable.

Subd. 3.

Eligible ambulance service personnel.

Each public ambulance service with eligible personnel may elect to participate in the plan. If a service elects to participate, its eligible personnel may elect to participate or deleted text begin to deleted text end decline to participate. An individual's election must be made within 30 days of the service's election to participate or new text begin within new text end 30 days of the date on which the individual deleted text begin was employed by deleted text end new text begin began employment with new text end the service or began to provide service for it, whichever date is later. An election by a service or an individual is deleted text begin revocable deleted text end new text begin irrevocable new text end .

Subd. 4.

Eligible rescue squad personnel.

The municipality or county, as applicable, associated with a rescue squad under section 353D.01, subdivision 2, paragraph (a), clause (4), may elect to participate in the plan. If the municipality or county, as applicable, elects to participate, the eligible personnel may elect to participate or decline to participate. An eligible individual's election must be made within 30 days of the service's election to participate or new text begin within new text end 30 days of the date on which the individual deleted text begin begins to provide service to deleted text end new text begin first began employment with new text end the rescue squad, whichever is later. Elections under this subdivision by a government unit or individual are irrevocable. The municipality or county, as applicable, must specify by resolution eligibility requirements for rescue squad personnel which must be satisfied if the individual is to be authorized to make the election under this subdivision.

Subd. 5.

St. Paul Port Authority personnel.

Employees of the Port Authority of the city of St. Paul who do not elect to participate in the general employees retirement plan may elect new text begin within the first 30 days of commencing employment new text end to participate in the plan by filing a membership application on a form prescribed by the executive director of the association authorizing contributions to be deducted from the employee's salary. Participation begins on the first day of the pay period for which the contributions were deducted or, if pay period coverage dates are not provided, the date on which the membership application or the contributions are received in the office of the association, whichever is received first, if the membership application is received by the association within 60 days of the receipt of the contributions. An election to participate in the plan is irrevocable.

Subd. 6.

City managers.

City managers who elected to be excluded from the general employees retirement plan of the Public Employees Retirement Association under section 353.028, and who elected to participate in the plan under section 353.028, subdivision 3, paragraph (b), deleted text begin shall deleted text end new text begin must new text end file that election with the executive director new text begin within the first 30 days of commencing employment new text end . Participation begins on the first day of the pay period next following the date of the coverage election. An election to participate by a city manager is deleted text begin revocable deleted text end new text begin irrevocable new text end .

Subd. 7.

Certain volunteer firefighters.

Volunteer or deleted text begin emergency deleted text end on-call firefighters who are serving as members of a municipal fire department or an independent nonprofit firefighting corporation and who are not covered for that firefighting service by the public employees police and fire retirement plan under sections 353.63 to 353.68 deleted text begin or deleted text end new text begin , new text end by deleted text begin the applicable deleted text end new text begin a new text end volunteer firefighters relief association under chapter 424A new text begin , or by the statewide volunteer firefighter retirement plan under chapter 353G new text end may elect to participate in the plan new text begin within the first 30 days of commencing service new text end . An eligible firefighter's election is irrevocable. No employer contribution is payable by the fire department or the firefighting corporation unless the municipal governing body or the firefighting corporation governing body, whichever applies, ratifies the election.

new text begin Subd. 8. new text end

new text begin Election available only upon first hire and no prior retirement plan eligibility. new text end

new text begin Notwithstanding any other provisions under this section, an election under this section is available to eligible participants only within the first 30 days of commencing employment or service with the governmental subdivision. If the eligible participant has previously been or is currently in a position covered by any retirement plan administered by the association to which the governmental subdivision contributed or by any supplemental pension or deferred compensation plan under section 356.24 sponsored by the governmental subdivision, then the eligible participant must not receive an election. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024. new text end

Sec. 14.

Minnesota Statutes 2022, section 353E.03, is amended to read:

353E.03 CORRECTIONAL SERVICE PLAN CONTRIBUTIONS.

Subdivision 1.

Member contributions.

A member of the deleted text begin local government correctional service retirement deleted text end plan shall make an employee contribution in an amount equal to deleted text begin 5.83 deleted text end new text begin 6.83 new text end percent of salary.

Subd. 2.

Employer contributions.

The employer shall contribute for a member of the deleted text begin local government correctional service retirement deleted text end plan an amount equal to deleted text begin 8.75 deleted text end new text begin 10.25 new text end percent of salary.

new text begin Subd. 3. new text end

new text begin Contribution deductions. new text end

new text begin The head of each department of each governmental subdivision that employs members of the local government correctional service retirement plan must deduct employee contributions in the manner and subject to the terms provided in section 353.27, subdivision 4. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 15.

Minnesota Statutes 2022, section 353E.04, subdivision 3, is amended to read:

Subd. 3.

Annuity amount.

(a) The average salary as defined in subdivision 2, multiplied by 1.9 percent for each year of allowable service new text begin before July 1, 2025, and 2.2 percent for each year of allowable service beginning on or after July 1, 2025 new text end , determines the amount of the normal retirement annuity.

(b) If a person has earned allowable service in the general employees retirement plan of the Public Employees Retirement Association or the public employees police and fire retirement plan before participation under this chapter, the retirement annuity representing such service must be computed in accordance with the formula specified in sections 353.29 and 353.30 or 353.651, whichever applies.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025. new text end

Sec. 16.

Minnesota Statutes 2022, section 353E.06, subdivision 6, is amended to read:

Subd. 6.

deleted text begin Resumption of employment deleted text end new text begin Limitation on disability benefit payments new text end .

new text begin (a) new text end If a deleted text begin disabled employee deleted text end new text begin member receiving disability benefits new text end resumes a gainful occupation deleted text begin from which deleted text end new text begin with new text end earnings deleted text begin are less than deleted text end new text begin , the amount of the member's disability benefit must be reduced as described in paragraph (b) if the total of the disability benefit and earnings exceeds the greater of: new text end

new text begin (1) new text end the new text begin base new text end monthly salary deleted text begin received deleted text end new text begin rate the member had been receiving new text end at the date of disability new text begin ; new text end or

new text begin (2) new text end the new text begin base new text end monthly salary new text begin rate new text end currently paid new text begin by the employing governmental subdivision new text end for similar positions deleted text begin , or should the employee be entitled to receive workers' compensation benefits, deleted text end new text begin . new text end

new text begin (b) If paragraph (a) applies, new text end the new text begin member's new text end disability benefit must be deleted text begin continued in an amount that, when added to such earnings during the months of employment, and workers' compensation benefits, if applicable, does deleted text end new text begin reduced until the disability benefit plus the monthly earnings from employment do new text end not exceed the deleted text begin monthly salary received at the date of disability or the monthly salary currently payable for the same employment position or an employment position substantially similar to the one the person held as of the date of the disability, whichever is deleted text end greater new text begin of the salaries described in paragraph (a), clause (1) or (2) new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2025. new text end

Sec. 17.

new text begin ONETIME IRREVOCABLE ELECTION. new text end

new text begin Subdivision 1. new text end

new text begin City managers. new text end

new text begin (a) A city manager hired by a city within six months before August 1, 2024, and who is currently participating in the general employee retirement plan of the Public Employees Retirement Association may make a onetime irrevocable election to be excluded from membership if the election is: new text end

new text begin (1) in writing on a form prescribed by the executive director; new text end

new text begin (2) approved by a resolution adopted by the governing body of the city; and new text end

new text begin (3) received by the executive director between October 1, 2024, and October 30, 2024. new text end

new text begin (b) Membership of a city manager in the general employees retirement plan ceases on the date that the written election is received by the executive director. Employee and employer contributions made on behalf of a person exercising the option to be excluded from membership under this subdivision must be refunded or credited in accordance with Minnesota Statutes, section 353.27, subdivision 7. new text end

new text begin Subd. 2. new text end

new text begin Local government officials. new text end

new text begin A local government official elected or appointed to public office in a city within six months before the effective date of this act may make a onetime irrevocable election to participate in the public employees defined contribution plan if the election is: new text end

new text begin (1) in writing on a form prescribed by the executive director; new text end

new text begin (2) approved by a resolution adopted by the governing body of the city; and new text end

new text begin (3) received by the executive director between October 1, 2024, and October 30, 2024. new text end

new text begin Subd. 3. new text end

new text begin Public ambulance service personnel. new text end

new text begin Eligible personnel hired by or providing service to a participating public ambulance service within six months before the effective date of this act may make a onetime irrevocable election to participate in the public employees defined contribution plan if the election is: new text end

new text begin (1) in writing on a form prescribed by the executive director; and new text end

new text begin (2) received by the executive director between October 1, 2024, and October 30, 2024. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2024. new text end

Sec. 18.

new text begin REPEALER. new text end

new text begin (a) new text end new text begin Minnesota Statutes 2022, section 353D.071, new text end new text begin is repealed effective the day following final enactment. new text end

new text begin (b) new text end new text begin Minnesota Statutes 2022, section 353.33, subdivision 5, new text end new text begin and new text end new text begin Minnesota Statutes 2023 Supplement, section 353.335, subdivision 2, new text end new text begin are repealed effective January 1, 2025. new text end

ARTICLE 5

MINNESOTA STATE RETIREMENT SYSTEM

Section 1.

Minnesota Statutes 2022, section 352.01, subdivision 13, is amended to read:

Subd. 13.

Salary.

(a) Subject to the limitations of section 356.611, "salary" means wages, or other periodic compensation, paid to an employee before deductions for deferred compensation, supplemental retirement plans, or other voluntary salary reduction programs.

(b) "Salary" does not include:

(1) lump-sum sick leave payments;

(2) severance payments;

(3) lump-sum annual leave payments and overtime payments made at the time of separation from state service;

(4) payments in lieu of any employer-paid group insurance coverage, including the difference between single and family rates that may be paid to an employee with single coverage;

(5) payments made as an employer-paid fringe benefit;

(6) workers' compensation payments;

(7) employer contributions to a deferred compensation or tax-sheltered annuity program; and

(8) amounts contributed under a benevolent vacation and sick leave donation program.

(c) Amounts deleted text begin provided deleted text end new text begin paid new text end to an employee by the employer through a grievance proceeding or a legal settlement are salary only if the new text begin grievance or new text end settlement deleted text begin is reviewed by the executive director and deleted text end new text begin agreement is received by the executive director no fewer than 14 days before payment is made and the executive director determines that: new text end

new text begin (1) the grievance or settlement agreement describes with sufficient specificity the period or periods of time worked or not worked by the employee for which the amounts are compensation; and new text end

new text begin (2) new text end the amounts are deleted text begin determined by the executive director to be consistent with deleted text end new text begin salary as defined in new text end paragraph (a) and new text begin the determination is consistent with new text end prior determinations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 2.

Minnesota Statutes 2022, section 352.03, subdivision 5, is amended to read:

Subd. 5.

Executive director, deputy director, and assistant director.

(a) The board shall appoint an executive director, in this chapter called the director, on the basis of education, experience in the retirement field, ability to manage and lead system staff, and ability to assist the board in setting a vision for the system. The director must have had at least five years' experience in either an executive level management position or in a position with responsibility for the governance, management, or administration of a retirement plan.

(b) The executive director, deputy director, and assistant director must be in the unclassified service but appointees may be selected from civil service lists if desired. Notwithstanding any law to the contrary, the board must set the salary of the executive director. deleted text begin The salary of the executive director must not exceed the limit for a position listed in section 15A.0815, subdivision 2. deleted text end new text begin The board must review the performance of the executive director on an annual basis and may grant salary adjustments as a result of the review. new text end The salary of the deputy director and assistant director must be set in accordance with section 43A.18, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2022, section 352.113, subdivision 1, is amended to read:

Subdivision 1.

Age and service requirements.

(a) An employee covered by the system, deleted text begin who is less than deleted text end new text begin who has satisfied the applicable allowable service credit requirement under section 352.115, subdivision 1, has not reached new text end normal retirement age new text begin , new text end and deleted text begin who deleted text end becomes totally and permanently disabled deleted text begin after three or more years of allowable service if employed before July 1, 2010, or after five or more years of allowable service if employed after June 30, 2010, deleted text end is entitled to a disability benefit in an amount provided in subdivision 3.

(b) If the disabled employee's state service has terminated at any time, the employee must have at least two years of allowable service after last becoming a state employee covered by the system.

(c) Refunds may be repaid under section 352.23 before the effective accrual date of the disability benefit under subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from July 1, 2023. new text end

Sec. 4.

Minnesota Statutes 2022, section 352.12, subdivision 1, is amended to read:

Subdivision 1.

Death before termination of service.

If an employee dies before state service has terminated and neither a survivor annuity nor a deleted text begin reversionary deleted text end new text begin bounce-back new text end annuity is payable on behalf of the employee, or if a former employee who has sufficient service credit to be entitled to an annuity dies before the annuity has become payable, a refund deleted text begin with deleted text end new text begin in an amount equal to the employee's accumulated contributions plus new text end interest is payable upon filing a written application on a form prescribed by the executive director. The refund is payable to the last designated beneficiary or, if there is none, to the surviving spouse or, if none, to the employee's surviving children in equal shares or, if none, to the employee's surviving parents in equal shares or, if none, to the representative of the estate. Interest must be computed as provided in section 352.22, subdivision 2. Upon the death of an employee who has received a refund that was later repaid in full, interest must be paid on the repaid refund only from the date of the repayment. If the repayment was made in installments, interest must be paid only from the date on which the installment payments began. The designated beneficiary, the surviving spouse, or the representative of the estate of an employee who had received a disability benefit is not entitled to the payment of interest upon any balance remaining to the decedent's credit in the fund at the time of death, unless the death occurred before any payment could be negotiated.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 5.

Minnesota Statutes 2022, section 352.12, subdivision 2, is amended to read:

Subd. 2.

Surviving spouse benefit.

(a) If an employee or former employee has deleted text begin credit for at least three years allowable service if the employee was employed before July 1, 2010, or for at least five years of allowable service if the employee was employed after June 30, 2010, deleted text end new text begin satisfied the applicable allowable service credit requirement under section 352.115, subdivision 1, new text end and dies before an annuity or disability benefit has become payable, notwithstanding any designation of beneficiary to the contrary, the surviving spouse of the employee may elect to receive, in lieu of the refund with interest under subdivision 1, an annuity equal to the joint and 100 percent survivor annuity which the employee or former employee could have qualified for on the date of death.

(b) If the employee was new text begin an active employee at the time of the employee's death, was new text end under age 55 new text begin , new text end 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 based on the age of the employee and surviving spouse on the date of death. The annuity is payable using the full early retirement reduction under section 352.116, subdivision 1, paragraph (b), to age 55 and one-half of the early retirement reduction from age 55 to the age payment begins.

(c) If the employee was new text begin an active employee at the time of the employee's death, was new text end under age 55 new text begin , new text end and has deleted text begin credit for at least three years of allowable service credit on the date of death if the employee was employed before July 1, 2010, or for at least five years of allowable service if the employee was employed after June 30, 2010, deleted text end new text begin satisfied the applicable allowable service credit requirement under section 352.115, subdivision 1, new text end 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 surviving spouse at the time of death. The annuity is payable using the full early retirement reduction under section 352.116, subdivision 1 or 1a, to age 55 and one-half of the early retirement reduction from age 55 to the age payment begins.

(d) The surviving spouse eligible for benefits under paragraph (a) may apply for the annuity at any time after the date on which the employee or former employee would have attained the required age for retirement based on the allowable service earned. The surviving spouse eligible for surviving spouse benefits under paragraph (b) or (c) may apply for the annuity at any time after the employee's death. The annuity must be computed under sections 352.115, subdivisions 1, 2, and 3, and 352.116, subdivisions 1, 1a, and 3. deleted text begin Sections deleted text end new text begin Section new text end 352.22, deleted text begin subdivision deleted text end new text begin subdivisions new text end 3 deleted text begin , deleted text end and deleted text begin 352.72, subdivision 2 deleted text end new text begin 3a new text end , apply to a deferred annuity deleted text begin or deleted text end new text begin payable to a new text end surviving spouse deleted text begin benefit payable deleted text end under this subdivision. The annuity must cease with the last payment received by the surviving spouse in the lifetime of the surviving spouse, or upon expiration of a term certain benefit payment to a surviving spouse under subdivision 2a. An amount equal to the excess, if any, of the accumulated contributions credited to the account of the deceased employee in excess of the total of the benefits paid and payable to the surviving spouse must be paid to the deceased employee's or former employee's last designated beneficiary or, if none, as specified under subdivision 1.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from July 1, 2023. new text end

Sec. 6.

Minnesota Statutes 2022, section 352.12, subdivision 2b, is amended to read:

Subd. 2b.

Dependent child survivor coverage.

If there is no surviving spouse eligible for benefits under subdivision 2, a dependent child or children as defined in section 352.01, subdivision 26, is eligible for monthly payments new text begin under this subdivision, but only if the dependent child or children did not elect to receive a refund under subdivision 1 new text end . Payments to a dependent child must be paid from the date of the employee's death to the date the dependent child attains age 20 if the child is under age 15. If the child is 15 years or older on the date of death, payment must be made for five years. The payment to a dependent child is an amount actuarially equivalent to the value of a 100 percent optional annuity under subdivision 2 using the age of the employee and age of the dependent child at the date of death in lieu of the age of the surviving spouse. If there is more than one dependent child, each dependent child shall receive a proportionate share of the actuarial value of the employee's account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 7.

Minnesota Statutes 2022, section 352.12, subdivision 7, is amended to read:

Subd. 7.

Absence of optional or deleted text begin reversionary deleted text end new text begin bounce-back new text end annuity.

Upon the death of a retired employee who selected neither an optional annuity or a deleted text begin reversionary deleted text end new text begin bounce-back new text end annuity, a refund must be paid in an amount equal to the excess, if any, of the accumulated contributions to the credit of the retired employee immediately before retirement in excess of the sum of (1) all annuities, retirement allowances, and disability benefits that had been received and had accrued in the lifetime of the decedent, and (2) the annuity, retirement allowance, or disability benefit if not negotiated, payable to the surviving spouse under section 352.115, subdivision 8, or 352.113, subdivision 4, for the calendar month in which the retired employee died. The refund must be paid to the named beneficiary or, if there be none, to the surviving spouse or, if none, to the employee's surviving children in equal shares or, if none, to the employee's surviving parents in equal shares or, if none, to the representative of the estate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 8.

Minnesota Statutes 2022, section 352.12, subdivision 8, is amended to read:

Subd. 8.

Optional or deleted text begin reversionary deleted text end new text begin bounce-back new text end annuity.

If the last eligible recipient of an optional annuity dies and the total amounts paid under it are less than the accumulated contributions to the credit of the retired employee immediately before retirement, the balance of accumulated contributions must be paid to the person designated by the retired employee in writing to receive payment. If no designation has been made by the retired employee, the remaining balance of accumulated contributions must be paid to the surviving children of the deceased recipient of the optional annuity in equal shares. If there are no surviving children, payment must be made to the deceased recipient's parents or, if none, to the representative of the deceased recipient's estate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 9.

Minnesota Statutes 2023 Supplement, section 352.91, subdivision 3f, as amended by Laws 2024, chapter 79, article 9, section 18, is amended to read:

Subd. 3f.

Additional Department of Human Services personnel.

(a) "Covered correctional service" means service by a state employee in one of the employment positions specified in paragraph (b) in the state-operated forensic services program or the Minnesota Sex Offender Program if at least 75 percent of the employee's working time is spent in direct contact with patients and the determination of this direct contact is certified to the executive director by the commissioner of human services or direct care and treatment executive board.

(b) The employment positions are:

new text begin (1) baker; new text end

deleted text begin (1) deleted text end new text begin (2) new text end behavior analyst 2;

deleted text begin (2) deleted text end new text begin (3) new text end behavior analyst 3;

deleted text begin (3) deleted text end new text begin (4) new text end certified occupational therapy assistant 1;

deleted text begin (4) deleted text end new text begin (5) new text end certified occupational therapy assistant 2;

deleted text begin (5) deleted text end new text begin (6) new text end client advocate;

deleted text begin (6) deleted text end new text begin (7) new text end clinical program therapist 2;

deleted text begin (7) deleted text end new text begin (8) new text end clinical program therapist 3;

deleted text begin (8) deleted text end new text begin (9) new text end clinical program therapist 4;

new text begin (10) cook; new text end

new text begin (11) culinary supervisor; new text end

deleted text begin (9) deleted text end new text begin (12) new text end customer services specialist principal;

deleted text begin (10) deleted text end new text begin (13) new text end dental assistant registered;

deleted text begin (11) deleted text end new text begin (14) new text end dental hygienist;

new text begin (15) food service worker; new text end

new text begin (16) food services supervisor; new text end

deleted text begin (12) deleted text end new text begin (17) new text end group supervisor;

deleted text begin (13) deleted text end new text begin (18) new text end group supervisor assistant;

deleted text begin (14) deleted text end new text begin (19) new text end human services support specialist;

deleted text begin (15) deleted text end new text begin (20) new text end licensed alcohol and drug counselor;

deleted text begin (16) deleted text end new text begin (21) new text end licensed practical nurse;

deleted text begin (17) deleted text end new text begin (22) new text end management analyst 3;

new text begin (23) music therapist; new text end

deleted text begin (18) deleted text end new text begin (24) new text end occupational therapist;

deleted text begin (19) deleted text end new text begin (25) new text end occupational therapist, senior;

deleted text begin (20) deleted text end new text begin (26) new text end physical therapist;

deleted text begin (21) deleted text end new text begin (27) new text end psychologist 1;

deleted text begin (22) deleted text end new text begin (28) new text end psychologist 2;

deleted text begin (23) deleted text end new text begin (29) new text end psychologist 3;

deleted text begin (24) deleted text end new text begin (30) new text end recreation program assistant;

deleted text begin (25) deleted text end new text begin (31) new text end recreation therapist lead;

deleted text begin (26) deleted text end new text begin (32) new text end recreation therapist senior;

deleted text begin (27) deleted text end new text begin (33) new text end rehabilitation counselor senior;

deleted text begin (28) deleted text end new text begin (34) new text end residential program lead;

deleted text begin (29) deleted text end new text begin (35) new text end security supervisor;

deleted text begin (30) deleted text end new text begin (36) new text end skills development specialist;

deleted text begin (31) deleted text end new text begin (37) new text end social worker senior;

deleted text begin (32) deleted text end new text begin (38) new text end social worker specialist;

deleted text begin (33) deleted text end new text begin (39) new text end social worker specialist, senior;

deleted text begin (34) deleted text end new text begin (40) new text end special education program assistant;

deleted text begin (35) deleted text end new text begin (41) new text end speech pathology clinician;

deleted text begin (36) deleted text end new text begin (42) new text end substance use disorder counselor senior;

deleted text begin (37) deleted text end new text begin (43) new text end work therapy assistant; and

deleted text begin (38) deleted text end new text begin (44) new text end work therapy program coordinator.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective on the first day of the first payroll period occurring after the day of enactment. new text end

Sec. 10.

Minnesota Statutes 2022, section 352.95, subdivision 4, is amended to read:

Subd. 4.

Medical or psychological evidence.

(a) An applicant shall provide medical, chiropractic, or psychological evidence to support an application for disability benefits. The director deleted text begin shall deleted text end new text begin may new text end have the employee examined by at least one additional licensed physician, APRN, chiropractor, or psychologist who is designated by the medical adviser. The physicians, APRNs, chiropractors, or psychologists with respect to a mental impairment, shall make written reports to the director concerning the question of the employee's disability, including their expert opinions as to whether the employee has an occupational disability within the meaning of section 352.01, subdivision 17a, and whether the employee has a duty disability, physical or psychological, under section 352.01, subdivision 17b, or has a regular disability, physical or psychological, under section 352.01, subdivision 17c. The director shall also obtain written certification from the employer stating whether or not the employee is on sick leave of absence because of a disability that will prevent further service to the employer performing normal duties as defined in section 352.01, subdivision 17d, or performing less frequent duties as defined in section 352.01, subdivision 17e, and as a consequence, the employee is not entitled to compensation from the employer.

(b) If, on considering the reports by the physicians, APRNs, chiropractors, or psychologists and any other evidence supplied by the employee or others, the medical adviser finds that the employee has an occupational disability within the meaning of section 352.01, subdivision 17a, the adviser shall make the appropriate recommendation to the director, in writing, together with the date from which the employee has been disabled. The director shall then determine the propriety of authorizing payment of a duty disability benefit or a regular disability benefit as provided in this section.

(c) Unless the payment of a disability benefit has terminated because the employee no longer has an occupational disability, or because the employee has reached either age 55 or the five-year anniversary of the effective date of the disability benefit, whichever is later, the disability benefit must cease with the last payment which was received by the disabled employee or which had accrued during the employee's lifetime. While disability benefits are paid, the director has the right, at reasonable times, to require the disabled employee to submit proof of the continuance of an occupational disability. If any examination indicates to the medical adviser that the employee no longer has an occupational disability, the disability payment must be discontinued upon the person's reinstatement to state service or within 60 days of the finding, whichever is sooner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 11.

new text begin [352B.115] REEMPLOYMENT. new text end

new text begin Subdivision 1. new text end

new text begin Return to employment. new text end

new text begin (a) A member of the State Patrol retirement plan who has separated from service and is receiving an annuity under section 352B.08 or has applied to receive an annuity under section 352B.08 may return to employment in the same department and to a position covered by the State Patrol retirement plan as early as: new text end

new text begin (1) the second day after separation from service if the member is at least age 55; or new text end

new text begin (2) the 31st day after separation from service if the member is at least age 50 but not yet age 55. new text end

new text begin (b) The executive director must seek repayment of any annuity payments made to a member who returns to employment before the earliest day under paragraph (a), clause (1) or (2), as applicable. The executive director may waive the repayment requirement if the member's failure to comply with paragraph (a), clause (1) or (2), as applicable, was inadvertent or due to no fault of the member. new text end

new text begin Subd. 2. new text end

new text begin Effect on annuity. new text end

new text begin (a) A member's return to employment under subdivision 1 does not impact the member's continued receipt of an annuity or commencement of annuity payments. new text end

new text begin (b) During the period of reemployment: new text end

new text begin (1) the amount of the annuity must not increase or decrease as a result of the reemployment; new text end

new text begin (2) the member must make member contributions as required under section 352B.02, subdivisions 1a and 1b, during the period of reemployment; and new text end

new text begin (3) the member's employer must make employer and supplemental contributions as required under section 352B.02, subdivision 1c. new text end

new text begin Subd. 3. new text end

new text begin Separation from service after period of reemployment. new text end

new text begin The executive director must refund the member's contributions made during the period of reemployment, plus interest, following the member's separation from service after the period of reemployment. new text end

new text begin Subd. 4. new text end

new text begin Other law and rules not applicable. new text end

new text begin (a) Section 352.115, subdivision 10, does not apply to a member of the State Patrol retirement plan who returns to employment under this section. new text end

new text begin (b) Minnesota Rules, part 6700.0675, does not apply to a member of the State Patrol retirement plan who returns to employment under this section. new text end

new text begin (c) Minnesota Rules, part 6700.0670, does not apply to a member of the State Patrol retirement plan who returns to employment under this section, except that the member must be fingerprinted and the fingerprints must be forwarded by the employer to the Bureau of Criminal Apprehension and the Federal Bureau of Investigation. new text end

new text begin Subd. 5. new text end

new text begin Effect on mandatory retirement age. new text end

new text begin A member's right to reemployment under subdivision 1 does not extend or affect the application of the mandatory retirement age under section 43A.34. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 12.

Laws 2021, chapter 22, article 2, section 3, is amended to read:

Sec. 3.

MSRS; SERVICE CREDIT PURCHASE PERMITTED FOR PERIOD OF EMPLOYMENT AS AN EXCLUDED EMPLOYEE.

Subdivision 1.

Definitions.

For purposes of this section, the following definitions shall apply, unless the context indicates a different meaning is intended:

deleted text begin (1) "effective date" means the effective date of section 1; deleted text end

deleted text begin (2) deleted text end new text begin (1) new text end "eligible person" means a deleted text begin person deleted text end new text begin state employee or former state employee new text end who deleted text begin : (i) is employed in state service on the effective date or terminated employment in state service during the lookback period; (ii) deleted text end was an excluded employee for any period of employment before deleted text begin the effective date; and(iii) before the effective date, became eligible for coverage under Minnesota Statutes 2020, section 352.01, subdivision 2b, clause (14), or, on the effective date, became a state employee under the amendment made by section 1 deleted text end new text begin May 26, 2021 new text end ;

deleted text begin (3) deleted text end new text begin (2) new text end "excluded employee" means a person who was excluded from coverage under Minnesota Statutes 2020, section 352.01, subdivision 2b, clause (14) new text begin , or its predecessor new text end ; new text begin and new text end

deleted text begin (4) deleted text end new text begin (3) new text end "executive director" means the executive director of the Minnesota State Retirement System deleted text begin ; and deleted text end new text begin . new text end

deleted text begin (5) "lookback period" means the period that begins twelve months before the effective date of section 1 and ends on the effective date. deleted text end

new text begin Subd. 1a. new text end

new text begin Authorization to purchase service credit. new text end

new text begin (a) If the employer of an eligible person notifies the eligible person that the eligible person is entitled to make the payment of missed employee contributions described in subdivision 2, the eligible person may elect to purchase service credit for the period of employment or any portion thereof during which contributions were not made for or by the eligible person because the eligible person was considered an excluded employee. new text end

new text begin (b) If the eligible person elects to purchase service credit under paragraph (a), the eligible person must forward the notification from the employer under paragraph (a) to the executive director and request that the executive director determine the amount required under subdivision 2 to pay the missed employee contributions for the period of time that the eligible person did not make employee contributions because the eligible person was considered an excluded employee. The executive director must respond to the eligible person's request no later than 30 days after receiving the request. new text end

new text begin (c) The eligible person, upon receipt of the amount calculated by the executive director under paragraph (b), must follow the procedure under subdivision 2 if the eligible person wishes to purchase service credit for a period of employment during which contributions were not made for or by the eligible person. new text end

Subd. 2.

deleted text begin Authorizing the purchase of service credit deleted text end new text begin Payments required new text end .

(a) Notwithstanding any law to the contrary, the executive director must credit a person with allowable service credit for any period of employment during which contributions were not made for the person because the person was considered an excluded employee, if the person is an eligible person and the executive director receives the payment described in paragraph (b) or (c), as applicable new text begin , no later than 90 days after the date of the notification from the eligible person's employer under subdivision 1a, paragraph (a) new text end .

(b) The eligible person or the employer, on behalf of the eligible person, may deleted text begin , no later than August 31, 2021, deleted text end pay the deleted text begin missed employee contributions for any period of employment during which contributions were not made for the person because the person was considered an excluded employee, by transmitting the amount of the missed employee contributions in a lump sum to the Minnesota State Retirement System deleted text end new text begin amount calculated by the executive director under subdivision 1a, paragraph (b) new text end .

(c) new text begin In lieu of the amount under paragraph (a), new text end the eligible person may elect to pay missed employee contributions for less than the entire period of employment during which contributions were not made. The period of employment elected must be consecutive payroll periods and may be payroll periods during which the eligible person received the lowest salary. Upon payment of the missed employee contributions for the period of employment elected, the executive director must credit the eligible person with a proportionate amount of allowable service credit.

(d) If the missed employee contributions are paid, the eligible person's employer must, no later than deleted text begin September 30, 2021 deleted text end new text begin 60 days after the date the missed employee contributions are paid new text end , pay the missed employer contributions plus interest, compounded annually, at the applicable annual rate or rates specified in Minnesota Statutes, section 356.59, subdivision 2, on both the employee contributions and the employer contributions, from the end of the year in which the contributions would have been made to the date on which the payment is made, by transmitting the amount of the missed employer contributions plus interest in a lump sum to the Minnesota State Retirement System. If the eligible person elects to pay missed employee contributions for less than the entire period of employment as permitted under paragraph (c), the employer must pay the missed employer contributions plus interest on both the employee contributions and the employer contributions for the payroll periods elected by the eligible person.

(e) The executive director deleted text begin shall deleted text end new text begin must new text end notify the eligible person's employer regarding the amount required under paragraph (d) and the basis for determining the amount. If the employer fails to make all or any portion of the payment required by paragraph (d), the executive director shall follow the procedures in Minnesota Statutes, section 352.04, subdivision 8, paragraph (b), to collect the unpaid amount.

new text begin Subd. 3. new text end

new text begin Expiration. new text end

new text begin This section expires June 30, 2027. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 13.

new text begin NEW POSITIONS PERMITTED TO TRANSFER PAST SERVICE CREDIT FROM THE MSRS GENERAL PLAN. new text end

new text begin For each employee whose employment position is baker, cook, culinary supervisor, food service worker, food services supervisor, or music therapist and who enters the correctional state employees retirement plan on the effective date of section 9, the executive director must consider the employee an eligible employee under Minnesota Statutes, section 352.955, subdivision 1, paragraph (b), for purposes of Minnesota Statutes, section 352.955. The executive director must transfer, from the general state employees retirement plan to the correctional state employees retirement plan, any eligible prior correctional employment as defined under Minnesota Statutes, section 352.955, subdivision 1, paragraph (c), if elected by the eligible employee, subject to all other requirements of Minnesota Statutes, section 352.955, including payment by the eligible employee of the additional member contribution as defined under Minnesota Statutes, section 352.955, subdivision 3, paragraph (a). new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 14.

new text begin WORK GROUP ON MSRS CORRECTIONAL PLAN ELIGIBILITY. new text end

new text begin Subdivision 1. new text end

new text begin Work group established. new text end

new text begin The executive director of the Legislative Commission on Pensions and Retirement (commission executive director) must convene a work group for the purpose of recommending legislation amending Minnesota Statutes, sections 352.91 and 356.955, and other statutes applicable to eligibility for the Minnesota State Retirement System correctional state employees retirement plan (correctional plan) that will correct the deficiencies in the process under current law for adding employees and positions to coverage by the correctional plan. new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The members of the work group are the following: new text end

new text begin (1) the executive director of the Minnesota State Retirement System or the executive director's designee and a second member of the Minnesota State Retirement System staff designated by the executive director of the Minnesota State Retirement System; new text end

new text begin (2) the commissioner of corrections or the commissioner's designee and a member of the department's human resources staff with knowledge of the department's process for creating and amending position descriptions of positions in the facilities with employees covered by the correctional plan; new text end

new text begin (3) the commissioner of human services or the commissioner's designee and a member of the department's human resources staff with knowledge of the department's process for creating and amending position descriptions of positions in the facilities with employees covered by the correctional plan; new text end

new text begin (4) two representatives from the American Federation of State, County and Municipal Employees (AFSCME); new text end

new text begin (5) two representatives from the Minnesota Association of Professional Employees (MAPE); new text end

new text begin (6) two representatives from the Middle Management Association (MMA); and new text end

new text begin (7) one representative from the Minnesota Nurses Association. new text end

new text begin (b) the commission executive director may invite others, including legislators and legislative staff, to participate in one or more meetings of the work group. new text end

new text begin (c) The organizations specified in paragraph (a) must provide the commission executive director with the names and contact information for the representatives who will serve on the work group by June 14, 2024. new text end

new text begin Subd. 3. new text end

new text begin Scope. new text end

new text begin (a) In arriving at the work group's recommendation for legislation or alternatives for legislation the work group must consider: new text end

new text begin (1) the effectiveness of the current process for certifying that an employee has direct contact with inmates or patients at least 75 percent of the employee's working time as required under Minnesota Statutes, section 352.91, and take into account that an employee's direct contact may fluctuate from year to year or pay period to pay period and may vary among facilities; new text end

new text begin (2) whether correctional plan membership should depend on position descriptions that are not updated frequently enough or on position titles that may change from time to time and whether there are alternatives to conditioning membership on position descriptions or titles; new text end

new text begin (3) whether the procedures under Minnesota Statutes, section 352.91, subdivisions 4a to 4c, should be reformed to ensure there is an effective procedure that will be followed for evaluating positions and employees entitled to membership; new text end

new text begin (4) whether the service credit transfer provisions are effective or should be revised to apply whenever an employee transfers coverage from the Minnesota State Retirement System general state employees retirement plan to the correctional plan; new text end

new text begin (5) the philosophy behind current law that identifies certain positions as being automatically eligible for plan membership and other positions as being eligible for plan membership only if the direct contact requirement is met and the factors considered in making determinations as to which positions will be automatically eligible; and new text end

new text begin (6) any other topics relevant to the considerations listed above that will reduce the frequency with which the commission is requested to review plan membership issues. new text end

new text begin Subd. 4. new text end

new text begin Due date for submitting recommendation to the commission. new text end

new text begin The commission executive director must submit the recommendation of the work group to the chair of the Legislative Commission on Pensions and Retirement by January 10, 2025. new text end

new text begin Subd. 5. new text end

new text begin Meetings. new text end

new text begin (a) The executive director of the commission must convene the first meeting of the work group no later than August 1, 2024, and will serve as chair. new text end

new text begin (b) Meetings may be conducted remotely or in person or a combination of remote and in person. new text end

new text begin (c) In-person meetings must be held in the offices of the Legislative Coordinating Commission or in the Retirement Systems of Minnesota Building in St. Paul. new text end

new text begin Subd. 6. new text end

new text begin Compensation; lobbying; retaliation. new text end

new text begin (a) Members of the work group serve without compensation. new text end

new text begin (b) Participation in the work group is not lobbying under Minnesota Statutes, chapter 10A. new text end

new text begin (c) An individual's employer or an association of which an individual is a member must not retaliate against the individual because of the individual's participation in the work group. new text end

new text begin Subd. 7. new text end

new text begin Administrative support. new text end

new text begin Commission staff must provide administrative support for the work group. new text end

new text begin Subd. 8. new text end

new text begin Expiration. new text end

new text begin The work group expires June 30, 2025. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 6

MINNESOTA SECURE CHOICE RETIREMENT PROGRAM

Section 1.

Minnesota Statutes 2023 Supplement, section 187.03, is amended by adding a subdivision to read:

new text begin Subd. 7a. new text end

new text begin Home and community-based services employee. new text end

new text begin "Home and community-based services employee" means an individual employed by the individual's child or spouse to provide: new text end

new text begin (1) consumer-directed community supports services under sections 256B.092 and 256B.49 and chapter 256S or under the alternative care program authorized under section 256B.0913; or new text end

new text begin (2) services under the community first services and supports program authorized under section 256B.85 and Minnesota's federally approved waiver programs. new text end

new text begin This definition applies only to this chapter and does not create any other legal rights or obligations under state or federal law. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 2.

Minnesota Statutes 2023 Supplement, section 187.05, subdivision 7, is amended to read:

Subd. 7.

Individuals not employed by a covered employer.

new text begin (a) In addition to home and community-based services employees under paragraph (b), new text end the board may allow individuals new text begin not employed by a covered employer new text end to open and contribute to an account in the program, in which case the individual deleted text begin shall deleted text end new text begin must new text end be considered a covered employee for purposes of sections 187.05 to 187.11.

new text begin (b) The board must allow any home and community-based services employee to open and contribute to an account in the program within six months of the opening of the program and must consider a home and community-based services employee a covered employee for purposes of sections 187.05 to 187.11. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2023 Supplement, section 187.08, subdivision 1, is amended to read:

Subdivision 1.

Membership.

The policy-making function of the program is vested in a board of directors consisting of seven members as follows:

(1) the executive director of the Minnesota State Retirement System or the executive director's designee;

(2) the executive director of the State Board of Investment or the executive director's designee;

(3) three members chosen by the Legislative Commission on Pensions and Retirement, one from each of the following experience categories:

(i) executive or operations manager with substantial experience in record keeping 401(k) plans;

(ii) executive or operations manager with substantial experience in individual retirement accounts; and

(iii) executive or other professional with substantial experience in retirement plan investments;

(4) a human resources or retirement benefits executive from a private company with substantial experience in administering the company's 401(k) plan, appointed by the governor; and

(5) a small business owner new text begin , a small business executive, new text end or new text begin a nonprofit new text end executive appointed by the governor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 4.

Minnesota Statutes 2023 Supplement, section 187.08, subdivision 7, is amended to read:

Subd. 7.

Executive director; staff.

new text begin (a) new text end The board must appoint an executive director, determine the duties of the executive director, and set the compensation of the executive director. new text begin The board may appoint an interim executive director to serve as executive director during any period that the executive director position is vacant. new text end

new text begin (b) new text end The board may deleted text begin also deleted text end hire staff as necessary to support the board new text begin and the executive director or interim executive director new text end in performing deleted text begin its deleted text end new text begin their new text end duties new text begin or the board may authorize the executive director or interim executive director to hire staff new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2024. new text end

Sec. 5.

Minnesota Statutes 2023 Supplement, section 187.08, subdivision 8, is amended to read:

Subd. 8.

Duties.

In addition to the duties set forth elsewhere in this chapter, the board has the following duties:

(1) to establish secure processes for enrolling covered employees in the program and for transmitting employee deleted text begin and employer deleted text end contributions to accounts in the trust;

(2) to prepare a budget and establish procedures for the payment of costs of administering and operating the program;

(3) to lease or otherwise procure equipment necessary to administer the program;

(4) to procure insurance in connection with the property of the program and the activities of the board, executive director, and other staff;

(5) to determine the following:

(i) any criteria for a covered employee other than employment with a covered employer under section 187.03, subdivision 5;

(ii) contribution rates and an escalation schedule under section 187.05, subdivision 4;

(iii) withdrawal and distribution options under section 187.05, subdivision 6; and

(iv) the default investment fund under section 187.06, subdivision 5;

(6) to keep annual administrative fees, costs, and expenses as low as possible:

(i) except that any administrative fee assessed against the accounts of covered employees may not exceed a reasonable amount relative to the fees charged by auto-IRA or defined contribution programs of similar size in the state of Minnesota or another state; and

(ii) the fee may be asset-based, flat fee, or a hybrid combination of asset-based and flat fee;

(7) to determine the eligibility of an employer, employee, or other individual to participate in the program and review and decide claims for benefits and make factual determinations;

(8) to prepare information regarding the program that is clear and concise for dissemination to all covered employees and includes the following:

(i) the benefits and risks associated with participating in the program;

(ii) procedures for enrolling in the program and opting out of the program, electing a different or zero percent employee contribution rate, making investment elections, applying for a distribution of employee accounts, and making a claim for benefits;

(iii) the federal and state income tax consequences of participating in the program, which may consist of or include the disclosure statement required to be distributed by retirement plan trustees or custodians under the Internal Revenue Code and the Treasury Regulations thereunder;

(iv) how to obtain additional information on the program; and

(v) disclaimers of covered employer and state responsibility, including the following statements:

(A) covered employees seeking financial, investment, or tax advice should contact their own advisors;

(B) neither a covered employer nor the state of Minnesota are liable for decisions covered employees make regarding their account in the program;

(C) neither a covered employer nor the state of Minnesota guarantees the accounts in the program or any particular investment rate of return; and

(D) neither a covered employer nor the state of Minnesota monitors or has an obligation to monitor any covered employee's eligibility under the Internal Revenue Code to make contributions to an account in the program, or whether the covered employee's contributions to an account in the program exceed the maximum permissible contribution under the Internal Revenue Code;

(9) to publish an annual financial report, prepared according to generally accepted accounting principles, on the operations of the program, which must include but not be limited to costs attributable to the use of outside consultants, independent contractors, and other persons who are not state employees and deliver the report to the chairs and ranking minority members of the legislative committees with jurisdiction over jobs and economic development and state government finance, the executive directors of the State Board of Investment and the Legislative Commission on Pensions and Retirement, and the Legislative Reference Library;

(10) to publish an annual report regarding plan outcomes, progress toward savings goals established by the board, statistics on the number of participants, participating employers, and covered employees who have opted out of participation, plan expenses, estimated impact of the program on social safety net programs, and penalties and violations, and disciplinary actions for enforcement, and deliver the report to the chairs and ranking minority members of the legislative committees with jurisdiction over jobs and economic development and state government finance, the executive directors of the State Board of Investment and the Legislative Commission on Pensions and Retirement, and the Legislative Reference Library;

(11) to file all reports required under the Internal Revenue Code or chapter 290;

(12) to, at the board's discretion, seek and accept gifts, grants, and donations to be used for the program, unless such gifts, grants, or donations would result in a conflict of interest relating to the solicitation of service provider for program administration, and deposit such gifts, grants, or donations in the Secure Choice administrative fund;

(13) to, at the board's discretion, seek and accept appropriations from the state or loans from the state or any agency of the state;

(14) to assess the feasibility of partnering with another state or a governmental subdivision of another state to administer the program through shared administrative resources and, if determined beneficial, enter into contracts, agreements, memoranda of understanding, or other arrangements with any other state or an agency or a subdivision of any other state to administer, operate, or manage any part of the program, which may include combining resources, investments, or administrative functions;

(15) to hire, retain, and terminate third-party service providers as the board deems necessary or desirable for the program, including but not limited to the trustees, consultants, investment managers or advisors, custodians, insurance companies, recordkeepers, administrators, consultants, actuaries, legal counsel, auditors, and other professionals, provided that each service provider is authorized to do business in the state;

(16) to interpret the program's governing documents and this chapter and make all other decisions necessary to administer the program;

(17) to conduct comprehensive employer and worker education and outreach regarding the program that reflect the cultures and languages of the state's diverse workforce population, which may, in the board's discretion, include collaboration with state and local government agencies, community-based and nonprofit organizations, foundations, vendors, and other entities deemed appropriate to develop and secure ongoing resources; and

(18) to prepare notices for delivery to covered employees regarding the escalation schedule and to each covered employee before the covered employee is subject to an automatic contribution increase.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 6.

Laws 2023, chapter 46, section 11, is amended to read:

Sec. 11.

BOARD SUPPORT UNTIL APPOINTMENT OF EXECUTIVE DIRECTOR.

With the assistance of the Legislative Coordinating Commission, the executive director of the Legislative Commission on Pensions and Retirement must deleted text begin : deleted text end

deleted text begin (1) deleted text end provide notice to members of the board regarding the first meeting of the board and work with the member designated under section 10, subdivision 2, to determine the agenda and provide meeting support deleted text begin ; deleted text end and

deleted text begin (2) serve as the interim executive director to deleted text end assist the board until the board new text begin appoints an interim executive director or new text end completes the search, recruitment, and interview process and appoints the executive director under Minnesota Statutes, section 187.08, subdivision 8.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2024. new text end

ARTICLE 7

SUPPLEMENTAL PLANS

Section 1.

Minnesota Statutes 2023 Supplement, section 356.24, subdivision 1, is amended to read:

Subdivision 1.

Restriction; exceptions.

It is unlawful for a school district or other governmental subdivision or state agency to levy taxes for or to contribute public funds to a supplemental pension or deferred compensation plan that is established, maintained, and operated in addition to a primary pension program for the benefit of the governmental subdivision employees other than:

(1) to a supplemental pension plan that was established, maintained, and operated before May 6, 1971;

(2) to a plan that provides solely for group health, hospital, disability, or death benefits;

(3) to the individual retirement account plan established by chapter 354B;

(4) to a plan that provides solely for severance pay under section 465.72 to a retiring or terminating employee;

(5) to a deferred compensation plan defined in subdivision 3;

(6) for personnel employed by the Board of Trustees of the Minnesota State Colleges and Universities and not covered by clause (5), to the supplemental retirement plan under chapter 354C, if the supplemental plan coverage is provided for in a personnel policy or in the collective bargaining agreement of the public employer with the exclusive representative of the covered employees in an appropriate unit, in an amount matching employee contributions on a dollar for dollar basis, but not to exceed an employer contribution of $2,700 a year for each employee;

(7) to a supplemental plan or to a governmental trust to save for postretirement health care expenses qualified for tax-preferred treatment under the Internal Revenue Code, if the supplemental plan coverage is provided for in a personnel policy or in the collective bargaining agreement of a public employer with the exclusive representative of the covered employees in an appropriate unit;

(8) to the laborers national industrial pension fund or to a laborers local pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $10,000 per year per employee;

(9) to the plumbers and pipefitters national pension fund or to a plumbers and pipefitters local pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per employee;

(10) to the international union of operating engineers pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $10,000 per year per employee;

(11) to the International Association of Machinists national pension fund for the employees of a governmental subdivision who are covered by a collective bargaining agreement that provides for coverage by that fund and that sets forth a fund contribution rate, but not to exceed an employer contribution of $5,000 per year per employee;

(12) for employees of United Hospital District, Blue Earth, to the state of Minnesota deferred compensation program, if the employee makes a contribution, in an amount that does not exceed the total percentage of covered salary under section 353.27, subdivisions 3 and 3a;

(13) to the alternative retirement plans established by the Hennepin County Medical Center under section 383B.914, subdivision 5; deleted text begin or deleted text end

(14) to the International Brotherhood of Teamsters Central States pension plan for fixed-route bus drivers employed by the St. Cloud Metropolitan Transit Commission who are members of the International Brotherhood of Teamsters Local 638 by virtue of that employment deleted text begin . deleted text end new text begin ; or new text end

new text begin (15) to a supplemental plan organized and operated under the Internal Revenue Code, as amended, that is wholly and solely funded by the employee's accumulated sick leave, accumulated vacation leave, and accumulated severance pay. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 2.

Minnesota Statutes 2022, section 356.24, subdivision 3, is amended to read:

Subd. 3.

Deferred compensation plan.

(a) As used in this section:

(1) "deferred compensation plan" means a plan that satisfies the requirements of this subdivision;

(2) "plan administrator" means the individual or entity defined as the plan administrator in the plan document for the Minnesota deferred compensation plan under section 352.965 or a deferred compensation plan under section 457(b) of the Internal Revenue Code; and

(3) "vendor" means the provider of an annuity contract, custodial account, or retirement income account under a tax-sheltered annuity plan under section 403(b) of the Internal Revenue Code.

(b) The plan is:

(1) the Minnesota deferred compensation plan under section 352.965;

(2) a tax-sheltered annuity plan under section 403(b) of the Internal Revenue Code; or

(3) a deferred compensation plan under section 457(b) of the Internal Revenue Code.

(c) For each investment fund available to participants under the plan, other than in a self-directed brokerage account new text begin or fixed annuity contract new text end , the plan administrator or vendor discloses at least annually to participants a statement that sets forth (1) all fees, including administrative, maintenance, and investment fees, that impact the rate of return on each investment fund available under the plan, and (2) the rates of return for the prior one-, deleted text begin three-, deleted text end five-, and ten-year periods or for the life of the fund, if shorter, in an easily understandable document. The plan administrator or vendor must file a copy of this statement new text begin annually new text end with the executive director of the Legislative Commission on Pensions and Retirement deleted text begin within 30 days of the end of each fiscal year of the plan deleted text end .

(d) Enrollment in the plan is provided for in:

(1) a personnel policy of the public employer;

(2) a collective bargaining agreement between the public employer and the exclusive representative of public employees in an appropriate unit; or

(3) an individual employment contract new text begin (i) new text end between a city and a city manager new text begin or other management employee, or (ii) between a school district and a superintendent or other management employee new text end .

(e) The plan covers employees of a school district, state agency, or other governmental subdivision. The plan may cover city managers covered by an alternative retirement arrangement under section 353.028, subdivision 3, paragraph (a) or (b), but must not cover employees of the Board of Trustees of Minnesota State Colleges and Universities who are covered by the Higher Education Supplemental Retirement Plan under chapter 354C.

(f) deleted text begin Except as permitted under paragraph (g), public funds are contributed to the plan only in an amount that matches deleted text end new text begin If the public employer makes matching contributions to the plan, the matching contributions must match, on a dollar for dollar basis, new text end employee new text begin elective deferral new text end contributions deleted text begin on a dollar for dollar basis, but deleted text end not to exceed the lesser of (1) the maximum authorized under the policy described in paragraph (d) that provides for enrollment in the plan or program, or (2) one-half of the annual limit on elective deferrals under section 402(g) of the Internal Revenue Code. new text begin In lieu of or in addition to matching an employee's elective deferral contributions, the public employer may make employer matching contributions on behalf of an employee on account of qualified student loan payments, as defined in the Secure 2.0 Act of 2022, Public Law 117-328 (December 29, 2022), Division T, section 110, paragraph (b), and any regulations adopted thereunder. The employer matching contributions on account of an employee's qualified student loan payments plus any employer matching contributions that match an employee's elective deferral contributions must not exceed, for the year, the lesser of (1) the maximum authorized under the policy described in paragraph (d) that provides for enrollment in the plan or program, (2) one-half of the annual limit on elective deferrals under section 402(g) of the Internal Revenue Code, or (3) the employee's compensation for the year. new text end

(g) Contributions to the plan may include contributions deducted from an employee's sick leave, accumulated vacation leave, or accumulated severance pay, whether characterized as employee contributions or nonelective employer contributions, up to applicable limits under the Internal Revenue Code. Such contributions are not subject to the match requirement and limit in paragraph (f).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 8

APPLICABLE TO ALL PLANS:
AMORTIZATION; INTERNAL REVENUE CODE COMPLIANCE

Section 1.

Minnesota Statutes 2023 Supplement, section 356.215, subdivision 11, is amended to read:

Subd. 11.

Amortization contributions.

(a) In addition to the exhibit indicating the level normal cost, the actuarial valuation of the retirement plan must contain an exhibit for financial reporting purposes indicating the additional annual contribution sufficient to amortize the unfunded actuarial accrued liability and must contain an exhibit indicating the additional contribution sufficient to amortize the unfunded actuarial accrued liability. For the retirement plans listed in subdivision 8, paragraph (a), but excluding the legislators retirement plan, the Bloomington Fire Department Relief Association, and the local monthly benefit volunteer firefighter relief associations, the additional contribution must be calculated on a level percentage of covered payroll basis by the established date for full funding in effect when the valuation is prepared, assuming annual payroll growth at the applicable percentage rate set forth in the appendix described in subdivision 8, paragraph (c). For the legislators retirement plan, the additional annual contribution must be calculated on a level annual dollar amount basis.

deleted text begin (b) For any retirement plan other than a retirement plan governed by paragraph (d), (e), (f), (g), (h), (i), or (j), if there has not been a change in the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a change in the benefit plan governing annuities and benefits payable from the fund, a change in the actuarial cost method used in calculating the actuarial accrued liability of all or a portion of the fund, or a combination of the three, which change or changes by itself or by themselves without inclusion of any other items of increase or decrease produce a net increase in the unfunded actuarial accrued liability of the fund, the established date for full funding is the first actuarial valuation date occurring after June 1, 2020. deleted text end

deleted text begin (c) deleted text end new text begin (b) This paragraph applies only if the calculation under this paragraph for a retirement plan results in an established date for full funding that is earlier than the established date for full funding applicable to the retirement plan under paragraph (c). new text end For any retirement plan, if there has been a change in any or all of the actuarial assumptions used for calculating the actuarial accrued liability of the fund, a change in the benefit plan governing annuities and benefits payable from the fund, a change in the actuarial cost method used in calculating the actuarial accrued liability of all or a portion of the fund, or a combination of the three, and the change or changes, by itself or by themselves and without inclusion of any other items of increase or decrease, produce a net increase in the unfunded actuarial accrued liability in the fund, the established date for full funding must be determined using the following procedure:

(i) the unfunded actuarial accrued liability of the fund must be determined in accordance with the plan provisions governing annuities and retirement benefits and the actuarial assumptions in effect before an applicable change;

(ii) the level annual dollar contribution or level percentage, whichever is applicable, needed to amortize the unfunded actuarial accrued liability amount determined under item (i) by the established date for full funding in effect before the change must be calculated using the investment return assumption specified in subdivision 8 in effect before the change;

(iii) the unfunded actuarial accrued liability of the fund must be determined in accordance with any new plan provisions governing annuities and benefits payable from the fund and any new actuarial assumptions and the remaining plan provisions governing annuities and benefits payable from the fund and actuarial assumptions in effect before the change;

(iv) the level annual dollar contribution or level percentage, whichever is applicable, needed to amortize the difference between the unfunded actuarial accrued liability amount calculated under item (i) and the unfunded actuarial accrued liability amount calculated under item (iii) over a period of 30 years from the end of the plan year in which the applicable change is effective must be calculated using the applicable investment return assumption specified in subdivision 8 in effect after any applicable change;

(v) the level annual dollar or level percentage amortization contribution under item (iv) must be added to the level annual dollar amortization contribution or level percentage calculated under item (ii);

(vi) the period in which the unfunded actuarial accrued liability amount determined in item (iii) is amortized by the total level annual dollar or level percentage amortization contribution computed under item (v) must be calculated using the investment return assumption specified in subdivision 8 in effect after any applicable change, rounded to the nearest integral number of years, but not to exceed 30 years from the end of the plan year in which the determination of the established date for full funding using the procedure set forth in this clause is made and not to be less than the period of years beginning in the plan year in which the determination of the established date for full funding using the procedure set forth in this clause is made and ending by the date for full funding in effect before the change; and

(vii) the period determined under item (vi) must be added to the date as of which the actuarial valuation was prepared and the date obtained is the new established date for full funding.

new text begin (c) The established date for full funding is the date provided for each of the following plans: new text end

deleted text begin (d) deleted text end new text begin (i) new text end for the general employees retirement plan of the Public Employees Retirement Association, the established date for full funding is June 30, 2048 deleted text begin . deleted text end new text begin ; new text end

deleted text begin (e) deleted text end new text begin (ii) new text end for the Teachers Retirement Association, the established date for full funding is June 30, 2048 deleted text begin , through June 30, 2025. Beginning July 1, 2025, the established date for full funding is June 30, 2053. deleted text end new text begin ; new text end

deleted text begin (f) deleted text end new text begin (iii) new text end for the correctional state employees retirement plan and the State Patrol retirement plan of the Minnesota State Retirement System, the established date for full funding is June 30, 2048 deleted text begin . deleted text end new text begin ; new text end

deleted text begin (g) deleted text end new text begin (iv) new text end for the judges retirement plan, the established date for full funding is June 30, 2048 deleted text begin . deleted text end new text begin ; new text end

deleted text begin (h) deleted text end new text begin (v) new text end for the local government correctional service retirement plan and the public employees police and fire retirement plan, the established date for full funding is June 30, 2048 deleted text begin . deleted text end new text begin ; new text end

deleted text begin (i) deleted text end new text begin (vi) new text end for the St. Paul Teachers Retirement Fund Association, the established date for full funding is June 30, 2048 deleted text begin . deleted text end new text begin ; and new text end

deleted text begin (j) deleted text end new text begin (vii) new text end for the general state employees retirement plan of the Minnesota State Retirement System, the established date for full funding is June 30, 2048.

deleted text begin (k) deleted text end new text begin (d) new text end For the retirement plans for which the annual actuarial valuation indicates an excess of valuation assets over the actuarial accrued liability, the valuation assets in excess of the actuarial accrued liability must be recognized as a reduction in the current contribution requirements by an amount equal to the amortization of the excess expressed as a level percentage of pay over a 30-year period beginning anew with each annual actuarial valuation of the plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2024. new text end

Sec. 2.

Minnesota Statutes 2022, section 356.611, subdivision 2, is amended to read:

Subd. 2.

Federal compensation limits.

(a) For members new text begin or participants new text end of a covered deleted text begin pension deleted text end new text begin retirement new text end plan deleted text begin enumerated in section 356.30, subdivision 3, and of the plan established under chapter 353D deleted text end new text begin listed in subdivision 6 new text end , compensation in excess of the limitation specified in section 401(a)(17) of the Internal Revenue Code, as deleted text begin amended deleted text end new text begin adjusted new text end , for changes in the cost of living under section 401(a)(17)(B) of the Internal Revenue Code, deleted text begin may deleted text end new text begin must new text end not be included for contribution and benefit computation purposes.

(b) Notwithstanding paragraph (a), for members new text begin or participants new text end specified in paragraph (a) who first contributed to a plan specified in that paragraph before July 1, 1995, the annual compensation limit specified in section 401(a)(17) of the Internal Revenue Code on June 30, 1993, applies if that provides a greater allowable annual compensation.

(c) To the extent required by sections 3401(h) and 414(u)(12) of the deleted text begin federal deleted text end Internal Revenue Code, an individual receiving a differential wage payment as defined in section 3401(h)(2) of the deleted text begin federal deleted text end Internal Revenue Code from an employer shall be treated as employed by that employer, and the differential wage payment will be treated as compensation for purposes of applying the limits on annual additions under section 415(c) of the deleted text begin federal deleted text end Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2022, section 356.611, is amended by adding a subdivision to read:

new text begin Subd. 6. new text end

new text begin Covered retirement plan. new text end

new text begin As used in this section, "covered retirement plan" means any of the following plans: new text end

new text begin (1) the legislator's retirement plan, established by chapter 3A, including constitutional officers as specified in that chapter; new text end

new text begin (2) the general state employees retirement plan of the Minnesota State Retirement System, established by chapter 352; new text end

new text begin (3) the correctional state employees retirement plan of the Minnesota State Retirement System, established by chapter 352; new text end

new text begin (4) the State Patrol retirement plan, established by chapter 352B; new text end

new text begin (5) the unclassified state employees retirement plan, established by chapter 352D; new text end

new text begin (6) the general employees retirement plan of the Public Employees Retirement Association, established by chapter 353; new text end

new text begin (7) the public employees police and fire retirement plan of the Public Employees Retirement Association, established by chapter 353; new text end

new text begin (8) the public employees defined contribution plan, established by chapter 353D; new text end

new text begin (9) the local government correctional service retirement plan of the Public Employees Retirement Association, established by chapter 353E; new text end

new text begin (10) the statewide volunteer firefighter retirement plan, established by chapter 353G; new text end

new text begin (11) the Teachers Retirement Association, established by chapter 354; new text end

new text begin (12) the St. Paul Teachers Retirement Fund Association, established by chapter 354A; new text end

new text begin (13) the higher education individual retirement account plan, established by chapter 354B; new text end

new text begin (14) the higher education supplemental retirement plan, established by chapter 354C; new text end

new text begin (15) a retirement plan of a volunteer firefighter retirement association subject to chapter 424A; new text end

new text begin (16) the judges retirement plan, established by chapter 490; or new text end

new text begin (17) the Bloomington Fire Department Relief Association governed by Laws 2013, chapter 111, article 5, sections 31 to 42; Minnesota Statutes 2000, chapter 424; and Laws 1965, chapter 446, as amended. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 4.

new text begin [356.612] LIMITATION ON BENEFITS AND CONTRIBUTIONS. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the meanings given. new text end

new text begin (b) "Annual addition" means the sum for the limitation year of all pretax and after-tax contributions made by the member or the member's employer and credited to an account in the name of the member in any defined contribution plan maintained by the employer. new text end

new text begin (c) "Annuity starting date" means the first day of the first period for which an amount is payable as an annuity or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the member to the benefit. new text end

new text begin (d) "Compensation" means the compensation actually paid or made available to a member or participant for any limitation year, including all items of remuneration described in Code of Federal Regulations, title 26, section 1.415(c)-2(b), and excluding all items of remuneration described in Code of Federal Regulations, title 26, section 1.415(c)-2(c). Compensation for pension plan purposes for any limitation year shall not exceed the applicable federal compensation limit described in section 356.611, subdivision 2. new text end

new text begin (e) "Limitation year" means the calendar year or fiscal year, whichever is applicable to the particular pension plan. new text end

new text begin (f) "Maximum permissible benefit" means an annual benefit of $160,000, automatically adjusted under section 415(d) of the Internal Revenue Code for each limitation year ending after December 31, 2001, payable in the form of a single life annuity. The new limitation shall apply to limitation years ending with or within the calendar year of the date of the adjustment, but a member's benefits shall not reflect the adjusted limit prior to January 1 of that calendar year. The maximum permissible benefit amount shall be further adjusted as follows: new text end

new text begin (1) if the member has less than ten years of participation, the maximum permissible benefit shall be multiplied by a fraction, the numerator of which is the number of years, or part thereof, but not less than one year, of participation in the plan, and the denominator of which is ten; new text end

new text begin (2) for a member who is not a qualified participant, if the annual benefit begins before the member has attained 62 years of age, the determination as to whether the maximum permissible benefit limit has been satisfied shall be made, in accordance with regulations prescribed by the United States secretary of the treasury, by reducing the limit so that the limit, as so reduced, equals an annual benefit, beginning when the annual benefit actually begins, which is equivalent to a $160,000, as adjusted, annual benefit beginning at 62 years of age; and new text end

new text begin (3) if the annual benefit begins after the member has attained 65 years of age, the determination as to whether the maximum permissible benefit limit has been satisfied shall be made, in accordance with regulations prescribed by the United States secretary of the treasury, by increasing the limit so that the limit, as so increased, equals an annual benefit, beginning when the annual benefit actually begins, which is equivalent to a $160,000, as adjusted, annual benefit beginning at 65 years of age. new text end

new text begin (g) "Qualified participant" means a member of a defined benefit plan listed in section 356.611, subdivision 6, with respect to whom the period of service taken into account in determining the amount of the benefit under such defined benefit plan includes at least 15 years of service of the member: new text end

new text begin (1) as a full-time employee of any police department or fire department which is organized and operated by the state, Indian Tribal government, or any political subdivision maintaining such defined benefit plan to provide police protection, firefighting services, or medical services for any area within the jurisdiction of the state, Indian Tribal government, or political subdivision; or new text end

new text begin (2) as a member of the Armed Forces of the United States. new text end

new text begin Subd. 2. new text end

new text begin Annual benefit limitations; defined benefit plans. new text end

new text begin (a) For a defined benefit plan listed in section 356.611, subdivision 6, the annual benefit payable to a member shall not exceed the maximum permissible benefit. If the benefit the member would otherwise receive for a limitation year would result in the payment of an annual benefit in excess of the maximum permissible benefit, the benefit shall be reduced to the extent necessary so the benefit does not exceed the maximum permissible benefit. new text end

new text begin (b) For purposes of applying the limitation in paragraph (a), an annual benefit that is payable in any form other than a single life annuity shall be adjusted to an actuarially equivalent single life annuity that equals, if the annuity starting date is in a plan year beginning after 2005, the annual amount of the single life annuity commencing at the same annuity starting date that has the same actuarial present value as the member's form of benefit, using whichever of the following produces the greatest annual amount: new text end

new text begin (1) the interest rate and the mortality table or other tabular factor specified in the plan for adjusting benefits in the same form; new text end

new text begin (2) a 5.5 percent interest rate assumption and the applicable mortality table; or new text end

new text begin (3) the applicable interest rate under section 417(e)(3) of the Internal Revenue Code and the applicable mortality table, divided by 1.05. new text end

new text begin (c) If a member participated in more than one pension plan in which the employer participates, the benefits under each plan must be reduced proportionately to satisfy the limitation in paragraph (a). new text end

new text begin Subd. 3. new text end

new text begin Annual addition limitation; defined contribution plans. new text end

new text begin For any limitation year, the annual additions by or on behalf of a member to a defined contribution plan listed in section 356.611, subdivision 6, shall not exceed the lesser of: new text end

new text begin (1) 100 percent of the member's compensation for the limitation year; or new text end

new text begin (2) the dollar limit in effect for the limitation year under section 415(c)(1)(A) of the Internal Revenue Code, as adjusted by the United States secretary of the treasury under section 415(d)(1)(C) of the Internal Revenue Code. new text end

new text begin Subd. 4. new text end

new text begin Incorporation by reference. new text end

new text begin Any requirements of section 415(b) and (c) of the Internal Revenue Code and related regulations and agency guidance not addressed by this section shall be considered incorporated by reference, including provisions applicable to a qualified participant and to survivor and disability benefits. This section shall be interpreted in a manner that is consistent with the requirements of sections 415(b) and (c) of the Internal Revenue Code and the related regulations. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 5.

new text begin [356.614] LIMITATION ON USE OF FORFEITURES. new text end

new text begin This section applies to any defined benefit plan listed in section 356.611, subdivision 6. Unless otherwise permitted by section 401(a)(8) of the Internal Revenue Code, forfeitures must not be applied to increase the benefits any participant would otherwise receive under the plan at any time prior to the termination of the plan or the complete discontinuance of employer contributions. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 6.

Minnesota Statutes 2022, section 356.62, is amended to read:

356.62 PAYMENT OF EMPLOYEE CONTRIBUTION.

new text begin Subdivision 1. new text end

new text begin Definitions new text end

new text begin (a) For purposes of this section, the following terms have the meanings given. new text end

new text begin (b) "Employee" means any person covered by a public pension or retirement plan. new text end

new text begin (c) "Employee contributions" means any sums deducted from the employee's salary or wages or otherwise paid in lieu thereof, regardless of whether they are denominated contributions by the public pension or retirement plan. new text end

new text begin (d) "Public pension or retirement plan" means a covered retirement plan listed in section 356.611, subdivision 6, or any other public retirement plan to which section 414(h)(2) of the Internal Revenue Code applies. new text end

new text begin Subd. 2. new text end

new text begin Pick up of employee contributions. new text end

(a) For purposes of any public pension new text begin or retirement new text end plan, deleted text begin as defined in section 356.63, paragraph (b), deleted text end each employer shall pick up the employee contributions required under law or under the pension plan document for all salaries. deleted text begin If the United States Treasury Department rules that under section 414(h) of the Internal Revenue Code of 1986, as amended through December 31, 1992, that these picked up contributions are not includable in the employee's adjusted gross income until they are distributed or made available, then these picked up contributions must be treated as employer contributions in determining tax treatment under the Internal Revenue Code of 1986 and the employer shall discontinue withholding federal income taxes on the amount of these contributions. The employer shall pay these picked up contributions from the same source of funds as is used to pay the salary of the employee. deleted text end The employer shall pick up these employee contributions by a reduction in the cash salary of the employee.

(b) Employee contributions that are picked up must be treated for all purposes of the public pension new text begin or retirement new text end plan in the same manner and to the same extent as employee contributions that were made before the date on which the employee contributions pick up began. The amount of the employee contributions that are picked up must be included in the salary upon which retirement coverage is credited and upon which retirement and survivor's benefits are determined. deleted text begin For purposes of this section, "employee" means any person covered by a public pension plan. For purposes of this section, "employee contributions" include any sums deducted from the employee's salary or wages or otherwise paid in lieu thereof, regardless of whether they are denominated contributions by the public pension plan. deleted text end

(c) The employing unit shall supply each employee and the commissioner of revenue with an information return indicating the amount of the employer's picked-up contributions for the calendar year that were not subject to withholding. This return must be provided to the employee not later than January 31 of the succeeding calendar year. The commissioner of revenue shall prescribe the form of the return and the provisions of section 289A.12 must apply to the extent not inconsistent with the provisions of this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 7.

new text begin [356.633] DIRECT ROLLOVERS. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the meanings given. new text end

new text begin (b) "Distributee" means: new text end

new text begin (1) a participant in a covered retirement plan listed in section 356.611, subdivision 6; new text end

new text begin (2) the surviving spouse of a participant; new text end

new text begin (3) the former spouse of the participant who is the alternate payee under a qualified domestic relations order as defined in section 414(p) of the Internal Revenue Code, or who is a recipient of a court-ordered equitable distribution of marital property, as provided in section 518.58; or new text end

new text begin (4) a nonspousal beneficiary of a participant who qualifies for a distribution under the plan and is a designated beneficiary as defined in section 401(a)(9)(E) of the Internal Revenue Code. new text end

new text begin (c) "Eligible retirement plan" means: new text end

new text begin (1) an individual retirement account under section 408(a) or 408A of the Internal Revenue Code; new text end

new text begin (2) an individual retirement annuity plan under section 408(b) of the Internal Revenue Code; new text end

new text begin (3) an annuity plan under section 403(a) of the Internal Revenue Code; new text end

new text begin (4) a qualified trust plan under section 401(a) of the Internal Revenue Code that accepts the distributee's eligible rollover distribution; new text end

new text begin (5) an annuity contract under section 403(b) of the Internal Revenue Code; new text end

new text begin (6) an eligible deferred compensation plan under section 457(b) of the Internal Revenue Code, which is maintained by a state or local government and which agrees to separately account for the amounts transferred into the plan; new text end

new text begin (7) in the case of an eligible rollover distribution to a nonspousal beneficiary, an individual account or annuity treated as an inherited individual retirement account under section 402(c)(11) of the Internal Revenue Code; or new text end

new text begin (8) a savings incentive match plan for employees of small employers (SIMPLE) individual retirement account under section 408(p) of the Internal Revenue Code, provided that the rollover distribution is made after the two-year period beginning on the date the distributee first participated in any qualified salary reduction arrangement maintained by the distributee's employer under section 408(p)(2) of the Internal Revenue Code, as described in section 72(t)(6) of the Internal Revenue Code. new text end

new text begin (d) "Eligible rollover distribution" means any distribution of all or any portion of the balance to the credit of the distributee. An eligible rollover distribution does not include: new text end

new text begin (1) a distribution that is one of a series of substantially equal periodic payments, receivable annually or more frequently, that is made for the life or life expectancy of the distributee, the joint lives or joint life expectancies of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; new text end

new text begin (2) a distribution that is required under section 401(a)(9) of the Internal Revenue Code; or new text end

new text begin (3) any other exception required by law or the Internal Revenue Code. new text end

new text begin Subd. 2. new text end

new text begin Right to elect direct rollover. new text end

new text begin Except as provided in subdivision 3 for after-tax contributions, a distributee may elect, at the time and in the manner prescribed by the plan administrator, to have all or any portion of an eligible rollover distribution paid directly to an eligible retirement plan as specified by the distributee. new text end

new text begin Subd. 3. new text end

new text begin Distributions of after-tax contributions. new text end

new text begin For distributions of after-tax contributions which are not includable in gross income, the after-tax portion may be transferred only to an individual retirement account or annuity described in section 408(a) or (b) of the Internal Revenue Code, to a Roth individual retirement account described in section 408A of the Internal Revenue Code, to a qualified plan described in either section 401(a) of the Internal Revenue Code, or to an annuity contract described in section 403(b) of the Internal Revenue Code, that agrees to separately account for the amounts transferred, including separately accounting for the portion of the distribution which is includable in gross income and the portion of the distribution which is not includable. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 8.

Minnesota Statutes 2022, section 356.635, subdivision 1, is amended to read:

Subdivision 1.

deleted text begin Retirement benefit commencement deleted text end new text begin Definitions new text end .

new text begin (a) For purposes of this section, the following terms have the meanings given. new text end

deleted text begin (a) the retirement benefit of a member or participant must begin to be distributed or, if a lump sum, be distributed no later than the member's or participant's required beginning date. "Required beginning date" means April 1 of the calendar year following the later of (1) the calendar year in which the member or the participant attains the age specified in section 401(a)(9)(C)(i)(I) of the Internal Revenue Code, or (2) the calendar year in which the member or participant terminates employment. deleted text end

deleted text begin (b) A pension or defined contribution plan shall not be required to obtain the consent of a member or participant to a distribution if the distribution is required to satisfy the requirements of paragraph (a). deleted text end

new text begin (b) "Beneficiary" means the person designated as the beneficiary under the terms of the applicable covered retirement plan. new text end

new text begin (c) "Covered retirement plan" means a pension or retirement plan listed in section 356.611, subdivision 6. new text end

new text begin (d) "Designated beneficiary" means an individual beneficiary within the meaning of section 401(a)(9)(E)(i) of the Internal Revenue Code. new text end

new text begin (e) "Distribution calendar year" means a calendar year for which a minimum distribution is required. For distributions beginning before the participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the participant's required beginning date. For distributions beginning after the participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin under subdivision 2a, paragraph (b). The required minimum distribution for the participant's first distribution calendar year shall be made on or before the participant's required beginning date. new text end

new text begin (f) "Eligible designated beneficiary" means a designated beneficiary who meets the additional criteria under section 401(a)(9)(E)(ii) of the Internal Revenue Code. new text end

new text begin (g) "Participant's account balance" means the account balance as of the last valuation date in the valuation calendar year increased by the amount of any contributions made and allocated to the account balance as of dates in the valuation calendar year after the valuation date and decreased by distributions made in the valuation calendar year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or transferred to the plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year. new text end

new text begin (h) "Required beginning date" means April 1 of the calendar year following the later of: new text end

new text begin (1) the calendar year in which the member or the participant attains the age specified in section 401(a)(9)(C)(i)(I) of the Internal Revenue Code; or new text end

new text begin (2) the calendar year in which the member or participant terminates employment. new text end

new text begin (i) "Valuation calendar year" means the calendar year immediately preceding the distribution calendar year. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 9.

Minnesota Statutes 2022, section 356.635, is amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin Required beginning date. new text end

new text begin (a) Notwithstanding any state law to the contrary, the retirement benefit of a member or participant must begin to be distributed or, if a lump sum, be distributed no later than the member's or participant's required beginning date. new text end

new text begin (b) A pension or retirement plan is not required to obtain the consent of a member or participant to a distribution if the distribution is required to satisfy the requirements of paragraph (a). If the plan is unable to obtain the consent of a member or participant to a distribution that is required to satisfy the requirements of paragraph (a), the plan must make the required distribution to the member or participant. If the plan is a defined benefit plan that permits the distribution to be in the form of an annuity, the required distribution must be: new text end

new text begin (1) in the form of a single life annuity if the plan administrator's records do not indicate that the member is married; or new text end

new text begin (2) in the form of a 50 percent joint and survivor annuity naming the member's spouse as survivor if the plan administrator's records indicate that the member is married. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 10.

Minnesota Statutes 2022, section 356.635, subdivision 2, is amended to read:

Subd. 2.

new text begin Required minimum new text end distributions.

new text begin Notwithstanding any state law to the contrary: new text end

new text begin (1) new text end distributions deleted text begin shall deleted text end new text begin from a covered retirement plan must new text end be new text begin determined and new text end made deleted text begin as required under deleted text end new text begin in accordance with a reasonable, good faith interpretation of the requirements of new text end section 401(a)(9) of the Internal Revenue Code new text begin as applicable to governmental plans, as defined under section 414(d) of the Internal Revenue Code, new text end and the treasury regulations adopted under deleted text begin that deleted text end section new text begin 401(a)(9) new text end , including, but not limited to, the incidental death benefit provisions of section 401(a)(9)(G) of the Internal Revenue Code deleted text begin . deleted text end new text begin ; and new text end

new text begin (2) the entire interest of a member of participant under a covered retirement plan must begin to be distributed or, if a lump sum, be distributed no later than the member's or participant's required beginning date. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 11.

Minnesota Statutes 2022, section 356.635, is amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Required distributions from defined contribution plans. new text end

new text begin (a) This section applies to any covered retirement plan that is a defined contribution plan, including but not limited to the following: new text end

new text begin (1) the unclassified state employees retirement plan, established by chapter 352D; new text end

new text begin (2) the public employees defined contribution plan, established by chapter 353D; new text end

new text begin (3) the defined contribution plan that is part of the statewide volunteer firefighter retirement plan, established by chapter 353G; new text end

new text begin (4) the higher education individuals retirement account plan, established by chapter 354B; new text end

new text begin (5) the higher education supplemental retirement plan, established by chapter 354C; and new text end

new text begin (6) a defined contribution relief association, as defined under section 424A.001, subdivision 1c. new text end

new text begin (b) If the participant dies before the required minimum distribution begins, the participant's account must be distributed in a lump sum no later than as follows: new text end

new text begin (1) if the participant's account balance is payable to an eligible designated beneficiary, the distribution must be made by December 31 of the calendar year immediately following the calendar year in which the participant died. If the eligible designated beneficiary is the surviving spouse, the surviving spouse may elect to delay payment until December 31 of the calendar year in which the participant would have attained the participant's required beginning date. Effective for calendar years beginning after December 31, 2023, a surviving spouse who is the member's sole designated beneficiary may elect to be treated as if the surviving spouse were the member as provided under section 401(a)(9)(B)(iv) of the Internal Revenue Code; new text end

new text begin (2) if the participant's account balance is payable to a beneficiary that is not a designated beneficiary, the participant's account must be distributed by December 31 of the calendar year containing the fifth anniversary of the participant's death; or new text end

new text begin (3) if the participant's account balance is payable to a designated beneficiary who is not an eligible designated beneficiary, the participant's account must be distributed by December 31 of the calendar year containing the tenth anniversary of the participant's death. new text end

new text begin (c) Upon the death of the participant after distribution of the participant's account balance begins, any remaining portion of the participant's account balance shall continue to be distributed at least as rapidly as under the method of distribution in effect at the time of the participant's death, provided that the portion of the participant's account balance payable to a designated beneficiary who is not an eligible designated beneficiary must be distributed in its entirety by December 31 of the calendar year containing the tenth anniversary of the participant's death. new text end

new text begin (d) Upon the death of an eligible designated beneficiary, or the attainment of the age of majority of an eligible designated beneficiary who is a minor child of the participant, before distribution of the participant's entire account balance under paragraphs (b) or (c), the remainder of the participant's account balance shall be distributed by December 31 of the calendar year containing the tenth anniversary of the eligible designated beneficiary's death, or by December 31 of the calendar year in which the child attains the age of majority plus ten years, as applicable. new text end

new text begin (e) Notwithstanding any other provisions of this subdivision, a participant or beneficiary, who would have been required to receive required minimum distributions in 2020 (or paid in 2021 for the 2020 calendar year for a participant with a required beginning date of April 1, 2021) but for the enactment of Section 401(a)(9)(I) of the Internal Revenue Code, and who would have satisfied that requirement by receiving a distribution that satisfies the required minimum distribution for 2020, will receive that distribution unless the participant or beneficiary chooses not to receive the distribution. Solely for purposes of applying the direct rollover provisions of section 356.633, such distributions will be treated as eligible rollover distributions in 2020. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 12.

new text begin [356.636] CORRECTION OF ERRORS. new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the meanings given. new text end

new text begin (b) "Pension fund" means the Minnesota State Retirement System, the Public Employees Retirement Association, the Teachers Retirement Association, and the St. Paul Teachers Retirement Fund Association. new text end

new text begin (c) "Tax qualification" means compliance with all applicable requirements of section 401(a) or 457(b) of the Internal Revenue Code. new text end

new text begin Subd. 2. new text end

new text begin Correction of errors. new text end

new text begin (a) The executive director of a pension fund may correct an operational, demographic, or employer or employee eligibility error, or an error in a plan document that is not a statute if the executive director determines that correction is necessary or appropriate to preserve and protect the tax qualification of any pension or retirement plan listed in section 356.611, subdivision 6, that is part of the pension fund. The method of correction must comply with the Internal Revenue Service Employee Plans Compliance Resolution System (EPCRS) or any successor thereto, if the EPCRS addresses the error and correction. new text end

new text begin (b) To the extent deemed necessary by the executive director to implement correction, the executive director may: new text end

new text begin (1) make distributions; new text end

new text begin (2) transfer assets; new text end

new text begin (3) recover an overpayment by reducing future benefit payments or designating appropriate revenue or source of funding that will restore to the plan the amount of the overpayment; or new text end

new text begin (4) take any other action that will restore the plan and any affected member or participant to the position the plan, member, or participant would have been in had the error not occurred. new text end

new text begin (c) An executive director may correct an error under paragraph (a) or (b) without regard to any statute that imposes a time limitation on making such correction. new text end

new text begin Subd. 3. new text end

new text begin Annual report. new text end

new text begin The executive director of each pension fund must report annually, no later than each February 1, to the chair and executive director of the Legislative Commission on Pensions and Retirement on whether the executive director of the pension fund corrected any operational, demographic, employer or employee eligibility, or plan document error during the preceding calendar year. The report must describe the error, the pension or retirement plan affected by the error, the method of correction, and the cost, if any, to the pension or retirement plan, employee, or employer of the error and correction. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 13.

new text begin WORK GROUP ON AMORTIZATION. new text end

new text begin Subdivision 1. new text end

new text begin Work group established. new text end

new text begin The executive director of the Legislative Commission on Pensions and Retirement (commission executive director) must convene a work group for the purpose of recommending legislation amending Minnesota Statutes, section 356.215, subdivision 11, that will update the statute to conform to current actuarial best practices for amortizing liabilities. new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The members of the work group are the following: new text end

new text begin (1) the executive director of the Minnesota State Retirement System or the executive director's designee and a second member of the Minnesota State Retirement System staff designated by the executive director; new text end

new text begin (2) the executive director of the Public Employees Retirement Association or the executive director's designee and a second member of the Public Employees Retirement Association staff designated by the executive director; new text end

new text begin (3) the executive director of the Teachers Retirement Association or the executive director's designee and a second member of the Teachers Retirement Association staff designated by the executive director; and new text end

new text begin (4) the executive director of the St. Paul Teachers Retirement Fund Association, designated by the executive director of the St. Paul Teachers Retirement Fund Association or the executive director's designee. new text end

new text begin (b) The commission executive director may invite others, including the commission's actuary, to participate in one or more meetings of the work group. new text end

new text begin (c) The organizations specified in paragraph (a) must provide the commission executive director with the names and contact information for the representatives who will serve on the work group by June 14, 2024. new text end

new text begin Subd. 3. new text end

new text begin Scope. new text end

new text begin In arriving at the work group's recommendation for legislation or alternatives for legislation, the work group must consider: new text end

new text begin (1) layered amortization; new text end

new text begin (2) whether amortization policy should be regulated by statute, addressed in an appendix to the commission's standards for actuarial work, or documented elsewhere; new text end

new text begin (3) whether all pension plans must employ the same approach to amortization; new text end

new text begin (4) whether the proposed legislation will result in any cost to the pension funds and, if so, estimates of the cost; and new text end

new text begin (5) whether changes to amortization will require the approval of the Legislative Commission on Pensions and Retirement. new text end

new text begin Subd. 4. new text end

new text begin Due date for submitting recommendation to the commission. new text end

new text begin The commission executive director must submit the recommendation of the work group to the chair of the Legislative Commission on Pensions and Retirement by January 10, 2025. new text end

new text begin Subd. 5. new text end

new text begin Meetings. new text end

new text begin (a) The commission executive director must convene the first meeting of the work group no later than August 1, 2024, and will serve as chair. new text end

new text begin (b) Meetings may be conducted remotely or in person or a combination of remotely and in person. new text end

new text begin (c) In-person meetings must be held in the offices of the Legislative Coordinating Commission or in the Retirement Systems of Minnesota Building in St. Paul. new text end

new text begin Subd. 6. new text end

new text begin Compensation; lobbying; retaliation. new text end

new text begin (a) Members of the work group serve without compensation. new text end

new text begin (b) Participation in the work group is not lobbying under Minnesota Statutes, chapter 10A. new text end

new text begin (c) An individual's employer or an association of which an individual is a member must not retaliate against the individual because of the individual's participation in the work group. new text end

new text begin Subd. 7. new text end

new text begin Administrative support. new text end

new text begin Commission staff must provide administrative support for the work group. new text end

new text begin Subd. 8. new text end

new text begin Expiration. new text end

new text begin The work group expires June 30, 2025. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 14.

new text begin REVISOR INSTRUCTION. new text end

new text begin The revisor of statutes shall renumber each section of Minnesota Statutes listed in column A with the number listed in column B. The revisor shall also make necessary cross-reference changes consistent with the renumbering. new text end

	new text begin Column A new text end	new text begin Column B new text end
	new text begin 356.631 new text end	new text begin 356.648 new text end
	new text begin 356.99 new text end	new text begin 356.637 new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 15.

new text begin REVISOR INSTRUCTION. new text end

new text begin In Minnesota Statutes, the revisor of statutes shall delete the reference in column A and insert the reference in column B. new text end

	new text begin Column A new text end	new text begin Column B new text end
	new text begin 356.635, subdivision 1 new text end	new text begin 356.635, subdivision 1a new text end
	new text begin 356.635, subdivision 3 new text end	new text begin 356.633, subdivision 2 new text end
	new text begin 356.635, subdivision 4 new text end	new text begin 356.633, subdivision 1, paragraph (c) new text end
	new text begin 356.635, subdivision 5 new text end	new text begin 356.633, subdivision 1, paragraph (c) new text end
	new text begin 356.635, subdivision 6 new text end	new text begin 356.633, subdivision 1, paragraph (b) new text end
	new text begin 356.635, subdivision 7 new text end	new text begin 356.633, subdivision 1, paragraph (a) new text end
	new text begin 356.635, subdivision 8 new text end	new text begin 356.614 new text end
	new text begin 356.635, subdivision 9a new text end	new text begin 356.612, subdivision 1 new text end
	new text begin 356.635, subdivision 10 new text end	new text begin 356.612, subdivision 2 new text end
	new text begin 356.635, subdivision 11 new text end	new text begin 356.612, subdivision 3 new text end
	new text begin 356.635, subdivision 12 new text end	new text begin 356.612, subdivision 4 new text end
	new text begin 356.635, subdivision 13 new text end	new text begin 356.636, subdivision 2 new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 16.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2022, section 356.635, subdivisions 3, 4, 5, 6, 7, 8, 9a, 10, 11, 12, and 13, new text end new text begin are repealed. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

ARTICLE 9

STATE AID CLARIFICATION

Section 1.

Minnesota Statutes 2022, section 353.65, subdivision 3b, is amended to read:

Subd. 3b.

Direct state aid.

(a) The state deleted text begin shall deleted text end new text begin must new text end pay $4,500,000 on October 1, 2018, and October 1, 2019, to the public employees police and fire retirement plan. By October 1 of each year after 2019, the state deleted text begin shall deleted text end new text begin must new text end pay $9,000,000 to the public employees police and fire retirement plan. The commissioner of management and budget deleted text begin shall deleted text end new text begin must new text end pay the aid specified in this subdivision. The amount required is annually appropriated from the general fund to the commissioner of management and budget.

(b) The aid under paragraph (a) continues until the earlier of:

(1) the first day of the fiscal year following deleted text begin the deleted text end new text begin three consecutive new text end fiscal deleted text begin year deleted text end new text begin years new text end in which new text begin , for each fiscal year, new text end the actuarial value of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or

(2) July 1, 2048.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 2.

Minnesota Statutes 2022, section 354.435, subdivision 4, is amended to read:

Subd. 4.

Aid expiration.

The aid amounts specified in this section deleted text begin shall deleted text end new text begin must new text end continue until the earlier of:

(1) the first day of the fiscal year following deleted text begin the deleted text end new text begin three consecutive new text end fiscal deleted text begin year deleted text end new text begin years new text end in which new text begin , for each fiscal year, new text end the actuarial value of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or

(2) July 1, 2048.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2022, section 354.436, subdivision 3, is amended to read:

Subd. 3.

Aid expiration.

The aid amounts specified in this section continue until the earlier of:

(1) the first day of the fiscal year following deleted text begin the deleted text end new text begin three consecutive new text end fiscal deleted text begin year deleted text end new text begin years new text end in which new text begin , for each fiscal year, new text end the actuarial value of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or

(2) July 1, 2048.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 4.

Minnesota Statutes 2022, section 354A.12, subdivision 3a, is amended to read:

Subd. 3a.

Direct state aid to deleted text begin first class city teachers retirement fund associations deleted text end new text begin St. Paul Teachers Retirement Fund Association new text end .

(a) The state deleted text begin shall deleted text end new text begin must new text end pay $2,827,000 to the St. Paul Teachers Retirement Fund Association.

(b) In addition to other amounts specified in this subdivision, the state deleted text begin shall deleted text end new text begin must new text end pay $7,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.

(c) In addition to the amounts specified in paragraphs (a) and (b), the state deleted text begin shall deleted text end new text begin must new text end pay $5,000,000 as state aid to the St. Paul Teachers Retirement Fund Association.

(d) The aid under this subdivision is payable October 1 annually. The commissioner of management and budget deleted text begin shall deleted text end new text begin must new text end pay the aid specified in this subdivision. The amount required is appropriated annually from the general fund to the commissioner of management and budget.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 5.

Minnesota Statutes 2022, section 354A.12, subdivision 3c, is amended to read:

Subd. 3c.

Termination of supplemental contributions and direct matching and state aid.

deleted text begin (a) deleted text end The supplemental contributions payable to the St. Paul Teachers Retirement Fund Association by Independent School District No. 625 under section 423A.02, subdivision 3, and the aid under subdivision 3a, paragraphs (a) deleted text begin and (b), deleted text end new text begin to (c), new text end continue until the earlier of:

(1) the first day of the fiscal year following deleted text begin the year deleted text end new text begin three consecutive fiscal years new text end in which new text begin , for each fiscal year, new text end the actuarial value of assets of the fund equals or exceeds 100 percent of the actuarial accrued liability as reported by the actuary retained under section 356.214 in the deleted text begin most recent deleted text end annual actuarial valuation prepared under section 356.215; or

(2) July 1, 2048.

deleted text begin (b) The aid under subdivision 3a, paragraph (c), continues until the earlier of: deleted text end

deleted text begin (1) the first day of the fiscal year following the fiscal year in which the actuarial value of assets of the fund equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or deleted text end

deleted text begin (2) July 1, 2048. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 6.

Minnesota Statutes 2022, section 423A.02, subdivision 5, is amended to read:

Subd. 5.

Termination of state aid programs.

The amortization state aid and additional amortization state aid programs continue until the earlier of:

(1) the December 31 following deleted text begin the end of the deleted text end new text begin three consecutive new text end fiscal deleted text begin year deleted text end new text begin years new text end in which new text begin , for each fiscal year, new text end the actuarial value of assets of the St. Paul Teachers Retirement Fund Association or the Teachers Retirement Association equals or exceeds 100 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation report prepared under section 356.215; or

(2) July 1, 2048.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 7.

Minnesota Statutes 2022, section 423A.022, subdivision 5, is amended to read:

Subd. 5.

Aid termination.

(a) The aid under subdivision 2, paragraph (a), clauses (1) and (3), continues until the earlier of:

(1) the December 1 following deleted text begin the end of the deleted text end new text begin three consecutive new text end fiscal deleted text begin year deleted text end new text begin years new text end in which new text begin , for each fiscal year, new text end the actuarial value of assets of both the State Patrol retirement plan and the public employees police and fire retirement plan equals or exceeds 90 percent of the actuarial accrued liabilities as reported by the actuary retained under section 356.214 in the annual actuarial valuation prepared under section 356.215; or

(2) July 1, 2048.

(b) The aid under subdivision 2, paragraph (a), clause (2), does not terminate.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 8.

Minnesota Statutes 2023 Supplement, section 477B.02, subdivision 3, is amended to read:

Subd. 3.

Benefits requirements.

(a) The fire department must deleted text begin have a separate subsidiary incorporated firefighters' deleted text end new text begin : new text end

new text begin (1) be associated with a volunteer firefighter new text end relief association that provides retirement benefits deleted text begin or must deleted text end new text begin ; new text end

new text begin (2) new text end participate in the statewide volunteer firefighter plan; deleted text begin or if the municipality solely employs deleted text end

new text begin (3) have retirement coverage under the public employees police and fire retirement plan for the department's new text end full-time firefighters new text begin , new text end as defined in section 299N.03, subdivision 5, deleted text begin retirement coverage must be provided by the public employees police and fire retirement plan deleted text end new text begin or the fire department's part-time firefighters, or the fire department's full-time firefighters and part-time firefighters; or new text end

new text begin (4) satisfy either clauses (1) and (3) or clauses (2) and (3) new text end .

new text begin (b) new text end For purposes of retirement benefits, a fire department may be associated with only one volunteer deleted text begin firefighters' deleted text end new text begin firefighter new text end relief association or one account in the deleted text begin voluntary deleted text end statewide volunteer firefighter retirement plan at one time.

deleted text begin (b) deleted text end new text begin (c) new text end Notwithstanding paragraph (a), a municipality without a relief association as described under section 424A.08, paragraph (a), may still qualify to receive fire state aid if all other requirements of this section are met.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2025. new text end

ARTICLE 10

CHANGES TO EXECUTIVE DIRECTOR QUALIFICATIONS AND COMPENSATION

Section 1.

Minnesota Statutes 2022, section 353.03, subdivision 3a, is amended to read:

Subd. 3a.

Executive director.

(a) Appointment. The board deleted text begin shall deleted text end new text begin must new text end appoint an executive director on the basis of education, experience in the retirement field, new text begin ability to manage and lead system staff, new text end and deleted text begin leadership deleted text end ability new text begin to assist the board in setting a vision for the system new text end . The executive director must have had at least five deleted text begin years' deleted text end new text begin years of new text end experience in new text begin either new text end an deleted text begin executive level deleted text end new text begin executive-level new text end management position deleted text begin , which has included responsibility for pensions, deferred compensation, or employee benefits deleted text end new text begin or a position with responsibility for the governance, management, or administration of a retirement plan new text end . The executive director serves at the pleasure of the board. Notwithstanding any law to the contrary, the board must set the salary of the executive director. deleted text begin The salary of the executive director must not exceed the limit for a position listed in section 15A.0815, subdivision 2 deleted text end new text begin The board must review the performance of the executive director on an annual basis and may grant salary adjustments as a result of the review new text end .

(b) Duties. The management of the association is vested in the executive director who shall be the executive and administrative head of the association. The executive director shall act as adviser to the board on all matters pertaining to the association and shall also act as the secretary of the board. The executive director shall:

(1) attend all meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out the provisions of this chapter;

(3) establish and maintain an adequate system of records and accounts following recognized accounting principles and controls;

(4) designate, with the approval of the board, up to two persons who may serve in the unclassified service and whose salaries are set in accordance with section 43A.18, subdivision 3, appoint a confidential secretary in the unclassified service, and appoint employees to carry out this chapter, who are subject to chapters 43A and 179A in the same manner as are executive branch employees;

(5) organize the work of the association as the director deems necessary to fulfill the functions of the association, and define the duties of its employees and delegate to them any powers or duties, subject to the control of, and under such conditions as, the executive director may prescribe;

(6) with the approval of the board, contract for the services of an approved actuary, professional management services, and any other consulting services as necessary to fulfill the purposes of this chapter. All contracts are subject to chapter 16C. The commissioner of administration shall not approve, and the association shall not enter into, any contract to provide lobbying services or legislative advocacy of any kind. Any approved actuary retained by the executive director shall function as the actuarial advisor of the board and the executive director. In addition to filing requirements under section 356.214, any supplemental actuarial valuations or experience studies shall be filed with the executive director of the Legislative Commission on Pensions and Retirement. Copies of professional management survey reports shall be transmitted to the secretary of the senate, the chief clerk of the house of representatives, and the Legislative Reference Library as provided by section 3.195, and to the executive director of the commission at the same time as reports are furnished to the board. Only management firms experienced in conducting management surveys of federal, state, or local public retirement systems shall be qualified to contract with the director hereunder;

(7) with the approval of the board provide in-service training for the employees of the association;

(8) make refunds of accumulated contributions to former members and to the designated beneficiary, surviving spouse, legal representative or next of kin of deceased members or deceased former members, as provided in this chapter;

(9) determine the amount of the annuities and disability benefits of members covered by the association and authorize payment of the annuities and benefits beginning as of the dates on which the annuities and benefits begin to accrue, in accordance with the provisions of this chapter;

(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses of the association;

(11) prepare and submit to the board and the legislature an annual financial report covering the operation of the association, as required by section 356.20;

(12) prepare and submit biennial and annual budgets to the board for its approval and submit the approved budgets to the Department of Management and Budget for approval by the commissioner;

(13) reduce all or part of the accrued interest payable under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, subdivision 5, upon receipt of proof by the association of an unreasonable processing delay or other extenuating circumstances of the employing unit; and notwithstanding section 353.27, subdivision 7, may waive the payment of accrued interest to the member if a credit has been taken by the employer to correct an employee deduction taken in error and if the accrued interest is $10 or less. The executive director shall prescribe and submit for approval by the board the conditions under which such interest may be reduced; and

(14) with the approval of the board, perform such other duties as may be required for the administration of the association and the other provisions of this chapter and for the transaction of its business.

Sec. 2.

Minnesota Statutes 2023 Supplement, section 354.06, subdivision 2, is amended to read:

Subd. 2.

President; executive director.

The board must annually elect one of its members as president. It must elect an executive director. Notwithstanding any law to the contrary, the board must set the salary of the executive director. deleted text begin The salary of the executive director must not exceed the limit for a position listed in section 15A.0815, subdivision 2 deleted text end new text begin The board must review the performance of the executive director on an annual basis and may grant salary adjustments as a result of the review new text end . The executive director deleted text begin shall deleted text end new text begin must new text end serve at the pleasure of the board and be the executive officer of the board, with the duties prescribed in subdivision 2a and any additional duties that the board may prescribe. The board must employ all other clerks and employees necessary to properly administer the association. The board must appoint an executive director on the basis of education, experience in the retirement field, ability to manage and lead system staff, and ability to assist the board in setting a vision for the system. The executive director must have had at least five years of experience in either an executive-level management position or in a position with responsibility for the governance, management, or administration of a retirement plan.

Sec. 3.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 2 are effective the day following final enactment. new text end

ARTICLE 11

ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION
TECHNICAL CHANGES

Section 1.

Minnesota Statutes 2022, section 354A.011, subdivision 7, is amended to read:

Subd. 7.

Association.

"Association" or "teachers retirement fund association" means the deleted text begin applicable teachers retirement fund association deleted text end new text begin St. Paul Teachers Retirement Fund Association new text end established pursuant to this chapter.

Sec. 2.

Minnesota Statutes 2022, section 354A.021, subdivision 2, is amended to read:

Subd. 2.

Organization; board duties.

(a) deleted text begin Each deleted text end new text begin The new text end teachers retirement fund association deleted text begin shall deleted text end new text begin must new text end be organized and governed pursuant to this chapter and chapter 317A, except that deleted text begin each deleted text end new text begin the new text end association deleted text begin shall deleted text end new text begin must new text end be deemed to be a nonprofit corporation without coming within the definition in section 317A.011, subdivision 6. Any corporate action of any teachers retirement fund association taken prior to April 9, 1976, deleted text begin shall deleted text end new text begin must new text end be deemed to be valid if it conformed with Minnesota Statutes 1976, chapter 317 or 354A, or Revised Laws 1905, chapter 58, as amended through April 9, 1976.

(b) In addition to the other powers and duties of deleted text begin a deleted text end new text begin the new text end board of trustees of deleted text begin a first class city teacher deleted text end new text begin the teachers new text end retirement fund association, the board deleted text begin shall deleted text end new text begin must new text end approve early retirement and optional annuity factors, subject to review by the actuary retained by the Legislative Commission on Pensions and Retirement; deleted text begin shall deleted text end new text begin must new text end establish the schedule for implementation of the approved factors; and deleted text begin shall deleted text end new text begin must new text end notify the Legislative Commission on Pensions and Retirement of the implementation schedule.

Sec. 3.

Minnesota Statutes 2022, section 354A.021, subdivision 3, is amended to read:

Subd. 3.

Fund.

Within deleted text begin each deleted text end new text begin the new text end teachers retirement fund association there deleted text begin shall deleted text end new text begin must new text end be created a special retirement fund, which deleted text begin shall deleted text end new text begin must new text end include all of the assets of the teachers retirement fund association other than assets of a tax-sheltered annuity program and fund authorized pursuant to subdivision 5 which were acquired for the specific purpose of being credited to that fund. The special retirement fund deleted text begin shall deleted text end new text begin must new text end be credited with all employee and employer contributions, all interest and all other income authorized by law. Within the special retirement fund there may be established separate special retirement fund accounts for the purpose of providing convenience in the funding of and accounting for retirement annuities and any authorized ancillary benefits.

Sec. 4.

Minnesota Statutes 2022, section 354A.021, subdivision 6, is amended to read:

Subd. 6.

Trustees' fiduciary obligation.

The trustees deleted text begin or directors deleted text end of deleted text begin each deleted text end new text begin the new text end teachers retirement fund association deleted text begin shall deleted text end new text begin must new text end administer deleted text begin each deleted text end new text begin the new text end fund in accordance with the applicable portions of this chapter, of the articles of incorporation, of the bylaws, and of chapters 356 and 356A. The purpose of this subdivision is to establish deleted text begin each deleted text end new text begin the new text end teachers retirement fund association as a trust under the laws of the state of Minnesota for all purposes related to section 401(a) of the Internal Revenue Code of the United States, including all amendments.

Sec. 5.

Minnesota Statutes 2022, section 354A.021, subdivision 7, is amended to read:

Subd. 7.

Actuarial consultant.

The board of trustees deleted text begin or directors deleted text end of deleted text begin each deleted text end new text begin the new text end teachers retirement fund association may contract for the services of an approved actuary and fix the reasonable compensation for those services. Any approved actuary retained by the board deleted text begin shall deleted text end new text begin must new text end function as the actuarial advisor to the board and may perform actuarial valuations and experience studies to supplement those performed by the actuary retained under section 356.214. Any supplemental actuarial valuations or experience studies must be filed with the executive director of the Legislative Commission on Pensions and Retirement.

Sec. 6.

Minnesota Statutes 2022, section 354A.021, subdivision 8, is amended to read:

Subd. 8.

Audit by state auditor.

The books and accounts of deleted text begin each deleted text end new text begin the new text end teachers retirement fund association must be examined and audited periodically as considered necessary by the state auditor. A full and detailed report of the examination and audit must be made and a copy provided to the teachers retirement fund association board of trustees. The cost of any examination and audit must be paid by the teachers retirement fund association in accordance with section 6.56. For purposes of section 6.56, deleted text begin each deleted text end new text begin the new text end teachers retirement fund association is considered a local governmental entity equivalent to a county, city, town, or school district.

Sec. 7.

Minnesota Statutes 2022, section 354A.021, subdivision 9, is amended to read:

Subd. 9.

Updated articles of incorporation and bylaws; filing.

(a) On or before July 1, 2006, and within six months of the date of the approval of any amendment to the articles of incorporation or bylaws, the chief administrative officer of deleted text begin each first class city teacher deleted text end new text begin the teachers new text end retirement fund association deleted text begin shall deleted text end new text begin must new text end prepare and publish an updated compilation of the articles of incorporation and the bylaws of the association.

(b) The chief administrative officer of the deleted text begin first class city teacher deleted text end new text begin teachers new text end retirement fund association must certify the accuracy and the completeness of the compilation.

(c) The compilation of the articles of incorporation and bylaws of deleted text begin a first class city teacher deleted text end new text begin the teachers new text end retirement fund association must contain an index.

(d) The compilation must be made available to association members and other interested parties. The association may charge a fee for a copy that reflects the price of printing or otherwise producing the copy. deleted text begin Two copies of deleted text end The compilation must be filed, without charge, by deleted text begin each deleted text end new text begin the teachers new text end retirement fund association with the deleted text begin Legislation deleted text end new text begin Legislative new text end Commission on Pensions and Retirement, the Legislative Reference Library, the state auditor, the commissioner of education, the chancellor of the Minnesota State Colleges and Universities system, and the superintendent of deleted text begin the applicable school district deleted text end new text begin Independent School District No. 625, St. Paul. The compilation may be filed by email new text end .

(e) deleted text begin A first class city teacher deleted text end new text begin The teachers new text end retirement fund association may contract with the revisor of statutes for the preparation of the compilation.

(f) If deleted text begin a first class city teacher deleted text end new text begin the teachers new text end retirement fund association makes an updated copy of its articles of incorporation and bylaws available on its website, the new text begin teachers new text end retirement fund association is not obligated to file a hard copy of the documents under paragraph (d) for the applicable filing period.

Sec. 8.

Minnesota Statutes 2022, section 354A.05, is amended to read:

354A.05 MEMBERSHIP IN A TEACHERS RETIREMENT ASSOCIATION IN ST. PAUL.

Teachers contributing to the deleted text begin respective deleted text end teachers retirement fund association, as provided in this chapter and the articles of incorporation and the bylaws of the association, are entitled to the benefit of coverage by or entitlement to annuities or benefits from the association. All teachers deleted text begin in a city of the first class in which there exists a teachers retirement fund association deleted text end new text begin of Independent School District No. 625, St. Paul, new text end are members of deleted text begin that deleted text end new text begin the new text end teachers retirement fund association and participate in the benefits provided by the special retirement fund.

Sec. 9.

Minnesota Statutes 2022, section 354A.091, is amended to read:

354A.091 TEACHERS ON EXTENDED LEAVE.

Subdivision 1.

Retirement contributions.

Notwithstanding any provision to the contrary of this chapter or the articles of incorporation or bylaws of deleted text begin an deleted text end new text begin the new text end association relating to the salary figure to be used for the determination of contributions or the accrual of service credit an elementary, secondary, or technical college teacher in deleted text begin the public schools of a city of the first class deleted text end new text begin Independent School District No. 625, St. Paul, new text end who is granted an extended leave of absence pursuant to section 122A.46, or a teacher who is granted an extended leave of absence under section 136F.43, may pay employee contributions to the deleted text begin applicable deleted text end association and deleted text begin shall deleted text end new text begin must new text end be entitled to receive allowable service credit in deleted text begin that deleted text end new text begin the new text end association for each year of leave, provided the member and the employing board make the required employer contributions, in any proportion they may agree upon, to deleted text begin that deleted text end new text begin the new text end association during the period of leave which shall not exceed five years. The state deleted text begin shall deleted text end new text begin must new text end not make an employer contribution on behalf of the teacher. The employee and employer contributions deleted text begin shall deleted text end new text begin must new text end be based upon the rates of contribution prescribed by section 354A.12 as applied to a salary figure equal to the teacher's actual covered salary for the plan year immediately preceding the leave. Payment of the employee and employer contributions authorized pursuant to this section deleted text begin shall deleted text end new text begin must new text end be made on or before June 30 of the fiscal year for which service credit is to be received. No allowable service with respect to a year of extended leave of absence shall be credited to a teacher until payment of the required employee and employer contributions has been received by the association.

Subd. 2.

Membership retention.

A teacher on extended leave under either section 122A.46 or 136F.43 whose employee and employer contributions are made to the deleted text begin applicable deleted text end teachers retirement fund association pursuant to subdivision 1 deleted text begin shall deleted text end new text begin must new text end retain membership in the association for each year during which the contributions are made, under the same terms and conditions as if the teacher had continued to teach in the district.

Subd. 3.

Effect of nonpayment.

A teacher on extended leave under either section 122A.46 or 136F.43 who does not make employee contributions or whose employer contribution is not made to the deleted text begin applicable deleted text end teachers retirement fund association in any year deleted text begin shall deleted text end new text begin must new text end be deemed to have ceased to be an active member of the association and to have ceased to render teaching services beginning in that year for purposes of this chapter and the articles of incorporation and bylaws of the association, and may not pay employee or employer contributions into the fund in any subsequent year of the leave. Nonpayment of contributions into the fund deleted text begin shall deleted text end new text begin must new text end not affect the rights or obligations of the teacher or the employing school district under section 122A.46 or the Minnesota State Colleges and Universities system under section 136F.43.

Subd. 4.

Failure to resume service.

If a teacher who has made employee contributions to the deleted text begin applicable deleted text end teachers retirement fund association for the agreed maximum duration of an extended leave does not resume teaching service in the first school year after that maximum duration has elapsed, the teacher deleted text begin shall deleted text end new text begin must new text end be deemed to have ceased to be an active member of the association and to have ceased to render teaching services beginning in that first school year after that maximum duration has elapsed for purposes of this chapter and the articles of incorporation and bylaws of the association.

Subd. 5.

Applicability.

The provisions of this section deleted text begin shall deleted text end new text begin must new text end not apply to a teacher who is discharged pursuant to section 122A.41 while the teacher is on an extended leave of absence pursuant to section 122A.46. The provisions of this section also do not apply to a teacher who is discharged for cause while the teacher is on an extended leave of absence under section 136F.43.

Subd. 6.

Exclusive coverage.

A teacher who makes employee contributions to and receives allowable service credit in the deleted text begin applicable teacher's deleted text end new text begin teachers new text end retirement fund association pursuant to this section may not make employee contributions or receive allowable service credit for the same period of time in any other Minnesota public employee pension plan, except a volunteer firefighters relief association governed by sections 424A.091 to 424A.096 new text begin or the statewide volunteer firefighter plan governed by chapter 353G new text end . This subdivision deleted text begin shall deleted text end new text begin must new text end not be construed to prohibit a member who pays employee contributions and receives allowable service credit in the fund pursuant to this section in any year from being employed as a substitute teacher by any school district during that year. Notwithstanding the provisions of this chapter or the bylaws of a retirement association, a teacher may not pay retirement contributions or receive allowable service credit in the fund for teaching service rendered for any part of any year for which the teacher pays retirement contributions or receives allowable service credit pursuant to section 354.094 or this section while on an extended leave of absence under either section 122A.46 or 136F.43.

Sec. 10.

Minnesota Statutes 2022, section 354A.094, is amended to read:

354A.094 QUALIFIED PART-TIME TEACHERS; PARTICIPATION IN FUND.

Subdivision 1.

Teachers, defined.

For purposes of this section, the term "teachers" deleted text begin shall have deleted text end new text begin has new text end the meaning given in section 122A.15, subdivision 1, except that the term deleted text begin shall deleted text end new text begin must new text end not include superintendents.

Subd. 2.

Part-time teaching position, defined.

For purposes of this section, the term "part-time teaching position" deleted text begin shall mean deleted text end new text begin means new text end a teaching position within deleted text begin the district deleted text end new text begin Independent School District No. 625, St. Paul, new text end in which the teacher is employed for at least 50 full days or a fractional equivalent of 50 full days calculated using the appropriate minimum number of hours which would result in a full day of service credit by the deleted text begin appropriate deleted text end association and for which the teacher is compensated in an amount not to exceed 80 percent of the compensation rate established by the board for a full-time teacher with identical education and experience within the district.

Subd. 3.

Qualified part-time teacher program participation requirements.

(a) A teacher in deleted text begin the public schools of a city of the first class deleted text end new text begin Independent School District No. 625, St. Paul, new text end who is vested, or who has combined years of full-time teaching service in Minnesota public elementary schools, Minnesota secondary schools, and Minnesota State Colleges and Universities system at least equal to the number of years specified for vesting in the deleted text begin applicable first class city teacher plan deleted text end new text begin association new text end , may, by agreement with the board of the deleted text begin employing deleted text end district, be assigned to teaching service within the district in a part-time teaching position. The agreement must be executed before October 1 of the year for which the teacher requests to make retirement contributions under subdivision 4. A copy of the executed agreement must be filed with the executive director of the new text begin teachers new text end retirement fund association. If the copy of the executed agreement is filed with the association after October 1 of the year for which the teacher requests to make retirement contributions under subdivision 4, the deleted text begin employing deleted text end school district deleted text begin shall deleted text end new text begin must new text end pay a fine of $5 for each calendar day that elapsed since the October 1 due date. The association may not accept an executed agreement that is received by the association more than 15 months late. The association may not waive the fine required by this section.

(b) Notwithstanding paragraph (a), if the teacher is also a legislator:

(1) the agreement in paragraph (a) must be executed before March 1 of the school year for which the teacher requests to make retirement contributions under subdivision 4; and

(2) the fines specified in paragraph (a) apply if the employing unit does not file the executed agreement with the executive director of the deleted text begin applicable deleted text end teachers retirement fund association by March 1.

Subd. 4.

Retirement contributions.

Notwithstanding any provision to the contrary in this chapter or the articles of incorporation or bylaws of deleted text begin an deleted text end new text begin the new text end association relating to the salary figure to be used for the determination of contributions or the accrual of service credit, a teacher assigned to a part-time position under this section deleted text begin shall deleted text end new text begin must new text end continue to make employee contributions to and to accrue allowable service credit in the deleted text begin applicable deleted text end association during the period of part-time employment on the same basis and in the same amounts as would have been paid and accrued if the teacher had been employed on a full-time basis provided that, prior to June 30 each year the member and the employing board make that portion of the required employer contribution to the deleted text begin applicable deleted text end association in any proportion which they may agree upon, that is based on the difference between the amount of compensation that would have been paid if the teacher had been employed on a full-time basis and the amount of compensation actually received by the teacher for services rendered in the part-time assignment. The employer contributions to the deleted text begin applicable deleted text end association on behalf of the teacher deleted text begin shall deleted text end new text begin must new text end be based on the amount of compensation actually received by the teacher for the services rendered in the part-time assignment in the manner described in section 354A.12, subdivision 2a. The employee and employer contributions deleted text begin shall deleted text end new text begin must new text end be based upon the rates of contribution prescribed by section 354A.12. Full membership, accrual of allowable service credit and employee contributions for part-time teaching service by a teacher pursuant to this section and section 354.66 deleted text begin shall deleted text end new text begin must new text end not continue for a period longer than ten years.

Subd. 5.

Limits on outside coverage.

A teacher entitled to full membership, accrual of allowable service credit and employee contributions for part time teaching service pursuant to this section deleted text begin shall deleted text end new text begin must new text end not be entitled during the same period of time to be a member of, accrue allowable service credit in or make employee contributions to any other Minnesota public pension plan, except a volunteer firefighters relief association governed by sections 424A.091 to 424A.096 new text begin or the statewide volunteer firefighter plan governed by chapter 353G new text end .

Subd. 6.

Insurance.

deleted text begin A deleted text end new text begin The new text end board of deleted text begin an employing district deleted text end new text begin Independent School District No. 625, St. Paul, new text end entering into an agreement authorized by this section deleted text begin shall deleted text end new text begin must new text end take all steps necessary to assure continuance of any insurance programs furnished or authorized a full-time teacher on an identical basis and with identical sharing of costs for a part time teacher pursuant to this section.

Subd. 7.

Qualification.

Only teachers who are in the bargaining unit as defined in section 179A.03, subdivision 7, during the year preceding the period of part time employment pursuant to this section shall qualify for full membership in, accrual of service credit from, and employee contributions to deleted text begin a deleted text end new text begin the new text end teachers retirement fund association for part time teaching service pursuant to subdivision 4. Notwithstanding the provisions of section 179A.03, subdivision 14, paragraph (a), clauses (5) and (6), teachers who are employed on a part time basis for purposes of this section and who would therefore be disqualified from the bargaining unit by one or both of those provisions, shall continue to be in the bargaining unit during the period of part time employment pursuant to this section for purposes of compensation, fringe benefits and the grievance procedure.

Subd. 8.

One district limit.

No teacher shall qualify for full membership in, accrual of service credit from and employee contributions to the Teachers Retirement Association or deleted text begin a deleted text end new text begin the new text end teachers retirement fund association for part time teaching service pursuant to subdivision 4 or section 354.66, subdivision 4, in more than one district at the same time. No teacher shall qualify for full membership in, accrual of service credit from and employee contributions to deleted text begin a deleted text end new text begin the new text end teachers retirement fund association during part time employment in deleted text begin a district deleted text end new text begin Independent School District No. 625, St. Paul, new text end pursuant to this section in any year if the teacher also takes a full time or part time teaching position in another Minnesota school district.

Subd. 10.

Nonqualified part-time positions.

Nothing in this section shall be construed to limit the authority of a school board to assign a teacher to a part time teaching position which does not qualify for employee contributions to deleted text begin a deleted text end new text begin the new text end teachers retirement fund association pursuant to this section.

Subd. 11.

Substitute teaching; no coverage overlap.

Neither subdivision 5 nor subdivision 8 shall be construed to prohibit a teacher who qualifies for full membership in, accrual of service credit from and employee contributions to deleted text begin a deleted text end new text begin the new text end teachers retirement fund association pursuant to this section in any year from being employed as a substitute teacher by any school district during that year. Notwithstanding the provisions of this chapter or the bylaws of deleted text begin a retirement deleted text end new text begin the new text end association, a teacher may not pay retirement contributions or receive allowable service credit in the deleted text begin funds deleted text end new text begin association new text end for other teaching service rendered for any part of any year for which the teacher qualifies for full membership in, accrual of service credit from and employee contributions to the Teachers Retirement Association or deleted text begin a deleted text end new text begin the new text end teachers retirement fund association pursuant to section 354.66 or this section.

Subd. 12.

Information supplied by district.

deleted text begin Each school district covered by the provisions of this chapter shall deleted text end new text begin Independent School District No. 625, St. Paul, must new text end furnish to the deleted text begin appropriate deleted text end teachers retirement fund association whatever information and reports deemed necessary by the board of trustees of the deleted text begin applicable deleted text end teachers retirement fund association to administer the provisions of this section.

Sec. 11.

Minnesota Statutes 2022, section 354A.12, subdivision 5, is amended to read:

Subd. 5.

Reporting and remittance requirements.

(a) deleted text begin Each deleted text end new text begin The new text end employing unit deleted text begin shall deleted text end new text begin must new text end provide to the deleted text begin appropriate deleted text end teachers retirement fund association the following member data regarding all new or returning employees before the employee's first payroll date in a format approved by the executive secretary or director. Data changes and the dates of those changes must be reported to the association on an ongoing basis for the payroll cycle in which they occur. Data on the member includes:

(1) legal name, address, date of birth, association member number, employer-assigned employee number, and Social Security number;

(2) association status, including, but not limited to, basic, coordinated, exempt annuitant, exempt technical college teacher, or exempt independent contractor or consultant;

(3) employment status, including, but not limited to, full time, part time, intermittent, substitute, or part-time mobility;

(4) employment position, including, but not limited to, teacher, superintendent, principal, administrator, or other;

(5) employment activity, including, but not limited to, hire, termination, resumption of employment, disability, or death;

(6) leaves of absence; and

(7) other information as may be required by the association.

(b) deleted text begin Each deleted text end new text begin The new text end employing unit deleted text begin shall deleted text end new text begin must new text end provide the following data to the deleted text begin appropriate deleted text end association for each payroll cycle in a format approved by the executive secretary or director:

(1) an association member number;

(2) employer-assigned employee number;

(3) Social Security number;

(4) amount of each salary deduction;

(5) amount of salary as defined in section 354A.011, subdivision 24, from which each deduction was made;

(6) reason for payment;

(7) service credit;

(8) the beginning and ending dates of the payroll period covered and the date of actual payment;

(9) fiscal year of salary earnings;

(10) total remittance amount including employee, employer, and employer additional contributions; and

(11) other information as may be required by the association.

(c) On or before August 1 each year, deleted text begin each deleted text end new text begin the new text end employing unit must report to the deleted text begin appropriate deleted text end association giving an itemized summary for the preceding 12 months of the total amount that was withheld from the salaries of teachers for deductions and all other information required by the association.

(d) deleted text begin An deleted text end new text begin If the new text end employing unit deleted text begin that deleted text end does not comply with the reporting requirements under this section deleted text begin shall deleted text end new text begin , the employing unit must new text end pay a fine of $5 per calendar day until the association receives the required member data.

(e) deleted text begin An deleted text end new text begin The new text end employing unit deleted text begin shall deleted text end new text begin must new text end remit all amounts that are due to the association and deleted text begin shall deleted text end new text begin must new text end furnish for each pay period an itemized statement indicating the total amount that is due and is transmitted with any other information required by the association. All amounts due and other employer obligations that are not remitted within 30 days of notification by the association must be certified by the director or secretary to the commissioner of management and budget, who deleted text begin shall deleted text end new text begin must new text end deduct the amount from any state aid or appropriation amount applicable to the employing unit and deleted text begin shall deleted text end new text begin must new text end transmit the deducted amount to the deleted text begin applicable deleted text end association.

Sec. 12.

Minnesota Statutes 2022, section 354A.31, subdivision 3a, is amended to read:

Subd. 3a.

No annuity reduction.

(a) The annuity reduction provisions of subdivision 3 do not apply to a person who:

(1) retires from the technical college system with at least ten years of service credit in the system from which the person retires;

(2) was employed on a full-time basis immediately preceding retirement as a technical college faculty member;

(3) was not a recipient of an early retirement incentive under section 136F.481;

(4) begins drawing an annuity from deleted text begin a first class city deleted text end new text begin the new text end teachers retirement new text begin fund new text end association; and

(5) returns to work on not less than a one-third time basis and not more than a two-thirds time basis in the technical college system under an agreement in which the person may not earn a salary of more than $62,000 in a calendar year through the technical college system.

(b) Initial participation, the amount of time worked, and the duration of participation under this section must be mutually agreed upon by the employer and the employee. The employer may require up to a one-year notice of intent to participate in the program as a condition of participation under this section. The employer shall determine the time of year the employee shall work.

(c) Notwithstanding any law to the contrary, a person eligible under paragraphs (a) and (b) may not earn further service credit in deleted text begin a first class city deleted text end new text begin the new text end teachers retirement new text begin fund new text end association and is not eligible to participate in the individual retirement account plan or the supplemental retirement plan established in chapter 354B as a result of service under this section. No employer or employee contribution to any of these plans may be made on behalf of such a person.

Sec. 13.

Minnesota Statutes 2022, section 354A.32, subdivision 1a, is amended to read:

Subd. 1a.

Bounce-back annuity.

(a) If a former coordinated member or disabilitant has selected a joint and survivor annuity option under subdivision 1 after June 30, 1989, the former member or disabilitant must receive a normal single life annuity if the designated optional annuity beneficiary dies before the former member or disabilitant. Under this option, no reduction may be made in the person's annuity to provide for restoration of the normal single life annuity in the event of the death of the designated optional annuity beneficiary.

(b) The annuity adjustment specified in paragraph (a) also applies to joint and survivor annuity options elected before July 1, 1989. The annuity adjustment under this paragraph occurs on July 1, 1989, or on the first day of the first month following the death of the designated optional annuity beneficiary, whichever is later. This paragraph may not be interpreted as authorizing retroactive payments.

(c) Unless otherwise specified in this subdivision, the restoration of the normal single life annuity under this subdivision takes effect on the first of the month following the date of death of the designated optional annuity beneficiary or on the first of the month following one year before the date on which a certified copy of the death record of the designated optional annuity beneficiary is received in the office of the deleted text begin appropriate deleted text end teachers retirement fund association, whichever date is later.

Sec. 14.

new text begin REVISOR INSTRUCTION. new text end

new text begin In Minnesota Statutes, chapter 354A, the revisor of statutes must change the term "a teachers retirement fund association" to "the teachers retirement fund association" wherever the term appears. The revisor must make any necessary grammatical changes or changes to sentence structure necessary to preserve the meaning of the text as a result of the changes. new text end

Sec. 15.

new text begin EFFECTIVE DATE. new text end

new text begin Sections 1 to 14 are effective the day following final enactment. new text end

ARTICLE 12

MISCELLANEOUS CHANGES

Section 1.

Minnesota Statutes 2022, section 353.27, subdivision 4, is amended to read:

Subd. 4.

Employer reporting requirements; contributions; member status.

(a) A representative authorized by the head of each department deleted text begin shall deleted text end new text begin must new text end deduct employee contributions from the salary of each public employee who qualifies for membership in the general employees retirement plan deleted text begin of the Public Employees Retirement Association deleted text end or deleted text begin in deleted text end the public employees police and fire retirement plan under this chapter deleted text begin or deleted text end new text begin , the public employees defined contribution plan under new text end chapter 353D new text begin , new text end or new text begin the local government correctional service retirement plan under chapter new text end 353E at the rate under section 353.27, 353.65, 353D.03, or 353E.03, whichever is applicable, that is in effect on the date the salary is paid. The employer representative must also remit payment in a manner prescribed by the executive director for the aggregate amount of the employee contributions and the required employer contributions to be received by the association within 14 calendar days after each pay date. If the payment is less than the amount required, the employer must pay the shortage amount to the association and collect reimbursement of any employee contribution shortage paid on behalf of a member through subsequent payroll withholdings from the wages of the employee. Payment of shortages in employee contributions and associated employer contributions, if applicable, must include interest at the rate specified in section 353.28, subdivision 5, if not received within 30 days following the date the amount was initially due under this section.

(b) The head of each department or the person's designee shall submit for each pay period to the association a salary deduction report in the format prescribed by the executive director. The report must be received by the association within 14 calendar days after each pay date or the employer may be assessed a fine of $5 per calendar day until the association receives the required data. Data required as part of salary deduction reporting must include, but are not limited to:

(1) the legal names and Social Security numbers of employees who are members;

(2) the amount of each employee's salary deduction;

(3) the amount of salary defined in section 353.01, subdivision 10, earned in the pay period from which each deduction was made, including a breakdown of the portion of the salary that represents overtime pay that the employee was paid for additional hours worked beyond the regularly scheduled hours, pay for unused compensatory time, and the salary amount earned by a reemployed annuitant under section 353.37, subdivision 1, or 353.371, subdivision 1, or by a disabled member under section 353.33, subdivision 7 or 7a;

(4) the beginning and ending dates of the payroll period covered and the date of actual payment; and

(5) adjustments or corrections covering past pay periods as authorized by the executive director.

(c) Employers must furnish the data required for enrollment for each new or reinstated employee who qualifies for membership in the general employees retirement plan deleted text begin of the Public Employees Retirement Association or in deleted text end new text begin , new text end the public employees police and fire retirement plan new text begin , the public employees defined contribution plan, or the local government correctional service retirement plan new text end in the format prescribed by the executive director. The required enrollment data on new members must be submitted to the association prior to or concurrent with the submission of the initial employee salary deduction. Also, the employer shall report to the association all member employment status changes, such as leaves of absence, terminations, and death, and shall report the effective dates of those changes, on an ongoing basis for the payroll cycle in which they occur. If an employer fails to comply with the reporting requirements under this paragraph, the executive director may assess a fine of $25 for each failure if the association staff has notified the employer of the noncompliance and attempted to obtain the missing data or form from the employer for a period of more than three months.

(d) The employer shall furnish data, forms, and reports as may be required by the executive director for proper administration of the retirement system. Before implementing new or different computerized reporting requirements, the executive director shall give appropriate advance notice to governmental subdivisions to allow time for system modifications.

(e) Notwithstanding paragraph (a), the executive director may provide for less frequent reporting and payments for small employers.

(f) The executive director may establish reporting procedures and methods as required to review compliance by employers with the salary and contribution reporting requirements in this chapter. A review of the payroll records of a participating employer may be conducted by the association on a periodic basis or as a result of concerns known to exist within a governmental subdivision. An employer under review must extract requested data and provide records to the association after receiving reasonable advanced notice. Failure to provide requested information or materials will result in the employer being liable to the association for any expenses associated with a field audit, which may include staff salaries, administrative expenses, and travel expenses.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 2.

Minnesota Statutes 2022, section 353.87, subdivision 1, is amended to read:

Subdivision 1.

Participation.

deleted text begin Except as provided in subdivision 2, deleted text end A volunteer firefighter, as defined in section 353.01, subdivision 36, who, on June 30, 1989, was a member of, and a participant in, the general employees retirement fund or the public employees police and fire fund and was making contributions to either of those funds based, at least in part, on compensation for services performed as a volunteer firefighter shall continue as a member of, and a participant in, the general employees retirement fund or the public employees police and fire fund and compensation for services performed as a volunteer firefighter must be considered salary.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 3.

Minnesota Statutes 2022, section 356.215, subdivision 2, is amended to read:

Subd. 2.

Requirements.

(a) It is the policy of the legislature that it is necessary and appropriate to determine annually the financial status of tax-supported retirement and pension plans for public employees. To achieve this goal, the actuary retained under section 356.214 shall prepare annual actuarial valuations new text begin , as of the beginning of each fiscal year, new text end of the retirement plans enumerated in section 356.214, subdivision 1, paragraph (b), and quadrennial experience studies of the retirement plans enumerated in section 356.214, subdivision 1, paragraph (b), clauses (1), (2), and (6).

(b) The governing deleted text begin or managing deleted text end board or deleted text begin administrative officials deleted text end new text begin executive director new text end of each public pension and retirement plan enumerated in section 356.20, subdivision 2, clauses (7), (9), and (10), shall have prepared by an approved actuary annual actuarial valuations of their respective funds as provided in this section. This requirement also applies to any plan that is the successor to any organization enumerated in section 356.20, subdivision 2, or to the governing deleted text begin or managing deleted text end board or new text begin chief new text end administrative deleted text begin officials deleted text end new text begin officer new text end of any newly formed retirement fund, plan, or association operating under the control or supervision of any public employee group, governmental unit, or institution receiving a portion of its support through legislative appropriations, and any local police or fire relief association to which section 356.216 applies.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 4.

Minnesota Statutes 2022, section 356.215, subdivision 3, is amended to read:

Subd. 3.

Reports.

(a) The deleted text begin actuarial valuations required annually must be made as of the beginning of each fiscal year. deleted text end

deleted text begin (b) Two copies of the completed valuation deleted text end new text begin governing board or executive director of each public pension plan required to prepare an annual valuation under subdivision 2 new text end must deleted text begin be delivered deleted text end new text begin deliver the annual valuation new text end to the executive director of the Legislative Commission on Pensions and Retirement, deleted text begin to deleted text end the commissioner of management and budget, and deleted text begin to deleted text end the Legislative Reference Library deleted text begin . The copies of the actuarial valuation must be filed with the executive director of the Legislative Commission on Pensions and Retirement, the commissioner of management and budget, and the Legislative Reference Library deleted text end no later than the last day of the sixth month occurring after the end of the previous fiscal year. new text begin The annual valuation may be delivered by email. new text end

deleted text begin (c) Two copies of a deleted text end new text begin (b) The governing board or executive director of each public pension plan required to prepare a quadrennial experience study under subdivision 2 must deliver the new text end quadrennial experience study deleted text begin must be filed with deleted text end new text begin to new text end the executive director of the Legislative Commission on Pensions and Retirement, deleted text begin with deleted text end the commissioner of management and budget, and deleted text begin with deleted text end the Legislative Reference Library, deleted text begin not deleted text end new text begin no new text end later than the last day of the 12th month occurring after the end of the last fiscal year of the four-year period deleted text begin which deleted text end new text begin covered by new text end the experience study deleted text begin covers deleted text end . new text begin The quadrennial experience study may be delivered by email. new text end

deleted text begin (d) For actuarial valuations and experience studies prepared at the direction of the Legislative Commission on Pensions and Retirement, one copy of the document must be delivered to the governing or managing board or administrative officials of the applicable public pension and retirement fund or plan. deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 5.

Minnesota Statutes 2022, section 356A.06, subdivision 5, is amended to read:

Subd. 5.

Investment business recipient disclosure.

The chief administrative officer of a covered pension plan, with respect to investments made by the plan, and the executive director of the State Board of Investment, with respect to investments of plan assets made by the board, shall annually disclose in writing the recipients of investment business placed with or investment commissions allocated among commercial banks, investment bankers, brokerage organizations, or other investment managers. The disclosure document must be prepared within 60 days after the close of the fiscal year of the plan and must be available for public inspection during regular office hours at the office of the plan. The disclosure document must also be filed with the executive director of the Legislative Commission on Pensions and Retirement within 90 days after the close of the fiscal year of the plan. For the State Board of Investment and deleted text begin a first class city teacher retirement fund association deleted text end new text begin the St. Paul Teachers Retirement Fund Association new text end , a disclosure document included as part of a regular annual report deleted text begin of the board or of the first class city teacher retirement fund association deleted text end when filed with the executive director of the Legislative Commission on Pensions and Retirement is considered to have been filed on a timely basis. new text begin An officer or member of the board of trustees of a covered pension plan governed by sections 424A.091 to 424A.096 or the Bloomington Fire Department Relief Association may file the disclosure document with the executive director of the Legislative Commission on Pensions and Retirement by email. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. new text end

Sec. 6.

new text begin REPEALER. new text end

new text begin Minnesota Statutes 2022, sections 353.86; and 353.87, subdivisions 2, 3, and 4, new text end new text begin are repealed effective August 1, 2024. new text end

ARTICLE 13

ONETIME APPROPRIATIONS AND FUND TRANSFERS

Section 1.

new text begin TRANSFER TO THE IRAP TO TRA TRANSFER ACCOUNT; APPROPRIATION. new text end

new text begin (a) $1,458,000 in fiscal year 2025 is transferred from the general fund to the IRAP to TRA transfer account established under Minnesota Statutes, section 354B.215, subdivision 11. This is a onetime transfer. new text end

new text begin (b) Money in the IRAP to TRA transfer account is appropriated to the Board of Trustees of the Minnesota State Colleges and Universities to reduce the cost of service credit purchases by eligible persons who transfer coverage from the individual retirement account plan to the Teachers Retirement Association under Minnesota Statutes, section 354B.215. This is a onetime appropriation. new text end

Sec. 2.

new text begin TRANSFERS; ONETIME DIRECT STATE AID. new text end

new text begin (a) $28,462,000 in fiscal year 2025 is transferred from the general fund to the Teachers Retirement Association. This transfer must be made no later than October 1, 2024. This is a onetime transfer. new text end

new text begin (b) $1,538,000 in fiscal year 2025 is appropriated from the general fund to the commissioner of management and budget to pay, no later than October 1, 2024, onetime state aid to the St. Paul Teachers Retirement Fund Association. This is a onetime appropriation. new text end

Presented to the governor May 14, 2024

Signed by the governor May 15, 2024, 9:36 a.m.