1999 Minnesota Statutes

     69.77 Police and Firefighters' Relief Association 
  Guidelines Act. 

    Subdivision 1.    Authorized employer support for a relief 
 association.  Notwithstanding any law to the contrary, a 
 municipality may contribute public funds, including any 
 applicable police or fire state aid, or levy property taxes for 
 the support of a police or firefighters' relief association, 
 enumerated in subdivision 1a, however organized, which provides 
 retirement coverage or pays a service pension to a retired 
 police officer or firefighter or a retirement benefit to a 
 surviving dependent of either an active or retired police 
 officer or firefighter, for the operation and maintenance of the 
 relief association only if the municipality and the relief 
 association comply with the provisions of this section.  The 
 commissioner shall not include in the apportionment of police or 
 fire state aid to the county auditor pursuant to section 69.021, 
 subdivision 6, any municipality in which there exists a local 
 police or salaried firefighters' relief association as 
 enumerated in subdivision 1a which does not comply with the 
 provisions of this section or the provisions of any applicable 
 special law relating to the funding or financing of the 
 association and that municipality shall not qualify initially to 
 receive, or be entitled subsequently to retain, state aid 
 pursuant to sections 69.011 to 69.051 until the reason for 
 disqualification is remedied, whereupon the municipality, if 
 otherwise qualified, shall be entitled to again receive state 
 aid for the year occurring immediately subsequent to the year in 
 which the disqualification is remedied.  The state auditor and 
 commissioner shall determine if a municipality with a local 
 police or salaried firefighters' relief association fails to 
 comply with the provisions of this section or the funding or 
 financing provisions of any applicable special law. 

    Subd. 1a.  The provisions of this section shall apply to 
 the following retirement funds: 

    (1) any police pension fund or relief association which is 
 established pursuant to chapter 423; 

    (2) any salaried firefighters' pension fund or relief 
 association which is established pursuant to chapter 424; 

    (3) any pension fund or relief association which is 
 established pursuant to this chapter which has five or more 
 members who receive compensation for services rendered in the 
 employment covered by the pension fund or relief association and 
 which provides for retirement coverage or a service pension 
 based on the compensation paid to members for that service; 

    (4) any pension fund or relief association which is 
 established and operates in whole or in part pursuant to special 
 legislation and which provides for retirement coverage or a 
 service pension based on the compensation paid to members for 
 service as police officers or firefighters or which provides for 
 retirement coverage or a service pension to volunteer 
 firefighters based on the compensation paid to or the service 
 pension provided by a pension fund or relief association located 
 in the same municipality for police officers employed by the 
 municipality but not covered by clause (1), (2) or (3); and 

    (5) any governmental subdivision retirement fund 
 established pursuant to any law providing for retirement 
 coverage to police officers or salaried firefighters or a 
 retirement benefit to their dependents and not otherwise 
 described in this subdivision. 

    Subd. 2.  The penalty provided for in subdivision 1 shall 
 not apply to a relief association enumerated in subdivision 1a 
 if the requirements of subdivisions 2a to 2h are met. 

    Subd. 2a.  Each member of the relief association shall pay 
 into the special fund of the association during a year of 
 covered service, a contribution for retirement coverage 
 including survivorship benefits of not less than eight percent 
 of the maximum rate of salary upon which retirement coverage is 
 credited and service pension and retirement benefit amounts are 
 determined.  The member contributions shall be made by payroll 
 deduction from the salary of the member by the municipality, and 
 shall be transmitted by the municipality to the relief 
 association as soon as practical.  The relief association shall 
 deposit the member contribution to the credit of the special 
 fund of the relief association.  The member contribution 
 requirement specified in this subdivision shall not apply to any 
 members who are volunteer firefighters. 

    Subd. 2b.    Relief association financial requirements; 
 minimum municipal obligation.  The officers of the relief 
 association shall determine the financial requirements of the 
 relief association and minimum obligation of the municipality 
 for the following calendar year in accordance with the 
 requirements of this subdivision.  The financial requirements of 
 the relief association and the minimum obligation of the 
 municipality shall be determined on or before the submission 
 date established by the municipality pursuant to subdivision 2c. 

    The financial requirements of the relief association for 
 the following calendar year shall be based on the most recent 
 actuarial valuation or survey of the special fund of the 
 association if more than one fund is maintained by the 
 association, or of the association, if only one fund is 
 maintained, prepared in accordance with sections 356.215, 
 subdivisions 4 to 4k and 356.216, as required pursuant to 
 subdivision 2h.  If an actuarial estimate is prepared by the 
 actuary of the relief association as part of obtaining a 
 modification of the benefit plan of the relief association and 
 the modification is implemented, the actuarial estimate shall be 
 used in calculating the financial requirements of the relief 
 association. 

    If the relief association has an unfunded actuarial accrued 
 liability as reported in the most recent actuarial valuation or 
 survey, the total of the amounts calculated pursuant to clauses 
 (a), (b), and (c) shall constitute the financial requirements of 
 the relief association for the following year.  If the relief 
 association does not have an unfunded actuarial accrued 
 liability as reported in the most recent actuarial valuation or 
 survey, the amount calculated pursuant to clauses (a) and (b) 
 shall constitute the financial requirements of the relief 
 association for the following year. 

    (a) The normal level cost requirement for the following 
 year, expressed as a dollar amount, which shall be determined by 
 applying the normal level cost of the relief association as 
 reported in the actuarial valuation or survey and expressed as a 
 percentage of covered payroll to the estimated covered payroll 
 of the active membership of the relief association, including 
 any projected increase in the active membership, for the 
 following year. 

    (b) To the dollar amount of normal cost thus determined 
 shall be added an amount equal to the dollar amount of the 
 administrative expenses of the special fund of the association 
 if more than one fund is maintained by the association, or of 
 the association if only one fund is maintained, for the most 
 recent year, multiplied by the factor of 1.035.  For a relief 
 association in a municipality, the administrative expenses are 
 those authorized under section 69.80.  No amount of 
 administrative expenses under this clause shall be included in 
 the financial requirements of a relief association in a city of 
 the first class with a population of more than 300,000. 

    (c) To the dollar amount of normal cost and expenses 
 determined under clauses (a) and (b) shall be added an amount 
 equal to the level annual dollar amount which is sufficient to 
 amortize the unfunded actuarial accrued liability by December 
 31, 2010, as determined from the actuarial valuation or survey 
 of the fund, using an interest assumption set at the rate 
 specified in section 356.215, subdivision 4d.  The amortization 
 date specified in this clause shall apply to all local police or 
 salaried firefighters' relief associations and shall supersede 
 any amortization date specified in any applicable special law. 

    The minimum obligation of the municipality shall be an 
 amount equal to the financial requirements of the relief 
 association reduced by the estimated amount of member 
 contributions from covered salary anticipated for the following 
 calendar year and the estimated amounts anticipated for the 
 following calendar year from the applicable state aid program 
 established pursuant to sections 69.011 to 69.051 receivable by 
 the relief association after any allocation made pursuant to 
 section 69.031, subdivision 5, clause (2), subclause (c) or 
 423A.01, subdivision 2, clause (6), from the local police and 
 salaried firefighters' relief association amortization aid 
 program established pursuant to section 423A.02 and from the 
 supplementary amortization state-aid program established under 
 Laws 1984, chapter 564, section 48, and Laws 1985, chapter 261, 
 section 17. 

    Subd. 2c.  The officers of the relief association shall 
 submit determination of the financial requirements of the relief 
 association and of the minimum obligation of the municipality to 
 the governing body on or before the date established by the 
 municipality which shall not be earlier than August 1 and shall 
 not be later than September 1 of each year.  The governing body 
 of the municipality shall ascertain whether or not the 
 determinations were prepared in accordance with law. 

    Subd. 2d.  The municipality shall provide for and shall pay 
 each year at least the amount of the minimum obligation of the 
 municipality to the relief association.  If there is any 
 deficiency in the municipal payment to meet the minimum 
 obligation of the municipality as of the end of any calendar 
 year, the amount of the deficiency shall be added to the minimum 
 obligation of the municipality for the following year calculated 
 pursuant to subdivision 2b and shall include interest at the 
 rate of six percent per annum compounded from the date that the 
 municipality was required to make payment pursuant to this 
 subdivision until the date that the municipality actually makes 
 the required payment. 

    Subd. 2e.  The municipality shall provide in the annual 
 municipal budget for at least the minimum obligation of the 
 municipality calculated pursuant to subdivision 2b.  The 
 municipality may levy taxes for the payment of the minimum 
 obligation of the municipality without any limitation as to rate 
 or amount and irrespective of limitations imposed by other 
 provisions of law upon the rate or amount of taxation when the 
 balance of the special fund or any fund of the relief 
 association has attained a specified minimum asset level.  In 
 addition, any taxes levied pursuant to this section shall not 
 cause the amount or rate of other taxes levied in that year or 
 to be levied in a subsequent year by the municipality which are 
 subject to a limitation as to rate or amount to be reduced.  If 
 the municipality does not include the full amount of the minimum 
 obligation of the municipality in the levy that the municipality 
 certified to the county auditor in any year, the officers of the 
 relief association shall certify the amount of any deficiency to 
 the county auditor.  Upon verifying the existence of any 
 deficiency in the levy certified by the municipality, the county 
 auditor shall spread a levy over the taxable property of the 
 municipality in the amount of the deficiency certified to by the 
 officers of the relief association. 

    Subd. 2f.  Any sums of money paid by the municipality to 
 the relief association in excess of the minimum obligation of 
 the municipality in any year shall be used to amortize any 
 unfunded liabilities of the relief association. 

    Subd. 2g.    Local police and paid fire relief association 
 investment authority.  The funds of the association must be 
 invested in securities that are authorized investments under 
 section 356A.06, subdivision 6 or 7.  Notwithstanding the 
 foregoing, up to 75 percent of the market value of the assets of 
 the fund may be invested in open-end investment companies 
 registered under the federal Investment Company Act of 1940, if 
 the portfolio investments of the investment companies comply 
 with the type of securities authorized for investment under 
 section 356A.06, subdivision 7.  Securities held by the 
 association before June 2, 1989, that do not meet the 
 requirements of this subdivision may be retained after that date 
 if they were proper investments for the association on that date.

    The governing board of the association may select and 
 appoint investment agencies to act for and in its behalf or may 
 certify special fund assets for investment by the state board of 
 investment under section 11A.17.  The governing board of the 
 association may certify general fund assets of the relief 
 association for investment by the state board of investment in 
 fixed income pools or in a separately managed account at the 
 discretion of the state board of investment as provided in 
 section 11A.14.  The governing board of the association may 
 select and appoint a qualified private firm to measure 
 management performance and return on investment, and the firm 
 shall use the formula or formulas developed by the state board 
 under section 11A.04, clause (11). 

    Subd. 2h.    Actuarial valuation required.  The 
 association shall obtain an actuarial valuation showing the 
 condition of the special fund of the relief association pursuant 
 to sections 356.215 and 356.216 and any applicable standards for 
 actuarial work established by the legislative commission on 
 pensions and retirement as of December 31 of every year.  A copy 
 of the actuarial valuation shall be filed with the director of 
 the legislative reference library, the governing body of the 
 municipality in which the association is organized, the 
 executive director of the legislative commission on pensions and 
 retirement, and the state auditor, not later than July 1 of the 
 following year. 

    Subd. 2i.  Any amendment to the bylaws or articles of 
 incorporation of a relief association which increases or 
 otherwise affects the retirement coverage provided by or the 
 service pensions or retirement benefits payable from any police 
 or firefighters' relief association enumerated in subdivision 1a 
 shall not be effective until it is ratified by the municipality 
 in which the relief association is located.  The officers of the 
 relief association shall not seek municipal ratification prior 
 to obtaining either an updated actuarial valuation including the 
 proposed amendment or an estimate of the expected actuarial 
 impact of the proposed amendment prepared by the actuary of the 
 relief association and submitting that actuarial valuation or 
 estimate to the clerk of the municipality. 

    Subd. 3.  This section may be cited as the "Police and 
 Firefighters' Relief Associations Guidelines Act of 1969." 

    HIST: 1969 c 223 s 1,2; 1971 c 11 s 1; 1971 c 329 s 1; 1973 c 
 129 s 6; 1973 c 772 s 2; 1974 c 152 s 10; 1975 c 271 s 6; 1977 c 
 429 s 63; 1978 c 563 s 1-3; 1980 c 341 s 1; 1980 c 607 art 14 s 
 27; art 15 s 2; 1981 c 208 s 7; 1981 c 224 s 23-26; 1982 c 460 s 
 5; 1982 c 578 art 3 s 2; 1983 c 71 s 1; 1983 c 289 s 114 subd 1; 
 1983 c 291 s 2; 1984 c 574 s 2; 1984 c 655 art 1 s 92; 1Sp1985 c 
 7 s 35; 1986 c 356 s 6; 1986 c 359 s 10; 1987 c 259 s 6,7; 1989 
 c 319 art 8 s 7; art 19 s 3; 1993 c 300 s 8; 1994 c 604 art 2 s 
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