1.1                          A bill for an act
  1.2             relating to retirement; various local public employee 
  1.3             pension plans; providing for various benefit 
  1.4             modifications and related changes that require local 
  1.5             governing body approval; repealing Minnesota Statutes 
  1.6             1994, section 423B.02; Laws 1969, chapter 1088; Laws 
  1.7             1971, chapter 114; Laws 1978, chapters 562, section 
  1.8             32; and 753; Laws 1979, chapters 97; 109, section 1; 
  1.9             and 201, section 27; Laws 1981, chapters 157, section 
  1.10            1; and 224, sections 250 and 254; Laws 1985, chapter 
  1.11            259, section 3; and Laws 1990, chapter 570, article 7, 
  1.12            section 4. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14                             ARTICLE 1 
  1.15                  LOCAL PENSION PLAN MODIFICATIONS 
  1.16     Section 1.  [EVELETH POLICE AND FIREFIGHTERS; BENEFIT 
  1.17  INCREASE.] 
  1.18     Notwithstanding any general or special law to the contrary, 
  1.19  in addition to the current pensions and other retirement 
  1.20  benefits payable, the pensions and retirement benefits payable 
  1.21  to retired police officers and firefighters and their surviving 
  1.22  spouses by the Eveleth police and fire trust fund are increased 
  1.23  by $100 a month.  Increases are retroactive to January 1, 1995.  
  1.24  If the city of Eveleth fails to contribute an amount required in 
  1.25  a given year sufficient to amortize the unfunded actuarial 
  1.26  accrued liability of the police and fire trust fund by December 
  1.27  31, 1998, the increases under this section in the following year 
  1.28  are not payable. 
  1.29     Sec. 2.  [DULUTH TEACHERS RETIREMENT FUND ASSOCIATION; 
  2.1   SPECIAL SERVICE PURCHASE AUTHORIZATION FOR CERTAIN FORMER DULUTH 
  2.2   TECHNICAL COLLEGE TEACHERS.] 
  2.3      (a) A retired member of the Duluth teachers retirement fund 
  2.4   association who: 
  2.5      (1) was born on April 29, 1932; 
  2.6      (2) was initially employed by independent school district 
  2.7   No. 709 on September 8, 1970; 
  2.8      (3) terminated employment as a teacher at the Duluth 
  2.9   technical college on July 1, 1994; 
  2.10     (4) retired from the Duluth teachers retirement fund 
  2.11  association effective on July 15, 1994; and 
  2.12     (5) did not receive certification of eligibility for an 
  2.13  early separation incentive from the chancellor of the higher 
  2.14  education board in a timely fashion, but did eventually receive 
  2.15  the required certification on October 24, 1994; 
  2.16  may purchase two years of additional service credit from the 
  2.17  Duluth teachers retirement fund association as provided in Laws 
  2.18  1994, chapter 572, section 3, subdivision 3, paragraph (e), 
  2.19  clause (2)(i), as though otherwise qualified, to have the 
  2.20  person's retirement annuity from the Duluth teachers retirement 
  2.21  fund association recomputed based on the additional service 
  2.22  credit, and to have any medical insurance premiums that the 
  2.23  person paid subsequent to retirement reimbursed by the Duluth 
  2.24  technical college on the basis of the provisions of Laws 1994, 
  2.25  chapter 572, section 3, subdivision 3, paragraph (e), clause (1).
  2.26     (b) The purchase of additional service credit must be made 
  2.27  within 30 days of the effective date of this section. 
  2.28     (c) The recomputed retirement annuity must be based on any 
  2.29  optional annuity form selected upon retirement and must be 
  2.30  subject to the early retirement reduction imposed upon 
  2.31  retirement.  The recomputed annuity accrues as of the effective 
  2.32  date of retirement and any omitted retirement annuity amounts 
  2.33  from the date of retirement to the date of recomputation must be 
  2.34  paid in a lump sum as soon as practicable following the 
  2.35  recomputation and must include annual interest on the omitted 
  2.36  amounts at the rate of six percent, expressed as a monthly rate, 
  3.1   and compounded monthly. 
  3.2      (d) If the retired member seeks reimbursement for medical 
  3.3   insurance premiums, the retired member must furnish the 
  3.4   president of the Duluth technical college with reasonable 
  3.5   verification of medical insurance coverage and of prior medical 
  3.6   insurance premiums paid. 
  3.7      Sec. 3.  [MINNEAPOLIS EMPLOYEES RETIREMENT FUND; TEMPORARY 
  3.8   OPTION.] 
  3.9      Notwithstanding any law to the contrary, a retired member 
  3.10  of the Minneapolis employees retirement fund who elected a joint 
  3.11  and survivor optional annuity form at the time of retirement and 
  3.12  who has a living designated optional annuity recipient may 
  3.13  select a substitute joint and survivor option under which the 
  3.14  retired member will receive a normal single-life annuity if the 
  3.15  previously designated recipient dies before the retired member.  
  3.16  This substitute optional annuity must be the actuarial 
  3.17  equivalent of the joint and survivor annuity option amount in 
  3.18  effect at the time this option substitution is selected.  This 
  3.19  option must be exercised before July 1, 1996, according to 
  3.20  procedures specified by the board of the Minneapolis employees 
  3.21  retirement fund. 
  3.22     Sec. 4.  [WEST ST. PAUL POLICE CONSOLIDATION ACCOUNT; 
  3.23  CERTAIN SURVIVING SPOUSE BENEFITS.] 
  3.24     (a) Notwithstanding Minnesota Statutes, section 353A.08, 
  3.25  the surviving spouse of a person described in paragraph (b) is 
  3.26  entitled to receive survivor benefits provided under paragraph 
  3.27  (c). 
  3.28     (b) This section applies to the surviving spouse of a 
  3.29  person who was: 
  3.30     (1) employed as a police chief by the city of West St. 
  3.31  Paul; 
  3.32     (2) an active member of the West St. Paul police relief 
  3.33  association on February 8, 1993, when the governing body of West 
  3.34  St. Paul, in accordance with Minnesota Statutes, section 
  3.35  353A.04, subdivision 5, gave preliminary approval to the 
  3.36  consolidation of the association with the public employees 
  4.1   retirement association; 
  4.2      (3) whose intention, upon consolidation, to elect benefits 
  4.3   provided under the relevant provisions of the public employees 
  4.4   retirement association police and fire fund benefit plan was 
  4.5   recognized by the governing body of West St. Paul in a 
  4.6   resolution adopted March 16, 1994; 
  4.7      (4) who died in April 1993, before the governing body of 
  4.8   West St. Paul, on August 23, 1993, gave final approval to the 
  4.9   consolidation in accordance with Minnesota Statutes, section 
  4.10  353A.04, subdivision 8; and 
  4.11     (5) who was thus unable, before his death, to carry out his 
  4.12  intent to elect public employees retirement association benefits 
  4.13  under Minnesota Statutes, section 353A.08. 
  4.14     (c) As of the effective date of this section, benefits for 
  4.15  the surviving spouse identified in paragraph (b) computed under 
  4.16  provisions of the West St. Paul police relief association plan 
  4.17  terminate and survivor benefits computed under relevant 
  4.18  provisions of the public employees retirement association police 
  4.19  and fire plan commence.  The relevant provisions of the public 
  4.20  employees retirement association police and fire plan are 
  4.21  survivor benefits computed under Minnesota Statutes, section 
  4.22  353.657, assuming the deceased police officer was covered by 
  4.23  that plan at the time of death.  The benefit will include 
  4.24  adjustments if any, under Minnesota Statutes, section 353.271.  
  4.25  Retroactive payment of benefits is not authorized. 
  4.26     Sec. 5.  [EDEN PRAIRIE VOLUNTEER FIREFIGHTERS RELIEF 
  4.27  ASSOCIATION SERVICE PENSIONS.] 
  4.28     Subdivision 1.  [SERVICE PENSION VESTING REQUIREMENT.] (a) 
  4.29  Notwithstanding any provision of Minnesota Statutes, section 
  4.30  424A.02, subdivision 2, to the contrary, if the bylaws of the 
  4.31  relief association so provide, the Eden Prairie volunteer 
  4.32  firefighters relief association may pay an unreduced service 
  4.33  pension to a member of the association who has terminated active 
  4.34  service as a firefighter in the Eden Prairie fire department, 
  4.35  who has at least ten years of service as an active firefighter 
  4.36  in good standing with the department and at least ten years of 
  5.1   membership in good standing in the association, and who meets 
  5.2   all other applicable eligibility requirements of the association 
  5.3   for entitlement to a service pension.  
  5.4      (b) Notwithstanding any provision of Minnesota Statutes, 
  5.5   section 424A.02, subdivision 2, to the contrary, if the bylaws 
  5.6   of the association so provide, the association may pay a reduced 
  5.7   service pension to a member of the association who has 
  5.8   terminated active service as a firefighter in the department, 
  5.9   who has at least five years of service but less than ten years 
  5.10  of service as an active firefighter in good standing with the 
  5.11  department and at least five years but less than ten years as a 
  5.12  member in good standing in the association, and who meets all 
  5.13  other applicable eligibility requirements of the association for 
  5.14  entitlement to a service pension.  The amount of the reduced 
  5.15  service pension is the amount determined by multiplying the 
  5.16  total service pension amount as specified in the articles of 
  5.17  incorporation or bylaws of the association that is appropriate 
  5.18  for the number of completed years of service to the credit of 
  5.19  the retiring member by the applicable percentage, as follows: 
  5.20    Completed years of service            Applicable percentage 
  5.21               5                              40 percent
  5.22               6                              52 percent
  5.23               7                              64 percent
  5.24               8                              76 percent
  5.25               9                              88 percent
  5.26              10 and thereafter              100 percent.
  5.27     Subd. 2.  [POSTRETIREMENT SERVICE PENSION ADJUSTMENTS FOR 
  5.28  DEFERRED RETIREES.] (a) A "deferred retiree" is a former Eden 
  5.29  Prairie volunteer firefighter who has completed at least five 
  5.30  years of service as a firefighter in good standing with the Eden 
  5.31  Prairie volunteer fire department and five years as a member in 
  5.32  good standing in the Eden Prairie volunteer firefighters relief 
  5.33  association and has separated from active service as a 
  5.34  firefighter before attaining the earliest age for immediate 
  5.35  receipt of service pension from the association as provided in 
  5.36  the articles of incorporation or the bylaws of the association. 
  6.1      (b) Notwithstanding any provision of Minnesota Statutes, 
  6.2   section 424A.02, to the contrary, if the articles of 
  6.3   incorporation or bylaws of the association so provide, and if 
  6.4   the Eden Prairie city council approves the deferred service 
  6.5   pension increase under Minnesota Statutes, sections 69.773, 
  6.6   subdivision 6, and 424A.02, subdivision 10, a deferred retiree 
  6.7   who has credit for at least 15 years of active service with the 
  6.8   department and who has not elected to receive a lump sum service 
  6.9   pension as an alternative to a monthly service pension, may 
  6.10  receive the same postretirement increase in the amount of that 
  6.11  deferred monthly service pension that is approved and is payable 
  6.12  to an association service pension recipient under Minnesota 
  6.13  Statutes, section 424A.02, subdivision 9a. 
  6.14     (c) A deferred retiree who has credit for less than 15 
  6.15  years of active service with the department is not eligible for 
  6.16  a postretirement increase. 
  6.17     Sec. 6.  [RETURNING ANNUITANT.] 
  6.18     (a) Notwithstanding any provision of Minnesota Statutes, 
  6.19  section 353.37, to the contrary, an eligible person described in 
  6.20  paragraph (b) will be treated as specified in paragraph (c). 
  6.21     (b) An eligible person is a person who: 
  6.22     (1) was born on December 9, 1936; 
  6.23     (2) terminated from the Carlton county human services 
  6.24  department as a financial eligibility specialist and retired 
  6.25  from the public employees retirement association on April 1, 
  6.26  1992; and 
  6.27     (3) returned to Carlton county employment as a financial 
  6.28  worker. 
  6.29     (c) As of the effective date of this section, annuity 
  6.30  payments from the public employees retirement association 
  6.31  terminate for an eligible person described in paragraph (b).  As 
  6.32  of that date the person is considered to have elected a deferred 
  6.33  annuity under Minnesota Statutes, section 353.34, subdivision 3, 
  6.34  with deferred annuity payments to commence upon the termination 
  6.35  of the person's present employment.  During the person's present 
  6.36  employment, the person is entitled to participation in the 
  7.1   public employees unclassified plan, and the person and the 
  7.2   county shall make the contributions required under Minnesota 
  7.3   Statutes, section 353D.03, paragraph (a). 
  7.4      Sec. 7.  [REPEALER.] 
  7.5      Minnesota Statutes 1994, section 423B.02, is repealed 
  7.6   effective March 1, 1995.  
  7.7      Sec. 8.  [EFFECTIVE DATE.] 
  7.8      (a) Section 1 is effective on approval by the Eveleth city 
  7.9   council and compliance with Minnesota Statutes, section 645.021. 
  7.10     (b) Section 2 is effective on the day following approval by 
  7.11  the board of education of independent school district No. 709 
  7.12  and compliance with Minnesota Statutes, section 645.021. 
  7.13     (c) Section 3 is effective on approval by the Minneapolis 
  7.14  city council and compliance with Minnesota Statutes, section 
  7.15  645.021. 
  7.16     (d) Section 4 is effective on the day following approval by 
  7.17  the governing body of the city of West St. Paul and compliance 
  7.18  with Minnesota Statutes, section 645.021, subdivision 2. 
  7.19     (e) Section 5 is effective on the day following compliance 
  7.20  with Minnesota Statutes, section 69.773, subdivision 6, approval 
  7.21  by the Eden Prairie city council, and compliance with Minnesota 
  7.22  Statutes, section 645.021, subdivision 3. 
  7.23     (f) Section 6 is effective on the day following approval by 
  7.24  the Carlton county board and compliance with Minnesota Statutes, 
  7.25  section 645.021. 
  7.26                             ARTICLE 2 
  7.27               CRYSTAL-NEW HOPE VOLUNTEER FIREFIGHTER 
  7.28                  RELIEF ASSOCIATION CONSOLIDATION 
  7.29     Section 1.  [CONSOLIDATED CRYSTAL-NEW HOPE VOLUNTEER 
  7.30  FIREFIGHTERS' RELIEF ASSOCIATION; CREATION.] 
  7.31     Notwithstanding any provision of law to the contrary, if 
  7.32  the cities of Crystal and New Hope enter into a joint powers 
  7.33  agreement under Minnesota Statutes, section 471.59, to establish 
  7.34  and operate a joint powers fire department, the Crystal 
  7.35  volunteer firefighters' relief association and the New Hope 
  7.36  volunteer firefighters' relief association shall consolidate 
  8.1   into a single volunteer firefighters' relief association.  The 
  8.2   consolidated volunteer firefighters' relief association must be 
  8.3   governed by sections 1 to 7 and the applicable provisions of 
  8.4   Minnesota Statutes, chapters 69, 356, 356A, and 424A. 
  8.5      Sec. 2.  [CONSOLIDATED VOLUNTEER FIREFIGHTERS' RELIEF 
  8.6   ASSOCIATION.] 
  8.7      Subdivision 1.  [ESTABLISHMENT.] The consolidated volunteer 
  8.8   firefighters' relief association for the joint powers fire 
  8.9   department serving the cities of Crystal and New Hope must be 
  8.10  incorporated under Minnesota Statutes, chapter 317A.  The 
  8.11  incorporators of the consolidated relief association must 
  8.12  include at least one board member of the Crystal volunteer 
  8.13  firefighters' relief association and at least one board member 
  8.14  of the former New Hope volunteer firefighters' relief 
  8.15  association.  The consolidated relief association must be 
  8.16  incorporated within 90 days of the establishment of the joint 
  8.17  powers fire department.  The joint powers fire department is 
  8.18  established on the date specified in the joint powers agreement. 
  8.19     Subd. 2.  [GOVERNANCE OF CONSOLIDATED VOLUNTEER 
  8.20  FIREFIGHTERS' RELIEF ASSOCIATION.] (a) Notwithstanding Minnesota 
  8.21  Statutes, section 424A.04, subdivision 1, the consolidated 
  8.22  volunteer firefighters' relief association is governed by a 
  8.23  board of trustees consisting of nine members, as provided in the 
  8.24  bylaws of the consolidated relief association, composed of: 
  8.25     (1) six firefighters in the joint fire department elected 
  8.26  by the membership of the consolidated relief association; and 
  8.27     (2) three appointed members, including the fire chief of 
  8.28  the joint fire department, one member appointed by the city 
  8.29  council of the city of New Hope, and one member appointed by the 
  8.30  city council of the city of Crystal. 
  8.31     (b) The board must have three officers, including a 
  8.32  president, a secretary, and a treasurer.  The membership of the 
  8.33  consolidated volunteer firefighters' relief association must 
  8.34  elect the three officers from the nine board members.  A board 
  8.35  of trustees member may not hold more than one officer position 
  8.36  at the same time. 
  9.1      (c) The board of trustees must administer the affairs of 
  9.2   the relief association consistent with sections 1 to 7 and the 
  9.3   applicable provisions of Minnesota Statutes, chapters 69, 356A, 
  9.4   and 424A. 
  9.5      Subd. 3.  [SPECIAL AND GENERAL FUNDS.] (a) The consolidated 
  9.6   volunteer firefighters' relief association must establish and 
  9.7   maintain a special fund and may establish and maintain a general 
  9.8   fund. 
  9.9      (b) The special fund must be established and maintained as 
  9.10  provided in Minnesota Statutes, section 424A.05. 
  9.11     (c) The general fund must be established and maintained as 
  9.12  provided in Minnesota Statutes, section 424A.06. 
  9.13     Sec. 3.  [CONSOLIDATION OF FORMER RELIEF ASSOCIATIONS.] 
  9.14     Subdivision 1.  [EFFECTIVE DATE OF CONSOLIDATION.] On the 
  9.15  first business day occurring 30 days after the establishment of 
  9.16  the consolidated volunteer firefighters' relief association 
  9.17  under section 2, which is the effective date of consolidation, 
  9.18  the administration, records, assets, and liabilities of the 
  9.19  prior Crystal volunteer firefighters' relief association and of 
  9.20  the prior New Hope volunteer firefighters' relief association 
  9.21  transfer to the consolidated volunteer firefighters' relief 
  9.22  association and the Crystal volunteer firefighters' relief 
  9.23  association and the New Hope volunteer firefighters' relief 
  9.24  association cease to exist as legal entities. 
  9.25     Subd. 2.  [TRANSFER OF ADMINISTRATION.] On the effective 
  9.26  date of consolidation, the administration of the prior relief 
  9.27  associations is transferred to the board of trustees of the 
  9.28  consolidated volunteer firefighters' relief association. 
  9.29     Subd. 3.  [TRANSFER OF RECORDS.] On the effective date of 
  9.30  consolidation, the secretary and the treasurer of the Crystal 
  9.31  volunteer firefighters' relief association and the secretary and 
  9.32  the treasurer of the New Hope volunteer firefighters' relief 
  9.33  association shall transfer all records and documents relating to 
  9.34  the prior relief associations to the secretary and the treasurer 
  9.35  of the consolidated volunteer firefighters' relief association. 
  9.36     Subd. 4.  [TRANSFER OF SPECIAL FUND ASSETS AND 
 10.1   LIABILITIES.] (a) On the effective date of consolidation, the 
 10.2   secretary and the treasurer of the Crystal volunteer 
 10.3   firefighters' relief association and the secretary and the 
 10.4   treasurer of the New Hope volunteer firefighters' relief 
 10.5   association shall cause to occur the transfer of the assets of 
 10.6   the special fund of the applicable relief association to the 
 10.7   special fund of the consolidated relief association.  Unless the 
 10.8   applicable secretary and treasurer decide otherwise, the assets 
 10.9   may be transferred as investment securities rather than as 
 10.10  cash.  The transfer must include any accounts receivable.  The 
 10.11  applicable secretary shall settle any accounts payable from the 
 10.12  special fund of the relief association before the effective date 
 10.13  of consolidation. 
 10.14     (b) Upon the transfer of the assets of the special fund of 
 10.15  a prior relief association, the pension liabilities of that 
 10.16  special fund become the obligation of the special fund of the 
 10.17  consolidated volunteer firefighters' relief association. 
 10.18     (c) Upon the transfer of the prior relief association 
 10.19  special fund assets, the board of trustees of the consolidated 
 10.20  volunteer firefighters' relief association has legal title to 
 10.21  and management responsibility for the transferred assets as 
 10.22  trustees for persons having a beneficial interest in those 
 10.23  assets arising out of the benefit coverage provided by the prior 
 10.24  relief association. 
 10.25     (d) The consolidated volunteer firefighters' relief 
 10.26  association is the successor in interest for all claims for and 
 10.27  against the special funds of the prior Crystal volunteer 
 10.28  firefighters' relief association and the prior New Hope 
 10.29  volunteer firefighters' relief association, or the cities of 
 10.30  Crystal and New Hope with respect to the special funds of the 
 10.31  prior relief associations.  The status of successor in interest 
 10.32  does not apply to any claim against a prior relief association, 
 10.33  the city in which that relief association is located, or any 
 10.34  person connected with the prior relief association or the city, 
 10.35  based on any act or acts that were not done in good faith and 
 10.36  that constituted a breach of fiduciary responsibility under 
 11.1   common law or Minnesota Statutes, chapter 356A. 
 11.2      Subd. 5.  [DISSOLUTION OF PRIOR GENERAL FUND 
 11.3   BALANCES.] Before the effective date of consolidation, the 
 11.4   secretary of the Crystal volunteer firefighters' relief 
 11.5   association and the secretary of the New Hope volunteer 
 11.6   firefighters' relief association shall settle any accounts 
 11.7   payable from the respective general fund or any other relief 
 11.8   association fund in addition to the relief association special 
 11.9   fund.  Any investments held by a fund of the prior relief 
 11.10  associations in addition to the special fund must be liquidated 
 11.11  before the effective date of consolidation as the bylaws of the 
 11.12  relief association provide.  Before consolidation, the 
 11.13  respective relief associations shall pay all applicable general 
 11.14  fund expenses from their respective general funds and any 
 11.15  balance remaining in the general fund or in a fund other than 
 11.16  the relief association special fund as of the effective date of 
 11.17  consolidation must be paid to the new general fund of the 
 11.18  consolidated volunteer relief association. 
 11.19     Subd. 6.  [TERMINATION OF PRIOR RELIEF 
 11.20  ASSOCIATIONS.] Following the transfer of administration, 
 11.21  records, special fund assets, and special fund liabilities from 
 11.22  the prior relief associations to the consolidated volunteer 
 11.23  firefighters' relief association, the Crystal volunteer 
 11.24  firefighters' relief association and the New Hope volunteer 
 11.25  firefighters' relief association cease to exist as legal 
 11.26  entities.  The city manager of the city of Crystal and the city 
 11.27  manager of the city of New Hope must notify the following 
 11.28  government officials of the termination of the respective relief 
 11.29  associations and of the establishment of the consolidated 
 11.30  volunteer firefighters' relief association: 
 11.31     (1) Minnesota secretary of state; 
 11.32     (2) Minnesota state auditor; 
 11.33     (3) Minnesota commissioner of revenue; and 
 11.34     (4) commissioner of the federal Internal Revenue Service. 
 11.35     Sec. 4.  [EFFECT ON PREVIOUS BENEFIT PLAN COVERAGE.] 
 11.36     Subdivision 1.  [BENEFIT COVERAGE FOR CURRENT RETIRED 
 12.1   MEMBERS.] (a) A person who is receiving a monthly service 
 12.2   pension, a monthly disability benefit, or a monthly survivorship 
 12.3   benefit from the Crystal volunteer firefighters' relief 
 12.4   association or from the New Hope volunteer firefighters' relief 
 12.5   association on the effective date of consolidation is entitled 
 12.6   to a continuation of that pension or benefit, including any 
 12.7   death benefit or monthly survivorship benefit provided for in 
 12.8   the benefit plan document of the applicable prior relief 
 12.9   association in effect on the day before the effective date of 
 12.10  the consolidation, from the consolidated volunteer firefighters' 
 12.11  relief association.  Unless paragraph (b) applies, the amount of 
 12.12  the pension or benefit payable after the effective date of 
 12.13  consolidation must be identical to the amount payable before the 
 12.14  effective date of consolidation.  The pension or benefit payable 
 12.15  after the effective date of consolidation is subject to the same 
 12.16  terms, conditions, and qualifications as were in effect before 
 12.17  the effective date of consolidation. 
 12.18     (b) If the board of trustees of the consolidated volunteer 
 12.19  firefighters' relief association establishes the option, a 
 12.20  pension or benefit recipient to whom paragraph (a) applies is 
 12.21  entitled to elect an alternative pension or benefit amount as 
 12.22  offered by the relief association board.  To provide this 
 12.23  alternative pension or benefit, the relief association board may 
 12.24  arrange for a lump-sum payment or the purchase of an annuity 
 12.25  contract for the pension or benefit recipient in place of a 
 12.26  direct payment from the relief association to the person.  The 
 12.27  annuity contract may be purchased only from an insurance company 
 12.28  that is licensed to do business in this state, regularly 
 12.29  undertakes life insurance and annuity business, and is rated by 
 12.30  a recognized national rating agency or organization as being 
 12.31  among the top 25 percent of all insurance companies undertaking 
 12.32  life insurance and annuity business.  The alternative pension or 
 12.33  benefit payable monthly may be in an amount greater than the 
 12.34  pension or benefit payable before the effective date of 
 12.35  consolidation, but may not exceed the maximum service pension or 
 12.36  benefit payable under Minnesota Statutes, chapter 424A.  In 
 13.1   electing the alternative pension or benefit payable under an 
 13.2   annuity contract from a qualified insurance company, the 
 13.3   affected person must waive in writing the person's eligibility 
 13.4   and entitlement to any direct future pension or benefit payments 
 13.5   from the consolidated volunteer firefighters' relief association.
 13.6      Subd. 2.  [BENEFIT COVERAGE FOR CURRENT DEFERRED 
 13.7   MEMBERS.] (a) A person who is not an active member of the 
 13.8   Crystal volunteer firefighters' relief association or an active 
 13.9   member of the New Hope volunteer firefighters' relief 
 13.10  association but who has sufficient service credit with one of 
 13.11  the relief associations to be entitled to a future service 
 13.12  pension from the appropriate relief association remains entitled 
 13.13  to the receipt of that service pension, upon application, when 
 13.14  the person attains at least the minimum age for receipt of a 
 13.15  service pension unless the person elects an alternative service 
 13.16  pension under paragraph (b).  A deferred member may transfer the 
 13.17  member's current service pension to a member's individual 
 13.18  account established under subdivision 3, paragraph (c), subject 
 13.19  to the same conditions of individual accounts for active 
 13.20  members, and remain entitled to receipt of a service pension 
 13.21  when the member reaches the normal retirement age. 
 13.22     (b) If the board of trustees of the consolidated volunteer 
 13.23  firefighters' relief association establishes the option for 
 13.24  benefit recipients under subdivision 1, the deferred service 
 13.25  pensioner described in paragraph (a) may elect the same 
 13.26  alternative service pension as established under subdivision 1, 
 13.27  paragraph (b), except that the deferred service pensioner may 
 13.28  not receive the alternative service pension at an age younger 
 13.29  than the normal retirement age in effect for the prior 
 13.30  applicable relief association. 
 13.31     Subd. 3.  [BENEFIT COVERAGE FOR NEW FIREFIGHTERS' AND 
 13.32  CURRENT VESTED AND NONVESTED ACTIVE MEMBERS.] (a) The benefit 
 13.33  coverage for persons who become firefighters for the joint fire 
 13.34  department for the first time after the effective date of 
 13.35  consolidation and for persons who are active members of the 
 13.36  consolidated volunteer firefighters' relief association as of 
 14.1   the effective date of consolidation is a defined contribution 
 14.2   plan governed under this subdivision and Minnesota Statutes, 
 14.3   section 424A.02, subdivision 4. 
 14.4      (b) For an active member of the consolidated volunteer 
 14.5   firefighters' relief association as of the effective date of 
 14.6   consolidation, that member's prior service as a firefighter in 
 14.7   the prior Crystal fire department or the prior New Hope fire 
 14.8   department must be converted into a dollar accumulation by 
 14.9   multiplying each full year of prior service as a firefighter in 
 14.10  the prior fire department of Crystal or the prior fire 
 14.11  department of New Hope by not less than $3,000.  A member's 
 14.12  prior service of a partial year will be converted into a dollar 
 14.13  accumulation by prorating the full year of prior service yearly 
 14.14  amount by the number of months served in the partial year.  The 
 14.15  total calculated dollar accumulation must be credited to the 
 14.16  member's individual account established under paragraph (c). 
 14.17     (c) For each active member of the consolidated volunteer 
 14.18  firefighters' relief association covered by the defined 
 14.19  contribution plan, an individual account must be established, as 
 14.20  provided in Minnesota Statutes, section 424A.02, subdivision 4, 
 14.21  with an initial balance based on the conversion accumulation 
 14.22  determined under paragraph (b), if applicable.  Notwithstanding 
 14.23  Minnesota Statutes, section 424A.02, subdivision 4, the amount 
 14.24  of fire state aid and the amount of regular municipal 
 14.25  contributions must be credited to individual active firefighter 
 14.26  accounts as specified in section 6, subdivision 4. 
 14.27     Sec. 5.  [ACTUARIAL VALUATIONS REQUIRED.] 
 14.28     (a) Unless all benefit recipients and deferred service 
 14.29  pensioners elect alternative pensions or benefits under section 
 14.30  4, subdivisions 1, paragraph (b); and 2, paragraph (b), a 
 14.31  special actuarial valuation of the consolidated volunteer 
 14.32  firefighters' relief association must be prepared as soon as 
 14.33  practicable following the benefit selection under section 4, 
 14.34  subdivision 1.  The actuarial valuation must be prepared under 
 14.35  the applicable provisions of Minnesota Statutes, sections 
 14.36  356.215 and 356.216. 
 15.1      (b) Subsequent actuarial valuations must be prepared as 
 15.2   required under Minnesota Statutes, section 69.773, subdivisions 
 15.3   2 and 3, if any person is entitled or is reasonably anticipated 
 15.4   to be entitled to a direct future monthly benefit from the 
 15.5   consolidated relief association. 
 15.6      Sec. 6.  [ANNUAL RELIEF ASSOCIATION FUNDING.] 
 15.7      Subdivision 1.  [SOURCES.] In addition to investment income 
 15.8   earned by the special fund, the sources of the annual funding of 
 15.9   the consolidated volunteer firefighters' relief association are 
 15.10  the fire state aid received by the city of Crystal, the fire 
 15.11  state aid received by the city of New Hope, the regular 
 15.12  municipal contribution from the city of Crystal, and the regular 
 15.13  municipal contribution from the city of New Hope. 
 15.14     Subd. 2.  [FIRE STATE AID.] The fire state aid received by 
 15.15  the city of Crystal and the fire state aid received by the city 
 15.16  of New Hope must be deposited in the special fund of the 
 15.17  consolidated volunteer firefighters' relief association, for 
 15.18  allocation as provided in subdivision 4. 
 15.19     Subd. 3.  [REGULAR MUNICIPAL CONTRIBUTION.] (a) Annually, 
 15.20  as part of the municipal budget setting process, the city 
 15.21  council of the city of Crystal and the city council of the city 
 15.22  of New Hope must jointly establish the amount of the regular 
 15.23  municipal contribution by each city to the consolidated 
 15.24  volunteer firefighters' relief association. 
 15.25     (b) The regular municipal contribution in total must be at 
 15.26  least equal to (1) the amount of the fire state aid received by 
 15.27  the city of Crystal and the fire state aid received by the city 
 15.28  of New Hope, plus (2) whatever additional amount is needed to 
 15.29  equal the sum determined by multiplying $1,811 by the total of 
 15.30  the number of active firefighters' who are members of the 
 15.31  consolidated volunteer firefighters' relief association. 
 15.32     (c) The established amount for each city must be included 
 15.33  in the budget of the respective city, and, if not payable from a 
 15.34  municipal revenue source other than the city's property tax levy 
 15.35  or fire state aid, must be included in the property tax levy of 
 15.36  the respective city.  The regular municipal contribution must be 
 16.1   allocated in the manner specified in subdivision 4. 
 16.2      (d) If a direct service pension or entitlement is payable 
 16.3   under section 4, subdivision 1, paragraph (a); or subdivision 2, 
 16.4   paragraph (a), to a retiree or deferred retiree, the applicable 
 16.5   city remains responsible for any amount of service pension that 
 16.6   is payable beyond the relief association assets allocated for 
 16.7   the retiree or deferred retiree.  Following any actuarial 
 16.8   valuation of the consolidated relief association, if there is a 
 16.9   net mortality loss attributable to the applicable city, the city 
 16.10  shall make a contribution in addition to the regular municipal 
 16.11  contribution under paragraphs (a) to (c) equal to the amount of 
 16.12  that net mortality loss.  The municipal contribution under this 
 16.13  paragraph is payable on or before the last business day of the 
 16.14  month next following the completion of the actuarial valuation. 
 16.15     Subd. 4.  [ALLOCATION OF FUNDING AMOUNTS.] (a) The annual 
 16.16  fire state aid and the regular municipal contribution, after 
 16.17  deduction for payment of administrative expenses as specified in 
 16.18  subdivision 5, must be allocated to individual active 
 16.19  firefighter accounts based on the level of firefighting services 
 16.20  rendered by the individual active firefighter as stated in the 
 16.21  bylaws of the consolidated volunteer firefighters' relief 
 16.22  association. 
 16.23     (b) Investment income earned by the special fund of the 
 16.24  consolidated relief association must be allocated to each 
 16.25  individual account based on the proportion of the total assets 
 16.26  of the special fund represented by the account. 
 16.27     Subd. 5.  [PAYMENT OF RELIEF ASSOCIATION ADMINISTRATIVE 
 16.28  EXPENSES.] (a) The payment of authorized administrative expenses 
 16.29  of the consolidated volunteer firefighters' relief association 
 16.30  shall be from the special fund of the relief association 
 16.31  according to Minnesota Statutes, section 69.80, and as provided 
 16.32  for in the bylaws of the consolidated relief association and 
 16.33  approved by the board of trustees of the consolidated relief 
 16.34  association.  The allocation of these administrative expenses to 
 16.35  the individual member accounts must occur as provided in the 
 16.36  bylaws of the consolidated relief association. 
 17.1      (b) The payment of any other expenses of the consolidated 
 17.2   relief association shall be from the general fund of the 
 17.3   consolidated relief association according to Minnesota Statutes, 
 17.4   section 69.80, and as provided for in the bylaws of the 
 17.5   consolidated relief association and approved by the board of 
 17.6   trustees of the consolidated relief association. 
 17.7      Sec. 7.  [VALIDATION OF CURRENT BENEFIT PLANS AND PRIOR 
 17.8   ACTIONS.] 
 17.9      Notwithstanding any provisions of Laws 1969, chapter 1088, 
 17.10  as amended by Laws 1978, chapters 562, section 32, and 753; Laws 
 17.11  1979, chapter 201, section 44; or Laws 1981, chapter 224, 
 17.12  section 250; or Laws 1971, chapter 114, as amended by Laws 1979, 
 17.13  chapters 97, and 201, sections 27 and 44; and Laws 1981, chapter 
 17.14  224, section 254, the benefit plans of the Crystal volunteer 
 17.15  firefighters' relief association and of the New Hope volunteer 
 17.16  firefighters' relief association as reflected in each relief 
 17.17  association's articles of incorporation and bylaws as of 
 17.18  December 15, 1993, are hereby ratified and validated.  Any acts 
 17.19  previously taken by the Crystal volunteer firefighters' relief 
 17.20  association and by the New Hope volunteer firefighters' relief 
 17.21  association with those ratified articles of incorporation and 
 17.22  bylaws are also ratified and validated. 
 17.23     Sec. 8.  [REPEALER OF PRIOR SPECIAL LAWS.] 
 17.24     Laws 1969, chapter 1088; Laws 1971, chapter 114; Laws 1978, 
 17.25  chapters 562, section 32, and 753; Laws 1979, chapters 97, and 
 17.26  201, section 27; and Laws 1981, chapter 224, sections 250 and 
 17.27  254, are repealed. 
 17.28     Sec. 9.  [EFFECTIVE DATE.] 
 17.29     Sections 1 to 7 are effective on the day following final 
 17.30  approval by the city council of the city of Crystal and by the 
 17.31  city council of the city of New Hope and compliance with 
 17.32  Minnesota Statutes, section 645.021, subdivision 3.  Section 8 
 17.33  is effective on the effective date of consolidation of the 
 17.34  Crystal volunteer firefighters' relief association and the New 
 17.35  Hope volunteer firefighters' relief association. 
 17.36                             ARTICLE 3 
 18.1            ST. PAUL TEACHERS RETIREMENT FUND ASSOCIATION  
 18.2                POST RETIREMENT ADJUSTMENT MECHANISMS 
 18.3      Section 1.  [ST. PAUL TEACHERS' RETIREMENT FUND 
 18.4   ASSOCIATION; POSTRETIREMENT ADJUSTMENTS.] 
 18.5      Subdivision 1.  [AUTHORITY FOR AMENDMENT.] Under Minnesota 
 18.6   Statutes, section 354A.12, authority is granted for the St. Paul 
 18.7   teachers retirement fund association to amend its articles of 
 18.8   incorporation or bylaws as required to provide postretirement 
 18.9   adjustments after June 1, 1995, in accordance with this section. 
 18.10     Subd. 2.  [CALCULATION OF THIRTEENTH CHECK POSTRETIREMENT 
 18.11  ADJUSTMENT.] Retired members and survivors of retired members 
 18.12  from the St. Paul teachers retirement fund association are 
 18.13  entitled to receive an annual lump sum postretirement increase 
 18.14  granted at the discretion of the board of trustees under this 
 18.15  subdivision.  If granted, the lump sum postretirement increase 
 18.16  is payable to all eligible annuitants and benefit recipients who 
 18.17  have been retired for at least one year on July 1 following the 
 18.18  June 30 fiscal year end.  The lump sum amount must be determined 
 18.19  as follows: 
 18.20     (1) The years of service and years of annuity or benefit 
 18.21  payment receipt of each eligible annuitant or benefit recipient 
 18.22  must be determined by the executive secretary as of each June 
 18.23  30, based on the records of the association and are called units.
 18.24     (2) The unit value of the lump sum adjustment is one 
 18.25  percent of the actuarial value of fund assets divided by the 
 18.26  total of all units determined in clause (1). 
 18.27     (3) The amount payable to each eligible annuitant or 
 18.28  benefit recipient is the product of the number of units 
 18.29  allocated to that annuitant or beneficiary multiplied by the 
 18.30  unit value determined in clause (2). 
 18.31     (4) The lump sum postretirement adjustment determined under 
 18.32  this paragraph is payable annually to each eligible annuitant or 
 18.33  beneficiary and must be paid no sooner than six months following 
 18.34  the fiscal year end.  In lieu of a lump sum payment, the 
 18.35  annuitant or beneficiary may annuitize the lump sum to a 
 18.36  lifetime annuity or benefit increase using the interest and 
 19.1   mortality assumptions required for the annual actuarial 
 19.2   valuations of the fund.  
 19.3      Subd. 3.  [INVESTMENT PERFORMANCE POSTRETIREMENT 
 19.4   ADJUSTMENT.] (a) Annually, following the fiscal year end, the 
 19.5   board of trustees of the St. Paul teachers retirement fund 
 19.6   association shall use the procedures in paragraph (b) to 
 19.7   determine whether an additional investment performance 
 19.8   postretirement adjustment is payable and the amount of that 
 19.9   additional investment performance postretirement adjustment. 
 19.10     (b) Annually, as of each June 30, the rate of return, after 
 19.11  deduction of any investment-related expenses, must be determined 
 19.12  using the method described in Minnesota Statutes, section 
 19.13  11A.04, clause (11), and the return above the assumed interest 
 19.14  rate specified in Minnesota Statutes, section 356.215, must be 
 19.15  determined and certified by the board of trustees to the actuary 
 19.16  performing the annual actuarial valuation of the retirement 
 19.17  fund.  The amount of excess investment earnings, the funding 
 19.18  ratio, and the actuarial accrued liability must be determined by 
 19.19  the actuary preparing the annual actuarial valuation as 
 19.20  specified in Minnesota Statutes, section 356.215, and must be 
 19.21  used to determine the amount of an excess earnings 
 19.22  postretirement adjustment, as follows: 
 19.23     (1) The amount of excess investment return must be 
 19.24  determined by the actuary as of the end of the fiscal year end. 
 19.25     (2) The retiree percentage of the total fund actuarial 
 19.26  accrued liability must be determined and must be multiplied by 
 19.27  the amount of excess investment return determined in clause (1). 
 19.28     (3) The amount determined in clause (2) must be multiplied 
 19.29  by the accrued liability funding ratio to determine the amount 
 19.30  of excess investment return available for the postretirement 
 19.31  increase. 
 19.32     (4) One-fifth of the amount determined in clause (3) must 
 19.33  be allocated equally to the current year postretirement 
 19.34  adjustment and one-fifth to each of the subsequent four years. 
 19.35     (5) The amount determined in clause (4) must be combined 
 19.36  with the amount of excess investment return available for the 
 20.1   postretirement increase allocated to the same fiscal year in 
 20.2   prior years. 
 20.3      (6) If the amount determined in clause (5) is not positive, 
 20.4   then no adjustment under this subdivision is payable. 
 20.5      (7) The postretirement adjustment increase percentage rate 
 20.6   must be determined by dividing the amount determined in clause 
 20.7   (6) by the actuarial accrued liability for annuitants and 
 20.8   benefit recipients in the year preceding the most recent fiscal 
 20.9   year actuarial report. 
 20.10     (c) The additional postretirement adjustment rate 
 20.11  determined in (b) applies to all annuitants and benefit 
 20.12  recipients eligible for the regular lump sum postretirement 
 20.13  increase determined in subdivision 2. 
 20.14     Subd. 4.  [PAYMENT.] Any additional postretirement 
 20.15  adjustment determined under subdivision 2 or 3 is payable to 
 20.16  eligible annuitants and benefit recipients on January following 
 20.17  the fiscal year end. 
 20.18     Sec. 2.  [REPEALER.] 
 20.19     Laws 1979, chapter 109, section 1; Laws 1981, chapter 157, 
 20.20  section 1; Laws 1985, chapter 259, section 3; and Laws 1990, 
 20.21  chapter 570, article 7, section 4, are repealed. 
 20.22     Sec. 3.  [EFFECTIVE DATE.] 
 20.23     Sections 1 and 2 are effective upon approval by the board 
 20.24  of education of independent school district No. 625 (St. Paul) 
 20.25  and compliance with Minnesota Statutes, section 645.021.