1.1                          A bill for an act 
  1.2             relating to retirement; various public pension plans; 
  1.3             expanding the membership of the state correctional 
  1.4             employees retirement plan to include certain Minnesota 
  1.5             extended treatment options program employees; 
  1.6             downsizing the early retirement reduction rates for 
  1.7             various public safety plans; grandparenting public 
  1.8             employee police and fire plan coverage for certain 
  1.9             Rice county correctional employees; requiring Rice 
  1.10            county to repay certain police state aid amounts; 
  1.11            providing employer penalties for pension plan 
  1.12            membership certification failures or errors; providing 
  1.13            special retirement coverage for certain state fire 
  1.14            marshal employees; clarifying various Minneapolis 
  1.15            employees retirement plan survivor benefit provisions; 
  1.16            increasing the number of vendors for certain 
  1.17            tax-sheltered annuities for educational employees; 
  1.18            modifying various benefit provisions for certain 
  1.19            Minnesota state colleges and universities employees; 
  1.20            authorizing the establishment of volunteer rescue 
  1.21            squad relief associations by Kandiyohi county and the 
  1.22            city of Litchfield; amending Minnesota Statutes 1998, 
  1.23            sections 43A.27, subdivision 3; 136F.48; 352.90; 
  1.24            352.91, by adding a subdivision; 352.93, subdivision 
  1.25            2a; 352B.08, subdivision 2a; 353.64, subdivision 1; 
  1.26            353.651, subdivision 4; 353A.083, by adding a 
  1.27            subdivision; 354.445; 354.66, subdivisions 1b, 1c, and 
  1.28            3; 354B.24, subdivision 3; 354B.25, subdivisions 2, 3, 
  1.29            and 5; 354C.12, subdivision 4; 356.19, by adding a 
  1.30            subdivision; 356.24, subdivision 1; 356A.01, 
  1.31            subdivisions 7 and 8; 422A.06, subdivisions 3 and 6; 
  1.32            422A.101, subdivision 4; 422A.18, subdivision 2; 
  1.33            422A.22, subdivisions 4 and 5; and 422A.23; proposing 
  1.34            coding for new law in Minnesota Statutes, chapters 
  1.35            352; 353; 354B; and 422A; proposing coding for new law 
  1.36            as Minnesota Statutes, chapter 425B; repealing 
  1.37            Minnesota Statutes 1998, section 422A.16, subdivision 
  1.38            3a. 
  1.39  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.40                             ARTICLE 1 
  1.41           CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES 
  1.42     Section 1.  Minnesota Statutes 1998, section 352.90, is 
  2.1   amended to read: 
  2.2      352.90 [POLICY.] 
  2.3      It is the policy of the legislature to provide special 
  2.4   retirement benefits and contributions for certain correctional 
  2.5   employees who may be required to retire at an early age because 
  2.6   they lose the mental or physical capacity required to maintain 
  2.7   the safety, security, discipline, and custody of inmates at 
  2.8   state correctional facilities or of patients at the Minnesota 
  2.9   security hospital or at the Minnesota sexual psychopathic 
  2.10  personality treatment center or of patients in the Minnesota 
  2.11  extended treatment options on-campus program at Cambridge.  
  2.12     Sec. 2.  Minnesota Statutes 1998, section 352.91, is 
  2.13  amended by adding a subdivision to read: 
  2.14     Subd. 3e.  [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM; 
  2.15  CAMBRIDGE.] "Covered correctional service" means service by a 
  2.16  state employee in one of the following employment positions with 
  2.17  the Minnesota extended treatment options on-campus program at 
  2.18  Cambridge if at least 75 percent of the employee's working time 
  2.19  is spent in direct contact with patients who are in the 
  2.20  Minnesota extended treatment options program and if service in 
  2.21  such a position is certified to the executive director by the 
  2.22  commissioner of human services, unless the person elects to 
  2.23  retain current retirement coverage under section 4: 
  2.24     (1) behavior analyst I; 
  2.25     (2) human services support specialist; 
  2.26     (3) mental retardation residential program lead; 
  2.27     (4) psychologist II; 
  2.28     (5) recreation program assistant; 
  2.29     (6) recreation therapist assistant; 
  2.30     (7) recreation therapist senior; 
  2.31     (8) registered nurse senior; 
  2.32     (9) skills development specialist; and 
  2.33     (10) social worker senior. 
  2.34     Sec. 3.  Minnesota Statutes 1998, section 352.93, 
  2.35  subdivision 2a, is amended to read: 
  2.36     Subd. 2a.  [EARLY RETIREMENT.] Any covered correctional 
  3.1   employee, or former employee if service ended after June 30, 
  3.2   1989, who becomes at least 50 years old and who has at least 
  3.3   three years of allowable service is entitled upon application to 
  3.4   a reduced retirement annuity equal to the annuity calculated 
  3.5   under subdivision 2, reduced so that the reduced annuity is the 
  3.6   actuarial equivalent of the annuity that would be payable if the 
  3.7   employee deferred receipt of the annuity from the day the 
  3.8   annuity begins to accrue to age 55 by two-tenths of one percent 
  3.9   for each month that the correctional employee is under age 55 at 
  3.10  the time of retirement. 
  3.11     Sec. 4.  [TEMPORARY PROVISION; ELECTION TO RETAIN 
  3.12  RETIREMENT COVERAGE.] 
  3.13     (a) An employee in a position specified as qualifying under 
  3.14  section 2 may elect to retain coverage under the general 
  3.15  employees retirement plan of the Minnesota state retirement 
  3.16  system or may elect to transfer coverage and contribute to the 
  3.17  correctional employees retirement plan.  An employee electing to 
  3.18  participate in the correctional employees retirement plan shall 
  3.19  begin making contributions to the correctional plan beginning 
  3.20  the first full pay period after July 1, 1999, or the first full 
  3.21  pay period following filing of their election to transfer 
  3.22  coverage to the correctional employees retirement plan, 
  3.23  whichever is later.  The election to retain coverage or to 
  3.24  transfer coverage must be made in writing by the person on a 
  3.25  form prescribed by the executive director of the Minnesota state 
  3.26  retirement system and must be filed with the executive director 
  3.27  no later than December 31, 1999. 
  3.28     (b) An employee failing to make an election by December 15, 
  3.29  1999, must be notified by certified mail by the executive 
  3.30  director of the Minnesota state retirement system of the 
  3.31  deadline to make a choice.  A person who does not submit an 
  3.32  election form must continue coverage in the general employees 
  3.33  retirement plan and forfeits all rights to transfer retirement 
  3.34  coverage to the correctional employees retirement plan. 
  3.35     (c) The election to retain coverage in the general 
  3.36  employees retirement plan or the election to transfer retirement 
  4.1   coverage to the correctional employees retirement plan is 
  4.2   irrevocable once it is filed with the executive director. 
  4.3      Sec. 5.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
  4.4   PERSONS.] 
  4.5      Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 
  4.6   (a) An employee who has future retirement coverage transferred 
  4.7   to the correctional employees retirement plan under section 4, 
  4.8   and who does not elect to retain general state employees 
  4.9   retirement plan coverage, is entitled to elect to obtain prior 
  4.10  service credit for eligible state service performed on or after 
  4.11  July 1, 1997, and before the first day of the first full pay 
  4.12  period beginning after December 31, 1999.  All prior service 
  4.13  credit must be purchased. 
  4.14     (b) Eligible state service is any period of service on or 
  4.15  after the date which the employee started employment with the 
  4.16  Minnesota extended treatment options program in a position 
  4.17  specified in Minnesota Statutes, section 352.91, subdivision 3e, 
  4.18  in which at least 75 percent of the employee's working time is 
  4.19  determined to have been spent in direct contact with Minnesota 
  4.20  extended treatment options program patients or July 1, 1997, 
  4.21  whichever is later, and the date the employee joined the 
  4.22  correctional employees plan.  
  4.23     (c) The department of human services shall certify eligible 
  4.24  state service to the executive director of the Minnesota 
  4.25  retirement system. 
  4.26     Subd. 2.  [PAYMENT FOR PRIOR SERVICE.] (a) An employee 
  4.27  electing to obtain prior service credit under subdivision 1 must 
  4.28  pay an additional employee contribution for that prior service.  
  4.29  The additional member contribution is the contribution 
  4.30  differential percentage applied to the actual salary paid to the 
  4.31  employee during the period of the prior eligible state service, 
  4.32  plus interest at the rate of six percent per annum, compounded 
  4.33  annually.  The contribution differential percentage is the 
  4.34  difference between 5.5 percent of salary and the applicable 
  4.35  employee contribution rate of the general state employees 
  4.36  retirement plan during the prior eligible state service. 
  5.1      (b) The additional member contribution must be paid only in 
  5.2   a lump sum.  Payment must accompany the election to obtain prior 
  5.3   service credit.  No election or payment may be made by the 
  5.4   person or accepted by the executive director after June 30, 2001.
  5.5      Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
  5.6   from the general state employees retirement plan to the 
  5.7   correctional employees retirement plan in an amount equal to the 
  5.8   present value of benefits earned under the general employees 
  5.9   retirement plan for each employee transferring to the 
  5.10  correctional employees retirement plan, as determined by the 
  5.11  actuary retained by the legislative commission on pensions and 
  5.12  retirement in accordance with Minnesota Statutes, section 
  5.13  356.215, multiplied by the accrued liability funding ratio of 
  5.14  active members as derived from the most recent actuarial 
  5.15  valuation prepared by the commission-retained actuary.  The 
  5.16  transfer of assets must be made within 45 days after the 
  5.17  employee elects to transfer coverage to the correctional 
  5.18  employees retirement plan. 
  5.19     Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon the transfer 
  5.20  of assets in subdivision 3, service credit in the general state 
  5.21  employees plan of the Minnesota state retirement system is 
  5.22  forfeited and may not be reinstated.  The service credit and 
  5.23  transferred assets must be credited to the correctional 
  5.24  employees retirement plan. 
  5.25     Subd. 5.  [COUNSELING.] (a) The commissioners of human 
  5.26  services and employee relations, and the executive director of 
  5.27  the Minnesota state retirement system have the joint 
  5.28  responsibility of providing affected employees with appropriate 
  5.29  and timely retirement and related benefit counseling. 
  5.30     (b) Counseling must include the anticipated impact of the 
  5.31  retirement coverage change on the person's future retirement 
  5.32  benefit amounts, future retirement eligibility, future 
  5.33  applicability of mandatory retirement laws, and future 
  5.34  postemployment insurance coverage. 
  5.35     (c) The commissioner of human services must consult with 
  5.36  the appropriate collective bargaining agents of the affected 
  6.1   employees regarding the content, form, and timing of the 
  6.2   counseling required by this section. 
  6.3      Sec. 6.  [TRANSITIONAL PROVISION; RETENTION OF CERTAIN 
  6.4   RIGHTS.] 
  6.5      (a) Nothing in sections 1, 2, and 4 to 7 may be considered 
  6.6   to restrict the entitlement of a person under state law to repay 
  6.7   a previously taken refund of employee or member contributions to 
  6.8   a Minnesota public pension plan if all qualifying requirements 
  6.9   are met. 
  6.10     (b) The period of correctional employees retirement plan 
  6.11  contributions, plus interest, must be restored upon the 
  6.12  repayment of the appropriate refund amount if the service was 
  6.13  correctional employees retirement plan covered service on the 
  6.14  date when the service was rendered or on the date when the 
  6.15  refund was taken. 
  6.16     Sec. 7.  [EARLY RETIREMENT INCENTIVE.] 
  6.17     This section applies to an employee who has future 
  6.18  retirement coverage transferred to the correctional employee 
  6.19  retirement plan under section 4 and who is at least 55 years old 
  6.20  on the effective date of section 4.  That employee may 
  6.21  participate in a health insurance early retirement incentive 
  6.22  available under the terms of a collective bargaining agreement, 
  6.23  notwithstanding any provision of the collective bargaining 
  6.24  agreement that limits participation to persons who select the 
  6.25  option during the payroll period in which they become 55 years 
  6.26  old.  A person selecting the health insurance early retirement 
  6.27  incentive under this section must retire by the later of 
  6.28  December 31, 2000, or within the pay period following the time 
  6.29  at which the person has at least three years of covered 
  6.30  correctional service, including any purchased service credit.  
  6.31  An employee meeting this criteria who wishes to extend the 
  6.32  person's employment must do so under Minnesota Statutes, section 
  6.33  43A.34, subdivision 3. 
  6.34     Sec. 8.  [EFFECTIVE DATE.] 
  6.35     Sections 1, 2, and 4 to 7 are effective on the first day of 
  6.36  the first full pay period beginning after July 1, 1999.  Section 
  7.1   3 is effective July 1, 1999. 
  7.2                              ARTICLE 2 
  7.3                    PUBLIC SAFETY EMPLOYEE PENSION 
  7.4                             PLAN CHANGES 
  7.5      Section 1.  Minnesota Statutes 1998, section 352B.08, 
  7.6   subdivision 2a, is amended to read: 
  7.7      Subd. 2a.  [EARLY RETIREMENT.] Any member who has become at 
  7.8   least 50 years old and who has at least three years of allowable 
  7.9   service is entitled upon application to a reduced retirement 
  7.10  annuity equal to the annuity calculated under subdivision 2, 
  7.11  reduced by two-tenths one-tenth of one percent for each month 
  7.12  that the member is under age 55 at the time of retirement. 
  7.13     Sec. 2.  Minnesota Statutes 1998, section 353.64, 
  7.14  subdivision 1, is amended to read: 
  7.15     Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
  7.16  person who prior to July 1, 1961, was a member of the police and 
  7.17  fire fund, by virtue of being a police officer or firefighter, 
  7.18  shall, as long as the person remains in either position, 
  7.19  continue membership in the fund.  
  7.20     (b) A person who was employed by a governmental subdivision 
  7.21  as a police officer and was a member of the police and fire fund 
  7.22  on July 1, 1978, by virtue of being a police officer as defined 
  7.23  by this section on that date, and if employed by the same 
  7.24  governmental subdivision in a position in the same department in 
  7.25  which the person was employed on that date, shall continue 
  7.26  membership in continues to be a member of the fund, whether or 
  7.27  not that person has the power of arrest by warrant and is 
  7.28  licensed by the peace officers standards and training board 
  7.29  after that date.  A person who was employed as a correctional 
  7.30  officer by Rice county before July 1, 1998, for the duration of 
  7.31  employment in the correctional position held on July 1, 1998, 
  7.32  continues to be a member of the public employees police and fire 
  7.33  plan, whether or not the person has the power of arrest by 
  7.34  warrant and is licensed by the peace officers standards and 
  7.35  training board after that date. 
  7.36     (c) A person who was employed by a governmental subdivision 
  8.1   as a police officer or a firefighter, whichever applies, was an 
  8.2   active member of the local police or salaried firefighters 
  8.3   relief association located in that governmental subdivision by 
  8.4   virtue of that employment as of the effective date of the 
  8.5   consolidation as authorized by sections 353A.01 to 353A.10, and 
  8.6   has elected coverage by the public employees police and fire 
  8.7   fund benefit plan, shall become a member of the police and fire 
  8.8   fund after that date if employed by the same governmental 
  8.9   subdivision in a position in the same department in which the 
  8.10  person was employed on that date. 
  8.11     (d) Any other employee serving on a full-time basis as a 
  8.12  police officer as defined in subdivision 2 or as a firefighter 
  8.13  as defined in subdivision 3 on or after July 1, 1961, shall 
  8.14  become a member of the public employees police and fire fund.  
  8.15     (e) An employee serving on less than a full-time basis as a 
  8.16  police officer shall become a member of the public employees 
  8.17  police and fire fund only after a resolution stating that the 
  8.18  employee should be covered by the police and fire fund is 
  8.19  adopted by the governing body of the governmental subdivision 
  8.20  employing the person declaring that the position which the 
  8.21  person holds is that of a police officer. 
  8.22     (f) An employee serving on less than a full-time basis as a 
  8.23  firefighter shall become a member of the public employees police 
  8.24  and fire fund only after a resolution stating that the employee 
  8.25  should be covered by the police and fire fund is adopted by the 
  8.26  governing body of the governmental subdivision employing the 
  8.27  person declaring that the position which the person holds is 
  8.28  that of a firefighter. 
  8.29     (g) A police officer or firefighter employed by a 
  8.30  governmental subdivision who by virtue of that employment is 
  8.31  required by law to be a member of and to contribute to any 
  8.32  police or firefighter relief association governed by section 
  8.33  69.77 which has not consolidated with the public employees 
  8.34  police and fire fund and any police officer or firefighter of a 
  8.35  relief association that has consolidated with the association 
  8.36  for which the employee has not elected coverage by the public 
  9.1   employees police and fire fund benefit plan as provided in 
  9.2   sections 353A.01 to 353A.10 shall not become a member of the 
  9.3   public employees police and fire fund. 
  9.4      Sec. 3.  Minnesota Statutes 1998, section 353.651, 
  9.5   subdivision 4, is amended to read: 
  9.6      Subd. 4.  [EARLY RETIREMENT.] Any police officer or 
  9.7   firefighter member who has become at least 50 years old and who 
  9.8   has at least three years of allowable service is entitled upon 
  9.9   application to a retirement annuity equal to the normal annuity 
  9.10  calculated under subdivision 3, reduced by two-tenths one-tenth 
  9.11  of one percent for each month that the member is under age 55 at 
  9.12  the time of retirement. 
  9.13     Sec. 4.  [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN 
  9.14  CERTAIN INSTANCES.] 
  9.15     (a) If a public employee continues in retirement plan 
  9.16  coverage by the public employees police and fire retirement plan 
  9.17  by virtue of this article and subsequently is covered by the 
  9.18  federal old age, survivors, and disability insurance program for 
  9.19  service as a Rice county correctional officer, the retirement 
  9.20  annuity of the person under section 353.651 or the disability 
  9.21  benefit of the person under section 353.656 must be reduced 
  9.22  dollar-for-dollar for the social security benefit that the 
  9.23  person is entitled to receive by virtue of Rice county 
  9.24  correctional service rendered after the effective date of 
  9.25  section 2. 
  9.26     (b) To be effective, the retirement annuity or disability 
  9.27  benefit application form for a Rice county correctional employee 
  9.28  must include signed written permission by the person for the 
  9.29  public employees retirement association to obtain the necessary 
  9.30  information from the federal old age, survivors, and disability 
  9.31  insurance program to implement the offset provision in paragraph 
  9.32  (a). 
  9.33     Sec. 5.  [353.90] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS 
  9.34  AND CERTIFICATION FAILURES.] 
  9.35     (a) If the board of trustees of the public employees 
  9.36  retirement association, upon the recommendation of the executive 
 10.1   director, determines that a governmental subdivision has 
 10.2   certified a public employee for membership in the public 
 10.3   employees police and fire retirement plan when the public 
 10.4   employee was not eligible for that retirement plan coverage, the 
 10.5   public employee must be covered by the correct retirement plan 
 10.6   for subsequent service, the public employee retains the coverage 
 10.7   for the period of the misclassification, and the governmental 
 10.8   subdivision shall pay in a lump sum the difference in the 
 10.9   actuarial present value of the retirement annuities to which the 
 10.10  public employee would have been entitled if the public employee 
 10.11  was properly classified.  The government subdivision payment is 
 10.12  payable within 30 days of the board's determination.  If unpaid, 
 10.13  it must be collected under section 353.28.  The lump-sum payment 
 10.14  must be deposited in the public employees retirement fund. 
 10.15     (b) If the executive director of the public employees 
 10.16  retirement association determines that a governmental 
 10.17  subdivision has failed to certify a person for retirement plan 
 10.18  membership and coverage under this chapter, in addition to the 
 10.19  procedures under section 353.27, subdivision 4, 9, 10, 11, 12, 
 10.20  12a, or 12b, the director shall charge a fine of $....... for 
 10.21  each membership certification failure. 
 10.22     Sec. 6.  Minnesota Statutes 1998, section 353A.083, is 
 10.23  amended by adding a subdivision to read: 
 10.24     Subd. 4.  [PRE-1999 CONSOLIDATIONS.] For any consolidation 
 10.25  account in effect on July 1, 1999, the public employees police 
 10.26  and fire fund benefit plan applicable to consolidation account 
 10.27  members who have elected or will elect that benefit plan 
 10.28  coverage under section 353A.08 is the most recent change adopted 
 10.29  by the applicable municipality under subdivision 1, 2, or 3, 
 10.30  unless the applicable municipality approves the extension of the 
 10.31  post-June 30, 1999, public employees police and fire fund 
 10.32  benefit plan to the consolidation account. 
 10.33     Sec. 7.  [COLLECTION OF POLICE STATE OVERPAYMENTS.] 
 10.34     As police state aid that was received by Rice county on 
 10.35  account of correctional officers who were improperly included in 
 10.36  retirement coverage by the public employees police and fire 
 11.1   plan, the total of the following amounts must be deducted in 20 
 11.2   equal annual installments from any police state aid payable to 
 11.3   Rice county under Minnesota Statutes, chapter 69: 
 11.4             Amount                 Year  
 11.5            $11,543                 1994
 11.6             19,096                 1995 
 11.7             39,111                 1996  
 11.8             19,170                 1997 
 11.9             13,764                 1998  
 11.10     Sec. 8.  [EFFECTIVE DATE.] 
 11.11     Sections 1, 3, and 7 are effective on July 1, 1999.  
 11.12  Sections 2, 4, and 6 are effective on the day following final 
 11.13  enactment.  Section 5 is effective on August 1, 2000. 
 11.14                             ARTICLE 3  
 11.15                    SPECIAL RETIREMENT COVERAGE  
 11.16                       FOR CERTAIN STATE FIRE 
 11.17                         MARSHAL EMPLOYEES
 11.18     Section 1.  [352.87] [STATE FIRE MARSHAL DIVISION 
 11.19  EMPLOYEES.] 
 11.20     Subdivision 1.  [ELIGIBILITY.] A member of the general plan 
 11.21  who is employed by the department of public safety, state fire 
 11.22  marshal division, as a deputy state fire marshal, fire/arson 
 11.23  investigator, who elects special benefit coverage under 
 11.24  subdivision 8, is entitled to retirement benefits or disability 
 11.25  benefits, as applicable, as stated in this section for eligible 
 11.26  service under this section rendered after July 1, 1999, for 
 11.27  which allowable service credit is received.  The covered member 
 11.28  must be at least age 55 to qualify for the retirement annuity 
 11.29  specified in subdivision 3. 
 11.30     Subd. 2.  [RETIREMENT ANNUITY ELIGIBILITY.] A person 
 11.31  specified in subdivision 1 who meets all eligibility 
 11.32  requirements specified in this chapter applicable to general 
 11.33  plan members is eligible for retirement benefits as specified in 
 11.34  subdivision 3. 
 11.35     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
 11.36  in subdivision 1 will have a retirement annuity applicable for 
 12.1   allowable service credit under this section calculated by 
 12.2   multiplying the employee's average salary, as defined in section 
 12.3   352.115, subdivision 2, by the percentage specified in section 
 12.4   356.19, subdivision 2a, for each year or portions of a year of 
 12.5   allowable service credit.  No reduction for retirement prior to 
 12.6   normal retirement age, as specified in section 352.01, 
 12.7   subdivision 25, applies to service to which this section applies.
 12.8      Subd. 4.  [NON-JOB-RELATED DISABILITY BENEFITS.] An 
 12.9   eligible member described in subdivision 1, who is less than 55 
 12.10  years of age and who becomes disabled and physically or mentally 
 12.11  unfit to perform the duties of the position because of sickness 
 12.12  or injury while not engaged in covered employment, is entitled 
 12.13  to a disability benefit amount equivalent to an annuity computed 
 12.14  under subdivision 3 assuming the member has 15 years of service 
 12.15  qualifying under this section and waiving the minimum age 
 12.16  requirement.  If the eligible member becomes disabled under this 
 12.17  subdivision with more than 15 years of service covered under 
 12.18  this section, the eligible member is entitled to a disability 
 12.19  benefit amount equivalent to an annuity computed under 
 12.20  subdivision 3 based on all years of service credited under this 
 12.21  section and waiving the minimum age requirement. 
 12.22     Subd. 5.  [JOB-RELATED DISABILITY BENEFITS.] An eligible 
 12.23  member defined in subdivision 1, who is less than 55 years of 
 12.24  age and who becomes disabled and physically or mentally unfit to 
 12.25  perform the duties of the position because of sickness or injury 
 12.26  while engaged in covered employment, is entitled to a disability 
 12.27  benefit amount equivalent to an annuity computed under 
 12.28  subdivision 3 assuming the member has 20 years of service 
 12.29  qualifying under this section and waiving the minimum age 
 12.30  requirement.  An eligible member who becomes disabled under this 
 12.31  subdivision with more than 20 years of service credited under 
 12.32  this section is entitled to a disability benefit amount 
 12.33  equivalent to an annuity computed under subdivision 3 based on 
 12.34  all years of service credited under this section and waiving the 
 12.35  age requirement. 
 12.36     Subd. 6.  [DISABILITY BENEFIT COORDINATION.] If the 
 13.1   eligible employee is entitled to receive a disability benefit as 
 13.2   provided in subdivision 4 or 5 and has allowable service credit 
 13.3   under this section for less service than the length of service 
 13.4   upon which the disability benefit in subdivision 4 or 5 is 
 13.5   based, and also has allowable service in the general plan not 
 13.6   includable in this section, the employee is entitled to a 
 13.7   disability benefit or deferred retirement annuity based on the 
 13.8   general plan service not includable in this section only for the 
 13.9   service that, when combined with the service includable in this 
 13.10  section, exceeds the number of years on which the disability 
 13.11  benefit provided in subdivision 4 or 5 is based.  The benefit 
 13.12  recipient under subdivision 4 or 5 who also has credit for 
 13.13  regular plan service must in all respects qualify under section 
 13.14  352.113 to be entitled to receive a disability benefit based on 
 13.15  the general plan service not includable in this section, except 
 13.16  that the service may be combined to satisfy length of service 
 13.17  requirements.  Any deferred annuity to which the employee may be 
 13.18  entitled based on general plan service not includable in this 
 13.19  section must be augmented as provided in section 352.72, 
 13.20  subdivision 2, while the employee is receiving a disability 
 13.21  benefit under this section. 
 13.22     Subd. 7.  [ADDITIONAL CONTRIBUTIONS.] The special 
 13.23  retirement annuity and disability coverage under this section 
 13.24  shall be financed by an employee contribution of $....... and an 
 13.25  employer contribution of $.......  These contributions are in 
 13.26  addition to the contributions required by section 352.04, 
 13.27  subdivisions 2 and 3, and must be made in the manner provided 
 13.28  for in section 352.04, subdivisions 4 to 6. 
 13.29     Subd. 8.  [ELECTION OF COVERAGE.] To be covered by this 
 13.30  section, an employee of the department of public safety 
 13.31  described in subdivision 1 who is employed in a position 
 13.32  described in that subdivision on or after July 1, 1999, must 
 13.33  file a notice with the executive director of the Minnesota state 
 13.34  retirement system on a form prescribed by the executive director 
 13.35  stating whether or not the employee elects to be covered by this 
 13.36  section.  Notice must be filed by September 1, 1999, or within 
 14.1   90 days of employment, whichever is later.  Elections are 
 14.2   irrevocable during any period of covered employment.  A failure 
 14.3   to file a timely notice shall be deemed a waiver of coverage by 
 14.4   this section. 
 14.5      Sec. 2.  Minnesota Statutes 1998, section 356.19, is 
 14.6   amended by adding a subdivision to read: 
 14.7      Subd. 2a.  [COORDINATED MEMBERS.] The applicable benefit 
 14.8   accrual rate is 2.0 percent. 
 14.9      Sec. 3.  [EFFECTIVE DATE.] 
 14.10     Sections 1 and 2 are effective the day following final 
 14.11  enactment. 
 14.12                             ARTICLE 4  
 14.13                    MNSCU INDIVIDUAL RETIREMENT  
 14.14                        ACCOUNT PLAN CHANGES  
 14.15     Section 1.  Minnesota Statutes 1998, section 43A.27, 
 14.16  subdivision 3, is amended to read:  
 14.17     Subd. 3.  [RETIRED EMPLOYEES.] (a) A person may elect to 
 14.18  purchase at personal expense individual and dependent hospital, 
 14.19  medical, and dental coverages if the person is: 
 14.20     (1) a retired employee of the state or an organization 
 14.21  listed in subdivision 2 or section 43A.24, subdivision 2, who, 
 14.22  at separation of service: 
 14.23     (i) is immediately eligible to receive a retirement benefit 
 14.24  under chapter 354B or an annuity under a retirement program 
 14.25  sponsored by the state or such organization of the state and; 
 14.26     (ii) immediately meets the age and service requirements in 
 14.27  section 352.115, subdivision 1; and 
 14.28     (ii) (iii) has five years of service or meets the service 
 14.29  requirement of the collective bargaining agreement or plan, 
 14.30  whichever is greater; or 
 14.31     (2) a retired employee of the state who is at least 50 
 14.32  years of age and has at least 15 years of state service.  
 14.33     (b) The commissioner shall offer at least one plan which is 
 14.34  actuarially equivalent to those made available through 
 14.35  collective bargaining agreements or plans established pursuant 
 14.36  to under section 43A.18 to employees in positions equivalent to 
 15.1   that from which retired. 
 15.2      (c) A spouse of a deceased retired employee who received an 
 15.3   annuity under a state retirement program person eligible under 
 15.4   paragraph (a) may purchase the coverage listed in this 
 15.5   subdivision if the spouse was a dependent under the retired 
 15.6   employee's coverage at the time of the employee's retiree's 
 15.7   death. 
 15.8      (d) Coverages must be coordinated with relevant health 
 15.9   insurance benefits provided through the federally sponsored 
 15.10  Medicare program.  Until the retired employee reaches age 65, 
 15.11  the retired employee and dependents must be pooled in the same 
 15.12  group as active employees for purposes of establishing premiums 
 15.13  and coverage for hospital, medical, and dental insurance.  
 15.14  Coverage for retired employees and their dependents may not 
 15.15  discriminate on the basis of evidence of insurability or 
 15.16  preexisting conditions unless identical conditions are imposed 
 15.17  on active employees in the group that the employee left.  
 15.18  Appointing authorities shall provide notice to employees no 
 15.19  later than the effective date of their retirement of the right 
 15.20  to exercise the option provided in this subdivision.  The 
 15.21  retired employee must notify the commissioner or designee of the 
 15.22  commissioner within 30 days after the effective date of the 
 15.23  retirement of intent to exercise this option. 
 15.24     Sec. 2.  Minnesota Statutes 1998, section 136F.48, is 
 15.25  amended to read: 
 15.26     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
 15.27     (a) This section applies to a person who:  
 15.28     (1) retires from the Minnesota state college and university 
 15.29  system, the technical college system, or the community college 
 15.30  system, or from a successor system employing state university, 
 15.31  technical college, or community college faculty, with at least 
 15.32  ten years of combined service credit in a system under the 
 15.33  jurisdiction of the board of trustees of the Minnesota state 
 15.34  colleges and universities; 
 15.35     (2) was employed on a full-time basis immediately preceding 
 15.36  retirement as a state university, technical college, or 
 16.1   community college faculty member or as an unclassified 
 16.2   administrator in one of those systems the Minnesota state 
 16.3   college and university system; 
 16.4      (3) begins drawing a retirement benefit from the individual 
 16.5   retirement account plan or an annuity from the teachers 
 16.6   retirement association, the Minnesota state retirement system, 
 16.7   or from a first class city teacher plan; and 
 16.8      (4) returns to work on not less than a one-third time basis 
 16.9   and not more than a two-thirds time basis in the system from 
 16.10  which the person retired under an agreement in which the person 
 16.11  may not earn a salary of more than $35,000 in a calendar year 
 16.12  from employment after retirement in the system from which the 
 16.13  person retired.  
 16.14     (b) Initial participation, the amount of time worked, and 
 16.15  the duration of participation under this section must be 
 16.16  mutually agreed upon by the president of the institution where 
 16.17  the person returns to work and the employee.  The president may 
 16.18  require up to one-year notice of intent to participate in the 
 16.19  program as a condition of participation under this section.  The 
 16.20  president shall determine the time of year the employee shall 
 16.21  work.  The employer or the president may not require a person to 
 16.22  waive any rights under a collective bargaining agreement as a 
 16.23  condition of participation under this section.  
 16.24     (c) For a person eligible under paragraphs (a) and (b), the 
 16.25  employing board shall make the same employer contribution for 
 16.26  hospital, medical, and dental benefits as would be made if the 
 16.27  person were employed full time.  
 16.28     (d) For work under paragraph (a), a person must receive a 
 16.29  percentage of the person's salary at the time of retirement that 
 16.30  is equal to the percentage of time the person works compared to 
 16.31  full-time work.  
 16.32     (e) If a collective bargaining agreement covering a person 
 16.33  provides for an early retirement incentive that is based on age, 
 16.34  the incentive provided to the person must be based on the 
 16.35  person's age at the time employment under this section ends.  
 16.36  However, the salary used to determine the amount of the 
 17.1   incentive must be the salary that would have been paid if the 
 17.2   person had been employed full time for the year immediately 
 17.3   preceding the time employment under this section ends. 
 17.4      (f) A person who returns to work under this section is a 
 17.5   member of the appropriate bargaining unit and is covered by the 
 17.6   appropriate collective bargaining contract.  Except as provided 
 17.7   in this section, the person's coverage is subject to any part of 
 17.8   the contract limiting rights of part-time employees. 
 17.9      Sec. 3.  [352.1155] [NO ANNUITY REDUCTION.] 
 17.10     Subdivision 1.  [ELIGIBILITY.] Except as indicated in 
 17.11  subdivision 4, the annuity reduction provisions of section 
 17.12  352.115, subdivision 10, do not apply to a person who: 
 17.13     (1) retires from the Minnesota state college and university 
 17.14  system with at least ten years of combined service credit in a 
 17.15  system under the jurisdiction of the board of trustees of the 
 17.16  Minnesota state colleges and universities; 
 17.17     (2) was employed on a full-time basis immediately preceding 
 17.18  retirement as a faculty member or as an unclassified 
 17.19  administrator in that system; 
 17.20     (3) begins drawing an annuity from the Minnesota state 
 17.21  retirement system general plan; and 
 17.22     (4) returns to work on not less than a one-third time basis 
 17.23  and not more than a two-thirds time basis in the system from 
 17.24  which the person retired under an agreement in which the person 
 17.25  may not earn a salary of more than $35,000 in a calendar year 
 17.26  from employment after retirement in the system from which the 
 17.27  person retired. 
 17.28     Subd. 2.  [APPROVAL REQUIREMENTS.] Initial participation, 
 17.29  the amount of time worked, and the duration of participation 
 17.30  under this section must be mutually agreed upon by the president 
 17.31  of the institution where the person returns to work and the 
 17.32  employee.  The president may require up to one-year notice of 
 17.33  intent to participate in the program as a condition of 
 17.34  participation under this section.  The president shall determine 
 17.35  the time of year the employee shall work.  The employer or the 
 17.36  president may not require a person to waive any rights under a 
 18.1   collective bargaining agreement as a condition of participation 
 18.2   under this section.  
 18.3      Subd. 3.  [SERVICE CREDIT PROHIBITION.] Notwithstanding any 
 18.4   law to the contrary, a person eligible under this section may 
 18.5   not, based on employment to which the waiver in this section 
 18.6   applies, earn further service credit in a Minnesota public 
 18.7   defined benefit plan and is not eligible to participate in a 
 18.8   Minnesota public defined contribution plan, other than a 
 18.9   volunteer fire plan governed by chapter 424A.  No employer or 
 18.10  employee contribution to any of these plans may be made on 
 18.11  behalf of such a person. 
 18.12     Subd. 4.  [EXEMPTION LIMIT.] For a person eligible under 
 18.13  this section who earns more than $35,000 in a calendar year from 
 18.14  reemployment in the Minnesota state college and university 
 18.15  system following retirement, the annuity reduction provisions of 
 18.16  section 352.115, subdivision 10, apply only to income over 
 18.17  $35,000. 
 18.18     Subd. 5.  [CONTINUING RIGHTS.] A person who returns to work 
 18.19  under this section is a member of the appropriate bargaining 
 18.20  unit and is covered by the appropriate collective bargaining 
 18.21  contract.  Except as provided in this section, the person's 
 18.22  coverage is subject to any part of the contract limiting rights 
 18.23  of part-time employees. 
 18.24     Sec. 4.  Minnesota Statutes 1998, section 354.445, is 
 18.25  amended to read: 
 18.26     354.445 [NO ANNUITY REDUCTION.] 
 18.27     (a) The annuity reduction provisions of section 354.44, 
 18.28  subdivision 5, do not apply to a person who: 
 18.29     (1) retires from the Minnesota state college and university 
 18.30  system, technical college system, or the community college 
 18.31  system, or from a successor system employing state university, 
 18.32  technical college, or community college faculty, with at least 
 18.33  ten years of combined service credit in a system under the 
 18.34  jurisdiction of the board of trustees of the Minnesota state 
 18.35  colleges and universities; 
 18.36     (2) was employed on a full-time basis immediately preceding 
 19.1   retirement as a state university, technical college, or 
 19.2   community college faculty member or as an unclassified 
 19.3   administrator in one of these systems that system; 
 19.4      (3) begins drawing an annuity from the teachers retirement 
 19.5   association; and 
 19.6      (4) returns to work on not less than a one-third time basis 
 19.7   and not more than a two-thirds time basis in the system from 
 19.8   which the person retired under an agreement in which the person 
 19.9   may not earn a salary of more than $35,000 in a calendar year 
 19.10  from employment after retirement in the system from which the 
 19.11  person retired. 
 19.12     (b) Initial participation, the amount of time worked, and 
 19.13  the duration of participation under this section must be 
 19.14  mutually agreed upon by the president of the institution where 
 19.15  the person returns to work and the employee.  The president may 
 19.16  require up to one-year notice of intent to participate in the 
 19.17  program as a condition of participation under this section.  The 
 19.18  president shall determine the time of year the employee shall 
 19.19  work.  The employer or the president may not require a person to 
 19.20  waive any rights under a collective bargaining agreement as a 
 19.21  condition of participation under this section.  
 19.22     (c) Notwithstanding any law to the contrary, a person 
 19.23  eligible under paragraphs (a) and (b) may not, based on 
 19.24  employment to which the waiver in this section applies, earn 
 19.25  further service credit in the teachers retirement association 
 19.26  and is not eligible to participate in the individual retirement 
 19.27  account plan or the supplemental retirement plan established in 
 19.28  chapter 354B as a result of service under this section a 
 19.29  Minnesota public defined benefit plan and is not eligible to 
 19.30  participate in a Minnesota public defined contribution plan, 
 19.31  other than a volunteer fire plan governed by chapter 424A.  No 
 19.32  employer or employee contribution to any of these plans may be 
 19.33  made on behalf of such a person. 
 19.34     (d) For a person eligible under paragraphs (a) and (b) who 
 19.35  earns more than $35,000 in a calendar year from employment after 
 19.36  retirement in the system from which the person retired due to 
 20.1   employment in the Minnesota state college and university system, 
 20.2   the annuity reduction provisions of section 354.44, subdivision 
 20.3   5, apply only to income over $35,000. 
 20.4      (e) A person who returns to work under this section is a 
 20.5   member of the appropriate bargaining unit and is covered by the 
 20.6   appropriate collective bargaining contract.  Except as provided 
 20.7   in this section, the person's coverage is subject to any part of 
 20.8   the contract limiting rights of part-time employees. 
 20.9      Sec. 5.  Minnesota Statutes 1998, section 354.66, 
 20.10  subdivision 1b, is amended to read: 
 20.11     Subd. 1b.  [DISTRICT, DEFINED.] For purposes of this 
 20.12  section, the term "district" means a school district, the 
 20.13  community or the Minnesota state college system and the state 
 20.14  university system. 
 20.15     Sec. 6.  Minnesota Statutes 1998, section 354.66, 
 20.16  subdivision 1c, is amended to read: 
 20.17     Subd. 1c.  [PARTICIPATION.] (a) Except as indicated in 
 20.18  paragraph (b), participation in the part-time mobility program 
 20.19  must be based on a full fiscal year and the employment pattern 
 20.20  of the teacher during the most recent fiscal year.  
 20.21     (b) For a teacher in the Minnesota state colleges and 
 20.22  universities system who teaches only during the first semester 
 20.23  in an academic year and retires immediately after the first 
 20.24  semester, participation in the part-time mobility program must 
 20.25  be based on one-half of a full fiscal year and the employment 
 20.26  pattern of the teacher during the most recent one-half of the 
 20.27  most recent fiscal year. 
 20.28     Sec. 7.  Minnesota Statutes 1998, section 354.66, 
 20.29  subdivision 3, is amended to read: 
 20.30     Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] (a) For 
 20.31  purposes of this section, the term "part-time teaching position" 
 20.32  shall mean a teaching position within the district in which the 
 20.33  teacher is employed for at least 50 full days or a fractional 
 20.34  equivalent thereof as prescribed in section 354.091, and for 
 20.35  which the teacher is compensated in an amount not exceeding 80 
 20.36  percent of the compensation established by the board for a 
 21.1   full-time teacher with identical education and experience with 
 21.2   the employing unit.  
 21.3      The compensation of a teacher in the state colleges and 
 21.4   universities system may exceed the 80 percent limit if the 
 21.5   teacher does not teach just one of the three quarters in the 
 21.6   system's full school year, provided no additional services are 
 21.7   performed while the teacher participates in the program.  (b) 
 21.8   For a teacher to which subdivision 1c, paragraph (b), applies, 
 21.9   the term "part-time teaching position" shall mean a teaching 
 21.10  position within the district in which the teacher is employed 
 21.11  for at least 25 full days or a fractional equivalent thereof as 
 21.12  prescribed in section 354.091, and for which the teacher is 
 21.13  compensated in an amount not exceeding 40 percent of the 
 21.14  compensation established by the board for a full-time teacher, 
 21.15  with identical education and experience with the employing unit. 
 21.16     Sec. 8.  Minnesota Statutes 1998, section 354B.24, 
 21.17  subdivision 3, is amended to read: 
 21.18     Subd. 3.  [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In 
 21.19  addition to contributions required by subdivision 2, a plan 
 21.20  participant on an approved sabbatical leave may shall make an 
 21.21  optional additional a member contribution.  The optional 
 21.22  additional member may not exceed based on the applicable member 
 21.23  contribution rate specified in section 354B.23, subdivision 1, 
 21.24  applied to the difference between the amount of salary actually 
 21.25  received during the sabbatical leave and the amount of full-time 
 21.26  salary actually received for a comparable period of an identical 
 21.27  length to the member would have received if not on sabbatical 
 21.28  leave that occurred during the fiscal year immediately preceding 
 21.29  the sabbatical leave.  
 21.30     (b) Any optional additional member contribution must be 
 21.31  made before the last day of the fiscal year next following the 
 21.32  fiscal year in which the sabbatical leave terminates.  The 
 21.33  optional additional member contribution may not include interest 
 21.34  through payroll deduction as though the member were employed 
 21.35  full time.  
 21.36     (c) When an optional additional member contribution is 
 22.1   made, the employing unit must make the employer contribution at 
 22.2   the rate set forth specified in section 354B.23, subdivision 3, 
 22.3   on the salary that was the basis for the optional additional 
 22.4   member contribution under paragraph (a). 
 22.5      (d) An employer contribution required under this section 
 22.6   must be made no later than 60 days after the date on which the 
 22.7   optional additional member contribution was made.  
 22.8      Sec. 9.  Minnesota Statutes 1998, section 354B.25, 
 22.9   subdivision 2, is amended to read: 
 22.10     Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS 
 22.11  INVESTMENT OPTIONS.] (a) The plan administrator shall arrange 
 22.12  for the purchase of fixed annuity contracts, variable annuity 
 22.13  contracts, a combination of fixed and variable annuity 
 22.14  contracts, or custodial accounts from financial institutions 
 22.15  which have been selected by the state board of investment under 
 22.16  subdivision 3, as the investment vehicle for the retirement 
 22.17  coverage of plan participants and to provide retirement benefits 
 22.18  to plan participants.  Custodial accounts from financial 
 22.19  institutions shall include open-end investment companies 
 22.20  registered under the federal Investment Company Act of 1940, as 
 22.21  amended investment products. 
 22.22     (b) The annuity contracts or accounts investment products 
 22.23  must be purchased with contributions under section 354B.23 or 
 22.24  with money or assets otherwise provided by law by authority of 
 22.25  the board and deemed acceptable by the applicable financial 
 22.26  institution. 
 22.27     (c) In addition to contracts and accounts from financial 
 22.28  institutions, The Minnesota supplemental investment fund 
 22.29  established under section 11A.17 and administered by the state 
 22.30  board of investment is one of the investment options products 
 22.31  for the individual retirement account plan.  Direct access must 
 22.32  also be provided to lower expense and no load mutual funds, as 
 22.33  those terms are defined by the federal Securities and Exchange 
 22.34  Commission, including stock funds, bond funds, and balanced 
 22.35  funds.  Other investment products or combination of investment 
 22.36  products which may be included are: 
 23.1      (1) savings accounts at federally insured financial 
 23.2   institutions; 
 23.3      (2) life insurance contracts and fixed and variable annuity 
 23.4   contracts from companies that are subject to regulation by the 
 23.5   commerce commissioner; 
 23.6      (3) investment options from open-ended investment companies 
 23.7   registered under the federal Investment Company Act of 1940, 
 23.8   United States Code, title 15, sections 80a-1 to 80a-64; 
 23.9      (4) investment options from a firm that is a registered 
 23.10  investment advisor under the federal Investment Advisors Act of 
 23.11  1940, United States Code, title 15, sections 80b-1 to 80b-21; 
 23.12  and 
 23.13     (5) investment options of a bank as defined in United 
 23.14  States Code, title 80b-2, subsection (a), paragraph (2), or a 
 23.15  bank holding company as defined in the federal Bank Holding 
 23.16  Company Act of 1956, United States Code, title 12, section 1841, 
 23.17  subsection (a), paragraph (1). 
 23.18     Sec. 10.  Minnesota Statutes 1998, section 354B.25, 
 23.19  subdivision 3, is amended to read: 
 23.20     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] (a) 
 23.21  The financial institutions investment options provided for under 
 23.22  subdivision 2 must be selected by the state board of 
 23.23  investment.  Financial institutions include open-end investment 
 23.24  companies registered under the federal Investment Company Act of 
 23.25  1940, as amended. 
 23.26     (b) The state board of investment may select up to five 
 23.27  financial institutions to provide annuity contracts, custodial 
 23.28  accounts, or a combination, as investment options for the 
 23.29  individual retirement account plan in addition to the Minnesota 
 23.30  supplemental investment fund.  In making its selection, at a 
 23.31  minimum, the state board of investment shall consider at least 
 23.32  the following: 
 23.33     (1) the experience and ability of the financial institution 
 23.34  to provide retirement and death benefits and products that are 
 23.35  suited to meet the needs of plan participants; 
 23.36     (2) the relationship of those retirement and death benefits 
 24.1   and products provided by the financial institution to their 
 24.2   cost; and 
 24.3      (3) the financial strength and stability of the financial 
 24.4   institution; and 
 24.5      (4) the fees and expenses associated with the investment 
 24.6   products in comparison to other products of similar risk and 
 24.7   rates of return. 
 24.8      (c) (b) After selecting a financial institution, the state 
 24.9   board of investment must periodically review each financial 
 24.10  institution selected under paragraph (b) and the offered 
 24.11  products.  The periodic review must occur at least every three 
 24.12  years.  In making its review, the state board of investment may 
 24.13  retain appropriate consulting services to assist it in its 
 24.14  periodic review, establish a budget for the cost of the periodic 
 24.15  review process, and charge a proportional share of these costs 
 24.16  to the reviewed financial institution. 
 24.17     (d) (c) Contracts with financial institutions under this 
 24.18  section must be executed by the board and must be approved by 
 24.19  the state board of investment before execution. 
 24.20     (e) (d) The state board of investment shall also establish 
 24.21  policies and procedures under section 11A.04, clause (2), to 
 24.22  carry out the provisions of this subdivision. 
 24.23     Sec. 11.  Minnesota Statutes 1998, section 354B.25, 
 24.24  subdivision 5, is amended to read: 
 24.25     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 24.26  ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
 24.27  administrative expenses of the individual retirement account 
 24.28  plan must may be paid by charged to plan participants by the 
 24.29  plan sponsor in the following manner: 
 24.30     (1) from plan participants with amounts invested in the 
 24.31  Minnesota supplemental investment fund, the plan administrator 
 24.32  may charge an administrative expense assessment in an amount 
 24.33  such that annual total fees charged for plan administration 
 24.34  cannot exceed 40/100 of one percent of the assets of the 
 24.35  Minnesota supplemental investment funds; and 
 24.36     (2) from plan participants with amounts through annuity 
 25.1   contracts and custodial accounts purchased under subdivision 2, 
 25.2   paragraph (a), the plan administrator may charge an 
 25.3   administrative expense assessment of a designated amount, not to 
 25.4   exceed two percent of member and employer contributions, as 
 25.5   those contributions are made form of an annual fee, an 
 25.6   asset-based fee, a percentage of the contributions to the plan, 
 25.7   or a combination thereof. 
 25.8      (b) Any administrative expense charge that is not actually 
 25.9   needed for the administrative expenses of the individual 
 25.10  retirement account plan must be refunded to member accounts. 
 25.11     (c) The board of trustees shall report annually, before 
 25.12  October 1, to the advisory committee created in subdivision 1a 
 25.13  on administrative expenses of the plan.  The report must include 
 25.14  a detailed accounting of charges for administrative expenses 
 25.15  collected from plan participants and expenditure of the 
 25.16  administrative expense charges.  The administrative expense 
 25.17  charges collected from plan participants must be kept in a 
 25.18  separate account from any other funds under control of the board 
 25.19  of trustees and may be used only for the necessary and 
 25.20  reasonable administrative expenses of the plan. 
 25.21     Sec. 12.  [354B.31] [IRAP PART-TIME TEACHER MOBILITY 
 25.22  PROGRAM.] 
 25.23     Subdivision 1.  [PARTICIPATION REQUIREMENTS.] A faculty 
 25.24  member who has three years or more of service in the Minnesota 
 25.25  state colleges and universities system, by agreement with the 
 25.26  board or with the authorized representative of the board, may be 
 25.27  assigned to teaching service in a part-time teaching position 
 25.28  under subdivision 2. 
 25.29     Subd. 2.  [PART-TIME TEACHING POSITION; DEFINED.] For 
 25.30  purposes of this section, "part-time teaching position" means a 
 25.31  teaching position within the Minnesota state colleges and 
 25.32  universities system in which the teacher is employed for at 
 25.33  least 50 full days or a fractional equivalent as prescribed in 
 25.34  section 354.091, and for which the faculty member is compensated 
 25.35  in an amount not exceeding 80 percent of the compensation 
 25.36  established by the board for a full-time faculty member with 
 26.1   identical education and experience with the employing unit. 
 26.2      Subd. 3.  [RETIREMENT CONTRIBUTIONS.] A faculty member 
 26.3   assigned to a part-time position under this section shall 
 26.4   continue to make employee contributions to the individual 
 26.5   retirement account plan during the period of part-time 
 26.6   employment on the same basis and in the same amounts as would 
 26.7   have been paid if the person had been employed on a full-time 
 26.8   basis provided that, prior to June 30 each year the member and 
 26.9   the board make that portion of the required employer 
 26.10  contribution to the plan, in any proportion which they may agree 
 26.11  upon, that is based on the difference between the amount of 
 26.12  compensation that would have been paid if the person had been 
 26.13  employed on a full-time basis and the amount of compensation 
 26.14  actually received by the person for the services rendered in the 
 26.15  part-time assignment.  The employing unit shall make that 
 26.16  portion of the required employer contributions to the plan on 
 26.17  behalf of the person that is based on the amount of compensation 
 26.18  actually received by the person for the services rendered in the 
 26.19  part-time assignment.  The employee and employer contributions 
 26.20  shall be based upon the rates of contribution prescribed by 
 26.21  section 354B.23.  Employee contributions for part-time teaching 
 26.22  service pursuant to this section shall not continue for more 
 26.23  than ten years. 
 26.24     Subd. 4.  [OTHER MEMBERSHIP PRECLUDED.] A faculty member 
 26.25  entitled to make employee contributions for part-time teaching 
 26.26  service pursuant to this section shall not be entitled during 
 26.27  the same period of time to be a member of, accrue allowable 
 26.28  service credit in, or make employee contributions to any other 
 26.29  Minnesota public employee pension plan, except a volunteer 
 26.30  firefighters relief association governed by sections 69.771 to 
 26.31  69.776. 
 26.32     Subd. 5.  [INSURANCE.] If the board enters into an 
 26.33  agreement authorized by this section, the board shall continue 
 26.34  any insurance programs furnished or authorized to a full-time 
 26.35  teacher on an identical basis and with identical sharing of 
 26.36  costs for a part-time teacher pursuant to this section.  
 27.1   However, the requirements of this subdivision may be modified by 
 27.2   a collective bargaining agreement between the board and an 
 27.3   exclusive representative pursuant to chapter 179A.  Teachers as 
 27.4   defined in section 136F.43 employed on a less than 75 percent 
 27.5   time basis pursuant to this section are eligible for state paid 
 27.6   insurance benefits as if the teachers were employed full-time. 
 27.7      Subd. 6.  [ELIGIBILITY FOR CREDIT.] Only teachers who are 
 27.8   public employees as defined in section 179A.03, subdivision 14, 
 27.9   during the school year preceding the period of part-time 
 27.10  employment pursuant to this section qualify for employee 
 27.11  contributions to the retirement plan for part-time teaching 
 27.12  service under subdivision 4.  Notwithstanding section 179A.03, 
 27.13  subdivision 14, clauses (e) and (f), teachers who are employed 
 27.14  on a part-time basis for purposes of this section and who would 
 27.15  therefore be disqualified from the bargaining unit by one or 
 27.16  both of those provisions, continue to be in the bargaining unit 
 27.17  during the period of part-time employment under this section for 
 27.18  purposes of compensation, fringe benefits, and the grievance 
 27.19  procedure. 
 27.20     Subd. 7.  [BOARD POWER NOT RESTRICTED.] This section does 
 27.21  not limit the authority of the board to assign a teacher to a 
 27.22  part-time teaching position which does not qualify for full 
 27.23  accrual of service credit from and employee contributions to the 
 27.24  retirement fund under this section. 
 27.25     Subd. 8.  [SUBSTITUTE TEACHING.] Subdivision 4 does not 
 27.26  prohibit a teacher who qualifies for full accrual of service 
 27.27  credit from and employee contributions to the retirement fund 
 27.28  pursuant to this section in any year from being employed as a 
 27.29  substitute teacher by any school district during that year.  
 27.30  Notwithstanding sections 354.091 and 354.42, a teacher may not 
 27.31  qualify for full accrual of service credit from and employee 
 27.32  contributions to the retirement fund for other teaching service 
 27.33  rendered for any part of any year for which the teacher 
 27.34  qualifies for employee contributions to the retirement plan 
 27.35  pursuant to this section. 
 27.36     Sec. 13.  Minnesota Statutes 1998, section 354C.12, 
 28.1   subdivision 4, is amended to read: 
 28.2      Subd. 4.  [ADMINISTRATIVE EXPENSES.] (a) The board of 
 28.3   trustees of the Minnesota state colleges and universities is 
 28.4   authorized to pay the necessary and reasonable administrative 
 28.5   expenses of the supplemental retirement plan and may bill 
 28.6   participants to recover these expenses.  The administrative fees 
 28.7   or charges must may be paid by charged to participants in the 
 28.8   following manner: as an annual fee, an asset based fee, a 
 28.9   percentage of contributions to the plan, or a contribution 
 28.10  thereof. 
 28.11     (1) from participants whose contributions are invested with 
 28.12  the state board of investment, the plan administrator may 
 28.13  recover administrative expenses in the manner authorized by the 
 28.14  Minnesota state colleges and universities in an amount such that 
 28.15  annual total fees charged for plan administration cannot exceed 
 28.16  40/100 of one percent of the assets of the Minnesota 
 28.17  supplemental investment funds; or 
 28.18     (2) from participants where contributions are invested 
 28.19  through contracts purchased from any other authorized source, 
 28.20  the plan administrator may assess an amount of up to two percent 
 28.21  of the employee and employer contributions.  
 28.22     (b) Any recovered or assessed amounts that are not needed 
 28.23  for the necessary and reasonable administrative expenses of the 
 28.24  plan must be refunded to member accounts. 
 28.25     (c) The board of trustees shall report annually, before 
 28.26  October 1, to the advisory committee created in section 354B.25, 
 28.27  subdivision 1a, on administrative expenses of the plan.  The 
 28.28  report must include a detailed accounting of charges for 
 28.29  administrative expenses collected from plan participants and 
 28.30  expenditure of the administrative expense charges.  The 
 28.31  administrative expense charges collected from plan participants 
 28.32  must be kept in a separate account from any other funds under 
 28.33  control of the board of trustees and may be used only for the 
 28.34  necessary and reasonable administrative expenses of the plan. 
 28.35     Sec. 14.  [EFFECTIVE DATE.] 
 28.36     Sections 1 to 13 are effective on July 1, 1999. 
 29.1                              ARTICLE 5  
 29.2                    EMPLOYER MATCHING CONTRIBUTION  
 29.3                        TAX-SHELTERED ANNUITY  
 29.4                               CHANGES 
 29.5      Section 1.  Minnesota Statutes 1998, section 356.24, 
 29.6   subdivision 1, is amended to read: 
 29.7      Subdivision 1.  [RESTRICTION; EXCEPTIONS.] (a) It is 
 29.8   unlawful for a school district or other governmental subdivision 
 29.9   or state agency to levy taxes for, or contribute public funds to 
 29.10  a supplemental pension or deferred compensation plan that is 
 29.11  established, maintained, and operated in addition to a primary 
 29.12  pension program for the benefit of the governmental subdivision 
 29.13  employees other than: 
 29.14     (1) to a supplemental pension plan that was established, 
 29.15  maintained, and operated before May 6, 1971; 
 29.16     (2) to a plan that provides solely for group health, 
 29.17  hospital, disability, or death benefits; 
 29.18     (3) to the individual retirement account plan established 
 29.19  by chapter 354B; 
 29.20     (4) to a plan that provides solely for severance pay under 
 29.21  section 465.72 to a retiring or terminating employee; 
 29.22     (5) for employees other than personnel employed by the 
 29.23  state university board or the community college board and 
 29.24  covered by the board of trustees of the Minnesota state colleges 
 29.25  and universities supplemental retirement plan under chapter 
 29.26  354C, if provided for in a personnel policy of the public 
 29.27  employer or in the collective bargaining agreement between the 
 29.28  public employer and the exclusive representative of public 
 29.29  employees in an appropriate unit, in an amount matching employee 
 29.30  contributions on a dollar for dollar basis, but not to exceed an 
 29.31  employer contribution of $2,000 a year per employee; 
 29.32     (i) to the state of Minnesota deferred compensation plan 
 29.33  under section 352.96; or 
 29.34     (ii) in payment of the applicable portion of the premium on 
 29.35  a tax-sheltered annuity contract qualified under section 403(b) 
 29.36  of the Internal Revenue Code, if purchased from a qualified 
 30.1   insurance company, or from a qualified investment entity, as 
 30.2   defined in subdivision 1a, and if the employing unit has 
 30.3   complied with any applicable pension plan provisions of the 
 30.4   Internal Revenue Code with respect to the tax-sheltered annuity 
 30.5   program during the preceding calendar year; or 
 30.6      (6) for personnel employed by the state university board or 
 30.7   the community college board and not covered by clause (5), to 
 30.8   the supplemental retirement plan under chapter 354C, if provided 
 30.9   for in a personnel policy or in the collective bargaining 
 30.10  agreement of the public employer with the exclusive 
 30.11  representative of the covered employees in an appropriate unit, 
 30.12  in an amount matching employee contributions on a dollar for 
 30.13  dollar basis, but not to exceed an employer contribution of 
 30.14  $2,000 a year for each employee.  
 30.15     (b) Subd. 1a.  [QUALIFIED INSURANCE COMPANY; QUALIFIED 
 30.16  INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance 
 30.17  company is a company that: 
 30.18     (1) meets the definition in section 60A.02, subdivision 4; 
 30.19     (2) is licensed to engage in life insurance or annuity 
 30.20  business in the state; 
 30.21     (3) is determined by the commissioner of commerce to have a 
 30.22  rating within the top two rating categories by a recognized 
 30.23  national rating agency or organization that regularly rates 
 30.24  insurance companies; and 
 30.25     (4) is determined by the state board of investment to be 
 30.26  among the ten up to 20 applicant insurance companies with 
 30.27  competitive investment options and investment returns on annuity 
 30.28  products. 
 30.29     (b) A qualified investment entity is an open-end investment 
 30.30  company that is: 
 30.31     (1) registered under the federal Investment Company Act of 
 30.32  1940; 
 30.33     (2) licensed to do business in the state; 
 30.34     (3) determined by the commissioner of commerce to be in 
 30.35  sound financial standing; and 
 30.36     (4) determined by the state board of investment to be among 
 31.1   up to five applicant investment entities with competitive 
 31.2   investment options and investment returns. 
 31.3      (c) The state board of investment determination must be 
 31.4   made on or before January 1, 1993 July 1, 2000, and must be 
 31.5   reviewed periodically.  The state board of investment may retain 
 31.6   actuarial services to assist it in this determination and in its 
 31.7   periodic review.  The state board of investment may annually 
 31.8   establish a budget for its costs in any determination and 
 31.9   periodic review processes.  The state board of investment may 
 31.10  charge a proportional share of all costs related to the periodic 
 31.11  review to those qualified insurance companies and qualified 
 31.12  investment entities currently under contract and may charge a 
 31.13  proportional share of all costs related to soliciting and 
 31.14  evaluating bids in a determination process to each company and 
 31.15  investment entity selected by the state board of investment.  
 31.16  All contracts must be approved before execution by the state 
 31.17  board of investment.  The state board of investment shall 
 31.18  establish policies and procedures under section 11A.04, clause 
 31.19  (2), to carry out this paragraph. 
 31.20     (c) Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy 
 31.21  for unrepresented employees or a collective bargaining agreement 
 31.22  may establish limits on the number of vendors under paragraph 
 31.23  (b), clause (5), subdivision 1 that it will utilize and 
 31.24  conditions under which the vendors may contact employees both 
 31.25  during working hours and after working hours. 
 31.26     Sec. 2.  [COMMISSION STUDY.] 
 31.27     The legislative commission on pensions and retirement shall 
 31.28  study the issue of the appropriate means to provide partially 
 31.29  employer-funded tax-sheltered savings opportunities for 
 31.30  educational employees, including the establishment of single 
 31.31  comprehensive program structure for all applicable educational 
 31.32  employers and the elimination of any restriction on investment 
 31.33  vendors in providing partially employer-funded investment 
 31.34  opportunities to educational employees. 
 31.35     Sec. 3.  [EFFECTIVE DATE.] 
 31.36     Section 1 is effective May 15, 2000.  Section 2 is 
 32.1   effective on the day following final enactment. 
 32.2                              ARTICLE 6  
 32.3                   MINNEAPOLIS EMPLOYEES RETIREMENT  
 32.4                             PLAN CHANGES  
 32.5      Section 1.  Minnesota Statutes 1998, section 422A.06, 
 32.6   subdivision 3, is amended to read: 
 32.7      Subd. 3.  [DEPOSIT ACCUMULATION FUND.] The deposit 
 32.8   accumulation fund consists of the assets held in the fund, 
 32.9   increased by including amounts contributed by or for employees, 
 32.10  amounts contributed by the city, amounts contributed by 
 32.11  municipal activities supported in whole or in part by revenues 
 32.12  other than taxes and amounts contributed by any public 
 32.13  corporation, amounts paid by the state, and by income from 
 32.14  investments.  There must be paid from the fund the amounts 
 32.15  required to be transferred to the retirement benefit fund, or 
 32.16  the disability benefit fund, refunds of contributions, death 
 32.17  benefits payable on death before retirement that are not payable 
 32.18  from the survivors' benefit fund including the 
 32.19  death-while-active refund specified in section 422A.22, 
 32.20  subdivision 4, postretirement increases in retirement allowances 
 32.21  granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 
 32.22  and expenses of the administration of the retirement fund which 
 32.23  were not charged by the retirement board against the income of 
 32.24  the retirement benefit fund from investments as the cost of 
 32.25  handling the investments of the retirement benefit fund. 
 32.26     Sec. 2.  Minnesota Statutes 1998, section 422A.06, 
 32.27  subdivision 6, is amended to read: 
 32.28     Subd. 6.  [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 
 32.29  fund shall consist consists of the amount held for survivor 
 32.30  benefits, increased by contributions for survivor benefits made 
 32.31  by and for employees, including contributions made by the 
 32.32  employer, by any municipal activity supported in whole or in 
 32.33  part by revenue other than taxes or by any public corporation.  
 32.34  A proportionate share of income from investments shall must be 
 32.35  allocated to this fund.  There shall be paid from such fund the 
 32.36  Survivor benefits specified in section 422A.23 except that the 
 33.1   refund of net accumulated deductions from the salary of a 
 33.2   contributing member shall upon death in service be paid from the 
 33.3   deposit accumulation fund must be paid from this fund. 
 33.4      Sec. 3.  Minnesota Statutes 1998, section 422A.101, 
 33.5   subdivision 4, is amended to read: 
 33.6      Subd. 4.  [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 
 33.7   INSTANCES.] (a) If a participating employing unit, other than 
 33.8   the state, has a negative asset balance in the deposit 
 33.9   accumulation fund, the executive director shall bill the 
 33.10  employing unit for the amount of the deficiency.  Any amount 
 33.11  billed will include six percent interest, compounded annually, 
 33.12  for any year or portion of a year from the billing date until 
 33.13  the date of payment. 
 33.14     (b) If assets in the deposit accumulation fund are 
 33.15  insufficient to make a transfer to the retirement benefit fund, 
 33.16  the city of Minneapolis shall pay the amount of that 
 33.17  insufficiency to the retirement benefit fund within three days 
 33.18  of certification of the insufficiency by the executive director 
 33.19  of the fund.  The city of Minneapolis may bill any other 
 33.20  participating employing unit other than the state for its 
 33.21  proportion of the amount paid.  Any amount billed by the city 
 33.22  under this paragraph will include interest as specified in 
 33.23  paragraph (a).  
 33.24     Sec. 4.  Minnesota Statutes 1998, section 422A.18, 
 33.25  subdivision 2, is amended to read: 
 33.26     Subd. 2.  [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 
 33.27  disability allowance under this section shall be the amount of 
 33.28  service allowance to which the employee would be entitled under 
 33.29  section 422A.15, notwithstanding the age requirements expressed 
 33.30  therein; or the lesser of the following amounts:  50 percent of 
 33.31  the final average compensation, or an amount equal to two 
 33.32  percent of final average compensation for each year of allowable 
 33.33  service for the first ten years, and thereafter 2.5 percent of 
 33.34  final average compensation per year of allowable service, 
 33.35  including in the latter assumed service between the date the 
 33.36  disability occurred and the 60th birthday of the employee. 
 34.1      If the amount of annuity (b) Annuities payable from the 
 34.2   Minnesota postretirement investment fund to any class of 
 34.3   annuitants is adjusted pursuant to section 11A.18, the amount of 
 34.4   benefits payable from the disability benefit fund for that class 
 34.5   of annuitants under this section shall also be adjusted at the 
 34.6   same time and rate as retirement annuities in the retirement 
 34.7   benefit fund. 
 34.8      Sec. 5.  Minnesota Statutes 1998, section 422A.22, 
 34.9   subdivision 4, is amended to read: 
 34.10     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
 34.11  of a contributing an active member while still in the service of 
 34.12  the city, and before reaching the compulsory age of 
 34.13  retirement prior to termination of service, there shall be paid 
 34.14  to such person the beneficiary or persons as beneficiaries 
 34.15  designated by the member shall have nominated by written 
 34.16  designation on a form specified by the executive director and 
 34.17  filed with the retirement board, in such form as the retirement 
 34.18  board shall require, the net accumulated amount of employee 
 34.19  deductions from salary, pay, or compensation, including interest 
 34.20  , to the member's credit on date of compounded annually to the 
 34.21  date of the member's death.  The amount must not include any 
 34.22  contributions made by the employee or on the employee's behalf, 
 34.23  or any interest or investment earnings on those contributions, 
 34.24  which were allocated to the survivor benefit fund under section 
 34.25  422A.06, subdivision 6. 
 34.26     (b) If the employee fails to make a designation, or if 
 34.27  the person or persons beneficiary or beneficiaries designated by 
 34.28  such the employee predeceases such the employee, the net 
 34.29  accumulated amount of deductions from salary, pay, or 
 34.30  compensation including interest, to the credit of such employee 
 34.31  on date of death shall benefit specified in paragraph (a) must 
 34.32  be paid to such the deceased employee's estate. 
 34.33     (c) A benefit payable under this subdivision is in addition 
 34.34  to any applicable survivor benefit under section 422A.23. 
 34.35     Sec. 6.  Minnesota Statutes 1998, section 422A.22, 
 34.36  subdivision 5, is amended to read: 
 35.1      Subd. 5.  [REPAYMENT OF REFUND.] Upon reinstatement 
 35.2   reemployment of a former covered employee to the service, in 
 35.3   employment covered by the Minneapolis employees retirement fund, 
 35.4   service credit for such past service or for any part thereof 
 35.5   shall which was forfeited by taking a refund must be granted 
 35.6   reinstated only upon repayment of the amount of the separation 
 35.7   refund, with interest, from the time of separation payment of 
 35.8   the refund until the date repaid.  
 35.9      Sec. 7.  Minnesota Statutes 1998, section 422A.23, is 
 35.10  amended to read: 
 35.11     422A.23 [SURVIVOR BENEFITS.] 
 35.12     Subdivision 1.  [PAYMENT OF CITY INSTALLMENT ACCUMULATED 
 35.13  AMOUNT.] (a) If a contributing an active or deferred member dies 
 35.14  after having been in the service with ten or more years of 
 35.15  service credit, and before actual retirement, as determined by 
 35.16  the retirement board, the present worth of the city's annual 
 35.17  installments of $60 then to the credit of the contributing 
 35.18  member, shall be paid to a beneficiary designated by such 
 35.19  contributing member in such form as the retirement board shall 
 35.20  require, who shall be the surviving spouse, or surviving child, 
 35.21  or children of such member or, if there be no surviving spouse 
 35.22  or surviving child or children, then to a person actually 
 35.23  dependent on and receiving principal support from such member or 
 35.24  surviving mother or father, or grandchildren, or surviving 
 35.25  brother or sister, or surviving children of the deceased brother 
 35.26  or sister of such member except as noted in paragraph (d), the 
 35.27  individual specified in paragraph (b) is eligible to receive the 
 35.28  benefit specified in paragraph (c). 
 35.29     (b) An individual eligible for the benefit specified in 
 35.30  paragraph (c) is a beneficiary designated by the member on a 
 35.31  form specified by the executive director.  If the beneficiary 
 35.32  designated by the member is not one of the class of persons 
 35.33  named in the preceding sentence, such benefit from the 
 35.34  accumulation of city deposits shall be paid in the following 
 35.35  order:  (1) to the surviving spouse, the whole thereof; (2) if 
 35.36  there be no surviving spouse, to the surviving children, share 
 36.1   and share alike; (3) if there be no surviving spouse or child or 
 36.2   children, to the dependent or dependents as those terms are 
 36.3   herein defined, of the member, share and share alike; (4) if 
 36.4   there be no surviving spouse, child or children, or dependents, 
 36.5   to the surviving mother and father, share and share alike; (5) 
 36.6   if there be no surviving mother and father, to the 
 36.7   grandchildren, in equal shares; if there be no grandchildren, to 
 36.8   the surviving brothers and sisters of the member, in equal 
 36.9   shares; (6) if there be no surviving brothers and sisters, to 
 36.10  the surviving children of the deceased brothers and sisters of 
 36.11  the member, in equal shares; or (7) if there is none of the 
 36.12  foregoing persons who survives the member, the accumulation of 
 36.13  the city deposits shall be applied to the funeral expenses of 
 36.14  the member failed to designate a beneficiary, or if the 
 36.15  beneficiary or beneficiaries designated by the employee 
 36.16  predeceases the employee, the benefit in paragraph (c) is 
 36.17  payable to the deceased employee's estate. 
 36.18     (c) The benefit is a lump-sum payment of the present value 
 36.19  of the city's or other contributing employer's annual 
 36.20  installments of $60 to the credit of the member. 
 36.21     (d) No benefit is payable under this subdivision if a 
 36.22  monthly survivor benefit is paid under another subdivision of 
 36.23  this section. 
 36.24     Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 
 36.25  active member dies prior to termination of service with at least 
 36.26  18 months but less than 20 years of service credit, the 
 36.27  surviving spouse or surviving child or children is eligible to 
 36.28  receive the survivor benefit specified in paragraph (b) or (c), 
 36.29  as applicable.  Payment of a benefit for any surviving child 
 36.30  under the age of 18 years shall be made to the surviving parent, 
 36.31  or if there be none, to the legal guardian of the surviving 
 36.32  child.  For purposes of this subdivision, a surviving child is 
 36.33  an unmarried child of the deceased member under the age of 18, 
 36.34  or under the age of 22 if a full-time student at an accredited 
 36.35  school, college, or university. 
 36.36     (b) If the surviving spouse or surviving child benefit 
 37.1   commenced before July 1, 1983, the surviving spouse benefit is 
 37.2   increased from $500 per month to $750 per month and the 
 37.3   surviving child benefit is $225 per month, beginning with the 
 37.4   first monthly payment payable after May 28, 1998.  The sum of 
 37.5   surviving spouse and surviving child benefits payable under this 
 37.6   paragraph shall not exceed $900 per month.  The increased cost 
 37.7   resulting from the benefit increases under this paragraph must 
 37.8   be allocated to each employing unit listed in section 422A.101, 
 37.9   subdivisions 1a, 2, and 2a, on the basis of the additional 
 37.10  accrued liability resulting from increased benefits paid to the 
 37.11  survivors of employees from that unit. 
 37.12     (c) If the surviving spouse or surviving child benefit 
 37.13  commences after June 30, 1983, the surviving spouse benefit is 
 37.14  30 percent of the member's average salary in effect over the 
 37.15  last six months of allowable service preceding the month in 
 37.16  which death occurs.  The surviving child benefit is ten percent 
 37.17  of the member's average salary in effect over the last six 
 37.18  months of allowable service preceding the month in which death 
 37.19  occurs.  The sum of surviving spouse and surviving child 
 37.20  benefits payable under this paragraph shall not exceed 50 
 37.21  percent of the member's average salary in effect over the last 
 37.22  six months of allowable service. 
 37.23     (d) Any surviving child benefit or surviving spouse benefit 
 37.24  computed under paragraph (c) and in effect for the month 
 37.25  immediately prior to May 28, 1998, is increased by 15 percent as 
 37.26  of the first payment on or after May 28, 1998. 
 37.27     (e) Surviving child benefits under this subdivision 
 37.28  terminate when the child no longer meets the definition of 
 37.29  surviving child. 
 37.30     Subd. 5.  [ADMINISTRATION.] Benefits herein provided shall 
 37.31  in this section following the death of an active employee or 
 37.32  deferred member, as applicable, commence with on the first day 
 37.33  of the month following the month in which the active employee or 
 37.34  deferred member dies and shall end with the last day of the 
 37.35  month preceding the month in which eligibility 
 37.36  ceases.  Eligibility for the benefits herein provided shall be 
 38.1   determined by the retirement board and its determination shall 
 38.2   be final.  Each beneficiary or parent or guardian of a dependent 
 38.3   child or legal representative shall furnish such Information as 
 38.4   the board may deem deemed necessary by the executive director to 
 38.5   determine eligibility for the benefits provided by this section, 
 38.6   and must be submitted.  Failure to furnish any required 
 38.7   information shall be sufficient grounds for the denial or 
 38.8   discontinuance of benefits.  A determination made by the 
 38.9   executive director may be appealed to the retirement board, 
 38.10  whose determination is final.  If the surviving spouse of the 
 38.11  deceased active employee or deferred member becomes entitled to 
 38.12  a retirement allowance by reason of membership in this fund, the 
 38.13  surviving spouse shall is authorized to receive the retirement 
 38.14  allowance in addition to the all applicable surviving spouse's 
 38.15  benefit spouse benefits to which the surviving spouse is 
 38.16  entitled as specified in this section and section 422A.22, 
 38.17  subdivision 4, if applicable.  The cost of all monthly 
 38.18  survivor's benefits provided in this section shall be is an 
 38.19  obligation of the members and of the city, any of its boards, 
 38.20  departments, commissions or public corporations or other 
 38.21  applicable employing units. 
 38.22     Subd. 6.  [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 
 38.23  retirement board shall create a reserve account for survivor's 
 38.24  benefits from which shall be paid on an actuarial basis all 
 38.25  survivor benefits due and payable.  At the end of each fiscal 
 38.26  year, as part of the annual actuarial valuation of the fund 
 38.27  prepared by the commission-retained actuary, a determination of 
 38.28  the normal cost of the benefits payable from the survivor's 
 38.29  benefit account shall be made and the board shall reduce or 
 38.30  increase the employee contribution rate of one-fourth of one 
 38.31  percent if and when it is determined based on the annual 
 38.32  actuarial valuation that the member contribution rate is in 
 38.33  excess of or is less than the amount necessary to pay for 50 
 38.34  percent of the calculated normal cost of the survivor benefits 
 38.35  provided in this section. 
 38.36     Subd. 7.  [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 
 39.1   COVERAGE.] (a) If the contributing active or deferred member 
 39.2   dies after having been in the service of the city 20 or more 
 39.3   years, and before the effective date of retirement, as 
 39.4   determined by the retirement board, the board shall pay with 20 
 39.5   or more years of service credit, a beneficiary, as defined in 
 39.6   paragraph (b), is eligible to receive the benefit specified in 
 39.7   paragraph (c). 
 39.8      (b) The beneficiary eligible for a benefit under paragraph 
 39.9   (c) is the surviving spouse of the deceased employee.  If there 
 39.10  is no surviving spouse, the beneficiary may be a dependent 
 39.11  surviving child of the member or dependent parent designated by 
 39.12  the employee on a form prescribed by the executive director. 
 39.13     (c) The benefit payable to the beneficiary designated in 
 39.14  paragraph (b) is a monthly allowance for life to the designated 
 39.15  beneficiary of the employee.  The monthly allowance herein 
 39.16  provided for shall be is the actuarial equivalent of a single 
 39.17  life service allowance specified in section 422A.15, subdivision 
 39.18  1, which would have been payable to the employee on the date of 
 39.19  death, notwithstanding the age requirement stated in section 
 39.20  422A.15, subdivision 1.  For purposes of this section, the 
 39.21  amount of any excess contributions or voluntary additions by the 
 39.22  member shall not be included in the calculations in determining 
 39.23  the monthly allowance.  
 39.24     The survivor allowance under this subdivision shall be 
 39.25  computed and determined under a procedure specified by the 
 39.26  commission-retained actuary utilizing the appropriate mortality 
 39.27  table established by the board of trustees based on the 
 39.28  experience of the fund as recommended by the commission-retained 
 39.29  actuary and using the applicable postretirement interest rate 
 39.30  assumption specified in section 356.215, subdivision 4d. 
 39.31     (d) For benefits payable under this subdivision following 
 39.32  the death of a deferred member, the benefit must be calculated 
 39.33  as of the date of termination from service and increased by five 
 39.34  percent per year until January 1, 1981, and by three percent per 
 39.35  year thereafter compounded annually. 
 39.36     Subd. 8.  [SURVIVING CHILD; DEPENDENT DEFINITION.] The 
 40.1   beneficiary designated by the employee shall be the surviving 
 40.2   spouse of such employee.  If there is no surviving spouse, the 
 40.3   designated beneficiary may be a dependent surviving child or 
 40.4   dependent parent of such employee as dependency is defined in 
 40.5   sections 422A.01 to 422A.25.  If the beneficiary designated by 
 40.6   the employee is not of the class of persons provided for in this 
 40.7   subdivision, or if the designated beneficiary predeceases the 
 40.8   employee, a refund shall be made as provided for in section 
 40.9   422A.22, in lieu of a life income.  If the employee does not 
 40.10  elect to designate a beneficiary to receive a life income as 
 40.11  herein provided, the designated beneficiary, if of the class of 
 40.12  persons set forth in this subdivision, may elect within 60 days 
 40.13  after the date of death of the employee to receive a life income 
 40.14  computed and determined as though the employee had retired on 
 40.15  the date of death under the option 2 plan of retirement, as 
 40.16  provided for in sections 422A.01 to 422A.25, and had designated 
 40.17  such person as beneficiary.  For purposes of subdivision 2, a 
 40.18  surviving child is an unmarried child of the deceased member 
 40.19  under the age of 18, or under the age of 22 if a full-time 
 40.20  student at an accredited school, college, or university.  For 
 40.21  purposes of subdivision 7, a dependent surviving child or 
 40.22  dependent parent must meet the definition of dependent, as 
 40.23  defined in section 422A.01, subdivision 12, at the time of the 
 40.24  active or deferred member's death. 
 40.25     Subd. 9.  [LUMP-SUM DEATH BENEFIT.] If any employee who has 
 40.26  contributed to the survivor's benefit account as herein provided 
 40.27  dies before the effective date of retirement on a service or 
 40.28  disability pension and is not survived by a beneficiary eligible 
 40.29  to receive a monthly allowance as herein provided If no monthly 
 40.30  survivor benefit is payable under subdivision 2 or 7, there 
 40.31  shall be paid from the survivor's survivor benefit account to a 
 40.32  beneficiary designated by the employee on a form prescribed by 
 40.33  the executive director a lump-sum death benefit of $750 if death 
 40.34  occurs prior to the end of the employee's tenth year of 
 40.35  service credit or of $1500 if the employee had prior to death 
 40.36  completed ten or more calendar years of service credit.  Upon 
 41.1   reinstatement of a former employee to the service, credit for 
 41.2   such past service or for any part thereof shall be granted only 
 41.3   upon repayment of the amount of the separation refund, with 
 41.4   interest, from the time of separation Any benefit under this 
 41.5   subdivision may be paid in addition to a benefit payable under 
 41.6   subdivision 1. 
 41.7      Subd. 10.  [BENEFIT INCREASES.] If the amount of annuity 
 41.8   payable from the Minnesota postretirement investment fund to any 
 41.9   class of annuitants is adjusted pursuant to section 11A.18, the 
 41.10  amount of benefits payable from the survivor's benefit fund 
 41.11  pursuant to subdivisions 7 or 8 for that class of annuitants 
 41.12  shall also be adjusted at the same time and rate.  Annuities 
 41.13  payable under this section shall be adjusted at the same time 
 41.14  and rate as retirement annuities in the retirement benefit fund. 
 41.15     Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
 41.16  survivor benefit is must not suspended, be discontinued or 
 41.17  terminated, or otherwise stopped due to a surviving spouse's 
 41.18  remarriage. 
 41.19     Subd. 12.  [DETERMINATION OF ANNUITY.] The survivor 
 41.20  annuities payable under this section shall be computed and 
 41.21  determined under a procedure specified by the actuary retained 
 41.22  by the legislative commission on pensions and retirement 
 41.23  utilizing the appropriate mortality table based on the 
 41.24  experience of the fund as recommended by that actuary and 
 41.25  approved by the legislative commission on pensions and 
 41.26  retirement and using the applicable postretirement interest rate 
 41.27  assumption specified in section 356.215, subdivision 4d. 
 41.28     Sec. 8.  [422A.231] [COST ALLOCATION.] 
 41.29     Notwithstanding any law to the contrary, all current and 
 41.30  future contribution requirements due to this act are payable by 
 41.31  the participating contributing employing units other than the 
 41.32  state. 
 41.33     Sec. 9.  [REPEALER.] 
 41.34     Minnesota Statutes 1998, section 422A.16, subdivision 3a, 
 41.35  is repealed. 
 41.36     Sec. 10.  [EFFECTIVE DATE.] 
 42.1      Sections 1 to 9 are effective upon approval by the 
 42.2   Minneapolis city council and compliance with Minnesota Statutes, 
 42.3   section 645.021. 
 42.4                              ARTICLE 7 
 42.5                 KANDIYOHI COUNTY AND LITCHFIELD CITY 
 42.6                    VOLUNTEER RESCUE SQUAD RELIEF 
 42.7                      ASSOCIATION AUTHORIZATION 
 42.8      Section 1.  Minnesota Statutes 1998, section 356A.01, 
 42.9   subdivision 7, is amended to read: 
 42.10     Subd. 7.  [COVERED GOVERNMENTAL ENTITY.] "Covered 
 42.11  governmental entity" means a governmental subdivision or other 
 42.12  governmental entity that employs persons who are plan 
 42.13  participants in a covered pension plan and who are eligible for 
 42.14  that participation because of their employment.  Covered 
 42.15  governmental entity also means a governmental subdivision or 
 42.16  other governmental entity that establishes a relief association 
 42.17  under chapter 425B. 
 42.18     Sec. 2.  Minnesota Statutes 1998, section 356A.01, 
 42.19  subdivision 8, is amended to read: 
 42.20     Subd. 8.  [COVERED PENSION PLAN.] "Covered pension plan" 
 42.21  means a pension plan or fund listed in section 356.20, 
 42.22  subdivision 2, or 356.30, subdivision 3, or the special fund of 
 42.23  any relief association established under chapter 425B. 
 42.24     Sec. 3.  [425B.01] [DEFINITIONS.] 
 42.25     Subdivision 1.  [TERMS DEFINED.] As used in this chapter, 
 42.26  the terms defined in this section have the meanings given. 
 42.27     Subd. 2.  [RESCUE SQUAD.] "Rescue squad" includes a 
 42.28  municipal or county rescue squad and independent nonprofit 
 42.29  rescue squad corporation that performs emergency management 
 42.30  services (EMS).  Rescue squad does not include any rescue squad 
 42.31  that is affiliated with a fire department or ambulance service 
 42.32  and whose members are eligible for membership in that fire 
 42.33  department's or ambulance's relief association or comparable 
 42.34  pension plan. 
 42.35     Subd. 3.  [MUNICIPALITY.] "Municipality" means the city of 
 42.36  Litchfield in Meeker county. 
 43.1      Subd. 4.  [COUNTY.] "County" means Kandiyohi county. 
 43.2      Sec. 4.  [425B.02] [VOLUNTEER RESCUE SQUAD RELIEF 
 43.3   ASSOCIATION; AUTHORIZATION.] 
 43.4      Notwithstanding any provision of section 356.24 or 356.25 
 43.5   to the contrary, the governing body of a municipality or county 
 43.6   is authorized to establish a rescue squad relief association as 
 43.7   provided in this chapter. 
 43.8      Sec. 5.  [425B.03] [RELIEF ASSOCIATION SELF-GOVERNING.] 
 43.9      Subdivision 1.  [INCORPORATION.] (a) The relief association 
 43.10  must be incorporated under chapter 317A. 
 43.11     (b) The incorporators of the relief association are the 
 43.12  members of the governing body of the municipality or county. 
 43.13     Subd. 2.  [BOARD OF TRUSTEES; COMPOSITION.] (a) The relief 
 43.14  association must be governed by a board of trustees. 
 43.15     (b) The relief association board of trustees consists of 
 43.16  nine persons.  Six members of the board of trustees must be 
 43.17  elected by and from the membership of the relief association.  
 43.18  The remaining members of the board of trustees must be appointed 
 43.19  by the governing body of the municipality or county. 
 43.20     (c) The relief association must have three officers, which 
 43.21  are a president, secretary, and treasurer.  The officers must be 
 43.22  elected by and from the membership of the relief association.  
 43.23     (d) Initially, the term of office of the elected members of 
 43.24  the board of trustees is one year for board members designated 
 43.25  "A" and "B," two years for board members designated "C" and "D," 
 43.26  and three years for board members designated "E" and "F."  
 43.27  Thereafter, the term of office of all elected members of the 
 43.28  board of trustees is three years.  The term of office of ex 
 43.29  officio members of the board of trustees is the term of office 
 43.30  of the person that gave rise to board membership.  The term of 
 43.31  office of an officer of the relief association is two years or 
 43.32  the balance of the board member's term of office as a board 
 43.33  member, whichever is shorter. 
 43.34     (e) The board of trustees must administer the affairs of 
 43.35  the relief association consistent with this chapter and the 
 43.36  applicable provisions of chapters 317A and 356A. 
 44.1      Subd. 3.  [SPECIAL AND GENERAL FUNDS.] (a) The relief 
 44.2   association shall establish and maintain a special fund and may 
 44.3   establish and maintain a general fund. 
 44.4      (b) The special fund must be credited with all money 
 44.5   received by the relief association from the municipality or 
 44.6   county or any money received from any other source for the 
 44.7   purpose of providing retirement benefits for rescue squad 
 44.8   members, any money or property that is donated, given, granted, 
 44.9   or devised by any person for the benefit of the rescue squad 
 44.10  relief association special fund, and any investment income 
 44.11  earned on the invested assets of the relief association. 
 44.12     (c) The treasurer of the relief association is the 
 44.13  custodian of the assets of the special fund and must be the 
 44.14  recipient, on behalf of the special fund, of all revenues 
 44.15  payable to the special fund.  The treasurer shall maintain 
 44.16  adequate records documenting any transaction involving the 
 44.17  assets or the revenues of the special fund.  The record of the 
 44.18  treasurer is public record and must be open for inspection by 
 44.19  any member of the relief association, any officer or employee of 
 44.20  the state of Minnesota or of the municipality or county, or any 
 44.21  member of the public, at reasonable times and places. 
 44.22     (d) Disbursements from the special fund may be made only 
 44.23  for one of the following purposes: 
 44.24     (1) for the payment of service pensions to retired members 
 44.25  of the relief association; 
 44.26     (2) for the payment of disability pensions to disabled 
 44.27  members of the relief association; 
 44.28     (3) for the payment of survivor benefits to the surviving 
 44.29  spouse, surviving dependent children, or estate of a deceased 
 44.30  member of the relief association; and 
 44.31     (4) for the payment of administrative expenses of the 
 44.32  relief association if the expenses are of the kind and type 
 44.33  authorized by section 69.80. 
 44.34     (e) All pension and benefit payments must be authorized by 
 44.35  and paid in accordance with the applicable law, the articles of 
 44.36  incorporation, and the bylaws of the relief association. 
 45.1      (f) The assets of the special fund must be invested only in 
 45.2   securities that comply with or are authorized by sections 
 45.3   356A.04 and 356A.06. 
 45.4      (g) The general fund, if established, must be operated as 
 45.5   provided in the articles of incorporation or bylaws of the 
 45.6   relief association. 
 45.7      Sec. 6.  [425B.04] [MEMBERSHIP; ELIGIBILITY.] 
 45.8      Subdivision 1.  [MEMBERSHIP.] The municipality or county, 
 45.9   by resolution, must specify the personnel providing rescue squad 
 45.10  service who may be members of the relief association. 
 45.11     Subd. 2.  [ELIGIBILITY.] The bylaws of the relief 
 45.12  association must specify any additional eligibility requirements 
 45.13  for persons specified under subdivision 1 for relief association 
 45.14  membership. 
 45.15     Sec. 7.  [425B.05] [BENEFITS.] 
 45.16     A relief association must either be a defined contribution 
 45.17  plan or a flexible service plan, as established by the 
 45.18  municipality or county. 
 45.19     Sec. 8.  [425B.06] [DEFINED CONTRIBUTION PLAN OPTION.] 
 45.20     Subdivision 1.  [INDIVIDUAL ACCOUNTS.] (a) The relief 
 45.21  association must establish individual accounts within the 
 45.22  special fund of the relief association for each relief 
 45.23  association member. 
 45.24     (b) To each individual account there must be credited an 
 45.25  equal share of any contribution made by the governing body of 
 45.26  the municipality or county, any gift, bequeath, devise or other 
 45.27  transfer to the special fund, and any amount forfeited by a 
 45.28  former member who terminates active service with the rescue 
 45.29  squad before reaching the vesting requirements set forth in 
 45.30  subdivision 2, paragraph (b), and who does not return within 
 45.31  five years of the date of termination.  Any investment income of 
 45.32  the special fund must be credited to the individual accounts in 
 45.33  proportion to the balances in those accounts. 
 45.34     (c) Amounts to be credited to individual accounts may be 
 45.35  allocated only after the deduction of any reasonable and 
 45.36  necessary administrative expenses payable. 
 46.1      Subd. 2.  [SERVICE PENSION.] (a) The service pension amount 
 46.2   is the balance in the member's individual account. 
 46.3      (b) The service pension is not payable until the member 
 46.4   terminates active service with the rescue squad, has credit for 
 46.5   at least five years of service as an active member of the rescue 
 46.6   squad and five years as an active member of the relief 
 46.7   association, and has attained the age of at least 50 years. 
 46.8      (c) The retiring member must apply for the service pension. 
 46.9      Subd. 3.  [DISABILITY PENSION.] (a) The disability pension 
 46.10  amount is the balance in the member's individual account. 
 46.11     (b) The disability pension is not payable until the member 
 46.12  terminates active service with the rescue squad by virtue of any 
 46.13  injury or illness that renders the member incapable of 
 46.14  performing rescue squad duties.  
 46.15     Subd. 4.  [DEATH BENEFIT.] The death benefit amount is the 
 46.16  balance in the deceased member's individual account. 
 46.17     Subd. 5.  [PAYMENT.] All pensions and benefits under this 
 46.18  section are payable in a single lump-sum payment. 
 46.19     Sec. 9.  [425B.07] [FLEXIBLE SERVICE PLAN OPTION.] 
 46.20     A municipality or county may develop and implement its own 
 46.21  flexible service plan for payment of pensions to eligible 
 46.22  members out of the special fund.  The plan, as enacted by the 
 46.23  municipality or county as an ordinance, in the discretion of the 
 46.24  municipality or county, must include provisions for vesting 
 46.25  requirements; contribution levels; payment amounts; disability 
 46.26  pension provisions; death benefits; payment terms; the method of 
 46.27  payment, including lump sum, monthly, or annually; and such 
 46.28  other terms as the municipality or county deems necessary. 
 46.29     Sec. 10.  [425B.08] [FUNDING.] 
 46.30     (a) A municipality or county, annually, must include in its 
 46.31  budget a contribution to the relief association. 
 46.32     (b) The contribution amount must be transmitted to the 
 46.33  relief association treasurer annually on the payment date 
 46.34  specified by the governing body of the municipality or county. 
 46.35     Sec. 11.  [425B.09] [AUDIT.] 
 46.36     The rescue squad relief association must be audited 
 47.1   annually by the state auditor. 
 47.2      Sec. 12.  [425B.10] [SPECIAL BENEFITS FOR EXISTING 
 47.3   MEMBERS.] 
 47.4      A municipality or county may, under such terms and 
 47.5   conditions as it approves, provide pensions under either the 
 47.6   defined contribution plan option or flexible service plan option 
 47.7   to existing members of the rescue squad as of the date the 
 47.8   relief association is incorporated through waivers of length of 
 47.9   service vesting requirements.  The terms and conditions must be 
 47.10  included in the bylaws of the relief association at the time of 
 47.11  incorporation. 
 47.12     Sec. 13.  [425B.11] [NONAPPLICABILITY OF CHAPTERS 144C AND 
 47.13  424A.] 
 47.14     No member of the rescue squad relief association may 
 47.15  participate in or be eligible to receive any benefit or award 
 47.16  amount from the ambulance service personnel longevity award and 
 47.17  incentive program established under chapter 144C, or from any 
 47.18  volunteer firefighter relief association under chapter 424A, by 
 47.19  virtue of service rendered on behalf of the rescue squad. 
 47.20     Sec. 14.  [EFFECTIVE DATE.] 
 47.21     Sections 1 to 13 are effective on the day following final 
 47.22  enactment.