1.1                          A bill for an act 
  1.2             relating to retirement; general and statewide pension 
  1.3             changes; authorizing certain service credit purchases; 
  1.4             mandating certain school district service credit 
  1.5             purchase payments including supplemental needs trusts 
  1.6             as recipients of optional annuity forms; eliminating 
  1.7             the service credit maximum for monthly benefit 
  1.8             volunteer fire relief associations; mandating school 
  1.9             district repayment of certain omitted deduction 
  1.10            interest charges; expanding the membership of the 
  1.11            state correctional employees retirement plan to 
  1.12            include certain Minnesota extended treatment options 
  1.13            program employees; downsizing the early retirement 
  1.14            reduction rates for various public safety plans; 
  1.15            grandparenting public employee police and fire plan 
  1.16            coverage for certain Rice county correctional 
  1.17            employees; requiring Rice county to repay certain 
  1.18            police state aid amounts; providing employer penalties 
  1.19            for pension plan membership certification failures or 
  1.20            errors; providing special retirement coverage for 
  1.21            certain state fire marshal employees; authorizing the 
  1.22            purchase of credit for certain periods of prior 
  1.23            military service, out-of-state public teaching 
  1.24            service, maternity leaves, maternity 
  1.25            breaks-in-employment, parochial or private school 
  1.26            teaching service, Peace Corps service or VISTA 
  1.27            service; clarifying various Minneapolis employees 
  1.28            retirement plan survivor benefit provisions; 
  1.29            increasing the number of vendors for certain 
  1.30            tax-sheltered annuities for educational employees; 
  1.31            modifying various benefit provisions for certain 
  1.32            Minnesota state colleges and universities employees; 
  1.33            amending Minnesota Statutes 1998, sections 43A.27, 
  1.34            subdivision 3; 136F.48; 352.90; 352.91, by adding a 
  1.35            subdivision; 352.93, subdivision 2a; 352B.08, 
  1.36            subdivision 2a; 353.64, subdivision 1; 353.651, 
  1.37            subdivision 4; 353A.083, by adding a subdivision; 
  1.38            354.445; 354.66, subdivisions 1b, 1c, and 3; 354B.24, 
  1.39            subdivision 3; 354B.25, subdivisions 2, 3, and 5; 
  1.40            354C.12, subdivision 4; 356.19, by adding a 
  1.41            subdivision; 356.24, subdivision 1; 356.55, 
  1.42            subdivisions 1 and 6; 422A.06, subdivisions 3 and 6; 
  1.43            422A.101, subdivision 4; 422A.18, subdivision 2; 
  1.44            422A.22, subdivisions 4 and 5; and 422A.23; proposing 
  1.45            coding for new law in Minnesota Statutes, chapters 
  1.46            352; 353; 354; 354A; 354B; 356; and 422A; repealing 
  2.1             Minnesota Statutes 1998, sections 422A.16, subdivision 
  2.2             3a; and 424A.02, subdivision 5. 
  2.3   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.4                              ARTICLE 1
  2.5              INDIVIDUAL AND SMALL GROUP PENSION CHANGES
  2.6      Section 1.  [PURCHASE OF SERVICE CREDIT; PRIOR SAINT PAUL 
  2.7   BUREAU OF HEALTH EMPLOYEE.] 
  2.8      (a) An eligible person, as described in paragraph (b), is 
  2.9   entitled to purchase coordinated service credit in the public 
  2.10  employees retirement association general plan for the period of 
  2.11  employment described in paragraph (b), clause (2), by making 
  2.12  payment as specified in paragraph (c). 
  2.13     (b) An eligible person is a person who: 
  2.14     (1) was born on May 22, 1932; 
  2.15     (2) was employed by the St. Paul Bureau of Health from 
  2.16  March 17, 1958, to September 21, 1962, was covered by the St. 
  2.17  Paul bureau of health relief association as a result of that 
  2.18  employment, and who forfeited all service credit in that relief 
  2.19  association upon leaving that employment; and 
  2.20     (3) later became a coordinated member of the general plan 
  2.21  of the public employees retirement association and currently is 
  2.22  a coordinated member of that plan. 
  2.23     (c) An eligible person described in paragraph (b) may 
  2.24  purchase service credit from the public employees retirement 
  2.25  association by paying the amount specified in Minnesota 
  2.26  Statutes, section 356.55, prior to termination of public 
  2.27  employees retirement association covered employment or prior to 
  2.28  January 1, 2000, whichever is earlier.  If the city of St. Paul 
  2.29  agrees to make a payment under Minnesota Statutes, section 
  2.30  356.55, subdivision 5, an eligible person must make the employee 
  2.31  payments prior to termination of public employees retirement 
  2.32  association covered employment or prior to January 1, 2000, 
  2.33  whichever is earlier.  If the employee payment is made in a 
  2.34  timely fashion, the city payment must be remitted 60 days 
  2.35  thereafter. 
  2.36     (d) An eligible person must provide any relevant 
  3.1   documentation required by the executive director to determine 
  3.2   eligibility for the prior service credit under this section. 
  3.3      (e) Service credit for the purchase period must be granted 
  3.4   by the public employees retirement association to the account of 
  3.5   the eligible person upon receipt of the purchase payment amount 
  3.6   specified in paragraph (c). 
  3.7      Sec. 2.  [INDEPENDENT SCHOOL DISTRICT NO. 276, MINNETONKA, 
  3.8   TEACHER.] 
  3.9      (a) Notwithstanding Minnesota Statutes, section 354.095, an 
  3.10  eligible person described in paragraph (b) is entitled to 
  3.11  purchase allowable and formula service credit in the teachers 
  3.12  retirement association for the period described in paragraph (c) 
  3.13  by paying the amount specified in Minnesota Statutes, section 
  3.14  356.55, subdivision 2. 
  3.15     (b) An eligible person is a person who: 
  3.16     (1) was on medical leave for a period that includes the 
  3.17  1994-1995 and the 1995-1996 school years; 
  3.18     (2) was employed by independent school district No. 276, 
  3.19  Minnetonka, during the period that the medical leave was taken; 
  3.20  and 
  3.21     (3) due to the failure of independent school district No. 
  3.22  276, Minnetonka, to file certain papers with the teachers 
  3.23  retirement association was not able to obtain service credit for 
  3.24  the 1994-1995 and 1995-1996 school year portions of the medical 
  3.25  leave. 
  3.26     (c) The period for service credit purchase is the 1994-1995 
  3.27  and 1995-1996 school years. 
  3.28     (d) Notwithstanding Minnesota Statutes, section 356.55, 
  3.29  subdivision 5, the eligible person must pay, on or before 
  3.30  September 1, 1999, an amount equal to the employee, employer, 
  3.31  and employer additional contribution rates in effect during the 
  3.32  prior service period applied to the actual salary rates in 
  3.33  effect during the prior service period, plus annual compound 
  3.34  interest at the rate of 8.5 percent from the date on which the 
  3.35  contributions would have been made if made contemporaneous with 
  3.36  the service period to the date on which the payment is actually 
  4.1   made.  Independent school district No. 276, Minnetonka, must pay 
  4.2   one-half of the remaining balance of the prior service credit 
  4.3   purchase payment amount calculated under Minnesota Statutes, 
  4.4   section 356.55, within 30 days of the payment by the eligible 
  4.5   person.  Recognizing that the teachers retirement association 
  4.6   failed to provide adequate information on the opportunity of the 
  4.7   eligible person to make timely payments for the 1995-1996 school 
  4.8   year following receipt of the medical leave of absence forms on 
  4.9   August 16, 1996, the teachers retirement association is 
  4.10  responsible for one-half of the remaining balance of the prior 
  4.11  service credit purchase payment amount calculated under 
  4.12  Minnesota Statutes, section 356.55.  The executive director of 
  4.13  the teachers retirement association must notify the 
  4.14  superintendent of independent school district No. 276, 
  4.15  Minnetonka, of its payment amount and payment due date if the 
  4.16  eligible person makes the required payment. 
  4.17     (e) If independent school district No. 276, Minnetonka, 
  4.18  fails to pay its portion of the required prior service credit 
  4.19  purchase payment amount, the executive director may notify the 
  4.20  commissioner of finance of that fact and the commissioner of 
  4.21  finance may order that the required school district payment be 
  4.22  deducted from the next subsequent payment or payments of state 
  4.23  education aid to the school district and be transmitted to the 
  4.24  teachers retirement association.  
  4.25     Sec. 3.  [TEACHERS RETIREMENT ASSOCIATION; REPAYMENT OF 
  4.26  INTEREST CHARGE ON CERTAIN MEMBER CONTRIBUTION SHORTAGE 
  4.27  PAYMENTS.] 
  4.28     (a) Independent school district No. 274, Hopkins, shall pay 
  4.29  the amount of $1,004.08, plus compound interest on each amount 
  4.30  at the annual rate of six percent from June 1, 1997, to the date 
  4.31  of payment, to an eligible person described in paragraph (b) to 
  4.32  compensate the person for a past overcharge in a member 
  4.33  contribution shortage payment.  The shortage was caused by the 
  4.34  failure of the school district to make the required member 
  4.35  contribution deductions during the 1968-1969 school year and the 
  4.36  overpayment was caused by the failure of the teachers retirement 
  5.1   association to notify the eligible person in a timely fashion of 
  5.2   the shortage. 
  5.3      (b) An eligible person is a person who: 
  5.4      (1) was employed by independent school district No. 274 
  5.5   (Hopkins) during the 1968-1969 school year and suffered an under 
  5.6   deduction by the school district of $114.66; 
  5.7      (2) took a member contribution refund in the early 1970's 
  5.8   and repaid the refund in November 1974; and 
  5.9      (3) had an appeal denied by the teachers retirement 
  5.10  association board of trustees at a May 8, 1998, hearing, 
  5.11  reflected in a May 21, 1998, findings and final order. 
  5.12     (c) The payments must be made within 30 days of the 
  5.13  effective date.  If independent school district No. 274, 
  5.14  Hopkins, fails to make a timely payment of its obligation, the 
  5.15  teachers retirement association must make the payment and may 
  5.16  notify the commissioner of finance of the school district's 
  5.17  failure to pay.  In that event, the commissioner of finance may 
  5.18  order that the required school district payment be deducted from 
  5.19  the next subsequent payment of state education aid to the school 
  5.20  district and transmitted to the teachers retirement association. 
  5.21     Sec. 4.  [TEACHERS RETIREMENT ASSOCIATION; PURCHASE OF 
  5.22  SERVICE CREDIT FOR CERTAIN SABBATICAL LEAVES.] 
  5.23     (a) Notwithstanding any provision of Minnesota Statutes, 
  5.24  chapter 354, to the contrary, an eligible teacher as defined in 
  5.25  paragraph (b) is entitled to purchase allowable and formula 
  5.26  service credit from the teachers retirement association for the 
  5.27  uncredited portion of a sabbatical leave during the 1976-1977 
  5.28  school year under paragraph (c). 
  5.29     (b) An eligible teacher is a person who was born on 
  5.30  September 10, 1942, became a member of the teachers retirement 
  5.31  association on October 31, 1968, is employed by independent 
  5.32  school district No. 16, Spring Lake Park, and will qualify for 
  5.33  an early normal retirement annuity under the "rule of 90" on 
  5.34  September 16, 2000. 
  5.35     (c) Notwithstanding Minnesota Statutes, section 356.55, 
  5.36  subdivision 5, the eligible person may pay, before January 1, 
  6.1   2000, or the date of retirement, whichever is earlier, an amount 
  6.2   equal to the employee contribution rate or rates in effect 
  6.3   during the prior service period applied to the actual salary 
  6.4   rates in effect during the prior service period, plus annual 
  6.5   compound interest at the rate of 8.5 percent from the date on 
  6.6   which the contributions would have been made if made 
  6.7   contemporaneous with the service period to the date on which the 
  6.8   payment is actually made.  Independent school district No. 16, 
  6.9   Spring Lake Park, must pay the balance of the prior service 
  6.10  credit purchase payment amount calculated under Minnesota 
  6.11  Statutes, section 356.55, within 30 days of the payment by the 
  6.12  eligible person.  The executive director of the teachers 
  6.13  retirement association must notify the superintendent of 
  6.14  independent school district No. 16, Spring Lake Park, of its 
  6.15  payment amount and payment due date if the eligible person makes 
  6.16  the required payment. 
  6.17     (d) If independent school district No. 16, Spring Lake 
  6.18  Park, fails to pay its portion of the required prior service 
  6.19  credit purchase payment amount, the executive director may 
  6.20  notify the commissioner of finance of that fact and the 
  6.21  commissioner of finance may order that the required employer 
  6.22  payment be deducted from the next subsequent payment or payments 
  6.23  of state education aid to the school district and be transmitted 
  6.24  to the teachers retirement association. 
  6.25     (e) An eligible teacher must provide any relevant 
  6.26  documentation required by the executive director to determine 
  6.27  eligibility for the prior service credit under this section. 
  6.28     (f) Service credit for the purchase period must be granted 
  6.29  by the teachers retirement association to the account of the 
  6.30  eligible teacher upon receipt of the purchase payment amount 
  6.31  specified in paragraph (c). 
  6.32     Sec. 5.  [PUBLIC EMPLOYEES RETIREMENT ASSOCIATION; STATE 
  6.33  BOARD OF PUBLIC DEFENSE EMPLOYEE PRIOR SERVICE CREDIT PURCHASE.] 
  6.34     (a) An eligible person described in paragraph (b) is 
  6.35  entitled to purchase service credit from the public employees 
  6.36  retirement association for the period of omitted deductions 
  7.1   December 19, 1992, through December 27, 1994. 
  7.2      (b) An eligible person for purposes of paragraph (a) is a 
  7.3   person who: 
  7.4      (1) was born on August 17, 1950; 
  7.5      (2) was employed through Winona county until 1992; 
  7.6      (3) is currently employed by the state board of public 
  7.7   defense in the third judicial district public defender's office; 
  7.8   and 
  7.9      (4) had omitted member contributions for public employment 
  7.10  during the period December 19, 1992, through December 27, 1994. 
  7.11     (c) The prior service credit purchase payment amount is 
  7.12  governed by Minnesota Statutes, section 356.55.  Authority to 
  7.13  purchase the service credit expires on July 1, 2000. 
  7.14     (d) Notwithstanding Minnesota Statutes, section 356.55, 
  7.15  subdivision 5, the eligible person must pay, on or before 
  7.16  September 1, 1999, an amount equal to the employee contribution 
  7.17  rate in effect during the prior service period applied to the 
  7.18  actual salary rates in effect during the prior service period, 
  7.19  plus annual compound interest at the rate of 8.5 percent from 
  7.20  the date on which the contributions would have been made if made 
  7.21  contemporaneous with the service period to the date on which the 
  7.22  payment is actually made.  The state board of public defense 
  7.23  must pay the balance of the prior service credit purchase 
  7.24  payment amount calculated under Minnesota Statutes, section 
  7.25  356.55, within 30 days of the payment by the eligible person. 
  7.26     (e) A person purchasing service credit under this section 
  7.27  must provide sufficient documentation of eligibility to the 
  7.28  executive director of the public employees retirement 
  7.29  association. 
  7.30     Sec. 6.  [TRA; PURCHASE OF SERVICE CREDIT FOR FINAL PORTION 
  7.31  OF EXTENDED LEAVE OF ABSENCE BY ANOKA-HENNEPIN TEACHER.] 
  7.32     (a) An eligible person, as described in paragraph (b), is 
  7.33  entitled to purchase allowable and formula service credit in the 
  7.34  teachers retirement association for the period specified in 
  7.35  paragraph (c) by making the payment specified in Minnesota 
  7.36  Statutes, section 356.55. 
  8.1      (b) An eligible person is a person who: 
  8.2      (1) was born February 1, 1943; 
  8.3      (2) was initially employed as a teacher by the Richfield 
  8.4   school district in 1966; 
  8.5      (3) is currently employed as an elementary school principal 
  8.6   by independent school district No. 11 (Anoka-Hennepin); and 
  8.7      (4) was on an extended leave of absence from June 29, 1984, 
  8.8   to June 28, 1989, but failed to obtain service credit for the 
  8.9   final two years of the leave. 
  8.10     (c) The prior service credit purchase period is July 1, 
  8.11  1987, through June 28, 1989. 
  8.12     Sec. 7.  [EFFECTIVE DATE.] 
  8.13     Sections 1 to 6 are effective on the day following final 
  8.14  enactment. 
  8.15                             ARTICLE 2  
  8.16               INCLUSION OF SUPPLEMENTAL NEEDS TRUSTS 
  8.17                AS OPTIONAL ANNUITY FORM RECIPIENTS 
  8.18     Section 1.  [356.372] [SUPPLEMENTAL NEEDS TRUST AS OPTIONAL 
  8.19  ANNUITY FORM RECIPIENT.] 
  8.20     Subdivision 1.  [INCLUSION AS RECIPIENT.] Notwithstanding 
  8.21  any provision to the contrary of the laws, articles of 
  8.22  incorporation, or bylaws governing a covered retirement plan 
  8.23  specified in subdivision 3, a retiring member may designate a 
  8.24  qualified supplemental needs trust under subdivision 2 as the 
  8.25  remainder recipient on an optional retirement annuity form for a 
  8.26  period not to exceed the lifetime of the beneficiary of the 
  8.27  supplemental needs trust. 
  8.28     Subd. 2.  [QUALIFIED SUPPLEMENTAL NEEDS TRUST.] A qualified 
  8.29  supplemental needs trust is a trust that: 
  8.30     (1) was established on or after July 1, 1992; 
  8.31     (2) was established solely for the benefit of one person 
  8.32  who has a disability under federal Social Security 
  8.33  Administration supplemental security income or retirement, 
  8.34  survivors, and disability insurance disability determination 
  8.35  standards who was determined as such before the creation of the 
  8.36  trust; 
  9.1      (3) is funded, in whole or in part, by the primary 
  9.2   recipient of the optional annuity form and, unless the trust is 
  9.3   a Zebley trust, is not funded by the beneficiary, the 
  9.4   beneficiary's spouse, or a person who is required to pay a sum 
  9.5   to or for the trust beneficiary under the terms of litigation or 
  9.6   a litigation settlement; 
  9.7      (4) is established to cover reasonable living expenses and 
  9.8   other basic needs of the disabilitant, in whole or in part, in 
  9.9   instances when public assistance does not provide sufficiently 
  9.10  for these needs; 
  9.11     (5) is not permitted to make disbursement to replace or 
  9.12  reduce public assistance otherwise available; 
  9.13     (6) is irrevocable; 
  9.14     (7) terminates upon the death of the disabled person for 
  9.15  whose benefit it was established; and 
  9.16     (8) is determined by the executive director to be a trust 
  9.17  that contains excluded assets for purposes of the qualification 
  9.18  for public entitlement benefits under the applicable federal and 
  9.19  state laws and regulations. 
  9.20     Subd. 3.  [COVERED RETIREMENT PLAN.] The provisions of this 
  9.21  section apply to the following retirement plans: 
  9.22     (1) general state employees retirement plan of the 
  9.23  Minnesota state retirement system, established under chapter 
  9.24  352; 
  9.25     (2) correctional employees retirement plan of the Minnesota 
  9.26  state retirement system, established under chapter 352; 
  9.27     (3) state patrol retirement plan, established under chapter 
  9.28  352B; 
  9.29     (4) legislators retirement plan, established under chapter 
  9.30  3A; 
  9.31     (5) judges retirement plan, established under chapter 490; 
  9.32     (6) public employees retirement plan, established under 
  9.33  chapter 353; 
  9.34     (7) public employees police and fire plan, established 
  9.35  under chapter 353; 
  9.36     (8) teachers retirement plan, established under chapter 
 10.1   354; 
 10.2      (9) Duluth teachers retirement fund association, 
 10.3   established under chapter 354A; 
 10.4      (10) St. Paul teachers retirement fund association, 
 10.5   established under chapter 354A; 
 10.6      (11) Minneapolis teachers retirement fund association, 
 10.7   established under chapter 354A; 
 10.8      (12) Minneapolis employees retirement plan, established 
 10.9   under chapter 422A; 
 10.10     (13) Minneapolis firefighters relief association, 
 10.11  established under chapter 69; and 
 10.12     (14) Minneapolis police relief association, established 
 10.13  under chapter 423B. 
 10.14     Sec. 2.  [EFFECTIVE DATE.] 
 10.15     Section 1 is effective on the day following final enactment.
 10.16                             ARTICLE 3 
 10.17             VOLUNTEER FIRE RELIEF ASSOCIATION CHANGES 
 10.18     Section 1.  [REPEALER.] 
 10.19     Minnesota Statutes 1998, section 424A.02, subdivision 5, is 
 10.20  repealed. 
 10.21     Sec. 2.  [EFFECTIVE DATE.] 
 10.22     Section 1 is effective July 1, 1999. 
 10.23                             ARTICLE 4 
 10.24           CORRECTIONAL EMPLOYEES RETIREMENT PLAN CHANGES 
 10.25     Section 1.  Minnesota Statutes 1998, section 352.90, is 
 10.26  amended to read: 
 10.27     352.90 [POLICY.] 
 10.28     It is the policy of the legislature to provide special 
 10.29  retirement benefits and contributions for certain correctional 
 10.30  employees who may be required to retire at an early age because 
 10.31  they lose the mental or physical capacity required to maintain 
 10.32  the safety, security, discipline, and custody of inmates at 
 10.33  state correctional facilities or of patients at the Minnesota 
 10.34  security hospital or at the Minnesota sexual psychopathic 
 10.35  personality treatment center or of patients in certain programs 
 10.36  with the Cambridge regional human services center.  
 11.1      Sec. 2.  Minnesota Statutes 1998, section 352.91, is 
 11.2   amended by adding a subdivision to read: 
 11.3      Subd. 3e.  [MINNESOTA EXTENDED TREATMENT OPTIONS PROGRAM; 
 11.4   CAMBRIDGE.] "Covered correctional service" means service by a 
 11.5   state employee in one of the following employment positions with 
 11.6   the Cambridge regional human services center if at least 75 
 11.7   percent of the employee's working time is spent in direct 
 11.8   contact with patients who are in the Minnesota extended 
 11.9   treatment options program and if service in such a position is 
 11.10  certified to the executive director by the commissioner of human 
 11.11  services, unless the person elects to retain current retirement 
 11.12  coverage under section 4: 
 11.13     (1) behavior analyst; 
 11.14     (2) human services support specialist; 
 11.15     (3) mental retardation residential program lead; 
 11.16     (4) psychologist 2; 
 11.17     (5) recreation therapist assistant; 
 11.18     (6) recreation therapist senior; 
 11.19     (7) registered nurse senior; 
 11.20     (8) skills development specialist; and 
 11.21     (9) social worker senior. 
 11.22     Sec. 3.  Minnesota Statutes 1998, section 352.93, 
 11.23  subdivision 2a, is amended to read: 
 11.24     Subd. 2a.  [EARLY RETIREMENT.] Any covered correctional 
 11.25  employee, or former employee if service ended after June 30, 
 11.26  1989, who becomes at least 50 years old and who has at least 
 11.27  three years of allowable service is entitled upon application to 
 11.28  a reduced retirement annuity equal to the annuity calculated 
 11.29  under subdivision 2, reduced so that the reduced annuity is the 
 11.30  actuarial equivalent of the annuity that would be payable if the 
 11.31  employee deferred receipt of the annuity from the day the 
 11.32  annuity begins to accrue to age 55 by two-tenths of one percent 
 11.33  for each month that the correctional employee is under age 55 at 
 11.34  the time of retirement. 
 11.35     Sec. 4.  [TEMPORARY PROVISION; ELECTION TO RETAIN 
 11.36  RETIREMENT COVERAGE.] 
 12.1      (a) An employee in a position specified as qualifying under 
 12.2   section 2 may elect to retain coverage under the general 
 12.3   employees retirement plan of the Minnesota state retirement 
 12.4   system or may elect to transfer coverage and contribute to the 
 12.5   correctional employees retirement plan.  An employee electing to 
 12.6   participate in the correctional employees retirement plan shall 
 12.7   begin making contributions to the correctional plan beginning 
 12.8   the first full pay period after July 1, 1999, or the first full 
 12.9   pay period following filing of their election to transfer 
 12.10  coverage to the correctional employees retirement plan, 
 12.11  whichever is later.  The election to retain coverage or to 
 12.12  transfer coverage must be made in writing by the person on a 
 12.13  form prescribed by the executive director of the Minnesota state 
 12.14  retirement system and must be filed with the executive director 
 12.15  no later than December 31, 1999. 
 12.16     (b) An employee failing to make an election by December 15, 
 12.17  1999, must be notified by certified mail by the executive 
 12.18  director of the Minnesota state retirement system of the 
 12.19  deadline to make a choice.  A person who does not submit an 
 12.20  election form must continue coverage in the general employees 
 12.21  retirement plan and forfeits all rights to transfer retirement 
 12.22  coverage to the correctional employees retirement plan. 
 12.23     (c) The election to retain coverage in the general 
 12.24  employees retirement plan or the election to transfer retirement 
 12.25  coverage to the correctional employees retirement plan is 
 12.26  irrevocable once it is filed with the executive director. 
 12.27     Sec. 5.  [COVERAGE FOR PRIOR STATE SERVICE FOR CERTAIN 
 12.28  PERSONS.] 
 12.29     Subdivision 1.  [ELECTION OF PRIOR STATE SERVICE COVERAGE.] 
 12.30  (a) An employee who has future retirement coverage transferred 
 12.31  to the correctional employees retirement plan under section 2, 
 12.32  and who does not elect to retain general state employees 
 12.33  retirement plan coverage, is entitled to elect to obtain prior 
 12.34  service credit for eligible state service performed on or after 
 12.35  July 1, 1997, and before the first day of the first full pay 
 12.36  period beginning after December 31, 1999.  All prior service 
 13.1   credit must be purchased. 
 13.2      (b) Eligible state service is any period of service on or 
 13.3   after the date which the employee started employment with the 
 13.4   Minnesota extended treatment options program in a position 
 13.5   specified in Minnesota Statutes, section 352.91, subdivision 3e, 
 13.6   in which at least 75 percent of the employee's working time is 
 13.7   determined to have been spent in direct contact with Minnesota 
 13.8   extended treatment options program patients or July 1, 1997, 
 13.9   whichever is later, and the date the employee joined the 
 13.10  correctional employees plan.  
 13.11     (c) The department of human services shall certify eligible 
 13.12  state service to the executive director of the Minnesota 
 13.13  retirement system. 
 13.14     Subd. 2.  [PAYMENT FOR PRIOR SERVICE.] (a) An employee 
 13.15  electing to obtain prior service credit under subdivision 1 must 
 13.16  pay an additional employee contribution for that prior service.  
 13.17  The additional member contribution is the contribution 
 13.18  differential percentage applied to the actual salary paid to the 
 13.19  employee during the period of the prior eligible state service, 
 13.20  plus interest at the rate of six percent per annum, compounded 
 13.21  annually.  The contribution differential percentage is the 
 13.22  difference between 5.5 percent of salary and the applicable 
 13.23  employee contribution rate of the general state employees 
 13.24  retirement plan during the prior eligible state service. 
 13.25     (b) The additional member contribution must be paid only in 
 13.26  a lump sum.  Payment must accompany the election to obtain prior 
 13.27  service credit.  No election or payment may be made by the 
 13.28  person or accepted by the executive director after June 30, 2001.
 13.29     Subd. 3.  [TRANSFER OF ASSETS.] Assets must be transferred 
 13.30  from the general state employees retirement plan to the 
 13.31  correctional employees retirement plan in an amount equal to the 
 13.32  present value of benefits earned under the general employees 
 13.33  retirement plan for each employee transferring to the 
 13.34  correctional employees retirement plan, as determined by the 
 13.35  actuary retained by the legislative commission on pensions and 
 13.36  retirement in accordance with Minnesota Statutes, section 
 14.1   356.215, multiplied by the accrued liability funding ratio of 
 14.2   active members as derived from the most recent actuarial 
 14.3   valuation prepared by the commission-retained actuary.  The 
 14.4   transfer of assets must be made within 45 days after the 
 14.5   employee elects to transfer coverage to the correctional 
 14.6   employees retirement plan. 
 14.7      Subd. 4.  [EFFECT OF THE ASSET TRANSFER.] Upon the transfer 
 14.8   of assets in subdivision 3, service credit in the general state 
 14.9   employees plan of the Minnesota state retirement system is 
 14.10  forfeited and may not be reinstated.  The service credit and 
 14.11  transferred assets must be credited to the correctional 
 14.12  employees retirement plan. 
 14.13     Subd. 5.  [COUNSELING.] (a) The commissioners of human 
 14.14  services and employee relations, and the executive director of 
 14.15  the Minnesota state retirement system have the joint 
 14.16  responsibility of providing affected employees with appropriate 
 14.17  and timely retirement and related benefit counseling. 
 14.18     (b) Counseling must include the anticipated impact of the 
 14.19  retirement coverage change on the person's future retirement 
 14.20  benefit amounts, future retirement eligibility, future 
 14.21  applicability of mandatory retirement laws, and future 
 14.22  postemployment insurance coverage. 
 14.23     (c) The commissioner of human services must consult with 
 14.24  the appropriate collective bargaining agents of the affected 
 14.25  employees regarding the content, form, and timing of the 
 14.26  counseling required by this section. 
 14.27     Sec. 6.  [TRANSITIONAL PROVISION; RETENTION OF CERTAIN 
 14.28  RIGHTS.] 
 14.29     (a) Nothing in sections 1, 2, and 4 to 7 may be considered 
 14.30  to restrict the entitlement of a person under state law to repay 
 14.31  a previously taken refund of employee or member contributions to 
 14.32  a Minnesota public pension plan if all qualifying requirements 
 14.33  are met. 
 14.34     (b) The period of correctional employees retirement plan 
 14.35  contributions, plus interest, must be restored upon the 
 14.36  repayment of the appropriate refund amount if the service was 
 15.1   correctional employees retirement plan covered service on the 
 15.2   date when the service was rendered or on the date when the 
 15.3   refund was taken. 
 15.4      Sec. 7.  [EARLY RETIREMENT INCENTIVE.] 
 15.5      This section applies to an employee who has future 
 15.6   retirement coverage transferred to the correctional employee 
 15.7   retirement plan under section 2 and who is at least 55 years old 
 15.8   on the effective date of section 2.  That employee may 
 15.9   participate in a health insurance early retirement incentive 
 15.10  available under the terms of a collective bargaining agreement 
 15.11  in effect on the day before the effective date of section 2, 
 15.12  notwithstanding any provision of the collective bargaining 
 15.13  agreement that limits participation to persons who select the 
 15.14  option during the payroll period in which they become 55 years 
 15.15  old.  A person selecting the health insurance early retirement 
 15.16  incentive under this section must retire by the later of 
 15.17  December 31, 2000, or within the pay period following the time 
 15.18  at which the person has at least three years of covered 
 15.19  correctional service, including any purchased service credit.  
 15.20  An employee meeting this criteria who wishes to extend the 
 15.21  person's employment must do so under Minnesota Statutes, section 
 15.22  43A.34, subdivision 3. 
 15.23     Sec. 8.  [EFFECTIVE DATE.] 
 15.24     Sections 1, 2, and 4 to 7 are effective on the first day of 
 15.25  the first full pay period beginning after July 1, 1999.  Section 
 15.26  3 is effective July 1, 1999. 
 15.27                             ARTICLE 5 
 15.28                   PUBLIC SAFETY EMPLOYEE PENSION 
 15.29                            PLAN CHANGES 
 15.30     Section 1.  Minnesota Statutes 1998, section 352B.08, 
 15.31  subdivision 2a, is amended to read: 
 15.32     Subd. 2a.  [EARLY RETIREMENT.] Any member who has become at 
 15.33  least 50 years old and who has at least three years of allowable 
 15.34  service is entitled upon application to a reduced retirement 
 15.35  annuity equal to the annuity calculated under subdivision 2, 
 15.36  reduced by two-tenths one-tenth of one percent for each month 
 16.1   that the member is under age 55 at the time of retirement. 
 16.2      Sec. 2.  Minnesota Statutes 1998, section 353.64, 
 16.3   subdivision 1, is amended to read: 
 16.4      Subdivision 1.  [POLICE AND FIRE FUND MEMBERSHIP.] (a) A 
 16.5   person who prior to July 1, 1961, was a member of the police and 
 16.6   fire fund, by virtue of being a police officer or firefighter, 
 16.7   shall, as long as the person remains in either position, 
 16.8   continue membership in the fund.  
 16.9      (b) A person who was employed by a governmental subdivision 
 16.10  as a police officer and was a member of the police and fire fund 
 16.11  on July 1, 1978, by virtue of being a police officer as defined 
 16.12  by this section on that date, and if employed by the same 
 16.13  governmental subdivision in a position in the same department in 
 16.14  which the person was employed on that date, shall continue 
 16.15  membership in continues to be a member of the fund, whether or 
 16.16  not that person has the power of arrest by warrant and is 
 16.17  licensed by the peace officers standards and training board 
 16.18  after that date.  A person who was employed as a correctional 
 16.19  officer by Rice county before July 1, 1998, for the duration of 
 16.20  employment in the correctional position held on July 1, 1998, 
 16.21  continues to be a member of the public employees police and fire 
 16.22  plan, whether or not the person has the power of arrest by 
 16.23  warrant and is licensed by the peace officers standards and 
 16.24  training board after that date. 
 16.25     (c) A person who was employed by a governmental subdivision 
 16.26  as a police officer or a firefighter, whichever applies, was an 
 16.27  active member of the local police or salaried firefighters 
 16.28  relief association located in that governmental subdivision by 
 16.29  virtue of that employment as of the effective date of the 
 16.30  consolidation as authorized by sections 353A.01 to 353A.10, and 
 16.31  has elected coverage by the public employees police and fire 
 16.32  fund benefit plan, shall become a member of the police and fire 
 16.33  fund after that date if employed by the same governmental 
 16.34  subdivision in a position in the same department in which the 
 16.35  person was employed on that date. 
 16.36     (d) Any other employee serving on a full-time basis as a 
 17.1   police officer as defined in subdivision 2 or as a firefighter 
 17.2   as defined in subdivision 3 on or after July 1, 1961, shall 
 17.3   become a member of the public employees police and fire fund.  
 17.4      (e) An employee serving on less than a full-time basis as a 
 17.5   police officer shall become a member of the public employees 
 17.6   police and fire fund only after a resolution stating that the 
 17.7   employee should be covered by the police and fire fund is 
 17.8   adopted by the governing body of the governmental subdivision 
 17.9   employing the person declaring that the position which the 
 17.10  person holds is that of a police officer. 
 17.11     (f) An employee serving on less than a full-time basis as a 
 17.12  firefighter shall become a member of the public employees police 
 17.13  and fire fund only after a resolution stating that the employee 
 17.14  should be covered by the police and fire fund is adopted by the 
 17.15  governing body of the governmental subdivision employing the 
 17.16  person declaring that the position which the person holds is 
 17.17  that of a firefighter. 
 17.18     (g) A police officer or firefighter employed by a 
 17.19  governmental subdivision who by virtue of that employment is 
 17.20  required by law to be a member of and to contribute to any 
 17.21  police or firefighter relief association governed by section 
 17.22  69.77 which has not consolidated with the public employees 
 17.23  police and fire fund and any police officer or firefighter of a 
 17.24  relief association that has consolidated with the association 
 17.25  for which the employee has not elected coverage by the public 
 17.26  employees police and fire fund benefit plan as provided in 
 17.27  sections 353A.01 to 353A.10 shall not become a member of the 
 17.28  public employees police and fire fund. 
 17.29     Sec. 3.  Minnesota Statutes 1998, section 353.651, 
 17.30  subdivision 4, is amended to read: 
 17.31     Subd. 4.  [EARLY RETIREMENT.] Any police officer or 
 17.32  firefighter member who has become at least 50 years old and who 
 17.33  has at least three years of allowable service is entitled upon 
 17.34  application to a retirement annuity equal to the normal annuity 
 17.35  calculated under subdivision 3, reduced by two-tenths one-tenth 
 17.36  of one percent for each month that the member is under age 55 at 
 18.1   the time of retirement. 
 18.2      Sec. 4.  [353.652] [SOCIAL SECURITY BENEFIT OFFSET IN 
 18.3   CERTAIN INSTANCES.] 
 18.4      (a) If a public employee continues in retirement plan 
 18.5   coverage by the public employees police and fire retirement plan 
 18.6   by virtue of this article and subsequently is covered by the 
 18.7   federal old age, survivors, and disability insurance program for 
 18.8   service as a Rice county correctional officer, the retirement 
 18.9   annuity of the person under section 353.651 or the disability 
 18.10  benefit of the person under section 353.656 must be reduced 
 18.11  dollar for dollar for the social security benefit that the 
 18.12  person is entitled to receive by virtue of Rice county 
 18.13  correctional service rendered after the effective date of 
 18.14  section 1. 
 18.15     (b) To be effective, the retirement annuity or disability 
 18.16  benefit application form for a Rice county correctional employee 
 18.17  must include signed written permission by the person for the 
 18.18  public employees retirement association to obtain the necessary 
 18.19  information from the federal old age, survivors, and disability 
 18.20  insurance program to implement the offset provision in paragraph 
 18.21  (a). 
 18.22     Sec. 5.  [353.90] [PENALTY FOR MEMBERSHIP MISCERTIFICATIONS 
 18.23  AND CERTIFICATION FAILURES.] 
 18.24     (a) If the board of trustees of the public employees 
 18.25  retirement association, upon the recommendation of the executive 
 18.26  director, determines that a governmental subdivision has 
 18.27  certified a public employee for membership in the public 
 18.28  employees police and fire retirement plan when the public 
 18.29  employee was not eligible for that retirement plan coverage, the 
 18.30  public employee must be covered by the correct retirement plan 
 18.31  for subsequent service, the public employee retains the coverage 
 18.32  for the period of the misclassification, and the governmental 
 18.33  subdivision shall pay in a lump sum the difference in the 
 18.34  actuarial present value of the retirement annuities to which the 
 18.35  public employee would have been entitled if the public employee 
 18.36  was properly classified.  The governmental subdivision payment 
 19.1   is payable within 30 days of the board's determination.  If 
 19.2   unpaid, it must be collected under section 353.28.  The lump sum 
 19.3   payment must be deposited in the public employees retirement 
 19.4   fund. 
 19.5      (b) If the executive director of the public employees 
 19.6   retirement association determines that a governmental 
 19.7   subdivision has failed to certify a person for retirement plan 
 19.8   membership and coverage under this chapter, in addition to the 
 19.9   procedures under section 353.27, subdivision 4, 9, 10, 11, 12, 
 19.10  12a, or 12b, the director shall charge a fine of $......... for 
 19.11  each membership certification failure. 
 19.12     Sec. 6.  Minnesota Statutes 1998, section 353A.083, is 
 19.13  amended by adding a subdivision to read: 
 19.14     Subd. 4.  [PRE-1999 CONSOLIDATIONS.] For any consolidation 
 19.15  account in effect on July 1, 1999, the public employees police 
 19.16  and fire fund benefit plan applicable to consolidation account 
 19.17  members who have elected or will elect that benefit plan 
 19.18  coverage under section 353A.08 is the most recent change adopted 
 19.19  by the applicable municipality under subdivision 1, 2, or 3, 
 19.20  unless the applicable municipality approves the extension of the 
 19.21  post-June 30, 1999, public employees police and fire fund 
 19.22  benefit plan to the consolidation account. 
 19.23     Sec. 7.  [COLLECTION OF POLICE STATE OVERPAYMENTS.] 
 19.24     As police state aid that was received by Rice county on 
 19.25  account of correctional officers who were improperly included in 
 19.26  retirement coverage by the public employees police and fire 
 19.27  plan, the total of the following amounts must be deducted in 20 
 19.28  equal annual installments from any police state aid payable to 
 19.29  Rice county under Minnesota Statutes, chapter 69: 
 19.30            amount                 year  
 19.31           $11,543                 1994
 19.32            19,096                 1995 
 19.33            39,111                 1996  
 19.34            19,170                 1997 
 19.35            13,764                 1998.  
 19.36     Sec. 8.  [EFFECTIVE DATE.] 
 20.1      Sections 1, 3, and 7 are effective on July 1, 1999.  
 20.2   Sections 2, 4, and 6 are effective on the day following final 
 20.3   enactment.  Section 5 is effective on August 1, 2000. 
 20.4                              ARTICLE 6  
 20.5                     SPECIAL RETIREMENT COVERAGE  
 20.6                        FOR CERTAIN STATE FIRE 
 20.7                          MARSHAL EMPLOYEES
 20.8      Section 1.  [352.87] [STATE FIRE MARSHAL DIVISION 
 20.9   EMPLOYEES.] 
 20.10     Subdivision 1.  [ELIGIBILITY.] A member of the general plan 
 20.11  who is employed by the department of public safety, state fire 
 20.12  marshal division, as a deputy state fire marshal, fire/arson 
 20.13  investigator, who elects special benefit coverage under 
 20.14  subdivision 8, is entitled to retirement benefits or disability 
 20.15  benefits, as applicable, as stated in this section for eligible 
 20.16  service under this section rendered after July 1, 1999, for 
 20.17  which allowable service credit is received.  The covered member 
 20.18  must be at least age 55 to qualify for the retirement annuity 
 20.19  specified in subdivision 3. 
 20.20     Subd. 2.  [RETIREMENT ANNUITY ELIGIBILITY.] A person 
 20.21  specified in subdivision 1 who meets all eligibility 
 20.22  requirements specified in this chapter applicable to general 
 20.23  plan members is eligible for retirement benefits as specified in 
 20.24  subdivision 3. 
 20.25     Subd. 3.  [RETIREMENT ANNUITY FORMULA.] A person specified 
 20.26  in subdivision 1 will have a retirement annuity applicable for 
 20.27  allowable service credit under this section calculated by 
 20.28  multiplying the employee's average salary, as defined in section 
 20.29  352.115, subdivision 2, by the percent specified in section 
 20.30  356.19, subdivision 2a, for each year or portions of a year of 
 20.31  allowable service credit.  No reduction for retirement prior to 
 20.32  normal retirement age, as specified in section 352.01, 
 20.33  subdivision 25, applies to service to which this section applies.
 20.34     Subd. 4.  [NON-JOB-RELATED DISABILITY BENEFITS.] An 
 20.35  eligible member described in subdivision 1, who is less than 55 
 20.36  years of age and who becomes disabled and physically or mentally 
 21.1   unfit to perform the duties of the position because of sickness 
 21.2   or injury while not engaged in covered employment, is entitled 
 21.3   to a disability benefit amount equivalent to an annuity computed 
 21.4   under subdivision 3 assuming the member has 15 years of service 
 21.5   qualifying under this section and waiving the minimum age 
 21.6   requirement.  If the eligible member becomes disabled under this 
 21.7   subdivision with more than 15 years of service covered under 
 21.8   this section, the eligible member is entitled to a disability 
 21.9   benefit amount equivalent to an annuity computed under 
 21.10  subdivision 3 based on all years of service credited under this 
 21.11  section and waiving the minimum age requirement. 
 21.12     Subd. 5.  [JOB-RELATED DISABILITY BENEFITS.] An eligible 
 21.13  member defined in subdivision 1, who is less than 55 years of 
 21.14  age and who becomes disabled and physically or mentally unfit to 
 21.15  perform the duties of the position because of sickness or injury 
 21.16  while engaged in covered employment, is entitled to a disability 
 21.17  benefit amount equivalent to an annuity computed under 
 21.18  subdivision 3 assuming the member has 20 years of service 
 21.19  qualifying under this section and waiving the minimum age 
 21.20  requirement.  An eligible member who becomes disabled under this 
 21.21  subdivision with more than 20 years of service credited under 
 21.22  this section is entitled to a disability benefit amount 
 21.23  equivalent to an annuity computed under subdivision 3 based on 
 21.24  all years of service credited under this section and waiving the 
 21.25  age requirement. 
 21.26     Subd. 6.  [DISABILITY BENEFIT COORDINATION.] If the 
 21.27  eligible employee is entitled to receive a disability benefit as 
 21.28  provided in subdivision 4 or 5 and has allowable service credit 
 21.29  under this section for less service than the length of service 
 21.30  upon which the disability benefit in subdivision 4 or 5 is 
 21.31  based, and also has allowable service in the general plan not 
 21.32  includable in this section, the employee is entitled to a 
 21.33  disability benefit or deferred retirement annuity based on the 
 21.34  general plan service not includable in this section only for the 
 21.35  service that, when combined with the service includable in this 
 21.36  section, exceeds the number of years on which the disability 
 22.1   benefit provided in subdivision 4 or 5 is based.  The benefit 
 22.2   recipient under subdivision 4 or 5 who also has credit for 
 22.3   regular plan service must in all respects qualify under section 
 22.4   352.113 to be entitled to receive a disability benefit based on 
 22.5   the general plan service not includable in this section, except 
 22.6   that the service may be combined to satisfy length of service 
 22.7   requirements.  Any deferred annuity to which the employee may be 
 22.8   entitled based on general plan service not includable in this 
 22.9   section must be augmented as provided in section 352.72, 
 22.10  subdivision 2, while the employee is receiving a disability 
 22.11  benefit under this section. 
 22.12     Subd. 7.  [ADDITIONAL CONTRIBUTIONS.] The special 
 22.13  retirement annuity and disability coverage under this section 
 22.14  shall be financed by an employee contribution of $..... and an 
 22.15  employer contribution of $.....  These contributions are in 
 22.16  addition to the contributions required by section 352.04, 
 22.17  subdivisions 2 and 3, and must be made in the manner provided 
 22.18  for in section 352.04, subdivisions 4, 5, and 6. 
 22.19     Subd. 8.  [ELECTION OF COVERAGE.] To be covered by this 
 22.20  section, an employee of the department of public safety 
 22.21  described in subdivision 1 who is employed in a position 
 22.22  described in that subdivision on or after July 1, 1999, must 
 22.23  file a notice with the executive director of the Minnesota state 
 22.24  retirement system on a form prescribed by the executive director 
 22.25  stating whether or not the employee elects to be covered by this 
 22.26  section.  Notice must be filed by September 1, 1999, or within 
 22.27  90 days of employment, whichever is later.  Elections are 
 22.28  irrevocable during any period of covered employment.  A failure 
 22.29  to file a timely notice shall be deemed a waiver of coverage by 
 22.30  this section. 
 22.31     Sec. 2.  Minnesota Statutes 1998, section 356.19, is 
 22.32  amended by adding a subdivision to read: 
 22.33     Subd. 2a.  [COORDINATED MEMBERS.] The applicable benefit 
 22.34  accrual rate is 2.0 percent. 
 22.35     Sec. 3.  [EFFECTIVE DATE.] 
 22.36     Sections 1 and 2 are effective the day following final 
 23.1   enactment. 
 23.2                              ARTICLE 7  
 23.3                       TEACHER RETIREMENT PLANS  
 23.4                    PRIOR SERVICE CREDIT PURCHASE  
 23.5                            AUTHORIZATION  
 23.6      Section 1.  [354.533] [PRIOR OR UNCREDITED MILITARY SERVICE 
 23.7   CREDIT PURCHASE.] 
 23.8      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 23.9   teacher who has at least three years of allowable service credit 
 23.10  with the teachers retirement association and who performed 
 23.11  service in the United States armed forces before becoming a 
 23.12  teacher as defined in section 354.05, subdivision 2, or who 
 23.13  failed to obtain service credit for a military leave of absence 
 23.14  under the provisions of section 354.53, is entitled to purchase 
 23.15  allowable and formula service credit for the initial period of 
 23.16  enlistment, induction, or call to active duty without any 
 23.17  voluntary extension by making payment under section 356.55 
 23.18  provided the teacher is not entitled to receive a current or 
 23.19  deferred retirement annuity from a United States armed forces 
 23.20  pension plan and has not purchased service credit from any other 
 23.21  defined benefit public employee pension plan for the same period 
 23.22  of service. 
 23.23     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 23.24  desires to purchase service credit under subdivision 1 must 
 23.25  apply with the executive director to make the purchase.  The 
 23.26  application must include all necessary documentation of the 
 23.27  teacher's qualifications to make the purchase, signed written 
 23.28  permission to allow the executive director to request and 
 23.29  receive necessary verification of applicable facts and 
 23.30  eligibility requirements, and any other relevant information 
 23.31  that the executive director may require. 
 23.32     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
 23.33  service credit for the purchase period must be granted by the 
 23.34  teachers retirement association to the purchasing teacher upon 
 23.35  receipt of the purchase payment amount. 
 23.36     Sec. 2.  [354.534] [PRIOR OUT-OF-STATE TEACHING SERVICE 
 24.1   CREDIT PURCHASE.] 
 24.2      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 24.3   teacher who has at least three years of allowable service credit 
 24.4   with the teachers retirement association is entitled to purchase 
 24.5   up to ten years of allowable and formula service credit for 
 24.6   out-of-state teaching service by making payment under section 
 24.7   356.55, provided the out-of-state teaching service was performed 
 24.8   for an educational institution established and operated by 
 24.9   another state, governmental subdivision of another state, or the 
 24.10  federal government and the teacher is not entitled to receive a 
 24.11  current or deferred age and service retirement annuity or 
 24.12  disability benefit and has not purchased service credit from 
 24.13  another defined benefit public employee pension plan for that 
 24.14  out-of-state teaching service. 
 24.15     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 24.16  desires to purchase service credit under subdivision 1 must 
 24.17  apply with the executive director to make the purchase.  The 
 24.18  application must include all necessary documentation of the 
 24.19  teacher's qualifications to make the purchase, signed written 
 24.20  permission to allow the executive director to request and 
 24.21  receive necessary verification of applicable facts and 
 24.22  eligibility requirements, and any other relevant information 
 24.23  that the executive director may require. 
 24.24     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
 24.25  service credit for the purchase period must be granted by the 
 24.26  teachers retirement association to the purchasing teacher on 
 24.27  receipt of the purchase payment amount. 
 24.28     Sec. 3.  [354.535] [MATERNITY LEAVE OF ABSENCE AND BREAK IN 
 24.29  SERVICE PURCHASES.] 
 24.30     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 24.31  teacher who has at least three years of allowable service credit 
 24.32  with the teachers retirement association and who was granted a 
 24.33  maternity leave of absence by a school district or other 
 24.34  employing unit covered by the teachers retirement association 
 24.35  for which the teacher did not previously receive allowable and 
 24.36  formula service credit, or who had a maternity break in teaching 
 25.1   service for which the teacher did not receive or purchase 
 25.2   service credit from another defined benefit public employee 
 25.3   pension plan is entitled to purchase the actual period of the 
 25.4   leave or of the break in teaching service, up to five years, of 
 25.5   allowable and formula service credit for applicable maternity 
 25.6   leaves of absence or applicable maternity break in teaching 
 25.7   service periods by making payment under section 356.55. 
 25.8      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 25.9   desires to purchase service credit under subdivision 1 must 
 25.10  apply with the executive director to make the purchase.  The 
 25.11  application must include all necessary documentation of the 
 25.12  teacher's qualifications to make the purchase, signed written 
 25.13  permission to allow the executive director to request and 
 25.14  receive necessary verification of applicable facts and 
 25.15  eligibility requirements, and any other relevant information 
 25.16  that the executive director may require. 
 25.17     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
 25.18  service credit for the purchase period must be granted by the 
 25.19  teachers retirement association to the purchasing teacher on 
 25.20  receipt of the purchase payment amount. 
 25.21     Sec. 4.  [354.536] [PRIVATE OR PAROCHIAL TEACHING SERVICE 
 25.22  CREDIT PURCHASE.] 
 25.23     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 25.24  teacher who has at least three years of allowable service credit 
 25.25  with the teachers retirement association is entitled to purchase 
 25.26  up to ten years of allowable and formula service credit for 
 25.27  private or parochial school teaching service by making payment 
 25.28  under section 356.55, provided that the teacher is not entitled 
 25.29  to receive a current or deferred age and service retirement 
 25.30  annuity or disability benefit from the applicable 
 25.31  employer-sponsored pension plan and has not purchased service 
 25.32  credit from the applicable defined benefit employer-sponsored 
 25.33  pension plan for that service. 
 25.34     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 25.35  desires to purchase service credit under subdivision 1 must 
 25.36  apply with the executive director to make the purchase.  The 
 26.1   application must include all necessary documentation of the 
 26.2   teacher's qualifications to make the purchase, signed written 
 26.3   permission to allow the executive director to request and 
 26.4   receive necessary verification of applicable facts and 
 26.5   eligibility requirements, and any other relevant information 
 26.6   that the executive director may require. 
 26.7      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
 26.8   service credit for the purchase period must be granted by the 
 26.9   teachers retirement association to the purchasing teacher on 
 26.10  receipt of the purchase payment amount. 
 26.11     Sec. 5.  [354.537] [PEACE CORPS OR VISTA SERVICE CREDIT 
 26.12  PURCHASE.] 
 26.13     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 26.14  teacher who has at least three years of allowable service credit 
 26.15  with the teachers retirement association is entitled to purchase 
 26.16  up to ten years of allowable and formula service credit for 
 26.17  service rendered in the federal peace corps program or in the 
 26.18  federal volunteers in service to America program by making 
 26.19  payment under section 356.55, provided that the teacher has not 
 26.20  purchased service credit from any defined benefit pension plan 
 26.21  for that service. 
 26.22     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 26.23  desires to purchase service credit under subdivision 1 must 
 26.24  apply with the executive director to make the purchase.  The 
 26.25  application must include all necessary documentation of the 
 26.26  teacher's qualifications to make the purchase, signed written 
 26.27  permission to allow the executive director to request and 
 26.28  receive necessary verification of applicable facts and 
 26.29  eligibility requirements, and any other relevant information 
 26.30  that the executive director may require. 
 26.31     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable and formula 
 26.32  service credit for the purchase period must be granted by the 
 26.33  teachers retirement association to the purchasing teacher on 
 26.34  receipt of the purchase payment amount. 
 26.35     Sec. 6.  [354A.097] [PRIOR OR UNCREDITED MILITARY SERVICE 
 26.36  CREDIT PURCHASE.] 
 27.1      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 27.2   teacher who has at least three years of allowable service credit 
 27.3   with the teachers retirement fund association and who performed 
 27.4   service in the United States armed forces before becoming a 
 27.5   teacher as defined in section 354A.011, subdivision 27, or who 
 27.6   failed to obtain service credit for a military leave of absence 
 27.7   period under section 354A.093, is entitled to purchase allowable 
 27.8   service credit for the initial period of enlistment, induction, 
 27.9   or call to active duty without any voluntary extension by making 
 27.10  payment under section 356.55 provided the teacher is not 
 27.11  entitled to receive a current or deferred retirement annuity 
 27.12  from a United States armed forces pension plan and has not 
 27.13  purchased service credit from another defined benefit public 
 27.14  employee pension plan for the same period of service. 
 27.15     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 27.16  desires to purchase service credit under subdivision 1 must 
 27.17  apply with the executive director or secretary of the respective 
 27.18  teachers retirement fund association to make the purchase.  The 
 27.19  application must include all necessary documentation of the 
 27.20  teacher's qualifications to make the purchase, signed written 
 27.21  permission to allow the executive director or secretary to 
 27.22  request and receive necessary verification of applicable facts 
 27.23  and eligibility requirements, and any other relevant information 
 27.24  that the executive director or secretary may require. 
 27.25     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
 27.26  for the purchase period must be granted by the applicable 
 27.27  teachers retirement fund association to the purchasing teacher 
 27.28  on receipt of the purchase payment amount. 
 27.29     Sec. 7.  [354A.098] [PRIOR OUT-OF-STATE TEACHING SERVICE 
 27.30  CREDIT PURCHASE.] 
 27.31     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 27.32  teacher who has at least three years of allowable service credit 
 27.33  with one of the retirement fund associations under this chapter 
 27.34  and who rendered out-of-state teaching service for an 
 27.35  educational institution established and operated by another 
 27.36  state, governmental subdivision of another state, or the federal 
 28.1   government, is entitled to purchase up to ten years of allowable 
 28.2   service credit for that out-of-state service by making payment 
 28.3   under section 356.55, provided the teacher is not entitled to 
 28.4   receive a current or deferred age and service retirement annuity 
 28.5   or disability benefit and has not purchased service credit from 
 28.6   another defined benefit public employee pension plan for that 
 28.7   out-of-state teaching service. 
 28.8      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 28.9   desires to purchase service credit under subdivision 1 must 
 28.10  apply with the executive director or secretary of the respective 
 28.11  teachers retirement fund association to make the purchase.  The 
 28.12  application must include all necessary documentation of the 
 28.13  teacher's qualifications to make the purchase, signed written 
 28.14  permission to allow the executive director or secretary to 
 28.15  request and receive necessary verification of applicable facts 
 28.16  and eligibility requirements, and any other relevant information 
 28.17  that the executive director or secretary may require. 
 28.18     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
 28.19  for the purchase period must be granted by the applicable 
 28.20  teachers retirement fund association to the purchasing teacher 
 28.21  on receipt of the purchase payment amount. 
 28.22     Sec. 8.  [354A.099] [MATERNITY BREAK IN SERVICE OR LEAVE 
 28.23  SERVICE CREDIT PURCHASE.] 
 28.24     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 28.25  teacher who has at least three years of allowable service credit 
 28.26  with the teachers retirement fund association and who was 
 28.27  granted a maternity leave of absence by a school district or 
 28.28  other employing unit covered by the teachers retirement 
 28.29  association for which the teacher did not previously receive 
 28.30  allowable service credit or who had a maternity break in 
 28.31  teaching service for which the teacher did not receive or 
 28.32  purchase service credit from another defined benefit public 
 28.33  employee pension plan is entitled to purchase the actual period 
 28.34  of the leave or of the break in teaching service, up to five 
 28.35  years, of allowable service credit for applicable maternity 
 28.36  leaves of absence or applicable maternity break in teaching 
 29.1   service periods by making payment under section 356.55. 
 29.2      Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 29.3   desires to purchase service credit under subdivision 1 must 
 29.4   apply with the executive director or secretary of the respective 
 29.5   retirement fund association to make the purchase.  The 
 29.6   application must include all necessary documentation of the 
 29.7   teacher's qualifications to make the purchase, signed written 
 29.8   permission to allow the executive director or secretary to 
 29.9   request and receive any necessary verification of applicable 
 29.10  facts and eligibility requirements, and any other relevant 
 29.11  information that the executive director or secretary may require.
 29.12     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
 29.13  for the purchase period must be granted by the applicable 
 29.14  teachers retirement fund association to the purchasing teacher 
 29.15  on receipt of the purchase payment amount. 
 29.16     Sec. 9.  [354A.101] [PRIVATE OR PAROCHIAL TEACHING SERVICE 
 29.17  CREDIT PURCHASE.] 
 29.18     Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 29.19  teacher who has at least three years of allowable service credit 
 29.20  with the teachers retirement fund association is entitled to 
 29.21  purchase up to ten years of allowable service credit for private 
 29.22  or parochial school teaching service by making payment under 
 29.23  section 356.55, provided that the teacher is not entitled to 
 29.24  receive a current or deferred age and service retirement annuity 
 29.25  or disability benefit from the applicable employer-sponsored 
 29.26  pension plan and has not purchased service credit from the 
 29.27  applicable defined benefit employer-sponsored pension plan for 
 29.28  that service. 
 29.29     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 29.30  desires to purchase service credit under subdivision 1 must 
 29.31  apply with the executive director to make the purchase.  The 
 29.32  application must include all necessary documentation of the 
 29.33  teacher's qualifications to make the purchase, signed written 
 29.34  permission to allow the executive director to request and 
 29.35  receive necessary verification of applicable facts and 
 29.36  eligibility requirements, and any other relevant information 
 30.1   that the executive director may require. 
 30.2      Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
 30.3   for the purchase period must be granted by the teachers 
 30.4   retirement fund association to the purchasing teacher on receipt 
 30.5   of the purchase payment amount. 
 30.6      Sec. 10.  [354A.102] [PEACE CORPS OR VISTA SERVICE CREDIT 
 30.7   PURCHASE.] 
 30.8      Subdivision 1.  [SERVICE CREDIT PURCHASE AUTHORIZED.] A 
 30.9   teacher who has at least three years of allowable service credit 
 30.10  with the teachers retirement fund association is entitled to 
 30.11  purchase up to ten years of allowable service credit for service 
 30.12  rendered in the federal Peace Corps program or in the federal 
 30.13  Volunteers in Service to America program by making payment under 
 30.14  section 356.53, provided that the teacher has not purchased 
 30.15  service credit from any defined benefit pension plan for that 
 30.16  service. 
 30.17     Subd. 2.  [APPLICATION AND DOCUMENTATION.] A teacher who 
 30.18  desires to purchase service credit under subdivision 1 must 
 30.19  apply with the executive director to make the purchase.  The 
 30.20  application must include all necessary documentation of the 
 30.21  teacher's qualifications to make the purchase, signed written 
 30.22  permission to allow the executive director to request and 
 30.23  receive necessary verification of applicable facts and 
 30.24  eligibility requirements, and any other relevant information 
 30.25  that the executive director may require. 
 30.26     Subd. 3.  [SERVICE CREDIT GRANT.] Allowable service credit 
 30.27  for the purchase period must be granted by the teachers 
 30.28  retirement fund association to the purchasing teacher on receipt 
 30.29  of the purchase payment amount. 
 30.30     Sec. 11.  Minnesota Statutes 1998, section 356.55, 
 30.31  subdivision 1, is amended to read: 
 30.32     Subdivision 1.  [APPLICATION.] Unless the prior service 
 30.33  credit purchase authorization special law or general statute 
 30.34  provision explicitly specifies a different purchase payment 
 30.35  amount determination procedure, this section governs the 
 30.36  determination of the prior service credit purchase payment 
 31.1   amount of any prior service credit purchase.  The purchase 
 31.2   payment amount determination procedure must recognize any 
 31.3   service credit accrued to the purchaser in a pension plan listed 
 31.4   in section 356.30, subdivision 3.  Any service credit in a 
 31.5   Minnesota defined benefit public employee pension plan available 
 31.6   to be reinstated by the purchaser through the repayment of a 
 31.7   refund of member or employee contributions previously received 
 31.8   must be repaid in full before any purchase of prior service 
 31.9   credit payment is made under this section. 
 31.10     Sec. 12.  Minnesota Statutes 1998, section 356.55, 
 31.11  subdivision 6, is amended to read: 
 31.12     Subd. 6.  [REPORT ON PRIOR SERVICE CREDIT PURCHASES.] (a) 
 31.13  As part of the regular data reporting to the consulting actuary 
 31.14  retained by the legislative commission on pensions and 
 31.15  retirement annually, the chief administrative officer of each 
 31.16  public pension plan that has accepted a prior service credit 
 31.17  purchase payment under this section shall report for any 
 31.18  purchase, the purchaser, the purchaser's employer, the age of 
 31.19  the purchaser, the period of the purchase, the purchaser's 
 31.20  prepurchase accrued service credit, the purchaser's postpurchase 
 31.21  accrued service credit, the purchaser's prior service credit 
 31.22  payment, the prior service credit payment made by the 
 31.23  purchaser's employer, and the amount of the additional benefit 
 31.24  or annuity purchased. 
 31.25     (b) As part of a supplemental report to the regular annual 
 31.26  actuarial valuation for the applicable public pension plan 
 31.27  prepared by the consulting actuary retained by the legislative 
 31.28  commission on pensions and retirement, there must be an exhibit 
 31.29  comparing a comparison for each purchase showing the total prior 
 31.30  service credit payment received from all sources and the 
 31.31  increased public pension plan actuarial accrued liability 
 31.32  resulting from each purchase. 
 31.33     Sec. 13.  [INSTRUCTION TO REVISOR.] 
 31.34     The revisor of statutes shall replace the current headnote 
 31.35  for Minnesota Statutes, section 354.53, with the headnote 
 31.36  "CREDIT FOR MILITARY SERVICE LEAVE OF ABSENCE." 
 32.1      Sec. 14.  [EFFECTIVE DATE.] 
 32.2      Sections 1 to 13 are effective on May 16, 1999. 
 32.3                              ARTICLE 8  
 32.4                   MINNEAPOLIS EMPLOYEES RETIREMENT  
 32.5                             PLAN CHANGES  
 32.6      Section 1.  Minnesota Statutes 1998, section 422A.06, 
 32.7   subdivision 3, is amended to read: 
 32.8      Subd. 3.  [DEPOSIT ACCUMULATION FUND.] The deposit 
 32.9   accumulation fund consists of the assets held in the fund, 
 32.10  increased by including amounts contributed by or for employees, 
 32.11  amounts contributed by the city, amounts contributed by 
 32.12  municipal activities supported in whole or in part by revenues 
 32.13  other than taxes and amounts contributed by any public 
 32.14  corporation, amounts paid by the state, and by income from 
 32.15  investments.  There must be paid from the fund the amounts 
 32.16  required to be transferred to the retirement benefit fund, or 
 32.17  the disability benefit fund, refunds of contributions, death 
 32.18  benefits payable on death before retirement that are not payable 
 32.19  from the survivors' benefit fund including the 
 32.20  death-while-active refund specified in section 422A.22, 
 32.21  subdivision 4, postretirement increases in retirement allowances 
 32.22  granted under Laws 1965, chapter 688, or Laws 1969, chapter 859, 
 32.23  and expenses of the administration of the retirement fund which 
 32.24  were not charged by the retirement board against the income of 
 32.25  the retirement benefit fund from investments as the cost of 
 32.26  handling the investments of the retirement benefit fund. 
 32.27     Sec. 2.  Minnesota Statutes 1998, section 422A.06, 
 32.28  subdivision 6, is amended to read: 
 32.29     Subd. 6.  [SURVIVOR'S BENEFIT FUND.] The survivor's benefit 
 32.30  fund shall consist consists of the amount held for survivor 
 32.31  benefits, increased by contributions for survivor benefits made 
 32.32  by and for employees, including contributions made by the 
 32.33  employer, by any municipal activity supported in whole or in 
 32.34  part by revenue other than taxes or by any public corporation.  
 32.35  A proportionate share of income from investments shall must be 
 32.36  allocated to this fund.  There shall be paid from such fund the 
 33.1   Survivor benefits specified in section 422A.23 except that the 
 33.2   refund of net accumulated deductions from the salary of a 
 33.3   contributing member shall upon death in service be paid from the 
 33.4   deposit accumulation fund must be paid from this fund. 
 33.5      Sec. 3.  Minnesota Statutes 1998, section 422A.101, 
 33.6   subdivision 4, is amended to read: 
 33.7      Subd. 4.  [ADDITIONAL EMPLOYER CONTRIBUTION IN CERTAIN 
 33.8   INSTANCES.] (a) If a participating employing unit, other than 
 33.9   the state, has a negative asset balance in the deposit 
 33.10  accumulation fund, the executive director shall bill the 
 33.11  employing unit for the amount of the deficiency.  Any amount 
 33.12  billed will include six percent interest, compounded annually, 
 33.13  for any year or portion of a year from the billing date until 
 33.14  the date of payment. 
 33.15     (b) If assets in the deposit accumulation fund are 
 33.16  insufficient to make a transfer to the retirement benefit fund, 
 33.17  the city of Minneapolis shall pay the amount of that 
 33.18  insufficiency to the retirement benefit fund within three days 
 33.19  of certification of the insufficiency by the executive director 
 33.20  of the fund.  The city of Minneapolis may bill any other 
 33.21  participating employing unit other than the state for its 
 33.22  proportion of the amount paid.  Any amount billed by the city 
 33.23  under this paragraph will include interest as specified in 
 33.24  paragraph (a).  
 33.25     Sec. 4.  Minnesota Statutes 1998, section 422A.18, 
 33.26  subdivision 2, is amended to read: 
 33.27     Subd. 2.  [DISABILITY ALLOWANCE AMOUNT.] (a) The amount of 
 33.28  disability allowance under this section shall be the amount of 
 33.29  service allowance to which the employee would be entitled under 
 33.30  section 422A.15, notwithstanding the age requirements expressed 
 33.31  therein; or the lesser of the following amounts:  50 percent of 
 33.32  the final average compensation, or an amount equal to two 
 33.33  percent of final average compensation for each year of allowable 
 33.34  service for the first ten years, and thereafter 2.5 percent of 
 33.35  final average compensation per year of allowable service, 
 33.36  including in the latter assumed service between the date the 
 34.1   disability occurred and the 60th birthday of the employee. 
 34.2      If the amount of annuity (b) Annuities payable from the 
 34.3   Minnesota postretirement investment fund to any class of 
 34.4   annuitants is adjusted pursuant to section 11A.18, the amount of 
 34.5   benefits payable from the disability benefit fund for that class 
 34.6   of annuitants under this section shall also be adjusted at the 
 34.7   same time and rate as retirement annuities in the retirement 
 34.8   benefit fund. 
 34.9      Sec. 5.  Minnesota Statutes 1998, section 422A.22, 
 34.10  subdivision 4, is amended to read: 
 34.11     Subd. 4.  [DEATH-WHILE-ACTIVE REFUND.] (a) Upon the death 
 34.12  of a contributing an active member while still in the service of 
 34.13  the city, and before reaching the compulsory age of 
 34.14  retirement prior to termination of service, there shall be paid 
 34.15  to such person the beneficiary or persons as beneficiaries 
 34.16  designated by the member shall have nominated by written 
 34.17  designation on a form specified by the executive director and 
 34.18  filed with the retirement board, in such form as the retirement 
 34.19  board shall require, the net accumulated amount of employee 
 34.20  deductions from salary, pay, or compensation, including interest 
 34.21  , to the member's credit on date of compounded annually to the 
 34.22  date of the member's death.  The amount must not include any 
 34.23  contributions made by the employee or on the employee's behalf, 
 34.24  or any interest or investment earnings on those contributions, 
 34.25  which were allocated to the survivor benefit fund under section 
 34.26  422A.06, subdivision 6. 
 34.27     (b) If the employee fails to make a designation, or if 
 34.28  the person or persons beneficiary or beneficiaries designated by 
 34.29  such the employee predeceases such the employee, the net 
 34.30  accumulated amount of deductions from salary, pay, or 
 34.31  compensation including interest, to the credit of such employee 
 34.32  on date of death shall benefit specified in paragraph (a) must 
 34.33  be paid to such the deceased employee's estate. 
 34.34     (c) A benefit payable under this subdivision is in addition 
 34.35  to any applicable survivor benefit under section 422A.23. 
 34.36     Sec. 6.  Minnesota Statutes 1998, section 422A.22, 
 35.1   subdivision 5, is amended to read: 
 35.2      Subd. 5.  [REPAYMENT OF REFUND.] Upon reinstatement 
 35.3   reemployment of a former covered employee to the service, in 
 35.4   employment covered by the Minneapolis employees retirement fund, 
 35.5   service credit for such past service or for any part thereof 
 35.6   shall which was forfeited by taking a refund must be granted 
 35.7   reinstated only upon repayment of the amount of the separation 
 35.8   refund, with interest, from the time of separation payment of 
 35.9   the refund until the date repaid.  
 35.10     Sec. 7.  Minnesota Statutes 1998, section 422A.23, is 
 35.11  amended to read: 
 35.12     422A.23 [SURVIVOR BENEFITS.] 
 35.13     Subdivision 1.  [PAYMENT OF CITY INSTALLMENT ACCUMULATED 
 35.14  AMOUNT.] (a) If a contributing an active or deferred member dies 
 35.15  after having been in the service with ten or more years of 
 35.16  service credit, and before actual retirement, as determined by 
 35.17  the retirement board, the present worth of the city's annual 
 35.18  installments of $60 then to the credit of the contributing 
 35.19  member, shall be paid to a beneficiary designated by such 
 35.20  contributing member in such form as the retirement board shall 
 35.21  require, who shall be the surviving spouse, or surviving child, 
 35.22  or children of such member or, if there be no surviving spouse 
 35.23  or surviving child or children, then to a person actually 
 35.24  dependent on and receiving principal support from such member, 
 35.25  or surviving mother or father, or grandchildren, or surviving 
 35.26  brother or sister, or surviving children of the deceased brother 
 35.27  or sister of such member except as noted in paragraph (d), the 
 35.28  individual specified in paragraph (b) is eligible to receive the 
 35.29  benefit specified in paragraph (c). 
 35.30     (b) An individual eligible for the benefit specified in 
 35.31  paragraph (c) is a beneficiary designated by the member on a 
 35.32  form specified by the executive director.  If the beneficiary 
 35.33  designated by the member is not one of the class of persons 
 35.34  named in the preceding sentence, such benefit from the 
 35.35  accumulation of city deposits shall be paid in the following 
 35.36  order:  (1) to the surviving spouse, the whole thereof; (2) if 
 36.1   there be no surviving spouse, to the surviving children, share 
 36.2   and share alike; (3) if there be no surviving spouse or child or 
 36.3   children, to the dependent or dependents as those terms are 
 36.4   herein defined, of the member, share and share alike; (4) if 
 36.5   there be no surviving spouse, child or children, or dependents, 
 36.6   to the surviving mother and father, share and share alike; (5) 
 36.7   if there be no surviving mother and father, to the 
 36.8   grandchildren, in equal shares; if there be no grandchildren, to 
 36.9   the surviving brothers and sisters of the member, in equal 
 36.10  shares; (6) if there be no surviving brothers and sisters, to 
 36.11  the surviving children of the deceased brothers and sisters of 
 36.12  the member, in equal shares; or (7) if there is none of the 
 36.13  foregoing persons who survives the member, the accumulation of 
 36.14  the city deposits shall be applied to the funeral expenses of 
 36.15  the member failed to designate a beneficiary, or if the 
 36.16  beneficiary or beneficiaries designated by the employee 
 36.17  predecease the employee, the benefit in paragraph (c) is payable 
 36.18  to the deceased employee's estate. 
 36.19     (c) The benefit is a lump-sum payment of the present value 
 36.20  of the city's or other contributing employer's annual 
 36.21  installments of $60 to the credit of the member. 
 36.22     (d) No benefit is payable under this subdivision if a 
 36.23  monthly survivor benefit is paid under another subdivision of 
 36.24  this section. 
 36.25     Subd. 2.  [SHORT-SERVICE SURVIVOR BENEFIT.] (a) If an 
 36.26  active member dies prior to termination of service with at least 
 36.27  18 months but less than 20 years of service credit, the 
 36.28  surviving spouse or surviving child or children is eligible to 
 36.29  receive the survivor benefit specified in paragraph (b) or (c), 
 36.30  as applicable.  Payment of a benefit for any surviving child 
 36.31  under the age of 18 years shall be made to the surviving parent, 
 36.32  or if there be none, to the legal guardian of the surviving 
 36.33  child.  For purposes of this subdivision, a surviving child is 
 36.34  an unmarried child of the deceased member under the age of 18, 
 36.35  or under the age of 22 if a full-time student at an accredited 
 36.36  school, college, or university. 
 37.1      (b) If the surviving spouse or surviving child benefit 
 37.2   commenced before July 1, 1983, the surviving spouse benefit is 
 37.3   increased from $500 per month to $750 per month and the 
 37.4   surviving child benefit is $225 per month, beginning with the 
 37.5   first monthly payment payable after May 28, 1998.  The sum of 
 37.6   surviving spouse and surviving child benefits payable under this 
 37.7   paragraph shall not exceed $900 per month.  The increased cost 
 37.8   resulting from the benefit increases under this paragraph must 
 37.9   be allocated to each employing unit listed in section 422A.101, 
 37.10  subdivisions 1a, 2, and 2a, on the basis of the additional 
 37.11  accrued liability resulting from increased benefits paid to the 
 37.12  survivors of employees from that unit. 
 37.13     (c) If the surviving spouse or surviving child benefit 
 37.14  commences after June 30, 1983, the surviving spouse benefit is 
 37.15  30 percent of the member's average salary in effect over the 
 37.16  last six months of allowable service preceding the month in 
 37.17  which death occurs.  The surviving child benefit is ten percent 
 37.18  of the member's average salary in effect over the last six 
 37.19  months of allowable service preceding the month in which death 
 37.20  occurs.  The sum of surviving spouse and surviving child 
 37.21  benefits payable under this paragraph shall not exceed 50 
 37.22  percent of the member's average salary in effect over the last 
 37.23  six months of allowable service. 
 37.24     (d) Any surviving child benefit or surviving spouse benefit 
 37.25  computed under paragraph (c) and in effect for the month 
 37.26  immediately prior to May 28, 1998, is increased by 15 percent as 
 37.27  of the first payment on or after May 28, 1998. 
 37.28     (e) Surviving child benefits under this subdivision 
 37.29  terminate when the child no longer meets the definition of 
 37.30  surviving child. 
 37.31     Subd. 5.  [ADMINISTRATION.] Benefits herein provided shall 
 37.32  in this section following the death of an active employee or 
 37.33  deferred member, as applicable, commence with on the first day 
 37.34  of the month following the month in which the active employee or 
 37.35  deferred member dies and shall end with the last day of the 
 37.36  month preceding the month in which eligibility 
 38.1   ceases.  Eligibility for the benefits herein provided shall be 
 38.2   determined by the retirement board and its determination shall 
 38.3   be final.  Each beneficiary or parent or guardian of a dependent 
 38.4   child or legal representative shall furnish such Information as 
 38.5   the board may deem deemed necessary by the executive director to 
 38.6   determine eligibility for the benefits provided by this section, 
 38.7   and must be submitted.  Failure to furnish any required 
 38.8   information shall be sufficient grounds for the denial or 
 38.9   discontinuance of benefits.  A determination made by the 
 38.10  executive director may be appealed to the retirement board, 
 38.11  whose determination is final.  If the surviving spouse of the 
 38.12  deceased active employee or deferred member becomes entitled to 
 38.13  a retirement allowance by reason of membership in this fund, the 
 38.14  surviving spouse shall is authorized to receive the retirement 
 38.15  allowance in addition to the all applicable surviving spouse's 
 38.16  benefit spouse benefits to which the surviving spouse is 
 38.17  entitled as specified in this section and section 422A.22, 
 38.18  subdivision 4, if applicable.  The cost of all monthly 
 38.19  survivor's benefits provided in this section shall be is an 
 38.20  obligation of the members and of the city, any of its boards, 
 38.21  departments, commissions or public corporations or other 
 38.22  applicable employing units. 
 38.23     Subd. 6.  [SURVIVOR BENEFIT EMPLOYEE CONTRIBUTION.] The 
 38.24  retirement board shall create a reserve account for survivor's 
 38.25  benefits from which shall be paid on an actuarial basis all 
 38.26  survivor benefits due and payable.  At the end of each fiscal 
 38.27  year, as part of the annual actuarial valuation of the fund 
 38.28  prepared by the commission-retained actuary, a determination of 
 38.29  the normal cost of the benefits payable from the survivor's 
 38.30  benefit account shall be made and the board shall reduce or 
 38.31  increase the employee contribution rate of one-fourth of one 
 38.32  percent if and when it is determined based on the annual 
 38.33  actuarial valuation that the member contribution rate is in 
 38.34  excess of or is less than the amount necessary to pay for 50 
 38.35  percent of the calculated normal cost of the survivor benefits 
 38.36  provided in this section. 
 39.1      Subd. 7.  [LONG-SERVICE ACTIVE AND DEFERRED MEMBER SURVIVOR 
 39.2   COVERAGE.] (a) If the contributing active or deferred member 
 39.3   dies after having been in the service of the city 20 or more 
 39.4   years, and before the effective date of retirement, as 
 39.5   determined by the retirement board, the board shall pay with 20 
 39.6   or more years of service credit, a beneficiary as defined in 
 39.7   paragraph (b) is eligible to receive the benefit specified in 
 39.8   paragraph (c). 
 39.9      (b) The beneficiary eligible for a benefit under paragraph 
 39.10  (c) is the surviving spouse of the deceased employee.  If there 
 39.11  is no surviving spouse, the beneficiary may be a dependent 
 39.12  surviving child of the member or dependent parent designated by 
 39.13  the employee on a form prescribed by the executive director. 
 39.14     (c) The benefit payable to the beneficiary designated in 
 39.15  paragraph (b) is a monthly allowance for life to the designated 
 39.16  beneficiary of the employee.  The monthly allowance herein 
 39.17  provided for shall be is the actuarial equivalent of a single 
 39.18  life service allowance specified in section 422A.15, subdivision 
 39.19  1, which would have been payable to the employee on the date of 
 39.20  death, notwithstanding the age requirement stated in section 
 39.21  422A.15, subdivision 1.  For purposes of this section, the 
 39.22  amount of any excess contributions or voluntary additions by the 
 39.23  member shall not be included in the calculations in determining 
 39.24  the monthly allowance.  
 39.25     The survivor allowance under this subdivision shall be 
 39.26  computed and determined under a procedure specified by the 
 39.27  commission-retained actuary utilizing the appropriate mortality 
 39.28  table established by the board of trustees based on the 
 39.29  experience of the fund as recommended by the commission-retained 
 39.30  actuary and using the applicable postretirement interest rate 
 39.31  assumption specified in section 356.215, subdivision 4d. 
 39.32     (d) For benefits payable under this subdivision following 
 39.33  the death of a deferred member, the benefit must be calculated 
 39.34  as of the date of termination from service and increased by five 
 39.35  percent per year until January 1, 1981, and by three percent per 
 39.36  year thereafter compounded annually. 
 40.1      Subd. 8.  [SURVIVING CHILD; DEPENDENT DEFINITION.] The 
 40.2   beneficiary designated by the employee shall be the surviving 
 40.3   spouse of such employee.  If there is no surviving spouse, the 
 40.4   designated beneficiary may be a dependent surviving child or 
 40.5   dependent parent of such employee as dependency is defined in 
 40.6   sections 422A.01 to 422A.25.  If the beneficiary designated by 
 40.7   the employee is not of the class of persons provided for in this 
 40.8   subdivision, or if the designated beneficiary predeceases the 
 40.9   employee, a refund shall be made as provided for in section 
 40.10  422A.22, in lieu of a life income.  If the employee does not 
 40.11  elect to designate a beneficiary to receive a life income as 
 40.12  herein provided, the designated beneficiary, if of the class of 
 40.13  persons set forth in this subdivision, may elect within 60 days 
 40.14  after the date of death of the employee to receive a life income 
 40.15  computed and determined as though the employee had retired on 
 40.16  the date of death under the option 2 plan of retirement, as 
 40.17  provided for in sections 422A.01 to 422A.25, and had designated 
 40.18  such person as beneficiary.  For purposes of subdivision 2, a 
 40.19  surviving child is an unmarried child of the deceased member 
 40.20  under the age of 18, or under the age of 22 if a full-time 
 40.21  student at an accredited school, college, or university.  For 
 40.22  purposes of subdivision 7, a dependent surviving child or 
 40.23  dependent parent must meet the definition of dependent, as 
 40.24  defined in section 422A.01, subdivision 12, at the time of the 
 40.25  active or deferred member's death. 
 40.26     Subd. 9.  [LUMP-SUM DEATH BENEFIT.] If any employee who has 
 40.27  contributed to the survivor's benefit account as herein provided 
 40.28  dies before the effective date of retirement on a service or 
 40.29  disability pension and is not survived by a beneficiary eligible 
 40.30  to receive a monthly allowance as herein provided If no monthly 
 40.31  survivor benefit is payable under subdivision 2 or 7, there 
 40.32  shall be paid from the survivor's survivor benefit account to a 
 40.33  beneficiary designated by the employee on a form prescribed by 
 40.34  the executive director a lump-sum death benefit of $750 if death 
 40.35  occurs prior to the end of the employee's tenth year of 
 40.36  service credit or of $1500 if the employee had prior to death 
 41.1   completed ten or more calendar years of service credit.  Upon 
 41.2   reinstatement of a former employee to the service, credit for 
 41.3   such past service or for any part thereof shall be granted only 
 41.4   upon repayment of the amount of the separation refund, with 
 41.5   interest, from the time of separation Any benefit under this 
 41.6   subdivision may be paid in addition to a benefit payable under 
 41.7   subdivision 1. 
 41.8      Subd. 10.  [BENEFIT INCREASES.] If the amount of annuity 
 41.9   payable from the Minnesota postretirement investment fund to any 
 41.10  class of annuitants is adjusted pursuant to section 11A.18, the 
 41.11  amount of benefits payable from the survivor's benefit fund 
 41.12  pursuant to subdivisions 7 or 8 for that class of annuitants 
 41.13  shall also be adjusted at the same time and rate.  Annuities 
 41.14  payable under this section shall be adjusted at the same time 
 41.15  and rate as retirement annuities in the retirement benefit fund. 
 41.16     Subd. 11.  [EFFECT OF SPOUSE REMARRIAGE.] A monthly 
 41.17  survivor benefit is must not suspended, be discontinued or 
 41.18  terminated, or otherwise stopped due to a surviving spouse's 
 41.19  remarriage. 
 41.20     Subd. 12.  [DETERMINATION OF ANNUITY.] The survivor 
 41.21  annuities payable under this section shall be computed and 
 41.22  determined under a procedure specified by the actuary retained 
 41.23  by the legislative commission on pensions and retirement 
 41.24  utilizing the appropriate mortality table based on the 
 41.25  experience of the fund as recommended by that actuary and 
 41.26  approved by the legislative commission on pensions and 
 41.27  retirement and using the applicable postretirement interest rate 
 41.28  assumption specified in section 356.215, subdivision 4d. 
 41.29     Sec. 8.  [422A.231] [COST ALLOCATION.] 
 41.30     Notwithstanding any law to the contrary, all current and 
 41.31  future contribution requirements due to this act are payable by 
 41.32  the participating contributing employing units other than the 
 41.33  state. 
 41.34     Sec. 9.  [REPEALER.] 
 41.35     Minnesota Statutes 1998, section 422A.16, subdivision 3a, 
 41.36  is repealed. 
 42.1      Sec. 10.  [EFFECTIVE DATE.] 
 42.2      Sections 1 to 9 are effective upon approval by the 
 42.3   Minneapolis city council and compliance with Minnesota Statutes, 
 42.4   section 645.021. 
 42.5                              ARTICLE 9  
 42.6                    EMPLOYER MATCHING CONTRIBUTION  
 42.7                        TAX-SHELTERED ANNUITY  
 42.8                               CHANGES 
 42.9      Section 1.  Minnesota Statutes 1998, section 356.24, 
 42.10  subdivision 1, is amended to read: 
 42.11     Subdivision 1.  [RESTRICTION; EXCEPTIONS.] (a) It is 
 42.12  unlawful for a school district or other governmental subdivision 
 42.13  or state agency to levy taxes for, or contribute public funds to 
 42.14  a supplemental pension or deferred compensation plan that is 
 42.15  established, maintained, and operated in addition to a primary 
 42.16  pension program for the benefit of the governmental subdivision 
 42.17  employees other than: 
 42.18     (1) to a supplemental pension plan that was established, 
 42.19  maintained, and operated before May 6, 1971; 
 42.20     (2) to a plan that provides solely for group health, 
 42.21  hospital, disability, or death benefits; 
 42.22     (3) to the individual retirement account plan established 
 42.23  by chapter 354B; 
 42.24     (4) to a plan that provides solely for severance pay under 
 42.25  section 465.72 to a retiring or terminating employee; 
 42.26     (5) for employees other than personnel employed by the 
 42.27  state university board or the community college board and 
 42.28  covered by the board of trustees of the Minnesota state colleges 
 42.29  and universities supplemental retirement plan under chapter 
 42.30  354C, if provided for in a personnel policy of the public 
 42.31  employer or in the collective bargaining agreement between the 
 42.32  public employer and the exclusive representative of public 
 42.33  employees in an appropriate unit, in an amount matching employee 
 42.34  contributions on a dollar for dollar basis, but not to exceed an 
 42.35  employer contribution of $2,000 a year per employee; 
 42.36     (i) to the state of Minnesota deferred compensation plan 
 43.1   under section 352.96; or 
 43.2      (ii) in payment of the applicable portion of the premium on 
 43.3   a tax-sheltered annuity contract qualified under section 403(b) 
 43.4   of the Internal Revenue Code, if purchased from a qualified 
 43.5   insurance company, or from a qualified investment entity, as 
 43.6   defined in subdivision 1a, and if the employing unit has 
 43.7   complied with any applicable pension plan provisions of the 
 43.8   Internal Revenue Code with respect to the tax-sheltered annuity 
 43.9   program during the preceding calendar year; or 
 43.10     (6) for personnel employed by the state university board or 
 43.11  the community college board and not covered by clause (5), to 
 43.12  the supplemental retirement plan under chapter 354C, if provided 
 43.13  for in a personnel policy or in the collective bargaining 
 43.14  agreement of the public employer with the exclusive 
 43.15  representative of the covered employees in an appropriate unit, 
 43.16  in an amount matching employee contributions on a dollar for 
 43.17  dollar basis, but not to exceed an employer contribution of 
 43.18  $2,000 a year for each employee.  
 43.19     (b) Subd. 1a.  [QUALIFIED INSURANCE COMPANY; QUALIFIED 
 43.20  INVESTMENT ENTITIES; DEFINITIONS.] (a) A qualified insurance 
 43.21  company is a company that: 
 43.22     (1) meets the definition in section 60A.02, subdivision 4; 
 43.23     (2) is licensed to engage in life insurance or annuity 
 43.24  business in the state; 
 43.25     (3) is determined by the commissioner of commerce to have a 
 43.26  rating within the top two rating categories by a recognized 
 43.27  national rating agency or organization that regularly rates 
 43.28  insurance companies; and 
 43.29     (4) is determined by the state board of investment to be 
 43.30  among the ten up to 20 applicant insurance companies with 
 43.31  competitive investment options and investment returns on annuity 
 43.32  products. 
 43.33     (b) A qualified investment entity is an open-end investment 
 43.34  company that: 
 43.35     (1) is registered under the federal Investment Company Act 
 43.36  of 1940; 
 44.1      (2) is licensed to do business in the state; 
 44.2      (3) is determined by the commissioner of commerce to be in 
 44.3   sound financial standing; and 
 44.4      (4) is determined by the state board of investment to be 
 44.5   among up to five applicant investment entities with competitive 
 44.6   investment options and investment returns. 
 44.7      (c) The state board of investment determination must be 
 44.8   made on or before January 1, 1993 July 1, 2000, and must be 
 44.9   reviewed periodically.  The state board of investment may retain 
 44.10  actuarial services to assist it in this determination and in its 
 44.11  periodic review.  The state board of investment may annually 
 44.12  establish a budget for its costs in any determination and 
 44.13  periodic review processes.  The state board of investment may 
 44.14  charge a proportional share of all costs related to the periodic 
 44.15  review to those qualified insurance companies and qualified 
 44.16  investment entities currently under contract and may charge a 
 44.17  proportional share of all costs related to soliciting and 
 44.18  evaluating bids in a determination process to each company and 
 44.19  investment entity selected by the state board of investment.  
 44.20  All contracts must be approved before execution by the state 
 44.21  board of investment.  The state board of investment shall 
 44.22  establish policies and procedures under section 11A.04, clause 
 44.23  (2), to carry out this paragraph. 
 44.24     (c) Subd. 1b.  [VENDOR RESTRICTIONS.] A personnel policy 
 44.25  for unrepresented employees or a collective bargaining agreement 
 44.26  may establish limits on the number of vendors under paragraph 
 44.27  (b), clause (5), subdivision 1 that it will utilize and 
 44.28  conditions under which the vendors may contact employees both 
 44.29  during working hours and after working hours. 
 44.30     Sec. 2.  [COMMISSION STUDY.] 
 44.31     The legislative commission on pensions and retirement shall 
 44.32  study the issue of the appropriate means to provide partially 
 44.33  employer-funded tax-sheltered savings opportunities for 
 44.34  educational employees, including the establishment of a single 
 44.35  comprehensive program structure for all applicable educational 
 44.36  employers and the elimination of any restriction on investment 
 45.1   vendors in providing partially employer-funded investment 
 45.2   opportunities to educational employees. 
 45.3      Sec. 3.  [EFFECTIVE DATE.] 
 45.4      Section 1 is effective May 15, 2000.  Section 2 is 
 45.5   effective on the day following final enactment. 
 45.6                              ARTICLE 10  
 45.7                     MNSCU INDIVIDUAL RETIREMENT  
 45.8                         ACCOUNT PLAN CHANGES  
 45.9      Section 1.  Minnesota Statutes 1998, section 43A.27, 
 45.10  subdivision 3, is amended to read:  
 45.11     Subd. 3.  [RETIRED EMPLOYEES.] (a) A person may elect to 
 45.12  purchase at personal expense individual and dependent hospital, 
 45.13  medical, and dental coverages if the person is: 
 45.14     (1) a retired employee of the state or an organization 
 45.15  listed in subdivision 2 or section 43A.24, subdivision 2, who, 
 45.16  at separation of service: 
 45.17     (i) is immediately eligible to receive a retirement benefit 
 45.18  under chapter 354B or an annuity under a retirement program 
 45.19  sponsored by the state or such organization of the state and; 
 45.20     (ii) immediately meets the age and service requirements in 
 45.21  section 352.115, subdivision 1; and 
 45.22     (ii) (iii) has five years of service or meets the service 
 45.23  requirement of the collective bargaining agreement or plan, 
 45.24  whichever is greater; or 
 45.25     (2) a retired employee of the state who is at least 50 
 45.26  years of age and has at least 15 years of state service.  
 45.27     (b) The commissioner shall offer at least one plan which is 
 45.28  actuarially equivalent to those made available through 
 45.29  collective bargaining agreements or plans established pursuant 
 45.30  to under section 43A.18 to employees in positions equivalent to 
 45.31  that from which retired. 
 45.32     (c) A spouse of a deceased retired employee who received an 
 45.33  annuity under a state retirement program person eligible under 
 45.34  paragraph (a) may purchase the coverage listed in this 
 45.35  subdivision if the spouse was a dependent under the retired 
 45.36  employee's coverage at the time of the employee's retiree's 
 46.1   death. 
 46.2      (d) Coverages must be coordinated with relevant health 
 46.3   insurance benefits provided through the federally sponsored 
 46.4   Medicare program.  Until the retired employee reaches age 65, 
 46.5   the retired employee and dependents must be pooled in the same 
 46.6   group as active employees for purposes of establishing premiums 
 46.7   and coverage for hospital, medical, and dental insurance.  
 46.8   Coverage for retired employees and their dependents may not 
 46.9   discriminate on the basis of evidence of insurability or 
 46.10  preexisting conditions unless identical conditions are imposed 
 46.11  on active employees in the group that the employee left.  
 46.12  Appointing authorities shall provide notice to employees no 
 46.13  later than the effective date of their retirement of the right 
 46.14  to exercise the option provided in this subdivision.  The 
 46.15  retired employee must notify the commissioner or designee of the 
 46.16  commissioner within 30 days after the effective date of the 
 46.17  retirement of intent to exercise this option. 
 46.18     Sec. 2.  Minnesota Statutes 1998, section 136F.48, is 
 46.19  amended to read: 
 46.20     136F.48 [EMPLOYER-PAID HEALTH INSURANCE.] 
 46.21     (a) This section applies to a person who:  
 46.22     (1) retires from the Minnesota state university colleges 
 46.23  and universities system, the technical college system, or the 
 46.24  community college system, or from a successor system employing 
 46.25  state university, technical college, or community college 
 46.26  faculty, with at least ten years of combined service credit in a 
 46.27  system under the jurisdiction of the board of trustees of the 
 46.28  Minnesota state colleges and universities; 
 46.29     (2) was employed on a full-time basis immediately preceding 
 46.30  retirement as a state university, technical college, or 
 46.31  community college faculty member or as an unclassified 
 46.32  administrator in one of those systems the Minnesota state 
 46.33  colleges and universities system; 
 46.34     (3) begins drawing a retirement benefit from the individual 
 46.35  retirement account plan or an annuity from the teachers 
 46.36  retirement association, the Minnesota state retirement system, 
 47.1   or from a first class city teacher plan; and 
 47.2      (4) returns to work on not less than a one-third time basis 
 47.3   and not more than a two-thirds time basis in the system from 
 47.4   which the person retired under an agreement in which the person 
 47.5   may not earn a salary of more than $35,000 in a calendar year 
 47.6   from employment after retirement in the system from which the 
 47.7   person retired.  
 47.8      (b) Initial participation, the amount of time worked, and 
 47.9   the duration of participation under this section must be 
 47.10  mutually agreed upon by the president of the institution where 
 47.11  the person returns to work and the employee.  The president may 
 47.12  require up to one-year notice of intent to participate in the 
 47.13  program as a condition of participation under this section.  The 
 47.14  president shall determine the time of year the employee shall 
 47.15  work.  The employer or the president may not require a person to 
 47.16  waive any rights under a collective bargaining agreement as a 
 47.17  condition of participation under this section.  
 47.18     (c) For a person eligible under paragraphs (a) and (b), the 
 47.19  employing board shall make the same employer contribution for 
 47.20  hospital, medical, and dental benefits as would be made if the 
 47.21  person were employed full time.  
 47.22     (d) For work under paragraph (a), a person must receive a 
 47.23  percentage of the person's salary at the time of retirement that 
 47.24  is equal to the percentage of time the person works compared to 
 47.25  full-time work.  
 47.26     (e) If a collective bargaining agreement covering a person 
 47.27  provides for an early retirement incentive that is based on age, 
 47.28  the incentive provided to the person must be based on the 
 47.29  person's age at the time employment under this section ends.  
 47.30  However, the salary used to determine the amount of the 
 47.31  incentive must be the salary that would have been paid if the 
 47.32  person had been employed full time for the year immediately 
 47.33  preceding the time employment under this section ends. 
 47.34     (f) A person who returns to work under this section is a 
 47.35  member of the appropriate bargaining unit and is covered by the 
 47.36  appropriate collective bargaining contract.  Except as provided 
 48.1   in this section, the person's coverage is subject to any part of 
 48.2   the contract limiting rights of part-time employees. 
 48.3      Sec. 3.  [352.1155] [NO ANNUITY REDUCTION.] 
 48.4      Subdivision 1.  [ELIGIBILITY.] Except as indicated in 
 48.5   subdivision 4, the annuity reduction provisions of section 
 48.6   352.115, subdivision 10, do not apply to a person who: 
 48.7      (1) retires from the Minnesota state colleges and 
 48.8   universities system with at least ten years of combined service 
 48.9   credit in a system under the jurisdiction of the board of 
 48.10  trustees of the Minnesota state colleges and universities; 
 48.11     (2) was employed on a full-time basis immediately preceding 
 48.12  retirement as a faculty member or as an unclassified 
 48.13  administrator in that system; 
 48.14     (3) begins drawing an annuity from the Minnesota state 
 48.15  retirement system general plan; and 
 48.16     (4) returns to work on not less than a one-third time basis 
 48.17  and not more than a two-thirds time basis in the system from 
 48.18  which the person retired under an agreement in which the person 
 48.19  may not earn a salary of more than $35,000 in a calendar year 
 48.20  from employment after retirement in the system from which the 
 48.21  person retired. 
 48.22     Subd. 2.  [APPROVAL REQUIREMENTS.] Initial participation, 
 48.23  the amount of time worked, and the duration of participation 
 48.24  under this section must be mutually agreed upon by the president 
 48.25  of the institution where the person returns to work and the 
 48.26  employee.  The president may require up to one-year notice of 
 48.27  intent to participate in the program as a condition of 
 48.28  participation under this section.  The president shall determine 
 48.29  the time of year the employee shall work.  The employer or the 
 48.30  president may not require a person to waive any rights under a 
 48.31  collective bargaining agreement as a condition of participation 
 48.32  under this section.  
 48.33     Subd. 3.  [SERVICE CREDIT PROHIBITION.] Notwithstanding any 
 48.34  law to the contrary, a person eligible under this section may 
 48.35  not, based on employment to which the waiver in this section 
 48.36  applies, earn further service credit in a Minnesota public 
 49.1   defined benefit plan and is not eligible to participate in a 
 49.2   Minnesota public defined contribution plan, other than a 
 49.3   volunteer fire plan governed by chapter 424A.  No employer or 
 49.4   employee contribution to any of these plans may be made on 
 49.5   behalf of such a person. 
 49.6      Subd. 4.  [EXEMPTION LIMIT.] For a person eligible under 
 49.7   this section who earns more than $35,000 in a calendar year from 
 49.8   reemployment in the Minnesota state colleges and universities 
 49.9   system following retirement, the annuity reduction provisions of 
 49.10  section 352.115, subdivision 10, apply only to income over 
 49.11  $35,000. 
 49.12     Subd. 5.  [CONTINUING RIGHTS.] A person who returns to work 
 49.13  under this section is a member of the appropriate bargaining 
 49.14  unit and is covered by the appropriate collective bargaining 
 49.15  contract.  Except as provided in this section, the person's 
 49.16  coverage is subject to any part of the contract limiting rights 
 49.17  of part-time employees. 
 49.18     Sec. 4.  Minnesota Statutes 1998, section 354.445, is 
 49.19  amended to read: 
 49.20     354.445 [NO ANNUITY REDUCTION.] 
 49.21     (a) The annuity reduction provisions of section 354.44, 
 49.22  subdivision 5, do not apply to a person who: 
 49.23     (1) retires from the Minnesota state university colleges 
 49.24  and universities system, technical college system, or the 
 49.25  community college system, or from a successor system employing 
 49.26  state university, technical college, or community college 
 49.27  faculty, with at least ten years of combined service credit in a 
 49.28  system under the jurisdiction of the board of trustees of the 
 49.29  Minnesota state colleges and universities; 
 49.30     (2) was employed on a full-time basis immediately preceding 
 49.31  retirement as a state university, technical college, or 
 49.32  community college faculty member or as an unclassified 
 49.33  administrator in one of these systems that system; 
 49.34     (3) begins drawing an annuity from the teachers retirement 
 49.35  association; and 
 49.36     (4) returns to work on not less than a one-third time basis 
 50.1   and not more than a two-thirds time basis in the system from 
 50.2   which the person retired under an agreement in which the person 
 50.3   may not earn a salary of more than $35,000 in a calendar year 
 50.4   from employment after retirement in the system from which the 
 50.5   person retired. 
 50.6      (b) Initial participation, the amount of time worked, and 
 50.7   the duration of participation under this section must be 
 50.8   mutually agreed upon by the president of the institution where 
 50.9   the person returns to work and the employee.  The president may 
 50.10  require up to one-year notice of intent to participate in the 
 50.11  program as a condition of participation under this section.  The 
 50.12  president shall determine the time of year the employee shall 
 50.13  work.  The employer or the president may not require a person to 
 50.14  waive any rights under a collective bargaining agreement as a 
 50.15  condition of participation under this section.  
 50.16     (c) Notwithstanding any law to the contrary, a person 
 50.17  eligible under paragraphs (a) and (b) may not, based on 
 50.18  employment to which the waiver in this section applies, earn 
 50.19  further service credit in the teachers retirement association 
 50.20  and is not eligible to participate in the individual retirement 
 50.21  account plan or the supplemental retirement plan established in 
 50.22  chapter 354B as a result of service under this section a 
 50.23  Minnesota public defined benefit plan and is not eligible to 
 50.24  participate in a Minnesota public defined contribution plan, 
 50.25  other than a volunteer fire plan governed by chapter 424A.  No 
 50.26  employer or employee contribution to any of these plans may be 
 50.27  made on behalf of such a person. 
 50.28     (d) For a person eligible under paragraphs (a) and (b) who 
 50.29  earns more than $35,000 in a calendar year from employment after 
 50.30  retirement in the system from which the person retired due to 
 50.31  employment in the Minnesota state colleges and universities 
 50.32  system, the annuity reduction provisions of section 354.44, 
 50.33  subdivision 5, apply only to income over $35,000. 
 50.34     (e) A person who returns to work under this section is a 
 50.35  member of the appropriate bargaining unit and is covered by the 
 50.36  appropriate collective bargaining contract.  Except as provided 
 51.1   in this section, the person's coverage is subject to any part of 
 51.2   the contract limiting rights of part-time employees. 
 51.3      Sec. 5.  Minnesota Statutes 1998, section 354.66, 
 51.4   subdivision 1b, is amended to read: 
 51.5      Subd. 1b.  [DISTRICT, DEFINED.] For purposes of this 
 51.6   section, the term "district" means a school district, the 
 51.7   community or the Minnesota state college system and the state 
 51.8   university system. 
 51.9      Sec. 6.  Minnesota Statutes 1998, section 354.66, 
 51.10  subdivision 1c, is amended to read: 
 51.11     Subd. 1c.  [PARTICIPATION.] (a) Except as indicated in 
 51.12  paragraph (b), participation in the part-time mobility program 
 51.13  must be based on a full fiscal year and the employment pattern 
 51.14  of the teacher during the most recent fiscal year.  
 51.15     (b) For a teacher in the Minnesota state colleges and 
 51.16  universities system who teaches only during the first semester 
 51.17  in an academic year and retires immediately after the first 
 51.18  semester, participation in the part-time mobility program must 
 51.19  be based on one-half of a full fiscal year and the employment 
 51.20  pattern of the teacher during the most recent one-half of the 
 51.21  most recent fiscal year. 
 51.22     Sec. 7.  Minnesota Statutes 1998, section 354.66, 
 51.23  subdivision 3, is amended to read: 
 51.24     Subd. 3.  [PART-TIME TEACHING POSITION, DEFINED.] (a) For 
 51.25  purposes of this section, the term "part-time teaching position" 
 51.26  shall mean a teaching position within the district in which the 
 51.27  teacher is employed for at least 50 full days or a fractional 
 51.28  equivalent thereof as prescribed in section 354.091, and for 
 51.29  which the teacher is compensated in an amount not exceeding 80 
 51.30  percent of the compensation established by the board for a 
 51.31  full-time teacher with identical education and experience with 
 51.32  the employing unit.  
 51.33     (b) The compensation of a teacher in the state colleges and 
 51.34  universities system may exceed the 80 percent limit if the 
 51.35  teacher does not teach just one of the three quarters in the 
 51.36  system's full school year, provided no additional services are 
 52.1   performed while the teacher participates in the program.  For a 
 52.2   teacher to which subdivision 1c, paragraph (b), applies, the 
 52.3   term "part-time teaching position" shall mean a teaching 
 52.4   position within the district in which the teacher is employed 
 52.5   for at least 25 full days or a fractional equivalent thereof as 
 52.6   prescribed in section 354.091, and for which the teacher is 
 52.7   compensated in an amount not exceeding 40 percent of the 
 52.8   compensation established by the board for a full-time teacher, 
 52.9   with identical education and experience with the employing unit. 
 52.10     Sec. 8.  Minnesota Statutes 1998, section 354B.24, 
 52.11  subdivision 3, is amended to read: 
 52.12     Subd. 3.  [OPTIONAL ADDITIONAL CONTRIBUTIONS.] (a) In 
 52.13  addition to contributions required by subdivision 2, a plan 
 52.14  participant on an approved sabbatical leave may shall make an 
 52.15  optional additional a member contribution.  The optional 
 52.16  additional member may not exceed based on the applicable member 
 52.17  contribution rate specified in section 354B.23, subdivision 1, 
 52.18  applied to the difference between the amount of salary actually 
 52.19  received during the sabbatical leave and the amount of full-time 
 52.20  salary actually received for a comparable period of an identical 
 52.21  length to the member would have received if not on sabbatical 
 52.22  leave that occurred during the fiscal year immediately preceding 
 52.23  the sabbatical leave.  
 52.24     (b) Any optional additional member contribution must be 
 52.25  made before the last day of the fiscal year next following the 
 52.26  fiscal year in which the sabbatical leave terminates.  The 
 52.27  optional additional member contribution may not include interest 
 52.28  through payroll deduction as though the member were employed 
 52.29  full-time.  
 52.30     (c) When an optional additional member contribution is 
 52.31  made, the employing unit must make the employer contribution at 
 52.32  the rate set forth specified in section 354B.23, subdivision 3, 
 52.33  on the salary that was the basis for the optional additional 
 52.34  member contribution under paragraph (a). 
 52.35     (d) An employer contribution required under this section 
 52.36  must be made no later than 60 days after the date on which the 
 53.1   optional additional member contribution was made.  
 53.2      Sec. 9.  Minnesota Statutes 1998, section 354B.25, 
 53.3   subdivision 2, is amended to read: 
 53.4      Subd. 2.  [ANNUITY CONTRACTS AND CUSTODIAL ACCOUNTS 
 53.5   INVESTMENT OPTIONS.] (a) The plan administrator shall arrange 
 53.6   for the purchase of fixed annuity contracts, variable annuity 
 53.7   contracts, a combination of fixed and variable annuity 
 53.8   contracts, or custodial accounts from financial institutions 
 53.9   which have been selected by the state board of investment under 
 53.10  subdivision 3, as the investment vehicle for the retirement 
 53.11  coverage of plan participants and to provide retirement benefits 
 53.12  to plan participants.  Custodial accounts from financial 
 53.13  institutions shall include open-end investment companies 
 53.14  registered under the federal Investment Company Act of 1940, as 
 53.15  amended investment products. 
 53.16     (b) The annuity contracts or accounts investment products 
 53.17  must be purchased with contributions under section 354B.23 or 
 53.18  with money or assets otherwise provided by law by authority of 
 53.19  the board and deemed acceptable by the applicable financial 
 53.20  institution. 
 53.21     (c) In addition to contracts and accounts from financial 
 53.22  institutions, The Minnesota supplemental investment fund 
 53.23  established under section 11A.17 and administered by the state 
 53.24  board of investment is one of the investment options products 
 53.25  for the individual retirement account plan.  Direct access must 
 53.26  also be provided to lower expense and no load mutual funds, as 
 53.27  those terms are defined by the federal securities and exchange 
 53.28  commission, including stock funds, bond funds, and balanced 
 53.29  funds.  Other investment products or combination of investment 
 53.30  products which may be included are: 
 53.31     (1) savings accounts at federally insured financial 
 53.32  institutions; 
 53.33     (2) life insurance contracts, fixed and variable annuity 
 53.34  contracts from companies that are subject to regulation by the 
 53.35  commerce commissioner; 
 53.36     (3) investment options from open ended investment companies 
 54.1   registered under the federal Investment Company Act of 1940, 
 54.2   United States Code, title 15, sections 80a-1 to 80a-64; 
 54.3      (4) investment options from a firm that is a registered 
 54.4   investment advisor under the Investment Advisors Act of 1940, 
 54.5   United States Code, title 15, sections 80b-1 to 80b-21; 
 54.6      (5) investment options of a bank as defined in United 
 54.7   States Code, title 15, section 80b-2, subsection (a), paragraph 
 54.8   2, or a bank holding company as defined in the Bank Holding 
 54.9   Company Act of 1956, United States Code, title 12, section 1841, 
 54.10  subsection (a), paragraph (1). 
 54.11     Sec. 10.  Minnesota Statutes 1998, section 354B.25, 
 54.12  subdivision 3, is amended to read: 
 54.13     Subd. 3.  [SELECTION OF FINANCIAL INSTITUTIONS.] (a) 
 54.14  The financial institutions investment options provided for under 
 54.15  subdivision 2 must be selected by the state board of 
 54.16  investment.  Financial institutions include open-end investment 
 54.17  companies registered under the federal Investment Company Act of 
 54.18  1940, as amended. 
 54.19     (b) The state board of investment may select up to five 
 54.20  financial institutions to provide annuity contracts, custodial 
 54.21  accounts, or a combination, as investment options for the 
 54.22  individual retirement account plan in addition to the Minnesota 
 54.23  supplemental investment fund.  In making its selection, at a 
 54.24  minimum, the state board of investment shall consider at least 
 54.25  the following: 
 54.26     (1) the experience and ability of the financial institution 
 54.27  to provide retirement and death benefits and products that are 
 54.28  suited to meet the needs of plan participants; 
 54.29     (2) the relationship of those retirement and death benefits 
 54.30  and products provided by the financial institution to their 
 54.31  cost; and 
 54.32     (3) the financial strength and stability of the financial 
 54.33  institution; and 
 54.34     (4) the fees and expenses associated with the investment 
 54.35  products in comparison to other products of similar risk and 
 54.36  rates of return. 
 55.1      (c) (b) After selecting a financial institution, the state 
 55.2   board of investment must periodically review each financial 
 55.3   institution selected under paragraph (b) and the offered 
 55.4   products.  The periodic review must occur at least every three 
 55.5   years.  In making its review, the state board of investment may 
 55.6   retain appropriate consulting services to assist it in its 
 55.7   periodic review, establish a budget for the cost of the periodic 
 55.8   review process, and charge a proportional share of these costs 
 55.9   to the reviewed financial institution. 
 55.10     (d) (c) Contracts with financial institutions under this 
 55.11  section must be executed by the board and must be approved by 
 55.12  the state board of investment before execution. 
 55.13     (e) (d) The state board of investment shall also establish 
 55.14  policies and procedures under section 11A.04, clause (2), to 
 55.15  carry out the provisions of this subdivision. 
 55.16     Sec. 11.  Minnesota Statutes 1998, section 354B.25, 
 55.17  subdivision 5, is amended to read: 
 55.18     Subd. 5.  [INDIVIDUAL RETIREMENT ACCOUNT PLAN 
 55.19  ADMINISTRATIVE EXPENSES.] (a) The reasonable and necessary 
 55.20  administrative expenses of the individual retirement account 
 55.21  plan must may be paid by charged to plan participants by the 
 55.22  plan sponsor in the following manner: 
 55.23     (1) from plan participants with amounts invested in the 
 55.24  Minnesota supplemental investment fund, the plan administrator 
 55.25  may charge an administrative expense assessment in an amount 
 55.26  such that annual total fees charged for plan administration 
 55.27  cannot exceed 40/100 of one percent of the assets of the 
 55.28  Minnesota supplemental investment funds; and 
 55.29     (2) from plan participants with amounts through annuity 
 55.30  contracts and custodial accounts purchased under subdivision 2, 
 55.31  paragraph (a), the plan administrator may charge an 
 55.32  administrative expense assessment of a designated amount, not to 
 55.33  exceed two percent of member and employer contributions, as 
 55.34  those contributions are made form of an annual fee, an asset 
 55.35  based fee, a percentage of the contributions to the plan, or a 
 55.36  combination thereof. 
 56.1      (b) Any administrative expense charge that is not actually 
 56.2   needed for the administrative expenses of the individual 
 56.3   retirement account plan must be refunded to member accounts. 
 56.4      (c) The board of trustees shall report annually, before 
 56.5   October 1, to the advisory committee created in subdivision 1a 
 56.6   on administrative expenses of the plan.  The report must include 
 56.7   a detailed accounting of charges for administrative expenses 
 56.8   collected from plan participants and expenditure of the 
 56.9   administrative expense charges.  The administrative expense 
 56.10  charges collected from plan participants must be kept in a 
 56.11  separate account from any other funds under control of the board 
 56.12  of trustees and may be used only for the necessary and 
 56.13  reasonable administrative expenses of the plan. 
 56.14     Sec. 12.  [354B.31] [IRAP PART-TIME TEACHER MOBILITY 
 56.15  PROGRAM.] 
 56.16     Subdivision 1.  [PARTICIPATION REQUIREMENTS.] A faculty 
 56.17  member who has three years or more of service in the Minnesota 
 56.18  state colleges and universities system, by agreement with the 
 56.19  board or with the authorized representative of the board, may be 
 56.20  assigned to teaching service in a part-time teaching position 
 56.21  under subdivision 2. 
 56.22     Subd. 2.  [PART-TIME TEACHING POSITION; DEFINED.] For 
 56.23  purposes of this section, "part-time teaching position" means a 
 56.24  teaching position within the Minnesota state colleges and 
 56.25  universities system in which the teacher is employed for at 
 56.26  least 50 full days or a fractional equivalent as prescribed in 
 56.27  section 354.091, and for which the faculty member is compensated 
 56.28  in an amount not exceeding 80 percent of the compensation 
 56.29  established by the board for a full-time faculty member with 
 56.30  identical education and experience with the employing unit. 
 56.31     Subd. 3.  [RETIREMENT CONTRIBUTIONS.] A faculty member 
 56.32  assigned to a part-time position under this section shall 
 56.33  continue to make employee contributions to the individual 
 56.34  retirement account plan during the period of part-time 
 56.35  employment on the same basis and in the same amounts as would 
 56.36  have been paid if the person had been employed on a full-time 
 57.1   basis provided that, prior to June 30 each year the member and 
 57.2   the board make that portion of the required employer 
 57.3   contribution to the plan, in any proportion which they may agree 
 57.4   upon, that is based on the difference between the amount of 
 57.5   compensation that would have been paid if the person had been 
 57.6   employed on a full-time basis and the amount of compensation 
 57.7   actually received by the person for the services rendered in the 
 57.8   part-time assignment.  The employing unit shall make that 
 57.9   portion of the required employer contributions to the plan on 
 57.10  behalf of the person that is based on the amount of compensation 
 57.11  actually received by the person for the services rendered in the 
 57.12  part-time assignment.  The employee and employer contributions 
 57.13  shall be based upon the rates of contribution prescribed by 
 57.14  section 354B.23.  Employee contributions for part-time teaching 
 57.15  service pursuant to this section shall not continue for more 
 57.16  than ten years. 
 57.17     Subd. 4.  [OTHER MEMBERSHIP PRECLUDED.] A faculty member 
 57.18  entitled to make employee contributions for part-time teaching 
 57.19  service pursuant to this section shall not be entitled during 
 57.20  the same period of time to be a member of, accrue allowable 
 57.21  service credit in or make employee contributions to any other 
 57.22  Minnesota public employee pension plan, except a volunteer 
 57.23  firefighters relief association governed by sections 69.771 to 
 57.24  69.776. 
 57.25     Subd. 5.  [INSURANCE.] If the board enters into an 
 57.26  agreement authorized by this section, the board shall continue 
 57.27  any insurance programs furnished or authorized a full-time 
 57.28  teacher on an identical basis and with identical sharing of 
 57.29  costs for a part-time teacher pursuant to this section.  
 57.30  However, the requirements of this subdivision may be modified by 
 57.31  a collective bargaining agreement between a board and an 
 57.32  exclusive representative pursuant to chapter 179A.  Teachers as 
 57.33  defined in section 136F.43 employed on a less than 75 percent 
 57.34  time basis pursuant to this section are eligible for state paid 
 57.35  insurance benefits as if the teachers were employed full-time. 
 57.36     Subd. 6.  [ELIGIBILITY FOR CREDIT.] Only teachers who are 
 58.1   public employees as defined in section 179A.03, subdivision 14, 
 58.2   during the school year preceding the period of part-time 
 58.3   employment pursuant to this section qualify for employee 
 58.4   contributions to the retirement plan for part-time teaching 
 58.5   service under subdivision 4.  Notwithstanding section 179A.03, 
 58.6   subdivision 14, clauses (e) and (f), teachers who are employed 
 58.7   on a part-time basis for purposes of this section and who would 
 58.8   therefore be disqualified from the bargaining unit by one or 
 58.9   both of those provisions, continue to be in the bargaining unit 
 58.10  during the period of part-time employment under this section for 
 58.11  purposes of compensation, fringe benefits, and the grievance 
 58.12  procedure. 
 58.13     Subd. 7.  [BOARD POWER NOT RESTRICTED.] This section does 
 58.14  not limit the authority of the board to assign a teacher to a 
 58.15  part-time teaching position which does not qualify for full 
 58.16  accrual of service credit from and employee contributions to the 
 58.17  retirement fund under this section. 
 58.18     Subd. 8.  [SUBSTITUTE TEACHING.] Subdivision 4 does not 
 58.19  prohibit a teacher who qualifies for full accrual of service 
 58.20  credit from and employee contributions to the retirement fund 
 58.21  pursuant to this section in any year from being employed as a 
 58.22  substitute teacher by any school district during that year.  
 58.23  Notwithstanding sections 354.091 and 354.42, a teacher may not 
 58.24  qualify for full accrual of service credit from and employee 
 58.25  contributions to the retirement fund for other teaching service 
 58.26  rendered for any part of any year for which the teacher 
 58.27  qualifies for employee contributions to the retirement plan 
 58.28  pursuant to this section. 
 58.29     Sec. 13.  Minnesota Statutes 1998, section 354C.12, 
 58.30  subdivision 4, is amended to read: 
 58.31     Subd. 4.  [ADMINISTRATIVE EXPENSES.] (a) The board of 
 58.32  trustees of the Minnesota state colleges and universities is 
 58.33  authorized to pay the necessary and reasonable administrative 
 58.34  expenses of the supplemental retirement plan and may bill 
 58.35  participants to recover these expenses.  The administrative fees 
 58.36  or charges must may be paid by charged to participants in the 
 59.1   following manner: as an annual fee, an asset based fee, a 
 59.2   percentage of contributions to the plan, or a contribution 
 59.3   thereof. 
 59.4      (1) from participants whose contributions are invested with 
 59.5   the state board of investment, the plan administrator may 
 59.6   recover administrative expenses in the manner authorized by the 
 59.7   Minnesota state colleges and universities in an amount such that 
 59.8   annual total fees charged for plan administration cannot exceed 
 59.9   40/100 of one percent of the assets of the Minnesota 
 59.10  supplemental investment funds; or 
 59.11     (2) from participants where contributions are invested 
 59.12  through contracts purchased from any other authorized source, 
 59.13  the plan administrator may assess an amount of up to two percent 
 59.14  of the employee and employer contributions.  
 59.15     (b) Any recovered or assessed amounts that are not needed 
 59.16  for the necessary and reasonable administrative expenses of the 
 59.17  plan must be refunded to member accounts. 
 59.18     (c) The board of trustees shall report annually, before 
 59.19  October 1, to the advisory committee created in section 354B.25, 
 59.20  subdivision 1a, on administrative expenses of the plan.  The 
 59.21  report must include a detailed accounting of charges for 
 59.22  administrative expenses collected from plan participants and 
 59.23  expenditure of the administrative expense charges.  The 
 59.24  administrative expense charges collected from plan participants 
 59.25  must be kept in a separate account from any other funds under 
 59.26  control of the board of trustees and may be used only for the 
 59.27  necessary and reasonable administrative expenses of the plan. 
 59.28     Sec. 14.  [EFFECTIVE DATE.] 
 59.29     Sections 1 to 13 are effective on July 1, 1999.